Wise v. Texas Co.
Wise v. Texas Co.
Opinion of the Court
after stating the factsThis case, in one material aspect of it, turns upon the point whether there is any evidence of ratification by defendants of the unauthorized act of its agent, in contracting for them to sell the gasoline below the market price, and in positive violation of express instructions not to do so. In order to decide this question, we must consider the evidence in the most'“favorable light for the plaintiffs; but when it is thus viewed, we are of the opinion there was no ratification, and the nonsuit should have been granted.
We start out with the fact admitted that the plaintiffs knew, when the contract was made, that C. C. Clark, the agent, had no authority to make it in behalf of his principal. He so stated to them, and told them of his recent instructions, and they knew well why the defendants had withdrawn the authority to sell from him, because the price of gasoline w;as rapidly advancing, having risen to a point quite a full cent per gallon over the price mentioned in the alleged contract, and still advancing, and reaching within the ensuing year a price nearly double that at which they proposed to buy. The contract was made under very suspicious circumstances, sufficient to warrant the inference, or even to produce the conviction, that it was intended to deceive the defendants and to induce them, unsuspectingly, to believe that their agent had made the contract at a time when he was authorized to do so, by antedating it and making it appear, on its face, to be within his authority as agent, and, therefore,.
Applying the principle to this case, we find no evidence of ratification of Clark’s unauthorized act by the defendants. It is true, the defendants shipped 79 barrels of gasoline, but this is perfectly consistent with their ignorance of the facts at the time of the shipment.
It has been said that the act which is claimed to be a ratification must be with knowledge of the facts and. “inconsistent with the existence of an intention not to adopt, and hence conduct which would have been within the principal’s right in casé he repudiated the transaction will not amount to ratification. And if the principal is ignorant of material facts, as where he accepts moneys from an agent without knowledge that they are the proceeds of an unauthorized sale, intention to ratify cannot be implied.” Tiffany on Agency, p. 66.
The cases are numerous where the courts have held that the sale or acceptance of goods, or the doing of other acts, under an unauthorized contract made by an agent, when the principal proceeds without knowledge of the facts, is not a valid ratification ; otherwise where the principal acts with knowledge or with what is equivalent to it. “If an agent, having unwritten authority to make leases of real property, execute a lease for more than three years, the knowledge of his principal that the tenant is in possession and paying rent is not sufficient to work either ratification or estoppel.” Clement v. Young, 70 N. J. Eq., 677. The 'same was held in a case where the wife paid interest on a note of her husband and her mortgage to secure it, under the belief on her part that the mortgage was’ binding upon her, the Court saying that there was no ratification. Brown v. Rouse, 104 Cal., 672. So in Nichols v. Bruns, 5 S. D., 28, it was decided that one cannot be held liable for the fraudulent representations of an unauthorized agent by accepting the benefits without knowledge of the fraud, and where the court charged
Tbe principle was strongly and clearly stated by tbe Court in Bell v. Cunningham, 3 Peters (U. S.), 69: “If tbe principal, after a knowledge that bis orders have been violated by bis agent, receives merchandise purchased for him contrary to orders, and sells tbe same without signifying any intention of disavowing tbe acts of tbe agent, an inference in favor of tbe ratification of tbe acts of tbe agent may be fairly drawn by tbe jury. But if tbe merchandise was received by tbe principal under a just confidence that bis orders to bis agent bad been faithfully executed, such an inference would be in a high degree unreasonable.” And tbe doctrine is well stated in Roberts v. Rumley, 58 Iowa, 306, 307: “It does not appear that tbe defendants ever bad any intimation of tbe agreement which tbe plaintiff now alleges to exist, and which be is seeking to enforce, until tbe commencement of this suit. They could not have ratified and adopted an act about which they knew nothing. . . . To bold that tbe principal is bound by agreements between tbe special agent and tbe person with whom be contracts, not authorized by tbe agent’s appointment, and of ’which be bad no knowledge when be accepted tbe benefits of tbe contract, would be entirely subversive of tbe whole doctrine of special agency, and instead of requiring tbe persons dealing with tbe agent to ascertain, at bis peril, that tbe agent has kept within bis special authority, would require tbe principal to inquire, at bis peril, whether tbe agent bad gone beyond it.” Here plaintiffs bad full notice of tbe lack of authority.
In this case there is no evidence that defendants had knowledge of the fact that his agent and the plaintiffs had wrongfully antedated the contract, which, of course, was calculated to mislead and deceive the plaintiffs, unless we should hold, contrary to principle and authority, that the mere shipment of the gasoline was sufficient to show such knowledge. On the contrary, the only evidence upon the question tends strongly to show that the defendants had no knowledge of the facts until the first trial of this case, when one of the witnesses testified that the contract had been incorrectly dated. If there was such prior knowledge on the part of the. defendants, the plaintiffs, upon whom rested the burden of proving it, had the means of doing so by the agent himself, who was not called to the stand. They should have known the facts, as a man would hardly ratify an unauthorized act, which was not binding upon him, and thereby entail a heavy loss upon himself, when he could so easily escape the liability by repudiating the wrongful act.
• The case does not present a favorable aspect for the plaintiffs in any view we may reasonably take of it. It has not the right complexion. There is no satisfactory explanation of the order for 350 barrels of the oil, sent in just before the expiration of the year fixed by the alleged contract, when they had only- ordered during the nine preceding months 79 barrels as fully sufficient to supply their wants for that period, and supposed (why, is not clear) that they had already ordered 150 barrels. The whole ease shows that defendants were ignorant of the facts from the beginning to the end of this transaction.
It is perfectly evident that when the agent promised to “get the contract through” he expected to do so, and did do so, by a deception practiced upon his principals, and plaintiffs must have been cognizant of this purpose. There was no use at all in mis-
The plaintiffs, having the burden of proof upon them, have not met the requirement of the law in such cases. The agent “put the contract through,” but in disobedience of positive instructions, and, as the case shows, by imposition upon his principal, who was ignorant of the real transaction. ' It is hardly reasonable or conceivable to suppose that defendants would have assented to a losing contract, or that plaintiffs could have believed that they would do so. That would be presuming too much upon their charity and benevolence; and besides, if a fair and honest request for such a contract was intended, why falsify the date, instead of proceeding according to the natural and ordinary course of business dealings where the parties.are inspired by perfect good faith? The whole trend of the evidence produces the conviction that the defendants were the victims of the deception, and there is nothing to relieve the transaction of the taint which, in law, vitiates it. As Chief Justice Wilmot said in Collins v. Blanton, 1 Wilson, 341 (1 Smith’s Leading Cases (9 Ed.), 646): “The manner of the transaction was to gild over and conceal the truth, and wherever courts of law see such attempts made to conceal such wicked deeds, they will brush away the cobweb varnish, and show the transactions in their true light. . . . All writers upon our laws agree in this: no polluted hand shall touch the pure fountains of justice. . . . You shall not have a right of action when you come into a court of justice in this unclean manner.” Ex dolo malo non oritur actio.
Tbe nonsuit should have been allowed.
Reversed.
Reference
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- C. E. WISE & BRO. v. THE TEXAS COMPANY
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