Plaintiff assigns as error the failure of the trial court to allow its motion to dismiss defendant’s counterclaim. Defendant, having admitted the execution and delivery of the conditional sales contract in suit, must establish the novation he has alleged if plaintiff is not to recover the amount it claims.
To establish the terms of the novation he alleges, defendant relies upon his conversations with Manuel, plaintiff’s sales agent for Western North Carolina. The evidence discloses, however, that Manuel himself had no authority to modify the contractual relations existing between plaintiff and defendant, and that defendant knew this. 2 C.J.S., Agency § 114, p. 1324. Manuel’s declarations to defendant on September 19, 1963, which tended to show his authority to take back the Eimco and to modify the contract by a “separation” were not, as the trial judge held, competent to establish the nature and extent of Manuel’s agency.
Commercial Solvents v. Johnson,
A novation is the substitution of a new contract fоr an old one which is thereby extinguished.
Tomberlin v. Long,
The determinative question here is whether plaintiff’s acceptance of the check for $496.02 for “payment on truck & trailer,” coupled with the other circumstances disclosed, was “evidence of ratification fit to be considered by a jury.”
Mfg. Co. v. McPhail,
“ ‘If certain acts have been performed or contracts made on behalf of another without his authority, he has, when he obtains knowledge thereof, an election either to accept or repudiate such acts or contracts. If he аccept them, his acceptance is a ratification of the previously unauthorized acts or contracts, and makes them as binding upon him from the time they were performed as if they had been authorized in the first plaсe.’ Gallup v. Liberty County,57 Tex. Civ. App., 175 ,122 S.W. 291 .” McNeely v. Walters,211 N.C. 112 , 113,189 S.E. 114 , 115.
In order to establish the act of a principal as a ratification of the unauthorized transactions of an agent, the party claiming ratification must prove (1) that at the time of the act relied upon, the principal had full knowledge of all material facts relative to the unauthorized transaction,
Wilkins v. Welch,
A principal who acted without actual knowledge of the material facts will not be held to have ratified an unauthorized act of his agent even though he failed to exercise due diligence which would have revealed the truth. “This general rule pertains whether the want of knowledge arises from the intentional or the unintentional concealment or misrepresentation of the agent, or from his mere innocent inadvertence; and, of course, if the material facts are suppressed or unknown, the ratification is invalid, because founded on mistake or fraud.” 3 Am. Jur. 2d, Agency § 173. However, as stated by the American Law Institute, “knowledge by the purportеd principal can be inferred as in other cases; when he has such information that a person of ordinary intelligence would infer the existence of the facts in question, the triers of fact ordinarily would find that he had knowledge оf such fact.” Restatement (Second), Agency § 91; 1 Mechem, Law of Agency § 406 (2d Ed. 1914). See
Fisher v. Lumber Co.,
A principal is not permitted to repudiate the act of its agent as being beyond the scope of his authority while accepting the benefits of what he has done.
Jones v. Bank,
Clearly, if plaintiff’s president, Stephenson, knew that defendant had attached conditions to the acceptance of his check he could not endorse
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it, collect the proceeds for plaintiff, and then repudiate the conditions attached to it notwithstanding he may have intended to do so.
DeLoache v. DeLoache,
In Lipschutz v. Weatherly, supra, plaintiff agreed with defendants that they should have an exclusive contract for the sale of plaintiff’s cigars (which they were authorized to purchase at a special price) in a specific area so long as they complied with certain conditions. Plaintiff, contending that defendants had violated the conditions, notified them that in the future defendants could order only upon the same terms and conditions as any other person. Thereafter plaintiff declined to fill defendants’ orders until they agreed to the cancellation of the previous contract. This defendants did and ordered cigars upon the new terms. When defendants refused to pay for these cigars, plaintiff sued for the purchase price and defendants set up a counterclaim for damages for breach of contract. In affirming the trial judgе’s peremptory instruction in favor of plaintiff, the Court said that, assuming plaintiff had breached the original contract, defendants could have sued for damages; instead, they assented to plaintiff’s terms for further sales and made a new contract which discharged the old, thereby eliminating any claim for damages resulting from its breach. See also Mfg. Co. v. McPhail, supra.
The evidence here strongly suggests that if Manuel’s prospect in Kings Mountain had purchased the Eimco, this lawsuit would have been averted; that Manuel, thinking he had the Eimco sold elsewhere, talked one way to defendant Anders, and thereafter, when the sale was not made, another way to his employer Stephenson. It was then, no doubt, that he blotted оut the figure 3 within the parentheses on the check. But, be that as it may, Stephenson knew that defendant had requested “a separation of the truck and trailer and the Eimco trac *403 tor,” and that at the time defendant made the request he had issued a check for $496.02 which stated that it was “for (3) payments on truck & trailer.” Each monthly payment under the original contract was to have been an even $496.00. The notation of plural payments totalling $496.02 negated a pаyment on the original indebtedness. Obviously defendant was not making a payment on the original contract. Stephenson said that, after telling Manuel defendant’s proposition was ridiculous and not to be considered, he asked him “if he had emphatically told Mr. Anders that we must use the check that we had collected against the obligations.” Curiously enough, Stephenson did not testify what reply, if any, he got to this inquiry. He merely said that after asking this question he “then had the check endorsed and forwarded.”
We think there was “evidence of ratification fit to be considered by the jury.” The court instructed the jury, in effect, that in order for it to find that plaintiff and defendant entered into a new contract on September 19, 1963, defendant must satisfy the jury (1) that defendant and Manuel made the agreement defendant alleged; (2) that defendant’s payment of three installments on the tractor-trailer under the new contract was received by the plaintiff with knowledgе of the new contract and with “intent on the part of the plaintiff corporation to ratify and confirm the transaction and substitute this contract for the contract of June 1963,” and that if defendant failed to satisfy the jury of these facts it would answer the first issue (novation) against defendant. Plaintiff has no cause to complain of this instruction. The verdict that there had been a novation was supported by competent evidence, the credibility of which was for the jury. Plaintiff’s motion to nonsuit defendant’s counterclaim was properly overruled. The fact that defendant prayed damages to which he is not entitled does not preclude recovery on a theory supported by the allegations and proof.
Board of Education v. Board of Education,
Plaintiff’s assignment of error No. 12 relates to the limitation which the court placed upon that testimony of Mr. Stephenson as noted in the statement of facts. Conceding the error in limiting this evidence to the cоrroboration of Manuel, we regard the probable effect of this limitation upon the jury as entirely too tenuous to justify a new trial. Technical error alone will not upset a judgment. Appellant must show a reasonable probability that the error affected the result of the trial.
Johnson v. Heath,
The issuеs submitted were sufficient to embrace the questions in dispute between the parties,, and plaintiff's assignment of error based on the failure of the judge to submit the issues it tendered is not sustained. Hall v. Giessell, supra. Each of plaintiff’s other assignments of error has been considered; no prejudicial error appears.
No error.