171 Iowa 346 | Iowa | 1915
— On June 26, 1912, the plaintiff executed a lease of a storeroom owned by him in Waterloo for a term of 32 months beginning August 1st of that year, at a rental of $50 per month. The lease recited that it was entered into by and between the plaintiff, as party of the first part, and “Wear-U-Well Shoe Company of Columbus, Ohio, with northwestern headquarters in Minneapolis, Minn., and F. H. Foster, local manager and agent for above Wear-U-Well Shoe Co. of the second part.” This lease was signed “Wear-U-Well Shoe Co. by F. H. Foster, Mgr. & Agt.” Foster also signed it individually. Though there was a company of the same name located at Columbus, Ohio, it had nothing directly or indirectly to do with the lease or its execution. The defendant is a corporation, bearing the name Wear-U-Well Shoe Company, of Minneapolis, Minn., and, during the time in question, was engaged in the business of selling shoes through branch agencies. It began business in April, 1912, operating under • two plans: one by renting a storeroom, installing a stock of goods and selling through salesmen employed by it; and the other, by selecting a suitable location and employing an agent to sell the shoes on commission, he to “ furnish room for said merchandise and give bond for the faithful discharge of his duties.” At the time the lease was executed, the defendant bad abandoned the plan first mentioned and entered into the contract with Foster, under the terms of which he was to receive 15 per cent, of the proceeds of shoes of one class and 12 per cent of the proceeds of shoes of another class, and to pay the rent for the storeroom. Endorsed on the contract were the words: “Freight charges on first shipment and store completely built
Plaintiff made all reasonable efforts to rent to another but failed. The issues raised by the evidence are: (1) Whether Waters had ostensible authority to contract for the lease in defendant’s behalf; (2) whether the defendant subsequently ratified the execution thereof; and (3) whether it was a lease to defendant.
“Was quite surprised at its having been signed with our company name and told him he had no authority to sign our name to lease, and that he was the only one they were holding on it, and in making transfer from Foster to Barnes I told Foster that he would have to see Hosteter and arrange with him for subleasing to Barnes, and make his terms on the lease, as we weren’t on the lease. Barnes succeeded Foster. Wear-U-Well Company entered into a written contract with Barnes. I believe I made that contract for the company. . . . Told Foster he was liable on lease.- Told him to see. Hosteter and arrange for transfer of lease to new man, Barnes, and that he himself was liable. Don’t know whether he did this.”
Foster testified:
“Don’t remember whether I said anything about having signed, think we didn’t. He (Dexter) looked the lease*351 over, my recollection is he said something to Waters, wanting to know why the lease was made out in that way. Don’t remember the exact conversation. Waters said something about that was the only way they could get the room or something -to that effect. They talked about the lease, I presume they were talking about it, but don’t know whether they were or not. They talked some and looked over lease. Talked something about it, don’t know what. They finally got Barnes to take the store.”
Neither Foster nor anyone else advised plaintiff that defendant’s name was attached to the lease without its authority, and with this knowledge on Dexter’s part, together with that of the fact that plaintiff had refused to lease to other than the owner of the stock to be- installed, he, in behalf of the defendant, entered into a contract with Barnes like that with Foster, and the occupancy of the premises by its goods was continued under the same lease. Barnes was succeeded by W. J. Roth, under a like contract, November 4, 1912, and the latter by Wm. Tiep, June 5, 1913. The goods of the company continued on the premises in charge of its sales agents for nearly a year after it acquired knowledge through its president of the execution of the lease by its agent, and by accepting the advantages of said lease, it ratified the act of its agent in attaching its name thereto. Had it repudiated such act promptly by notifying plaintiff that it would not be bound thereby, or had it ceased to occupy the room with its goods, it must have been relieved of all liability. As contended by appellant, knowledge of all the material facts connected with the making of the lease was essential to an effective ratification. Haswell v. Strandring, 152 Iowa 291.
As seen, such knowledge was obtained by the company through its president. Was this while he was acting within the scope of his duties? He testified that Waters was an “installing agent. We sent him out to secure agents for
“Any officer or agent of a corporation may give validity to the unauthorized acts of his subordinates, provided they be of a kind which he might have authorized them to perform.” Purdy’s Beach on Priv. Corp. Sec. 777.
In the latter work, it is said, in Sec. 779:
“Knowledge, by the corporation, of all the material facts and terms of the unauthorized contract, is essential to show, in attempt to hold that the corporation impliedly ratified it, but acquiescence implies such knowledge.- If a person assuming to act as agent of a corporation, but without legal authority, or an agent in excess of his proper authority, make a contract, and the corporation knowingly receive and retain*353 the benefit of it, this will be a ratification of the contract and render the corporation liable as a party to it. The rule does not apply unless the corporation itself received the money or property, or appropriated it under corporate agency.”
There was no direct evidence bearing on the authority of the president, save as recited above, which disclosed that he was in the active management of the affairs of the company in establishing branch stores, and that, in pursuance of the arrangements of its agent, Waters, under his supervision, stocks were placed and the business carried on by the company. This, in connection with the presumption that the acts of the president of a corporation arising in the ordinary course of its business are authorized by the directing officers, was quite enough to warrant the conclusion of the trial court that Dexter, as president of the defendant corporation, was endowed with power to lease the premises originally or to ratify the leasing thereof by Waters and Foster. See White v. The Elgin Creamery Co., 108 Iowa 522; Ney v. Eastern Iowa Tel. Co., 162 Iowa 525.