Lauer Brewing Co. v. Schmidt, 24 Pa. Super. 396

24 Pa. Super. 396 | Pa. Super. Ct. | 1904

Opinion by

Smith, J;,

The plaintiff, a brewing company, established what it describes as “ agencies ” for the sale of its products. As thus employed, however, the words “ agency ” and “ agent ” must be regarded as in the nature of trade names. The person conducting the so-called'agency was in no sensé an agent. He was in fact a purchaser at wholesale, buying at a stipulated price, and selling not for the manufacturer but for himself. In the conduct of his business he was wholly independent of the manufacturer, was without authority to bind him in any manner, and without responsibility to him except for the price of the goods received. The defendant had conducted one of these agencies at Shenandoah for many years, and in August, 1899, took charge of another at Ashland. In the fall of 1900 both appear to have been discontinued. Upon a settlement made November 12, the defendant was found in debt to the plaintiff $6,251.54 for beer received at Shenandoah. Subsequently, and before the commencement of the present suit, this was paid. No settlement appears to have been made for the beer received at Ashland, and the matter stood until September 13,1901, when this action was commenced. In this, there is no dispute as to the value of the beer received or the payments made by the defendant ; and the balance, claimed by the plaintiff, is $1,430.85. The defendant, however, contends that he is entitled to further credits, sufficient not only to extinguish this balance, but to show a balance of $657.58 in his favor. As to some of these credits, there is no contention. The defendant’s right to credit for unsalable beer returned, for horseshoeing and repairs to wagon, and to certain freights, is admitted. The right to credit for his own services, for a driver’s wages, for the maintenance of a horse, and for outstanding book accounts, is denied, and the controversy on trial was in relation to these items.

The engagement of the defendant as agent at Ashland was made by John M. Killian, an employee of the plaintiff. The defendant claims the credits in dispute under an agreement, alleged to have been made by Killian, fixing the terms of his engagement. The plaintiff denies that Killian had authority to make such agreement. The defendant’s right, therefore, depends on Killian’s authority in the premises.

As to third parties, the liability of the principal for the acts of his agent is measured not merely by the authority actually given, but by the authority essential to the business of the agency, and the authority held out by the principal as possessed by the agent, or the apparent authority Avhich he permits the agent to assume. No express terms are required to define the agent’s powers. The relation of principal and agent implies a grant of the powers necessarily incident to the purposes of the agency, or which, by established usage, may properly be employed in carrying out those purposes. In brief, the agent has the authority of the principal in all matters within the scope of the agency, and, beyond this, all powers which the principal has, either directly or by a course of dealing, held him out to the public, or to those dealing with him, as possessing.

Killian died before the commencement of the suit. The only evidence respecting his authority is found in the testimony of Frank P. Lauer, the plaintiff’s general manager. He testified that Killian was the plaintiff’s “ general collector; ” that, as such, he visited the agencies and settled the plaintiff’s accounts with them; established new agencies, with Lauer’s approval; and that this was the extent of his power. As to the engagement of the defendant, Lauer testified that the agency at Ash-land was given him “ on the same terms and conditions as other agencies had,” these being “ that we deliver him the beer there at a certain price, for him to dispose of to the retail trade at his own risk;” also furnishing the agent a horse and wagon, and paying for shoeing the horse and repairs to the wagon. He further testified that Killian reported to him that the defendant “ was going to take the agency of the Ashland territory on the same terms as his predecessor,” Constantine Metz, and nothing more; that those terms were $5.00 a barrel for the beer, delivered at Ashland, — “ Five dollars a barrel and no other arrangement; ” that Killian said nothing to him of any agreement making the plaintiff responsible for any bills, for horse keeping, for driver, or for salary, and that he never heard of such agreement before bringing suit. Lauer approved of the engagement as thus reported, and proceeded to ship beer to the defendant at Ashland.

According to the evidence for the defense, the agreement between Killian -and the defendant, beyond the authority of the former • as defined by Lauer, was that a driver should be employed and a horse maintained at the plaintiff’s expense; that the driver should make the collections and deposit them in bank, reporting daily to the defendant; that the defendant should be responsible only for such deposits; and that the defendant should receive a compensation, the amount of which was not fixed. The evidence, on the one side as to the authority actually given by the plaintiff to Killian, and on the other, as to the alleged agreement, was uncontradieted. The defendant conducted the business in conformity with the alleged agreement. It does not appear who made the sales; but all collections were made by the driver, and the money in bank was checked out by the defendant until it was exhausted. The collections were not fully made; and among the items for which the defendant claimed credit were outstanding accounts amounting to $684.75.

A person dealing with an agent is bound to ascertain the extent of the agent’s authority, and this is particularly the case in dealing with him for the first time; in subsequent dealing he may assume that the original authority continues, unless informed to the contrary. The mere designation of general agent is not sufficiently specific. A general agency in a particular branch of the principal’s business implies no power in connection with any other branch. As an illustration, “ A superintendent is defined to be one who has the oversight and charge of something, with the power of direction, as a superintendent of the almshouse or of the public works; but a superintendent may have no authority to furnish supplies or purchase materials for the enterprise he directs : ” Central Penna. Telephone Co. v. Thompson, 112 Pa. 118, Clark, J. That Killian, in the case before us, was the plaintiff’s general collector, — a general agent with respect to collections, — gave him no authority beyond the scope of this branch of the plaintiff’s business. What his authority may have been respecting methods of making collections; the adjustment of accounts, the allowance of credits, the compromise of claims, fixing and extending the time of payment, the acceptance of securities, or the release of indebtedness, we need not here inquire. Plenary power in relation to these matters implies no power to make the contract alleged to have been made by Killian with the defendant.

“ It is always competent for the principal to show the scope and extent of the agent’s authority: ” Telephone Co. v. Thompson, supra. The authority thus shown is not, however, the only measure of the principal’s liability for the acts of the agent. It is always competent for a person dealing with an agent to show that the acts of the agent, in excess of his express authority, are nevertheless within the scope of the authority which the principal has permitted him to assume, or which, by a course of dealing or otherwise, he has been held out by the principal, either to the public in general or to' the person dealing with him, as possessing. “ The extent of an agent’s powers depends upon the authority under which he acts. This may be shown by his instructions, or his course of dealing. It is true the public are not always bound by the private instructions of the agent, and may hold the principal responsible, though the particular acts done are in excess of his private instructions. This was asserted in Adams Express Co. v. Schlessinger, 75 Pa. 246. It applies to cases where the agent has been held out to the world as such by the principal, allowed to exercise enlarged powers from time to time, and his acts therein have been ratified by his principal. But this doctrine in no sense conflicts with the right of the principal to show that his agent in a given case exceeded his authority : ” American Life Ins., etc., Co. v. Shultz, 82 Pa. 46. The burden of proving both the fact of agency, and its scope, lies on him who asserts them. Prima facie, the powers of an agent are limited to those expressly granted, or arising by implication from the character of the grant. The burden of proof lies on him who asserts that they have been enlarged by the acts of the principal.

In the case before us, the plaintiff gave evidence showing the scope and extent of the power expressly given to the agent. The authority thus shown did not extend to the malting of the contract in question, or imply a power to make such a contract as incident to the purposes of the agency. The defendant offered no evidence to show a direct and specific enlargement of this authority by the plaintiff, or to prove a single instance tending to exhibit a course of dealing in which Killian was held out by the plaintiff as having authority to make contracts of the character described by the defendant, or was permitted to assume any authority beyond that expressly given. Nor was there any attempt to contradict Lauer’s testimony as to the-terms to agents, though the defendant, and his witness Metz, having held agencies, had full knowledge on this subject, and evidence respecting other agencies was within reach. On the contrary, inquiry on this point, on the part of the plaintiff, was checked by the defendant’s objection. The declarations of an agent are not competent evidence of the extent of his powers until after some evidence tending to show that he has the authority which he assumes to exercise. Evidence of an author-

ity substantially different is insufficient. Hence the evidence of Killian’s agency as a collector did not make his declarations evidence of authority to bind the plaintiff by the contract which he is alleged to have made, since this was wholly beyond the scope of such agency.

There are some features of the transaction with a significant bearing on the question whether the alleged contract was in fact made. Bills, or statements of the plaintiff’s account with the defendant, showing the balance claimed, were repeatedly sent to the defendant. In business practice, as well as in law, this is understood as a demand for payment. Yet the defendant, with matters of defense, as he alleges, sufficient to show a. large balance in his favor, took no steps to obtain a settlement ; he neither gave the plaintiff notice of counterclaims, nor called his attention to the contract on which, as he alleges, these were based, but remained silent until after suit was brought, a period of nearly a year and meantime paid the balance due on the Shenandoah business. These, however, were matters for the consideration of the jury, had there been evidence of Killian’s authority on which the case could be submitted to them. But there was no such evidence, and the plaintiff’s first point should have been affirmed.

The first specification is sustained. This dispenses with discussion of the others. The adjustment of credits, referred to in the argument, is substantially a matter of bookkeeping, and if there were errors or omissions respecting these, in submitting the case to the jury, they may readily be corrected on another trial. The only matter conclusively determined on this appeal is that the evidence given on the trial below, of Killian’s authority to make the alleged contract, was not sufficient to warrant the submission to the jury of evidence respecting the terms of that contract. However, since the proceedings on another trial will be de novo, this question will also remain open for any further evidence on this point.

Judgment reversed and venire de novo awarded.