Merrick Thread Co. v. Philadelphia Shoe Manufacturing Co.

| Pa. | Mar 21, 1887

Mr. Justice Trunkey

delivered the opinion of the court, March 21st, 1887.

The plaintiffs demand is admitted. To defeat the action the defendant alleges a contract made with the plaintiffs agent who sold the goods, for sale of twenty-five shares of stock at the par value of $1,250 to be paid by credit of purchases of goods from the plaintiff. Previous to the time of making this contract the defendant had repeatedly purchased goods from the same agent of the plaintiff, always to be paid for in money.

It is not pretended that the agent had authority to buy the stock for his principal. The written proposition of the defendant contemplated an acceptance of the stock by the plaintiff, and the agent’s receipt stated that it was to be submitted to the plaintiff, “and if approved to be taken out in the purchase of thread.”

There is evidence tending to show that the agent did submit the proposition, as he promised, and that the stock was at once refused. There is no evidence that the plaintiff knew that the agent held the certificate after said refusal, or that any goods had been sold or purchased with an understanding that the price should be applied in payment for the stock. The defendant not only failed to adduce testimony of authority in the agent to sell goods for stock, but very clearly showed its own knowledge that the agent had no such authority. It was proved that Hovey agreed to communicate with the plaintiff, inform the defendant of the result, and if the stock should not be accepted to promptly return the certificate; but it was not proved that the plaintiff had any knowledge of what Hovey had promised the defendant.

The principal is not liable to a third party when such partjr had knowledge that the agent in the contract acted out of the scope of his authority. But it is unnecessary to refer to this principle, for Hovey did not make a contract for the stock as agent for the plaintiff. Whatever agency existed in Hovey in relation to the stock was created by the defendant at whose instance Hovey acted and promised, and no promise made to or 1>3T the plaintiff was broken.

Nor is there any question of ratification, in absence of proof that the plaintiff had knowledge of the facts. And for like reason there was no implied acceptance of the proposition for sale of the stock. Hovey allowed longer time without payment for the goods after his negotiation about the stock than before. Prior sales and payments were through Hovey, and his delay in demanding the money, in itself, does not warrant the inference of an acceptance of the proposition, or of a ratification by the plaintiff.

The principle which controlled in Keough v. Leslie, 92 Pa., 424" court="Pa." date_filed="1880-01-19" href="https://app.midpage.ai/document/keough-v-leslie-6236399?utm_source=webapp" opinion_id="6236399">92 Pa., 424, cited by defendant, has no application when the declarations made by the agent were neither inducement to the making of the contract, nor part .of its conditions.

The plaintiff’s seventh point ought to have been affirmed.

Judgment1 reversed, and venire facias de novo awarded.