Schrack v. McKnight

84 Pa. 26 | Pa. | 1877

Mr. Justice Mercur

delivered the opinion of the court,

We discover no substantial error in the fifth, sixth and ninth assignments. All the other assignments relate to question of agency, and will be considered together.

Three rules, in regard to the liability of a principal for the acts of one professing to be his agent, are pretty well established :

1. An agent constituted for a particular purpose, and under a limited power, cannot bind his principal if he exceeds that power.

2. A subsequent ratification by a principal of the unauthorized act of his agent, may have the same effect as previous authority.

3. The principal is bound to disavow the unauthorized act of his agent as soon as that fact comes to his knowledge, otherwise, as to third persons, he makes the act his own: Bredin v. Dubarry, 14 S. & R. 27 ; Valentine v. Packer, 5 Barr 333. But as between him and his agent the rule is not so stringent. In the latter case, he is not bound to disavow the act until he has such information of the facts and circumstances as will enable him to act understandingly: Porter v. Patterson, 3 Harris 229.

case attorney was specific a ited power. It authorized the agent to subscribe for five shares of stock for the principal; to pay a specific sum as the first instalment for him, and to vote the stock so subscribed as fully as the principal could do it if personally present. These three specific acts were all the letter of attorney authorized the agent to do. The language clearly implied that the stock should be subscribed for in the name of his principal. The sum to be paid as the first instalment was advanced to the agent, at the time he was authorized to subscribe. Under this specific and restricted agency it is clear that the agent could not subscribe in his own name for a much greater number of shares and long afterwards compel his principal to take five shares off his hands.

It further appears by the testimony of witnesses that at the very time the agent was authorized to make this subscription, the principal said to him that he wanted the stock put in his own name, and that the agent replied he would put it down in his, Schraek’s, name.

Subsequently, the agent caused a certificate for the whole stock purchased by him, to be issued to himself. Neither the mode of subscription nor the form of the certificate appears to have been authorized by the principal. They were contrary to both the written and the verbal authority given. The principal had the right to require a strict execution of the power given: Story on Agency, § 192; Wilson v. Wilson, 2 Casey 393. He may have had a very substantial reason for desiring the stock to be subscribed in his own name. Be that as it may, he had the right so to direct it, and his agent had no power to disregard those instructions and hold the principal liable for his action: Story on Contracts, § 359.

The plaintiff in error then could only be made liable for the unauthorized acts of his agent, by a failure to repudiate the acts after information or by subsequent ratification. The evidence would not justify the court in saying as a conclusion of law that the plaintiff had ratified the acts of his agent either by omission or commission. Those were questions of fact which should have been submitted to the jury to find under a proper review of the evidence.

The fact that a jury might find that the defendant acted in good faith does not enlarge his power. Neither does it absolve him from his obligation to obey his instructions; nor does it dispense with the necessity of his procuring a subsequent ratification. We see no evidence of any prior agreement, that the defendant in error should subscribe for the stock in his own name, and hold it in trust for the plaintiff in error. Without some evidence, it was error to submit that fact to the jury. So it was error to say to the jury in the imperative manner the court did, that when the plaintiff in error discovered the stock- was in the name of his agent, if he was not satisfied with the manner of subscription, he should have demanded a cancellation of the letter of attorney, or a transfer of the stock to his own name.

He was not bound to do either. A cancellation of the letter of attorney would not affect the action already taken under it; nor was he obliged then to accept the stock. The conduct and action of the plaintiff in error when he discovered the fact referred to, and subsequently, were evidence pertinent for the jury to consider, as bearing on the, question of ratification.

In so far as the court refused to affirm the sixth point, submitted by the plaintiff in error, that he was not liable without “positive proof” of subsequent ratification, we see no error. The word “ positive” is too strong. It is defined by Webster to mean “ direct,” “ express,” opposed to “ circumstantial.” The proof should be “satisfactory,” but it may be such without being “positive.” In that portion of the charge covered by the second assignment, the jury were told that the plaintiff in error might be liable “ even without proof of subsequent ratification,” if the agent acted in good faith, although the plaintiff in error told him he wanted the stock in his own name. It is true the judge added if the agent made the subscription in his own name “ for the same purpose of carrying out the trust.” He thereby assumed the existence of the trust, which is denied by the plaintiff in error. The fact of there being such a trust as to bind the principal, was a question to be first found by the jury, before he could be held responsible on it. The tendency of the charge was calculated to mislead the jury from a proper consideration of the controlling questions in the case.

It therefore follows that in so far as we have not qualified the language in the written points, the assignments are substantially sustained.

Judgment reversed, and a venire facias de novo awarded.