This is an appeal from a judgment for defendant in an action wherein plaintiff *52 sought reimbursement, under an indemnification provision of a lease agreement, for pecuniary losses sustained. The district court, finding that the agreement was unauthorized, held that defendant was not bound by its terms.
Defendant, an Illinois resident, had been engaged in the trucking business for seventeen years. In 1949, he was operating under an arrangement whereby he leased his equipment to Safeway Truck Lines who, during its slack season, permitted defendant to obtain his own hauling contracts. In the event that there were one-way transactions, defendant personally customarily made - arrangements for additional or return loads and, though there is some conflict in the testimony, it appears that the drivers who were in defendant's employment, also, on occasion, entered into similar agreements in his behalf.
On October 30, 1949, defendant directed one of his drivers, Johnson, to haul a load to Omaha, Nebraska. As no provision had been made in advance for a return shipment, defendant instructed Johnson to pick up a load for Los Angeles or San Francisco. However, contrary to this direction, after the driver had delivered his cargo in Omaha, he proceeded to Austin, Minnesota where he entered into a Motor Vehicle lease with the agent of plaintiff, whereby Johnson, acting as lessor, agreed to furnish the equipment and a driver for a one-way trip to Miami, Florida. At that time Johnson had in his possession Illinois state registration cards showing defendant was the owner of the vehicle, and the lease recited the registration data. Included in the contract was an indemnification provision that the lessor would “indemnify the lessee against * * * any loss or damage resulting from the negligence, incompetency or dishonesty” of the driver of the truck.
Four days after the journey to Florida had commenced, plaintiff became concerned about the location of the shipment, as no word had as yet been received from Johnson. Defendant, reached by telephone, informed plaintiff that he had not heard from the driver but assured plaintiff of Johnson’s experience and competence saying that the load would be cared for. Subsequently, Johnson called defendant and was informed that he had no authority to enter into the agreement, as the equipment was too heavy to travel on the highways of the southern states and he was instructed to transfer his load and return to Chicago. Notwithstanding this admonition, Johnson continued on his journey, and, while traveling through Alabama, was involved in a collision with a car driven by Dr. G. R. Smith. Due to the resulting delay, Johnson did not reach his destination until January 8, 1950. Thereafter no demand for payment of carriage charges was made until June 15, 1950, when one Roos, acting for defendant, appeared at plaintiff’s office and requested compensation for transporting the cargo; thereupon plaintiff gav¿ him a check payable to defendant.
As Dr. Smith had sustained serious injuries, plaintiff’s insurance company entered into settlement negotiations, in which defendant refused to participate. Ultimately, an agreement was reached whereby plaintiff! paid $8000 to Dr. Smith, which he sought to recover from defendant in the present action under the indemnification elapse.
For the purpose of this appeal, we adopt the finding of fact of the district court, as indeed we must unless clearly erroneous, to the effect that no actual authority was ever conferred on Johnson to enter into the agreement. Hence, it is clear that, although Johnson was the agent of defendant, he was not acting within the scope of his actual authority, either or implied.
Nevertheless, in determining whether defendant is bound by the terms of the indemnification clause, we are faced with the further question of whether the doctrine of apparent authority is applicable. Evidently, the district court did not consider tlje applicability of apparent authority, which is clearly a part
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of Illinois law. See Indemnity Ins. Co. of North America v. Midwest Transfer Co., 7 Cir.,
We do not hold that each element enumerated is of itself necessarily sufficient to clothe the agent with apparent authority. However, when considered as a composite picture, the circumstances of this case constitute events and actions reasonably leading an ordinarily prudent third person to believe that the responsible party to the transaction was defendant. Consequently, even though defendant may have expressly limited the scope of his agent’s actual authority, he is not relieved from responsibility arising from the transaction herein involved.
We conclude also that defendant’s conduct, in assuring plaintiff that the load was in competent hands, as well as his acceptance of payment of charges for the carriage, constituted a ratification of the agent’s acts and an adoption of the agreement by defendant. Thus, as stated in Vetesnik v. Magull,
*54 For the reasons stated,' defendant is bound by the terms of the lease including the indemnification clause contained therein. The judgment is reversed for further proceeding consistent with this opinion.