Brimmer v. M. H. Brimmer & Co., 174 N.C. 435 (1917)

Oct. 31, 1917 · Supreme Court of North Carolina
174 N.C. 435


(Filed 31 October, 1917.)

1. Appeal and Error — Answer to Issues — Harmless Error.

Exception to tbe admission of evidence relating to issues answered by the jury in appellant’s favor is immaterial on appeal.

2. Evidence — Nonsuit—Pledge—Burden of Proof — Trials.

In an action to recover personal property, defended on the ground that it had been left with the defendant as security for a debt, the burden is on the defendant to establish his defense, and when, there is evidence that title to the property is in the plaintiff,-the defendant’s motion to nonsuit upon the evidence is properly denied.

3. Judgments — Issues.

An affirmative finding of an issue that plaintiff is entitled to the proceeds of sale of personal property claimed by the defendant in an action to recover- it, as a pledge for plaintiff’s debt, is sufficient for judgment that plaintiff recover such sum. ' ,

4. Corporations — Mortgages — General Manager — Principal and Agent— Directors.

While ordinarily a general manager of a corporation is without implied authority'to pledge corporate property for the payment of its debts, unless *436byresolution of the board of directors, tbe doctrine is subject to the rule that he may have such power when incidentally necessary to the carrying on of the business under his general authority, as such manager, and that acts of such character are binding upon their ratification by the company in accepting benefits thereunder.

5. Same — Evidence.

A funeral corporation was heavily indebted to a livery stable for furnishing it carriages for funerals, where its “dead wagon” was kept at the time and continuously thereafter; and to obtain further credit at the stable the manager of the corporation pledged the “dead wagon” of which the corporation received benefit with the knowledge and consent of the president. After insolvency, the receiver sued the owners of the stable for the wagon, and it is Held,, there was evidence sufficient to bind the funeral corporation or its receiver to the pledge made by its general manager, there being evidence both as to his authority and the ratification of his act by the corporation.

6. Appeal and Error — Courts—Determinative Issues.

When the controversy is made to depend upon the authority of a general manager of a corporation to bind the latter by his act, with evidence that it was necessary to the carrying on of the corporation’s business and of its subsequent ratification, and the trial judge has failed to submit an issue properly determinative of this question, a new trial will be ordered on appeal.

Appeal by petitioner from Bond, J., at the April Term, 1917, of New HANOVER.

- This is a petition filed by the receiver of the M. H. Brimmer Company against the Schloss-Bear-Davis Company to recover a certain “dead wagon,” or the proceeds thereof.

The Brimmer Company was in business as an undertaker, and it was admitted that it bought the wagon, which was in possession of the Davis Company at the commencement of the action, the Davis Company claiming that it had been pledged as security for debt by M. H. Brim-mer, general manager of the Brimmer Company.

The receiver denied that the wagon was left with the Davis Company as a pledge, and also denied that Brimmer had any authority to pledge the wagon.

Both parties introduced evidence in support of their respective claims.

The receiver introduced the deposition of M. H. Brimmer, who, among other things, was permitted to answer the following question:

Q. State in full the circumstances of your placing the “dead wagon” in the livery stables of Schloss, Bear & Davis Co. ?

The deposition and the answer to the question were objected to by the defendant and exception duly taken to their admission.

The plaintiff also introduced as a witness L. W. Moore, president of the Brimmer Company, who was asked the following questions by the defendant on cross-examination:

*437Q. How mucb did your concern owe wben it went into tbe bands of a receiver?

Objection by plaintiff; objection sustained; defendant excepted.

Q. I ask you if it was not hopelessly insolvent?

Objection by plaintiff; objection sustained; defendant excepted.

Q. I will ask you if you bad enough assets in your concern when it went into the hands of a receiver to pay 2 cents on the dollar?

Objection by plaintiff; objection sustained; defendant excepted.

The following is the verdict returned on the minutes:

1. Did M. H. Brimmer, manager of M. H. Brimmer Company, deliver said “dead wagon” to Schloss-Bear-Davis Company and pledge it to be security for what was due them by said Brimmer Company ? Answer: Yes.

2. What sum is due to Schloss-Bear-Davis Company by said M. H. Brimmer Company? Answer: $548.75.

3. Was said Brimmer, manager, authorized by directors of said company to pledge its property or any part of same to secure payment of debt to Schloss-Bear-Davis Company? Answer: No.

4. Is petitioner 0. C. Bellamy, receiver, entitled to money .for which said “dead wagon” was sold, by agreement, leaving said money to stand in the place of said wagon? Answer: Yes.

Judgment was rendered in favor of the receiver upon the verdict, and the defendant appealed, assigning the following errors:

1. The court erred in overruling the defendant’s objection to the introduction of the deposition of M. H. Brimmer, as set out in the first exception.

2. The court erred in overruling the defendant’s objection to the question : “State in full the circumstances of your placing the ‘dead wagon’ in the livery stable of Schloss, Bear & Co.,” as set out in the second exception.

3. The court erred in sustaining the objection of the plaintiff to the question: “How much did your concern owe when it went into the hands of a receiver?” as set out in the third exception.

4. The court erred in sustaining the objection of the plaintiff to the question: “I ask you if it was not hopelessly insolvent,” as set out in the fourth exception.

5. The court erred in sustaining the objection of the plaintiff to the question: “I will ask you if you had enough assets in your concern when it went into the hands of a receiver to pay 2 cents on the dollar?” as set out in the fifth exception.

6. The court erred in overruling the defendant’s motion for nonsuit, as set out in the sixth exception.

*4387. Tbe court erred in signing tbe judgment set out in tbe record and in bolding that tbe Sehloss, Bear & Davis Co. did not bold a lien upon tbe “dead wagon,” as set o.ut in tbe seventh exception. •

No counsel for receiver. ■

McGlammy & Burgwyn for defendant:

AlleN, J.

It is not necessary to consider tbe first and second assignments of error because the deposition of M. H. Brimmer bas no bearing upon any issue except tbe first, wbicb was answered in favor of tbe defendant.

Tbe third, fourth, and fifth assignments of error are without merit. Tbe record does not show what would have been tbe answer of tbe witness to tbe questions propounded to him, but if we assume that tbe purpose was to show tbe insolvency of tbe Brimmer Company, this was not relevant to any issue before tbe jury, and it was not in controversy, because tbe record shows that tbe petitioner was appointed receiver on account of insolvency.

Tbe motion for judgment of nonsuit was properly overruled, as it was admitted that tbe Brimmer Company bad bought tbe wagon, and that it was tbe owner, unless tbe defendant could establish that it bad been left in its possession as a pledge, and tbe burden was on the defendant, as bis Honor charged, to satisfy tbe jury of 'the facts upon wbicb it relied to show that it was entitled to retain tbe wagon or its proceeds.

Tbe seventh assignment presents tbe question as to whether tbe verdict is sufficient to support tbe judgment, and there can be no doubt that tbe.answer to tbe fourth issue, standing alone, justified bis Honor in holdiijg that tbe receiver was entitled to tbe proceeds- of tbe sale of tbe wagon, as it so finds in no uncertain language.

It appears, however, that tbe fourth issue was not answered by tbe jury, and that, on tbe contrary, bis Honor submitted only tbe first issue to tbe jury and reserved tbe others to be answered by himself as matters of law, and as there was no evidence of a meeting of tbe directors conferring power on tbe manager to pledge tbe wagon, be answered tbe third issue “No”; and being further of opinion that if there was no meeting of tbe directors, tbe manager was without authority, be answered tbe fourth issue “Yes.”

There is no. specific exception taken to this action of the judge, but it is important as it throws light on tbe trial, and shows that tbe case was tried upon tbe theory that tbe manager was without authority, unless tbe directors by resolution authorized bis action.

*439After tbe first issue was answered, tbe only fact in dispute was wbetber tbe manager, Brimmer, bad authority to make tbe pledge, and if tbis could be shown otherwise than by a resolution of tbe directors, tbe issues are not determinative of tbe controversy, if tbe first is not inconsistent with tbe fourth, and if there is evidence supporting a finding in favor of tbe defendant, on tbe question of authority, tbe judgment ought to be reversed.

Tbe authority of a managing agent is broad (Tiffany Agency, 216), but generally be cannot by virtue of bis office sell, mortgage, or pledge tbe corporate property. Duke v. Markham, 105 N. C., 131; 7 R. C. L., 645; Buckwald Transfer Co. v. Hurst, 19 Ann. Gas., 169, and note.

Tbe rule is not, however, inflexible, and is applied reasonably, taking into consideration the business, the duties to be performed, the relation of the property dealt with to the business and to the other property, the surrounding circumstances and the principle that be “has the implied power, in the absence of express limitations, to do all acts on behalf of the corporation that may be necessary or proper in performing his duties.” Clark on Corporations, 494.

“It is a general principle, applicable in all such cases, wbetber tbe agency be general or special, unless tbe inference is expressly negatived by some fact or circumstance, that it includes tbe authority to employ all tbe usual modes and means of accomplishing tbe purposes and ends of tbe agency, and a slight deviation by tbe agent from tbe course of bis duty will not vitiate bis act, if tbis be immaterial or circumstantial only, and does not, in substance, exceed bis power and duty. Such an agency carries with and includes in it, as an incident, all tbe powers which are necessary, proper, usual and reasonable as means to effectuate tbe purposes for which it was created.” Huntley v. Mathias, 90 N. C., 103.

“Tbe power of an agent, then, to bind bis principal may include not only tbe authority actually ■ conferred, but tbe authority implied as usu'al and necessary to tbe proper performance of tbe work intrusted to bim,' and it may be further extended by reason of acts indicating authority wbicb tbe principal has approved or knowingly or at times even negligently permitted tbe agent to do in tbe course of bis employmebt.” Powell v. L. Co., 168 N. C., 635.

“The principal is held to be liable upon a contract duly made by bis agent with a third person: (1) "When the agent aéts within the scope of bis actual authority. (2) "When the contract, although unauthorized, has been ratified. . (3) When the agent acts within the scope of bis apparent authority, unless the third person has notice that the agent is exceeding bis authority, the term ‘apparent authority’ including the power to do whatever is usually done and necessary to be done in order to carry *440into effect the principal power conferred upon the agent and to transact the business or to execute the commission which has been intrusted to him.” Wynn v. Grant, 166 N. C., 47.

In the application of this doctrine' it was held in Huntley v. Mathias, supra, that an agent traveling through the country to sell engines had implied authority to hire a horse, and in Brittain v. Westall, 137 N. C., 32, that an agent to buy, to whom money had not been furnished, could buy on credit and bind his principal.

It is also well settled that although the agent has no authority, express or implied, that the principal is responsible for his acts if he ratifies them; that taking benefit of the transaction with knowledge is a ratification (Starnes v. R. R., 170 N. C., 224), and that when the agent acts outside of his powers, the principal must adopt the whole transaction or repudiate the whole. “He cannot accept the beneficial part and reject what is left of it.” Pub. Co. v. Barber, 165 N. C., 482.

Is there evidence of authority or ratification?

The Brimmer Company was in business as an undertaker and the defendant company was in the livery business.

The evidence tends to prove that the Brimmer Company did not own horses and carriages, and that they were necessary in the conduct of its business; that it had been hiring from the defendant, and owed it a considerable account; that the defendant refused to permit the further use of the horses and carriages without security; that Brimmer, the manager, then pledged the wagon, and with the understanding that the defendant would continue to furnish the horses and carriages; that the president of the company was told of the pledge and the agreement; that the company continued to hire the horses and carriages and permitted the wagon to remain in possession of the defendant, and that when the defendant went to see the president about the account he said the defendant could hold the wagon until it was paid, the last statement appearing in the recital of the evidence in the charge.

It appears, therefore, that authority to bind the principal may exist without a resolution of the directors, and that ratification is as effectual as previous authority, and as there is evidence of authority and ratification, and no issue was submitted to cover these important contentions of the defendant, there must be a new trial, because, as said in Tucker v. Satterthwaite, 120 N. C., 122, “It is the duty of the judge, either of his own motion or at the suggestion of counsel, to submit such issues as are necessary to settle the material controversies arising in the pleadings, and that in the absence of such issues or admissions of record equivalent thereto sufficient to reasonably justify, directly or by clear implication, the judgment rendered therein, this Court will remand the case for a new trial.”

New trial.