Cue Oil Co. v. Fornea Oil Co.

Full title: CUE OIL CO. v. FORNEA OIL CO., INC

Court: Supreme Court of Mississippi, In Banc

Date published: Apr 10, 1950

45 So. 2d 597 (Miss. 1950)

45 So. 2d 597

Opinion

No. 37450.

April 10, 1950.

1. Principal and agent — apparent authority of agent — proof of isolated transactions — customary conduct, when not sufficient.

When it is attempted to show the apparent authority of an agent to borrow petroleum products from another company for the principal's account, it is not sufficient to prove isolated instances of such conduct on the agent's part when there was no proof that the principal knew of it, nor is it sufficient to show that this was customary unless the proof further shows that it was so prevalent as to put the principal on such notice of it as to be sufficient to establish his acquiescence in or ratification of it.

2. Principal and agent — agency with limited authority — liability of principal — burden of proof — declarations of agent.

An agency with limited authority may be created and a principal is liable for the acts of his agent only when that agent acts within the actual or apparent scope of his authority, and the burden of proof is on the claimant to show that authority and this may not be proved by the extrajudicial declarations of the agent.

3. Principal and agent — lack of actual or apparent authority of agent — acquiescence or ratification by principal, no proof of.

When the agent had no actual or apparent authority to purchase gasoline or other products from another company for the principal's account and there was no proof that the principal had acquiesced in or ratified the unauthorized transactions sufficient to overcome the lack of actual or apparent authority it was error, in an action against the principal, to refuse his request for a directed verdict.

Headnotes as approved by Lee, J.

APPEAL from the circuit court of Pearl River County; J.C. SHIVERS, Judge.

Gex Gex, Thigpen Stewart and W.E. Gore, for appellant.

The plaintiff in this case wholly failed to show that Taylor was the general agent of the defendant, with authority either to buy or to borrow gasoline from other distributors.

Cue, the president and manager of the defendant, testified positively that he had no such authority and the record does not contain any competent proof or circumstances to indicate that he had any such authority. Moreover, the plaintiff did not pretend to show that any act of Taylor's was ratified by the defendant or that the course of dealing between him and Fornea Oil Company was ever even brought to the attention of the defendant, until after Taylor absconded.

The burden of proof was on the plaintiff to establish the agency of Taylor and the scope of his authority. This the plaintiff wholly failed to do. The fact of agency cannot be proved by declarations of the agent. Heyman v. Dillard, 1 Miss. Dec. 195; Memphis Vicksburg Railway Co. v. Cock, 64 Miss. 713; Therrell v. Ellis, 83 Miss. 494; Sumrall v. Kitselman Bros., 101 Miss. 783; Gulfport Mississippi Coast Traction Co. v. Faulk, 118 Miss. 894; Postal Telegraph Cable Co. v. Friedhof, 127 Miss. 498; Walters v. Stonewall Cotton Mills, 136 Miss. 361; Columbus Greenville Ry. Co. v. Mississippi Clinic, 153 Miss. 29; Sumter Lumber Co. v. Hook, 184 So. 70; Fanning v. C.I.T. Corp., 187 Miss. 45; Byrd v. Anderson-Tully Co., 6 So.2d 319; National Cash Register Co. v. Giffin, 192 Miss. 556; Foye Tie Timber Co. v. Nicholas, 128 Miss. 709; McCaskey Reg. Co. v. Swor, 154 Miss. 396.

The case of the plaintiff is based on an acknowledged criminal act, to which the defendant was not a party. Even if it had been a party to the violation of the criminal statute, no relief would be given to the plaintiff. As it has been expressed by this Court, it will not serve as the handmaiden of iniquity.

The trial court expressed himself as having no patience with the enforcement of this principle of law and the justice of the position is debatable but the law is settled.

One of the writers of this brief took it full in the face in Whelchel v. Stennett, et al., 192 Miss. 241. We invite the Court's attention to the following cases: Creath's Administrator v. Sims, 46 U.S. 192, 12 L.Ed. 111; McWilliams v. Phillips, 51 Miss. 196; Wooten v. Miller, 7 S. M. 380; Dean's v. McLendon, 30 Miss. 343; Bellew v. Williams, 109 Miss. 74.

Courts were established to execute the laws, not to aid in their violation, and hence will not enforce a contract based on an immoral or illegal object. Mitchell v. Campbell, 111 Miss. 806; American Manufacturing Co. v. Crescent Drug Co., 113 Miss. 130, L.R.A. 1917D 482; Lowenberg v. Klein, 125 Miss. 284; Whittington v. Cottam Co., 158 Miss. 847; Green v. Brown, 159 Miss. 893; Hoover v. Pierce, 26 Miss. 627; Weaver Co. v. Phares, 185 Miss. 224; Independent Linen Service Co. v. Sennett, 194 Miss. 366.

Courts will not enforce a contract based on an immoral consideration, such as the sale of household goods to a defendant conducting a house of ill fame, since, as this Court expressed it, no court of justice can be made the handmaiden of iniquity. Ham v. Wilson, 123 Miss. 510.

Where a merchant sells furniture on credit to a keeper of a house of ill fame, for use in the business, with knowledge of the use and of the buyer's character, and the evidence shows that there was no means of payment other than the proceeds of the illegal business, the contract is contrary to public policy and the seller cannot recover the property's value. Menger v. Thompson, 123 Miss. 455.

The peremptory instruction should have been given on either of two grounds, the failure of the plaintiff to establish the agency of Taylor and the illegality of the whole transaction.

J.E. Stockstill, for appellee.

Lee, J.

Fornea Oil Company sued Cue Oil Company to recover a sum of money. From a jury verdict for the amount sued for, and a judgment thereon, the latter appeals.

Appellee was a partnership, handling Sinclair products, with a bulk plant in the Town of Picayune. The appellant was a corporation, handling Shell products, with its principal office at Bay St. Louis, and having a bulk plant also in the Town of Picayune, with one Taylor as its agent over the bulk plant. This agent worked on a commission basis. The appellant delivered Shell products to him at its bulk plant. His sole duties were to sell and deliver these products at retail stations, collect the money, and remit to the home office. In the case of approved customers, he simply delivered the products, and those customers made their remittances direct to the company. Taylor had no authority whatever to buy these products, or any products for the bulk plant.

Taylor had an independent service station, and he could, for that station, buy or use whatever products he desired.

Over a period of about ten days in the latter part of July, 1947, Taylor, from appellee's bulk plant, obtained about eight loads of gasoline, aggregating 4,200 gallons, and other products, of the value of $799.47. These were Sinclair products, and were delivered into his tank truck, on which Shell was painted. Appellee claimed that this was a loan, because Taylor represented that appellant's delivery truck was broken down. On the contrary, appellant asserted that its delivery truck was not broken down, — that it delivered the products when and as it became necessary, and that public transports were available in that contingency. In the first place, Taylor had no right to borrow, but, in the second place, if he had done so and used such borrowings for appellant's benefit, there would have been an overplus in his account. Instead of an overplus, Taylor was always in arrears — he did not account for all the products which appellant sent him.

(Hn 1) Appellee undertook to show that interchange of petroleum products had taken place previously. Once or twice, Taylor's predecessor borrowed gasoline from another company, but it was returned on the following day, and appellant had no notice thereof. Another instance of like import was shown, but appellant was not apprised of this transaction. Appellee offered proof of several like deals, as where they would lend today and a return would be made tomorrow. But in none of these cases was there any proof that these deals were called to the attention of appellant. Nor was the proof sufficient to show that this custom was so prevalent as to put appellant on notice sufficient to establish acquiescence or ratification. Taylor betook himself to other parts and did not testify in the trial.

A number of errors are assigned, but in view of our conclusion, we deal here with the question of agency only.

(Hn 2) It is elemental that an agent of limited authority can be created. Gulfport Mississippi Coast Traction Co. v. Faulk, 118 Miss. 894, 80 So. 340. The burden is on the claimant to show the authority of the agent. National Cash Register Co. v. Giffin, 192 Misc. 556, 6 So.2d 605; McCaskey Register Co. v. Swor, 154 Miss. 396, 122 So. 489, 753. It is further elemental that such authority may not be proved by the declaration of the agent outside of court. Walters v. Stonewall Cotton Mills, 136 Miss. 361, 101 So. 495. Of course, a principal is liable for the act of his agent done within the actual or apparent scope of his authority. (Hn 3) Since Taylor had no actual or apparent authority to purchase gasoline or other products, it follows that a purchase or loan of Sinclair products was contrary to his actual authority and not within the apparent scope of his authority.

Neither was there any proof of acquiescence or ratification of these unauthorized transactions by the appellant sufficient to overcome the lack of actual or apparent authority. Foye Tie Timber Co. v. Nicholas, 128 Miss. 709, 91 So. 395; 2 Am. Jur. 272, 3 C.J.S., Agency, Section 242, p. 166.

From the views stated herein, it follows that we think the trial court erred in refusing to grant appellant's request for a directed verdict.

Reversed and rendered.