Opinion
7 Div. 10.
May 13, 1970.
Appeal from the Circuit Court, Etowah County, George Murphy, J.
Lusk, Swann, Burns Stivender, and George B. White, Jr., Gadsden, for appellant.
The expression apparent authority, as well as its variant, ostensible authority, are defined as connoting that authority which a principal permits his agent to exercise or to represent himself as possessing, under such circumstances as to estop the principal from denying its existence. Patterson v. Williams, 206 Ala. 527, 91 So. 315; J. C. Lysle Milling Co. v. North Ala. Groc. Co., 201 Ala. 222, 77 So. 748; Goldfield v. Brewbaker Motors, 36 Ala. App. 152, 54 So.2d 797; Id., 256 Ala. 383, 54 So.2d 800. The field of power within which an agent's acts or statements will operate to create obligations against the principal in favor of third persons or affect his relation or status with reference to them is not confined to the authority actually bestowed upon the agent, but extends, in the absence of countervailing notice or knowledge, to embrace whatever comes within the scope of his apparent or ostentible authority, which is the governing consideration. Patterson v. Williams, 206 Ala. 527, 91 So. 315; Sayers v. Boyles, 280 Ala. 153, 190 So.2d 707; Railway Express Agency v. Luverne Bank Trust Co., 30 Ala. App. 172, 2 So.2d 787; Id., 241 Ala. 352, 2 So.2d 790. Whenever the principal, by statements or conduct, places the agent in a position where he appears to be acting for the principal, or without interference suffers the agent to assume such a position, and thereby justifies those dealing with the agent to believe that he is acting within his mandate, an apparent authority results which replaces that actually conferred as the basis for determining rights and liabilities. Langham v. Jackson, 211 Ala. 416, 100 So. 757; Ala. Mills v. Smith, 237 Ala. 296, 186 So. 699; 2 C.J.S. Agency § 96, p. 1210, n. 95. The general rule, that the nature and extent of the authority of an agent and whether the act or conduct in controversy was within the scope of his authority are questions of fact to be determined by the jury, is applicable to questions of apparent or ostensible authority. Birmingham News Co. v. Birmingham Printing Co., 213 Ala. 256, 104 So. 506; 3 C.J.S. Agency § 330, pp. 329-330, n. 79.
Inzer, Martin, Suttle Inzer, Gadsden, for appellees.
The apparent power of an agent is to be determined by the acts of the principal, and not by the acts of the agent; a principal is responsible for the acts of an agent within his apparent authority only where the principal by his acts or conduct has clothed the agent with the appearance of authority, and not where the agent's own conduct and statements have created the apparent authority. 3 Am.Jur.2d, p. 476, Sec. 74. In order to charge the principal because of apparent authority, a third party must prove that the principal manifested indicia of having cloaked the agent with authority. Restatement, 2d, Agency, Sec. 49; Owens v. Wood, 43 Ala. App. 366, 190 So.2d 734. All prior negotiations were merged into written contract purporting to cover entire transaction. W. T. Rawleigh Co. v. Cone, 232 Ala. 127, 173 So. 233; Worthington v. Davis, 208 Ala. 600, 609, 94 So. 806. Where there exists between parties a written contract, parol evidence cannot be received to explain, contradict, vary, add to, or subtract from its terms. Hartford Fire Ins. Co. v. Shapiro, 270 Ala. 149, 117 So.2d 348; Miles v. Sledge, 157 Ala. 528, 47 So. 595; W. T. Rawleigh Co. v. Phillips, 232 Ala. 124, 167 So. 271; Worthington v. Davis, 208 Ala. 600, 609, 94 So. 806. When the agent of one party is appointed the agent of another in adverse interest for a certain purpose, each party stands in the relation of principal as to the matters entrusted by him to the agent. Thigpen v. Arant, 213 Ala. 516, 105 So. 644; 2 C.J., p. 448, Sec. 47. Where borrower contracts with broker to procure a loan, and agrees to pay the broker a brokerage fee or commission for negotiating the loan, he thereby constitutes the broker as his agent. Florence v. Carr, 226 Ala. 654, 148 So. 148; Land Mortgage Investment Agency Co. v. Preston, 119 Ala. 290, 24 So. 707; American Mortgage Co. v. King, 105 Ala. 358, 16 So. 889; Hamil v. American Freehold Land Mortgage Co., 127 Ala. 90, 28 So. 558; Land Mortgage Investment Agency Co. v. Vinson, 105 Ala. 389, 17 So. 23; Thompson v. Atchley, 201 Ala. 398, 78 So. 196.
This is a suit filed by McGuffey's Nursing Home, Inc., a corporation, against Henry F. Taylor and Provident Life and Accident Insurance Company, seeking to recover damages for breach of contract.
The plaintiff was in the process of expanding the nursing home and was seeking financial backing to accomplish this expansion. One of the administrative assistants of the nursing home contacted Taylor in an effort to induce him to arrange the financing through Provident. Taylor agreed to use his influence with Provident and try to arrange the financing. Taylor told McGuffey's officers that a standby fee of $7,500.00 was required and that if the loan was approved and McGuffey went through with it, then the standby fee would be returned. Taylor also stated that if the loan was not approved by Provident then McGuffey's standby fee would be refunded. The nursing home did not get the loan from Provident and the $7,500.00 standby fee was not returned to McGuffey.
The evidence showed that the check in the amount of $7,500.00, as a standby fee, was made payable to Taylor and was deposited in his account. Testimony received during the course of the trial showed that other than one phone call from Taylor to Provident inquiring about the loan possibilities, Provident knew nothing about the loan or the standby fee. No proof was made that Provident received any part of the $7,500.00 and there was no showing that Taylor ever contacted Provident about the loan again. The damages for which McGuffey sued was for the failure of Taylor and Provident to refund the standby fee.
At the conclusion of the evidence the court gave the requested affirmative charge with hypothesis in favor of Provident and against Taylor, and the case was submitted to the jury. The jury returned a verdict in favor of the plaintiff and against the defendant Taylor in the amount of $8,175.00.
The plaintiff then filed a general motion for a new trial seeking to set aside the verdict of the jury and the judgment of the court. The motion for a new trial was overruled and the plaintiff appeals.
There are two assignments of error on this appeal. The first assignment is based upon the trial court giving to the jury the affirmative charge, with hypothesis, in favor of Provident. Assignment No. 2 is based upon the action of the trial court in overruling and denying plaintiff's motion for a new trial. We consider these two assignments together as one argument.
The evidence presented by the plaintiff during the trial of the case consisted of testimony of plaintiff's witnesses, photographs of Taylor's office, a written agreement entered into by McGuffey and Taylor and the canceled check in the amount of $7,500.00 made payable to Taylor.
We have thoroughly examined the testimony and exhibits contained in the transcript and we do not find a scintilla of evidence tending to prove the apparent authority of Henry Taylor as agent for Provident. The photographs of Taylor's office show Provident's name with Taylor's name under it. The testimony does not show that Provident provided this sign or even knew of its existence. Therefore, being confined to the record as we are, we do not think these photographs offer any proof of the agency relation which would render Provident liable to McGuffey for Taylor's actions and promises.
The written agreement entered into by McGuffey and Taylor established Taylor as the agent for McGuffey and not as the agent for Provident. All prior negotiations are merged into the written contract purporting to cover the entire transaction. W. T. Rawleigh Co. v. Cone, 232 Ala. 127, 167 So. 274. The written agreement was the best evidence of the arrangement between McGuffey and Taylor and parol evidence could not be received to explain, contradict, vary, add to, or subtract from its terms. Hartford Fire Ins. Co. v. Shapiro, 270 Ala. 149, 117 So.2d 348.
It is undisputed that McGuffey contracted with Taylor for the latter to lend his assistance in obtaining for McGuffey financial help from Provident in order to expand the nursing home. McGuffey sought out Taylor and solicited his help. The employment contract, which is in evidence, between Provident and Taylor limited Taylor's authority to matters involving life insurance and the procuring of soliciting agents. Even though Taylor was Provident's agent as to some matters, Taylor was McGuffey's agent in its effort to procure a loan from Provident. This case is analogous to the case of Thigpen v. Arant, 213 Ala. 516, 518, 105 So. 644, 646, wherein the court stated as follows:
"Crumpton was Thigpen's general agent to collect his mortgage dues, but in the matter of obtaining a loan for Moye from Peagler, which Moye intended should be applied in satisfaction of Thigpen's mortgage, it is clear that he was the agent of Moye. American Mortgage Co. v. King, 105 Ala. 358, 16 So. 889; * * * Assuming that the 'money was left with Crumpton to pay Thigpen,' as Moye testifies, in the matter of transmitting the money to Thigpen he was still the agent of Moye. When the agent of one party is appointed the agent of another in adverse interest for a certain purpose, each party stands in the relation of principal as to the matters intrusted by him to the agent. * * * In the matter of getting the loan from Peagler and transmitting the money to Thigpen it would seem that Crumpton's first duty was to Moye, for that was the purpose of his special appointment by Moye, and that the consequences of his dereliction in the performance of that duty, by reason of which the money failed to reach its destination, should not be visited upon Thigpen, who knew nothing of the matter."
Also, in Florence v. Carr, 226 Ala. 654, 656, 148 So. 148, 149, the Supreme Court said:
"The cases in this jurisdiction — on agency — and applicable here are to the effect that where one desiring a loan makes known that desire to another who applies to the lender and consummates the loan, the intermediary is prima facie the agent of the borrower and not of the lender, * * *"
Therefore, for the reasons hereinabove stated, we hold that the trial judge was correct in giving the affirmative charge with hypothesis at the request of Provident and was also correct in overruling plaintiff's motion for a new trial.
Affirmed.