McGalliard v. J. D. Halstead Lumber Co.

ARCHBALD, J., pro tem.

In the spring of 1927 J. R. Luttrell and wife purchased a lot in Los Angeles for the purpose of improving same with an apartment house. Respondents herein were subcontractors, McGalliard having the contract for brick work and Coker & Taylor, Inc., the contract for the plumbing. Before the work on such contracts was started orders were issued to appellant lumber company by Luttrell and wife in favor of said contractors for the contract price, payable in four installments. On such orders, as stated in appellant’s brief, C. C. Overpeck, “who was employed to handle sales promotion, especially in connection with construction and financing in conformity with the program of the Security Housing Corporation”, imprinted a purported acceptance, using a rubber stamp bearing the name of appellant corporation and signed, “By C. C. Over-peck”. Suit was brought for the unpaid balance due each respondent, and from judgments in their favor these appeals were taken.

The sole question raised is the authority of Overpeck to bind appellant by such acceptances. Appellant is an Arizona corporation, with three directors, J. G. Halstead, the president, and two sons, one of whom, A. E. Halstead, is secretary-treasurer. No express authority was given to make such acceptances, and unless the evidence shows that appellant either intentionally or by want of ordinary care caused an implied authority to he conferred upon Overpeck there would be no support for the findings that appellant accepted and agreed to pay the orders above mentioned.

The first loan of $50,000 was agreed to be advanced by the Security Housing Corporation. The owner, Luttrell, testified that he was given a list of lumber dealers by said housing corporation, “because the first loan was not sufficient and

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the lumber dealers would take care of the second trust deed”. The name of Overpeck “was on the list that the Security Housing Corporation supplied”, testified Luttrell, and “I saw Overpeck and talked with him about the deal. ... A clerk said that he was credit manager and sent me to see Overpeck. ... I took up the matter of the loan with Overpeck of the Halstead Lumber Company”. Apparently thereafter and on the sixth day of July, 1927, two trust deeds for $50,000 and $25,000 respectively were made. Appellant was the beneficiary under the first of these two. The application for the $25,000 loan is on a blank of the J. D. Halstead Lumber Company and is apparently made to it. In the commitment of the housing corporation to make the loan that company purchased the note secured by the first trust deed for the agreed sum of $50,000, to be paid as follows: 12% per cent when foundation was in, etc., 12% per cent when building was completely framed and roofed, 25 per cent when interior was plastered, etc., and 25 per cent when building was substantially ready for occupancy, the balance to be paid “after notice of completion has been filed and the improvements have been finally approved by the Corporation”. By acceptance of the commitment the lumber company guaranteed the payment of any liens prior to such deed of trust. The commitment was accepted by appellant July 11, 1927. The two trust deeds and accompanying notes were escrowed with the Metropolitan Trust Company under instructions signed by the Luttrells and appellant. With regard to the “papers” and the escrow, Mr. Luttrell testified that when the instruments were made out he took them to his wife, “and then I went over to the J. D. Halstead Lumber Company and signed the papers. ... I had no agreement except through Overpeck. Overpeck handled the escrow instructions. I had no other dealings with anybody in the Halstead Lumber Company. All of my dealings were with Overpeck. I did not come in contact with either of the Halsteads until the building was almost completed. I explained to Green, a salesman for Coker & Taylor, that the money would not be paid out except on orders at the time he gave me the bid. The work started approximately when the orders were issued”. With regard to the orders made out to respondents and other subcontractors, Luttrell said: “He [Overpeck] requested me to