Harris v. San Diego Flume Co.

California Supreme Court Jan 30, 1891 No. No. 13998Published

Before: Hayne

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Holding. The court held that the defendant corporation was not liable for the plaintiff's brokerage fees because the agent lacked both actual and ostensible authority to hire the broker, and the defendant did not knowingly accept the benefits of the services.

Issues

Whether the defendant's superintendent had ostensible authority to employ the plaintiff as a broker.
Whether the superintendent had actual or implied authority to employ a broker to secure a construction contractor.
Whether the defendant is liable for the value of services rendered when it was unaware of the unauthorized employment arrangement.

Disposition. affirmed

Quotations verified verbatim against the opinion

“Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.”

“A belief founded on the agent’s statements is not sufficient; for a party has no right to take the agent’s word for the existence of his authority.”

“We are not able to say that the employment of a high-priced broker is “necessary, or proper and usual, in the ordinary course of business,” for finding a contractor to build a flume.”

Synopsis

Principal and Agent — Ostensible Authority. — To make a case o£ ostensible authority, the act giving color of authority to the supposed agent must be known to the person who dealt with him, and must induce a belief in the mind of such person that the authority exists. If he does not know of any facts giving color of authority to the supposed agent, hut relies wholly upon the statements of the latter as to the existence of his authority, he cannot recover, although facts existed which, had he known them, might have justified belief in the existence of the authority.

Id. — Burden oe Proof. — The party maintaining that an ostensible authority existed must prove that he knew of the facts giving color of authority to the supposed agent. A mere surmise that he knew them is not sufficient.

Principal and Agent — Implied Authority — Burden of Proof. — While an agent has implied authority to do everything necessary, or proper and usual, in the ordinary course of business, for effecting the purpose of his agency, the party maintaining the existence of the agency must make it appear that the thing done was necessary, or proper and usual, etc.

Id. ■— Judicial Notice. — The court cannot know judicially that the employment of a high-priced broker is necessary, or proper and usual, in the ordinary course of business, to get a contractor to enter into a contract for building a flume.

Hayne, C. This was an action to recover five thousand dollars as brokerage for negotiating a contract. The complaint contained two counts, but the plaintiff elected to go to trial upon a quantum meruit. The trial court gave judgment for the defendant, and the plaiutiff appeals.

The principal question discussed by counsel relates to the authority of the person who employed the plaintiff.

The defendant was a corporation “to construct and operate a flume for the transmitting of water.” At the period in question its flume had not been constructed.

The engineering work was being done, and the business of acquiring rights of way, etc., was being attended to. In the beginning of August, 1886, the company sent its superintendent, one W. E. Robinson, to San Francisco to negotiate a contract for the construction of the flume. He employed the plaintiff as broker to find a contractor, and through the plaintiff’s exertions a suitable person was found. The claim is for compensation for services as such broker.

1. The defendant cannot be held on the ground of ostensible or apparent authority. There is evidence to the effect that in the county of San Diego Robinson was permitted by the company to do things outside of his ordinary duties as superintendent. And the plaintiff’s son, who was an engineer in the employment of the company, testified that on the eve of Robinson’s departure for San Francisco the president told him that Robinson “had full authority ” to enter into contracts. This latter evidence is contradicted. The former is not. But neither is ground for a decision in favor of plaintiff on the theory of an ostensible or apparent authority; for it does not appear either that the alleged statement of the president was communicated to the plaintiff, or that he was aware of the latitude which had been permitted Robinson in San Diego. It may possibly be surmised that he had [528]knowledge of the circumstances; hut the fact is not stated, and a mere surmise is not sufficient. “Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to possess.” (Civ. Code, sec. 2317.)

There are two essential features of an authority of this character; viz., the party must believe that the agent had authority, and such belief must be generated by some act or neglect of the person to be held. A belief founded on the agent’s statements is not sufficient; for a party has no right to take the agent’s word for the existence of his authority. In the case before us, as above stated, it does not appear that the acts of the company which are supposed to have been sufficient to justify a belief in Robinson’s authority were known to the plaintiff; and if not, they could not have generated in his mind any belief on the subject of the agency.

Harris v. San Diego Flume Co.

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