Mitrovich v. Fresno Fruit Packing Co.

California Supreme Court Jan 24, 1899 No. Sac. No. 317Published

Before: Britt

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Holding. The court held that the trial court committed reversible error by providing an instruction that allowed the jury to infer an agent's authority to purchase goods based solely on the agent's silence regarding limitations on his power.

Issues

Whether the complaint sufficiently alleged a cause of action for the sale and delivery of goods despite references to a prior partnership contract.
Whether an agent can bind a principal to a contract by failing to disclose limitations on his authority.
Whether the jury instruction regarding the scope of the agent's authority was legally erroneous.

Disposition. reversed

Quotations verified verbatim against the opinion

“If the instruction was designed to convey to the jury information on the subject of a “holding out” of Dunlap by defendant as an agent having authority to purchase, it was very misleading”

“As an agent cannot bind his principal by any express definition of his agency (Civ. Code, sec. 2322), so he certainly cannot by mere silence concerning limitations on his authority render such limitations ineffective.”

Synopsis

Sale of Fig Crop — Contract with Partnership—Incorporation— Novation—Pleading.—In an action to recover the agreed price of a crop of figs sold and delivered, in which the complaint alleges a sale and delivery of the figs at the agreed price directly to the defendant corporation, averments therein regarding a previous contract with a partnership whose members formed the corporation, are but of evidentiary matter, and might have been omitted. Such complaint is not demurrable for not alleging a novation of the contract and a release of the partnership from its obligations.

Id.—Assumption of Obligations of Partnership by Corporation—Release of Partnership not Essential.—Where it appears that the corporation succeeded directly to the business of the partnership, and assumed the duties of the partnership in reference to the figs which it received from the plaintiff, it is not essential to plaintiff’s right of action against the corporation that there should have been a formal novation of the corporation in the contract, and a release of the partnership from liability thereon.

Id.—Contract by Agent—Authority to Exercise Option to Purchase —Failure to Disclose Limitations—Instruction.—Where the evidence was conflicting as to the authority of an agent of the defendant corporation, who received a delivery of figs, to exercise an option given by the contract with the partnership to purchase the crop of figs at time of delivery, at the agreed market value, it was erroneous for the court to instruct the jury that if such agent did not disclose any limitations upon his authority to contract with the plaintiff, and the plaintiff did not know that he was not authorized to contract for the purchase of the figs, and that if he contracted for the purchase of the figs, on behalf of the defendant, they should find for the plaintiff.

Id.—Limitations upon Authority—Power of Agent.—An agent cannot bind his principal by any express definition of his agency, and cannot by mere silence concerning limitations upon his authority render such limitations ineffective; nor can it he inferred that an agent possesses power to purchase goods from the mere fact that he was an agent to represent the partnership or the corporation in some undefined dealing with the owner regarding the same.

BRITT, C. Four certain persons were copartners, and in that capacity, on June 37, 1895, they entered into a contract in writing with Mitrovich, the plaintiff in this action, whereby [381]he agreed to deliver to them the crop of figs to he obtained that, season from a certain orchard, and authorized them to pack and sell the same on his account for specified compensation; the dutics of which employment they on their part undertook to-discharge. Said contract contained also a provision allowing-to said partnership “the privilege of purchasing said described' figs at time of delivery at the agreed market value.” About. August 21st, following, three of said partners, together with two. other persons, formed a corporation under the same name which had been the partnership designation—Fresno Fruit Packing-Company. This is an action against said corporation; plaintiff’s-complaint contains three counts; in the first it is alleged, among; other things, that defendant “succeeded to all business relations,, interests, and liabilities of said partnership, and, in pursuance-of the terms of said contract, exercised its privilege and option; to, and did, buy of and from, said plaintiff, and plaintiff sold and. delivered to said defendant corporation,” twenty-one thousand two hundred and fifty-four pounds of said figs at certain prices-agreed upon, for which a balance specified remains unpaid.. There was a verdict in plaintiff’s favor for a few dollars less than the aggregate of the sums demanded on his several alleged! causes of action, and judgment was rendered accordingly. The-evidence at the trial concerning plaintiff’s right to recover on-the second and third counts was conflicting, and they are of little or no consequence in the appeal. The matters for our-consideration concern the first count of the complaint, which was the foundation of the greater part of the recovery.

Defendant claims that said first count (to which he demurred)-is bad both in form and substance in that it does not show with-certainty or at all a novation of defendant for the partnership of the same name in the contract of June 27, 1895; that there-could be no novation without a release of the partnership from the obligations of the contract, and that no such release is-averred. But, as we read the pleading, it alleges a sale and delivery of the figs by plaintiff directly to defendant at agreed prices; the averments regarding the previous contract with the-partnership and the relation of defendant to that contract are-but evidentiary matter and might as well—and better—have-been omitted. If, therefore, any uncertainty exists in the plead

Mitrovich v. Fresno Fruit Packing Co.

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