
    Williams v. Stearns et al., Partners.
    
      Agency — Authority of alleged agent assumed from circumstances — ■ Evidence to show previous authority or ratification not competent, when.
    
    .On the trial of issues involving the authority of an alleged agent to make purchases on account of the defendant, evidence that the defendant became guarantor to others than the plaintiff for the payment of the price of similar articles purchased by the alleged agent upon his own account is not competent for the purpose of showing either a previous authority or a ratification.
    (Decided October 11, 1898.)
    Error to the Circuit Court of Crawford county.
    The plaintiff filed his petition in the court of-common pleas against the defendants, Stearns & Hoover, alleging- that on and after July 15, 1892,-they were engaged as contractors in eonstructingthe Columbus and Short Line Railway ; that one Harmon was employed by them as ag-ent to purchase and pay for all lumber, timber and ties that might be needed in such construction, and that one-Brooks was in their employ in connection with and under Harmon “to so licit lumber and timber for said defendants in the construction of said railroad and to draw written orders and bills in favor of the vendors of such lumber, timber and ties, upon the said Harmon for his acceptance and payment thereof over to the holders of such orders and bills that Brooks solicited from the plaintiff timber and ties for the purpose of such construction, and that plaintiff, upon application to Harmon for information touching the authority of Brooks, was informed that he, Harmon, was agent and paymaster of the defendants, and Harmon then requested the plaintiff to let Brooks have such material as he might desire and that he, Harmon, would pay therefor.
    The first cause of action is for the value of material delivered by the plaintiff, and evidenced by an order drawn by Brooks upon Harmon in favor of the plaintiff, and alleged to have been accepted by Harmon, though his acceptance was not endorsed thereon. The second cause 5f action is upon an account for ties alleged to have been by the plaintiff “sold and delivered to the said defendants through their said agents at defendants’ special instance and request, and which ties were used by said defendants in the construction of said railroad.”
    The defendants by their answer admitted that they were partners, engaged at the time alleged in the construction of said railroad, but they deny every other allegation of the petition. A judgment in favor of the plaintiff followed a verdict, and this was reversed by the circuit court for error in the admission of evidence and in the charge. Other portions of the record are stated in the opinion.
    
      L. G. Feig finer, for plaintiff in error.
    That such evidence is competent is beyond question, in the proof of agency. And we maintain that a party may be made liable as principal for the acts of another as his agent, although no agency in fact, exist whenever such party puts himself in relation to a third party that the following maxim will be made applicable to him, towit: “When one of two innocent persons must suffer, the one who first reposed confidence and enabled the loss to be occasioned, shall sustain it.’’
    
      By the testimony of the defendants in error they have fully brought themselves wholly within this maxim, as may be seen from the testimony of Henry Stearns, in the printed record. Fullerton v. Sturges, 4 Ohio St., 534 ; Lessee of Simeon Jennings v. Robert Wood, 20 Ohio St., 266.
    There is no question in this case that the said company received the said lumber, timber and cross-ties of the plaintiff in error. And there is no question but that the said company received the same under the ag-reement and arrangements they had with their said employe, Dr. Harmon. Nor is there any question but that the said company had control of the said business and received the benefit of the same without paying for the same.
    We claim that George W. Brooks was an agent of the defendant company as fully as Goodwin was an agent of the insurance company in the case of Insurance Company v. Eshelman, 30 Ohio St., 656.
    In the ease at the bar the plaintiff in error did not rest his sales on the representations of George W. Brooks but sought out Harmon, the general agent and employe of the defendant company and through his general agent sold his timber to the defendant company.
    Did the court of common pleas err in the admission of evidence showing that the said agent, W. Harmon, made contracts with other persons as such agent, which were ratified by the defendant and payments made thereon, and did the common pleas court err in charging the jury that such evidence was admissible to be weig-hed by it ? Tennessee River Transportation Company v. Kavanaugh et al., 13 Southern Reporter, 283; 2 Greenleaf, 60, ; 1 Amer. & Eng. Enc., 340.
    
      Agency as a question of fact may be proved by the acts, declaration or conduct of the principal and agent. Columbia D. B. Co. v. Geisse, 38 N. J. L., 39.
    Agency will be implied where one party accepts the benefits resulting from the transactions of another party acting as his agent. Milligan v. Davis, 49 Iowa, 126; Veazie v. Williams, 8 How. (U. S.), 134; Foster v. Swasey, 2 W. & M. (U. S.), 217; Hatch v. Taylor, 10 N. H., 538; Fouch v. Wilson, 59 Ind., 93.
    Where a person acts openly and publicly as the agent of a corporation, and in such capacity employed a party to perform certain work, and the work when completed was appropriated and used by the corporation, and the work was done with the knowledge of its agents, held that the agency and authority of such person so permitted to act must be presumed. Rockford, etc., R. Co. v. Wilcox, 66 Ill., 417; Singer, etc., Co. v. Holdfodt, 86 Ill., 455 ; s. c. 29 Am. Rep., 43; Franklin v. Globe, etc., Ins. Co., 52 Mo., 461; Fetchum v. Verdell, 42 Ga., 534; Bank v. Dandridge, 12 Wheat. (U. S.), 64.
    So the statement and dealings of the principal with third person in recognition of the alleged agency are admissible against the principal. Meechem on Agency, section 100.
    Declarations of agents may be considered if there is other evidence of their authority. Holmes v. Holland, 29 W. L. B., 115; Gillingham v. Christen, 55 Ill. App., 17.
    
      Harris, Bears c& Monnett, for defendants in error.
    The plaintiff brings suit on two causes of action.
    
      First — On a bill of exchange for $56.20 to which defendants are strangers.
    
      
      Second — On an account against defendants for $9.00.
    The bill of exchange is drawn by Geo. W. Brooks, on Wm. W. Harmon in favor of H. Williams, the plaintiff.
    We don’t want to get away from the stubborn fact that plaintiff must stand or fall on his written instrument, the contract on which he brought his suit. If he desires to fall back on the consideration for which the bill was given, he is too late. He should have sued on it as an account, and given a copy as required by section 5086.
    Stearns ,& Hoover are strangers to the bill, and how does plaintiff seek to establish their liability on the instrument? His petition answers the question: “Said plaintiff duly presented said bill to the said W. Harmon, who duly accepted the same in behalf of the said defendant.” But it appears that Harmon then and there made a personal promise to pay the acceptance, and told plaintiff when he expected to obtain the means to make his promise good.
    Again what kind of an acceptance could be made by a tstranger to the bill?
    None is pretended in this case — if defendants had been present, they could not accept the draft because it was not drawn against them. At most they could become endorsers and their liability would depend on the subsequent protest of the paper, by demand on Harmon notice to Brooks as drawer and to defendants as endorsers. A parol acceptance of a bill of exchange maybe good if made by a party to the instrument, but there must be special authority for an ag’ent to accept in behalf of his principal and there is no allegation that Harmon had authority to bind anybody but himself.
    
      There is not a word of testimony in the record to show that he had authority to bind defendants by accepting bills of exchange, and more especially to bind them by parol acceptance of a bill to which they were not a party.
    The particular paragraph of the charge under consideration, leaves the jury to infer that evidence had been adduced before it, tending to establish the ratification by.defendants of the acts of Harmon and Brooks, under which plaintiff claims to have a cause of action against the defendants.
    Ratification, as we understand it, operates on the principle of estoppel, and proceeds upon the ground that one knowing all the facts and circumstances of a certain transaction, accepts the benefits of the same, is not in good conscience to be permitted to repudiate the authority of the one by whose act he had been benefited. There is no feature in this case in any way analogous to a supposed case where a person entrusts his name in blank, to another to the full extent to which such other may see fit to bind him, as counsel for plaintiff in error argued, citing there the case of Fullerton v. Sturges, 4 Ohio St., 534, neither can any similarity be traced to the case of one who has place'd it in the pbwer of another person to perpetrate a wrong on the third party. Meechem on Agency, section 100.
    Nor can his-authority be established by showing that he acted as agent, or that he claimed to have the powers which he assumed to exercise. 1 Wash., U. S. C. C., 330; Bacon v. Johnston, 56 Michigan, 182 ; North v. Metz, 57 Michigan, 612; Doonan v. Mitchell, 26 Georgia, 472; McDougald v. Dawson, 30 Alabama, 553; Cobum v. Paine, 36 Maine, 105.
   Shauck, J.

The first cause of action, like the second, was for the value of materials sold and delivered by the plaintiff to the defendants through their agents. It may be that the order was mere evidence not properly set out in the petition, and that the petition stated but one cause of action; but the record does not require the consideration of those questions.

It is apparent that the real contention upon the trial concerned Harmon’s authority ás agent of the defendants, that is, whether his purchases were as their agent, or in fulfillment of his contract to sell and deliver to them construction material at a price agreed upon. Against the objection of the defendants, one Lutz and other witnesses, were permitted to testify, on behalf of the plaintiff, that Harmon and Brooks came to them representing that they had a contract with the defendants to furnish material for the construction of the railroad, and requesting’ the witnesses to get out the material for the unfinished portion of their said contract, that the witnesses then made an arrangement with the defendants whereby the latter undertook to see that the witnesses were paid for such materials as they might furnish pursuant to this request of Harmon and Brooks.

The purpose for which this evidence was supposed to be competent was probably indicated to the jury by the instruction given at the request of the plaintiff, indicated in the record as his third request. The record contains no other evidence to which the instruction could have been thought applicable. That instruction is as follows:

“The jury are further instructed that it is the law of the case that a contract alleged to have been made with defendants’ agent on the question of agency, evidence that the alleged agent had made contracts with other persons as such agent, which were ratified by defendants, is admissible to be weighed by the jury. ’ ’

The error in treating the transactions testified to by these witnesses as ratifications is obvious. There can be no ratification by an alleged principal unless authority to represent him has been assumed by the alleged agent. It is of the essence of ratification that the principal confirms and adopts as his own an act done without his previous authority. In the transaction testified to by these witnesses, Harmon and Brooks did not assume to act as agents for the defendants. To the contrary, their representation was that they were purchasing materials on their own account to fill their contract with the defendants. It was entirely consistent with that representation that the defendants should undertake that Harmon and Brooks should pay for materials so purchased by them. This evidence, therefore, showed neither ratification nor equitable grounds upon which the defendants should be estopped to deny the alleged agency; and the trial court erred both in admitting the evidence and in giving the instruction with respect to it.

Evidence of this character is clearly distinguishable from such as tends to show a holding out to others by the alleged principal of the alleged agent as having authority to represent him with respect to a business which includes the transaction in controversy. That such holding out or recognition may be shown is the point decided in Transportation Company v. Kavanaugh et al., 13 So. Rep., 283, notwithstanding the inadvertent use of the word “ratification” in the syllabus.

It is also insisted by council for the defendants that the trial court erred in admitting the declarations of Harmon to establish his authorifcyas ag’ent. Upon the trial of issues of this character it is competent to show that the alleged agent assumed to act in a representative capacity, but his declarations are not competent to maintain the allegation as to his authority. Perhaps this distinction was not consistently observed in the admission of evidence,,but we cannot see that there was prejudicial error in view of the instruction given to the jury upon the precise point. That the rule might have been stated with more clearness is true, but it was given in the language requested by counsel for the defendants, and the jury could hardly have failed to understand that the authority of an agent cannot be established by his own declarations.

Judgment affi/rmed.  