Opinion
35734.
DECIDED JULY 5, 1955.
Open account. Before Judge Paschall. Whitfield Superior Court. March 15, 1955.
Adams McDonald, for plaintiff in error.
Hardin McCamy, contra.
1. The mere recording of a contract, between a principal and an agent, in the office of the clerk of the superior court, is not sufficient to relieve an agent of personal liability as to customers who did not know of the provisions of such contract. The agent is personally liable in such an instance for the amount of the purchases he made.
2. Even though the sustaining of demurrers to a plea and answer be erroneous, if on the trial the court permits evidence of the defendant to be submitted to the jury regarding the same issue, which the court in effect excluded in sustaining the demurrers, and in his charge presents to the jury such issue, the errors in sustaining the demurrers become harmless.
3. Under all the pleadings and the facts of this case, the evidence was sufficient to sustain the verdict as to the general grounds.
4. The special grounds show no reversible error, for the reasons given in the opinion.
DECIDED JULY 5, 1955.
Douglas Kersh and Mrs. Dorothy Kersh, d/b/a Dixie Building Supply Company (whom we shall designate as the plaintiffs), filed suit against L. M. Babb (whom we shall designate as the defendant). The plaintiffs entered suit for $388.70 on an open account. The defendant filed his plea and answer denying any indebtedness, and further answered as follows: "4. For further plea and answer defendant shows that the debt, if any, is owed by Henry L. Whitaker, trading as Dalton Manufacturing Company, and the defendant further shows:
"5. That prior to December 9, 1952, Henry L. Whitaker became indebted to the defendant in the sum of $6,750, and in order to secure said indebtedness to the defendant, said Henry L. Whitaker had his attorney prepare a bill of sale to secure debt and an irrevocable power of attorney as general agent and manager of the place of business of Henry L. Whitaker, then in Dalton, Georgia, know as Dalton Manufacturing Company, conveying the equipment of Dalton Manufacturing Company to L. M. Babb to secure said debt, and therein naming said L. M. Babb as general manager of said business at a stated salary of $50 per week, it being expressly stated in said instrument that when the indebtedness owned by Henry L. Whitaker to L. M. Babb was paid the said agency appointment would be terminated, but debt was not paid.
"6. Said Henry L. Whitaker executed said bill of sale to secure debt before a notary public and the same was properly recorded in the public records of Whitfield County, Georgia, in Mortgage Book 41, pages 11, 13 of Whitfield County, Georgia. Said instrument was recorded on December 23, 1952, and prior to the date of the debt sued on. Expressly stated in said instrument and being a part thereof appears the following stipulation: "It is understood that second party shall, in the management and operation of Dalton Manufacturing Company act as agent and attorney in fact only and does not hereby assume any personal obligations or liability.' The defendant further shows that he is the person referred to in said quoted matter as `second party.'
"7. Defendant further shows that at no time has he held himself out to the plaintiffs as the owner of said business, and no time did he agree to pay said debt, or request that the same be charged to him.
"8. Defendant further shows that the plaintiffs had notice that defendant herein was only acting as agent of Henry L. Whitaker, trading as Dalton Manufacturing Company.
"9. Defendant further shows that none of the material sued for was received by the defendant personally, but that such was delivered to Henry L. Whitaker, trading as Dalton Manufacturing Company."
The plaintiffs demurred to the answer, and for grounds of demurrer said: "1. Plaintiffs demur specially to the allegations of paragraph 5 of the answer, in their entirety, and move the court to strike said paragraph upon the ground that the allegations thereof are immaterial and irrelevant, and set forth no defense, or element of defense, to the claim sued upon, there being no reason in law why the defendant, L. M. Babb, if he were general manager of Dalton Manufacturing Company, as alleged, would not be liable for an individual undertaking, it not being alleged in said paragraph, or elsewhere in the answer, that credit was extended to the defendant, L. M. Babb, in any capacity other than in an individual capacity.
"2. Plaintiffs demur specially to the allegations of paragraph 6 of the answer, to wit: `Said instrument was recorded on December 23, 1952, and prior to the date of the debt sued on. Expressly stated in said instrument and being a part thereof appears the following stipulation: "It is understood that second party shall, in the management and operation of Dalton Manufacturing Company act as agent and attorney in fact only and does not hereby assume any personal obligation or liability." The defendant further shows that he is the person referred to in said quoted matter as "second party",' and moves the court to strike such allegations upon the ground that the same are immaterial and irrelevant and constitute no defense, or any element of defense, for the reason that the appointment of an attorney in fact by inclusion of such appointment in a recorded bill of sale does not constitute notice to third persons of agency, as a matter of law; upon the further ground that the language quoted is a matter of contractual relationship between the vendor and vendee, binding only upon them, as a matter of law, and cannot affect the rights of third persons dealing with the vendee as an individual purchaser.
"3. Plaintiffs demur specially to the allegations of paragraph 6 of the complaint, in their entirety, and move the court to strike the same, upon the ground that the allegations thereof are immaterial and irrelevant, and set forth no defense, or element of defense, it not being alleged in said paragraph, or elsewhere in the answer, that the defendant, L. M. Babb, was acting as agent for the alleged principal, H. L. Whitaker, nor it being alleged in said paragraph, or elsewhere in the answer, that credit was extended to H. L. Whitaker, by the plaintiff sellers.
"4. Plaintiffs demur specially to the allegation of paragraph 7 of the answer, in their entirety, and move the court to strike said paragraph, upon the ground that the same fails to set forth any defense, or element of defense, to the claim sued upon, it not being alleged in said paragraph, or elsewhere in the answer, that the defendant, L. M. Babb, informed the plaintiff sellers that he was purchasing the goods sold by plaintiffs to him as an agent of H. L. Whitaker, and that the plaintiffs, acting upon such information, extended credit to the alleged principal, H. L. Whitaker; that in the absence of such allegations, the same fails to set forth any legal defense to the suit.
"5. Plaintiffs demur specially to the allegations of paragraph 8 of the complaint, in their entirety, and move the court to strike said paragraph, upon the ground that the same constitute mere conclusions of the pleader, it not being alleged in said paragraph, or elsewhere in the answer, how or in what manner any notice was brought to the plaintiffs, either through the defendant, L. M. Babb, or any other person, that the defendant, L. M. Babb, was purchasing as an agent of H. L. Whitaker, and there being no allegation in said paragraph, or elsewhere in the answer, that the defendant, L. M. Babb, held himself out to plaintiffs as an agent of H. L. Whitaker.
"6. Plaintiffs demur specially to the allegations of paragraph 9 of the complaint, in their entirety, and move the court to strike said paragraph, upon the ground that the allegations thereof are immaterial and irrelevant, the fact of delivery to a person other than the purchaser, as alleged, constituting no defense, in the absence of allegations that the purchase was made by L. M. Babb, as agent, and that credit was extended to H. L. Whitaker, alleged principal; that in the absence of such allegations, the paragraph demurred to should be stricken."
The petition was filed on December 15, 1953. The defendant amended his answer three times: On January 8, 1954, on March 23, 1954, and on April 5, 1954.
The amendment of January 8, 1954, reads: "1. Defendant amends paragraph 6 of his plea and answer by adding the following to the end thereof:
"`After the execution of the said bill of sale to secure debt was executed, the defendant entered said Dalton Manufacturing Company as agent for Henry L. Whitaker aforesaid and acted only in the capacity of such agent in all dealings with the plaintiffs in this case.'
"2. Defendant amends paragraph 7 of this plea and answer by adding the following to the end thereof:
"`Defendant says that he did not personally order the merchandise for which charge is made in this suit, there being a number of other employees of said Henry L. Whitaker, trading as Dalton Manufacturing Company at said time.'
"3. Defendant amends paragraph 8 of his plea and answer by adding the following to the end thereof:
"`The defendant further shows that said Dalton Manufacturing Company had been in operation in Dalton for some time prior to the date that defendant herein became agent of said company. That prior to the defendant's becoming agent for said Henry L. Whitaker, trading as Dalton Manufacturing Company, that he was not connected with it in any way. That the plaintiff herein is also a firm of Dalton, which operated its place of business less than four hundred yards from that of Dalton Manufacturing Company.'
"4. Defendant amends paragraph 9 of his plea and answer by striking the period at the end thereof and inserting in lieu thereof a comma and by adding the word `purchaser'."
The amendment of March 23, 1954 reads: "1. Defendant amends paragraph 9 of his plea and answer, as amended, by striking from said paragraph the word `personally' as appears in the second line of said paragraph."
The amendment of April 5, 1954 reads: "1. The defendant amends paragraph 7 of his plea and answer as amended by striking the word `personally' appearing in the fifth line from the end of said paragraph as amended."
On December 28, 1953, the plaintiffs filed special demurrers to the plea and answer as amended. On January 8, 1954, the plaintiffs reurged special demurrers and further demurred to the defendant's plea and answer as amended as follows: "Now come plaintiffs, and urging all grounds of their original demurrer to the answer of defendant as amended, demur further to the answer as amended.
"1. Demur to paragraphs 4, 5, 6, 7, 8 and 9 in their entirety because the allegations thereof are irrelevant and set out no defense to plaintiffs' petition in the absence of an allegation to the effect that defendant purchased the merchandise sued for as agent for another, and that plaintiffs had knowledge of his agency in the particular transaction referred to in the answer and that credit was not expressly given to defendant; and in absence of an amendment, plaintiffs urge that said paragraphs be stricken.
"2. Demur to paragraph 6 and the allegation `the defendant entered said Dalton Manufacturing Company and acted only in the capacity of such agent in all dealings with plaintiff in this case', because the same is a conclusion of the pleader and no facts are set out therein to show what the dealings defendant had with the plaintiffs were in which he was acting as agent; and in the absence of an amendment setting out what the dealings referred to were, the allegations should be stricken.
"3. Demur further to paragraph 6 because it is not alleged in said paragraph or elsewhere in the answer that plaintiff had knowledge of defendant's agency in the particular transactions referred to in the answer.
"4. Demur to the following allegations of paragraph 7 as amended, `that he did not personally order the merchandise for which charge is made in this suit', because the same is evasive and uncertain and fails to allege whether or not defendant ordered the merchandise in any capacity, and in the absence of an allegation striking the word personally, or alleging defendant ordered the merchandise in some other capacity, the allegation should be stricken.
"5. Demur to paragraph 8 because the allegations of the amendment are irrelevant and do not sufficiently constitute an allegation of notice of alleged agency of the defendant, and there being no allegation as to how and what notice of defendant agency was given plaintiffs, the paragraph should be stricken."
On March 18, 1954, the court sustained grounds 4 and 5 of the demurrer. The defendant excepted to that part of the order sustaining ground 5 of the demurrer. On April 8, 1954, the court sustained grounds 1, 2, and 3 of the demurrer. The defendant excepted to this order. It is contended that the effect of the above rulings was to strike paragraphs 5, 6, and 8 of the plea and answer. It is contended that the court erred in the rulings on the demurrers.
At the trial the jury returned a verdict in favor of the plaintiffs for the amount sued for, besides interest. The defendant filed a motion for a new trial on the statutory grounds and ten special grounds.
Questions for decision here are: (1) whether or not the court erred in sustaining ground 5 of the plaintiffs' demurrer to the plea and answer; (2) whether or not the court erred in sustaining grounds 1, 2, and 3 of the demurrers to the plea and answer; (3) whether or not the court erred in denying the motion for a new trial as amended. We will discuss the propositions in the order in which they are named.
1. Regarding the sustaining of the demurrers to paragraphs 5 and 6 of the plea and answer, we know of no provision of law for the giving of notice of agency by having an instrument recorded in the office of the clerk of the superior court. It seems to us that, if such were true, it would open the door for many frauds to be practiced upon the public, if persons engaged in business were required to spend time in the office of the clerk to determine whether or not a customer is acting in an independent capacity or as an agent for another. In the instant case, before the plaintiffs could be bound by any agency contract and the defendant excused from any liability for purchases made, knowledge of the contents of the contract would be essential. Code § 4-406 provides: "Where the agency is known, and the credit is not expressly given to the agent, he shall not be personally responsible upon the contract. The question to whom the credit is given is a question of fact to be decided by the jury under the circumstances in each case." In our opinion it necessarily follows that the recording of the contract between the defendant and Dalton Manufacturing Company did not give proper notice of the contents of the contract to the plaintiffs. The demurrers to paragraphs 5 and 6 of the plea and answer were properly sustained.
2. With reference to the sustaining of the other demurrers, as set forth herein above, we may concede that the court committed error because it permitted evidence to be introduced, over objections of the defendant, to the effect that the defendant was an agent of Dalton Manufacturing Company. The court charged fully on this question and left the issue of fact with the jury for determination as to whether or not the defendant purchased the goods in his individual capacity or as an agent for Dalton Manufacturing Company. This being true, if it was erroneous to sustain the demurrers it was harmless error. See, in this connection, Mass. Bonding c. Co. v. U.S. Conservation Co., 31 Ga. App. 716 ( 122 S.E. 728); Greenwood v. Greenwood, 44 Ga. App. 846 ( 163 S.E. 316); Minter v. Malsby Machinery Co., 17 Ga. App. 443 ( 87 S.E. 607). On this issue counsel for the defendant call our attention to Code § 81-305, and L. N. R. Co. v. Barrett, 143 Ga. 742 ( 85 S.E. 923). There is nothing in Code § 81-305 nor in the cases cited to contravene the correctness of our holding as to the law regarding sustaining of the demurrers. This assignment of error does not require a reversal.
3. Regarding the general grounds, it is our opinion that the evidence is sufficient to sustain the verdict. It must be kept in mind that the defendant was more than a mere agent. He was an agent with an interest. He had full charge of the operations of the business for the purpose of operating the business as his own until he had made sufficient money out of it to pay what Whitaker (Dalton Manufacturing Company) owed him. Therefore, according to our way of thinking, the jury were authorized to find that the goods in question were properly chargeable to the defendant. The jury so found. As a matter of fact, under the charge of the court no error appears under this record that is cause for reversal on the general grounds.
4. Special ground 1 contends that the court erred in charging the jury as follows: "I charge you that before the defendant would be relieved from personal liability in this case on the ground of agency, he has the burden of proving the fact of such agency, as well as actual knowledge thereof by the plaintiff." Movant contends that said charge was erroneous and not sound as an abstract principle of law; not adjusted to the pleadings and the proof; misleading and confusing to the jury and in direct conflict with another part of the charge as follows: "I charge you that the name `Dalton Manufacturing Company' imports that such company is a corporation. Since a corporation acts only through its agent, if the plaintiff did not actually know the real owners of Dalton Manufacturing Company, and if you find that the defendant did not represent to them that he owned the business individually, the plaintiffs would have been put on inquiry as to whether they were dealing with L. M. Babb, or anyone else they dealt with at Dalton Manufacturing Company, if any, as agent for real owners, or as owners of the business themselves. . .
"I charge you that before the defendant could be held liable for the account sued on, you must find by a preponderance of the evidence that he either made the purchases, without revealing that he was doing so for Dalton Manufacturing Company, or that he had represented to the plaintiffs that he would be responsible for the obligation of Dalton Manufacturing Company. . .
"I charge you further that if you find that the defendant, L. M. Babb, did not personally order said material, and if you do not find by a preponderance of the evidence that he ever represented himself to the plaintiffs as being the owner of Dalton Manufacturing Company, he can not be held liable for the account sued on, and it would be your duty to return a verdict for the defendant."
We have read these excerpts from the charge in comparison with the whole charge of the court. We cannot agree with the contentions of counsel in this ground.
Counsel for the defendant call our attention to Carter Co. v. Coston, 9 Ga. App. 493; Sawyer v. Hannah, 34 Ga. App. 423 (2); Loftis v. Allen Plumbing Co., 52 Ga. App. 843; Nation v. Jones, 3 Ga. App. 83 (3); Wylly v. Gazan, 69 Ga. 506, 507 (3); Sikes v. Sikes, 153 Ga. 725 (3); Hand v. Matthews, 153 Ga. 75 (3); City of Madison v. Bearden, 22 Ga. App. 376 (2); A. C. L. R. Co. v. Andrews, 20 Ga. App. 605 (1); Code § 70-207. We find nothing in these authorities cited in conflict with what we have held herein above. There is no merit in this special ground.
5. Special ground 2 contends that the court erred in charging the jury as follows: "Since the mere fact of agency is not sufficient, to release one from personal liability, he must prove not only the fact of agency, but also that his principal was disclosed at the time of the act or the transaction in question and that he was acting in the capacity of agent." It is contended that this excerpt is in conflict with the excerpts quoted in paragraphs 2 and 3 of special ground 1, hereinabove set out. The authorities cited by counsel for the defendant in special ground 1, shown above, do not hold contrary to our ruling here. Under the whole record and charge of the court, the assignments of error on this special ground are without merit.
6. Special ground 3 contends that the court erred in charging as follows: "Unless there is an agreement or mutual intention of the parties to the contract that the agent should not be bound, an agent who enters into a contract in his own name without disclosing the identity of his principal renders himself personally liable." In view of what we have said herein above, the assignments of error on this excerpt show no reversible error.
7. Special ground 4 assigns error on the following excerpt from the charge: "I charge you that this bill of sale to secure debt could in no way affect the right of the plaintiffs in this case unless it be shown that they had actual knowledge of the contents of said bill of sale to secure debt, and the mere recording of the instrument in the office of the Clerk of the Superior Court of Whitfield County, Georgia, would not in itself be sufficient to give such notice." In view of what we have said previously as to other special grounds, this ground shows no reversible error. Counsel for the defendant call our attention to Bank of Ringgold v. West Publishing Co., 61 Ga. App. 426 ( 6 S.E.2d 598), in support of his contentions. Our attention is called also to Code § 4-406. These authorities are not in conflict with what we hold regarding this special ground.
8. Special ground 5 contends that certain evidence as set out in this special ground was illegally admitted, over objections of the movant. This was to the effect that Mrs. Kersh testified substantially that she would not extend credit to Dalton Manufacturing Company. This testimony was admissible. Counsel for the defendant call our attention to Settle v. Alison, 8 Ga. 201 (5), and Brown v. State, 203 Ga. 218, 221 ( 46 S.E.2d 160). These cases do not support the contentions of the defendant. In our opinion the assignments of error on this special ground show no reversible error. See Reynolds v. Simpson, 74 Ga. 454, and Simms v. Massengale Advertising Agency, 24 Ga. App. 182 ( 100 S.E. 235).
9. Special ground 6 complains of certain evidence being illegally admitted over objections of the movant. This evidence concerned certain receipts signed by L. M. Babb (record of Dalton Manufacturing Company), set out in this special ground. We think this evidence was admissible under all the facts of this case. We say this notwithstanding authorities relied upon by the defendant to sustain his position. Those authorities are: Code § 4-206; Garrard v. Moody, 48 Ga. 96 (2); and Pearl Assurance Co. v. Bernath, 185 Ga. 737 (2) ( 196 S.E. 389).
10. Special ground 7 objected to a receipt, which it is contended was illegally admitted by the court. This receipt was signed by William Owens. It is contended that it is not shown that Mr. Owens was an employee of Mr. Babb. We hold this ground not meritorious because the record reveals that the receipt was signed by William Owens, whom the record shows was working under the supervision of the defendant; Mr. Owens being the person who had accompanied the defendant to the plant of Dixie Building Supply Company, where arrangements were made for the purchase of material.
11. Special ground 8 complains of the admission of certain evidence in the form of questions propounded and answers elicited from Mr. Babb as to whether or not he paid his personal funds into the operation of Dalton Manufacturing Company. No reversible error is shown in this assignment. In our opinion Babb was more than an agent; he was an agent with an interest. Under the whole record of this case, this evidence was admissible notwithstanding authorities cited by the defendant, to wit: Hughes v. McHan, 121 Ga. 499 ( 49 S.E. 590); Dale v. Christian, 140 Ga. 790 (2) ( 79 S.E. 1127); Mackle Construction Co. v. Hotel Equipment Co., 25 Ga. App. 137 (2) ( 102 S.E. 868)
12. Special ground 9 complains of the illegal admission of certain evidence elicited from Mr. Babb as to whether or not he paid his personal money into Dalton Manufacturing Company. This is substantially the same contention as shown in special ground 8. For the same reasons given in our decision as to that special ground, we hold this assignment of error without merit.
13. Special ground 10 complains as follows: "Because, after completion of the evidence and argument in the case, and the charge of the court, and the jury had retired for consideration of the case, and Judge Paschall, judge presiding, had appointed the Hon. Gene Holcombe, as judge pro hac vice to receive the verdict, the jury returned, during the deliberations on the case, for further instructions, the jurors desiring instructions on the legal effect of the security instrument, marked as defendant's Exhibit No. 3, being, as movant contends, a security instrument from H. L. Whitaker, trading as Dalton Manufacturing Company, to L. M. Babb to secure debt, and containing therein an agency authorization from H. L. Whitaker to L. M. Babb, making L. M. Babb, the agent for H. L. Whitaker in charge of his business known as Dalton Manufacturing Company. Due to the fact that Hon. J. H. Paschall had gone to Calhoun, Gordon County, Georgia, and therefore was not in court to further instruct the jury, the defendant, now movant, requested orally out of the presence of the jury, that the jury be instructed that this said instrument was a security instrument only and did not convey absolute title and control to L. M. Babb in Dalton Manufacturing Company. Since the plaintiff would not agree to such instruction, Gene Holcombe would not so instruct the jury. The jury was informed that Judge Paschall was in Calhoun and that therefore they could not be further instructed as requested by them, and the jury was informed that judge Paschall would be called to return to Dalton and was called and did return immediately, and the jury returned to its deliberation of the case. Said Gene Holcombe telephoned Judge Paschall in Calhoun, informing him that the jury desired further instruction in said case. Before Judge Paschall had returned to the courtroom in Dalton, the jury had already informed the bailiff that it had made a verdict in the case. The defendant did not request that the verdict not be received without further charge. The defendant did not request a recharge to the jury after Judge Paschall had returned to the courtroom, the jury having announced that it had reached a verdict in the case, copy of said security instrument being attached as Exhibit No. 3 and made a part hereof. The movant contends that the foregoing was illegal and erroneous to him, and that he should be granted a new trial."
As to this ground, the assignment of error is exceedingly general. The assignment does not specifically set out any reason why the defendant was harmed by the trial judge having temporarily absented himself from the courtroom to go to his home out of the county. The record reveals that counsel for the defendant was present when the trial judge appointed Hon. Gene Holcombe to act in the capacity in which he did act, and thus impliedly counsel consented for the trial judge to absent himself. It must be kept in mind also that, when the trial judge was informed that he was needed, he returned immediately to the courtroom where the trial was in progress and was informed that the jury had reached a verdict. The trial judge received the verdict without any objections from the defendant or his counsel. Neither the defendant nor his counsel objected to the verdict being thus received without further instructions from the trial judge. Neither made any request that the verdict not be received as it was received, and they failed to request the court to make any further charge. The defendant and his counsel sat by and without any objections or requests whatsoever took a chance on the verdict being in favor of the defendant. They will not be heard now to complain of what was lost by laches in not complaining of what transpired before the trial judge and before the verdict was received. There is no merit in this contention.
The court committed no reversible error in any of its rulings on the assignments of error.
Judgment affirmed. Townsend and Carlisle, JJ., concur.