Summary
In Messman the plaintiff attempted to hold the defendant liable for another's gasoline bill by way of asserting a conspiracy between the two for illegally sharing highway permits.
Summary of this case from Envirotech, Inc. v. ThomasOpinion
No. 28438.
February 17, 1953. Rehearing Denied March 13, 1953.
APPEAL FROM THE CIRCUIT COURT, CITY OF ST. LOUIS, JOHN K. REGAN, J.
Franklin E. Reagan, Adolph K. Schwartz and Sievers, Reagan Schwartz, St. Louis, for appellant.
Thompson, Mitchell, Thompson Douglas and William Stix, St. Louis, and Gage, Hillix, Moore Park and James A. Moore, Kansas City, for respondent.
This is an action by plaintiff, A. C. Messman, doing business in Sheldon, Illinois, as Messman Oil Company, for the recovery of the sum of $2,411.91 with interest, which sum is alleged to be the balance due plaintiff from defendants on an open account for motor fuel, motor oil, and other merchandise sold by plaintiff between February 11 and October 10, 1947.
The defendants are William B. Vallow and Carl E. Mielke, a co-partnership doing business as B C Transport Company, and Riss Company, Inc., a Colorado corporation engaged in the motor freight transportation business with offices in Kansas City, St. Louis, and Detroit.
All the merchandise was sold to defendants Vallow and Mielke, and the theory upon which the case was tried and submitted was that in making the purchases from plaintiff, such defendants were acting as agents for defendant Riss Company so as to have rendered the latter liable on the account.
Defendant Riss Company answered by a general denial, and then asserted, as a separate defense, that if defendants Vallow and Mielke held themselves out as its agent in making the purchases from plaintiff, and if plaintiff extended any credit in connection therewith, he did so exclusively to defendants Vallow and Mielke, and neither sold any goods to nor made any contract with defendant Riss Company.
Tried to the court alone without the aid of a jury, there was a finding in favor of plaintiff and against defendants Vallow and Mielke for the full amount sued for with interest, but in favor of defendant Riss Company.
Plaintiff thereupon filed his motion for judgment or, in the alternative, for a new trial as to defendant Riss Company; and upon such motion being overruled, he gave notice of appeal, and by proper successive steps has caused the case to be transferred to this court for our review.
Plaintiff had been in the oil business in Sheldon since 1925, and had operated a filling station in that city since 1937 or 1938. He maintained what was described as a bulk plant, and he dealt both at wholesale and at retail. Sheldon is on a route in Illinois that is used by trucks moving between St. Louis and Detroit; and plaintiff's station and grounds were so constructed as to be adapted for use by the large tractor-trailer combinations which gave him their patronage.
Plaintiff first became acquainted with Vallow and Mielke about 1938 when they were operating their own trucks under an arrangement of some sort with one of the larger trucking companies. It seems that it is not unusual in the trucking business for the owner of equipment to lease or hire his equipment to a carrier, and then operate it in the carrier's business and under the carrier's name, with compensation to be paid him by the carrier upon some agreed basis. However at the time plaintiff first met Vallow and Mielke there was no connection between the two of them of which he was aware; and all transactions which he had with them over such initial period were strictly for cash, and never on a credit basis.
Meanwhile Vallow and Mielke had formed a partnership under the style of B C Transport Company; and on October 1, 1946, they entered into an agreement with defendant Riss Company for the use and operation of certain of their equipment in the transportation of merchandise from St. Louis to other cities including Detroit. While the actual agreement was oral, it was understood between the parties that its terms were to be identical with those incorporated in a detailed printed contract prepared by Riss Company, which was known as a Provider Agreement.
Suffice it to say for the present that under the provider plan as instituted by Riss Company, it was contemplated that while the actual physical transportation of freight consigned to Riss Company as a carrier was to be performed by Vallow and Mielke along with all the other similar providers of equipment, the operations were to be conducted in the name of Riss Company either alone or in conjunction with the names of the providers and under the authority of Riss Company's operating rights. In other words, all permits issued by the Interstate Commerce Commission covering the operation, under such agreement, of equipment owned by Vallow and Mielke were issued in the name of Riss Company, and Vallow and Mielke themselves had no permits either in their own names or in the name of B C Transport Company.
It is of interest to know, as the record discloses, that such provider plan became the subject of an investigation by the Interstate Commerce Commission, and was disapproved in 1948 upon the theory that it constituted a departure on the part of Riss Company from its prior status as a bona fide common carrier by motor vehicle. 6 Federal Carriers Cases, par. 31,485.
Some time in January of 1947 Vallow and Mielke drove up to plaintiff's filling station in a pleasure car, told plaintiff they were operating for Riss Company, and presented plaintiff with a business card of Riss Company out of its Detroit office, with Mielke's name appearing in the lower lefthand corner. In the course of the conversation they told plaintiff that Vallow was Riss Company's dispatcher out of its St. Louis terminal and Mielke its dispatcher out of its Detroit terminal; and on subsequent occasions plaintiff was always able to reach either Vallow or Mielke over the telephone by calling Riss Company's St. Louis or Detroit number as the case might be.
It was during this first conversation that Vallow and Mielke arranged with plaintiff for credit, with bills to be sent every fifteen days to B C Transport Company, C. E. Mielke, in care of Riss Company at its Detroit address. Sales of gasoline and other supplies commenced almost immediately, the commodities being supplied to some five or seven trucks, all identical in color and appearance with the trucks that actually belonged to and were operated by Riss Company, and all of them bearing the name and permit numbers of Riss Company either on the tractor or the trailer in conjunction with some form of identification of or reference to B C Transport Company. Sales slips were to be made out to B C Transport Company, and never to Riss Company, whose own drivers invariably paid in cash, and never asked for credit.
All payments on account were made either by Mielke's personal check or by cash, and no payment was ever made by a check of Riss Company. On the contrary, even in the early days of the credit arrangement, when plaintiff would ask Vallow and Mielke for a payment on the account, their reply would be that they would pay plaintiff as soon as they themselves were paid by Riss Company. Four months after the date of the last item of the account, plaintiff for the first time wrote to Riss Company at its home office in Kansas City, explaining that Mielke did not seem able to meet his obligations on the account, and inquiring whether Riss Company would pay the balance due and then withhold such amount from Mielke's commissions. Other correspondence followed, and finally in March, 1948, Riss Company wrote plaintiff expressly disclaiming any liability on the account.
In drawing his petition plaintiff counted heavily upon the theory that the trucking operations carried on by Vallow and Mielke under their arrangement with Riss Company were illegal for the want of operating permits issued to them personally; that Riss Company was chargeable with knowledge that the contemplated operations were illegal as subsequently held by the Interstate Commerce Commission; and that in entering into such an arrangement with Vallow and Mielke, Riss Company had made itself equally liable with Vallow and Mielke for the latter's purchases from plaintiff of gasoline and oil which were employed in the operation of the equipment in question.
In short, it was plaintiff's theory that the illegal operation of Vallow's and Mielke's trucks on the highway under the arrangement with Riss Company to operate under Riss Company's permits made all the parties to the arrangement guilty of a conspiracy to violate the applicable statutes and rules and regulations pertaining to the operations of motor carriers on the highways, and rendered Riss Company liable for the damages occasioned by the conspiracy under the settled doctrine that the act of each of the conspirators in carrying out the object of the conspiracy becomes the act of all. The authorities relied upon by plaintiff in support of such theory are Kneezle v. Scott County Milling Co., Mo. App., 113 S.W.2d 817; Wooldridge v. Scott County Milling Co., Mo.App., 102 S.W.2d 958; and Virgil v. Riss Co., Mo.App., 241 S.W.2d 96.
The court struck out the conspiracy charge on motion of defendant Riss Company, and its action in that regard constitutes plaintiff's first ground of complaint on this appeal.
The liability of any one conspirator, such as Riss Company was alleged to be, depends upon proof of such person's action in combination with the other conspirators to accomplish the object of the conspiracy. But what was the object of the conspiracy in the case at bar, assuming that the arrangement between the several defendants amounted to a conspiracy? Both as pleaded and as shown by the evidence, it was for Vallow and Mielke, acting under Riss Company's permits, to operate trucks on the highways in the capacity of a common carrier for hire without themselves securing the requisite permits to engaged in such form of operation. It was not a conspiracy to obtain credit for the sale of gasoline and motor oil; nor in fact is such subject embraced within the purpose of governmental regulation of motor carriers, which is merely to promote public service and to bring about conformity with prescribed standards and requirements in the field of motor transportation on public highways. There was no causal connection between the illegal operation of the trucks without permits and the granting of credit to Vallow and Mielke; and Riss Company's motion to strike the conspiracy charge from the petition was therefore properly sustained.
But if Riss Company was not to be held upon the theory that it was liable as a conspirator for the balance due on the account, what of the contention upon which the case was tried and submitted that it was liable as the principal of Vallow and Mielke?
In considering this question it is wholly immaterial whether Riss Company might conceivably be held liable as the principal of Vallow and Mielke in connection with some matter unrelated to the present controversy as in their solicitation of freight for transportation, or in connection with any negligence on their part while actually engaged in the operation of their trucks on the highways pursuant to the agreement between themselves and Riss Company. On the contrary, the question here is purely one of whether Riss Company is to be held liable as the principal of Vallow and Mielke in connection with their action in obtaining credit from plaintiff for gasoline and motor oil supplied to their individual trucks.
We do not understand that plaintiff is contending that Riss Company had vested Vallow and Mielke with actual authority to purchase gasoline and motor oil upon Riss Company's credit. As a matter of fact, the evidence showed the very contrary — that under the terms of the Provider Agreement, Vallow and Mielke were specifically obligated to pay the entire maintenance and operating costs and all expenses of every character incident to the use of their equipment under the contract. What plaintiff does contend is that irrespective of any question of the lack of actual authority, Riss Company had none the less clothed Vallow and Mielke with apparent authority to act as its agent, and is now estopped to deny such relationship after plaintiff has extended credit upon the reasonable assumption that such relationship existed.
It is of course true that upon the principle of estoppel an agency may be regarded as existing between two persons so far as a third person is concerned, although, as between the persons charged with the consequences of the relation, it does not in fact exist. In other words, where a person by his acts or conduct, has knowingly caused or permitted another person to appear as his agent to the injury of a third person who has dealt with the apparent agent in good faith and in the exercise of reasonable prudence, he will afterwards be estopped to deny the agency when the third person seeks to hold him to account. Will Doctor Meat Co. v. Hotel Kingsway, Mo.App., 232 S.W.2d 821; Dell-Wood Tires v. Riss Co., Mo.App., 198 S.W.2d 347; Sidney Weber, Inc. v. Interstate Motor Freight System, Mo.App., 205 S.W.2d 291; 2 C.J.S., Agency, § 29(b); 2 Am.Jur., Agency, Sec. 104.
While we appreciate that inasmuch as the case was tried upon facts without a jury, it becomes our duty to review the case upon both the law and the evidence as in suits of an equitable nature, we are at the same fully mindful of the statutory mandate that the judgment shall not be set aside unless clearly erroneous. Section 510.310 RSMo 1949, V.A.M.S.; Sidney Weber, Inc. v. Interstate Motor Freight System, supra; Dell-Wood Tires v. Riss Co., supra.
The trial court decided in favor of Riss Company, and therefore obviously concluded from its own consideration of the evidence that Riss Company had not permitted such an appearance of authority in Vallow and Mielke to obtain credit as its agent as to have entitled plaintiff to rely upon such appearance, and to extend credit, as he did, in the reasonable belief that it was Riss Company that was actually obtaining the credit and becoming liable on the account.
We can see no reason under the law and the evidence why this result should be disturbed.
In the first place, there is no pretense of any specific representation by either Vallow or Mielke that the credit was to be extended to Riss Company and that Riss Company would pay the bills. On the contrary, the information given plaintiff was merely that Vallow and Mielke had decided to go into business and operate under Riss Company's permits; and the understanding was that not only should the sales slips be made out to B C Transport Company, but also that all bills should be sent to B C Transport Company, C. E. Mielke, at Riss Company's Detroit address, where Mielke had his office as dispatcher. That Vallow and Mielke were dispatchers for Riss Company gave plaintiff no right to assume that they were purchasing agents as well, or at least the court could so conclude. Furthermore it seems strange that plaintiff should have assumed that it was Riss Company that was asking for credit for the gasoline and motor oil supplied to the five or seven trucks identified with B C Transport Company when he knew that cash was invariably paid him for purchases made for the trucks actually belonging to and operated by Riss Company itself.
Nor apart from what transpired on the occasion when Vallow and Mielke asked for credit, was there anything in the subsequent dealings of the parties that might have reasonably encouraged plaintiff to believe that it was Riss Company that was ultimately responsible on the account. All payments on the account other than any that were made in cash were made by Mielke's personal check, and no payment was ever made by a check of Riss Company. It was Vallow and Mielke that plaintiff constantly pressed for payment; and the truth of the matter is that when plaintiff finally decided to enlist the cooperation of Riss Company in securing payment of his account, he was still proceeding on the basis that the liability was that of B C Transport Company, and of Vallow and Mielke who composed it. Not only is the lower court's decision not to be held "clearly erroneous", which would be the statutory condition to its reversal, but instead it would appear to have been entirely correct.
The cases relied upon by plaintiff are clearly distinguishable on their facts in that in each of them there was evidence to show that the party to be held liable as principal had knowingly permitted the appearance of authority in whomsoever it was that purported to act as his agent.
It follows that the judgment rendered by the circuit court should be affirmed, and it is so ordered.
ANDERSON and ARONSON, JJ., concur.