#### POWELL & POWELL v. KING LUMBER COMPANY and CHISHOLM & CLARK et al.

(Filed 14 April, 1915.)

1. Principal and Agent — General Agent — Restrictions—Notice.

A general agent is one who is authorized to act for his principal in all matters concerning a particular business or employment of a particular nature, and he may usually bind his principal as to all acts within the scope of such agency; and as to third persons dealing with the agent, this real and apparent authority are the same and not subject to restrictions of a private nature placed thereon by the principal, unless they are known to such person, or the act or power in question is of such unusual character as to put a man of reasonable business prudence upon inquiry as to the existence of the particular authority claimed.

2. Liens — Principal and Agent — General Agent — Scope of Authority — Ratification.

The scope of the implied authority of a general agency may be extended by reason of acts indicating authority which the principal has approved or knowingly or, at times, negligently permitted the agent to do in the course of his employment.

3. Principal and Agent — Acts of Agent — Evidence of Agency.

While ordinarily the existence or extent of an agency may not alone be shown either by the declarations or acts of a supposed agent, it is otherwise where his acts, in the course of his employment, and indicative of his authority, are of such character and circumstance, or so often repeated, as to permit a fair and reasonable inference that they were approved or knowingly permitted by the principal; for in such way they become relevant on the question of authority expressly conferred.

*6334. Same — General Agency.

In an action brought by a material man against the contractor to recover the price for goods furnished to a subcontractor for the building on the credit alone of the former, alleged to have been authorized by his agent, which authority was denied, there was evidence tending to show that the alleged agent was the superintendent in charge of the work with-authority to hire, pay, or discharge the workmen of both the contractor and subcontractor; that two payments had been made the plaintiff by the contractor, one on the order of the subcontractor and the other by the contractor’s agent. Held,, evidence sufficient for the consideration of the jury to ascertain the fact of agency of the superintendent, though also spoken of as the foreman, to bind the contractor, his alleged principal, to the payment of the material man, as coming within his implied authority to do so as a general agent, and as a ratification of his acts by the alleged principal, notwithstanding the principal’s explanation of the circumstances under which the payments were made.

5. Statute of Frauds — Direct Obligation — Interest.

The statute of frauds has no application where the one sought to be charged has credit extended to him as an original obligation, and on a transaction in which he has a pecuniary interest.

6. Liens — Material Men — Notice to Owner — Subcontractor — Contractor—

Status with Owner.

Where the furnisher of material to a subcontractor has notified the owner and perfected his lien as required by the statute, secs. 2019, 2020, 2021, and it appears by admission in the pleadings in an action to enforce the lien that the owner of the building is still indebted to the principal contractor in a sufficient sum, this sum is applicable to the plaintiff’s demand regardless of the State of accounts between the contractor and the subcontractor. Bride Oo. v. Pulley, wnte, 371.

Appeal by defendants from Whedbee, J., at October Term, 1914, of Wake.

Civil action to recover $428.58, balance due for material furnished for plastering work on T. M. O. A. building in Raleigb.

It was proved that, in 1912, the Y. M. O. A. of the city of Raleigh had contracted with defendant the King Lumber Company for the erection of its building in the city of Raleigh, and that the said company had sublet the plastering to defendants Chisholm & Clark, and that the agreement between the King Lumber Company and Chisholm & Clark in form constituted these last subcontractors for this portion of the work.

There was evidence on the part of plaintiff tending to show that, owing to the fact that Chisholm & Clark owed plaintiff a balance on other accounts and were regarded as irresponsible, ^plaintiff had declined to supply any material for this work, and did not do so until the King Lumber Company became responsible therefor, this being done primarily under the direct promise and guarantee of J. R. Wood, agent of the company, in charge of this work here in Raleigh; that said Wood had *634authority from the company to make the contract, or same was ratified by it, and, after making two payments under this arrangement, as stated, the company had refused to pay further, and the balance was $428.58.

There was evidence for defendant tending to show that J. R. [Wood had not made the agreement as claimed by plaintiff, and, further, that he had no authority to make it; that he was only a foreman in charge of the work here in Raleigh, chiefly of that portion which was being done by the company itself; that he was supplied with a definite amount, subject to his check, which he could not exceed, and from which he was to pay freights, wages for men under him, and material bought by him, but that he had no authority to bind the company by a contract of this kind, and had been positively instructed not to make any such agreements; that as to the two payments referred to in plaintiff’s evidence, one was on the written order of Chisholm & Clark and the other was made by reason of representations of J. R. Wood that certain material on the yard for the purpose would .be attached by creditors of Chisholm & Clark unless paid for, and, owing to that, the money was sent, but with no intent to ratify any agreement of Wood’s; that the company had no knowledge of any such agreement, and had done nothing to approve dr ratify it.

It was further shown that Chisholm & Clark, after doing part of the work, had abandoned the job, and J. R. Wood had completed the same for the company, and there was only a small sum due from the company to them, under their contract, etc.

On issues submitted, the jury rendered the following verdict:

1. Did the defendant King Lumber Company agree to pay the plaintiff company for materials furnished, with which to plaster the Y. M. O. A. building, as alleged? • Answer: “Yes.”

2. If so, what amount was so furnished by plaintiff, which still remains unpaid by defendant King Lumber Company ? Answer: “$428.58, without interest.”

3. If “No” to first issue, what amount is due Chisholm & Clark by defendant King Lumber Company on account of contract for plastering said Y. M. 0. A. ? Answer: “$74.32.”

It was admitted in the pleadings that there was the sum of $428.58 due from the Y. M. C. A. to the lumber company, the principal contractor, and that plaintiff had given the notices required to perfect his lien for material, as provided under the statute, Revisal, secs. 2019, 2020, and 2021.

Judgment on the verdict for $428.58, and applying amount due from owner to lumber company in payment of same.

Defendant lumber company excepted and appealed.

*635 Cla/rTc & Broughton for plaintiff.

J. W. Hinsdale and Winston & Biggs for defendant.

Hoke, J.

It was chiefly objected to tbe validity of the verdict that there were no facts in evidence tending to show authority on the part of J. R. Wood to bind the defendant company to payment of plaintiff’s claim; but, on the record, we are of opinion that the position cannot be maintained. A general agent is said to be one who is authorized to act for his principal in all matters concerning a particular business or employment of a particular nature. .Tiffany on Agency, p. 191. And it is the recognized rule that such an agent may usually bind his principal as to all acts within the scope of his agency, including not only the authority actually conferred, but such as is usually “confided to an agent employed to transact the business- which is given him to do,” and it is held that, as to third persons, this real and apparent authority'is one and the same, and may not be restricted by special or private instructions of the principal unless the limitations sought to be placed upon it are known to such persons or the act or power in question is of such an unusual character as to put a man of reasonable business prudence upon inquiry as to the existence of the particular authority claimed. Latham, v. Field, 163 N. C., 356; Stephens v. The Lumber Co., 160 N. C., 107; Gooding v. Moore, 150 N. C., pp. 195-198; Tiffany on Agency, pp. 180-184-191 et seq.

The power of an agent,' then, to bind his principal may include not only the authority actually conferred, but the authority implied as usual and necessary to the proper performance of the work intrusted to him, and it may be further extended by reason of acts indicating authority which the principal has approved or knowingly or, at times, even negligently permitted the agent to do in the course of his employment. Law Reporting Co. v. Grain Co., 135 Mo. App. Rep., pp. 10-15; 31 Cyc., pp. 1326-1331.

In the Missouri case, Broaddus, P. J., delivering the opinion, quotes from Mechem on Agency, sec. 282, to the effect that the authority of agents consists:

> “First, and primarily, of the powers directly and intentionally conferred by the voluntary act of the principal.

> “Second, of those incidental powers which are reasonably necessary and proper to carry' into effect the main powers conferred and which are not known to be prohibited.

> “Third, of those powers which usage and custom have added to the main powers, and which the parties are to be deemed to.have had in contemplation at the time of the creation of the agency, and which are not known to have been forbidden.

> *636“Fourth, of all such other powers as the principal has, by his direct act' or by negligent omission or acquiescence, caused or permitted persons dealing with the agent reasonably to believe that the principal had conferred.

> “Fifth, of all those other powers whose exercise by the agent the principal has subsequently, with full knowledge of the facts, ratified and confirmed.”

And further cites, with approval, Kingsley v. Fitts, 51 Vt., 414, to the effect that: “The scope of an agency is to be determined not alone from what the principal may have told the agent to do, but from what he knows or ought to know, in the exercise of ordinary care and prudence, the agent is doing in the premises.” And, while it is true, as' held in Daniel v. Coast Line, 136 N. C., 517, and Francis v. Edwards, 77 N. C., 271, and other well considered cases, that neither the existence nor the extent of an agency may be shown by either the declarations or acts of an agent, and by them alone, it is also established that the acts of an agent, in the course of his employment and indicative of authority, may be of such character and circumstance or so often repeated as to permit a fair and reasonable inference that they were approved or knowingly permitted by the principal, and, in this way, may, of themselves, become relevant on the question of authority expressly conferred. Newbury v. R. R., 167 N. C., 50; R. R. v. Dickinson, 78 Ark., 783; Lytle v. Bank, 121 Ala., 215; Harvester Co. v. Campbell, 43 Tex. Civ. App., 421; Doan v. Duncan, 17 Ill., 272; 31 Cyc., p. 1662. In this, last citation the principle is thus stated: “As a general rule, the fact of agency cannot be established by proof of the acts of the pretended agent, in the absence of evidence tending to show the principal’s knowledge of such acts, or assent to them. Yet when the acts are of such a character, and so continued, as to justify an inference that the principal knew of them, and would not have permitted the same if unauthorized, the acts themselves are competent evidence of agency.”

Applying these principles, as stated, there was not only some evidence tending to show authority in J. R. Wood to make the contract, as stated, but, in our opinion, it clearly justifies the verdict rendered by the jury.

True, there was evidence for the defendant tending to show that "Wood had no actual authority to make the agreement or to bind the company under it; both Wood and McNeill, the secretary and treasurer of the company, so testify, and the payments by Wood are explained by the statement of these witnesses that the company kept as much as $500 in a bank here in Raleigh, subject to his check, and beyond this he was not allowed to go, and, as to the two payments by the company on the present account, defendant’s evidence tends to show that one was made on the written order of Chisholm & Clark and the other on the representations of Wood *637tbat it was necessary to make it to protect material already on tbe ground and presently required for tbe construction of tbe building. Mucb stress was'laid, too, on tbe fact tbat several of tbe witnesses spoke of "Wood as foreman, and, certainly, an ordinary foreman, in tbe sense of a leader of a squad of bands, would not, from bis position alone, bave tbe right to bind bis principal in a contract of tbis character.

A perusal of tbe testimony, however, will disclose tbat tbis man was not merely a foreman, in tbe ordinary meaning of tbe term, but be bad entire charge of tbe work here in Raleigh. Thus, Mr. Carey J. Hunter, one of tbe directors, after saying tbat Wood was tbe local man of tbe King Lumber Company in charge of tbe building as “foreman,” states further: “Mr. Wood was tbe company’s representative, and we dealt with him in regard to tbe construction of tbe building. Of course, I don’t know whether tbe dealings bad to be approved by tbe lumber company after-wards or whether there was an understanding with them or not. Our dealings were with Mr. Wood.”

J. R. Wood speaks of himself, in one place in bis testimony, as supervisor or superintendent, and McNeill, tbe secretary and treasurer, says of him: “He bad been our superintendent for six years.” True, tbis witness said, also, tbat “Not only bad Wood no authority to make tbe contract, as alleged, but be was instructed positively not to do’ so”; but, from tbe evidence of tbis witness and from others, testifying for plaintiff, it appears tbat J. R. Wood was in charge and control of tbe work here for tbe entire time; tbat be bought material from plaintiff and others and paid for it in cash and by check; tbat be hired bands and paid them off, not only those directly under him, but tbe bands of Chisholm & Clark, and after these men bad abandoned tbe job, be took it up and bad tbe same completed; and it was made to appear, further, as heretofore stated, tbat, after tbe promise relied upon by plaintiffs, there were two substantial payments on tbis account made by defendant company, and from tbis and other facts in evidence we think tbat it is clearly tbe permissible inference tbat tbe contract and agreement made by Wood was within tbe scope of bis agency, and, tbis being true, tbat tbe binding-effect of it could not be destroyed or sensibly impaired by reason of special and private restrictions put upon bis powers by bis principal, unknown to plaintiff and others who dealt with him; and we are of opinion, further, tbat tbe acts of Wood in tbe course of bis agency were of a kind and character and so continued and repeated as to permit tbe inference tbat they were known to and approved by tbe company, and, in themselves, afforded evidence of authority in tbe premises.

There is nothing in our present decision tbat militates or is intended to militate against tbe cases of Bank v. Hay, 143 N. C., 326, or of Swin- *638 dell v. Latham, 145 N. C., 144, or Stephens v. Lumber Co. 160 N. C., 107, or the more recent case of Wynne v. Grant, 166 N. C., 39, in all of which the acts of the agent were disallowed.

In Hay’s and in Swindell’s cases the contracts in question were held to have been beyond the scope of agents’ authority, real or apparent, the first being a draft by a. local insurance agent, of restricted power, on the general agent of the company, and the second where the agent, intrusted with the power to run a certain business on a cash basis, had signed the note of his principal for borrowed money, and to these the Court applied the wholesome principle that one who deals with an agent must “ascertain correctly the scope and extent of his authority”; but this, as stated, was on the ground that the acts of the agent were beyond the scope of his apparent authority, for, in ordinary instances, it is only to this that a third person is required to look.' In Wynne’s case there were facts in evidence, ultra, tending to show notice of limitations on the agent’s powers, and in Stephens’ case the character of the contract was so out of the ordinary as to put the claimant on inquiry and, in itself, to afford notice of lack of authority.

The objection raised, on the trial below, that recovery was barred under the statute of frauds and because the obligation of Wood, if made, was not in writing, was very properly abandoned here, the facts in evidence, which were accepted by the jury, tending to show that the credit was extended to the company as an original obligation and on a transaction in which it had a pecuniary interest. Peele v. Powell, 156 N. C., 553, citing Dale v. Lumber Co., 152 N. C., 653; Sheppard v. Newton, 139 N. C., 535.

While we have dealt with the objections made to the validity of the verdict by reason of their general importance and because they are directly presented in the record, the questions are not of practical moment in this case because of the admissions in the pleadings that the owners of the building are still indebted to defendant company, the principal contractor, to an amount sufficient to pay the claim sued for, and the plaintiffs have given the notices and perfected their lien as provided by our statute. Revisal, ch. 48, secs. 2019, 2020, 2021.

In such case, under Brick Co. v. Pulley, ante, 371, the debt due from the owners to the defendant, the principal contractor, is applicable to plaintiff’s demand, and this, regardless of the state of the account between defendant and the subcontractors, Chisholm & Clark.

There is no error, and the judgment below must be affirmed.

No error.