Perkins v. Pacific Fruit Exchange

Plaintiff sued on an alleged guaranty of a minimum return on fruit delivered to the defendant and sold for plaintiff’s account. The cause was tried with a jury and plaintiff had judgment. The defendant moved for an instructed verdict and, this motion having been denied, thereafter moved for judgment notwithstanding the verdict. This motion was denied and defendant appeals upon typewritten transcripts.

The plaintiff was the owner of a pear orchard; the defendant for twenty years past had been engaged in the business of receiving fruit on consignment and selling the same for the account of growers. The principal place of business and office of the defendant was located at San Francisco. Special agents were employed at various points in the state, one of whom was located at San Jose. During the year 1929 this special agent procured a contract from the plaintiff whereby the defendant handled his pears upon consignment, taking a seven per cent commission for the service. During the year 1930 the plaintiff approached the special agent in San Jose on several occasions, urging him to purchase on behalf of defendant his 1930 crop. The agent declined to do so, telling him that if he desired to sell his pears he should go to another company which was engaged in that business. The plaintiff testified that the agent then told him that if he would let the defendant ship his pears he

On this appeal the real question involved is whether the respondent sustained the burden of proving that the agent had actual or ostensible authority to bind his principal to the alleged guaranty. At the outset it must be conceded that when the third party seeks to hold a principal to a guaranty made by an agent the burden is on such party to prove authority of the agent to make the contract. (Peterkin v. Randolph Marketing Co., 48 Cal. App. 300 , 302 [ 191 Pac. 947 ]; People v. Ray, 91 Cal. App. 781 , 786 [ 267 Pac. 593 ]; Acme Gravel Co. v. Bryant, 111 Cal. App. 411 ,

Though there is a sharp conflict in the testimony as to the making of the contract with the agent there is no conflict in the proof that the agent did not have any authority to bind his principal to any guaranty of a net return upon the produce sold. The direct and only evidence is that such authority ivas not conferred upon the agent. The respondent does not contest this state of the evidence, but argues that because the jury found in his favor we must assume that it disbelieved the direct evidence of the want of such authority. If the burden of proof rested upon the principal to show want of authority in his agent this point might be well taken, but it falls before the settled rule that that burden rests upon the plaintiff. We have read the evidence with extreme care and fail to find a single word which supports the contention that the agent was expressly or impliedly authorized to make any guaranty of this character. (We disregard, of course, respondent’s statement that the agent was a “fruit buyer” for the appellant because that is not in the evidence.) So far the case is parallel to Peterkin v. Randolph Marketing Co., supra, which, in turn, is supported by abundant authority. (See 2 C. J., pp. 588, 665; Cannon v. Long, 135 Wash. 52 [ 236 Pac. 788 ]; Fargason v. Dudley, 173 Ark. 1148 [ 294 S. W. 6 ]; First Nat. Bank v. Farson, 226 N. Y. 218 [ 123 N. E. 490 ].)

But beyond the rule of these authorities we find the additional factor in this case that under the statutes of this state neither the principal nor the agent could legally make the contract sued on and of this the respondent must, of course, be presumed to have had knowledge. The business of produce dealers in this state is controlled by the “Produce Dealers’ Act” of 1927 (Deering’s Gen. Laws, Act No. 6154), supplemented by the “Deciduous Fruit Dealers’ Act” of 1929 (Deering’s Gen. Laws, Act No. 6155). The first act defined a “produce dealer” as one who shall receive produce for sale on commission and requires him to procure a license from the state department of agriculture and to deposit a bond for the faithful performance of his duties. The second act defines three classes of those dealing with growers in deciduous fruit, (1) “the cash buyer”, (2) “the consignment shipper”, and (3) “the dealer”.

For these reasons the appellant argues that it must be presumed that the guaranty was not made because of the legal presumption against crime. The respondent answers that this does not follow because the acts dealing with produce dealers are unconstitutional upon grounds which we need not state. We may assume for the moment that these acts are unconstitutional and that accordingly the presumption of innocence of crime is not applicable. But if we make this assumption there is another presumption which comes into play—that the ordinary course of business has been followed. The courts may take judicial knowledge that men do not ordinarily violate a penal statute on the chance it may at some time be declared unconstitutional and they might thus escape punishment, but that, in the ordinary course of business they will follow the terms of the statute.

In its final analysis the case is that the respondent offered no evidence tending to prove the authority of the agent to make the guaranty relied on and presented no facts from which an inference of that authority could be drawn. On the other hand, the undisputed direct evidence is that such authority did not exist and when this evidence is added to the presumptions that the authority was not

The judgment is reversed, with directions to the trial court to enter judgment for the appellant as herein indicated.

Sturtevant, J., and Spence, J., concurred.

A petition by respondent to have the cause heard in the Supreme Court, after judgment in the District Court of Appeal, was denied by the Supreme Court on July 25, 1933.