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Lawskills.com Georgia Caselaw
NATIONAL HOMES, INC. v. CITY PLUMBING & HEATING SUPPLY COMPANY.
40308.
Action on account. Hall City Court. Before Judge Blackshear.
HALL, Judge.
To create an estoppel by conduct of the principal it must be shown that the complaining party dealt with the supposed agent in reliance upon the authority which the principal apparently conferred upon him, and changed his position as a result of such reliance.
The plaintiff sued National Homes, Inc., and Gordon Edge on an account. The evidence showed that the account covered supplies and materials delivered by the plaintiff to houses on which construction was begun by Knox Corporation, predecessor of National Homes, Inc., in 1958 and 1959, and eight houses on which construction was begun by King Development Corporation in 1960. The plaintiff dealt with Mr. Edge, who did plumbing and construction work on the houses, and billed all the materials to Edge Plumbing & Electric Company. The amount of the charges had reached over $22,000, and this suit was for an unpaid balance of $6,045.66. Edge filed a plea of bankruptcy.
On the issue of Knox Corporation's liability for the account, the evidence, viewed in the light most favorable to the plaintiff, showed that when the account was past due, the plaintiff through Mr. Teaver, telephoned Mr. Boone Knox of the Knox Corporation concerning the matter, and Mr. Knox told him he would get in touch with him shortly and look into it. Thereafter Mr. Knox went by Mr. Teaver's office and left this memorandum: "Send all of Edges invoices (copies) to me so I can get them straight. Boone Knox. Thomson 1438." Mr. Teaver also had a telephone conversation with Mr. Peter Knox. Mr. Teaver testified that he placed a telephone call to Thomson, Georgia, asking for Knox Corporation, and called for Mr. Boone Knox and was told "the young Mr. Pete Knox is here." He testified, "I told him I was going to have to file liens if I did not get some money on these jobs," and that Mr. Peter Knox told him if he did not file liens on the houses, "they would be able to close them out quicker and that we would be one of the first ones to get our money," and told him "to send any invoices down there." Mr. Peter Knox testified that his father was president of Knox Corporation and that Boone Knox was his brother; that Knox Corporation was owned by National Homes, which was owned by many stock-holders including himself and other members of the Knox family; but that he was connected with King Development Co., which was owned by himself, his brother and others, not including his father.
The jury returned a verdict for the plaintiff for $3,022.83. The defendant National Homes, Inc., assigns error on the trial court's overruling of its motions for new trial and for judgment notwithstanding the verdict, and on the overruling of a demurrer to the petition.
We recognize the authorities holding that the authority of an agent ". . . may be established by the principal's conduct and course of dealing, and if one holds our another as his agent, and by his course of dealing indicates that the agent has certain authority, and thus induces another to deal with his agent as such, he is estopped to deny that the agent has any authority which, as reasonably deducible from the conduct of the parties, the agent apparently has." Equitable Credit Corp. v. Johnson, 86 Ga. App. 844, 847 (72 SE2d 816); Sinclair Refining Co. v. First Nat. Bank, 45 Ga. App. 769 (165 SE 860). An estoppel will arise when a principal places an agent in a position of apparent authority, so that a person of ordinary prudence conversant with business usages and the nature of the particular business is justified in assuming that such agent has authority to perform a particular act and deals with the agent upon that assumption. Commercial Credit Corp. v. Noles, 85 Ga. App. 392, 396 (69 SE2d 309). For a definition of "apparent authority," see U. S. Fidelity &c. Co. v. Hilliard, 107 Ga. App. 266, 269 (129 SE2d 559). To create an estoppel by conduct of the principal it must be shown that the complaining party dealt with the supposed agent in reliance upon the authority which the principal apparently conferred upon him, and changed his position as a result of such reliance. 2 CJS 1217 et seq., 96; 3 Am. Jur. 2d 477, 75 et seq.; accord Piedmont Operating Co. v. Cummings, 40 Ga. App. 397 (149 SE 814).
The evidence in this case failed to show that the plaintiff changed his position in reliance on any conduct of the principal apparently conferring authority on an agent.
The case of Greensboro Bonded Warehouse v. Klein Mfg. Co., 35 Ga. App. 515 (134 SE 140), relied on by the plaintiff, is not applicable because it was not proved in the present case that Edge was the agent of the Knox Corporation.
The trial court erred, therefore, in overruling the defendant's motion for judgment notwithstanding the verdict. The remaining assignments of error become moot.
Judgment reversed. Bell, P. J., and Pannell, J., concur.
Howard Oliver, Jr., contra.
Brannon, Brannon & Schuder, Robert E. Knox, for plaintiff in error.
DECIDED OCTOBER 9, 1963 -- REHEARING DENIED OCTOBER 18, 1963.
Friday May 22 22:26 EDT


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