# Hermann v. Clark

> Oregon Supreme Court · July 24, 1923 · 108 Or. 457

URL: https://www.frixlaw.com/law-library/cases/6907958

## Case

- **Full name:** HERMANN v. CLARK
- **Court:** Oregon Supreme Court
- **Decided:** July 24, 1923
- **Citations:** 108 Or. 457; 219 P. 608; 1923 Ore. LEXIS 65
- **Precedential status:** Published
- **Opinion:** Concurrence by Harris
- **Judges:** Band, Burnett, Harris, McBride
- **Cited by:** 4 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/6907958

## Opinion text

HARRIS, J.,
Specially Concurring. — I concur in the conclusion that the instructions quoted in the opinion of Mr. Justice Burnett constituted reversible error and that the judgment must for that reason be reversed. Although there may be room for debate as to whether or not, in the absence of a demurrer interposed before the filing of an answer, the complaint sufficiently alleges that Clark lacked authority to represent the supposed principals, I readily concur in the conclusion that a perfect pleading requires a direct averment of lack of authority. However, I am unable to agree with the theory that the complaint must allege that a demand was made upon the supposed principals, or with the view that Clark in all respects stands in the shoes of the supposed principals, or with the notion that Hermann’s right of action involved as an essential prerequisite a tender of the bonds to the supposed principals, or with the contention that the word “net,” as used by Hermann and Clark, means as a matter of law $5,700 over and above Hermann’s commission and the assessments against the property.
It must be constantly borne in mind that this is not an action to recover a commission. In this jurisdiction and by the weight of authority an agent is not liable upon a contract which he enters into without authority, unless it contains appropriate words to bind him personally; for the reason that it is neither the contract of the principal nor the contract of him who assumes to act as agent. The rem *475 edy accorded to the third person is in some jurisdictions deemed to be in the nature of an action for deceit; while in other jurisdictions, including Oregon, an action may be maintained by the third person against the assumed agent on the theory that the assumed agent impliedly warranted or promised that he had authority to bind the supposed principal; and as said in Anderson v. Adams, 43 Or. 621, 626 ( 74 Pac. 215, 217 ):
“This promise is not a part of the agreement supposed to have been entered into with the principal, but independent thereof, and tantamount to an implied warranty that, if a third party will enter into a contract with the agent on behalf of his principal, he will indemnify such party against any loss that he may sustain, if it shall be ascertained that he does not possess the measure of authority which he assumes.” 2 C. J. 806; Cochran v. Baker, 34 Or. 555, 563 ( 52 Pac. 520 , 56 Pac. 641 ); Sorenson v. Kribs, 82 Or. 130, 135 ( 161 Pac. 405 ); Hinton v. Roethler, 90 Or. 440, 450 ( 177 Pac. 59 ).
But whether the action is regarded as one in the nature of an action for deceit or as one for the breach of implied warranty, it is for damages and the measure of damages is the loss which has been sustained as the natural and probable consequences of the want of authority: 2 O. J. 811; 1 Mechem on Agency (2 ed.), § 1399.
In White v. Madison, 26 N. Y. 117, 124 , the view was expressed that not only in a specified class of cases but also in all cases
“where - one, pretending to be an agent, has contracted as such without authority from the principal, the party contracted with, on learning the facts, must have the right to repudiate the contract, and to hold the assumed agent immediately responsible for dam *476 ages, without waiting for the time when an action might be maintained on the contract itself; and the damages must be measured, not by the contract, but by the injury resulting from the agent’s want of power.”
In other words, the doctrine of the excerpt last quoted is that a right of action accrues to the third-person the moment he learns of the want of authority of the assumed agent. However, we are not required to ascertain whether Hermann might have recovered damages if he had sued Clark before finding a purchaser.
It must be conceded that the third person cannot have from the unauthorized agent damages for the loss of the contract, unless the contract is “one which would have been of some legal value against the principal, if it had been authorized by him” (1 Mechem on Agency (2 ed.), § 1401; 2 C. J. 810); and it must also be conceded that before Hermann can recover damages measured by the amount of the agreed commission he must show that he had the ability to perform his part of the agreement: Kent v. Addicks, 126 Fed. 112 ( 60 C. C. A. 660 ); 2 C. J. 811.
Hermann did show that he had the ability to perform. He found a purchaser who was ready, able and willing, and indeed anxious to pay $6,200 in Liberty Bonds for the property. Clark left California and arrived in Portland, Oregon, where the property is located and where Hermann and Johnson reside, about the middle of May. Everett A. Johnson was the purchaser found by Hermann. In April, before Clark left California, Johnson was anxious to buy and after Clark’s arrival in Portland Johnson was still very anxious to buy for $6,200 in Liberty *477 Bonds; but, according to Clark’s own testimony, he was unwilling to sell unless Johnson assumed the unpaid assessments with which the property was burdened. This position taken by Clark brings us to a consideration of the meaning of the word “net.”
The writer is of the opinion that it cannot be said as a matter of law that the word “net,” as used in the letters and telegrams signed by the parties, meant $5,700 over and above the assessments. The letter of April 11, 1920, written by Clark wherein he states that the -understanding is “that the net price coming to me will be $5,700,” means, when construed in the light of the other correspondence, that Clark was to receive $5,700 over and above the commission to be paid to Hermann; and it seems to the writer that when to the light of the other correspondence is added the light afforded by the testimony of the witnesses it is impossible within the recognized rules of construction to say as a matter of law that the word “net” means $5,700 over and above the commission and the assessments. If the word “net” meant over and above the assessments it also meant over and above the taxes and any other liens with which the property was burdened. The truth is that Clark, according to his own testimony, did not know at the time he assumed to make the contract that the property in controversy was burdened with any assessment, although he did know that other properties owned by the supposed principals were burdened with assessments.
If then the contract which Clark assumed to make meant $5,700 in Liberty Bonds over and above the commission, it can be said, if the testimony for the plaintiff is believed, that Hermann showed that he was able to perform his part of the contract, and that *478 lie was damaged as claimed by him. It was not necessary to show that Johnson went to each of the supposed principals and tendered the bonds and demanded a deed. It was not necessary to show that the owners were in default in order to entitle the plaintiff to recover damages from the unauthorized agent. Hermann is not suing on the express contract made by the unauthorized agent nor is he suing the supposed principals; but he is suing the unauthorized agent on an implied warranty for damages caused by him.
The burden of proof is on the third person to show the agent’s implied warranty, its breach, and the resulting damages: 1 Mechem on Agency (2 ed.), § 1399. Those damages may be great or small, full or partial, depending upon the time when the third person discovers the assumed agent’s want of authority. In the instant case Clark’s alleged lack of authority appears to have been discovered after Hermann had found Johnson as a purchaser. Hermann was therefore able, according to the testimony given for the plaintiff, to perform his part of the contract. If the supposed principals had neither authorized nor ratified Clark’s act, it was not necessary for Hermann to go through the vain and futile ceremony of tendering the bonds to the supposed principals; and so far as Clark is concerned, he waived any necessity of a tender by absolutely refusing to sell to Johnson unless Johnson assumed the assessments.
McBride, C. J., and Band, J., concur.

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/6907958. Public record. Not legal advice.