## Facts

- Jerome Kapperman owned a Galion road grader with a defective engine.
- James Schladweiler offered to buy the grader from Kapperman for $8,500 if the grader was put in running condition.
- Kapperman agreed he would pay up to $3,000 to have the grader’s engine repaired so it could be made operational.
- Schladweiler suggested that the repairs could be done for less than $3,000 by Alice and Gene Kasselder, doing business as A & G Diesel Truck Repair (Truck Repair).
- Kapperman shipped the grader to Schladweiler in Mitchell, South Dakota, where the repair arrangements were made with Truck Repair.
- At Schladweiler’s request, Truck Repair disassembled the engine and determined it was not repairable; Truck Repair suggested purchasing a new engine for about $7,000.
- Schladweiler relayed the new-engine option to Kapperman, who rejected it as too expensive and reaffirmed that he would not pay more than $3,000.
- Truck Repair located a used engine in Omaha and estimated roughly $2,300 (about $1,000 for the engine and $1,300 for labor, plus items like oil and gaskets).
- Schladweiler communicated the used-engine estimate to Kapperman; Kapperman approved proceeding but again capped his authorization at $3,000.
- Truck Repair later discovered additional problems (including a cracked cylinder head) and told Schladweiler that the cost would be about $5,000.
- Schladweiler approved the increased-cost work without informing Kapperman that the repairs would exceed the $3,000 limit.
- Truck Repair never discussed repair costs with Kapperman and had no reason, from Kapperman’s conduct, to believe Schladweiler could bind Kapperman beyond the stated cap.
- The final repair bill totaled $6,441.06; neither Kapperman nor Schladweiler paid.
- Truck Repair sued both Kapperman and Schladweiler; the trial court awarded Truck Repair $3,000 plus interest from Kapperman and $3,441.06 plus interest from Schladweiler.
- Schladweiler appealed the judgment and the denial of his motion for a new trial.

## Issues

1. When a principal authorizes an agent to arrange repairs only up to a stated dollar cap, is the principal liable for repair charges incurred above that cap when the agent approves the additional work without informing the principal?
2. Under SDCL 59-6-2, may the principal be bound only for the authorized portion of the transaction if the authorized and unauthorized portions can be plainly separated?
3. Is the agent personally liable for the portion of the repair bill attributable to work the agent approved beyond the principal’s authorization?

## Decision

- The Supreme Court of South Dakota affirmed the judgment and the order denying a new trial.
- Kapperman was liable only for $3,000 plus interest, reflecting the maximum amount he expressly authorized for repairs.
- Schladweiler was liable for the remaining $3,441.06 plus interest because he approved repairs beyond Kapperman’s authorization.
- The court treated the authorized and unauthorized portions of the repair obligation as separable and allocated liability accordingly.

## Legal Principles

- Under SDCL 59-6-2, when an agent exceeds authority, the principal is bound only by the agent’s authorized acts to the extent they can be plainly separated from unauthorized acts.
- A principal’s actual authorization may be limited by an express dollar cap; the principal is not responsible for costs beyond that limit absent approval or ratification.
- When an agent causes a third party to perform additional work outside the agent’s authority, the agent may be held responsible for the resulting excess charges when the principal is not bound for that excess.
- On appeal, factual findings supporting the allocation between authorized and unauthorized charges are reviewed under a deferential standard and will not be disturbed absent clear error.

## Conclusion

Kapperman agreed to fund repairs only up to $3,000, and that authorized portion of the repair obligation could be separated from the later, higher-cost work Schladweiler approved without notice to Kapperman; applying SDCL 59-6-2, the court enforced the $3,000 obligation against Kapperman and placed responsibility for the remaining $3,441.06 on Schladweiler, affirming the trial court’s allocation and denial of a new trial.


Kasselder v. Kapperman, 316 N.W.2d 628 (1982)