Professor Andrej Thomas Starkis



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Massachusetts School of Law

business associations

Spring Semester

2016

Professor Andrej Thomas Starkis


Table of Contents





Table of Contents ii

Table of Contents ii

Table of Cases cdlvii

Table of Cases cdlvii

Agency Cases 1

Agency Cases 1



Healthcare Services Group v. Royal Healthcare 1

Robichaud v. Athol Credit Union 9

Irene E. ROBICHAUD 10

v. 10

ATHOL CREDIT UNION 10

Supreme Judicial Court of Massachusetts, Worcester 10

Argued March 6, 1967 10

Decided April 5, 1967. 10

*352 WHITTEMORE, Justice. 10

The plaintiff's bill in equity sought cancellation of a note and discharge of a mortgage dated March 31, 1962, written for a fifteen year term in the amount of $5,000. The alleged basis for relief was that, in connection with negotiating the loan to the plaintiff and her deceased husband, Ernest J. Robichaud, the defendant had undertaken to make arrangements for insurance to cover payment of the loan in the event of Robichaud's death and had not done so, with the result that the plaintiff had a claim offsetting the amount due under the note. The defendant's answer included a counterclaim under the note and mortgage. The evidence is reported 10

The judge in the Superior Court found, on subsidiary findings, that the defendant entered into a contract to procure the insurance on the life of Robichaud and that the plaintiff and her husband had paid the premiums but the defendant had not procured the insurance. He ruled that the note and mortgage should be cancelled and discharged. The final decree so provided. The defendant contends that there is no evidence of such a contract between the defendant and either the plaintiff or her husband 10

The evidence showed, in accordance with findings of the judge, an original ten year loan for $2,000 dated November 15, 1961, covered by insurance on Robichaud's life. Charges to cover the cost of the insurance were included in the statement of monthly payments and were paid. The fifteen year, $5,000 loan, to supersede the ten year loan, was negotiated in March, 1962. At the date of Robichaud's death in July, 1962, $4,000 had been advanced on the loan 10

It was shown that the defendant had a group insurance policy issued under G.L. c. 175, s 133, permitting the insurer to cover '(c) a group of (not less than one hundred) persons who at any time are debtors of a bank * * * for a loan * * * or any balance thereof, in instalments over a *353 period of not more than ten years * * * for an amount not exceeding his individual indebtedness * * * and not exceeding ten thousand dollars * * * provided * * * that no such debtor shall be insured in such a group for a period of more than ten years on account of a debt arising out of said loan.' 10

Robert Linehan, assistant treasurer of the defendant, testified that in March, 1962, he discussed with Robichaud the increased loan. He pointed out to Robichaud, with reference to the application form, that if the loan was to be written for ten years he could have insurance but if it was to be for a longer period 'we could not cover it with insurance.' In a day or two Robichaud told Linehan that the decision had been made to have the fifteen year loan. The papers to set up the loan **349 would have been drawn by the treasurer, his father, Joseph R. Linehan. Q. 'And if this payment book says that it was set up for $2.75 (monthly premium) for insurance, then he would have done it?' A. 'If it had been set up that way, he would have.' The first payment by the Robichauds was on April 12, 1962, as shown by the loan book. That payment was for $32.72 and included $2.75 credited in the book to insurance. The bank collected like premiums in May, June and July 10

Joseph R. Linehan testified that the bank used for the new loan the same loan book that had been used for the $2,000 loan. Looking at the book, he said, '(W)hen the loan is put through, we collect the first premium for that month. And the loan not being insured, that premium was not collected (on March 31, 1962, when the loan was made out).' He testified that the $2.75 premiums were collected through error, 'apparently (by) one of the clerks.' 11

The plaintiff testified that when she and her husband went to the bank in March, 1962, to sign the prepared papers on the new loan and met with Joseph R. Linehan, there was no talk of insurance that she remembered. Thereafter on one occasion when making payments at the defendant's office she asked the girl who took her money to explain what every column in the book was. The girl told *354 her 'the $2.75 was my insurance.' The plaintiff said, 'I want you to make sure we have insurance because of the work he (Robichaud) has. * * * I don't want to be $5,000 in the hole if something happens.' The girl 'went to the file, * * * looked it up' and said, 'Oh yes, it's in black and white. * * * You're insured.' Robichaud was in the roofing business 11

Mrs. Robichaud also testified that about a month before her husband was killed, and following his brother's fall from a roof and consequent death, in the course of discussing that casualty, Robichaud said, 'If anything happens to me, Irene, I know you will have the place as yours, and I know you will have a place to raise the children without worrying about paying; just the taxes, that's all.' 11

Mrs. Robichaud and Robert Linehan agreed in their testimony that, shortly after Robichaud's death, she talked with Robert and that, after having looked at the legder card, he told her that the loan was insured. The evidence tended to show also that a few days later the elder Linehan called, bringing the folder in relation to the loan and told Mrs. Robichaud, 'You had no insurance * * * we made a mistake.' It was agreed that Mrs. Robichaud's testimony as to her two talks at the bank would be corroborated by the testimony of two witnesses, one having heard the talk with the girl at the counter and the other having been present at the talk with Robert Linehan 11

The judge, of course, could disbelieve the testimony that Robert Linehan had told Robichaud that the fifteen year loan could not be insured. There is, however, no evidence that the defendant undertook to make an insured loan or to procure insurance on Robichaud's life, and the finding to that effect cannot stand 11

The evidence does, however, support the final decree. There is no dispute that the loan book and the statement of the girl at the counter represented to the borrowers that payments were due for insurance premiums and that there was insurance. We rule that it was within the apparent authority of the girl at the counter to make statements as *355 to what the items in the loan book covered. It does not appear who put the items in the book, but the book spoke for the bank. [FN1] The evidence **350 shows that there were entries not only in the book but also on the bank's ledger card. The statements of the treasurer and assistant treasurer after the death of Robichaud tended to confirm that the loan had been represented to the Robichauds as insured. The representations were of a fact susceptible of actual knowledge and proof of intent to deceive is not required. Pietrazak v. McDermott, 341 Mass. 107, 110, 167 N.E.2d 166, and cases cited. The representations were intended to be relied on by the Robichauds in making the payment for the insurance premiums claimed due and in going forward with their obligations under the contract. The evidence shows that the Robichauds did reasonably rely on the existence of insurance. We think it unnecessary that there be affirmative testimony that, except for the representation, they would have sought to reduce the term of the loan to ten years so as to have the benefit of the bank's group policy, or would have sought other insurance. See Rice v. Price, 340 Mass. 502, 507--508, 164 N.E.2d 891; Baglio v. New York Cent. R.R., 344 Mass. 14, 19--20, 180 N.E.2d 798; McLearn v. Hill, 276 Mass. 519, 524--525, 177 N.E. 617, 77 A.L.R. 1039 (estoppel); Prosser, Torts, 3d ed. s 102. The plaintiff was damaged, and may recover what she would have had if the representation had been true. Rice v. Price, supra, 340 Mass. 507, 164 N.E.2d 891 11

FN1. Conceivably, the error related to the use of the same loan book, with provision therein for the premium payments on the $2,000 loan of $1.10 per month. The judge found that a new book was issued. Joseph R. Linehan at first so testified, but when shown the book used for the $5,000 loan corrected himself saying, 'We used the same book. I'm sorry.' The evidence does not show when and in what circumstances the entries of $2.75 per month for supposed premium on the new loan were made. 12

Ultra vires, an affirmative defence, Nowell v. Equitable Trust Co., 249 Mass. 585, 595--596, 144 N.E. 749, has not been pleaded. But it was not ultra vires the defendant to furnish insurance in connection with loans. Even if furnishing insurance would have been beyond the defendant's power, this would not have been a defence. McCarthy v. Brockton Nat. Bank, 314 Mass. 318, 324--325, 50 N.E.2d 196. 12

*356 The final decree is to be modified (a) to delete the finding of a contract; (b) to provide that the plaintiff's claim for damages based on misrepresentations of the defendant is equal to and is offset against the defendant's counterclaim under the note and mortgage and that the note and mortgage are paid, cancelled, and discharged; and (c) to be consistent with the provisions of the foregoing clause (b). As so modified it is affirmed. The plantiff shall have costs of appeal 12

So ordered 12

Elliott v. Great Nat’l Life Ins. Co. 12

Supreme Court of Texas. 12

B. N. ELLIOTT, Petitioner, 12

v. 12

GREAT NATIONAL LIFE INSURANCE COMPANY, Respondent. 12

No. B-9194. 12

Jan. 14, 1981. 13

Rehearing Denied Feb. 18, 1981. 13

BARROW, Justice. 13

B. N. Elliott brought this suit to recover the sum of $12,500 remaining unpaid on an alleged oral agreement of employment for a period of one year. Donald Spear, who was Senior Vice-President of Marketing for Great National Life Insurance Company, entered into the agreement with Elliott. The question presented is whether Spear was authorized by Great National to make the agreement. The trial court rendered *621 judgment on the jury verdict for Elliott. [FN1] The court of civil appeals reversed this judgment and rendered a take-nothing judgment for Great National after concluding that there was no evidence to support the jury finding as to Spear's authority. 592 S.W.2d 404. We reverse the judgment of the court of civil appeals and remand the cause to that court for consideration of other points raised by Great National. 13

FN1. The jury found that on September 16, 1976, Spear and Elliott entered into an oral agreement whereby Great National employed Elliott for a period of one year. The jury also found that Spear was authorized by Great National to employ Elliott. Included in the instruction with this issue was a definition of "apparent authority." 13

It is well settled that in order to determine whether there is "no evidence" to support the jury finding as to Spear's authority, we must consider only the evidence and inferences from the evidence which support the jury finding and disregard all evidence and inferences to the contrary. Stodghill, et al v. Texas Empl. Ins. Ass'n, 582 S.W.2d 102 (Tex.1979); Dodd v. Twin City Fire Ins. Co., 545 S.W.2d 766 (Tex.1977). Upon considering the evidence in that light, we hold that the facts show some evidence of Spear's apparent authority to offer a one year contract of employment to Elliott. 13

Great National was a Texas corporation which was wholly owned by US Life Corporation, a New York-based corporation. Spear's primary responsibility at Great National was to add to the field vice-president staff. Pursuant to this delegated responsibility, Spear, who was located in the Dallas office, contacted Elliott in Atlanta, Georgia, and inquired as to his interest in a field vice-president's position with Great National. 13

Elliott twice flew to Dallas to interview with Great National. He also flew to New York City to attend a meeting, sponsored by Great National's parent company, of all the marketing people from the parent company's subsidiaries. Elliott believed that he was attending the meeting in order to meet the people who would make the decision as to his selection for a field vice-president's position. Each one of these trips was pursuant to Spear's request and authorization. Great National paid for each of the trips. It also paid Elliott one-twelfth of the agreed annual salary for each of the six months Elliott worked for Great National. 13

During the series of interviews with Spear, Elliott requested that Great National allow him to remain in Atlanta. Spear testified in this regard as follows: 13

"Very early in our conversation, he (Elliott) indicated that he would like to remain there (Atlanta) ... and I spoke to my president about it and we declined to agree that Nick should live there." 14

Elliott testified that he first knew he would have to relocate to Dallas when he reported to work in the Dallas office on September 16, 1976. He testified as follows: 14

"Q. How did you find out, then, on September 16, that you did not have an agreement? 14

"A. Don (Spear) informed me at that time that we had not had any success at all in talking to New York and getting them to agree to leaving me remain in Atlanta and that I would have to move to Dallas." 14

The testimony of both Spear and Elliott provides evidence of a chain of communication which facilitated Great National's selection of Elliott as a field vice-president. Spear was expressly delegated to add employees such as Elliott. Spear and Elliott discussed the conditions of employment, and then Spear solicited a decision from the home office. When the decision concerning the conditions of employment was made, Spear communicated the decision to Elliott. 14

Great National did not limit the use of this chain of communication to a particular time or to a particular condition of employment. In fact, Elliott testified that he did not at any time discuss the terms of his employment with any employee of Great National other than Spear. It was this fact which led Elliott to believe that Spear had the authority to offer Elliott a one year term of employment: 14

*622 "Q. As a matter of fact, you testified in your deposition a year ago that you knew during the time of these discussions that Mr. Spear did not have the authority on behalf of Great National to guarantee you a one year term of employment? 14

"A. At that time, I didn't think he had the authority, but on September the 16th, I quickly determined that he did have the authority since he was the only person I had had dealings with. I hadn't had any dealings with anyone else and all arrangements were made through him." 14

In Chastain v. Cooper & Reed, 152 Tex. 322, 257 S.W.2d 422, 427 (Tex.1953), this Court said: 14

"The doctrine of apparent authority is based on estoppel, and one seeking to charge a principal through the apparent authority of an agent to bind the principal must prove such conduct on the part of the principal as would lead a reasonably prudent person, using diligence and discretion, to suppose that the agent has the authority he purports to exercise...." 14

See also Douglass v. Panama, Inc., 504 S.W.2d 776 (Tex.1974). 14

Great National established a chain of communication by which it communicated with Elliott through Spear. In so doing, Great National permitted Spear to hold himself out as having the authority to convey Great National's offer of employment to Elliott, and therefore indicated to Elliott that Spear had the authority to communicate that offer. In this situation, we hold that there was more than a scintilla of evidence that Spear had the apparent authority to hire Elliott on behalf of Great National for a period of one year. Therefore, the holding of the court of civil appeals that there was no evidence to support the jury finding was erroneous. Martinez v. Delta Brands, Inc., 515 S.W.2d 263 (Tex.1974). 14

This error requires a reversal of the judgment of the court of civil appeals. Since Great National's brief in the court of civil appeals contained points not considered by that court, including factual points beyond this Court's jurisdiction, we remand the cause to the court of civil appeals. Shriro Corp. v. Ward, 570 S.W.2d 395 (Tex.1978); Custom Leasing, Inc. v. Texas Bank & Tr. Co. of Dallas, 491 S.W.2d 869 (Tex.1973). 15

The judgment of the court of civil appeals is reversed and the cause is remanded to that court. 15

Hoddeson v. Koos Bros. 15

Robert HODDESON and Joan Hoddeson, Plaintiffs-Respondents, 15

v. 15

KOOS BROS., a New Jersey corporation, Defendant-Appellant. 15

No. A--487. 15

Superior Court of New Jersey. 15

Appellate Division. 15

Argued Sept. 30, 1957. 15

Decided Oct. 30, 1957. 15

The opinion of the court was delivered by 15

JAYNE, J.A.D. 15

The occurrence which engages our present attention is a little more than conventionally unconventional in the common course of trade. Old questions appear in new styles. A digest of the story told by Mrs. Hoddeson will be informative and perhaps admonitory to the unwary shopper. 15

The plaintiff Mrs. Hoddeson was acquainted with the spacious furniture store conducted by the defendant, Koos Bros., a corporation, at No. 1859 St. George Avenue in the City of Rahway. On a previous observational visit, her eyes had fallen upon certain articles of bedroom furniture which she ardently desired to acquire for her home. It has been said that 'the sea hath bounds but deep desire hath none.' Her sympathetic mother liberated her from the grasp of despair and bestowed upon her a gift of $165 with which to consummate the purchase. 15

It was in the forenoon of August 22, 1956 that Mrs. Hoddeson, accompanied by her aunt and four children, happily journeyed **704 from her home in South River to the defendant's store to attain her objective. Upon entering, she was greeted by a tall man with dark hair frosted at *228 the temples and clad in a light gray suit. He inquired if he could be of assistance, and she informed him specifically of her mission. Whereupon he immediately guided her, her aunt, and the flock to the mirror then on display and priced at $29 which Mrs. Hoddeson identified, and next to the location of the designated bedroom furniture which she had described. 16

Upon confirming her selections the man withdrew from his pocket a small pad or paper upon which he presumably recorded her order and calculated the total purchase price to be $168.50. Mrs. Hoddeson handed to him the $168.50 in cash. He informed her the articles other than those on display were not in stock, and that reproductions would upon notice be delivered to her in September. Alas, she omitted to request from him a receipt for her cash disbursement. The transaction consumed in time a period from 30 to 40 minutes. 16

Mrs. Hoddeson impatiently awaited the delivery of the articles of furniture, but a span of time beyond the assured date of delivery elapsed, which motivated her to inquire of the defendant the cause of the unexpected delay. Sorrowful, indeed, was she to learn from the defendant that its records failed to disclose any such sale to her and any such monetary credit in payment. 16

Such were the essentialities of the narrative imparted to the judge and jury in the Union County District Court, where Mrs. Hoddeson and her husband obtained a final judgment against the defendant in reimbursement of her cash expenditure. The testimony of her aunt was corroborative of that of Mrs. Hoddeson. 16

Although the amount of money involved is relatively inconsiderable, the defendant has resolved to incur the expense of this appeal. This Division has heretofore had occasion to state that justice is not qualified by the monetary importance of the controversy. Series Publishers, Inc. v. Greene, 9 N.J.Super. 166, 75 A.2d 549 (App.Div.1950). Obviously, the endeavor of the defendant is to elicit from us a precedential opinion concerning a merchant's liability in the exceptional *229 circumstances disclosed by the evidence to which we have already alluded, and by the supplementary evidence to which we shall presently refer. 16

It eventuated that Mrs. Hoddeson and her aunt were subsequently unable Positively to recognize among the defendant's regularly employed salesmen the individual with whom Mrs. Hoddeson had arranged for the purchase, although when she and her aunt were afforded the opportunities to gaze intently at one of the five salesmen assigned to that department of the store, both indicated a resemblance of one of them to the purported salesman, but frankly acknowledged the incertitude of their identification. The defendant's records revealed that the salesman bearing the alleged resemblance was on vacation and hence presumably absent from the store during the week of August 22, 1956. 16

As you will at this point surmise, the insistence of the defendant at the trial was that the person who served Mrs. Hoddeson was an impostor deceitfully impersonating a salesman of the defendant without the latter's knowledge. 16

It was additionally disclosed by the testimony that a relatively large number of salesmen were employed at the defendant's store, and that since they were remunerated in part on a sales commission basis, there existed considerable rivalry among them to serve incoming customers; hence the improbability of the unnoticed intrusion of an impersonator. 17

Fortifying the defense, each of the five salesmen, but not every salesman, denied that he had attended Mrs. Hoddeson on the stated occasion, and the defendant's comptroller **705 and credit manager verified the absence in the store records of any notation of the alleged sale and of the receipt of the stated cash payment. 17

The credibility of the testimony of both Mrs. Hoddeson and her aunt was thus shadowed. The trial judge transmitted to the jury for determination the simple factual issue whether Mrs. Hoddeson and her co-plaintiff had established by a preponderance of the credible evidence that the $168.50 was paid in fact to an employee of the defendant; otherwise, the defendant should be acquitted of liability. 17

*230 The jury resolved that controversial issue in favor of the plaintiffs. The defendant's application for a new trial was denied by the trial judge who announced: 17

'It is my conclusion that the evidence of the circumstances proved by the plaintiff warranted a finding by the jury that the person who received the money was an employee of the defendant.' 17

Does it clearly and unequivocally appear that the action of the trial judge constituted a manifest denial of justice under the law? Hartpence v. Grouleff, 15 N.J. 545, 549, 105 A.2d 514 (1954). 17

The ground now asserted on behalf of the defendant for a reversal of the judgment is that there was a deficit of evidence to support the conclusion that a relationship of master and servant existed between the man who served and received the money from Mrs. Hoddeson and the defendant company. 17

There can be no doubt that the existence of the alleged relationship, or in the alternative an estoppel by the defendant to deny its existence, was an essential element of the legal right of the plaintiff, Mrs. Hoddeson, to recover her monetary disbursement from the company. Neither is it to be doubted that such a relationship of agency, actual or apparent, can be proved by means of circumstantial evidence. 17

We do not hastily yield to the temptation immediately to adopt the postulate that the person who waited upon Mrs. Hoddeson was without question a humbugger unassociated with the defendant. We recognize that the jurors, pursuant to the directions of the court, weighed on the scales of reasonable probabilities the inferences anent that issue which were to them derivable from the circumstantial evidence relating on the one hand to the described behavior and deportment of the individual and on the other to the revelatory state of the defendant's records. 17

Perhaps in reality the jurors did not read the scales mistakenly, and so initially we pause to examine the probative *231 range of the circumstantial evidence. True, in the present case there was evidence that the person whose identity is undisclosed approached Mrs. Hoddeson and her aunt in the store, publicly exhibiting the mannerisms of a salesman; inquired if he could be of service; upon being informed of the type of the articles in which Mrs. Hoddeson was interested, he was not only sufficiently acquainted with their description, but also where in the department they were respectively on display, guiding them without hesitation to the location of the mirror and then to that of the indicated bedroom furniture; he represented that those articles were not then available in stock, which significantly the store records disclosed to be true; his prophetic representation concerning their prospective arrival in stock proved to be prescient, unless he gleaned that information from the price tag; he accurately calculated their true sales prices and openly received the cash. Those activities precisely characteristic of the common experiences and practices in the trade were conspicuously pursued in market overt during a period of 30 to 40 minutes. 18

In the consideration of the propriety of the defendant's motion for an involuntary dismissal of the action, we are **706 not at liberty to suspect that the verified narrative of Mrs. Hoddeson, corroborated by her aunt, was purely imaginative or artfully inventive, but rather to regard it as a trustworthy revelation of the factual events to the extent of her knowledge. Gentile v. Public Service Coordinated Transport, 12 N.J.Super. 45, 49, 78 A.2d 915 (App.Div.1951). 18

In the study of the circumstantial evidence, its perceptible legal deficiency and inadequacy inhere in the limitations of its disclosures. Obviously it confines its information solely to the activities of the supposed salesman. It does not embrace or, indeed, touch any manifestations whatever emanating From the defendant tending to indicate Its conference of authority, actual or apparent, upon the alleged salesman. 18

Where a party seeks to impose liability upon an alleged principal on a contract made by an alleged agent, as here, the party must assume the obligation of proving *232 the agency relationship. It is not the burden of the alleged principal to disprove it. 18

Concisely stated, the liability of a principal to third parties for the acts of an agent may be shown by proof disclosing (1) express or real authority which has been definitely granted; (2) implied authority, that is, to do all that is proper, customarily incidental and reasonably appropriate to the exercise of the authority granted; and (3) apparent authority, such as where the principal by words, conduct, or other indicative manifestations has 'held out' the person to be his agent. 18

Obviously the plaintiffs' evidence in the present action does not substantiate the existence of any basic express authority or project any question implicating implied authority. The point here debated is whether or not the evidence circumstantiates the presence of apparent authority, and it is at this very point we come face to face with the general rule of law that the apparency and appearance of authority must be shown to have been created by the manifestations of the alleged principal, and not alone and solely by proof of those of the supposed agent. Assuredly the law cannot permit apparent authority to be established by the mere proof that a mountebank in fact exercised it. 18

The plaintiffs here prosecuted an action in Assumpsit, alleging a privity of contract with the defendant through the relationship of agency between the latter and the salesman. The inadequacy of the evidence to prove the alleged essential element of agency obliges us to reverse the judgment. 19

But prelude, as we may do here, a case in which a reconciliation of the factual circumstances disclosed by the evidence of both the plaintiffs and the defendant exhibits an unalleged and an undetermined justiciable cause of action, should the plaintiffs, by our reversal of the judgment, be conclusively denied the opportunity, auspicious or not, appropriately and not mistakenly, to seek judicial relief? 19

Let us hypothesize for the purposes of our present comments that the acting salesman was not in fact an employee *233 of the defendant, yet he behaved and deported himself during the stated period in the business establishment of the defendant in the manner described by the evidence adduced on behalf of the plaintiffs, would the defendant be immune as a matter of law from liability for the plaintiffs' loss? The tincture of estoppel that gives color to instances of apparent authority might in the law operate likewise to preclude a defendant's denial of liability. It matters little whether for immediate purposes we entitle or characterize the principle of law in such cases as 'agency by estoppel' or 'a tortious dereliction of duty owed to an invited customer.' That which we have in mind are the unique occurrences where solely through the lack of the proprietor's reasonable surveillance and supervision an **707 impostor falsely impersonates in the place of business an agent or servant of his. Certainly the proprietor's duty of care and precaution for the safety and security of the customer encompasses more than the diligent observance and removal of banana peels from the aisles. Broadly stated, the duty of the proprietor also encircles the exercise of reasonable care and vigilance to protect the customer from loss occasioned by the deceptions of an apparent salesman. The rule that those who bargain without inquiry with an apparent agent do so at the risk and peril of an absence of the agent's authority has a patently impracticable application to the customers who patronize our modern department stores. Vide, 2 C.J.S. Agency s 93, p. 1193. 19

Our concept of the modern law is that where a proprietor of a place of business by his dereliction of duty enables one who is not his agent conspicuously to act as such and ostensibly to transact the proprietor's business with a patron in the establishment, the appearances being of such a character as to lead a person of ordinary prudence and circumspection to to believe that the impostor was in truth the proprietor's agent, in such circumstances the law will not permit the proprietor defensively to avail himself of the impostor's lack of authority and thus escape liability for the consequential loss thereby sustained by the customer. 19

*234 The reported decisions implicating Precisely such uncommon occurrences are not numerous. Of them, the following will suffice to illustrate the import of our comments. Kanelles v. Locke, 12 Ohio App. 210 (Ct.App.1919), where an impostor acting as the hotel clerk received at the desk for safe-keeping money and jewelry from a guest; Miltenberger v. Hulett, 188 Mo.App. 273, 175 S.W. 111 (K.C.Ct.App.1915), where an incoming railroad passenger delivered his trunk check to an impostor acting in the office of the transfer agency; Luken v. Buckeye Parking Corporation, 77 Ohio App. 451, 68 N.E.2d 217 (Ct.App.1945), where a motorist entrusted her vehicle to an impostor acting as the attendant at a parking lot. Consult also, Mechem, Outline of Agency (4th ed.) pp. 57, 59, 61 and 72; 1 Mechem on Agency (2d ed.) 534, s 752; 34 Mich.L.Rev. 404; 29 Yale L.J. 859; 5 Columbia L.Rev. 36; 1 Restatement of Agency 25, s 8, comm. a. 19

Although intrinsically distinguishable, see Livingston v. Fuhrman, 37 A.2d 747 (D.C.Mun.Ct.App.1944); Barron v. McLellan Stores Co., 310 Mass. 778, 39 N.E.2d 953 (Sup.Jud.Ct.1942); Hannon v. Siegel-Cooper Co., 167 N.Y. 244, 60 N.E. 597, 52 L.R.A. 429 (Ct.App.1901); Jackson v. Fort Pitt Hotel, Inc., 162 Pa.Super. 271, 57 A.2d 696 (Super.Ct.1948); Mulhern v. Public Auto Parks, 296 Ill.App. 238, 16 N.E.2d 157 (App.Ct.1938). 20

Let it not be inferred from our remarks that we have derived from the record before us a conviction that the defendant in the present case was heedless of its duty, that Mrs. Hoddeson acted with ordinary prudence, or that the factual circumstances were as represented at the trial. 20

In reversing the judgment under review, the interests of justice seem to us to recommend the allowance of a new trial with the privilege accorded the plaintiffs to reconstruct the architecture of their complaint appropriately to project for determination the justiciable issue to which, in view of the inquisitive object of the present appeal, we have alluded. We do not in the exercise of our modern *235 processes of appellate review permit the formalities of a pleading of themselves to defeat the substantial opportunities of the parties. Cf. Marschalk v. Weber, 11 N.J.Super. 16, 26, 77 A.2d 505 (App.Div.1950), certification denied 6 N.J. 569, 89 A.2d 146 (1951). 20

Reversed and new trial allowed. 20




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