Saturday, March 31, 2012

Key Missouri Agency Citations/Second Ten Cases

    #11. City of Springfield v. Koch, 228 Mo.App. 511, 72 S.W.2d 191 (1934), in which Edgar, brother of appellant Victor Koch, had over a period of years, with the knowledge and consent of Victor, signed Victor's name to surety bonds similar to the one in issue. Victor took no steps to prevent it nor to give notice such acts were unauthorized. In holding that Edgar had implied authority to bind Victor, the court held authority to do a given thing may be inferred from the agent's previous conduct of like character with the principal's acquiescence therein.

    #12. Wynn v. McMahon Ford Co.,414 S.W.2d 330 (Mo.App.1967), in which defendant automobile dealership gave an employee the title of used car sales manager. It was held a third person dealing with him could reasonably believe he had authority to conclude a sales contract for a boat on plaintiff's used car lot.

    #13. Newco Land Co. v. Martin, 358 Mo. 99, 213 S.W.2d 504, 511 (Mo.1948):

    It is well settled that the principal is chargeable with notice or knowledge received by his agent while acting within the scope of his authority concerning a matter within the scope of the agency. Restatement, Agency, Sec. 268, 2 Am. Jur. 286, Sec. 368; 3 C.J.S. 194, Sec. 262. There is an exception to this rule when the agent is acting adversely to the principal and entirely for his own or another's purpose. Restatement, Agency, Secs. 279, 282; 2 Am. Jur. 298, Sec. 379. But the stated exception is itself subject to an exception or qualification, which qualification, supported by the greater weight of authority, is to the effect that where the principal asserts or stands on the transaction either affirmatively or defensively, he is deprived of the benefit of the exception where the agent is his sole representative in the transaction, in which case the agents knowledge is imputed to the principal. Restatement, Agency, Sec. 282; 2 Am. Jur. 300, Sec. 380; 3 C.J.S. 202, Secs. 269, 270, and authorities infra.

    #14.  E.g., Maniaci v. Interurban Express Co., 182 S.W. 981, 985  (Mo. 1916) writing that rationale of respondeat superior is implied in fact warranty by principal that agent is competent and fitted to be trusted.  "In effect … he [the principal] warrants … [the agents] fidelity and good conduct in all matters within the scope of his agency."

    See also State ex rel. Matter v. Ogden172 S.W. 1172, 174 (1915) (citing Blackstone that one who provides services warrants he will  perform his duty with integrity, diligence, and skill).

    #15.  Clark's Adm'x v. Hannibal  & St. Joseph R.R. Co., 36 Mo. 202, 218 (1865), basing the rationale for respondeat superior upon the concept concept  that  benefits  and  liabilities  should  be reciprocal,  and  thus  that  those  who  hope  to  profit from  an  activity must  also  bear  its  costs.

    #16. Coble v. Economy Forms Corp., 304 S.W.2d 47, 52 (Mo.App. 1957).

    [O]ne of the reasons for the existence of the doctrine of respondeat superior lies in this power of the master to exercise detailed control over the manner in which the work is done.
    See generally David Jacks Achtenberg, Taking History Seriously: Municipal LiabilityUnder 42 U.S.C. § 1983 and the Debate Over Respondeat Superior 

    #17. Baker v. Aetna Casualty & Surety Co., 193 S.W.2d 363, 369  (Mo. App. 1946) approved use of a cautionary insurance on implied authority reading:

    Instruction No. 2 told the jury that whenever a person has held out another as his agent authorized to act for him in a given capacity, or where his habits and course of dealing have been such as to reasonably warrant the presumption that such other was his agent authorized to act in that capacity, whether it be in a single transaction or in a series of transactions, his authority to such other to act for him in that capacity may be presumed, and the principal will not be permitted to deny that such other was his agent authorized to do the act that he assumed to do, provided that act was within the real or apparent scope of the presumed authority.

      More on implied authority

      The key to authority implied from course of conduct is the knowing acquiescence of the principal in the past acts. State on Inf. of Taylor v. American Ins. Co., 355 Mo. 1053, 200 S.W.2d 1 (banc 1946). "An agent's authority may be inferred when it appears that the agent has repeatedly performed acts like the one in question which the principal has ratified and adopted." Austin-Western Road Machinery Co. v. Commercial State Bank, 255 S.W. 585, 588 (Mo.App.1923).

      Agency may be implied or inferred and may be circumstantially proved by conduct of the purported agent exhibiting pretense of authority with knowledge of the alleged principal coupled with acquiescence.

      The Federal Digital System

      An extraordinary new tool

      Implied authority in the United States District Court for the Eastern District of Missouri Eastern Distict


      The Eighth Circuit explained the factors relevant to actual authority under Missouri law in Essco Geometric v. Harvard Industries, 46 F.3d 718, 723-24 (8th Cir. 1995), and held as follows:
      Under Missouri law, for an agent to have actual authority, he must establish that the principal has empowered him, either expressly or impliedly, to act on the principal's behalf. Hyken v. Travelers Ins. Co., 678 S.W.2d 454, 457 (Mo. Ct. App. 1984). The principal can expressly confer authority by telling his agent what to do or by knowingly acquiescing to the agent's actions. Rosenblum v. Jacks or Better of America West, Inc., 745 S.W.2d 754, 760 (Mo. Ct. App. 1988). Implied authority flows from express authority, and "encompasses the power to act in ways reasonably necessary to accomplish the purpose for which express authority was granted." Id. Missouri case law suggests that custom and the relations of the parties establish the parameters of implied actual authority. Barton v. Snellson, 735 S.W.2d 160, 162 n. 2 (Mo. Ct. App. 1987); Molasky Enterprises, Inc. v. Carps, Inc., 615 S.W.2d 83, 87 (Mo. Ct. App.1981); Dudley v. Dumont, 526 S.W.2d 839, 844 (Mo. Ct. App. 1975). Thus, evidence that an agent historically engaged in related conduct, without limitation, would be enough to support a jury question on the issue of actual authority.
      See also IOS Capital, L.L.C. v. Allied Home Mortgage Capital Corp., 150 S.W.3d. 148, 151-52 (Mo. Ct. App. 2004) ("Implied authority is actual authority which the principal intended the agent to possess that lacks direct proof, but rather is implied from relevant facts and circumstances as reasonably necessary to accomplish the purpose or purposes of the expressly conferred authority."); Nichols v. Prudential Ins. Co.of America, 851 S.W.2d. 657, 661 (Mo. Ct. App. 1993) ("Express authority is created when the principal explicitly tells the agent what to `do'... [and] implied authority consists of those powers incidental and necessary to carry out the express authority.").
      Evidence of implied actual authority can be derived from an agent's own testimony, from his job description or from custom and practice within an industry. Essco, 46 F.3d at 724 (citing Sappington v. Miller, 821 S.W.2d 901, 904 (Mo. Ct. App. 1992); Barton v. Snellson, 735 S.W.2d 160, 162 n. 2 (Mo. Ct. App. 1987)).

      More on hide and seek: act is necessary to accomplish the purpose of the employment and is intended for such purpose, although in excess of the powers actually conferred

      In Sandman the court observed: 'It has been said an act is 'within the scope of the servant's employment' where such act is necessary to accomplish the purpose of the employment and is intended for such purpose, although in excess of the powers actually conferred on the servant by the master.' Sandman v. Hagan, supra at 117. See also, Seybold v. Eisle, 154 Iowa 128, 134 N.W. 578, 580-581 (1912); United States v. Farmer, 400 F.2d 107, 110-111 (8 Cir. 1968).

      Missouri follows this view.
      Implied authority flows from the express authority, and encompasses the power to act in ways reasonably necessary to accomplish the purpose for which express authority was granted.

      What if the agency agreement or contract has a secret limitation on the agent's authority?
      [A] contract will be treated as abandoned where the acts of one party inconsistent with its existence are acquiesced in by the other." Alropa Corp. v. Smith, 240 Mo. App. 376, 199 S.W.2d 866, 871 (1947); accord In re Estate of Reed, 414 S.W.2d 283 (Mo.1967).

      In Ticor Title Ins. Co. v. Nat'l Abstract Agency, Inc., District Judge Cleland found that title insurers routinely abandon provisions  in their agency contracts that limit the authority of agents to conduct or handle closings, escrows, or settlements.

      Independent contractors can be agents

      Our research on the role of an independent contractor as an agent has turned up a potentially misleading assertion in Missouri case law, namely that "[o]ne cannot be an independent contractor and at the same time be an agent for the same purposes."Jeff-Cole Quarries, Inc. v. Bell, 454 S.W.2d 5, 14 (Mo. 1970); Rackers & Baclesse, Inc. v. Kinstler, 497 S.W.2d 549, 552 (Mo.App.1973); Crist Sod Co. v. Bruce, 599 S.W.2d 43, 45 (Mo.App. E.D.1980). Although we presume that in those cases the court properly found that the independent contractor was not an agent, it is plain that an independent contractor can be an agent. RESTATEMENT (SECOND) OF AGENCY SECTIONS 2, 14N (1958). The Missouri cases stating a conflicting rule have been cited in secondary sources. See William R. Mureiko, Note, The Agency Theory of the Attorney-Client Relationship: An Improper Justification for Holding Clients Responsible for their Attorneys' Procedural Errors, 1988 Duke L.J. 733, 754 n. 44 (1988); 2A C.J.S. Agency Section 17 (2003).

      General agency arising out of continuity

      A general agent is  an agent "authorized to conduct a series of transactions involving a continuity of service," RESTATEMENT (SECOND) OF AGENCY, Section 7 (1958).

      Parshall v. Buetzer, 195 S.W.3d 515, 520 (Mo.App. W.D.2006)

      Secret Limitations do not limit the authority of an admitted agent

      Sophisticated defendants, especially insurers, often play hide and seek with agent's authority, writing secret limitations into agency agreements, manuals, or other instructions. 

      Parshall v. Buetzer, 195 S.W.3d 515, 521 (Mo.App. 2006). 
      "[S]ecret" limitations may mean those the principal intends "not to be revealed." RESTATEMENT (SECOND) OF AGENCY, Section 160 (1958).
       Wynn v. McMahon Ford Co., 414 S.W.2d 330, 337 (Mo.App.1967).
      "This testimony brings the situation to the borderline for application of the elementary rule that a third person dealing with an admitted agent is not bound by secret limitations upon the power of the agent of which the third person had no notice.

      Presumptions arising from the admission of agency

      Few Missouri cases has discussed the numerous presumptions that arise, once an agency relationship of any kind is admitted. Agency is not presumed, but once agency is admitted, authority is presumed. Counsel ought to consider all of the following propositions, which should naturally flow from the admission of agency:


      From the presumption of regularity,  a presumption should arise that an admitted agent is acting within the scope and course of their authority.

      The presumption of regularity has two branches. First, general or continuing agents are


      Principals are presumed to know what their agents know.  

      John D. Lawson, The Law of Presumptive Evidence 23 (2d. ed. St. Louis 1899) (available at Google Books)

      Principals have a duty to monitor the actions of their agents. Principals are thus imputed with knowledge

      Restatement Second

      Discussion of the Restatement (Second) Agency §  49, comment c:

      Inferences from agent's position. Acts are interpreted in the light of ordinary human experience. If a principal puts an agent into, or knowingly permits him to occupy, a position in which according to the ordinary habits of persons in the locality, trade or profession, it is usual for such an agent to have a particular kind of authority, anyone dealing with him is justified in inferring that he has such authority, in the absence of reason to know otherwise.
      Rosenblum v. Jacks or Better of America West Inc., 745 S.W.2d 754, 764 (Mo.App. E.D.1988).

      Specific application of the rule

      Missouri has a long history of talking about the presumption of authority of an attorney.
      Rosenblum v. Jacks or Better of America West Inc., 745 S.W.2d 754, 764 (Mo.App. E.D.1988).

      Principal's are not presumed to intend that the main authority shall fail, due to a lack of authority as to acts reasonably necessary to make authority necessary

      Craig v. Kansas City Terminal Ry. Co., 271 Mo. 516, 197 S.W. 141, 143 (Mo., 1917)

      "It is a fundamental principle in the law of agency that every delegation of authority, whether `general' or `special,' carries with it, unless the contrary be expressed, implied authority to do all of those acts, naturally and ordinarily done in such cases, which are reasonably necessary and proper to be done in this case in order to carry into effect the main authority conferred. This doctrine rests upon the presumed intention of the principal that the main authority shall not fail because of the lack of express authority to do the incidental acts reasonably necessary to make that authority effective, and also upon the presumption that the principal expects the business to be done in the usual and ordinary way."

      Principals are presumed to intend that their agents follow the practices, customs, and usages of the business or trade.

      Emerson v Marsh & McLennan decided

      Google Scholar reports the case