Saturday, March 31, 2012

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)).

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