Wednesday, April 25, 2012

The Affirmative Use of Prior Convictions in Civil Cases

Imputed Knowledge and Notice to the Principal


The "Shingle" Theory: holding out by a professional

Robert J. Eadington, Regulation of Over-the-Counter Markups: A Reappraisal of Present Policy,1 Loy. L.A. L. Rev. 128 (1968), http://digitalcommons.lmu.edu/llr/vol1/iss1/7 

Tamar Hed-Hofmann, The Maloney Act Experiment, 6 B.C.L. Rev. 187(1965), http://lawdigitalcommons.bc.edu/bclr/vol6/iss2/3 

Brokerage Firm's Liability for Salesman's Fraudulent Practices, 36 Fordham L. Rev. 95(1967), http://ir.lawnet.fordham.edu/flr/vol36/iss1/4    (warranty)

Scope of Employment, general authorities

Thomas H. Seymour, SCOPE OF EMPLOYMENT: HAVE THE RULES CHANGED IN MASSACHUSETTS?, 20 W. New Eng. L. Rev. 211(1998), http://digitalcommons.law.wne.edu/lawreview/vol20/iss1/14

Digital Commons

 A cuurent list can be found here and includes the following:


Yale

Duke 

Boston College

Loyola (LA)

Western New England


Ratification

Corbin, Arthur, "Ratification in Agency Without Knowledge of Material Fact" (1906). Faculty Scholarship Series. Paper 2924, ttp://digitalcommons.law.yale.edu/fss_papers/2924

What is the "authority of an agent?"

Corbin, Arthur, "The "Authority”of an Agent Definition" (1925). Faculty Scholarship Series. Paper 2857.http://digitalcommons.law.yale.edu/fss_papers/2857

Fowler W. Harper, The Duty to Control the Conduct of Another (with P. M. Kime), 43 Yale Law Journal 886 (1934).

Fowler W. Harper, The Basis of the Immunity of an Employer of an Independent Contractor, 10 Indiana Law Journal 494 (1935)

Assault or battery by an agent or employee

Mercer D. Tate, Insurance Company's Liability for Agent's Assault, 2 B.C.L. Rev. 333(1961), http://lawdigitalcommons.bc.edu/bclr/vol2/iss2/7

Fiduciary Duties


 Breach of Fiduciary Duty COA (targeted toward claims against accountants)
Larry E. Ribstein,Fiduciary Duty Contracts inUnincorporated Firms, 54 Wash. & Lee L. Rev. 537(1997), http://scholarlycommons.law.wlu.edu/wlulr/vol54/iss2/7
Deborah A. DeMott, Beyond Metaphor: An Analysis of Fiduciary Obligation (1988).

Deborah A. DeMott,Disloyal Agents, 58 Alabama Law Review 1049-1067(2007), http://scholarship.law.duke.edu/faculty_scholarship/1829


Douglas K. Moll, Reasonable Expectations V. Implied-In-Fact Contracts: Is the Shareholder Oppression Doctrine Needed?, 42 B.C.L. Rev. 989(2001), http://lawdigitalcommons.bc.edu/bclr/vol42/iss5/1

Victor Brudney, Contract and Fiduciary Duty in Corporate Law, 38 B.C.L. Rev. 595(1997), http://lawdigitalcommons.bc.edu/bclr/vol38/iss4/1

Tuesday, April 24, 2012

Holding Out: the shingle theory

the core concept of agency law is the application of the shingle theory 0f holding out to the principal:

Hamilton Hauling, Inc. v. GAF Corp., 719 S.W.2d 841, 846 (Mo.App.1986):

The "holding out" of the agent's authority by the principal party may be by action or inaction. The principal may directly communicate the authority to a third party or knowingly permit the agent to exercise such authority. See Continental-St. Louis Corp. v. Ray Scharf Vending Co., 400 S.W.2d 467, 470 (Mo.App.1966). The Continental-St. Louis Corp. court quotes 3 AM.JUR.2d Agency § 74 (now § 79) as saying:
[T]he rule is that if a principal acts or conducts his business, either intentionally or through negligence, or fails to disapprove of the agent's act or course of action so as to lead the public to believe that his agent possesses authority to act or contract in the name of the principal, such principal is bound by the acts of the agent within the scope of his apparent authority as to any person who, upon the faith of such holding out, believes, and has reasonable ground to believe, that the agent has such authority, and in good faith deals with him.

Monday, April 23, 2012

When Professor Demott finds error in a case finding no respondeat superior liablity we know the case was badly decided.

The Case: Groob v. Keybank

DeMott's criticism: 

Breach of Fiduciary Duty: On Justifiable Expectations of Loyalty and Their Consequences

 

note 99:

Cases from other jurisdiction reach the opposite result on relatively similar facts. See Pigg v. Robertson, 549 S.W.2d 597 (Mo. Ct. App. 1977) (purchase made by person sitting in president’s office in absence of president to whom bank teller directed loan applicant and to whom loan applicant explained acquisition proposal); Djowharzadeh v. City Nat’l Bank & Trust Co., 646 P.2d 616 (Okla. Civ. App. 1982) (purchase made by spouses of bank’s chair and president). In other cases, it is less evident whether either the bank or its agents, or neither, benefitted through by revealing a loan applicant’s confidential information in a manner allegedly injurious to the applicant. See Jordan v. Shattuck Nat’l Bank, 868 F.2d 383 (10th Cir. 1989); Dolton v. Capitol Fed. Sav. & Loan Ass’n, 642 P.2d 21 (Colo. Ct. App. 1981). A bank that represents it will handle a financing for a customer to retain the customer’s loan, neglects to do so, and affirmatively misleads the customer to forestall the customer’s departure may be subject to liability on several grounds, includingbreach of a confidential relationship with the customer. See Brandriet v. Norwest Bank, N.A., 499 N.W.2d 613, 618 (S.D. 1993).

at note 119:


 An agent acts with apparent authority when the third party with whom the agent interacts reasonably believes that the agent acts with actual authority on the basis of a manifestation of the principal, which may include placing the agent in a particular position or giving the agent a particular title.119See id. § 2.03 (defining apparent authority) and § 7.08 (principal’s vicarious liability for tortious conduct committed with apparent authority). For a recent application, see White v.Consolidated Planning, Inc., 603 S.E.2d 147, 157-59 (N.C. Ct. App. 2004), rev. den., 610 S.E.2d717 (N.C. 2005)(financial planning firm may be subject to liability when employee’s misappropriation of customer’s funds occurred in the course of activities employee was permitted to perform). English law recognized this basis for a principal’s liability in Lloyd v. Grace, Smith & Co., [1912] A.C. 716, in which a solicitor’s managing clerk disposed of a client’s properties for his own benefit, having been authorized by the solicitor to accept deeds to the properties from the client who wished to sell them.This well-established line of authority is ignored in Groob, see supra note 103.


Here


-

Less than clear thinking from Texas? Under what facts and circumstances can a mortgage broker be the agent of the mortgage loan wholesaler?

Foreclosure defenders ought to know that Texas has ruled that a mortgage loan wholesaler can be, dependent on the facts and circumstances, the principal of the mortgage loan broker. Tom Kirkendall forgets that agency law is the bedrock of commercial law.

SSRN has in depth treatment.

Freight Brokers as principals

An interesting warning from Utah:

FREIGHT BROKERS BEWARE: YOU MAY BE ON THE SLIPPERY SLOPE TOWARD VICARIOUS LIABILITY FOR THE ACTS OF YOUR INDEPENDENT CONTRACTORS

Friday, April 20, 2012

Mechem on Agency (1914)

Mechem wrote the last treatise on agency, available from Google Books.Story, Clark, and Reinhard are also available, as is the original treatment by Corpus Juris.

Inference from public nature of the act

Farm & Homes Savings &  Loan Ass'n of Mo. v. Stubbs, 98 S.W.2d 320, 334 (Mo. 1936) lays a sound foundation on which to build implied authority based on the principal's knowledge.

Knowledge need not be expressly shown. The act may have been so public or so closely related to the alleged principal that he could not be said to be ignorant of it. Where the acts are of such a nature and are so continuous as to justify a necessary inference that the principal knew of them if unauthorized, they become competent evidence of agency.


Course of dealing and implied authority

The authority of the agent may be implied from the course of dealing between the principal and the agent.

Meux v. Haller, 162 S.W. 688, 690 (Mo. App. 1913).

Proof of general manager being involved proves authority

Berthhold & Jennings Lumber Co., 209 S.W. 591, 595 (Mo. App. 1919):

one dealing with general manager "need not show affirmatively that the company had authorized such action before the company can be liable for the acts."

Fiduciary duties

are little understood by anyone, principally because few take an economic torts course as a part of their upper-level law school curriculum.

First, the rationale for a fiduciary duty is that, "fiduciary obligation are defined by the law because of entrustment, dependence, inequality, or other factors that can remove the limitations of contract law." 

Second, as Deborah A. DeMott likes to remind, fiduciary duties attach even before the relationship of principal and agent attaches.

Recent comment on the English and Scottish view is here: Fiduciary duties in agency

Jurors decide what warranties and representations are implied from facts and circumstances


Shippen v. Bowen, 122 U. S. 575, 581, 7 S. Ct. 1283, 30 L. Ed.1172 (1887).

And, in an action on the case for false warranty, which is an action sounding in tort, it is not necessary to allege or prove scienter. 

Useful sites and outlines

docstoc.com can be a useful site to search

Here is a helpful Agency Law outline.

Here is a use introductory chapter for law students.

Key Missouri Agency Citations/Second Ten


#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. Ogden,  172 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, 73 Fordham Law Review 2183, 2199-2000 (2005).

#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.

#18. J.M. v. Shell Oil Co., 922 S.W.2d 759, 764 (Mo.banc 1996) (holding that when a contract appears to be contradictory, a factual question arises as to whether the right of control exists, thereby making summary judgment inappropriate).

#19.Berthhold & Jennings Lumber Co., 209 S.W. 591, 595 (Mo. App. 1919):
one dealing with general manager "need not show affirmatively that the company had authorized such action before the company can be liable for the acts."
#20. Hamilton Hauling, Inc. v. GAF Corp., 719 S.W.2d 841, 846 (Mo.App.1986):

The "holding out" of the agent's authority by the principal party may be by action or inaction. The principal may directly communicate the authority to a third party or knowingly permit the agent to exercise such authority. See Continental-St. Louis Corp. v. Ray Scharf Vending Co., 400 S.W.2d 467, 470 (Mo.App.1966). The Continental-St. Louis Corp. court quotes 3 AM.JUR.2d Agency § 74 (now § 79) as saying:
[T]he rule is that if a principal acts or conducts his business, either intentionally or through negligence, or fails to disapprove of the agent's act or course of action so as to lead the public to believe that his agent possesses authority to act or contract in the name of the principal, such principal is bound by the acts of the agent within the scope of his apparent authority as to any person who, upon the faith of such holding out, believes, and has reasonable ground to believe, that the agent has such authority, and in good faith deals with him.
Id.

The rationales of respondeat superior

  1. Francis H. Bolen, The basis of affirmative obligations in the law of tort 29 (1905)
  2. David Jacks Achtenberg , Taking History Seriously: Municipal Liability under 42 U.S.C. 1983 and the Debate over Respondeant Superior, 73 Fordham L. Rev. 2183, 2196-2201 (2005)

Thursday, April 19, 2012

Cases on knowledge worked by Principal's negligent supervision by the Principal

Banker's Utilities Co. v. Farmers' Bank of Union, 258 S.W. 17, 19 (Mo. App. 1924) (stating that principal is charged with what it should have known "by the exercise of ordinary care").

William Goessling Box Co. v. Cal Hirsch & Sons Merc. Co., 251 S.W. 438, 440 (Mo. App. 1923) (same).

Magnolia Compress & Warehouse Co. v. St. Louis Cash Register Co., 210 S.W. 125, 127 (Mo. App. 1919) (same).

Berthold & Jennings Lumber Co. v. Texas Hardwood Lumber Co., 209 S.W. 591, 594 (Mo. App. 1919) (same) (general manager).

Meux v. Haller, 162 S.W. 688, 690 (Mo. App. 1913).

Law Reporting v. Elwood Grain, 115 S.W. 475, 477 (Mo. App. 1909) (citing Kingsley v. Vitt, 51 Vt. 414).

Watkins v. Edgar, 77 Mo. App. 148 (Mo. App. 1898) (collects authorities).

See generally Restatement (Third) Agency Sec. 2.05 (2006) (estoppel) ("The principal's failure to use care enables the agent, or an actor who purports to be an agent, to misrepresent the agent's authority or to masquerade as an agent.").

For a deeper discussion of knowledge, consider Daniel S. Kleinberger, Guilty Knowledge






SSRN offerings

Need a new insight for talking about Obamacare with your Ditto Head Uncle this weekend.  Try SSRN:

The Agency Law Origins of the Necessary and Proper Clause

Sometimes, Google Site is a better search tool!

Are these papers on point. Yes. Consider:

Breach of Fiduciary Duty: On Justifiable Expectations of Loyalty and Their Consequences?


Trouble sleeping over why there is a Restatement 3rd:

A Revised Prospectus for a Third Restatement of Agency

Saturday, April 7, 2012

Flawed Services from the Missouri Supreme Court: Emerson Electric Co. v. Marsh & McLennan Companies

This simple case was about two questions:

1) What information does an insurer broker have to provide to its customers about its financial relationship with insurers for whom it is selling policies?

2) Does the implied in fact express warranty by the broker that it services will be "performed properly or in a workmanlike manner"

3)