Thinking About cases

Who is the defendant is it a corporation?

How do we know this is a corporation?
Look to facts of the case and consider characteristics of a corporation.
Who is making the decisions of the corporation?
What did the lower court find?
Who are the shareholders?
Might not be included in the facts, just want to know general makeup and
majority
What standard did the court use to determine what corporation was doing was
problematic?
What rules are mentioned in the case? (Ie Biz Judgement Rule)
Next Class
14-24
section restatement third
Mill Street Church of Christ (Paintiff) v. Hogan (Defendant)
Who is alleging Agency? Did Bill Hogan have the authority to hire Sam?
Bill Hogan is an Agent of the Church, however church is saying Bill had no auhority
to hire people. So they have the burden of proving that it exists.

-Mill Street Church of Christ - Trying to reverse the decision of New Board that Sam
Hogan gets workers compensation.
-Sam Hogan wants workers compensation
What is the Issue? Is Samuel Hogan an Agent of Brother
How do you become an agent?

Did Bill Hogan have implied authority as an agent to hire Sam Hogan?
"New Board" Found that Bill had implied authority as an agent to hire Sam

"Old Board" Found that Sam Hogan was not an employee of the church.
What is the difference between implied and apparent authority?

How do we determine implied authority?

Express authority, is what the company specifically tells the agent they can do ie, "you can submit applications for our policies, and bind coverage within these
limits".
Implied authority, isn't specifically told to the agent, but gives the impression to
others, that he is able to do it - for example, if he's wearing a Progressive Insurance
shirt, driving a Progressive Insurance car, and says he can write you a check, he has
implied authority from Progressive, even if it's not spelled out in his contract. This is
an offshoot of "express authority", because you can't write a contract that covers
EVERYTHING (like scratching your nose).
Apparent authority, is neither express, nor implied, but the agent is doing it, and
the company doesn't tell the agent they can't do it. The customer relies on the
"apparent authority" and assumes that the agent is acting within his authority. It's
this authority that gets agents in trouble, with "errors and commissions", if they
step beyond the bounds of their contract authority, or compliance laws.
Rule: Is whether the agent reasonably believes because of present or
Prior similar Practices are important. Here there were prior similar p
What are the factors and facts here?
Three-Seventy Leasing Corporation v. Ampex Corporation

-Watteau v. Fenwick- !!Unidentified Principle vs. Undisclosed Principle!! Restatement 1.04

Undislosed Reasonable for third party to not enquire about undisclosed
principle and whether actions were taken in reliance of the authority ie
the detrimental change in position based on third parties belief that agent
had authority.

Reasoning: Cannot have apparent authority because the Fenwick believes he is dealing with
only Humble and is not even aware of Watteau so cannot meet the elements of Apparent
Authority
Parties:
Agent Humble Manager/operator of the Victoria Hotel for Fenwick
Principle - Watteau defendant Silent Owner of the Victoria Hotel
Third Party - Fenwick plaintiff supplied the cigars
Procedural:
-The County Court held that the defendants had held Humble out to the world as having general
authority, and that they were therefore liable for the claim because of the implied authority
thereby granted. Therefore Humble was agent of Fenwick
-Appealed Was dismissed - An undisclosed principal can be held liable for the actions of an
agent who is acting with an authority that is reasonable for a person in the agents position
regardless of whether the agent has the actual authority to do so.
Argument:
Watteau plaintiff was not paid for cigars so decided to sue Fenwick. Arguing that Humble is
Fenwicks servant. Humble held himself as having authority , Humble was acting with an
authority that was inherently reasonable for an agent in that position.
Fenwick defendant is arguing that Humble is independent. Defendant explicitly instructed
Humble not to make any purchases outside of bottled ales and mineral waters, but Humble still
entered into an agreement with Plaintiff for the purchase of cigars. Defendant is knowingly
acting outside his actual authority as an agent for Defendant.
Next class read liability in Tort we will get through the first 2 cases. Tuesday read Humble
and oil and miller through 347.
Reasonable for third party to not enquire about undisclosed principle and
whether actions were taken in reliance of the authority ie the detrimental
change in position based on third parties belief that agent had authority.
-Humble Oil & Refining Co. (Petitioner) v. Martin (Defendant)Parties:
Principal: Humble Oil & Refining - Owned Filling Station

Agent: W.T. Schneider and W.V. Manis - Service station Operator. ?? Independent
Contractor??
Third Party: Martins - Got injured by unoccupied car while walking home.
Mrs. Love - Was her unoccupied car that injured Martins
Procedure:
Trial Court - Judgement was against Humble and Mrs Love jointly and severally.
Appeals Court Held Humble responsible for the operation of the station, which
is admittedly owned.
Arguments:
Humble plaintiff is arguing that it is not liable to Martin or Love, since W.T
Schneider is the Service Station Operator and Independent contractor and is
therefore responsible for the negligence.
Court says these facts are not conclusive to master-servant
relationship
-

Provision of agreement repudiates any authority of Humble over

Employees
Humble, Schneider nor employees considered Humble as employer or
master.
Employees were paid and directed by Schneider as their boss.

Defendant and Court is arguing that Commission Agency Agreement as a

whole indicates a master servant relationship.
-

Provision that requires Schneider to make reports and perform other

duties in connection with the operation of the station, which are required
of Schneider from time to time by Humble Oil. -> Control over physical
conduct
Strict system of financial control and supervision by Humble, little or no
business discretion left to Schneider except managing employees.
Humble furnished station location and equipment, advertising media, and
substantial part of operating cost
Main object of enterprise was retail marketing of Humble products, which
they retained title until delivery to customer. (Financial Control>Principle then bears the risk)
Principle paid the majority of utility bills. Principle paid substantial part of
operating costs
Agency Agreement gave Schneider title to occupation of the premise, but
was terminable at the will of Humble.
Agreement required Schneider to do anything Humble told him to do.

Relationship Between Humble Oil and W.T. Schneider:

+ Humble Oil Admittedly owned the station and owned the principal products
sold by W.T. Schneider at the station Under the commission agency
agreement

Conclusion:
Humble is responsible for the operation of the station which it owned