Fairfield Lease Corp. v. Radio Shack Corp.

Citations: 5 Conn. Cir. Ct. 460; 256 A.2d 690; 1968 Conn. Cir. LEXIS 237Docket: File No. CV 1-6510-22491

Court: Connecticut Appellate Court; November 29, 1968; Connecticut; State Appellate Court

SummaryOriginalCytator Case TreatmentBackward CitatorAnalysis

EnglishEspañolSimplified EnglishEspañol Fácil

This action seeks recovery of the balance owed on an installment contract for a hot-drink machine. The trial focused solely on Radio Shack Corporation as the defendant, despite uncertainty about whether co-defendant Mel Williams was served. The plaintiff appealed a judgment favoring Radio Shack, arguing that the court failed to acknowledge certain admitted or undisputed facts, misidentified facts without evidence, and reached unsupported conclusions. However, the court criticized the plaintiff's broad attack on the findings, stating that such challenges seldom yield positive outcomes. The court affirmed the trial court's findings, emphasizing that credibility assessments and evidentiary weight are within the trial court's discretion. The case involved U-Vend Corporation, which leased vending machines to Radio Shack, with Mel Williams managing the Stamford outlet. U-Vend delivered a hot-drink machine and a soda machine upon Williams's request, signing a receipt for both. The hot-drink machine lease was set at $39 per month for three years, while the soda machine was provided at no cost. After the assignment of the lease to the plaintiff, payments were made to it directly, with checks signed by various Radio Shack employees, including Williams. Additionally, communications regarding supplies and repairs were sent to U-Vend on Radio Shack letterhead, with Williams’s signature, indicating his authority and involvement.

Mel Williams, manager of the Stamford store, lacked authority to make purchases or issue checks on behalf of the defendant, and did not possess a checkbook. All store proceeds were deposited in an agency account and transferred to Radio Shack Corporation. Neither the plaintiff nor U-Vend Corporation contacted any officers of the defendant regarding the lease or inquired about Williams' authority. The defendant was unaware of the lease until Williams left, at which point it notified U-Vend Corporation that he had no authority. The court concluded that Williams had no express, implied, or apparent authority to enter into the lease, and there was no ratification of the lease by the defendant. The court's findings are consistent with the evidence, and the basic legal question is whether Williams could bind the defendant to the lease without express authority. Implied authority is determined by the acts and conduct of the parties, while apparent authority arises from the principal's actions that lead third parties to believe the agent has authority. To impose liability on the principal for the agent's actions, it must be shown that the principal caused the mistaken belief or allowed it to occur, and the third party acted in good faith based on that belief.

A principal's liability for the acts of an agent towards a third party hinges on the third party's reasonable belief regarding the agent's authority, rather than the principal's actual authority granted. The agent's apparent authority must arise from the principal's authorized actions and the surrounding circumstances, not from unauthorized actions of the agent that the principal did not know about. In this case, the defendant did not present Mel Williams as having the authority to lease the vending machine and was unaware of his actions for eight months, at which point they rescinded the lease. The plaintiff's reliance on Williams was unjustified, as there was no indication that the defendant had knowledge of his unauthorized actions, nor did the defendant ratify the lease by inaction after the vending machine was placed on their premises. Ratification requires knowledge of the act's material circumstances, which was not established here, as the defendant did not make any payments related to the lease. The trial court's conclusions were upheld without error.