Hoddeson v. Koos Bros - Lecture notes 7 PDF

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Case Brief and Notes for Business Organizations I...

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HODDESON v. KOOS BROS. 47 N.J. Super. 224, 135 A.2d 702 (App. Div. 1957) FACTS: Parties: Plaintiff: Hoddeson Defendant: Koos Bros Procedural History: 

Trial in favor of Δ

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Π appealed

Relevant Facts: 

Π wanted bedroom furniture

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Π was greeted by “salesman” in Δ’s store

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Π told “salesman” what she wanted and he totaled the price and accepted cash payment

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“Salesman” said most of the stuff was out of stock and would get delivered in Sept.

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Π did not get a receipt for the cash paid

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After waiting the prescribed amount of the delivery Π learned Δ’s record failed to indicate her order and the receipt of any payment

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Π could not identify the salesman

ISSUE: 

Whether an imposter who acted as a salesman for the Δ binds the Δ as a principal

PARTIES’ ARGUMENTS: Plaintiff:  Defendant: 

The salesman was an imposter impersonating a salesman without the Δ’s knowledge

DISPOSITION OF THE COURT:

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Reversed

RULE OF LAW: 

Not the burden of principal to disprove an agency relationship, burden on Π to prove agency relationship

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Agency proof o Express or real authority which has been definitely granted o Implied authority, that is to do all that is proper, customarily incidental and reasonably appropriate to the exercise of the authority granted o Apparent authority, such as where the principal by words, conduct or other indicative manifestations has “held out” the person to be his agent

HOLDING: 

A principal is liable for an imposter that is acting within the apparent scope of authority if the principal should have reasonably been aware there was an imposter present

COURT’S REASONING:   

There is no evidence of the existence of any basic express authority or project any question implicating implied authority The salesman’s appearance of authority must have been created by a manifestation of authority by the Δ in order for the Δ to be bound by the salesman’s actions Stores owe a duty to customers to exercise reasonable care to spot imposter salesmen so as not to dupe customers...