Menard, Inc. v. Dage-MTI, Inc.

and that Hardiman re- puter problems, Conclusion immediately following the ceived notice affirm judgment We the trial match. court. party’s noncompliance If a DICKSON, SULLIVAN, BOEHM, and discovery grossly pre-trial orders is RUCKER, JJ. concur. faith, misleading or done bad then evi State, may dence be excluded. Nettles v. (Ind.1991). N.E.2d 1064 A trial court ruling

has broad discretion on issues

discovery only and we will interfere where apparent.

an of discretion abuse Jen State, (Ind.1993),

kins v. denied, 812, 115 64, 130

cert. 513 U.S. S.Ct. (1994). L.Ed.2d 21 MENARD, INC., Appellant (Plaintiff below), fingerprints Hardiman knew about the trial, for six months before he difficulty finding aware of the a State’s DAGE-MTI, INC., Appellee trial, positive days match. Several before (Defendant below). requested

both the State defense No. 46S03-0004-CV-00272. comparison finger- individual between the prints taken from the Hardi- scene and Supreme Court of Indiana. gave positive man. The State of a notice day April match the same match on was dis- covered. circumstances, these it

Under was with- the discretion the trial court to admit grant evidence or continuance. Sufficiency

IY. of the Evidence that,

Hardiman’s final argument is police report been admitted and Gilles-

pie’s testimony fingerprint and the evi- excluded,

dence been there would have support

been insufficient evidence to

jury’s verdict. above,

As we stated we conclude judge

that the trial right thing did the Moreover,

these disputed matters. ev

idence was not the sole indicator Hardi guilt.

man’s eyewitness Yet another iden

tified Hardiman as Terrell’s assailant.

Testimony single eyewitness from a is suf

ficient to sustain a conviction. Coleman v.

State, (Ind.1998). light N.E.2d 269 evidence,

of this we conclude that a rea

sonable jury could have found Hardiman

guilty of murder. Wukmer, Morse,

Michael A. Ice John J. IN, Indianapolis, Ryan, Miller Donadío & Jones, Lienhoop, Newby Mark Lewis Gene Jones, LaPorte, IN, Kaminsky & Attor- neys Appellant. for Peralta, Pope, D. Lucetta Baker Paul J. Bend, IN, Attorneys & Daniels South for Appellee. PETITION TO TRANSFER

ON SULLIVAN, Justice.

Menard, Inc., offered to Dage-MTI, acres of land from $1,450,000. presi- Sterling, Dage’s Arthur dent, accepted agree- in a the offer written represented ment in which he that he had requisite authority to bind to the sale. The board of directors did not complete trans- approve and refused to president, hold that action. We as Ster- ling possessed the inherent to bind in these circumstances.

Background Dage-MTI, closely is a held Indiana which manufactures equipment. At all specialized electronics appeal, Dage to this times relevant by a six-member board of di- governed (“Board”), Ronald and consisting rectors (a Piccolo financial Lynn Kerrigan, Louis Kerrigan), Ronald consultant retained Sterling, and Arthur and Marie William being a Board In addition Conners. member, Sterling (“Sterling”) Arthur for at least 20 president Dage as served mat- at the time of the trial on this years directors, only Arthur and On November called ter. Of the six Kerrigan and informed him that Menard in Indiana. Marie resided would make a second offer for the entire operated Dage many years, Sterling For presented a parcel. Sterling 30-acre two- input oversight from or significant without (“consent part proposed resolution resolu- the Board. Over the course tion”) part Board: first autho- 1993, however, fall of early summer purchase” rized an- “offer subject Dage man- steps took Kerrigan parcel immediately to the other located hired Kerrigan to Board control. agement of the 30-acre and referred to north New financial consultant York-based property”; part the second “Simon future Board member Piccolo assess authorized to “offer and sell” the Kerrigan re- company’s performance. also parcel. Kerrigan, Picco- Sterling, 30-acre attorney New Gerald tained York Gorin- lo, Gorinsky the offer and discussed and concerning sky represent to his interests Sterling and change was told to the “offer Dage. provision “to offer for He sell” to sale.” 1993, purchase that could Dage share- was also instructed he In late October of property Jersey Dage, an the Simon on behalf of but met in New to discuss holders only parcel the Kerri- could “offer” the 30-acre to by Sterling purchase offer to particular price. Menard at a Additional- Dage. During the course of gans’ shares ly, Sterling soliciting was told that in of- Sterling first informed other meeting, Menard, Inc., parcel, fers for the 30-acre he was not to expressed that directors Gorinsky terms of a purchasing parcel negotiate in sale. interest 30-acre Sterling any in offer from Me- and located reminded Dage land owned require nard would Board review and ac- City area. Menard is a Wiscon- Michigan ceptance, Sterling and he instructed to operates that owns and sin any approv- forward offer to the Board for improvement stores in the Midwest- home rejection. al or region ern of the United States. if Menard Finally, Sterling was told that 1993, 30, Menard forwarded On October agreement with the same submitted pertaining to the Sterling a formal offer to offer, objectionable provisions as the first par-' the 30-acre purchase of 10.5 acres of rejected. Sterling agreed it would be offer, Upon receipt of the did cel. Board follow the instructions of the “as to discuss the terms not contact Menard pay Gorinsky’s for” long as I don’t have to Instead, and conditions of the offer. on or reviewing the of- and Piccolo’s services 1993, 4, he forwarded the about November discussion, upon fer. Based all the directors with a cover offer to resolution, drafted a new which stated approval that Board acknowledging note as he was authorized “to take such actions accept reject the offer.

was 30 acre necessary are to offer for sale our rejected: Ultimately, this offer was Kerri- $1,200,- price less than parcel ... for Piccolo, gan, Gorinsky determined 000.” rejected due the offer should be informed of the On December

collective effect of certain sections Menard, to make agreed Piccolo that Menard had purchase agreement submitted Piccolo reminded co-development obligations well as another offer. as approval imposed rejection to secure Board Dage. obligation the offer on This of his a second al- the offer. Menard forwarded Sterling, communicated to Sterling. proposed purchase agreement though he viewed the offer to Later, provi- contained the same favorably, lapse. agreement offer he This he let the Litvin, objectionable found Gary that the Board informed Menard’s sions However, agreement. objected proposed to the first Dage’s that members of for the differed in that it was the offer. this offer provisions various 52(A); bility T.R. the entire 30-acre of witnesses. See Shell purchase of 962, 972 $1,450,000. Meyer, Oil Co. v. 705 N.E.2d (Ind.1998), review, reh’g denied. In our week-long series of discussions During a the evidence we first consider whether 14, 1993, and un- beginning December id.; supports findings. the factual See Es member of the known to other Co., Reasor v. Putnam 635 N.E.2d tate of Board, minor Sterling negotiated several 153, (Ind.1994), Second, reh’g denied. the Menard changes findings support we consider whether the the revised offer on behalf of then judgment. See Shell Oil Dage. signed, accepting Menard also 972; Reasor, N.E.2d at Estate 5(c)(1) Paragraph offer. Under N.E.2d at 158. As we have noted several Sterling, president Dage, agreement, cases, times in recent while we defer sub represented persons sign- as follows: “The fact, stantially findings we do not do ing Agreement behalf of Seller See, e.g., toso conclusions of law. Hase duly authorized to do and then- so Orman, (Ind. man v. 680 N.E.2d in accordance signatures bind Seller Cleave, 1997); State Van (R. at Agreement.” with the terms of this (Ind.1996), reh’g granted 47.) (R. Finding of Fact No. (Ind.1997). Here, part, 681 N.E.2d 181 we No had informed Me- one supports find that the evidence the trial authority respect that Sterling’s nard with However, of fact. findings court’s its con limit- to the sale of the 30-acre employed principles clusions of law of “ac only ed to the solicitation of offers. ” ” authority “apparent authority tual Upon learning princi they employed when should have Menard, the instructed Ster- A ples authority.” judgment of “inherent ling agreement. to extricate from the clearly if it relies on an erroneous incor Later, Co., the Board hired counsel inform legal rect standard. Shell Oil 705 question agree- Menard of its intent to the N.E.2d However, enforceability.

ment’s it was not I gave until March first to Menard intent. notice of this Two main classifications of au thority are generally recognized: “actual ultimately require filed suit to authority” “apparent authority.” Ac specifically perform the agree “by tual is created or written payment and to secure the ment dam spoken prin or other words conduct of the initially ages. Menard filed a motion for which, cipal reasonably interpreted, causes partial summary judgment, which was de agent principal to believe that the de trial, Following a bench trial nied. principal’s him to act on the ac sires so Dage. court ruled in favor of The Court of Randle, 60, count.” Scott v. 697 N.E.2d 66 affirmed, Appeals finding did denied; (Ind.Ct.App.1998), see transfer express apparent authority not have the or (Second) 7, §§ Agency Restatement 33 to bind the in this land trans (1958). Apparent authority refers to a Menard, Dage-MTI, action. Inc. v. party’s reasonable belief that (Ind.Ct.App.1998). 698 N.E.2d 1227 principal has authorized acts of its Discussion Ins. agent, Pepkowski v. Indiana Life of judgment Co., 1164, (Ind.1989); The trial court’s this 535 N.E.2d 1166-67 Fact and Findings case embodied principal’s it from the indirect or arises pursuant Conclusions of Law entered to a third direct manifestations 52(A). findings judg Trial Rule The or representations not from the or acts of the id.; Co., clearly ment are not to be set aside unless Drake v. Maid-Rite 681 erroneous, 734, (Ind.Ct.App.1997), regard given and due is to be to N.E.2d 737-38 reh’g the trial denied. ability court’s to assess the credi- occasion, “originates has taken an ex- ent differs and from On Indiana customary authority person of a authority, apparent view of includ- pansive particular type relationship of agency so concept ing within the discussion representations no beyond the fact of agency power.” “inherent See Koval v. agency the existence of the need be Telelect, Inc., 1299, 693 N.E.2d Simon Cange shown.” & Stotler F.2d (Ind.1998) answer to a fed- (certifying (7th Cir.1987) (citing Restatement attorney of an eral court retention (Second) (1958)) cmt. b power on that attor- confers inherent (stating “plaintiff prove that the need not ney pro- to bind to an in court the client part actions besides [defendant’s] Marsischke, ceeding); 159 Ind. Storm v. allowing its employee] [an to act as its 140-41, App. agent for handling plaintiffs account be- (Ind.Ct.App.1973).1 cause the trier of fact could find [the em- ployee’s] statements within his inherent “ power is a term agency ‘Inherent authority”). power agent used ... to indicate the of an In Cange, explained Circuit Seventh authority, appar is derived not from which concept’s genesis: but estoppel, solely or from ent Judge Hand Learned articulated this pro exists for relation and concept agency power of inherent when persons dealing tection of harmed upheld jury plaintiff he verdict for ” Koval, agent.’ awith servant or other jury based on a contract the found to be (omission in original) N.E.2d at an unconditional for a engagement sing added) (Ind.1998) (emphasis (quoting Re ing despite principal’s tour instruc Agency § 8A statement engage tions to its singer “ (1958)).2 This based’ ... [form ‘status only for as he such recitals could later upon liability of] vicarious rests certain persuade for, record dealers to her book important policies,” social and commercial were not instructions which told to “ primarily enterprise the ‘business plaintiff. Edison, Kidd v. Thomas A. of bear the the losses should burden creat Inc., (S.D.N.Y.), aff'd, 239 F. 242 405 F. by the ed mistakes or overzealousness of (2d Cir.1917). 923 He reasoned that the agents liability] its [because such stimu scope of an must be agency measured of the employer lates the watchfulness by “not alone the words which it is ” selecting supervising agents.’ the created, by setting but the whole Management, re Atlantic Fin. 784 used, which including those words (1st Cir.1986) (second 29, F.2d 32 altera customary powers agents” the of such in original) Seavey, W. (quoting tion and thus the contract was enforceable Agency § Handbook the Law 91 customary implication because “the (1964)), denied, 1072, cert. 481 U.S. 107 would seem have been that [the (1987). 2469, 95 877 S.Ct. L.Ed.2d And agent’s] authority was without limitation “representations of the principal while imposed.” of the here Id. 239 F. kind third for party defining the are central principal 406. The benefits from the apparent concept authority,” authority of inher- existence of inherent because "), possible say finding 'apparent' agency.' Because "[i]t 1. or 'inherent denied, 835, 58, cert. S.Ct. 364 U.S. 81 5 underlying rationale 'ap the decision in [an (1960). L.Ed.2d 60 parent authority' is the same rationale case] underlying principle agency of inherent There are at least two relevant sections of Marsischke, power,” Ind.App. Storm v. 159 (Second) Agency, the Restatement which 840, (Ind.Ct. 304 N.E.2d 843 n.3 scope define the and extent of inherent au- 1973), App. properly we find issues both be thority as it the facts of this case: relates to Schenley fore this Court. also Lind v. See (entitled, Power”), Agency § 8A "Inherent Indus., 79, (3d Cir.) .(‘‘In (entitled, 85 278 F.2d § 161 “Unauthorized Acts of many support Agent”). cases the facts will General same 1212 it, would as to do and whoever authority delegated authori- purpose of very

“[t]he it.”). In so by prove contrary constant recourse must avoid sert ty is to “1 would be which principal, persons to “dis significant consider finding, we agent denying corollary of act, corporate per ... between a tinction instructions.” his exact beyond latitude aof through the intermediation formed (Sec- 408; see Restatement Id. F. at 239 to act as its specially empowered person a, ond) 161 §§ 8A comment Agency immediately by a like act done agent, and (1958). comment a through its executive or (alterations in F.2d Cange, 826 officers, may be which administrative ’ ” original). agencies.” Com its inherent termed concept inherent findWe Ctrs., Inc., N.E.2d at 604 468 munity Care — appar than actual rather added) Fidelity & Ca (quoting (emphasis — analysis controls our ent 635-36, 117 Ind. at N.E. sualty 186 negotiate did not this case. Menard Corpora Thompson, 2 (quoting in turn a lower-tiered em ultimately contract with (2d ed.1910))). § tions “spe “general” or prototypical or a ployee actual or respect to whom cial” II Me be at issue. authority might apparent corpo with the nard dealt that the inher determination Our “ ‘ ... ration, recognizes law “[t]he whom analysis our concept controls ent are the the officers [who] one [as of] The inquiry, however. does not end the head, means, which the hands and § Restatement ’” normally act.” Communi corporations agent’s inherent provides that Ctrs., Dep’t v. Pub. Inc. Indiana ty Care acts subjects principal liability his (Ind.Ct.App. Welfare, 468 (1) usually [ ] done on his account which added) 1984) (alterations Fidelity (quoting or are incidental to transac accompany Carroll, Casualty 186 Ind. & Co. agent which the is authorized (1917) tions 635-36, (quoting N.E. if, they are forbidden although conduct Thompson, Corporations in turn denied; (2d ed.1910))), (2) see also other principal, [ ] transfer Prods., Man, Paper Burger Inc. v. Jordan reasonably believes Inc., 295, 311-13, 352 N.E.2d Ind.App. 170 (3) no them and has [ ] authorized to do (“When (1976) authorized.[3] notice that he is not so an act within manager does general basics, we find that Ster- Distilled to its objects or general of the busi the domain (1) authority here if: ling had inherent within the corporation, ness of the first, Sterling the usual and acted within of the chief offi scope of the usual duties presi- as ordinary scope of his cer, presumed it will be that he had appoints agent to conduct a series if one explains, 3. The Restatement time, period a it is impor- transactions over an] The rule in this Section ... [is ], power[ of inherent losses which are illustration[ ] tant is, that he should bear fair agent, power[ by an the exercise ] held although when such an incurred subject principal which effective to [is] so, something authority to do does without liability in which the in transactions usually in done connection which agent apparent has neither nor employed to conduct. the transactions he is authority, agent derives his but in which case, added). the Board In this (emphases Id. power wholly relation with the from his Sterling, to corporate president, positioned its agency principal. called inherent [It is] with Me- a series of transactions” “conduct power[] common since there is no other Dage real estate. concerning the sale nard designation adequately [it]. describes .which appli- of the Restatement We find this section (Second) Agency § cmt. a Restatement 161 to this case. cable (1958) added). (emphases Relevant to case before us is the observation (2) 11.) dent;4 second, Thus, reasonably be- the court concluded that “Ster- ling lieved that was authorized to con- performing was not an act that was Dage tract for the sale and in appropriate the ordinary course of (3) estate;5 third, real Menard had no Dage’s business.” Id. notice that was not authorized to initially We note that the Restatement ap- sell the 30-acre without Board looks at whether the acts “usually accom Koval,

proval.6 also See N.E.2d pany or are incidental to transactions (Second) (quoting 1304 n. 7 Restatement which is authorized to conduct.” 161). Restatement of Agency supra, As trial discussed court en- added). § 161(emphasis On the other findings tered of fact and conclusions of hand, our analysis of inherent agency “ pursuant law to Ind. Trial Rule 52. Hav- Koval was focused on general whether ‘a fact, accepted the ing findings of we review agent ... acted within the usual and ordi they if support finding them see will nary scope of the business in which he was ” had inherent as employed.’ 693 N.E.2d at 1304 (empha to bind this transaction. added) sis (quoting Farm Bureau Mut. Ins. Coffin, Ind.App. Co. v. A (1962)) (concerning an at As to whether acted within torney’s inherent agency power in court ordinary scope the usual and of his author proceedings). There ais difference. president, ity the trial court found that Sterling, director and substantial share The Restatement looks at holder had Dage, Dage’s pres agent’s served as company office or station in the inception; ident from its managed gauge scope had agent’s authority, period affairs of for an analysis extended of whereas our in Koval looked to time with little or no oversight; purpose and the and scope of the business purchased (i.e., real estate for with which the general agent attorney) was 911, 912; out Board approval. employed. Restatement, We find the 7-9, Findings However, of Fact Nos. which “solely is focused [on] relation,” the trial court reached the conclusion that appropriate more the cur persuasively record officers, “[t]he demonstrates rent involving corporate situation that the land in question persons transaction was who “natural who hold and an extraordinary transaction” for Dage, corporation.” administer the offices of the Centers, which manufactures electronic video prod Community Care ucts. Conclusion of Law No. N.E.2d at 604.7 puts inquiry: question extraordinary 4. Section 8A forth a similar Did was an transaction. See, "general agent e.g., Gentry something Tedesco v. Dev. do[] similar to do, (La.Ct.App.1988) (declining So.2d what he is authorized to but in violation of (Second) by enforce a sales contract for land Agency orders[?]” Restatement of president corporation concluding of a and § 8A cmt. b. apparent authority "that the doctrine of is inquiry third-party’s inappropriate 5. This into the "reason- in the realm of sales and mort gages president only of real estate” where the inquiry able a belief” is broad-based into the initially had the actual "to list the scope agent’s light of the inherent in property,” approval and he had not obtained agency princi- of his or her relation with the corpo from the board of directors to sell the pal. property”), aff'd, ration’s "immovable (La. 1989); Willsey inquiry third-party’s 6. This So.2d 960 into the "notice” W.C. Porter Co., inquiry focusing (Mo.Ct.App. a Farms 522 S.W.2d specific narrow on the 1975) (finding president corporation of a transaction. apparent authority did not have to bind cor “apparent authority” 7. Under a standard poration approximately to sell of its 35% analysis, farmland, agree we with the trial court and activity farming where no other but Appeals by corporation Court of that the land transaction in had ever been carried on and considering that n.7.8 And court found that the trial that Given of general is a officer “agent” in this case company since president of Sterling, as (as opposed “appoint- to an corporation affairs' for managed had its inception, its “company general general agent” no ed time little or of period an extended “should and, manager”), we find that Menard particular, oversight Board carefully required to scrutinize too past in the not be Dage real estate for purchased ... permanent of [this] that the mandates we conclude approval, Board without than what ... who no more agent[ [did] acts ] at issue here were Sterling’s actions corporate president9 usually by done [a incidental “usually accompany or are that (Second) § Agency of Restatement authorized was] ].” which [he to transactions a. of cmt. conduct.” Restatement § 161. Here, facts establish that Menard au- reasonably that was believed B pur- to contract for the sale and thorized Next, whether we must determine begin with Dage chase of real estate. We “ reasonably believed premise corpora- ‘the acts of a for the sale and was authorized to contract through done its officers are acts done tion ” While Ster purchase Dage of real estate. Ctrs., Inc., per Community se.’ Care Dage authority to bind ling’s apparent omitted) (emphasis 468 N.E.2d at 604 knowledge that by Menard’s was “vitiated” Casualty 186 Ind. (quoting Fidelity & Dage of real estate the sale 635-36, (citing at 859 turn at N.E. Menard, Inc., 698 approval, Board see (2d Thompson, Corporations not at this information did ed.1910))). Next, that at all times we note authority as Sterling’s inherent defeat out as of “Sterling held himself corporation in to bind the Dage president 67.) of Fact Dage.” Finding No. negoti where he was the sole “setting” fact, “Sterling ha[d] served ator, Cange, 826 F.2d see inception”; as noted Dage of since its section, theory preceding he was substantial agency inherent Because the six-person member of the customary authority shareholder and from the “originates Directors; managed he had type Board of person particular in the of a id., period for an extended agent’s affairs of relationship,” we look to the oversight; or no Board and to deter- time with little or direct indirect manifestations purchased real estate for have “reason- he had Menard could mine whether 911, 912; approval. autho- without ably believe[d]” 7-9, Fact Nos. And al- Findings and to contract for the sale rized transaction, Koval, “early in the though N.E.2d at real estate. most, all, binding to execute if documents to sell land was not usual thus contract customary activity corporation, and where corporation. Relevant to the issue before purchasers were advised that land involved ("Officers Corporation”), V us is Article approval by corporation was owned Documents”): ("Execution Section 8 was neces- of other members provided the board contract). Unless otherwise sary to validate leases, directors, contracts, commer- all inquiry to the to the 8. This is in contradistinction writing paper cial and other instruments apparent authority, looks test which documents, signed by legal shall be principal's indirect or direct manifestations secretary. All president and attested determine could have whether the bonds, signed mortgages be and shall deeds principal had au- reasonable believed that the thorized the by attested the secre- by president and the agent. Pepkowski, acts of its be of stock shall tary. All certificates N.E.2d at 1166-67. president and attested the signed the Dage’s By-laws 9. than those are no different secretary. corporations the closely of most in that held (R. 981.) at authority president is vested with the formal (1) that he was to the case [Menard] advised where himself awas (R. Board, 912; to obtain go ‘partners’ back to his authori- member of the at Finding (2) acres[, 16); ty thirty to sell the entire of Fact No. agreement the con- that the authority express representation confirmed he had tained an later] that proceed.” persons signing from his Board of Directors to Agreement “[t]he this (R. 922-23; at Conclusion of Law No. behalf of duly the Seller are authorized to do so and signatures their bind the Seller We find it reasonable that Menard did in accordance with the terms of this question corporate president’s not the (R. 916; Agreement,” Finding at of Fact “authority statement that he had from his 47) (R. (3) 1144, 1149); No. and Menard proceed” Board of Directors to with the corporate counsel, was aware that Dage’s Id.; land transaction. see Federal Sav. & Patrick Donoghue, was involved in the re- Corp. Loan Ins. v. Shearson-American view of the of agreement, terms the F.Supp. Express, 1133-34,1141,1391). (D.P.R.1987) (“[T]he authority agent may do in reasonably to certain acts be C continuity ferred from the of the acts Finally, we consider whether Me themselves.”); Proper McIntosh Vector nard had that Sterling notice was not au ties, 911, 914 (Okla.Ct.App. 889 P.2d parcel thorized to sell the 30-acre without 1995) that (finding corporation’s defendant approval. The record does not indi plaintiffs actions led to reasonable belief cate that Menard was aware of the exis agent corporation in that could bind com resolution, tence of consent much less mission-sharing agreement, where the authority that it limited Sterling’s presi as that knew dent. Nor was there evidence that either was himself out holding as vice- the Board or informed Menard that acknowledged Sterling’s authority respect with to corporation’s permission, with the the sale of the 30-acre was limited authority to agree enter into the And, only to the solicitation of offers. ment); R.H. Kyle Furniture Co. v. Russell supra, Sterling personally discussed ac Dry (Ky. Goods S.W.2d knowledged signed that he 1960) (finding persons dealing Directors, by authority Dage’s Board of corporations through managers their or of which was a he member. superintendents justified in relying upon apparent implied or true, Ap It is as the Court of agents). such noted, peals advised ear ly

We also find it reasonable for Menard the transaction that had to Sterling’s personal go scrutinize “ac- approval. the Board to obtain Me nard, knowledgefment] that he agree- (citing 698 N.E.2d at 1232 Conclu 16-22). ment for the knowledge sale of real sions of Law Nos. This by authority Dage’s estate apparent authority board of would have vitiated the directors.” Finding employee prototypi of Fact of a lower-tiered or a 67). especially No. believe general special agent.10 We this be cal But we do holds, agent’s apparent This is because an au- status or she so that he office thority party "required emanates not from the itself a third is not to scrutinize too principal's carefully” knowledge but from the indirect and direct or awareness that the manifestations, party possibly so that a third is re- officer’s has been limited. quired Agency § under the rule of law "use reason- See Restatement diligence prudence differently, able to ascertain” the cmt. a. Put it is reasonable for a corporate presi- extent of limitations which he or she to assume that a (in case, officer) has become aware. See 3 Am.Jur.2d dent chief executive (1986). hand, requisite approval” On the other an individu- obtained has "board transaction, al’s inherent is derived from the conduct a land absent 1216 one informed it that no bank and Sterling, plaintiff that notice it sufficient

not find may execute authority, was not the other than with inherent an officer closing. at the any guaranty to guaranties authorized bind and approval signature). and president’s the found that The trial court during Menard agreement with signed the 14, 1993; that he week of December

the d' that he was represented Koval, “if said: one this Court signature and that his sign it authorized must suffer due parties two innocent of law Dage’s Dage; and when bound principal betrayal of trust —either a 29, 1994, March Menard on yers contacted fall on the party third loss should —the given by Dage the first notice it “was Because the is most at fault. party who any regard that there was issue Menard position of agent in a principal puts the agreement.” enforceability of the ing the trust, bear the loss.” principal should 919; (R. 916, Fact Findings of at Koval, (citing Farm N.E.2d at 1304 693 63.) Indeed, to Menard on Sterling wrote 18, Co., Ind.App. at 136 Bureau Mut. Ins. 7,1994, Dage was indicating that February 183). at 186 N.E.2d agreement. required by performing particular resonance That maxim has 2059.) (R. Menard conclude that at We single a record fails to reveal here. The Board had limited no notice that the had inform act that took to affirmative respect to 30- authority Sterling’s authority with .Sterling’s limited See, Menard of v. Kane Gas parcel. e.g., Avery acre respect parcel, 14 the 30-acre F.Supp. Heating 403 Light & (W.D.Pa.1975) notify Menard that (finding corporation Board did by presi its without its until by instruments had acted bound denying despite bylaws Sterling’s it of action. days dent and treasurer after learned 52, party 919; deal officers’ where Fact Findings such Nos. no actual corporation 63.) with the ing time, Sterling had taken addi- By this Vernonia, bylaws); Filter notice of such steps to close the transaction. tional (1983) (deter P.2d 350 Or.App. Dage’s Fact No. Finding by principal has mining that unless act should not now form failure parties third given action notice to some relief, and de- penalizing basis authority, a agent’s on the the limitations it its See Federal Sav- priving bargain. to have the presumed managing Corp., F.Supp. ings & Loan Ins. managing acts which authority to do those (“Factors re- duty such as of care do); Truck normally Crane agents cf. of su- high to exercise a standard quired Barr-Nelson, 329 N.W.2d Co. v. Serv. a employee was pervision and whether (Minn.1983) a third (finding that where firm officer or director high level writing by party had been notified establishing an em- also relevant [in cor that the corporation liability under an ployer’s vicarious certain ser poration liability denied theory].”). vices, put inquiry the third Conclusion corporate notice as to the (2) (1) transfer, vacate the grant We employee position); to countermand such (3) Appeals, of the Court opinion Jaguar, Bank Wachovia v. Bob Dunn pro- for further to the trial court remand (1994) N.C.App. 450 S.E.2d conclusion with our ceedings consistent (holding vice-president lacks Sterling’s actions. was bound there authority to execute documents and bind the when the defen RUCKER, JJ., concur. DICKSON corporation’s president dant met with the contrary. party’s specific notice to the actual and SHEPARD, C.J., end, separate dissents with it is difficult to know how lawyers opinion. will advise their clients after to-

day’s parties decision. all Where to a corporate transaction understand BOEHM, J., participating. not approval board and that it may SHEPARD, Justice, dissenting. Chief may or not forthcoming, be the black letter law cited in today’s opinion points toward a today’s I think decision will leave most buyer’s conclusion that the offer was not corporate lawyers wondering what the law accepted by the seller. actually is. I agree While general legal A board of pres- directors authorizes the principles laid out the majority, those ident requires to sell some real estate but principles seem undercut by the resolution that the sale be submitted to the board for of this case. approval disapproval. The president

understands that he must submit sale potential

to the board.1 He tells buyer buyer

that he must submit it.2 The knows its offer must be submitted to the

board after the signs the sales The

agreement.3 agreement is in fact sub- disapproved.

mitted to the board and Our holds that the agreement binding Court TOWN COUNCIL OF HAR- NEW MONY, Indiana, anyway. Appellant (Defendant Below), The “an majority expansive calls this apparent authority.” view of Op. at 1211. Facially, this seems like understate- Shirley PARKER, Appellee

ment. (Plaintiff Below). hand, the other On the Court embarks No. 87S01-9911-CV-673. upon its discussion of authority,” “inherent Supreme Court of Indiana. rightfully specie which it describes as apparent authority, after endorsing the April conclusions of the trial court and Court of Appeals corporation’s

did possess apparent authority to sell land approval.4 without board obligation Agreement.” 1. "Piccolo reminded of his of this This same approval Op. language appeared secure Board of the offer.” agree- first sales at 1209. disap- ment submitted to the Board and proved. persons signing "The Agreement.If plays this this recitation true, noted, 2. "It is Appeals as the Court of legal majority the central it, role the ascribes to early that Menard was advised in the transac- it seems that the first sales is the go tion that had to litigating. Sensibly, we Menard, one should be no one approval. obtain 698 N.E.2d at 1232 suggested has 16-22).” that the earlier document con- (citing Op. Conclusions of Law Nos. agreement. binding stituted a at 1215. said, Appeals Sterling’s ap- 4.As Court of majority heavily, op. 3. The leans parent authority "was vitiated Menard's agree- on a in the recitation sales knowledge go persons signing ment to the had to to the effect that "The Menard, Agreement approval.” board to obtain on behalf of the Seller duly signatures (citing authorized do so and their N.E.2d at 1232 Conclusion of Law No. bind the Seller in accordance with the terms 22).

Case Details

Case Name: Menard, Inc. v. Dage-MTI, Inc.

Court Name: Indiana Supreme Court

Date Published: Apr 17, 2000

Citation: 726 N.E.2d 1206

Docket Number: 46S03-0004-CV-272

Court Abbreviation: Ind.