*1 incidents, widely inadequate is an separated (Ind.C.t.App.1995). This N.E.2d negli- to found a successful question of basis which generally a for the trier issue is fact, gence law. claim. answerable as matter of and not Thus, that trial court conclude we Furthermore, hold that a mat- I would as a of law it concluded matter erred when entirely premises were secure ter law the negligent granted that not Firestone was burglary. regard In this at the time of the summary judgment. motion for Firestone’s entry by important to note that the bur- open, glars by prying great and remanded.
Reversed was effected door, force, seriously jamb of a fire door ROBERTSON, J., door, concurs. breaking damaging the lower door one of two exposing handle and deadbolt SULLIVAN, J., separate dissents locks, pried from was also the door opinion. jamb. SULLIVAN, Judge, dissenting. required It was that Firestone make absolutely burglar-proof. court did not The trial determine its store It was bailment, except extraordinary necessary security as such deter- there was no to take may implied suggested employ- conclusion mination measures such duty employ- required Employers employ Firestone owed to the are not ees. security guards ees. full-time or install armed systems burglar elaborate alarm in order to may, disagree I Be that as liability. precautions avoid tort taken majority’s holding that there was evidence of matter of adequate here as a law. were Notwithstanding such the indicia bailment. perceived by the ma- employer “control” summary judgment. I would affirm the my jority opinion, forth their as set
view, employer here lacked the exclusive assumption
possession essen- control
tial The tools in to a bailment. their boxes merely employer’s within located weekends,
premises overnight and on weight of the bulk and they routinely
tools in their boxes were Although in that manner. it would stored COMPANY, INC., OIL SUPPLY required communication bit Appellant-Plaintiff, entry to obtain after-hour inconvenience tools, premises in order remove one’s permitted. Em- possible and was SERVICE, INC., HIRES PARTS d/b/a time, did, ployees from time remove some Parts, Appellee- Auto premises personal their tools from Defendant. overnight use or on weekends. evidence No. 02A05-9512-CV-506. majority of “control” alluded is not adequate permit inference of bail- Appeals Court Indiana. relationship. ment Aug. however, I hold importantly, More would law as a matter of Firestone did duty employees. a matter breach a As law, not negligent. Firestone majority reasonably that it holds “that a break-in could occur after
foreseeable ...”
working hours at the Firestone store
Op. criminal possibility at 85.' The mere of a persons despite prior
act few *2 Berne, appellants Sprunger, L.
Rick plaintiff. Snouffer, Wayne, for appel-
Eric E. Fort lee-defendant.
SHARPNACK, Judge. Chief (“Oil Supply Company, Supply”) Inc. Oil the trial court’s award appeals $820.80 brought this action Supply favor. Oil Service, Inc., Hires Hires Parts d/b/a (“Hires”), seeking payment Parts for Auto goods. Supply three shipment of Oil raises review, we restate as: for our issues 1) ato set off whether Hires was entitled- Sup- against the claimed Oil amount ply for the amount Hires credited the Dolin, the undis- account of William Supply; closed of Oil 2) erred in not whether the trial court ratification; applying the doctrine 3) Supply pre- whether Oil is entitled to judgment princi- on the entire interest pal balance due. and remand.
We affirm
dispute.
Supply
facts are
parts
a wholesale distributor
automotive
accessories, including antifreeze. Hires
parts
a retail distributor of automotive
accessories,
including antifreeze. William
(“Do-
Management
Evergreen
Dolin d/b/a/
lin”)
buys
who
commodities broker
products
automotive aftermarket.
sells
spring
Supply pur-
In the
products
Sup-
some
from Dolin. Oil
chased
ply
products
also sold some
Dolin. The
manager
general
Supply
of Oil
intended for
purchases
this sale to offset the
made from
Supply’s accounting
Dolin.
de-
mistakenly paid
pur-
Dolin for
partment
chases. To work out Dolin’s indebtedness to
overpayment,
as a result of the
products
to sell
for
allowed Dolin
provision
it on commission with the
applied
would be
portion of
commissions
debt.
Supply, Dolin was also
Unbeknownst to Oh
$28,-
approximately
indebted
Hires for
debt,
represent-
satisfy
To
Dolin
000.00.
of 1988 that he had
ed to
October
ship
he
720 cases of antifreeze
would
disclose Hires his
relation-
exchange
ship
a release of his indebt-
with Oil
evidence
shows
agreed
arrangement.
to this
prior
edness. Hires
that Oil
did not contact Hires
shipping
to its
the antifreeze to Hires....
entering
agreement
After
into
’
Hires,
general manager
telephoned
Dolin
Supreme
Indiana
Court
has held
stated,
got
“I
order
disclosed,
‘where
here,
Automotive,
Wayne,
Fort
for,
right to
hampered;
sue is
if the
antifreeze,
Ship
Indiana.
them
eases of
party
has acted
faith that
Record, p.
matter
what it is.”
217. After
interest,
was the real
and was
Hires,
running
a credit check on
behalf,
acting on his own
then the
shipped the antifreeze to Hires. On Novem-
action,
right
subject
receives
to all
7,1988,
signed
ber
Hires received and
equities growing out
transaction
*4
_
antifreeze,
shipment.
receiving
Upon
the
may
against
agent.’
which
exist
the
Hires credited Dolin’s account.
general rule,
As a
who
one
contracts
pay
Supply
After Hires
Oil
refused
agent
principal,
of an undisclosed
shipment,
Supply
the
Oil
initiated this action.
supposing
agent
party
the
is the real
Supply
appeals
judg-
now
the trial
Oil
court’s
interest,
being chargeable
and not
$820.80,
awarding
represents
ment
which
the
the principal,
notice of
existence of
only the difference between the total amount
entitled, if
by
sued
principal
the
on the
by
for the
and
the amount
contract,
up any
equi-
to set
defenses
Hires
Dolin’s
which
credited
account.1
up against
ties which he could have set
the
agent
reality
had the latter
been
the
I.
suing
principal
on his own behalf. Various
Supply
The first
our
issue Oil
raises for
rule,
assigned
reasons have been
for this
erroneously
review is whether
trial court
the
estoppel
such as the
of the undisclosed
determined that Hires was entitled
off
to set
principal, or the fact that the undisclosed
Supply
Oil
the claim of
the amount
principal
position
must assume the
of the
Hires had credited to the account Dolin.
shoes,
step
agent and
into his
or that the
Specifically,
Supply
Oil
contends that Dolin’s
by
principal,
permitting the
to con-
they
actions were unauthorized because
disclosing
tract
in his own name without
beyond
arrange-
scope
the
of the commission
agency,
perpetrate
has
him to
enabled
parties
agreed.
ment which the
had
As a
upon
persons,
a fraud
third
and thus the
result,
Supply
concludes that it “should
applies
rule
two
where one of
innocent
compelled
not be
bear
the loss in
persons must
suffer from
fraud of a
brief,
Appellant’s
p.
case.”
13.
person,
third
fall
loss should
person
negligence
act or
whose
enabled
order,
In its
court
the trial
found:
to be
But
the fraud
committed.
whatever
Supply
“Dolin and Oil
had
into
entered
rule,
for the
the rule itself
reason
agency relationship ...
al-
Supply
rule,
principal,
clear and the
under the
product
lowed Dohn to sell
on behalf Oil
he finds it
must take
contract as
Supply....
terms,
governed by
its
cannot en-
Dolin,
Hires,
In the
between
transaction
rights under it
the contract
force
Supply,
and Oil
was an
Dolin
undisclosed
give
does not
Supply
was his
generally accepted
...
Do-
principal
The evidence shows that
It
is also the
rule
person
lin'never
Hires of
a third
contracts
informed
the fact
that where
antifreeze,
given
even
who has not
notice to such
owned
or
agency,
person may
fact
did
that Oil
existed. Dolin
third
remand,
proceedings. Upon
This is
time
been
the second
this cause has
case for further
appeal,
evidence,
the initial
re-
stipulation
before this court.
In
we
considered
trial court
entry
judg-
summary
trial,
versed
trial court’s
presented
which was
evidence
ment
favor of Oil
because we found
rendering judgment
in favor of
genuine issues of
fact and
material
remanded
distinguishable
the facts
due to him from that the case
from
set off a debt
claim
Allegheny,
In
insur-
before us.
personally in an action on the
case
company was the defendant in the
ance
by
principal....
contract
the undisclosed
When these amounts are
notice Dolin’s
debt to
900.80.
from
ence
Supply. Oil
entitled
[*]
Dolin
of $820.80
the case
Dolin
[*]
in the amount of
to set off the debt due to
personally,
released
results.
agency.
hand
[*]
in the
claims
Hires was not
in this action Oil
the debt owed to it
[*]
Therefore,
set
amount
off,
[*]
$28,080.00.
a differ-
owes
given
[*]
$28,-
it,
We noted that
special agent
disclosed,
that the
special agent’s
brought
ance
agreement with the third
This action
special
power
act.
and the
limited
third
third
representing
was
was
third
attorney
agency relationship
who
party
beyond
party
duty
not bound
party
arranged
client.
who
authorizing
was aware
party.
ascertain
deals with
scope
expressed
We
an insur-
the acts
Id. at
of the
found
agent’s authority
dealing
of the
Judgment
is therefore entered for the
extent
before
with him.
concluded
Plaintiff
...
the Defendant
We
that the
$820.80_”
failed to
...
had
ascertain
extent
in the sum of
agent’s authority,
so the
(citations omitted).
Record, pp. 373-375
*5
agent.
the
acts
bound
unauthorized
agent’s
Supply argues that “if the
actions
unauthorized,
it
no
were
makes
difference
any agency relationship
whether
not
was
duty imposed
third
the
on
brief,
Appellant’s
p. 11. In other
disclosed.”
parties
special
to ascertain the
aof
words,
it
Supply contends that
should not
generally only applied
is
in eases
be forced to bear the loss because Dolin’s
agency relationship
the
is disclosed to
where
unauthorized,
regardless
actions
of
were
West,
id.;
party.
the third
See
v.
Oklahoma
agency relationship
whether the
had been
(Okla.Ct.App.1990).
796 P.2d
disagree.
Hires.2
disclosed to
We
logical
party
is
This rule
because
third
duty
investigate
cannot have
to
the authori
outset,
Supply’s
At the
contention
ty
party
of an
unaware
merely
that
were
Dolin’s acts
unauthorized is
agency relationship
In this
that an
exists.
request
reweigh
the evidence.
can We
case,
agency relationship
the
was not dis
Hobart,
City
do
so. See Chidester v.
of
closed,
know
did not
that Dolin
(Ind.1994).
908, 910
We
631 N.E.2d
consider
acting
as the
of Oil
Con
judgment
the
most
to the
facts
favorable
sequently,
opportunity
Hires had no
or rea
clearly
determining
in
it is
whether
errone
son
ascertain
extent of
authori
the
Dolin’s
ous. Id.
ty
was not aware that another
Furthermore, contrary
Supply’s
to Oil
addition,
party
In
involved.
contentions,
the resolution of the
issue
case,
in
plaintiff
suing
a con
the
this
on
whether Dolin’s acts were unauthorized is
that, by
argument,
tract
its own
it is not
dispositive
in our
evaluation
the trial
bound to because of the unauthorized acts of
judgment.
court’s
Thus,
relies exclu Dolin.
the circumstances
case
of this
sively Allegheny
Casualty
on
Mutual
Allegheny.
are quite different from those in
Franklin,
(Ind.Ct.App.1987), Therefore,
to acted charged the same. loss. This bear the principal and should especially given true determination All elements must be satisfied See id. three products Supply Dolin to its allowed sell Oil principles apply. for ratification on of its exis- put and did not notice Supply all of the ele- Oil contends that ship- by confirming the order before tence re- in this ease. With ments are satisfied Hence, approach ping. pursuant element, Supply spect to the first states rights a third are not authority only that had no to order a “Dolin “subsequent of an disclosure affected Supply for and on load of antifreeze from ” on principal and limitations unknown brief, Appellant’s Auto.... behalf Hires agent,” payment in Hires’ argument p. Supply 13. Oil concentrates credit to account can the form the Dolin’s test, ratification on second element to Oil off owed be set balance shipping signed by arguing receipt unautho- Supply even if Dolin’s actions were Hires was to demonstrate that sufficient rized. See id. knowledge to have of facts Hires was “shown ordinary pru- which would lead a Therefore, carefully considering the after Appellant’s investigate further.” dence strong policy for public case law and the brief, Supply pp. 14-15. Oil contends that protecting parties, we find innocent investigated shipment Hires should have by permitting that the trial court did err ship- name was on the given the credit to Dolin’s set off receipt than With re- ping rather Dolin’s. account, Dolin’s regardless whether acts element, Supply spect to the third states unauthorized. only that Auto did not return “Hires keep but elected to II. brief, Appellant’s p. instead.” issue our review is second findings trial of fact court’s applying whether the trial court erred in not thereon are inconsistent with and conclusions ratification facts of the doctrine of application principles. of ratification argues case. Oil that Hires ratified part trial court that: stated ordering Dolin’s actions of on its behalf 720 “Dolin and Oil had entered into from eases of antifreeze ac relationship ... al- cepting signing shipment. for the As a *7 product lowed Dolin to sell on behalf of Oil ratification, Supply Oil result of the contends Supply.... that Hires not entitled to off the credit is set Hires, Dolin, In the transaction between given against the owed to Dolin total debt Supply, and Dolin Oil was an undisclosed shipment. disagree. Supply Oil We Supply and was Do- principal ... The that evidence shows question Ratification is a of fact lin never informed Hires of the fact that adoption and is as “the of that which defined antifreeze, Supply Ofi owned the or even done for and in the name of another was Supply the fact that Oil existed. Dolin did authority.” Mortgage without Beneficial Hires his relation- not disclose to Powers, (Ind.Ct.App. 550 N.E.2d 796 ship with Oil The evidence shows 1990), denied, reh’g trans. denied. Ratifica prior Supply that Oil did not contact Hires tion is on the existence of three essen based Hires. Oil shipping to its the antifreeze to tial elements: Supply disclose that it was did not 1) act performed an unauthorized principal in this transaction or that Dolin and on another individual for behalf of acting mere was as fact himself, and not account of actor on shipper is listed on that Oil as the 2) knowledge all facts Exhibit “D” was not sufficient to alert of material charged Supply’s
person unautho- Hires to interest the trans- to be with said Ofi act, as principal.” rized actions
93 determinations, Record, pp. presented 373-374. These court to infer from the evidence effect, reject application ratify of ratification that Hires did not Dolin’s acts. Conse- principles. quently, prove failed to that the judgment clearly trial court erroneous.
First, the trial court found that Oil principal in the transaction parties and Dolin act between the that III. ing Supply’s agent. Generally, “ratifi our final issue for review by the person cation must be identified as whether prejudg entitled to original time of act principal ment on interest the entire amount. or, identified, person then no part § relies in on Ind.Code 24- act, one for whom the intended to support argument 4.6-1-103 in of its that it is power must one had be who prejudgment entitled to interest. to authorize the act when it was done provides: this section power has the to confer such at the (8%) eight percent “Interest the rate Agency time of 3 ratification.” Am.Jur.2d per annum shall be allowed: (1986). By Sup § determining that Oil (a) money From the on date settlement ply was the rather than Hires any uniting on instrument Supply’s agent, that Dolin was Oil the trial specify does not a rate of interest and rejected Supply’s theory court that Hires which is not or covered IC 24^4.5
was the
to the extent that
it or
article;
supply goods
it.
dered Dolin
(b) And from the date an
bill
itemized
Second,
ship-
the trial
court found
shall
been
de-
have
rendered and
ping receipt was not sufficient to alert Hires
stated,
on
manded
an account
account
Supply’s
to Oil
interest
the transaction.
for money
closed or
had
and received
The unauthorized act
can
the use of another and
without his
retained
person ratifying
ratified when the
had knowl-
consent.”
edge
Allegheny,
of all material
facts.
659; Floyd v. Jay County
N.E.2d at
Rural
added).
§
(emphasis
I.C.
24-4.6-1-103
As
Corp.,
Membership
Elec.
405 N.E.2d
there is
on
no settlement
an instrument
clearly
(Ind.Ct.App.1980). The trial court
wiiting
account stated between the
shipping
receipt
determined
alone parties
respect
ship-
this case with
Sup-
was insufficient to alert Hires
to Oil
goods,
§
ment of
I.C.
24-4.6-1-103 does
ply’s involvement. Because the trial court
apply to these facts.
See
J.
Thomas
knowledge
found that Hires did not
Henderson,
Leibowitz,
Inc. v.
490 N.E.2d
involvement,
Hires could not be
(Ind.Ct.App.1986) (defining
account
charged with Dolin’s unauthorized acts under
agreement
parties
stated as “an
between
principles
of ratification.
all items of
and the
account
balance struck
correct, together
promise, express
with a
Therefore,
because ratification
balance”).
implied,
pay
question,
argument
Oil Supply’s
factual
*8
court
applying
that the trial
“erred
Indiana
have
courts
long
doctrine of ratification to the
a
is
facts of
held that
statute
not the exclusive
actually
request
reweigh
prejudgment
case” is
for
interest.
See
evidence,
Erie-Haven,
Appellant’s
Tippmann
which
Refrigeration
we cannot do.
Inc. v.
brief,
Chidester,
Construction,
(Ind.Ct.
1;
646,
p.
see
94 prejudgment inter- See, Trucking, the trial court to award Bland e.g., Dale
accrued. (Ind.Ct.App. 1103 est. Kiger, 598 N.E.2d Inc. v. denied; 1992), Lipps v. Indus- Wedge trans. and remanded. Affirmed
tries, Inc.,
(Ind.Ct.App.1991);
N.E.2d 332
575
Erie-Haven,
Once the
95
821, 826,
personal
after
rep-
release Dolin’s
debt until
trans. denied. Statements or
Accordingly,
were received.
we deal
by
purported agent
resentations
in-
are
principles
part
governing
in
with
an
apparent authority.
here
sufficient to create
State
agency,
part
princi-
in
undisclosed
and
Farm Mut.
Ins.
Auto.
Co. v. Gonterman
(1994)
ples governing
agency
an
811,
Here,
the disclosure of
Ind.App., 637 N.E.2d
relationship
however,
transaction
after
commercial
“apparent
there is
issue of
au-
complet-
it
thority”
was initiated but before
had been
the time of the initial
Hires,
ed.
agreement
between
made
Dolin and
purchaser
no reasonable
would infer that Do-
hybrid
legal
Because of the
nature
authority
lin had
if
principal,
from a
such
case,
analysis required in this
difficult to
is
existed,
product
Supply’s
to barter Oil
in
implied
principles
apparent
isolate
or
au
personal
satisfaction of Dolin’s
But
debt.
see
thority
applicable
which
are
when
(1917)
Excel
Co. v.
Furniture
Brock
63 Ind.
fully
partially
principles
is
or
disclosed from
App.
position
belief creditor, son, the of the without consent the debt owed payment, effect satisfaction of payment.” 106 Ind. has no resemblance of personal by forgiving the a debt principal to 156, 6 at 14.. at N.E. Again, has a agent. the it been stated as of authority to sell general principle “[t]he case, where, in Similarly, purchas- as the principal’s personal property does not the shipper accepts goods er from a named scope ap- the include its to within forwarding payment awaiting of or instead payment property in of ply or transfer the shipper, purports satisfy invoice from the debt, so agent’s own and one who takes the through personal debt cancellation of a the faith, good though in cannot property, the agent, “no resem- of the seller’s there is debt against the ordinarily princi- hold same the payment.” blance § pal.” Agency 3 111. Am.Jur. undisclosed, a a third When general principle applica- person may up any has Another deemed set defenses he upon Agency agent § in 301: the the rationale that against ble here is stated 3 Am.Jur. persons one of two innocent must where knowingly ... person “A receives who from fraud the suffer the loss a in property from person permit- upon should fall the whose act so payment of the latter’s debt does at his committed, i.e., princi- the fraud to be the ted peril; if author- and the acts without (1992) pal. Stump Equip. v. Indiana facts, ity, proof these principal, the on 403, 398, Ind.App., 601 N.E.2d trans. denied to recover.” entitled Agency principle § 3 Am.Jur.2d 341. This must know or have reason however, party seeking if apply, not the does property princi- of the know that the in other- refuge principle wittingly the pal. Here it is clear that when Hires unscrupulous agent wise aided an to defraud accepted shipment it product knew principal. shipper that Oil was the and that (1906) Nye In Hamilton Natl Bank v. any way was in associated Dolin’s name 295, purchaser Ind.App. a N.E. transaction. situation is not payable issued a cheek to the seller (1886) unlike that in Robinson Anderson agency. the check to the In- and delivered closely most 106 Ind. N.E. forwarding princi- stead of the check to the There, analogous ease. Indiana certain pal, indorsed check from Rob- machine was ordered Anderson principal’s Although purchaser name. through placed inson. The order was Robin- regard to be at fault with shown son’s When the machine deliv- transaction, bank was held that ered, Anderson, gave payment, to the good faith and obtained cheek promissory payable notes to Robinson. for consideration could not enforce it Thereafter, those notes were surrendered original Although maker. case is not to Anderson without Robinson’s facts, analogous on it is instructive endorsement or other authorization and were purchaser goods, as maker of the agent him- replaced payable
Q7 purchaser such as us. A full purchase situation before amount of the price invoice agent having possession together from an neither the with interest thereon. may property indicia himself set
off a due him from the when debt sued the undisclosed The reason for apparent
the rule is that the absence of title put purchaser on inquiry
should as to the
true status the matter. Agency Clearly, § 343.
Am.Jur.2d no such where, here, set off is available “before DISS, M. Appellant-Defendant, Sara the contract has been consummated deliv- ery acceptance goods, or at least has, party dealing before the INTERNATIONAL, AGRI BUSINESS otherwise, by making payment or INC., Appellee-Plaintiff. altered his position or disadvantage^]” some incurred No. 02A03-9510-CV-362. Id. The same rule was articulated as follows (1950) in Syriani v. Gebhart 195 Md. Appeals Court of of Indiana.
A.2d 770: Aug. prospective “Even when a purchaser be- lieves that the is the owner and has contrary, reason believe goods before the disclosed are made, purchaser
delivered or against set-off price
cannot his debt
against agent.” concepts
These unmistakably related
synthesized applicable and made to the facts §
before us as set forth in Restatement
supra:
“(2) If the is authorized to con- name, principal’s
tract in the the other
party does not set-off have claim due
him from the unless the has possession
been entrusted with the of chat- disposes
tels which he of as directed or the principal
unless has otherwise misled extending into credit to
n n n n n n
Illustrations: P A is authorized to contract to sell T goods in P’s name A does not possession. A sells the in his
own name and causes them to be delivered A
to T. At this T time owes In an $500. T,
action P T may not set off
the claim which he A.”
I would reverse and remand with instruc- judgment
tions to enter in the notes check, upon check held liable Supreme invalidity self. The Court held that seller, name of the issued would of the verdict Anderson Robinson’s purchaser to follow that had not seem beyond any payment was claim for “clear seller-principal. satisfied his debt to the question.” 106 N.E. Ind. that: court stated accepted generally It is also the rule that agent having authority person “An to collect a where a third contracts with an supposed right given person be have the who has not notice to the third debt cannot agency, may off the note of the of his set take debtor himself, payable substituting agent person- thus him- claim him debt or from ally in the in an on contract [sic] self as creditor room action (Second) may paid by principal.... That debt be Restatement however, Again, § negotiable promissory Agency the set off execution debtor, conceded, may may imposed note of the but not be