Opinion
41368.
DECIDED SEPTEMBER 21, 1965.
Action on account. Fulton Civil Court. Before Judge Parker.
Kilpatrick, Cody, Rogers, McClatchey Regenstein, Harold E. Abrams, Albert C. Tate, Jr., for plaintiff in error.
Robert Carpenter, Harold Karp, contra.
1. In order to avoid personal liability an agent is under a duty to disclose the fact of his agency and the identity of his principal, and one who deals with an agent who fails to disclose his principal may at his election recover from either the agent or the principal.
2. The disclosure of an agency is not complete for the purpose of relieving the agent from personal liability unless it embraces the name of the principal.
3. One who assumes to act as agent for a non-existent principal or one having no legal status renders himself individually liable in contracts so made.
DECIDED SEPTEMBER 21, 1965.
Brown-Wright Hotel Supply Corp. brought this suit upon open account against Mrs. L. A. Bagen to recover the purchase price of restaurant equipment that she bought from plaintiff.
Evidence adduced on the trial of the case showed that defendant's husband, Leonard Bagen, and another person, Hess Mayer, were engaged in preparations to open a restaurant to be known as "Old Colony Inn." Defendant had no financial interest in this business venture except as a creditor. The restaurant was to be operated by a corporation to be organized for that purpose. However, on the occasions when defendant personally was in plaintiff's store, the prospective corporation had not then been legally formed.
On June 18, 1961, defendant, accompanied by Roy Hampton, a restaurant-equipment broker assisting her in her selections, went to plaintiff's store and purchased equipment costing $1,061.62 for use in the restaurant.
Plaintiff's witness Trammell, who was plaintiff's credit manager, and defendant's witness Walden, who was plaintiff's salesman, both testified that they had spoken with defendant while defendant was in plaintiff's store, and that during the transaction neither defendant nor Hampton had advised them to bill the merchandise to anyone other than defendant. Walden testified that defendant instructed him to bill the merchandise to "Old Colony Inn."
Defendant testified, "When I was introduced to Mr. Walden, Mr. Hampton told him at that time that it was my husband and his brother and Hess Mayer's business; and that they were operating it, and I was only there to pick out the supplies . . . We said that we were buying it for the boys." At another point she testified, "Q. In whose name was this initial order placed when you went in there? A. The Old Colony Inn." Later, she testified, "Q. . . . Who did you tell them they were to look to for payment? A. To the corporation operating Old Colony Inn."
On June 14, 1961, defendant returned to plaintiff's store and gave plaintiff a check for $1,000 (drawn by a purported corporation with no legal status as a corporation), leaving a balance of $61.62.
Afterwards, other purchases from plaintiff were made for the restaurant. Walden testified, "Q. . . Were any further orders made by Mrs. Bagen or Old Colony Inn after the initial order? A. Yes, Sir. Q. How were these orders made? A. By phone, mostly. I don't remember anyone else coming in." The evidence does not show that defendant made these other purchases.
No other payments were made on the account. The balance sought by plaintiff, including the balance of $61.62 on the initial order, was $1,149.27.
The jury returned a verdict for defendant and judgment was rendered according to the verdict.
Plaintiff excepts to the judgment of the trial court denying plaintiff's motion for new trial upon the general grounds.
"Where an agent wishes to avoid personal liability, the duty is on him to disclose his agency, and not on the party with whom he deals to discover it"; and one who deals with an agent who fails to disclose his principal "may recover from the agent, where he so elects, or he may proceed against the principal, when made known, should he not elect to proceed against the agent." Roberts v. Burnette, 72 Ga. App. 775, 777 ( 35 S.E.2d 201). See also: Wylly v. Collins, 9 Ga. 223, 239; Lippincott v. Behre, 122 Ga. 543 ( 50 S.E. 467); Willingham v. Glover, 28 Ga. App. 394, 396 (3) ( 111 S.E. 206); Davis v. Menefee, 34 Ga. App. 813, 814 (1) ( 131 S.E. 527); Ragsdale v. Duren, 100 Ga. App. 291, 293 ( 111 S.E.2d 144).
The testimony of Trammell and Walden, plaintiff's agents, shows that the plaintiff's only knowledge of defendant's real principals was the trade name under which defendant's principals proposed to operate the restaurant. "The disclosure of an agency is not complete for the purpose of relieving the agent from personal liability unless it embraces the name of the principal; without that, the party dealing with the agent may understand that he intended to pledge his personal liability and responsibility in support of the contract and for its performance. Furthermore, the use of a trade name is not necessarily a sufficient disclosure of the identity of the principal and the fact of agency so as to protect the agent against personal liability." 3 Am. Jur. 2d 677, Agency, § 320. See Saco Dairy Co. v. Norton, 140 Me. 204 ( 35 A.2d 857, 150 ALR 1299); Anno. 150 ALR 1303.
In the Norton case, supra, it was conceded that a trade name may be used under such circumstances that agency will be sufficiently disclosed, this being a question for the trior of facts. Here however, the transaction was not made under any circumstances tending to import knowledge of the fact of agency or the identity of the principals. Thus, it does not appear from testimony of plaintiff's agents that plaintiff had any knowledge either of defendant's true status or of whom she represented.
"The testimony of a party who offers himself as a witness in his own behalf is to be construed most strongly against him when it is self-contradictory, vague, or equivocal . . . And he is not entitled to a finding in his favor if that version of his testimony the most unfavorable to him shows that the verdict should be against him." Bedingfield v. McCullough, 106 Ga. App. 759, 760 ( 128 S.E.2d 374) and citations.
That version of defendant's testimony most unfavorable to her is that she told plaintiff to look to the corporation operating Old Colony Inn for payment of the account. This negates her testimony that she and Hampton advised plaintiff that she was acting for certain individuals. Therefore, we must take it that her real principals were undisclosed, and moreover that she purported to act for a non-existent principal, since the evidence shows that no corporation which was to operate Old Colony Inn was legally in existence at the time of the initial transaction.
One who assumes to act as agent for a non-existent principal or one having no legal status renders himself individually liable in contracts so made. Shiflett v. John W. Kelly Co., 16 Ga. App. 91, 94 ( 84 S.E. 606); Powers v. Brunswick-Balke-Collender Co., 19 Ga. App. 706 (2) ( 91 S.E. 1062); Hagan v. Asa G. Candler, Inc., 59 Ga. App. 587, 591 ( 1 S.E.2d 693), aff. 189 Ga. 250 ( 5 S.E.2d 739, 126 ALR 108).
There was no evidence that it was defendant who made the purchases subsequent to the first transaction. Thus a verdict against Mrs. Bagen, the defendant, in the full amount of the account was not authorized by the evidence. On the other hand, a verdict against Mrs. Bagen in the amount of $61.62 representing the remainder of the amount of the initial purchase was demanded by the evidence. Judgment reversed on the general grounds. Frankum and Hall, JJ., concur.