Law School Case Brief
Atl. Salmon A/S v. Curran - 32 Mass. App. Ct. 488, 591 N.E.2d 206 (1992)
It is the duty of the agent, if he would avoid personal liability on a contract entered into by him on behalf of his principal, to disclose not only that he is acting in a representative capacity, but also the identity of his principal.
Defendant Michael Curran began doing business with plaintiffs, Salmonor A/S (Salmonor) and Atlantic Salmon A/S (Atlantic), Norwegian corporations and exporters of salmon. At all times, Curran, as the purchaser, dealt with plaintiffs as a representative of "Boston International Seafood Exchange, Inc.," or "Boston Seafood Exchange, Inc." The salmon purchased by Curran was sold to other wholesalers. Payment checks from the defendant to the plaintiffs were imprinted with the name "Boston International Seafood Exchange, Inc.," and signed by Curran, using the designation "Treas.," intending thereby to convey the impression that he was treasurer. Wire transfers of payments were also made in the name of Boston International Seafood Exchange, Inc. Curran would also give the exporters' representatives business cards which listed him as "marketing director" of "Boston International Seafood Exchange, Inc." Advertising placed by the defendant appeared in trade journals under both the names "Boston Seafood Exchange, Inc.," and "Boston International Seafood Exchange, Inc." At the relevant times, no such Massachusetts or foreign corporation had been formed by the defendant or had existed.
When the plaintiff exporters filed suit against Curran to recover the debt incurred by the purchaser. At trial, Curran alleged that he was acting merely as an agent of another company when he incurred the debt that the exporters sought to recover from him individually. That other company had filed a certificate with the city that it was doing business in the name of the seafood exchange company. The trial court entered judgment in favor of defendant purchaser. The exporters appealed.
Was Curran acting as an agent?
The court held that a person who conducted business in the name of nonexistent corporations, was a principal and not an agent. Moreover, where Curran did not fully disclose the identity of a corporation for which he claimed to have acted as agent, he was held personally liable for contracts he entered into allegedly on behalf of the corporation. The court further held that it was not sufficient that the exporters might have had the means, through a search of the records of the city clerk, to determine the identity of the purchaser's principal. Actual knowledge was the test. It was the duty of Curran, as purchaser, if he wanted to avoid personal liability, to disclose his agency. The purchaser's use of trade names or fictitious names was not a sufficient identification of the alleged principal so as to protect him from personal liability. The judgment in favor of the purchaser was reversed and new judgments were entered against the purchaser in favor of the exporters, both with appropriate interest and costs.
Access the full text case
Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class