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Indep. Fire Ins. Co. v. Able Moving & Storage Co. - 94-1982 ( La. 2/20/95), 650 So. 2d 750

Rule:

The general rule that liability for the negligent and tortious acts of another does not flow simply because of a principal-agent or principal-mandatory relationship does not apply when third parties act to their detriment on the basis of an agent's apparent authority. Apparent authority is an estoppel principle which operates in favor of third persons seeking to bind a principal for unauthorized acts of an agent. When the apparent scope of an agent's authority, the indicia of authority, is relied upon by innocent third parties to their detriment, the principal is liable.

Facts:

Attracted by an ad featuring the interstate mover's name, Bekins, Mary Jane Hebert called what turned out to be the intrastate mover and made arrangements to move furniture. The customer did not see the intrastate mover's name, Able Moving & Storage, Co., which was in small type, and did not realize that she was dealing with anyone other than Bekins, the interstate mover. The men who arrived to do the moving, although employed by Able, the intrastate mover, came in a van bearing the Bekins' logo, and wore caps and shirts bearing that logo. When the job was completed, Mary Jane Hebert made out a check to Bekins for $175. The check was endorsed "BEKINS" and deposited. Careless smoking by one of the employees caused a fire in the Hebert's house. The trial court held that both Able and Bekins were liable for the fire damage because their newspaper advertisement gave the impression that they were one and the same. The trial court’s judgment against Bekins, the interstate mover, was reversed by the court of appeal, which concluded that Bekins did not have any control over Able’s employees who moved the customer’s furniture.

Issue:

Was the interstate mover liable for the fire damage caused by the intrastate mover’s employees?

Answer:

Yes.

Conclusion:

The Supreme Court of Louisiana held that the interstate mover was liable for the fire damage caused by the intrastate mover’s employees. According to the Court, the intrastate mover had actual authority from the intrastate mover and also apparent authority manifested by the interstate mover’s advertising and the intrastate mover’s use of the interstate mover’s name. According to the Court, the trial court correctly found that the interstate mover’s advertisement intentionally caused the customer to believe that she was dealing with the former. The customer paid the interstate mover and suffered a loss from what she believed to be the interstate mover’s servant. Hence, the Court concluded that the interstate mover was estopped from denying that the servants were its servants, and should thus be held liable for the loss sustained by the customer.

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