Lind v. Schenley Indus., Inc.

167 F. Supp. 590 (D.N.J. 1958)

 

RULE:

Unauthorized representations of an agent are not a holding out by the principal and cannot be a basis for apparent authority.

FACTS:

Plaintiff employee was appointed district manager for a certain area of the defendant employer's business and his supervisor informed him that he was to receive an "override" commission on the gross sales of all the salesmen working under him. He was transferred before he received the commission. He filed an action to recover the commission and a jury entered a verdict in his favor. Defendant filed a motion for judgment notwithstanding the verdict, which the court granted.

 

ISSUE:

Did the supervisor have the apparent authority to bind defendant to the commission agreement?

ANSWER:

No.

CONCLUSION:

The jury's findings were contrary to the weight of the evidence and the law. The employer had not held out the supervisor in such a manner as to give the employee the right to believe that it had authorized the supervisor to give him the commission. The supervisor had no express or apparent authority to make the representation, and the employer did not ratify it. The agreement upon which the employee relied was not sufficiently definite and specific to be enforceable against the employer. The memo that contained a reference to the commission did no more than contemplate a possible future agreement. The absence of evidence of the date of commencement of the commission was fatal to the alleged contract's enforceability.

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