[W]here a proprietor of a place of business by his dereliction of duty enables one who is not his agent conspicuously to act as such and ostensibly to transact the proprietor's business with a patron in the establishment, the appearances being of such a character as to lead a person of ordinary prudence and circumspection to believe that the impostor was in truth the proprietor's agent, in such circumstances the law will not permit the proprietor defensively to avail himself of the impostor's lack of authority and thus escape liability for the consequential loss thereby sustained by the customer.
Hoddeson v. Koos Bros
Plaintiff went to defendant's furniture store to buy some furniture. She was greeted by a tall man with dark hair frosted at the temples in a light gray suit who asked if he could help her. She told him what she wanted to buy and he led her around to the different items she wanted. When finished, he added up her total on a pad of paper he drew from his pocket. She handed him the money, and he informed her that some of the items were not in stock and would be delivered to her the next month.
The month passed without a delivery, so plaintiff contacted defendant, which informed her that there was no record of such a sale. Plaintiff filed suit and tried to identify the salesman who sold it to her, but did not recognize any of them who were working that day.
District court granted plaintiff a judgment reimbursing her for her payment.
Did the (phony) salesman have authority to sell the furniture to plaintiff?
Apparent authority cannot exist just because some person exercised it. However, stores also have a duty to ensure that their customers are reasonably protected from loss by the deceptions of fake salesmen. This case should be tried under this doctrine of estoppel, not apparent authority.
No, he did not have authority, but defendant may be liable under the doctrine of estoppel. Reversed and new trial allowed.