CAROLINA-GEORGIA CARPET & TEXTILES, INC., A FLORIDA CORPORATION, APPELLANT,
v.
ERNEST J. PELLONI AND VIRGINIA PELLONI, HIS WIFE, JOHN P. SCHLICHER, AN INDIVIDUAL, SIR JAMES CARPETS, LTD., APPELLEES
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Carolina-Georgia Carpet & Textiles, Inc. appeals a judgment for unpaid rent where the trial court held it liable for a lease assigned by John Schlicher without authorization. The appellate court reversed, finding no agency relationship, no estoppel, and no ratification by the defendant.
The court reversed the judgment, holding that Carolina-Georgia is not liable because: (1) the plaintiffs failed to prove agency by estoppel, as they could not show the defendant manifested a representation of Schlicher's authority or that the lessors relied on any representation before accepting the assignment; (2) the partnership by estoppel theory lacks merit; and (3) Carolina-Georgia did not ratify Schlicher's unauthorized actions, as instructing him to resolve the matter constituted a denial of responsibility rather than affirmation.
[1] Agency by estoppel requires proof that the principal manifested a representation of the agent's authority or knowingly allowed the agent to assume such authority, that th…
[2] To establish agency by estoppel, representations must predate the action taken in reliance.
Previewing 2 of 6 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“In order to hold the principal liable it must be established (1) that the principal manifested a representation of the agent's authority or knowingly allowed the agent to assume such authority; (2) that the third person in good faith relied upon such representation; and (3) that relying upon such representation such third person has changed his position to his detriment.”
Establishes the three-element test for agency by estoppel that plaintiffs failed to satisfy.
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Join FLexlaw to unlock all legal intelligenceThe Pellonis owned commercial property leased to Sir James Carpets, Ltd. and John Schlicher. When Schlicher faced financial difficulties and lease def…
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MOORE, Judge.
Carolina-Georgia Carpet and Textiles, Inc., one of the defendants in the trial court, appeals from a final judgment in favor of the plaintiffs-lessors, Ernest J. and Virginia Pelloni, in the amount of $15,-615.00 for past due rent on commercial premises.
The plaintiffs were the owners of commercial property which was subject to a lease in favor of Sir James Carpets, Ltd. and John Schlicher, personally. After the principals of Sir James Carpets, Ltd. departed, Mr. Schlicher continued to operate a carpet store at the subject premises. He was experiencing extreme financial difficulties and his lease was well in default. Schlicher approached Carolina-Georgia Carpet and Textiles, Inc. (hereinafter referred to as Carolina-Georgia) seeking a solution to his financial difficulties. This contact culminated in an agreement1 whereby Carolina-Georgia agreed to continue advertis ing its products on West Palm Beach Television channels and advise patrons of the availability of Carolina-Georgia products in Ft. Lauderdale. Schlicher was allowed to use the name “Carolina-Georgia Carpets at Ft. Lauderdale” in his business pursuits. Shortly after execution of the agreement, and without knowledge of Carolina-Georgia, Schlicher opened a corporate bank account in the name of Carolina-Georgia Carpets and Textiles, Inc. and assigned his lease on the subject premises to Carolina-Georgia Carpet and Textiles, Inc. Schlicher executed the assignment as assignor on behalf of Sir James Carpets Ltd. and also as assignee, signing as agent for Carolina-Georgia. The assignment was accepted by the plaintiff, Mr. Pelloni.
After the lease continued in default the plaintiffs sued Sir James Carpets, Ltd., John Schlicher and Carolina-Georgia Carpets and Textiles, Inc. Summary final judgments were entered against Sir James Carpets, Ltd. and John Schlicher and issue was joined by the answer filed by Carolina-Georgia Carpets and Textiles, Inc. which generally denied the allegations contained in the complaint and specifically denied the existence of any agency relationship with Schlicher and the assignment of the lease. This appeal is concerned only with the judgment against Carolina-Georgia Carpets and Textiles, Inc. Throughout the trial, Carolina-Georgia denied that Schlicher was their agent or that they had authorized him to execute the assignment of the lease. They maintained, and there was no proof to the contrary, that they had no knowledge of Schlicher’s assignment of the lease to Carolina-Georgia or of his use of their name in opening a corporate checking account. The plaintiffs attempt to sustain the judgment on theories of partnership by estoppel and agency by estoppel. We reject the partnership by estoppel theory and consider only the agency by estoppel theory worthy of comment.
The doctrine of agency by estoppel is similar to the doctrine of apparent authority such that there is no significant difference between them. In order to hold the principal liable it must be established (1) that the principal manifested a representation of the agent’s authority or knowingly allowed the agent to assume such authority; (2) that the third person in good faith relied upon such representation; and (3) that relying upon such representation such third person has changed his position to his detriment. See 3 Am.Jur.2d, “Agency”, § 75; Cawthon v. Phillips Petroleum Company, 124 So. 2d 517 (Fla.2d DCA 1960).
In attempting to prove the elements of agency by estoppel plaintiffs relied solely upon proof of Carolina — Georgia’s television commercials indicating their products were available at the Ft. Lauderdale store and that certain employees and/or agents of the lessors viewed those commercials. Assuming, without deciding, that such representations in the commercials were sufficiently material to warrant reliance thereon this argument has no merit. The record is totally void of any proof that the lessors, or the lessors’ employees, relied on the commercials when they accepted the assignment of the lease. One employee testified that she did not know whether she saw the commercials before or after the acceptance of the assignment of the lease. Another testified that he did not know the date of the advertisement. Agency by estoppel requires proof of reliance upon the representations, and that, in turn, needs proof that the representations predated the action tak en in reliance. Such proof is totally lacking in the instant case.
Plaintiffs also contend that Carolina-Georgia ratified Schlicher’s actions after the plaintiffs demanded past due rent from Carolina-Georgia. They suggest that such ratification is proved by Carolina-Georgia’s acquiescence upon learning of Schlicher’s actions. Thus, they argue that Carolina-Georgia did not take direct action to deny the demand for rent, but rather instructed Schlicher to straighten out the matter. This is hardly proof of ratification. Ratification of an unauthorized act may be express or implied from the conduct of the principal. It requires an affirmative showing of an intention on the part of the principal to ratify the act in question. By instructing Schlicher to straighten out the matter Carolina-Georgia clearly denied responsibility for Schlicher’s acts.
All actions taken by Schlicher were without the knowledge of appellant. Schlicher assigned the lease, used appellant’s name, opened a corporate checking account in appellant’s name and paid the rent with the checks from that account. Appellant, Carolina-Georgia, never knew of any of this until receipt of the plaintiff’s letter seeking past due rents. The plaintiffs failed to prove the existence of any agency relationship, either in fact or by estoppel, and have failed to prove that Carolina-Georgia ratified Schlicher’s unauthorized actions. We note in passing that Schlicher assigned a lease, which was in default, both as assignor and assignee. Under these facts the plaintiffs were placed on notice that further investigation on their part was warranted.
The final judgment of the trial court is reversed and this cause is remanded with instructions to enter.'final judgment in favor of appellant.
REVERSED and REMANDED.
DOWNEY, C. J., and DAUKSCH, J., concur. . “Let this serve as an agreement between John P. Schlicher, Sr. and Carolina-Georgia Carpet and Textiles, Inc., that Carolina-Georgia Carpets and Textiles, Inc. hereby gives permission to John P. Schlicher, Sr., to use the name Carolina-Georgia Carpets at Fort Lauderdale for the following purpose:
1. Advertisement
John P. Schlicher hereby agrees to the following stipulations:
2. John P. Schiicher Sr, and/or any of his agents shall be responsible for all debets [sic] and liabilities incurred by Carolina-Georgia Carpet at Fort Lauderdale and Carolina-Georgia Carpet & Textiles shall not be responsible for any debts and liabilities incurred by John P. Schlicher, Sr., or Carolina-Georgia Carpets at Fort Lauderdale.
3.John P. Schlicher hereby agrees to pay Carolina-Georgia Carpet & Textiles, Inc. one half of all profits that result from the sale of Carolina-Georgia Carpet at Fort Lauderdale.”
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Port Largo Club, Inc. v. Warren, 476 So. 2d 1330 (Fla. 3d DCA 1985)…ir units’ construction and set a date for their closings. Ratification is the express or implied adoption by a person of an act or contract entered into in his behalf by another without authority. Carolina-Georgia Carpet & Textiles, Inc. v. Pelloni, 370 So. 2d 450 (Fla. 4th DCA 1979); G & M Restaurants Corp. v. Tropical Music Service, Inc., 161 So. 2d 556 (Fla. 2d DCA 1964). In the instant case, a binding contract was established by ratification. Second, as to whether Port Largo Club properly terminated the…
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Deutsche Credit Corp. v. Thurman G. Peninger and Claudia G. Peninger, 603 So. 2d 57 (Fla. 5th DCA 1992)…ct and the extension agreement. Ratification of an agreement occurs where a person expressly or impliedly adopts an act or contract entered into in his or her behalf by another without authority. Carolina Georgia Carpet & Textiles, Inc. v. Pelloni, 370 So. 2d 450 (Fla. 4th DCA 1979). See also Port Largo Club, Inc. v. Warren, 476 So. 2d 1330 (Fla. 3d DCA 1985); G & M Restaurants Corp. v. Tropical Music Service, Inc., 161 So. 2d 556 (Fla. 2d DCA 1964). An agreement is deemed ratified where the principal has fu…
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Wash-Bowl Vending Co., Inc. v. NO. 3 Condo. Ass'n, 485 So. 2d 1307 (Fla. 3d DCA 1986)…is the express or implied adoption by a person of an act or contract entered into in his behalf by another without authority. Port Largo Club, Inc. v. Warren, 476 So. 2d 1330 (Fla. 3d DCA 1985); Carolina-Georgia Carpet & Textiles, Inc., v. Pelloni, 370 So. 2d 450 (Fla. 4th DCA 1979); G & M Restaurants Corp. v. Tropical Music Service, Inc., 161 So. 2d 556 (Fla. 2d DCA 1964). Since there is no allegation that a third party without authority entered into the lease on the Association’s behalf, ratification is in…
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Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Cawthon v. Phillips Petroleum Co., 124 So. 2d 517 (Fla. 2d DCA 1960)