Opinion ID: 2186471
Heading Depth: 1
Heading Rank: 1

Heading: Agency of Ziobro

Text: First, the Bank argues that there was no evidence to show that Ziobro had express, implied or apparent authority to bind the Bank to a lending commitment of the size Bolus alleged that Ziobro made to Bolus on behalf of the Bank. The Bank points to the fact that there was testimony that Ziobro had express authority only to make $5,000 unsecured and $10,000 secured loans. The Bank, therefore, argues that since there was no evidence that Ziobro was acting as the Bank's agent, the Bank cannot be liable either in contract or tort. The Bank draws this conclusion because absent a showing of Ziobro's agency, the evidence of Ziobro's acts is inadmissible against the Bank and without that evidence, the Bank contends that it cannot possibly be held liable. The Bank thus seeks a new trial because the verdict was against the weight of the evidence. In reviewing a denial of a new trial where the appellant argues that the verdict was against the weight of the evidence, we must award a new trial only where the verdict is so contrary to the evidence as to shock this Court's sense of justice. Macina v. McAdams, 280 Pa.Super. 115, 421 A.2d 432 (1980). In this case, our review demonstrates that the evidence was clearly sufficient to support a finding of Ziobro's agency relationship with the Bank and that as such, Ziobro was clothed with at least apparent authority to bind the Bank to the transactions with Bolus. It is true as the Bank urges that Bolus had the burden of proving an agency relationship before Ziobro's actions could be attributed to and binding on the Bank. Girard Trust Bank v. Sweeney, 426 Pa. 324, 231 A.2d 407 (1967). Whether an agency relationship exists is a question of fact for the jury. Levy v. First Pennsylvania Bank N.A., 338 Pa.Super. 73, 487 A.2d 857 (1985); Breslin by Breslin v. Ridarelli, 308 Pa.Super. 179, 454 A.2d 80 (1982). There are four grounds upon which a jury can conclude that an agency relationship exists and that the principal is bound by a particular act of the agent and liable to third parties on the basis thereof. The jury may find that the alleged agent had 1) express authority directly granted by the principal to bind the principal as to certain matters; or 2) implied authority to bind the principal to those acts of the agent that are necessary, proper and usual in the exercise of the agent's express authority; or 3) apparent authority, i.e. authority that the principal has by words or conduct held the alleged agent out as having; or 4) authority that the principal is estopped to deny. SEI Corp. v. Norton & Co., 631 F.Supp. 497 (E.D.Pa. 1986). As the trial court has indicated in its thorough opinion, further refinements of the foregoing rule indicate that in this case, the jury could have found that Ziobro had at least apparent authority to commit the Bank to a financing obligation of the type that Ziobro made to Bolus. Without reviewing the evidence in its entirety, we point out that it clearly established that Ziobro was employed as an officer of the Bank authorized to make loans. Although there was testimony that his individual lending authority was limited in amount, there was no evidence that this fact was communicated to Bolus or that Bolus should have concluded that Ziobro's authority was limited. In addition, certain facts of record indicate that one other employee of the Bank himself apparently thought that Ziobro was in charge of all commercial lending at the Bank. When Bolus initially contacted the Bank for financing on the Bartonsville project, this employee told Bolus to speak to Ziobro because he was in charge of commercial lending. Thus, the Bank itself held Ziobro out to Bolus as being clothed with authority to commit the Bank to provide whatever financing Ziobro reasonably determined to be appropriate under the circumstances. In fact, Ziobro was the only person at the Bank Bolus was ever required directly to deal with to obtain financing commitments for the project. Moreover, Ziobro told Bolus that although there was a loan committee at the Bank that would have to approve the loans, they would basically rubber stamp Ziobro's own recommendation and approval and this proved to be true. Since in determining the apparent authority of an agent we must look to the actions of the principal, not the agent, we decide that the foregoing adequately established Ziobro's apparent authority as to this transaction. Turnway Corp. v. Soffer, 461 Pa. 447, 336 A.2d 871 (1975); William B. Tanner Co., Inc. v. WIOO, Inc., 528 F.2d 262 (3d Cir. 1975). The Bank responds that Bolus had to have known that Ziobro could not have bound the Bank simply to finance the entire Bartonsville project since . . . Banks are not like streams which flow forever. . . . More importantly, such a loan is illegally [sic] as there is no way it could be collateralized and supported as required. Brief for Appellant at p. 14. However, the Bank has not chosen to provide us with any authority for this statement. Consequently, we have no way of knowing to what legal restriction on the Bank's lending activities it is referring. As to what Bolus had to have known with respect to Ziobro's authority, we point out that the true inquiry is whether Bolus reasonably interpreted the manifestations of the Bank when Bolus concluded that Ziobro had the authority to bind the Bank to a commitment to fund the Bartonsville project. An admitted agent is presumed to be acting within the scope of his authority where the act is legal and the third party has no notice of the limitations on the agent's authority. The Trident Corporation v. Reliance Insur. Co., 350 Pa.Super. 142, 150, 504 A.2d 285, 289 (1986). A principal's limitation on the agent's authority in amount only that is not communicated to the third party does not limit the principal's liability. Industrial Molded Plastics Products, Inc. v. J. Gross & Son, Inc., 263 Pa.Super. 515, 398 A.2d 695 (1979). Although a third party cannot rely on the apparent authority of an agent to bind a principal if he has knowledge of the limits of the agent's authority, without such actual knowledge, the third party must exercise only reasonable diligence to ascertain the agent's authority. Fishman v. Davidson, 369 Pa. 39, 44, 85 A.2d 34, 37 (1951). The third party is entitled to believe the agent has the authority he purports to exercise only where a person of ordinary prudence, diligence and discretion would so believe. Friedman v. Kasser, 332 Pa.Super. 475, 481 A.2d 886 (1984). Thus, a third party can rely on the apparent authority of an agent when this is a reasonable interpretation of the manifestations of the principal. Trident, 350 Pa.Super. at 150, 504 A.2d at 289. Given the evidence reviewed above, we conclude the jury here could have decided that Bolus acted reasonably in relying on Ziobro's representations as to his authority. We reiterate that Bolus was never required to deal with any other representative of the Bank, that the loan for the purchase of the land and construction of the Bartonsville project that Ziobro promised to Bolus did in fact come through, and that several witnesses testified that Ziobro repeatedly represented his authority and made commitments on behalf of the Bank which proved to be binding without first obtaining the approval of other Bank representatives. Moreover, in order for Bolus to have believed that the Bank would fulfill the obligations to which Ziobro had committed the Bank, Bolus would not have had to believe that the Bank was agreeing to provide Bolus an endless source of funds. In fact, Bolus has consistently maintained that Ziobro committed the Bank to provide only the funds necessary to set up the project. Even after the Bartonsville project had expanded beyond its original scope, the estimated additional needs of Bolus were only approximately $100,000, which is not an inordinately large sum in the context of commercial transactions such as this. We can dispose of the Bank's remaining contentions in a more summary fashion.