Opinion ID: 2196394
Heading Depth: 1
Heading Rank: 10

Heading: Principal's Responsibility for Agent

Text: Quoting a portion of another aspect of Wolford, Citicorp also contends, in effect, that as the house was sold with a disclaimer and an as is clause, Gibb necessarily knew that Citicorp's agent had no authority to make any representations. In this connection Citicorp calls our attention to the following language in Wolford: `A principal who authorizes an agent to conduct a transaction for him, intending that the agent shall make representations to another in the course of it which the principal knows to be untrue, is liable for such misrepresentations ... if, although he does not intend that the agent shall make misrepresentations, he should know that the agent will do so, the principal is liable....' [Citation omitted.] .... As between vendor and purchaser, where material facts and information are equally accessible to both, and nothing is said or done which tends to impose on the purchaser or to mislead him, the failure of the vendor to disclose such facts does not amount to actionable fraud.... 150 Neb. at 544-45, 35 N.W.2d at 102-03. However, Citicorp neglects to quote the remainder of that paragraph, which comments on when an agent's misrepresentations constitute actionable fraud: [W]here such facts are known by the vendor and he knows them to be not within reach of the reasonably diligent attention, observation and judgment of the purchaser, and they are such as would readily mislead the purchaser as to the true conditions of the property, the vendor is bound to disclose such facts. 150 Neb. at 545, 35 N.W.2d at 103. According to the operative petition, Citicorp and its agent knew of the extensive termite infestation and damage but elected to repair only the visible portion, and its agent represented that all the necessary repairs had been made and the problem had been eliminated. Under Wolford 's analysis, Citicorp had a duty to disclose such facts relating to the condition of the property regardless of whether it authorized its agent to make representations concerning the condition of the property. Moreover, we have declared: An agent, even though the contract which he presents contains a clause declaring that the company will not be bound by the representations that he may make, is known to be an agent sent out for the express purpose of making representations as an inducement to the sale ... and the provision in the contract, therefore, is not considered as limiting the scope of his ostensible authority [and] the company is responsible.... Schuster v. North American Hotel Co., 106 Neb. 672, 184 N.W. 136 (1921), reh'g denied 106 Neb. 679, 684, 186 N.W. 87, 89. Whether an act is within the scope of an agent's apparent authority is to be determined as a question of fact from all the circumstances. Draemel v. Rufenacht, Bromagen & Hertz, Inc., 223 Neb. 645, 392 N.W.2d 759 (1986); Moore v. Puget Sound Plywood, 214 Neb. 14, 332 N.W.2d 212 (1983). Consequently, Citicorp cannot escape liability for the fraudulent conduct of its agent on the sole basis that it included a disclaimer clause in the purchase agreement. What was said and whether the statements were within the agent's apparent authority are questions of fact.