Court Opinion

ID: 1816572
Source: CourtListenerOpinion
Date Created: 2013-10-30 07:30:58.17148+00
Date Added: 2024-06-11T18:18:16.961877
License: Public Domain

25 Mich. App. 100 (1970)
181 N.W.2d 36
BRANHAM
v.
FRANK FULLMER AND FULLMER STOCKYARDS, INC.
Docket No. 5,512.
Michigan Court of Appeals.
Decided June 29, 1970.
Leave to appeal denied September 22, 1970.
*101 Taylor & Carter, for plaintiffs.
Maurice C. Ransford, for defendant.
Before: McGREGOR, P.J., and BRONSON and MAHINSKE,[*] JJ.
Leave to appeal denied September 22, 1970. 384 Mich. 755.
PER CURIAM.
An agent of the plaintiffs herein delivered some cattle to the defendants, who then sold the cattle and received the proceeds from the sale. There was, at the time of the sale, a promissory note due and owing by the agent to the defendants, independent of this transaction. The defendants deducted the amount owed on the promissory note from the proceeds of the unrelated cattle sale; plaintiffs bring this action to recover the monies deducted. The trial court, sitting as the finder of fact, held that the defendants were not entitled to the setoff claimed and from this, defendants appeal.
On appeal, defendants argue that, inasmuch as there was an undisclosed principal, they were entitled to the setoff. The law in this matter is succinctly stated in 3 Am Jur 2d, Agency, § 327, pp 684, 685.
"The failure of an agent to disclose his principal to the party with whom he makes a contract does not entitle such party, when sued on the contract by the principal, to avail himself of a defense or setoff which would have been good as against the agent individually, where he knew of the existence of the agency, or was put on inquiry in respect thereof, and with reasonable diligence might have learned of it. Even though the agent acts in his own name, if the third person had any reason to believe that he was dealing with one who was representing someone *102 else, he cannot successfully set up such defense or setoff, even though he might not know the identity of the principal";
and
"It is generally held that notice need not extend to the identity of the principal, but it is sufficient if it merely discloses the fact that the agent is acting in a transaction for some third party." 53 A.L.R. 414, 448.
The financial condition of a party (herein the agent) can constitute sufficient reason to put a party on notice as to the existence of an agency relationship, as in the instant case.
"Knowledge that the person with whom one is dealing is insolvent, or in failing circumstances, or financially incapable of entering into and carrying out a proposed contract, has been held to require inquiry as to the existence and rights of an undisclosed principal." 53 A.L.R. 414, 455.
The trial judge had ample basis for his findings, and such findings will not be set aside unless clearly erroneous. GCR 1963, 517.
Affirmed. Costs to plaintiffs.
NOTES
[*]  Circuit judge, sitting on the Court of Appeals by assignment.