Myers-Leiber Sign Co. v. Weirich

410 P.2d 491, 2 Ariz. App. 534, 1966 Ariz. App. LEXIS 377

• Court: Court of Appeals of Arizona
• Decided: January 27, 1966
• Docket: 1 CA-CIV 103
• Status: Published

Opinions

STEVENS, Chief Judge.

This action was brought against W. L. Weirich, dba Northern-Aire Lodge and Country Club, for an amount due on a contract for the lease and maintenance of painted outdoor advertising displays for Northern-Aire Lodge and Country Club. Weirich filed an answer in which he denied individual liability on the contract and alleged that he signed such as an officer of a corporation, Northern-Aire Development Company which was doing business as Northern-Aire Lodge and Country Club. The action was tried to the court and resulted in a judgment for the defendant. Evidence was presented by both the plaintiff and the defendant. At the close of plaintiff’s case, the defendant moved for judgment which motion was denied. The evidence indicated that the advertising was to be displayed using the trade name. The advertising was solicited on behalf of the plaintiff by a salesman and the contract for the advertising was prepared by the plaintiff’s credit manager. The evidence reflected the absence of the exchange of information which we would classify as credit information between the salesman and the credit manager.

We recognize that an agent who executes a contract under the trade or fictitious name of a corporation as distinguished from the true name of the corporate principal, has the burden of proof in establishing the true agency situation. The minute entries reflect that after the case had been under advisement, the ruling of the court contains the following statement :

“The court finds that plaintiff has not sustained its burden to prove by a preponderance of the evidence that the defendant Weirich was individually liable for the obligation in question.”

This finding is consistent with the foregoing principle in that the trial court found that the defendant had carried his burden of proof which the plaintiff had not successfully rebutted.

Plaintiff appealed contending Weirich signed the contract as agent for a fictitious or undisclosed corporate entity and was therefore individually liable on the contract. Weirich contends that Northern-Aire Lodge and Country Club was the trade or assumed named of Northern-Aire Development Company and that appellant knew this when it entered into the agreement.

In order for an agent who negotiates a contract in behalf of his principal to avoid personal liability he must disclose not only his agency but also the identity of his principal. McNeill v. Appel, 197 A.2d 152 (D.C.Ct.App.1964); Alsco Iowa, Inc. v. Jackson, 254 Iowa 837, 118 N.W.2d 565 (1962). The fact that the agent in making the contract for his principal, instead of disclosing the identity of his principal, uses the tradename under which the principal transacts his business is not of itself a sufficient identification of the principal to protect the agent from personal liability. Alsco Iowa, Inc.; Saco Dairy Co. v. Norton, 140 Me. 204, 35 A.2d 857 (1944). See Ann.: 150 A.L.R. 1303. It is not the third persons duty to seek out the identity of the principal; rather, the duty to disclose the identity of the principal is on the agent. Stevens v. Graf, 358 Mich. 122, 99 N.W.2d 356 (1959). As stated in 3 Am.Jur.2d, Agency, § 317:

“There is no hardship in this rule of liability against agents who do not disclose their principals; they always have it in their power to relieve themselves from such liability, and when they do not, it must be presumed that they intend to be liable.”

Further, in order to protect the agent from personal liability, it is essential that the principal be disclosed to the third person at the time the transaction is being conducted. Potter v. Chaney, 290 S.W.2d 44 (Ky. 1956). The fact that the agent discloses the identity of his principal after the contract is executed will not relieve him from liability. McNeill.

Whether or not the fact of the agency and the name of the principal were disclosed or known to the third-party so as to protect the agent from personal liability on the transaction is essentially a question of fact which depends upon the circumstances surrounding the particular transaction. Matsko v. Dally, 49 Wash.2d 370, 301 P.2d 1074 (1956). Here there was ample evidence from which the trial judge could find appellant was apprised of the fact of Weirich’s agency and that he had not individually undertaken the contractual obligation. Appellant’s salesman and credit manager both testified they knew Weirich was not the only person financially interested in Northern-Aire Lodge and Country Club.

The question is whether there was a sufficient disclosure of the principal’s identity at the time the contract was made. There was a conflict in the testimony as to whether appellant knew that NorthernAire Lodge and Country Club was the tradename of Northern-Aire Development Company. While the testimony was conflicting there is evidence from which the trial court could reasonably find that appellant had knowledge of the existence of the corporation prior to and at the time the contract was executed and which evidence would support the findings of the trial court. It was the trial court’s function to determine all disputes in the testimony. We will not interfere with such determination when there is any reasonable evidence to support the lower court’s judgment. Ganz v. Virdee, 1 Ariz.App. 191, 400 P.2d 862 (1965); Mahurin v. Schmeck, 95 Ariz. 333, 390 P.2d 576 (1964); Kingsbery v. Kingsbery, 93 Ariz. 217, 379 P.2d 893 (1963).

Appellant contends the trial court committed reversible error when it failed to make findings of fact when it gave judgment for the defendant, citing Kazal v. Kazal, 98 Ariz. 173, 402 P.2d 1001 (1965).

Rule 52(a) of the Rules of Civil Procedure, 16 A.R.S. states in part:

“In all actions tried upon the facts without a jury or with an advisory jury, the court, if requested before trial, shall find the facts specially and state separately its conclusions of law thereon * * (Emphasis supplied.)

In the present case there was no request for findings of fact and conclusions of law. As stated by the Arizona Supreme Court in Lenslite Co. v. Zocher, 95 Ariz. 208, 388 P.2d 421 (1964):

“A trial judge is not required to find facts or state expressly his conclusions of law unless request is made therefor.”

The Kazal case can be of no solace to the appellant. In that case defendants’ motion for involuntary dismissal under Rule 41(b) of the Rules of Civil Procedure was granted after completion of plaintiff’s evidence. Here the court took the matter under advisement at the close of all the evidence and later gave judgment to the defendant on the merits.

Judgment affirmed.

DONOFRIO, J., concurs.