Friday, October 12, 2012

Atlantic Salmon A/S v. Curran case brief

Atlantic Salmon A/S v. Curran
591 N.E.2d 206 (1992)

Synopsis:  Foreign exporters of salmon sought to hold purchaser's representative personally liable for amounts owed. The Suffolk Superior Court, entered judgment for representative.
-Exporters appealed.
-The Appeals Court, Warner, C.J., held that representative failed to sufficiently identify his principal and would be held personally liable to exporters.

Facts:Curran (D) began doing business with Atlantic (P) in 1987. D dealt with P as Boston International Seafood Exchange, Inc. The salmon purchased by D was sold to other wholesalers. The personal checks from D to P were imprinted with the corporation name and D signed as treasurer. Wire transfers were made in a corporate name and D gave P business cards, which listed him as the marketing director of the corporation. D also placed advertising under the corporate name. The corporation in fact did not exist. Eventually in 1977, D did file corporation papers for Marketing Designs, Inc. but it was dissolved in 1983. In 1987, a certificate was filed with the city clerk that declared Marketing Designs, Inc. was DBA Boston Seafood Exchange. P is owed money for salmon it sold to the wholesale seafood businesses of D. Marketing Designs, Inc. was dissolved at the time the debt was incurred but advertising was placed under the corporate name and D still handed out his business cards. D never informed P of the existence of Marketing Designs, Inc. P learned after this litigation was started. Marketing Designs, Inc. was revived 30 days after this litigation commenced. D argues that he was acting as an agent for Marketing Designs, Inc. when he incurred the debt and he contends that it does not matter that the Boston corporations do not exist because P was aware it was conducting business with a corporation. The judge agreed with D.

Issue:Is an individual personally liable for the debts owed to the plaintiffs if the debts were incurred on behalf of a partially undisclosed or unidentified principal?

An agent that makes a contract on behalf of a partially disclosed or undisclosed principal is a party to the contact.

At all relevant times, no such company existed. At trial, the purchaser alleged that he was acting as an agent of another company when he incurred the debt that the exporters sought to recover from him individually. That other company had filed a certificate with the city that it was doing business in the name of the seafood exchange company. The trial court entered judgment in favor of the purchaser. On appeal, the court reversed. The court held that it was not sufficient that the exporters might have had the means, through a search of the records of the city clerk, to determine the identity of the purchaser's principal. Actual knowledge was the test. It was the purchaser's duty, if he wanted to avoid personal liability, to disclose his agency. The purchaser's use of trade names or fictitious names was not a sufficient identification of the alleged principal so as to protect him from personal liability.

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