Adams v. Duncan Transfer & Storage of Morristown
| Decision Date | 16 May 1988 |
| Citation | 757 S.W.2d 336 |
| Parties | Charles E. ADAMS, Lela M. Adams and T.R.W., Inc., Plaintiffs-Appellees, v. DUNCAN TRANSFER & STORAGE OF MORRISTOWN and Robert S. Duncan and Marilyn M. Duncan, Defendants, and North American Van Lines, Defendant-Appellant. 757 S.W.2d 336 |
| Court | Tennessee Court of Appeals |
D. Robert Black, Jr., Stewart, Estes & Donnell, Nashville, for defendant-appellant.
Harry P. Ogden, Egerton, McAfee, Armistead & Davis, P.C., Knoxville, for plaintiffs-appellees, Adams.
North American Van Lines appeals from a $56,000.00 judgment entered by the chancellor for loss and damage to household goods and other items of personalty owned by the plaintiffs while stored with Duncan Transfer & Storage of Morristown. North American urges reversal of the chancellor's determination that North American's actions had established an "apparent" agency relationship between North American and Duncan or the judgment should be reduced in amount.
The Adams, who resided in Rogersville, upon learning Charles would be required to work in England for a period of months, decided to store most of their furniture and move to England. Lela Adams assumed the responsibility for arranging the move and storage and, due to her previous experience with North American, she was attracted to an advertisement in the yellow pages of her local telephone directory. The largest advertisement emblazoned North American's logo and read:
Agent--
North American [in bold print]
Expert packing free estimates local and worldwide moving Storage complete door-to-door service special equipment experienced people
Ask about our You Load-We Drive program
We move the treasures of your world.
Duncan Transfer and Storage Co.
This was followed by two phone numbers and an address. The advertisement concluded with the depiction of a van with North American Van Lines inscribed on the trailer.
The chancellor's analyses of the Adams' transaction with Duncan are essentially correct and we adopt:
Because of North American's reputation and her previous experiences with North American, the plaintiff Mrs. Adams contacted Duncan and advised him that she had certain goods she wished shipped to England and other goods she wished stored. Duncan assured Mrs. Adams that he was competent and experienced in international shipping and had safe and suitable storage facilities. He indicated that his storage facilities were under his direct supervision and control. Based upon the Yellow Page advertisement, Mrs. Adams assumed that Duncan was the agent for North American not only for the shipping aspect of this transaction, but also the storage aspect. However, unknown to Mrs. Adams, Duncan was not the agent of North American for intrastate shipping or long-term storage. Duncan's agency was limited to interstate shipping.
Believing that Duncan was the agent of North American for both the shipping aspect and the storage aspect of what she needed to have accomplished, Mrs. Adams retained Duncan to arrange for the shipping of certain of her goods to England and the storage of the remainder in Duncan's facilities in Hamblen County. Duncan dispatched moving vans to the plaintiff's residence in Hawkins County, all of which bore the familiar North American Van Lines insignia. An itemized inventory was prepared both for the goods to be shipped and the goods to be stored, and all the goods thereafter were placed in the custody of Duncan. The goods shipped to England arrived without significant incident. However, with regard to the stored goods, and contrary to Duncan's representations to Mrs. Adams, Duncan stored the goods in a "mini-warehouse" some distance from Duncan's business situs and well out of sight. Further, this mini-warehouse or storage facility was not owned by Duncan nor under Duncan's control and supervision.
In approximately August, 1985, or one year after the goods were thus placed in storage, it was discovered that the storage facility had been broken into, a great quantity of the plaintiffs' property stolen, and that which was left was extensively damaged.
Duncan did not discuss with plaintiffs any limitations on his agency with North American; however, he presented plaintiffs two documents for execution, one covering the move to England headed by "North American International" and the other for storage "Duncan Transfer and Storage". The itemized inventory of plaintiffs' property prepared by Duncan was placed on pages with the heading Also the identifying labels placed on the individual items of personalty, in addition to control numbers, bore the inscription "North American Van Lines" plus its logo.
Early cases recognized an agency may arise from acts and appearances and the principal and agent as to third parties will be estopped to deny a relationship has been created. North-South Freightways, Inc. v. Slaten, 28 Tenn.App. 75, 186 S.W.2d 336 (1944); Ross v. Gossett, 2 Tenn.App. 233 (1926). The oft-quoted statement of the rule of "apparent or ostensible authority" recently quoted with approval by the Supreme Court in V.L. Nicholson Co. v. Transcon Inv. 595 S.W.2d 474 (Tenn.1980), is from Southern Ry. Co. v. Pickle, 138 Tenn. 238, 245-6, 197 S.W. 675, 677 (1917):
Apparent authority in an agent is such authority as the principal knowingly permits the agent to assume or which he holds the agent out as possessing; such authority as he appears to have by reason of the actual authority which he has; such authority as a reasonably prudent man, using diligence and discretion, in view of the principal's conduct, would naturally suppose the agent to possess. Ostensible authority is such authority as a principal intentionally or by want of ordinary care causes or allows a third person...
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