Frasier v. Palmetto Homes of Florence, Inc.

Decision Date04 June 1996
Docket NumberNo. 2533,2533
Citation473 S.E.2d 865,323 S.C. 240
CourtSouth Carolina Court of Appeals
PartiesDoward FRASIER and Lorene Frasier, Respondents, v. PALMETTO HOMES OF FLORENCE, INC., Appellant. . Heard

M.M. Weinberg, Jr., of Weinberg, Brown & McMillan, Sumter, for appellant.

William P. Hatfield and Gary I. Finklea, both of the Hyman Law Firm, Florence, for respondents.

HEARN, Judge.

Doward Frasier and Lorene Frasier (the Frasiers) brought this action against Palmetto Homes of Florence, Inc., and Robert Braddock, alleging fraud and deceit, unfair trade practices, conversion, and breach of contract accompanied by a fraudulent act involving the attempted purchase of a mobile home. The jury returned a verdict in favor of the Frasiers and against Palmetto Homes of Florence, Inc., for breach of contract in the amount of $4,000 actual damages, unfair trade practices in the amount of $4,000 actual damages plus interest with a finding of willful conduct, and conversion in the amount of $4,000 actual damages and $2,000 punitive damages. 1 The trial judge trebled the damages and awarded interest. Palmetto Homes of Florence, Inc. appeals. We reverse.

FACTS

In March of 1983, Palmetto Homes of Florence, a mobile home retail sales outlet, was incorporated with Ray Sanford as the sole stockholder. The business was located on 2623 East Palmetto Street in Florence. Robert Braddock was employed by Palmetto Homes of Florence, Inc. from the start of the business until March 5, 1991.

In the early part of 1991, Sanford was diagnosed with colon cancer, which precipitated his retirement. In March of 1991, Sanford sold the corporate assets to Glenn Cox, who formed a new corporation entitled On May 18, 1992, Lorene Frasier and her three sisters went to Florence from Longs, South Carolina to look for a mobile home. They stopped at one mobile home dealership and then proceeded next door to C & C. There they talked with Braddock about purchasing a mobile home located on the lot. The purchase price of the mobile home was $42,000, which required a down payment of $4,000. On that day, Lorene Frasier paid Braddock $2,000 in cash. After receiving the cash, Braddock filled out a receipt from the receipt book owned by Palmetto Homes of Florence, Inc. On the receipt inscribed with "Palmetto Homes of Florence, Inc." and the address, Braddock handwrote "C & C, Inc." above "Palmetto Homes."

C & C, Inc., of Florence d/b/a Palmetto Homes (C & C). C & C operated its business at the same location. The business license for Palmetto Homes of [323 S.C. 243] Florence, Inc. was voided in order that C & C, Inc. of Florence d/b/a Palmetto Homes could apply for a license. Cox hired Braddock as a sales manager for C & C.

On June 6, 1992, Lorene Frasier returned to the lot and paid Braddock an additional $2,000 in cash. Braddock again filled out a cash receipt identical to the first one; however, he did not superimpose the words "C & C, Inc." on the receipt.

When the Frasiers did not receive the mobile home on the delivery date of July 4, 1992, they returned to the lot and discovered Braddock was no longer employed there and that the mobile home they had selected had been sold. The Frasiers spoke with Mike Purvis, who had been hired by Cox as general manager in July of 1992, and requested a refund. Purvis told the Frasiers the money was in a bank account in Charleston, the home office of C & C, and that the money would be returned to them within three days. The Frasiers never received their deposit.

In March of 1993, Cox went out of business and Sanford took over the business. Sanford applied for and was given a business license in the name of Palmetto Homes of Florence, Inc.

DISCUSSION

Palmetto Homes of Florence, Inc. asserts the trial judge erred in denying its motion for a directed verdict on the question of whether or not Braddock had apparent authority to act as its agent. We agree.

In deciding a motion for a directed verdict, the evidence and all reasonable inferences must be viewed in the light most favorable to the non-moving party. If more than one inference can be drawn from the evidence, the case must be submitted to the jury. Dalon v. Golden Lanes, Inc., 320 S.C. 534, 466 S.E.2d 368 (Ct.App.1996). In ruling on the directed verdict motion, the trial court does not have the authority to decide credibility issues nor to resolve conflicts in the testimony and evidence. Garrett v. Locke, 309 S.C. 94, 419 S.E.2d 842 (Ct.App.1992). However, if the evidence does not yield more than one inference, a directed verdict in favor of the moving party is proper. Cock-n-Bull Steak House, Inc. v. Generali Ins. Co., --- S.C. ----, 466 S.E.2d 727 (1996).

Generally, agency is a question of fact. Gathers v. Harris Teeter Supermarket, 282 S.C. 220, 317 S.E.2d 748 (Ct.App.1984). Agency may be implied or inferred and may be proved circumstantially by the conduct of the purported agent exhibiting a pretense of authority with the knowledge of the alleged principal. Fernander v. Thigpen, 278 S.C. 140, 293 S.E.2d 424 (1982). If there are any facts tending to prove the relationship of agency, it then becomes a question for the jury. Gathers v. Harris Teeter Supermarket.

"A party asserting agency as a basis of liability must prove the existence of the agency, and the agency must be clearly established by the facts." Orphan Aid Society v. Jenkins, 294 S.C. 106, 109, 362 S.E.2d 885, 887 (Ct.App.1987) (quoting McCall v. Finley, 294 S.C. 1, 362 S.E.2d 26 (Ct.App.1987)). "It is the duty of one dealing with an agent to use due care to ascertain the scope of the agent's authority." Id.

The doctrine of apparent authority provides that the principal is bound by acts of his agent when he has placed the agent in such a position that a person of ordinary prudence, reasonably familiar with business usages and custom, is led to believe the agent has certain authority and in turn deals with the agent based on that assumption. Muller v. Myrtle Beach Golf and Yacht Club, 303 S.C. 137, 399 S.E.2d 430 (Ct.App.1990), rev'd on other grounds, 313 S.C. 412, 438 S.E.2d 248 (1993).

Apparent authority to do an act is created as to a third person by written or spoken words or any other conduct of the principal which, reasonably interpreted, causes the third person to believe the principal consents to have the act done on his behalf by the person purporting to act for him. Restatement (Second) of Agency § 27 (1958); Muller v. Myrtle Beach Golf and Yacht Club, 303 S.C. at 142, 399 S.E.2d at 433. Either the principal must intend to cause the third person to believe that the agent is authorized to act for him, or he should realize that his conduct is likely to create such belief. Id. Moreover, an agency may not be established solely by the declarations and conduct of an alleged agent. Muller v. Myrtle Beach Golf and Yacht Club, 303 S.C. at 142-43, 399 S.E.2d at 433.

To establish apparent agency, it is not enough simply to prove that the purported principal by either affirmative conduct or conscious and voluntary inaction has represented another to be his agent or servant. Watkins v. Mobil Oil Corp., 291 S.C. 62, 352 S.E.2d 284 (Ct.App.1986). In order for a third party to recover against the principal based upon this theory, it must be shown that he reasonably relied on the indicia of authority originated by the principal and such reliance must have effected a change of position by the third party. Beasley v. Kerr-McGee Chem. Corp., Inc., 273 S.C. 523, 257 S.E.2d 726 (1979); Watkins v. Mobil Oil Corp.

Appellant argues there was no evidence introduced at trial which would create any reasonable inference that C & C or Robert Braddock had apparent authority to act as the agent of Palmetto Mobile Homes of Florence, Inc. We agree.

Although Braddock originally admitted in his pro se Answer that he was employed by Palmetto Holmes of Florence, Inc., it is clear from a reading of the Answer that he was referring to the entity owned by Glenn Cox, not to the prior business owned by Sanford. Moreover, Braddock testified at trial that while he previously had been employed by Sanford's Palmetto Homes of Florence, Inc., he was employed by Cox at the time he dealt with the Frasiers. It was undisputed that the headquarters for Cox's corporation was in Charleston. Braddock testified during the time he worked for Cox, Sanford never came on the sales lot and had no communication with the dealership. In terms of the billboards, Braddock testified when Cox purchased the business the billboard advertised "Palmetto Homes of Florence." He further testified when Sanford owned the business the...

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