Shelby v. Zayre Corp.
| Decision Date | 19 July 1985 |
| Citation | 474 So.2d 1069 |
| Parties | 120 L.R.R.M. (BNA) 2224 Judy SHELBY v. ZAYRE CORP. 84-351. |
| Court | Alabama Supreme Court |
John H. England of England & Bivens, Tuscaloosa, for appellant.
Wilbor J. Hust, Jr. of Zeanah, Donald & Hust, Tuscaloosa, for appellee.
This is a termination of employment case.
Plaintiff-appellant Judy Shelby applied for work at a Zayre department store in Tuscaloosa, by filling out an application for employment which read, in pertinent part, as follows:
Shelby then interviewed with John Luno, an assistant manager at the Zayre store, and she testified that he made a representation of permanent employment:
Shelby quit her job with Stein's Shoe Store and commenced her employment with Zayre. Shelby was employed at Zayre from October 17 until October 24, 1983, when her employment was terminated. She filed a two-count complaint, alleging breach of an oral contract for permanent employment and alleging fraud. Zayre filed a motion for summary judgment, which was granted. Shelby pursues this appeal on count two of her complaint and asserts that Zayre, through its agent, John Luno, made false representations of permanent employment, which Luno knew were false, and which Shelby relied on to her detriment in quitting her job with Stein's Shoe Store.
The general rule is as follows:
3 C.J.S., Agency, § 427 (1973).
Here, both parties agree that Luno did not have authority to make the alleged misrepresentation. Thus, the issue presented for our review is whether Zayre, as a principal, can be held liable for the fraudulent misrepresentations of its agent, made during the course of the agent's employment, even though the agent did not have the authority to make the representations.
Shelby cites District 20, United Mine Workers of America v. Sams, 287 Ala. 312, 251 So.2d 613 (1971), for the proposition that a principal can be held liable to a third party for the fraud of its agent if the act was committed in the course of the agent's employment, where others rely on the fraudulent misrepresentation to their detriment. Sams involved an action by a union member against the union for fraud and deceit where the union member was told that he would be eligible for a pension if he kept his dues paid until he was sixty years of age. The payment of dues did not, in fact, entitle him to pension benefits at age sixty.
This Court quoted, with approval, the following language from Storey on Agency:
"It is a general doctrine of law that, although the principal is not...
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