Stephens v. Yamaha Motor Co., Ltd., Japan

• Decision Date: 14 April 1981
• Docket Number: No. 55593,55593
• Parties: John Lynn STEPHENS, Appellant, v. YAMAHA MOTOR COMPANY, LIMITED, JAPAN, a Japanese Corporation, Yamaha Motor Corporation, U. S. A., a California Corporation, Inoue Rubber Industries Co., Ltd., a Japanese Corporation, Abe Martin, Inc., an Oklahoma Corporation, L & A Tire Company, Abe Martin d/b/a L & A Tire Company, L & A Service Station, Abe Martin d/b/a L & A Service Station, Conoco, Inc., a Delaware Corporation, and Lien Shin Tire Company, Ltd., a Chinese Corporation, Appellees.
• Court: Oklahoma Supreme Court

Page 439

627 P.2d 439

1981 OK 42

John Lynn STEPHENS, Appellant, v. YAMAHA MOTOR COMPANY, LIMITED, JAPAN, a Japanese

Corporation, Yamaha Motor Corporation, U. S. A., a

California Corporation, Inoue Rubber Industries Co., Ltd., a

Japanese Corporation, Abe Martin, Inc., an Oklahoma

Corporation, L & A Tire Company, Abe Martin d/b/a L & A Tire

Company, L & A Service Station, Abe Martin d/b/a L & A

Service Station, Conoco, Inc., a Delaware Corporation, and

Lien Shin Tire Company, Ltd., a Chinese Corporation, Appellees.

No. 55593.

Supreme Court of Oklahoma.

April 14, 1981.

Appeal from the District Court, Oklahoma County; William S. Myers, Jr., District Judge.

In an action against several co-defendants, the trial court sustained the motion for summary judgment of Conoco, Inc., one of the co-defendants, and the only appellee involved in this appeal. Appellant appealed.

JUDGMENT AFFIRMED.

John W. Norman, Oklahoma City, for appellant.

Dale Reneau, Oklahoma City, for appellee Conoco, Inc.

IRWIN, Chief Justice:

Appellant Stephens was seriously injured when the motorcycle he was driving went out of control. A new tube and Dunlop tire had recently been wheel-mounted on the motorcycle at co-defendant Martin's service station by Martin's employees. Appellant contends that a washer, trapped between the tube and inside of the tire, created a leak which led to rapid deflation of the tire, which in turn caused the accident.

Appellant filed his action against multiple defendants to recover damages for personal injury. The action was based on theories of products liability, express and implied warranty, and negligence. Conoco was joined as a co-defendant on the theory that the alleged negligent acts of the service station employees in mounting the tube and tire were committed while acting under the apparent authority of Conoco.

Conoco filed a motion for summary judgment and a supporting affidavit which stated facts essentially the same as those contained in a stipulation of facts subsequently submitted to the court. The parties agree that the service station was owned and operated by Abe Martin, Inc., d/b/a L & A Service Station and L & A Tire Company; that Conoco exercised no control over the operation of the station, and that the employees performing the installation of the inner tube in question were agents, servants, and employees of Martin. They further agree that the only item furnished by Conoco to the station owner was a Conoco sign, and that Conoco did not distribute or sell Dunlop tires to the owners and operators of the station.

Appellant opposed the motion for summary judgment with an affidavit in which he claimed to have been led to believe by the Conoco signs displayed at the station and by other Conoco advertisements that the tire repair service at Martin's was offered and authorized by Conoco, and that he relied upon this belief in choosing the repair service at Martin's. ¹

The district court sustained Conoco's motion for summary judgment, finding that there was no material fact in dispute and citing Coe v. Esau, Okl., 377 P.2d 815 (1963), as controlling authority. In Coe we said:

"Neither the mere fact of ownership of property nor that goods marketed under the trade mark or trade name of the landlord are advertised and sold upon the demised premises is deemed sufficient to raise an inference that the tenant-vendor is the agent or employee of the landlord. (Citations omitted). It is indeed a matter of common knowledge and practice that distinctive colors and trade mark signs are displayed at gasoline stations by independent dealers of petroleum product suppliers. These signs and emblems represent no more than notice to the motorist that a given company's products are being marketed at the station." (Citations omitted).

Appellant contends Coe is not controlling because we are concerned here with a summary judgment and Coe involved the sustention of a demurrer to the evidence. Also, in the case at bar appellant seeks to impose liability based upon "apparent authority" while in Coe, the issue was whether the service station operator was an agent or employee of the oil company (Continental).

In Rosser-Moon Furniture Co. v. Oklahoma State Bank, 192 Okl. 169, 135 P.2d 336 (1943), we described apparent authority as follows:

" 'Apparent authority' of an agent is such authority as the principal knowingly permits the agent to assume or which he holds the agent out as possessing. And the elements that must be present before a third person can hold the principal for the acts of the agent on the theory of apparent authority are (a) conduct of the principal, (b) reliance thereon by the third person, and (c) change of position by the third person to his detriment." (Citations omitted.)

The existence of actual authority between principal and agent is not a prerequisite to establishing apparent authority. Apparent authority results from a manifestation by the principal to a third person that another is his agent. The manifestation may be made directly to a third person or to the community by signs or by advertising. Restatement 2d, Agency, § 8, 27, 49. But, "apparent authority exists only to the extent that it is reasonable for the third person dealing with the agent to believe that the agent is authorized." Restatement 2d, Agency, § 8, Comment c. (emphasis added.)

Appellant cites Gizzi v. Texaco, Inc., 437 F.2d 308 (3rd Cir. 1971), cert. denied 404 U.S. 829, 92 S.Ct. 65, 30 L.Ed.2d 57, as the leading case dealing with apparent authority. In Gizzi the trial court granted Texaco's motion for a directed verdict. Although the U. S. Court of Appeals reversed the trial court's judgment and said that questions of apparent...