A. S. Abell Co. v. Skeen

Digges, J., delivered the opinion of the Court. This action was initiated by The A. S. Abell Company, appellant, publisher of the Sun newspapers in Baltimore City, against the appellee, Richard T. Skeen, individually and t/a Warner & Company, as well as Warner & Company, Incorporated. 1 The dispute involves a $3,730.97 unpaid bill owed to Abell for advertisements it printed in its newspapers from December 1967 to May 1968. For many years appellant ran advertisements for Warner, a long established and well known haberdashery located in Baltimore City. Each February two contracts were entered into which provided that the Morning, Evening, and Sunday Sunpapers would advertise the clothing store’s merchandise.

While it is not contested here that $3,730.97 is owed ⁵⁵ to the appellant, there is a controversy as to whether the appellee, Richard T. Skeen, is responsible for that debt. Abell argues that Skeen is personally liable for the unpaid bill since he signed the advertising agreements either individually or as an agent for an undisclosed principal. Appellant also claims that even if the documents facially disclose they were signed in a representative capacity, there is nothing which demonstrates that the principal was a corporation. The newspaper contends that under Art. 23, § 5 of the Maryland Code (1957, 1966 Repl.

Vol.) the use of the name “Warner & Co.” in the contracts is an indication that a corporate entity is not involved. That section provides in part: “The name of the corporation— (1) Shall be such as to indicate that it is a corporation. This provision shall be deemed to be complied with if the name contains the word ‘corporation,’ ‘incorporated’ or ‘limited’; or ends with an abbreviation of one of such words; or ends with the word ‘company,’ if such word is not immediately preceded by the word ‘and’ or any symbol therefor.” In a non-jury trial, Judge Naughton, sitting by special assignment in the Batimore City Court, decided that the contracts were signed by Skeen in his representative capacity as president, and therefore an authorized officer of Warner & Company, Inc., a disclosed principal. In our opinion there is evidence which supports this conclusion and we do not find it to be clearly erroneous.

Maryland Rule 886. Under this rule we must consider the evidence produced at trial in a light most favorable to the prevailing party there and if substantial evidence was presented to support the trial court’s determination, it is not clearly erroneous and cannot be disturbed. However, the conclusions of law based on the facts can be reviewed. Lillet v. Logsdon, 261 Md. 367, 368-69 , 275 A. 2d 469 (1971); Simmons v. B & E Landscaping Co., 256 Md. 13, 17 , 259 A. 2d 314 (1969).

The law in this jurisdiction concerning an agent’s con ⁵⁶ tractual liability in such circumstances as exist in the present case is well established. If an agent, acting for his principal, enters into an agreement with a third party, he is personally responsible under that contract if the identity of his principal is not fully disclosed and is in fact unknown to the third party. This concept encompasses two basic factual situations; where the third party knows there is an agency relationship but is unaware of the principal’s identity; and where the third party is not even cognizant that an agency relationship exists. Garfinkel v. Schwartzman, 253 Md. 710, 727-28 , 254 A. 2d 667 (1969); Vail v. Walker, 199 Md. 441, 448 , 87 A. 2d 171 (1952); Burkhouse v. Duke, 190 Md. 44, 46 , 57 A. 2d 333 (1948); Hospelhorn v. Poe, 174 Md. 242, 257-61 , 198 A. 582 (1938).

Restatement (Second) of Agency § 322 (1958). Generally, if an agent fully discloses the identity of his principal to the third party, then, absent an agreement to the contrary, he is insulated from liability. Ace Development Co. v. Harrison, 196 Md. 357, 366 , 76 A. 2d 566 (1950); Burkhouse v. Duke, supra at 46-47; Mas Bottle Corp. v. Cox, 163 Md. 176, 178 , 161 A. 243 (1932); McClernan v. Hall, 33 Md. 293, 296 (1870). However, this is subject to exception when the purported principal that is disclosed is nonexistent or fictitious; or when the principal is legally incompetent.

Resnick v. Abner B. Cohen Advertising, 104 A. 2d 254 (D. C. 1936); 3 C. J.S. Agency § 213. In this case the advertising contracts Skeen signed each contained a signature block which appears as follows: ⁵⁷ On their face these documents exhibit that the appellee was not acting individually but rather in a representative capacity. There are other facts in the record in addition to the signature block and, taken as a whole, this evidence can support the conclusion that appellee acted as an agent for a principal known to Abell to be a corporation. To begin with, Edward Shore, Jr., the paper’s representative in the contract negotiations, stated that he knew appellee was at least an officer of Warner and maybe its president when the various agreements were signed.

Next, there was testimony from Skeen that some fifteen years ago appellant had published an article in one of its Sunpapers noting his election as president of Warner & Co., Inc. Skeen also stated that over the years the checks given in payment to the newspaper for advertisements were signed by him as an authorized officer of “Warner & Company, Incorporated.” It should be noted that the trial court correctly determined that Abell had the burden of proving it was unaware of the agency-principal relationship and Judge Naughton ascertained that burden had not been met. We think the evidence here permitted the judge to conclude, as he did, that Abell was aware appellee acted as an agent for a principal whose identity it knew to be Warner & Company, Inc. This finding of fact is not clearly erroneous and therefore we are without power to disturb it. Rule 886. Appellant posits several other arguments in an harried attempt to escape imminent defeat —