Implied authority is that which the agent reasonably believes himself to possess, as a result of representations by the principal or acts of the agent permitted by the principal over a course of time in which the principal has acquiesced. Coblentz v. Riskin, 74 Nev. 53, 57, 322 P.2d 905, 907 (1958). Incidental authority is that which is reasonably necessary, proper and usual to carry into effect the main authority granted. See id. Implied authority is inherent in an agent’s position and is proven by circumstantial evidence. See Amcore Bank, N.A. v. Hahnaman-Albrecht, Inc., 759 N.E.2d 174, 182-83 (Ill. App. 2001); see also, Heil-Quaker v. Swindler, 255 F.Supp. 445, 448-49 (D.C. S.C. 1966) (implied authority is actual authority circumstantially proved, or evidenced by conduct). Implied agency, in other words, is one that may be inferred from the dealings between the principal and the agent. See Gardner v. Rensmeyer, 557 P.2d 1258, 1261 (Kan. 1976). This type of authority has been further defined as follows:
Implied authority of an agent is, in fact, actual authority evidenced by conduct, that is
the conduct of the principal being such as to justify a Jury in finding that the Agent
had actual authority to do what he did. This may be proved by evidence of
acquiescence with knowledge of the Agent’s acts, and such knowledge and
acquiescence may be shown by evidence of the Agent’s course of dealing for so long
a period of time that acquiescence may be assumed.
Liberty Mut. Ins. Co. v. Enjay Chemical Co., 316 A.2d 219, 222 (Del.Super. 1974). Under implied authority, the general rule is that an agent employed to do an act is deemed authorized to do it in the manner in which the business entrusted to him is usually done. See Masuda v. Kawaski Dockyard Co.
Generally a handbook or guide regulating the responsibilities and conduct of a person within a position demonstrates control leading to actual authority. State of Hawaii v. Hoshijo, 76 P.3d 550, 562 (Hawaii 2003). In Hoshijo, the University of Hawaii was sued when a student manager on a basketball team yelled racial slurs during a basketball game. Id. at 554. The Court held that the handbook regulated the conduct of student managers and therefore subjected the student to the control of the University of Hawaii, and he was therefore an agent of the University. Id. at 562.
The Sub-Agent Or Sub-Servant Doctrine
The Restatement of Agency [Third] allows for liability of a principal by virtue of a
subagency as follows:
(1) A subagent is a person appointed by an agent to perform functions that the
agent has consented to perform on behalf of the agent’s principal and for
whose conduct the appointing agent is responsible to the principal. The
relationships between a subagent and the appointing agent and between the
subagent and the appointing agent’s principal are relationships of agency as
stated in § 1.01.
(2) An agent may appoint a subagent only if the agent has actual or apparent
authority to do so.
REST 3d AGEN § 3.15 (2006). Under this doctrine a sub-agent is the same as an agent.
“As a general rule, if a servant has authority, express or implied, to employ
assistants, the master is liable for the acts of the assistant, or subservant.” White v.
Morris, 152 S.E.2d 417, 419 (Ga. App. 1966) (principal liable for automobile
accident of sub-servant). In White, plaintiff sustained injuries from an automobile
accident with an employee of General Services Corporation, which had an exclusive
delivery agreement with Sears. See id. at 419. The court found that “[s]ince a
corporation can operate only through its officers, agents, and servants, the authority
of General Services to employ subservants for the performance of its duties to
Sears is necessarily implied.” See id. 419.
A principal is liable for wrongful acts of his agent’s assistant when the agent has been “clothed” with the authority to employ help. See Chevron Oil Co. v. Sutton, 515 P.2d 1283, 1287 (N.M. 1973). In Sutton, a husband of a deceased woman brought a lawsuit against the lessor of a service station that negligently repaired the wheel of her car that came off the vehicle causing her death. See id. at 1285. Chevron argued that the work was done by an employee of the service station over whom it had no control. See id. at 1286-87. The court citing Monetti v. Standard Oil Co., 195 So. 89 (La. App. 1940), found that “where the work for the performance of which the contract is entered into is such as to indicate the necessity of the employment of a subagent, there is liability in the principal for the acts of the subagent.” Id. at 1287. The court further found that it would be quite impracticable for the gas station lessee to operate it by himself, and therefore authority for the assistant existed. As such, the court held that a master-servant relationship existed and the liability of the subagent may be imputed to Chevron regardless of any language in the contract to the contrary. Id. at 1287.
In similar circumstances courts have routinely held principals liable for the torts of sub-servants or sub-agents. See Stat-Tech Liquidating Trust v. Fenster, 981 F.Supp 1325, 1329, 1345 (D. Colo. 1997) (principal had the same liability to third parties for the commission of torts by his subagents as he had for the tortious acts of his agents.); Marchman v. NCNB Texas Nat’l Bank, 898 P.2d 709, 727 (N.M. 1995); Blanchette v. Cataldo, 734 F.2d 869, 875 (1st Cir. 1984) (“A principal’s liability for the acts of its agents’ employees-its subagents-is normally the same as its liability for the acts of the agents themselves.” citing Restatement (Second) of Agency §255); Sharp v. W.H. Moore, Inc., 496 P.2d 506, 512 (Idaho 1990).
At the Las Vegas firm of Lagomarsino Law, we offer a wide variety of business counseling to our clients regarding the behavior of their employees. We also represent persons aggrieved by the employees of a particular business. Please do not hesitate to contact our law firm with any questions.