Mill Street Church of Christ v. Hogan (1990) Brief

Mill Street Church of Christ v. Hogan
785 S.W.2d 263 (Ky.App. 1990)

Facts: The church hired Hogan to paint the church, and Hogan started, but then decided that it was more than he wanted to handle. He told an elder of the church that he would need some help. The elder suggested a man, but didn’t say he had to hire that person. Hogan got his brother Sam to help him, but Sam’s ladder broke and he fell and broke his arm. Bill reported the accident and the church paid Sam for the ½ hour of work he had completed. Bill didn’t use his own tools (he purchased them on the church’s account). Sam sued the church, seeking worker’s compensation benefits from them. The petitioners said that they erred in holding that Hogan didn’t possess the implied authority as an agent to hire Sam.

Issue: Was Bill Hogan an agent of the church with implied authority to hire Sam?

Holding: Yes, Bill had implied actual authority due to past practices. The course of dealings of the brothers in the church went back several years. The church knew that he hired his brother to help on many jobs. When Sam came to work, he believed that his brother had the authority to hire him. Though the church claimed that Bill Hogan didn’t have the authority to hire Sam, there was implied actual authority by the church to Bill that he could hire his brother, based on the need for help and the past dealings.
Implied Authority – actual authority circumstantially proven which the principal actually intended the agent to possess and include such powers as are practically necessary to carry out the duties actually delegated. The test is whether the agent reasonably believed, because of conduct of the principal, that the principal wishes him to act in a certain way or to have certain authority (‘clothed with indicia of authority’).

Rule: A person has the authority to do certain acts that will bind the principal based upon the past practices and the way that the business has operated.

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