Case Background Benjamin Yim did business under the trade name Ho Tae. He ordered goods from Js Fashion. Invoices were
Case Background Benjamin Yim did business under the trade name Ho Tae. He ordered goods from J’s Fashion. Invoices were sent to Ho Tae. When the account was not paid, Fashion sued Yim. He denied liability on the grounds that he was acting as an agent for a corporation, the principal, known as Hosung Enterprise, Inc. It did business under the name Ho Tae. J’s Fashion replied that “at no time did Benjamin Yim disclose the existence of a corporation or other artificial entity with whom we were dealing. At all times, we dealt directly with Benjamin Yim using his trade name ‘Ho Tae.’ ” The trial court entered summary judgment against Yim for the amount invoiced. He appealed, contending that he was only an agent for Hosung Enterprise.
Case Decision Blackburn, Presiding Judge
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“An agent who makes a contract without identifying his principal becomes personally liable on the contract.” Thus, “in order to avoid personal liability, an agent is under a duty to disclose the fact of his agency and the identity of his principal, and one who deals with an agent who fails to disclose his principal may at his election recover from either the agent or the principal.” Because the duty is on the agent to make this disclosure, it is “not on the party with whom he deals to discover it.”
The agent must be specific in this disclosure. “The disclosure of an agency is not complete for the purpose of relieving the agent from personal liability unless it embraces the name of the principal.” Nor is it sufficient if the agent merely uses the trade name of the principal. “The use of a trade name is not necessarily a sufficient disclosure of the identity of the principal and the fact of agency so as to protect the agent against personal liability.” A “trade name is merely a name assumed or used by a person recognized as a legal entity. A judgment against one in an assumed or trade name is a judgment against him as an individual. An undertaking by an individual in a fictitious or trade name is the obligation of the individual.” Accordingly, if the agent’s only evidence of disclosing the fact of the agency and the identity of the principal is use of the principal’s trade name, summary judgment against the agent individually is usually warranted.
Here, J’s Fashion submitted the affidavit of its manager that at no point did Yim indicate he was acting other than as an individual doing business under the trade name “Ho Tae.”…
The trial court did not err in granting summary judgment to J’s Fashion. Judgment affirmed.
Suppose the court agreed that Yim was an agent for Hosung. If Hosung did not have the resources to pay the judgment, would J’s Fashion have any other legal argument to make?