## Facts

- Pittsburgh Mercantile Company, a publicly held corporation governed by a board of directors and an executive committee, sought to raise cash through a sale and leaseback of all its real property.
- Mercantile’s vice-president and treasurer-comptroller, Frederick A. Egmore, and a financial consultant, Walter P. Stern, met with Dan R. Jennings, a real estate broker, and Daniel B. Cantor, an investment counselor and attorney, and asked Jennings to solicit sale-leaseback offers.
- Plaintiffs presented evidence that Egmore stated the executive committee controlled the company, would decide whether to accept an offer, and that board approval would be automatic.
- Plaintiffs also presented evidence that Egmore promised a brokerage commission if Jennings produced an offer on terms acceptable to the executive committee and provided preliminary acceptable terms.
- Jennings presented three offers in 1958; the first two were rejected, and the third was close to the outlined terms.
- Stern later told Jennings the executive committee had “agreed to the deal,” but Egmore subsequently informed Jennings the third offer was rejected, and Mercantile refused to pay a commission.
- The contemplated deal involved all corporate real estate (about $1.5 million) with a leaseback of roughly 30 years.

## Issues

1. Whether there was sufficient evidence for a jury to find that Mercantile “clothed” Egmore with apparent authority to accept a sale-leaseback offer and thereby bind the corporation to pay a brokerage commission, despite Egmore’s lack of actual authority.
2. Whether a disclosed principal may be bound on apparent authority based solely on an agent’s extra-judicial statements about his own authority.
3. Whether Egmore’s corporate office and any prior dealings provided a reasonable basis to infer apparent authority for an extraordinary, all-assets sale-leaseback transaction.

## Decision

- The Supreme Court of Pennsylvania reversed the denial of judgment n.o.v. and directed entry of judgment n.o.v. for Pittsburgh Mercantile Company.
- The court held the evidence was legally insufficient to establish that Mercantile, by its own conduct, manifested Egmore’s apparent authority to accept the proposed sale-leaseback or obligate the corporation for a commission.
- The court ruled that Egmore’s title and plaintiffs’ reliance on Egmore’s and Stern’s statements did not support apparent authority for an unusual transaction involving disposition and long-term leaseback of all corporate real estate.

## Legal Principles

- Apparent authority exists only where the principal knowingly permits the agent to exercise authority or holds the agent out as possessing it.
- A disclosed (or partially disclosed) principal cannot be bound on apparent authority merely because an agent makes extra-judicial representations about the existence or scope of the agent’s authority.
- Apparent authority must rest on manifestations traceable to the principal, not the agent’s assertions.
- Prior dealings support an inference of apparent authority only when the prior acts are similar in kind to the challenged act and sufficiently repetitive.
- An officer’s corporate title, without more, does not justify inferring authority to bind the corporation in extraordinary transactions outside the ordinary scope of that office.

## Conclusion

Because Mercantile made no principal-based manifestation reasonably indicating that its vice-president had authority to accept an extraordinary all-real-estate sale-leaseback or incur a commission obligation, the jury’s apparent-authority finding could not stand, and judgment was entered for the corporation.


Jennings v. Pittsburgh Mercantile Co., 414 Pa. 641, 202 A.2d 51 (Pa. 1964)