Law School Resources
First Interstate Bank of Texas v. First National Bank of Jefferson, (1991)
1. First Interstate Bank of
Texas v. First National Bank of Jefferson,
(1991);
pg. 385, briefed 2/24/97
2. Facts:
FIB and FNJ entered into a contract for the purchase
of certain bonds. On behalf of FNJ, their senior
vice president, Boyd, signed the contract. When the
deal later fell through, FNJ refused to honor the
contract, claiming that Boyd did not have any
authority to bind FNJ in such a manner.
3. Procedural Posture:
The lower court held that as a matter of law, there
was insufficient evidence to show that Boyd had
sufficient authority to sign the contract, and
directed a verdict for FNJ.
4. Issue:
Whether sufficient evidence existed to present an
issue of fact for submission to the jury.
5. Holding:
Yes.
6. Reasoning:
There are two types of authority, actual and
apparent. There are further two types of actual
authority: express and implied. A principle can
confer express actual authority by writing or
orally. There was evidence that Boyd had spoken
with the board of directors, and that they had given
him authority to sign this contract. Furthermore,
Boyd’s position in the company lends credence to his
assertion that he was authorized to sign. With
regard to implied actual authority, an agent is
vested with the implied authority to do all of those
things necessary or incidental to the agency
assignment. However, a state statute requires
express agency. With regard to apparent authority,
a corporation may be bound if it 1) manifests the
agent’s authority to the third party, and 2) the
third party reasonably relies on the agent’s
purported authority as a result. By the nature of
Boyd’s position, the corporation holds him out as
having authority. Furthermore, the corporation sent
Boyd specifically to close the deal. Thus, there is
sufficient evidence to create a jury question as to
whether there was authority to bind the corporation.
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