W. W. Leasing Unlimited v. Commercial Standard Title Insurance

Opinion

ELKINGTON, P. J.

The several closely interrelated cross-complainants which will hereafter for convenience be described as “First California,”

[794]

have appealed from a judgment insofar as it denies them recovery over against cross-defendant Paul Lyme Sosnowski, for such sum as the judgment requires them to pay plaintiff W. W. Leasing Unlimited, and for their attorney’s fees and costs of the cross-action.

Having read the record, and read and considered the briefs and arguments of the cross-complainants and the cross-defendant, we conclude that the appeal is meritorious.

The questions presented by the appeal are: (1) whether an agent contracting on behalf of his principal is under a duty to disclose the principal’s identity; (2) if so, whether a fictitious, or trade, name of the principal will suffice; and (3) if there be such a duty; what if any is the liability of the agent for such nondisclosure.

The relevant and uncontroverted factual-procedural context of the case may reasonably be reduced to the following.

E. D. Jones Company was a corporation doing business under the fictitious trade name of Industrial Telephone Systems. Its principal shareholders were E. D. Jones, his wife, and Paul Lyme Sosnowski, the instant cross-defendant. In 1977 Sosnowski was the president and chief executive officer of the corporation, whose business was the sale and installation of telephone systems.

In 1973 First California had leased a telephone system for its Walnut Creek office from the instant plaintiff, W. W. Leasing Unlimited, or its predecessor company. After several years, and while the lease had a substantial period of time to run, First California became dissatisfied with the system.

In 1977 First California had entered into an agreement and lease for another telephone system at its Walnut Creek office under the following circumstances. Sosnowski represented himself to be president and chief executive officer of Industrial Telephone Systems, and an appropriate agreement and lease, prepared by or under the direction of Sosnowski, was entered into by First California for a new telephone system. The agreement provided, among other things, that