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Castle Fabrics, Inc., sold fabric to Fortune Manufacturers, Inc. A dispute arose as to the acceptability of the fabric received, and Fortune returned the fabric to Castle for full credit. Castle gave Fortune only partial credit and sued Fortune for recovery of its loss. In court, Fortune showed a credit memorandum from a Castle employee indicating that Fortune would be given full credit for the fabric.

Although it was within the regular responsibility of the Castle employee to send the memorandum, on this occasion, management had specifically instructed the employee not to send one. Fortune agrued that the employee was an agent of Castle and thus chargeable with any mistake the agent made.

Castle claimed it was not chargeable with the action of its employee because the employee had disobeyed specific instructions not to send the memorandum. The judgment was for whom and why?

Castle Fabrics, Inc., v. Fortune Furniture Mfrs. Inc., 459 F.Supp. 409 (N.D. MS).

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