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In 1982, Lee Hansen was an architect and partner in P. He was acquainted with Everett Foster socially and through Foster's former position as mayor of Sumner, Washington. Hansen also knew that Foster was employed by D. Hansen trusted Foster 'based on their past acquaintanceship and on Foster's status as a manager of D.' D employed Foster as a 'manager of manufacturing services'. D furnished Foster with business cards, an office, and a telephone. Foster's duties included purchasing materials needed for manufacturing, but did not include selling products to customers. Sales to customers were handled through the sales department. Hansen talked to Foster a half-dozen times by dialing D's switchboard and being connected. Hansen never visited D's offices, and no D letterhead or documents were used in connection with their discussions. In 1982, Foster visited Hansen at P's offices to solicit sales for D products and services in the construction of a hotel. Foster told Hansen that D had salvage glass available and was trying to find a use for it. Foster 'presented his business card showing that he was a manager of D's manufacturing services division.' Foster led Hansen to believe that Foster had authority to sell materials on behalf of D. Foster's efforts were unknown to D and contrary to its policies and direction. In late 1982, Hansen called Foster at D and inquired about salvage glass. Foster indicated that certain salvage glass, (ARCO glass), was available. Foster offered to sell the ARCO glass to P at a reduced price. Foster ostensibly made the offer on behalf of D. The offer was oral, and P did not request a written quotation from either Foster or D. Foster told Hansen that the glass had been rejected from D's ARCO project in Anchorage only because of its color, when in fact D had rejected the glass for other manufacturing deficiencies. The offer was accepted, and a man named Al Kapp drew up plans showing how the glass was to be installed. Kapp was a D employee who had actual authority to provide general designs on D's behalf at the request of his supervisors. Kapp was acting at Foster's request, and without D's knowledge or authority. P used the plans to install the glass. All installation work was done by non-Fentron employees hired by Foster. During construction, Foster delivered glass, aluminum, sealants, gaskets, and other materials that belonged to D. Foster did this by placing orders with D 'to be delivered to P, for installation, sealants, and other materials.' Foster and Kapp made visits to the jobsite and to P's offices. P wrote a series of 29 checks, totaling about $20,000, in order to pay for the materials. The checks were made payable 'to Foster', or 'on his behalf', or 'at his request'. At Foster's request, Roger Hansen, another principal in P, made both checks payable to Foster personally. Foster said he needed the first check because the glass was at a salvage yard and was about to be destroyed. He said he needed the second check in order to obtain metal extrusions for the project. Eventually, Hansen asked Foster to sign a written subcontract on behalf of D. Foster refused to sign on D's behalf or in his own name. In mid-May 1983, Foster absconded to California. At almost the same time, Stanley Tabor, D's contracts administrator, contacted P to request payment for the materials D had supplied. P and D then discovered that Foster had not forwarded P's payments to D, but instead had diverted them to his own use. P 'paid D directly for the D materials which Foster had supplied to the job site.' Beginning June 1, 1983, Kapp, on a self-requested leave of absence from Fentron, supervised the final weeks of construction, which ended in late June. Kapp was not paid by either P or D. Tabor learned that the ARCO glass was being used by P. He or his superior knew that the glass panels had not met specifications for the ARCO project. He did not inform P of that. A year after installation, the glass began to leak. It then developed that there were various defects in Kapp's design, in installation, and in the glass itself. The building owner sued P. P settled by paying $81,000. P then cross-complained against D for that amount, plus interest and attorney fees. The Superior Court granted judgment for approximately $108,000. D appealed.

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