Florence Barth and her husband owned an apartment complex. The Barths formed Barth, Inc. (defendant) to purchase the complex with a loan from the Federal Housing Authority (FHA). Under the terms of the loan agreement, Barth, Inc. could not sell the complex without FHA approval. Florence was named a Barth, Inc. officer and apartment manager. Subsequently, Florence signed a contract to sell the complex to Donald Newbery (plaintiff). Florence did not tell Newberry that Barth, Inc. owned the complex, or that FHA approval was needed for any sale. Newberry brought suit seeking specific performance of the sales contract on the ground that Florence was acting as Barth, Inc.’s agent. The trial court found in favor of Newberry. Barth, Inc. appealed.