ray Ha TATA A RATT HIEA L y AU EE ed Bi LR MA TMS La HUI Re ee A Hs Ni TR PALA fi OR eae HC RE tt fon) be ty a ty Naa HAN Ht CORNELL UNIVERSITY LAW LIBRARY The Moak Collection PURCHASED FOR The School of Law of Cornell University And Presented February 14, 1893 IN MEMORY OF JUDGE DOUGLASS BOARDMAN FIRST OEAN OF THE SCHOOL By his Wife and Daughter A. M. BOARDMAN and ELLEN D. WILLIAMS Cornell University Libra treatise upon the law of principal and A TREATISE UPON THE LAW OF PRINCIPAL AND AGENT IN CONTRACT AND TORT. BY WILLIAM EVANS, B. A. OXON,, AND OF THE INNER TEMPLE, ESQ., BARRISTER-AT-LAW. EDITED AND ANNOTATED BY MARSHALL D. EWELL, LL.D., PROFESSOR IN UNION COLLEGE oF Law, CHICAGO, AND AUTHOR OF “ A TREATISE ON THE Law OF FixtTvurzs,” ‘ LEADING CasEs ON DISABILITIES," ETO. CHICAGO: CALLAGHAN AND COMPANY. 1879. id Entered according to Act of Congress, in the year eighteen hundred and seventy-nine, By CALLAGHAN & CO., In the office of the Librarian of Congress, at Washington, D.C, DAVID ATWOOD, PRINTER AND STEREOTYPER, MADISON, WIS. AUTHOR’S PREFACE. Tux object of this Treatise is to present to the English lawyer a general view of the English law of agency in its various ramifications; and in order that this object may be carried out the more completely, few authorities are cited other than decisions of our own courts of law, and judicial statements of the law. Of the existing works which treat of the English law relating to principal and agent, that of Mr. Justice Story, embracing as it does the American and civil law, is wider in its range; whilst those of Paley and Mr. Russell, Q.C., being confined for the most part to an exposition of so much of the law as relates to mercantile agents, are less comprehensive in their range than the present Treatise. There appears, there- fore, to be room for a work which, although less ambitious than the excellent Treatise of Mr. Justice Story, will yet embrace the law of agency as administered in this country. As to the manner in which the subject has been treated, it may be observed, that the rules and principles relating to the law of principal and agent are referable to three divisions, viz., according as they relate, first, to the contract generally, its origin and dissolution; secondly, to the authority conferred, its nature, extent or execution; and, thirdly, to the rights, duties and liabilities arising out of the contract. Such has been the division adopted. For the rest, wherever it seemed necessary for the sake of clearness, an endeavour has been made in these pages to digest, at least, a part of the principles iv AUTHOR’S PREFACE. of the law of agency, as well as to show the development of the principles by a reference to reported cases. With reference to the undoubted merits of casting the whole law of agency into the form of a digest or code, nothing more need be said here than that a collection of decisions and authorities, such as are contained in this Work, will, it is hoped, render the making of either an easier task in the future. WILLIAM EVANS. 3, Essex Court, TEMPLE, June, 1878. EDITOR’S PREFACE. ‘ The very favorable opinions which Mr. Evans’ work has elicited from the legal press of this country would seem to render no apology necessary for the presentation of an Amer- ican edition. The object and scope of the original work are well stated in the author’s preface; and perhaps in the opinion of many of the profession one of its points of excellence, especially for the use of students, will be found in the fact that it discusses only the law of agency as it prevails at the common law, which in this respect is so rich in materials as to render a resort to foreign jurisprudence at the least super- fluous and of little value except to the student of comparative jurisprudence. The aim of the editor has been to present in the form of notes asummary of the American law upon the topics discussed in the text, and to cite with considerable full- ness the American cases upon the subjects treated, and thus render the work useful to American students and practitioners investigating this branch of the law. Such errors of citation and other errors as were discovered in the original edition have been corrected, and nearly one hundred additional English cases not cited in the original work have been cited in this edition, which it is hoped will be found of snfficient value to warrant its publication. MARSHALL D. EWELL. Curcaco, September 17th, 1879. CONTENTS. BOOK I. OF THE CONTRACT GENERALLY: ITS ORIGIN AND DISSOLUTION. PAGE. CHap. I.— Derinirions anp Drvisions . * je P ‘ 1 II.— Parrizs to rae Contract. Sect. 1. The Principal . ‘i . i‘ 5 9 Sect.2. The Agent . 3 A : * * 13 Ill.—Tue ApporntMEnT or AGENTS . i ‘ . 16 IV.—Jornt Prrncreas ‘ é ‘ . i ; 23 V.—Jornt AcEnts 5 ‘ . ‘ . < 82 VI.—Tue Docorrine or DELEGATION. Sect. 1. The Delegation of Original Authority : - 85 Sect. 2. The Delegation of Authority by Agent . a 38 VII. —Tuer Docrrine or RATIFICATION. Sect. 1. The Essentials of Ratification * a 7 48 Sect. 2. Ratification, Express and Implied i . 63 Sect. 3. Consequenoes of a Ratification a . - 77 VIII. —Tue DETERMINATION OF THE CONTRACT. Sect. 1. By Agreement ‘ . . - Sect. 2. By Act of Party . ‘ i . . 83 Sect. 3. By Operation of Law . . . .- & BOOK II. OF THE AUTHORITY CONFERRED. Parr I.— Of the Nature and Extent of the Authority. Cuap. I.— AUTHORITY, GENERAL AND SPECIAL = a . Idol vili CONTENTS. PAGE. Cuap. II.— Powrrs PRIMA FACIE INCIDENT TO EVERY ASCERTAINED AUTHORITY. Sect. 1. All the necessary and usual Means of executing Authority with Effect . é . 107 Sect. 2. Means justified by the Usages of Trade é . 111 Sect. 3. Powers contained in Authorities of a particular kind 115 ‘III. —THE IMPLIED AUTHORITY OF PARTICULAR CLASSES OF AGENTS. Sect. 1. Of the implied Authority of Auctioneers . » 121 Sect. 2. Of the implied Authority of Brokers : é 122 Sect. 3. Of the implied Authority of Factors . 5 « 123 Sect. 4. Of the implied Authority of Masters of Ships . 124 Sect. 5. Of the implied Authority of Partners 3 . 128 Sect. 6. Of the implied Authority of Solicitors . ‘ 129 IV.— Tue Limits cr an AGENT's AUTHORITY. Sect. 1. Of the Extension of the Authority . * - 186 Sect. 2. Of the Limitation of the Authority z : 140 V.—OrF THE CONSTRUCTION OF AN AGENT'’s AUTHORITY. po 1. Where the Authority is conferred by Formal Instru- ment , i : . 145 “Sect. 2. Where the hegthostys is anibiceneits 5 149 Sect. 3. Where the Authority is conferred by Informal Writ- ing or arises by Implication . ‘ . . 152 VI.— Apmissions AND DECLARATIONS By AGENTS . , 153 VII. —Tue Doctrine or Constructive Notice . A . 159 Parr Il.— Of the Euecution of the Authority. Cuap. I.—Or Tur ExEcuTION oF THE AUTHORITY GENERALLY - 166 II. — Or tHe Execution or Aurnority By INSTRUMENT UN- DER SEAL. ‘ 5 é 7 ‘ - ‘17 ITI. —Or tae Execurion or Paron Contracts. Sect. 1. The drawing and accepting Bills of Exchange - 176 Sect. 2. Promisory Notes . ‘ 3 e ‘ 186 Sect. 3. Bought and Sold Notes . ‘ 193 Sect. 4. Charter-Parties not under Seal ; « 207 CONTENTS. ix BOOK III. OF THE RIGHTS, DUTIES, AND LIABILITIES ARISING OUT OF THE CONTRACT. PAGE. Cuar. I.— Durizs or Acent—Dricest or Ruuzs. Sect. 1. Duties of Agent in general . . - 212 Sect. 2. Duties of Particular Classes of Kgent ‘ ‘ 216 II.— Liasmitres or AcentT TO PrincreaL ON CONTRACTS. Sect. 1. Of the Liability generally . ; ; . 224 Sect. 2. Measure of Damages . ‘ 226 Sect. 8. Omission to perform gratuitous Uadeieicng - 285 Sect. 4. Negligence in performing Undertaking . 288 Sect. 5. Profits made in course of Agency 243 Sect. 6. Liability of Agent to account 247 Ill.— Duries anp Liasiuitres or AGENT IN Fipuctary Post- TION. Sect. 1. Of the Fiduciary Relations generally 255 Sect. 2. Agent employed to purchase . 3 s 262 Sect. 8. Agent employed to sell j é é . 272 Sect. 4. Directors and Promotors . : rs 4 276 Sect. 5. Fiduciary Position of Legal Advisers é - 286 IV. —Liapiuity or AGENTs To THIRD PaRTIES. Sect. 1. On Contracts . - ‘ . ‘ - 299 Sect. 2. In Tort . e els oa ‘ 828 V —Ricuts or AGENT AGAINST HIS PRINCIPAL. Sect. 1. Right to Commission . ‘i ‘ . 835 Sect. 2. Right to an Indemnity . - - ‘ 353 Sect. 3. Rights of Lien - P 862 Sect. 4. Liens of particular Classes of ‘Agents 5 - 368 Sect. 5. Agent’s Rights of Stoppage in Transitu . . 37 VI.—Ricurs oF AGENT AGAINST THIRD PanrrIEs. Sect. 1. On Contracts . : 5 , ; . 879 Sect. 2. In Tort. 7 3 : : 3 389 VII. — Tue Ricuts or THE PrincrpaL against Turrp Parrizs. Sect. 1. The Right to sue upon the Contracts of the Agent 396 Sect. 2. The Right of the Principal to recover Money wrong- fully paid or applied 404 Sect. 3. The Right of the Principal to follow Propedky ce fully conveyed or its proceeds 405 Sect. 4. The right to rescind Contracts affected iy ee | 434 x CONTENTS. PAGE. Cu. VITI.—Lraziuiry or PrincrpaL To TarRD PARTIES. Sect. 1. On Contracts of Agent ‘ eB - 440 Sect. 2. For Agent’s Misrepresentation and Fd . 465 Sect. 3. For Agent’s Acts or Negligence. . - 479 ‘Sect. 4. Inevitable Necessity ‘ 494 Sect. 5. Effect of entrusting Performance of Work to a one tractor ‘ é 3 a . . 499 IX.— Lrapimity oF EmMPLoyer ror Insury CAUSED By Nueri- 3ENCE OF FELLOW-WORKMAN . ‘ c . 504 INDEX . A . . . . . . . 535-567 TABLE OF ENGLISH, IRISH, AND CANADIAN CASES. [THE REFERENCES ARE TO THE MARGINAL PAGES.] PAGE. Abraham ». Reynolds... .511, 512, 517 Adamson 9. Jarvis.............75, 850 Adansonia Fibre Co., 28 Addie v, Western Bank of Scotland 474 Addison v. Gandasequi...404, 448, 449 Aggs v. Nicholson......... sseoes 189 Agra, &c., Bank, Ex parte....... 15 ms RO se tiecc i se taser aeewae: 458 Akerman v. Humphrey........... 432 Albert Crosby, The proceeds of the 124 Albion Wire, &c. Co. ». Martin... 258 Alexander v. Alexander... .38, 39, 170 — v. Gibson...........46 - 465, 466 —— v, Sizer........006 oeoee 184, 192 =, THE iieicicecees Beate A eraasire 126 Aldridge v. Buller.......... re 13 Allen v. London and South West- ern Rail. Co......e..eeeeee 484, 487 — v. New Gas Co........0. eee 511 —— v. Rescous.......eesecessees 15 Allkins v. Jupe.......... sencceee 346 Alston ». Herring......... ooecese 280 Ancher v. Bank of England....... 405 Ancona v. Marks’.......... seeesa? (DD Anderson v. Clark,....+.....006. 392 — v. Wallace.......ceeseoee seep? — v. Watson.......6+ wereeveae 129 Anriay The si. sscnscwdses overex: LOT Appleby v. Myers.....-....+. eee 808 Appleton v. Binks............ 172, 404 Arlington, Lord, v. Merrick....... 145 Armstrong v. Stokes, 193, 441, 442, 444 449 Ashbury Rail. &. Co. ». Riche.... 52 Ashby 0. White.............. 228, 229 Ashworth v. Stanwix...........-- 531 Aspdin v. Austin. .......++-- 78, 79, 81 PAGE. Atheneum Life Assurance Co. ». Pooley s:assesdgsaigai aa wie Waweierers 62 Atkinson v. Cotesworth........... 370 Atkyns v. Amber.....seeseeeeeee 385 Attlee v, Backhouse..........2006 314 Att.-Gen. v, Berryman........008 39 —— »v. Chesterfield.......... eee 249 St. Davy sco csuaweeewesieen 33 Attwood v. Munnings........ 105, 147 —— v. Small..... 2... ee cee cece 70 Austin ». Chambers...........0 290 ——». Guardians of Bethnal Green 20 —— v, Manchester .............. 288 Australian Steam Navigation ». Morse...... sieroaie Swinareay Getacere 127 Bacon v. Dubarry.....seeeeeeeeee 172 Bagnall v. Carlton...... BEB 258 Baile: Bailé..scccss8s ses ccesee 375 Bailey v. Macaulay ....-.....se0e 29 Baines v. Swainson..... +. ...413, 418 Baird v. Robertson....... aSeieiaraeei ers 320) Baker v. Cave.....csssesee 1+. .88, 41 Balch v. Symes.........0 ais Geese 373 Balfe v. West......ce.ecececees '.. 287 Ball v. Dunsterville..........2... 17 Bamford ». Shuttleworth. ....... 319 Bank of Bengal ». McLeod....... 169 Barber v, Dennis.......e-eesseee 243 Baring ». Corrie ...... +o++.4, 123, 402 0, DlantON ees ccls winviieeien ees 246 Barnes v. Wood...... aie diawiecaie aes 525 Barnett ». Lambert.............. 44 Barry, Ex parte........... Sasa 133 Bartonshill Coal Co. v. Reid, 499, 507 511, 583 xil PAGE. Barwick v. English Joint Stock Bank soiis ew nesiees 404, 469, 471, 490 Bateman v. Davis..........2008% 49 Bateman v. Mid. Wales Rail Co.. 21 Bauerman v. Radenius. ...155, 387, 388 Bayley v. Chadwick.............. 341 — v. Manchester Rail Co... .485, 490 Bayliffe v. Butterworth........117, 151 Bayntum ». Cattle.......... eee= O27 Beattie 0. Lord Ebury.........6+. 331 Beal.o, Ry Re CO wassescscece nse 238 Beavan v. Macdonnell............ 11 Beaufort, Duke of, v. Neeld...105, 143 Beckham v. Drake... ........... 804 Belchier, Ex parte........ Wisaewe 224 Beldon v. Campbell....+.......0% 124 Bell v. Auldjo......+-.sseeseces - 123 Beman v. Rufford..........eee0e 46 Benham v. Batty........csee.e0. 66 Bent o. Puller........ Seaementemes 96 Bentley v. Craven....+...e005 119, 263 Berkeley v. Hardy........++ see. 17 Berris v. Howitt...... sisters) ietetslviets 374 Bertram v. Godfray...........6- 118 Bethan v. Benson.........seeeee 154 Betterley v. Read...........2-008 250 Betts v. Gibbins...........0..005 356 Bevan v. Waters........66 sivas 363 Bevins 0. Hulme........... meee 131 Bickerton v. Burrell .......... 384, 403 Biddle ». Bond.........s200-- 250, 251 Biggs v. Lawrence........0..e005 155 Bilbie ». Lumley......... i eewrses BLO Billage v. Southee........ 255, 297, 298 Birchall 0. Pugin........ 6. .... 3874 Bird: Boulter yssiss sesienecciaes 121 Bird v. Brown... ........ saseaes? “12 —— v. Deodorizing Co........... 58 —— v, Holbrook ......... ce eeeee 525 Bishop v. Countess of Jersey...... 137 Blackburn v. Scholes.......... 382, 402 Blackstone v. Wilson ............ 129 Blades v. Free. .....eccecceeesers 88 Blakely Ordnance Co, In re... ... 459 Blandy v. Allan.....-..0.-eeeseee 417 Blore v. Sutton.........6- eee 122, 438 Bock v. Gorrissen....-...seeeeees 863 Boden, Ex parte, Re Wood....... 94 —— 0. French .......see-eeecees 150 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. Boinglo 0. Morris..-+.-+++see+ see OO Bolinbroke ». Swindon........481, 490 Bolland 0. Bygrave....+cseserece 368 Bolton v. Puller........2.0¢ pagses: O20 Bonzi v. Stewart........eee00. 226, 420 Boorman 2. Brown......++0+-+++ 122 Borries v. Imperial Ottcman Bank 397 Boson 0. Sandford......-..seeee 124 Bottomley v. Fisher........+see0 190 — »v. Nuttall..... ayalawiwlalre-averarare 349 Boulton v. Dobree........ceeesee 13 Bourdillon v. Roche...........6+. 132 Boursot v. Savage......ec.e0s 163, 164 Bovill v. Hammond...-.......66. 28 Bowcher v. Noidstrom.........+.+ 332 Bowen v. Morris........ aavasisis coe 74 Bower v. Hartley... ....... eoee B61 19: JONES is 0 6, 5s a ereieterawratelererays 348 ——, Peateiss. xceiwswsarteaces 502 Bowring v. Shepherd ........- oe 114 Bracey 0. Carter......+sesee5 eee 221 Brady v. Todd. ... .....eseeee we Braithwaite v. Scofield......... some OL Brakenbury v. Pell. ...........- - 131 Brandao v. Barnett.......ceereees 363 Brandon v. Nesbitt .........-. wae 12 Bridge v. Grand Junction Rail Co. 491 Bridges 0, Garrett........e00: e008 117 Bright v. Hutton ..........20.00- 29 Brighton Brewery Co., Re........ 277 Brind v. Hampshire......... .... 322 Bristowe 0. Whitmore...... 70, 71, 370 British Columbia Saw Mills Co. ». Nettleshipiieccncapacs seaeccees 227 Britton v. Great Western Cotton COm ssc oainninnsnmnectancnaeseass 507 Broad v. Thomas......:eeseeee 838, 349 Bromley v. Holland.......--..... 86 Brook 0. Hook.........ssseeeee 49, 50 Brotherton v. Hall.......... «eee. 160 0s. atti. sarcminasemnsncraaiarere 165 Brown v. Accrington Cotton Co... 516 —— v, Andrew... .cesecssecceees 33 —— »v. Kennedy...... wieraree activate 291 Browning »v. Provincial Insurance Co. of Canada......... 3883, 401, 403 Brownlow v. Metropolitan Board.. 493 Bitice Ws. Wali Gawsiscdcersrsveievececern ies 394 Bevaneo: Nitieaicccaeas. and Ra1 202 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. PAGE. Buckley, Ex parte.......-..0. 186, 187 Bulkley 0. Wilford.....2...++-+.. 295 Buller v. Harrison........ +e» 013, 316 == 0 Sharps sctsiccsscdneiee cas 26 Bult v. Morrell........022+++-177, 182 Burgess v. Gray....+...0+--- 000, 502 Burgon v. Sharpe......esessseeee 127 Burial Board, Rochester, 0. Thomp- BON awre'e areuargcey ase eeras 0-200 008, 43 Burls 2. Smith ........ senesiesiens 29 Burnes v. Pennell.,......200 oe. 470 Burns v. Poulson .....eeseeeeeeee 488 Buron v. Denman........ 49, 51, 74, 75 Burrell ». Jones.. .....- Bs ersiesarsie 305 Burrough ». Skinner..........217, 320 Burroughs v. Bayne..... senicieccrer 63 Burton v. Great Northern Rail. Co. 77 —— v. Hughes... ..e.seeseeerees 889 Bush v. Steinman....... +++. .000, 503 Butler v, Baring......ecceseresss 479 —— v. Knight.........eceees 120, 180 —— v. Woolcott...cereeeses- 368, 370 Caffrey 0. Darby......+.-++++217, 241 Caine v. Horsfall........eeeeeeee 348 Calder v. Dobell..... 448, 449, 451, 452 Caledonian R’y Co. 0. Lockhart... 42 Callen, Re........+-.6 wetarerae tea 373 Campanari v. Woodburn.........- 88 Campbell v. Hassell.. .....-4+06 122 Campbell v. Hooper........ csazew IT Cargill v. Bower.......eeeeeseee 320 Carling, Hespeler and Walsh’s cases 281 Carr v. Hinchcliff,..........-: 397, 419 Carroll », Blencow....- tietw@encdear 12 Carter v. Dean of Ely.........00 18 Cartmell’s case......+eee6 e000 e 45-47 Cartwright v. Hateley........- oo. 249 Castrique v. Buttigieg..... osiaseieleie 187 Cass 0. Rudele ......-csecececess 172 Catlin v. Bell.......2+2+-.40, 119, 224 Catterall ». Hindle..........0.-6- 6 Chambers v. Mason....... Sewers 1380 Charitable Corporation v. Gutton.. 276 Charnley ». Winstanley ...... véee 99 Chase v. Westmore.......2e+eee- 362 Chedworth, Lord, ». Edwards. .248, 250 Cheetham v. Mayor of Manchester, 73 Xi . PAGE. Cherry v. Colonial Bank.......... 802 Chesterfield &c. Coll. Co. v. Black, 260 Child v. Morley ............0-00. 112 Childs 0. Monins......... ree 191 Chion, Ex parte....... 0.2.6 eoeee 406 Chomondley ». Clinton..........- 222 Chown v. Perrott..... sssseesees 120 Christoffersen v. Hansen.......... 207 Church v. Imperial Gaslight Co..19, 20 Churchill », Churchill ......... «-- 170 Churchward v. The Queen..... 81, 83 Clark, Ex parte,....s..cesseesee. JOO —— 0, Clark.........06 pelaersriaes: (221, —— v. Johnson..,........... eee O14 —— v. Powell ........... womens. 4 Clayhill v. Fitzgerald ............ 172 Cleland, Ex parte..........- Severe OO Clinan v. Cooke ....... sierausieiela yess 438 Close ». Holmes.......... swriweunte 415 Clothier 0. Webster......e.seeees 492 Coates v. Lewes........eceeereees 401 Cockerell », Aucompte ........... 31 Cockram ». Irlam......... 40, 128, 217 Coggs v. Bernard....... erase 217, 236 Cole v. North Western Bank, 411, 414 416, 417, 424, 433 Cole v. Wade..... seipaeeaaeuniene 39 Coleman v. Riches .... ...... 140, 484 Coles v. Bristowe...... aisiareraarewey 114 -—— v. Trecothick, 18, 40, 122, 123, 217 Collen v. Wright...-....+eeee8.. 302 Collingwood v. Berkeley ......... 159 Collins 2. Blantern..... 15, 36, 37, 346 — »v, Evans..........- sera sea teione 403 Comber v. Anderson.....seee.e0 218 Connop 2, Challis...........s000 132 Cooke, Ex parte, Re Strachan .... 407 —— v. Lamotte... .cceceseeesees 298 igh, WilsOnice sive bis, ainsis sce 209, 380 Coombe’s Case....secesses weenie 9, 15 Coope 2. Hyre..ccsseeeeses wesewe 26 Cooper v. Willomatt...........6 413 Copeman v. Gallant........+..94, 406 Coplett v. Gordon ...... ecereeeee 240 Cord v. Hope... ..sccesee cesses 219 Cornfort 7. Fowke ....... 403, 465, 467 Cork v. Youghal Rail. Co., Re.... 15 Cory 2. Thames Iron Works Co... 227 Courtauld v. Sanders .........06 xiv Courteen v, Touse ....seeeeeseees 159 Contourier v. Hastie ......eeeeeee 3 Cowell v. Simpson...... sssceee - 362 Cox v. Prentice..-.esceecsscceece 317 Cranch v. White ........- aangeeiee 15 Crew 0x: Pethites case dssiasteiesacss 191 Croft v. Alison ......ececeeee 480, 489 Cross v. Williams...... set . Hastings..... eeeeeee 153, 155 Fairthome 0. Blaguire......-+.- 11 Farley v. Turner.........- Valieon, 198 Farnworth v. Hyde...... cscseves LOT Farrow v. Wilson .....ceceseeess 87 Feaver v. Tel. Co...eseeeee ayaeverere (242 Feise 0. Wray..cescececece wits Ty OTF Fsltham v. England......... 511, 532 Fenn v. Harrison... 111, 116, 140, 453 Fenner v. South Coast Rail. Co... 222 Fergusson »v. Carrington.....-..-- 67 Feronia, The......sseececcecccce 371 Fish 0. Kelly....-ccsscccseeecees 235 —— v. Kimpton ........... eoeee 162 Fitchett v. Adams...... eewee wes 49 Fitzgerald 0. Dressler..........+. 63 Fitzmaurice v. Bayley......-.- --- 66 Fleet v. Murton..... 193, 198, 211, 308 Flemyng v. Hector...... oii sees 30, 31 Fletcher v. Dodd.......- saree sets 248 ———— 9, Narcotic sess se dee vivsiaeees 360 —— yp, Heathiiws osse0s os vies 417, 419 ——v. Rylands....-.-ssseeeeeee 494 Foley v. Hill......esseeeseececes 258 Forbes 0. Marshall .....see+-00-- 109 XV PAGE. Forster v. Wilson .......- Soeieereis 90 Foster 0. Frampton......-..+00.- 278 Fowler v. Down.......... eeeeeee 390 -— v. Hollings..............0000- 3 Fox v. Clifton........ Siedieseaieaas 128 —— v. Mackreth........ 265, 272, 274 Foxon v. Gascoigne..... seseieaee 376 Frampton, Ex parte....... sancrete 168 Franklin v. Frith ..... aiden »- 243 Franklyn v. Lamond ........ saa QUT Fray 0. Voules ......+0- +++-180, 228 Freeman v. Cook@.....0eeeeeeeee 427 — v. Rosher...ceeseee oe cove 62 — »v. Butcher ........s0esereee 11 French v. Backhouse ......++..+. 68 Friswell v, King ....0..e..ee06 o- 312 Frith v. Cartland .............. 93, 99 Frixione v. Tagliaferro...-....... 70 Frontin 0. Small.... .. aierejaraiaiasers 172 Fuentes v. Montis........e00.-4. 429 Fuller v. Bennett.... ... 160, 161, 165 — v. Wilson........eeeeeeceee 403 Fullwood v. Akerman............ 347 Gadd ». Houghton....... 194, 199, 208 Gadsden 0. Barrow....++seee oe 889 Gale vo. Luttrell... ....cceeceee eee 91 Gallagher v. Piper .......... 582, 583 Gardner 0. Emnor ...- ..eeseeeee 294 — ». Lachlan.............006- 174 Garth o, Howard..........6. seae 158 Gartside v, Outram.......... 2+. 221 Gauntlett v. King ............6:. 62 Gausson v. Morton ...-.....--- 84, 8&6 General Share Trust Co. 0. Chap- MAR wirs.wse save w veneers cwws ies 376 George v. Claggett.......... 399, 419 Georges 0. Georges.....+-. panto 3873 Gibbons 0. Pepper.....eee-see-ee 496 —». Rule...... cmieenes a Gibbs v. Daniel .....ceeeseeeeees 290 Giblin ». M’Mullen.......... 237, 238 Gibson 0. Ingo.........ceceeeees 370 —— 0. Jeyes....eeseeeee 274, 287, 291 —— >». Lupton..... BiG se arartaOes « 27 —— 0. May ...-. sees beyeeenieees 371 ——— 0. Winter. .esrecccscccceeee 387 Gilbert's CaS€ ..eesececesceer eee 217 Avi PAGE. Giles v. Taff Vale Rail. Co.... .. 486 Gillard v. Wise .....seeeseessee 326 Gillett v. Peppercorne...... 18, 14, 269 Gilman ». Robinson.... ...-+.- « 2 Glenmanna, The............0.0. 127 Godefroy v. Dalton. ..... cee 220 —— 0. JAY we ccereeseceres eves. 221 Godfrey v, Furz0.....ssee-eees 92, 94 Godwin v. Francis ........-- 302, 303 Goff v. Great Northern Rail. Co... 485 Goldschmidt v. Lyon ...... re 89 Gooday v. R'y Co ........- wa: Sayers 208 Goodson v. Brooke........+6. 111, 115 Goodtitle ». Woodward, 24,25, 49, 51, 70 Goodman v, Sayers.......s.e00-- 42 Goodwin v. Francis........+.ee5- 233 Goom », Affalo....+.++ wineaensteaneOl Gore v. Gibson ...... secevesceee 11 Gosden v. Elphick....... sane 64 Gosling 0. Birnie..........ee008- 251 Goupy v. Harden......-.-.eesees 87 Gover’s CASE... eeeeeeeeeceves we. 285 Graham v. Ackroyd ...........6 367 —— 0, Musson ........ cece wee 18 Grammar v. Nixon....... ss... 466 Granby v. Alton......ceecseeeeee 66 Grant v. Fletcher ..........- 201, 204 Gratitudine, The.............. -. 128 Graves v. Legg ....+.06 eisiorsis oe. 117 Gray v. Gutteridge ......0...- 217 0, Pullen ss:cesicccuis eae emeres 501 —— v. Roper....seeereeeeeee 191, 193 Great Luxembourg Rail. Co. 2. Magnay ..... aiaisiauseis-einvea 267, 270 Great Northern Rail. Co. 0. East- ern Counties Rail. Co.......... 46 Great Western Insurance Co. 2. 246 Great Western Rail. Co. ». Willis, 155 Green v. Kopke.......... 198, 194, 445 LDCS ss aisrerersirciereserarn cars 339 om 0, REAM 34 seasieseueeeesaiteney 340 Greenaway v. Adams..... weageay 488 Greenough v. Gaskell..... aeeareels 229 Grice v. Kenrick...........00s008 3888 Griffin v. Weatherby... ......... 326 Grill ». General Iron, etc. Co.... 237 Grindley ». Barker .... ......... 33 Grinham ». Willey ....... Ueletee es 64 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. Grissell ». Bristowe...ssseeseeses 114 Grove 0. Duboig....sssesseeecces 3 Grover v. Hugald ...-.-.- sheets 259 Guerriero v. Peile.....+.++++ 119, 218 Guest v. Smythe...........ee--ee 258 Gunn v. London, &c. Fire Insur- ANCE CO... ceceercoscccesesace 57 Gunnis v. Enhart...... seelinenes 121 Guthrie v, Armstrong.....- seceee OD Gwillim v. Stone...... sisieaiiestios 400 Hadley v. Baxendale.........++. 226 Haich v. Hale.........06 aieieteisterse 116 Hailld v. Smith... .seeeeeeseeees 393 Haines v. Buck ..........--- 348, 346 Halford v. Cameron, &c. Co. 177, 180 Hall o, Smith ........eceeceeeess 493 Hamer v. Sharp ....seeeceeeesees 119 Hamilton ». Grainger...........- ll =), ROVEC ies cmeinwenemnn see 38 —— 2. Wright... ...... epaloietsises 274 Hammond ». Barclay......--. oe. 368 Hamond »v. Holiday.............. 342 Hampson v. Hampson.......- ove 222 Hancocks v. Lablache........... 12 Hargreaves v. Rothwell.......... 160 Harington v. Hoggart........ 217, 248 Harman ». Johnson .......6..06. 133 Harmer v. Bell.......cceeeeeeeee 371 Harrison v. Jackson......eeeeee05 18 Hart vo. Frame .....cccsccssceers 221 Hartop, Ex parte.......... aromas 225 Harvey v. Shelton ..........6 ouse 42 Harvey v, Stracey.......+..e000- 170 Haseler v, Lemoyne.....-... ... 65, 66 Haslop v. Metcalf........... evves 220 Hassard v. Smith........ i eareuts «. Il Hassell v. Smithers............5- 406 Hatch v. Hatch.......-.eeeseeees 291 Hatfield ». Phillips .............. 416 Hawes v. Forster............ 202, 204 Hawkes v. Dunn...........0008 .- 317 Hawkins ». Bourne..........006 128 —— v. Harwood.......-..eeeeee, 221 —— v. Kemp........... Peaiaanag 39 Hawley v. Sentance...... arereiDeratens 67 Hay v. Goldsmidt. ...... axes 146 Hay’s Cas@...ccsecesevesees 278, 280 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. PAGE. Heald v. Kenworthy......... 448, 446 Healey v. Storey...... stereos aie, SGr 186 Hearle ». Greenbank.......- sisase. 14 Heathorn 0, Darling...... Bi eeeaies 125 Heinrich, The..... srdialeseias aieiwaeer OT! —— 0. Sutton........e00e0- 109, 374 Henderson v. Barnewell.. 40, 123, 208 Hereford, &. Co., Re......+..006 60 Heresy, The!:..3:05 csv svswwwee sees 128 Hern v. Nicholg........ eee ceeeeee 465 Heugh v. Abergavenny, Earl of... 15 Hewison v. Guthrie........ pare ateree 368 Heyman v. Flewkes.........0006 422 M0; Neale sai siewnewaistaase: coos 199 Hibblewhite ». McMorine......... 17 Hiern v, Mill........ aprapioa anes 159 Higgins 9. Senior .. . 805, 306, 3807 Hilbery v. Hatton..... ee 63, 72 Hill o. Simpson.........ee2eseeee 247 Hingston v. Wendt........- - 117, 371 Hinton v. Dibbin..... savsieiersl aie she 238 Hitchins v. Congreve........ 215, 265 Hoare 0. Dawes ...ee.ceeeeeer eee 27 Hochster v. De Latour.........06% 78 Hodgson ». Davies ........+- eevee 205 Hogg ». Snaith.............. 124, 146 Hoghton v. Hoghton.......2+++- 298 Holding ». Elliott......0.ceeres -. 806 Hole v. Sittingbourne Rail. Co.... 502 Holland v. Hall.......+ sseeeceee 347 -— v, Russell........0- averaiestenase 314 Holliday o. St. Leonard’s......+.. 491 Hollins v. Claridge....-... -. 865, 3873 Holman ». Johnson......- 15, 37, 218 — v. Loynes .....seeeesees 288, 294 Holmes v. Clarke ....-+.+.+- 506, 508 — 0. Mather .-.......0+.. 440, 497 — ». North-Eastern Rail. Co. 506, 528 Hooper v. Lusby....+-+ Saesingpeks 28 Hornby v. Lacy... ..--eeeeee eee 3 Horne v. Midland Rail. Co........ 227 Horsley v. Bell......++++ 80, 31, 490 Hoskins v. Slapton....... sister walahs 124 Houghton ». Matthews, 3, 123, 836, 401 Houldsworth v. Evans......--++-- 51 Hovil v. Pack....0..seseeeeees 65, 70 Flovill ». Lethwaite .....seeeeeees 89 Howard ». Bank of England...... 12 — >. Baillie.-..+.. 44, 66, 109, 111 xvii Howard’s case.....scseeseeecsoes 44 Howells ». Landore Steel Co...... 532 Howes 0. Bell..........ccceeneee 39 —— ». Martin ..... eaideanueaces 353 —— 0. Watson oseeseesee recone 251 Hudson v. Granger...... 92, 400, 404 Hughes 0. Trew.......seesseeeeee 118 Huguenin ». Baseley.... 256, 274, 298 Humfrey v. Dale .. 124, 193, 211, 309 Humphreys v. Pratt ..........265 305 Hunter v. Atkins....... 215, 257, 290 — 0. Bennison .....cee.eseeeee 42 — v. Caldwell.......... et 221 —— . Parker........ et etanae ebsites 127 Hurst 0. Holding..........-+.-0. 304 Hussey v. Christie...... 124, 865, 370 Hutchinson v. Tatham.. 207, 211, 308 — o. York Rail. Co..........00- 505 Hutton v. Bullock........... 380, 447 — v. Matthews...........- see. 380 Imperial Mercantile Credit Associa- tion v. Coleman .........- 0 -- 261 Indermaur v. Dames........ 506, 527 Ingram v. Ingram..........e.e5- 88 Ireland ». Livingstone .... 6, 149, 150 Irving 0. Wilson ...-.....eeeeees 314 Iveson v. Connington ........e065 224 Jabet, Ex parte ......cceseeesees 372 Jacaud v. Canning,......+ss5.60- 91 Jackson 0. Galloway ........ ...- 10 Jackson 0. Nichol.........sceeeee 377 Jacob v. Allen 20. seccccessceee 815 James, Ex parte...... sialeeiciaiene o. 288 —— ¥. Griffin... ec cece er eeceee 377 —— 0, THOMAS. .scececsccccevces 289 Janberry v. Britten.............. 415 Jeffries v. South Western Rail. CO setdaiieieastesiiete's retain eae 389 Jenkins v, Bethan.........022.- 242 —— v. Usbome..... Sloane urease 480 Jenner v. Jenner ......eseeeeeee + 146 Jesse v. Ray ..-seeeee sisal sree, BOS Jessopp v. Sutwyche...-.....ee6. 113 Joel v. Morrison......+. 479, 483, 488 The Johannes Christoph..... oe oe O10 xviii PAGE. Joint Stock Discount Co. v. Brown, 277 Johns 0. Simons.......-+..0-0008 124 Johnson 2. Credit Lyonnais... 424, 426 — ». Hill.......... asic heleatelsie 865 —— v. Robarts ....-.006 smisaicinais 824 —— 0. Ward .....cceee a Suchdaiondes 154 Johnston v. Bingham.....+..+++ 382 Jones v. Frost...c.seeccceseecees 3875 — 1. Littledale .......-6. 805, 306 —— 2. Peppercorne ...+...+seee 368 —— 0. Phipps........cscecceeees 26 sae 0), Smithy sardenwrewanieoeeiies 163 —— v. Turnbull....... agieiaiee siete 872 Jordan v. Norton..... siden seee 455 Josephs v. Peters... sesseceeeees 346 Joy o. Campbell..... Weeraticnres, OH Kahl ». Jansen .........5- «- 155, 156 Kampt v. Jones .......64. aesciees: LO Karnak, The ...........000. 125, 126 Kaye 0. Brett ...ccsccccesseesses 2 Keane, Re.....sseecscesccccsecs 875 Keane 9, Boycott.......+++ area tere ‘i Keating 0. Marsh....secssseesece 225 Keay v. Fenwick......... 28, 66, 349 Kelner 0. Baxter .....0eeeeeeee -. 56 Kemp »v. Burt........ +. aeReiS og 221 Kendray v. Hodgson .........0+- 72 Kennedy v. Gouveia .......eeee0e 208 ——= 9, Green iiviccoea sawed cteais «+. 161 Key o. Parnham ..........0..00- 248 Kimber ». Barber... 14, 246, 266, 272 King 2. Rossett ......... Sierebee ae 252 Kingsford v. Merry..........ee0s 431 Kinloch 0, Craig ....... 364, 892, 894 Kirkstall Brewery Co. v. Furness Rail, Coie stevens setosicare - 156 Kirkwood 0. Thompson........... 258 Kirwan 0. Goodwin...........68. 37 Kleinworth Co. ». Cassa Maritima Of GONOAr is actesvacrracawwerccens Knight v. Chambers ......0...08. 125 118 -—— 0. Majoribanks ............. 258 Kreuger v. Blanck ....... seeeeee 7 Kruger 0. Wilcox. «12.2. seeceee 368 Kymer v. Suwercropp ....+++6. ove 443 flanaw Wy narta...-...--2------- O7A. TABLE OF ENGLISH, IRISH AND CANADIAN CASES. Lake 0. Duke of Argyle..-..-. se 29 Lamb v, Attenborough.....-..-.- 423 sg, Palle weeeestonine sees 2) 479 Lambert 7. Heath .....--- wawnnss 218 Land Credit Co. 7. Fermoy... 277, 278 Lane v. Cotton ..ceeseeeeeee 828, 332 — 0. Dighton ...--.seeeeeereee 406 Lane’s CaSe ......-seeccsec cence 62 La Neve v. La Neve....-+.- eee: 165 Langhorn 0. Allnutt....eseeeeeee 156 Langton 0. Waite.........6- 116, 402 Lapierre v. M’Intosh....+....200- 12 Laporte v. Costick ..... des sewunie 12 Lara 0. Hill... ......- exicnwiminters 337 La Tuch 2. Pacherante..........- 129 Laugher 0. Pointer .....-.eeeeese 508 La Ysabel Boso ....seeeeeee weeex 125 Leav. Welsh. ...... .secececcuce 235 Leadbitter 0. Farrow ... 177, 178, 187 210 Theaders: The ssc: sais'eece vedic esa ciee 875 Leake v. Loveday ...... eRc eee 3889 Leama 2. Bray..... Joanesers evee 495 Lean v. Schutz...... Siar Harsrecata ll L'Apostre v. Plaistrier ..........- 406 Leather Cloth Co. 7. Huronimus.. 72 Lee v. Bullen............005 evace OL —— 2. Lee....... acqwieerorarere alalars - 247 Le Fevre v. Lloyd ..... aise exes . 184 Lees v, Nuttall...... s.sceseeces 263 Leese 0. Martin .....seeseesceeee 367 Legg v. Evans ...... majene deca 889 Legh v. Legh .....scescecveeesee 388 Lench v. Lench.....66 . eeseeees 406 Lennard v. Robinson ... 197, 207, 209 Le Texier v. Margravine of Ans- Pach ssvvincaeias ba hntane ely 249 Levy v. Abbott ......... eeee 180, 181 ——— 0 Pyne......ecceeane Sokewe 144 Lewis ». Hillman.......... a0 274 ~— 0, Lee 60. cecceeccccccccens il mn 0s RECdaweiccncsmdascecanres 61 Lickbarrow v0. Mason .......+..-. 481 Lindus 0. Bradwell.......... 177, 179 » Melrose... .......00. 189, 198 Limpus v. London General Omni- ust COnseteeey acionteeces 480, 483 Taindeav a Cihhe 90 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. PAGE. Lindsay, Petroleum Co. 2. Hurd.. 436 Little 0. Newton ....seceseeees -» Al Lloyd 0. Guibert .........eee0ees 124 Lochiel, The ......... Saenevereewy 128 Lockwood 0. Levick........+ cwieaysy Bot Loeschman 0. Machin ... ..-.. -- 413 — 0, Williams .......eee00002. O77 Logan, Ex parte ............ 349, 359 London, Brighton and South Coast Rail. Co. v. London and South Western Rail. Co........ sg 746 Lonsdale (Earl of) v. Church...... 248 Loonie 2. Oldfield...... deewaictwne B46 Lovegrove 0. White ......+..... - 132 Lowry 2. Guildford ...... fm ate 221 Lowson 0. Copeland...... yaaa ase 247 Lowther o. Lowther..........00 274 Lucena v. Crawford......++.+ eee. 128 Ludlow (Mayor of) v. Charlton.. 18, 20 Lupton v. White ......esee0e eee 344 Lynch v. Nurden.....ee..eeeeee+ 520 Lyons 0. Martin. ......cseeeeseee 489, Mabier v. Massias.......seeeesee- 183 Macbeath v. Ellis......2.+6+ saree OL, M’Carr v. O'Ferrall......200 sooo 99 Mace v. Cadell..........- wees, (94 M'Combie v. Davies.....- «e- 142, 411 Maccord v. Osborne......seeeeees 65 Madden v. Kempster ...-.-++.0- « 865 M'Ewan »v. Smith......-++-. 423, 430 M'Gowan & Co. v. Dyer.....22++- 478 M'Intyre v. Belcher...... .--.-- 851 Mackay v. Commercial Bank of New Brunswick ......-.06. 472, 478, 490 M’Kay’s case....---- saljenaaneisig, 280 Mackenzie v. Johnston.........+. 251 M’Kenzie v. M’Leod ..........00- 481 M’Laughlin v. Pryor....-.++- 495, 496 Maclure, Ex parte......-....- 83, 351 —v. Sutherland..... sieewiensae 18S Macmanus »v. Crickett...-......+- 480 M'Norton v. Caledonian Rail. Co.. 533 Madden v. Kempster. ..........- 321 Madrid Bank »v. Pelly...... scnees 277 Maestars v, Abram ........... «. 154 Magee v. Atkinson........+- 807, 808 Mahoney v. Kekulé..... 193, 194, 445 XIX PAGE. Maitland »v. Chartered Bank of Makepeace v. Rogers.249, 251, 252, 258 Malcolm ». Scott ....... Satta daree 820 Mander, Re......ceceesesseveee: 13 Mare v. Charles........006 «. 177, 182 Marsh v. Keating.......0eseeeeee 226 Marshall r. Corporation of Queens- Dorough ....+sseeesssereee -. 19 —— 0, Parsons,...-ssccersccseee 348 — >. Rutton.......... Seasases, UL —— v. Stewart .... sees. o veee 506 Martyn v. Blithman ...........- - 360 Mary Ann, The.......+...+. 370, 371 Marzetti v. Williams ........ 228, 229 Massey's CAaSC.+..ccccceeeceerees 93 Mason v. Whitehouse........-+-- 130 Mather, Ex parte........ . ss... 218 Matthews v. Baxter......... awww IL Mawson ». Blane..........6: weas “65 Max v. Roberts.........0.6- eevee; 231 Mayor of Ludlow +. Carlton...... 18 Melhado v. Porto, &c. Co. .....2- 58 Mellish v. Allnutt..... eoeeitais eseee 230 Mellors v. Unwin.......... eoeees 509 —— 0. Shaw........... sawed se DOG Mersey Docks, &c. 0. Gibbs... 333, 491 492 —— — ». Penhallow .......... 492 Mestaer v. Atkins.......sscceeees 83 Meux’s Executors’ case ....-..- -. 157 Mews v. Carr .......eeeees wes 12% Middieton v. Wells.......e00...- 290 Miles v. Gorton....... a ibidatersters -. 378 Milford v, Hughes......s.seeeeee 3,4 Miller v. Ario....0... ec cece e coe 314 Milligan v. Wedge ..-e.sceeeeees 499 Minnett 0. Forrester .....+..-02 5, 88 Mitchell v. Crassweller.........-. 482 —— v. Reynolds..........-. sooe OF Mole v. Smith...... iekeane axed 119 Mollett 0. Robinson........2..... 463 Molton vo, Camroux......eesee- 10, 99 Moneypenny v. Hartland......... 357 Monk ». Whittenbury... 414, 420, 424 Montague v. Benedict........... - il Montesquieu v. Sandys........++. 289 Moon v. Guardians of Witney Union 43 —— 0, Towers....cccosesscerees 64 xX PAGE. Moore v. Clementson .oseesese+++ 403 -~— »v. Magrath....... siete eee 146 —— v. Maxwell......ccccecceeee 348 — v. Metropolitan Rail. Co. 484, 487 — vv. Mourgue ......... «- 149, 224 Morgan ». Elford...... oieitoletarsiern 247 — ». Vale of Neath Rail. Co.... 532 Morrison v. Thompson.....+. 243, 245 Morris v. Cleasby.....seess0 eae 38 Morse v. Royal...-.sseeseceseees 294 @; Slu@sececwee sare realness 328 — v. Williams... dese eds 321 Mortimer v. M’Callan.......-.0- . 402 Mortlock v. Buller........e+ee0. 18 Mostyn v. Mostyn ..secseeceeees 133 Montford v. Scott ...-..e0- -. 159, 160 Moxon v. Bright.........eeeesees 202 Mollingar v. Florence.......-- oo. 367 Munro v, Butt....... Sioinieons 353, 360 Murphy >. Caralli..... Wewieiete 514, 515 — v. O'Shea... ...eeevee coer 14 —— 0) Smiths ndnscansicrsawdaeins 509 Murray v. Currie.......-. seauniee 514 — ». East India Co... 124, 147, 168 Mussey v. Davis..cecccceccees oo 243 National Exchange Co. v. Drew.... 571 403 Navulshaw v. Brownrigg.... 251, 420 Neal v. Irving... ..seeeseeeeeeeee 158 Nelson v. Aldridge .......... wei) 122 New Quebrada Co. v. Carr ....... 91 New Sombrero Phosphate Co. » Erlanger.......+.esecseoe 283, 370 Newall v. Tomlinson .... ... - 313 Newham v. May......essccesees 438 Newman v. Paine........ Siow sewers 294 Nichols v. Clent....... sseeeeees 894 — >. Diamond............ 177, 181 — »v. Marsland............0 «. 494 Nicholson v. Mouncey..........6 332 — vv. Ricketis........0.46 sees 27 Niell v. Morley....... eseuees Il Norris v. La Neve .......e sees +» 165 North Star, The............- snes 128 Norton v. Herron.......... eoeee 805 Nugent v. Smith.........06 495 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. PAGE. O’Brien 0. Lewis ...-sesereeoe+-s 294 O’Connor 2. Spaight........--++- 251 Okell 0. Charles. .....++eee- 177, 185 Olding 0. Smith. ....-seseeeeeee 137 Oliver v. Court ....+++ siapetovaare ae 217 Oom »v. Bruce......- B aisraceiemaaiaete 386 Oppenheim ». Russell......-+ 869, 378 Ormond 2. Hutchinson........+++ 294 Ormrod v, Huth ......ceesseees o- dol Osbery 0. Bowden....-.seeeeeeee 402 Oursell, Ex parte......ssseeeeeee 97 Overend, Gurney & Co. », Gibb... 277 283 Ogen v. Van Uster......+++- 177, 180 Owens, Re....e.sceeee avectneees «. 345 Paderson v. Lotinga ....-.+++ cove 207 Pain v. The Strand Union........ 19 Panama Gases eciesescsaciacoe aac 727 Panama Co. v. India Rubber Co.. 434 435 Pappa 0. Rose.......200 oscccces DAL Park v. Hammond......... 224, 230 Parke v. Eliason ..... peeres sare OF Parker 0. James....es.eeceeceees 231 ao, Meth wssigs coeaicneieasice 167 — v. McKenna........... 275, 279 —) Stoith. vss ea's ereieseis teense: 88) —— 0. Winlow .......06 seceeee 208 Parnaby 2. Lancaster Canal Co... 491 Parsons v. Lloyd .....eeeseeesees 129 —— 0. Spooner ..cccccecccerseee 59 Parton 0. Crofts......+.0+.. 122, 402 Pasley v. Freeman.......... .... 438 Paterson v. Gandasequi.. 235, 448, 449 —— 1. Tash .....00. eeesees 142, 420 Patten 0: REG caves sea caicsies awa - 481 —— vo. Thompson...........see0e 392 Pavy's Patent Felted Fabric Co., Re 867 Payne 0. Cave awe cseisiseas eevee - 121 Payne v. Chute .........se eee - 129 —- », New South Wales Coal, re CO. sakciwekontee Mike ek oma 5S Pearce v, Green..... siemens s sees 219 Pearson’s Case....s.eseeeees sees 280 Pearson 0, Cox..scscscsccses wees 498 Pease, Ex parte, Re Boldero.. . 97, 98 Peek v, Gurney ...66 wessesesees B31 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. PAGE. Peele 0. Hodgson .....++seseeee+ 442 Pelly o. Wathen ... ..essceescee 373 Pendleberry v. Greenhalgh ...... - 333 Penkivil v. Connell ...... Eseeemeals 188 Pennell v. Deffell......... vesecax, 98 Perkins v. Bradley........-+2--+- 160 —— v. Smith ............006 75, 3829 Peto v. Hague ....... soiea wings - 154 Phelps v. Prothero...........008- 403 Phillipine, The..........ssseeeee 375 Phillips 0. Huth..............- -. 416 —— »v. Phillips .......... eeecees 249 Picard v0, Hine ......cccesseesees 12 Pickard v. Sears....... sieee ans voce 427 — v. Smith .........-.00- 499, 500 Pickering ». Busk... 117, 123, 141, 411 426, 427, 483 Pickering’s claim ........... 174, 404 Pidgeon v. Burslem.....-.....+-- 118 Pigott v. Thompson..........+0.- 885 Phosphate Sewage Co. v. Hartmont 277 286 Pilcher 0. Arden ...... sigwinieien isie's 376 Pinkerton 0. Easton ............. 376 Pinto v, Santos... ..secceseeecees 249 Pitts 0. Backett.........06 e+ 202, 204 Planche 0. Colburn .......++ee06 - 485 -— v. Fletcher......eesseseeees 15 Playford v. Tel. Co...eeeceeeceee 242 Plumer ». Gregory...... Mewar 133 Pole v, Leask.....200 weeeveee 16, 22 Polhill ». Walter.... 74, 177, 179, 303 Pond v. Underwood..... ... 318, 415 Popplewell ». Wilson ..... -. 177, 184 Pordage v. Cole .....++ coeseee 80, 81 Portalis 0. Tetley.....-sseeesess+ 421 Potter v, Faulkner. ........... +. 526 Poulton v. London and South West- ern Rail. Co......se.eeeee 484, 490 Pow 2. Davis.....+ dadelededeseeet 802 Powell v. Divett.......- Siete 200 Pratt 0. Barber ...+...ss00. 216, 297 Prescott v. Flinn ......sseeseseee 140 Preston v. R’y Co ..ce-eeeeeee oo 58 Prestwich v. Pooley........- 120, 180 Price 0. Taylor ..e-secceesecccees 190 —— 0, Walker.....--++ 194, 197, 199 Prickett v. Badger.... ..seeceees 340 Priestley o. Fernie.......... 449, 452 XL PAGE. —— 0. Fowler ...sceces ceaceeee 504 Prince v. Clark..........eeseeee8 68 ——~ ». Oriental Bank Corporation, 8 Prind v. Hampshire............6. 327 Pritchard 0, Roberts.........+6+ oe BD Proctor », Williams...... ssicesaas 42 Proof v. Hines........... sesso 290 ». Leduc....... wisniseavalendiaiaossvatecs 383 Pym »v. Campbell......... -. 810, 312 Quarman >. Burnett ............ 503 Quebec Rail Co. 2. Quinn......... 44 Rabone v. Williams......... 396, 419 Railton ». Hodgson ......... 441, 442 Raleigh o. Atkinson ........... 83, 84 Ramazetti v. Bowring..... 65, 70, 139 Ramsden v. Brearley .......-..6 il Randall v. Trimen....... «oes 802, 303 Randelson v. Murray........ 503, 514 Ranger v. Great Western Rail. Co. 47 Ratcliff 0. Graves.........605 woes 247 Rawley 0. Rawley..scs.sseeoseee 66 Rayner v, Mitchell.........-.0008 481 Raynor 0. Grote .......00.05. 880, 384 Read v. Rann.... .......83, 336, 349 Reed w. Norris ......... oo--.215, 263 Reeve v. Palmer............ sisiececn DOL —». Rigby..... siieminisciicswinns. ol Reg.*v. Lichfield .......2... eee. 131 —— v. Windsor......ceceeeeeeee 125 —v. Williams.............2% - 3872 Reid v. Draper....sccccsecesccee 196 —— 0. Hoskins .......--se00..0. 157 Rex v. Beeston...... abies apres 33 — ». Bigg........ tiewseieews. 18 12 —— », Longnor..... niatelaeies 17 — ». Sankey..... .scceee éecaw ClO Reynell 0. Lewis......0- eeree-29, 158 —— », Sprye .. 477 Reynolds v. Howell.....esseeee Rhodes vy. Forwood.....-.e+seses Richardson v, Anderson..111, 116, 122 eeeee ere wereesrncvesce —— 0. Williamson...cscesvsece xxii PAGE. Ridgway v. Lee ...ssseeeveees oe. 373 Riga; Thee cwsivseenes a tareieiniaetiness 125 Right v. Cuthell........... 24,49, 50 Roberts v. Ogilby..... Sistem - 250 —— 0, Smith...cccercesveeceees 506 —— 0. Wyatt... ccceececee enacts COD Robertson v. French ..........- +. 280 — ». Kensington ............ «- 418 Robinson v. Gleadow ......... e+. 69 -—v. Mollett......... siazevarsceve -- 43 Rodger v. Comptoir D’Escompte.. 878 Roe v. Birkenhead, &c., Rail. Co.. 62 Rogers v. Boehm........ 224, 243, 248 ——v. Hadley .............. 309, 311 Rooke ». Lord Kensington........ 146 Rooth v. Wilson.........006 eevee 890 Rosewarne ». Billing .......-.4 - 113 Rothschild ». Brookman....... 13, 268 Rourke v, White Moss Colliery Co. 512 516 Rowe v. Hopwood....... sa%paxes: 6D Rowning v. Goodchild............ 838 Rowton, Ex parte ... ........e0e 97 Ruck v. Williams......... Sie eles 493 Ruffle, Ex parte..... sistaisieleesiaasaye 91 Rusby ». Scarlett........ eccerees 404 Rushforth v, Hadfield......... eee 369 Russell v, Palmer.........000.2-. 233 Ryall v. Roll..........4- asians 406 Sadler 0. Evans......... 803, 316, 405 —— 0. Leigh .....ccceececeenees 400 Sainsbury v. Jones...... so asrebseas 438 St. Aubyn v. Smart...........0.- 133 St. James Club, Inve..........4. 31 Salisbury, Lord, ». Wilkinson..... 248 Salomons v, Pender.......ssee0 « 344 Salte v. Field........ccececwsseee 87 *Sankey Brook Coal Co., Re....... 118 Sargent v. Morris..........ecee08 382 Saunderson v. Glass ..eeereseeeee 293 Savory v. Chapman..... eee 131, 132 Sawyer v. Goodwin.......see..0- 410 Sayer v. Bennet ...........ee00ee 160 Scarfe v. Morgan ............ 862, 363 Schack v. Anthony ...........2.- 404 Schmalz v. Avery.......... 883, 384 Scholefield v. Lockwood ....seee06 375 TABLE OF ENGLISH, IRISH AND CANADIAN CASES. PAGE. Schotmans 9, Lancashire and York- shire Rail. Co: oscosssewesweeees 377 Schroeder v, Mendl ...........--- 437 Scott, Cousing........6+. Siteamas ». Millington ... 85, 121, 122, 217 — v. North China Insurance Co. 65 66 Williamson 2. Barbour....... wsew 248 —v. Taylor...... foie isis latereistete’s 79 Willis 0. Freeman .........20005 . 821 — v. Palmer.........--00- 128, 168 Wilmhurst 0. Bowker.......-.++- 317 Wilmoth 2. Elkington ......... ea BOL Wilson v. Anderton..... Susiescen 251 —— >. Balfour.......... wieieVessietare 346 — ». Barker ........0000 wovee 10 — v. Fowler.............. 468, 499 a> (PU ET cea erieewn cerns ~ 404 — »v. Hart......... spareci ences 305 —— ov. Merry ....- eee ee eee elem 529 -—— v. Newport Dock Co .......- 227 —— ». Poulter....... aaiaaraaianers 65, 70 —— 0, Thorpe .-.-cereerscesceee 41 —. Tummon .... 49, 54, 55, 65, 70 — ». West Hartlepool Rail.Co.. 62 XXV PAGE. Wiltshire v. Sims ........... 119, 122 Winne v. Bampton.........-.06 18 Wiseman v. Vanderput...... 369, 377 Withington ». Herring ...... 148, 456 Witnell v. Gartham ...........-- 33 Wolf v. Horncastle ........... 1, 123 Wood) Ress cscsacttensseeecannicw 130 —— v. Argyle (Duke of)........ - 29 —— ». Rowceliffe..... . «02. 418, 422 Woodin v. Burford ...........06- 455 Woodley v. Metropolitan Rail. Co. 519 523, 584 Woodward ». Humpage...-...... 298 Woolfe v. Horne .........-. ee eee 121 Worsley v. Earl of Scarborough... 159 Wren 2. Kirton...........e. ec ees 224 Wright v. Dannah............ 15, 382 —— v. London and South Western Rail CO asisiesais sires eee O27, 529 == §.. Proud se sicaseeiae cid eviewers 291 =. 0; Snel cirenerarres smeceeeee 369 Wyllie v. Pollen ......e..00e 163, 164 Yates v. Freckleton .....-.2cce0e —— v. Hoppe....... eoevees al, Yelland’s case ..-cceceecsessceee Yorke v. Grenaugh...... isonet Yorkshire and North Midland Rail. Co. v. Hudson............ -- 44, 276 Young v. Bank of Bengal........ 90 Zinck v. Walker ......eeees+e. 95, 97 TABLE OF AMERICAN CASES. [THE REFERENCES ARE TO THE TOP PAGEs.] PAGE. Abbie v, Rood......eeeeeee coeeee 165 Abbott 0. May ...sceseeees vere 83 —— v. Rose......56. eesseee 139, 156 Ackenburg v. McCool.....-...6++ 333 Adams ». Humphrey.......-.+0- 148 — v. McMillan......... aeencee, 169 — ov. Power.......008 wesee 26, 82 —— 0. Roller.......cccssccevece 165 — v. Scales ........eceeeee 21, 169 Adams Exp. Co. 2. Schlastasei., . 189 198 — —». Trego....... 79, 143, 231 Adams Mining Co. v. Senter... 18, 23 Adsit 0. Brady....ce.sceseeesees 443 Aitna Ins. Co. v. Iron Co.......+ . 79 Ahern 2. Goodspeed .......0..00- 158 Aikin v, Bedford ....secsseeseeee 248 — v. Tel. Co........... sisfsaieigie: BOO Akerman »v. Dennison..........-- 655 Ala. etc. R. R. Co. v. Waller...... 660 Albro 0. Jaquith...........eceee 686 Aldrich 2. Printing Co........... 628 Alexander v. N. W. C. cee 462 Alldred v. Bray ......ceecee eens 72 Allene: Poole. «cs esssessewserves 231 —— ». Shortridge.........-2.++. 486 —— ». Suydam............. 198, 315; Allerton v. Allerton......... ... 605 | Allis v, Goldsmith.......... sone QT Alna, Inhabitants of, ». Plummer, 169 170 | Alsop v. Coit. ..ceeeesecoes ceeeee 815 Am. Ins. Co. v. Coster... .....+. 178 ——~ — ». Oakley.............. 167 Am. Cent. Ins, Co. », McLanathan, 149 Ames ». Log Driving Co......... 369 — v, Palmer....scsceerenee eo. 483 | PAGE. Amherst Bank v. Root....ee0.06- 208 Amiable Nancy, The.... ....... 812 Amison v, Ewing. ..e.sserecesees 443 Anderson v. Bruner...scesssecees 158 — ?. Mancrieff............ seoe 50 — 0. Gregg...... Be waiewepnrsyars 14 —— v. Rome, etc. R. R. Co.. 218, 220 —— v. State.....c.00. eeeee0 139, 341 ——». Sutton..... siesta wealaesr 183 —— 0. Weiser........ rptechccs 333, 333 Anderton v, Shoup ........ seseee 410 Andrews », Allen ......00. stasiames: QU —— v. Browne....... sictensimiorernelets 04% —— v. Estes... cc cccccwercnvece - 251 — v. Kneeland.........eese05 - 596 — v. Morse......seveeee sevens 499 — »v. Suffolk Bank............. 195 Antram v. Thorndell....... aacner U4 Arctic F. Ins. Co. v. Austin....... 646 Arents v. Commonwealth ........ 598 Armitage v. Widloe..... eooee 18, 71 Atkins v. Johnson..,.....-eesee 481 Atlantic Ins. Co. v. Sanders...... 71 Atlantic, etc. R. R. Co. ». Dunn... 627 Ardesco Oil Co. ». Gilson...... eee 645 ' Armstrong v. Clarion Co...... . 481 , au v. Cooley... ..eceee vecereee 624 — v. Elliott......... iy de eveeare - 861 —— v. Smith............ eeereee ODD Arnold 0. Clifford ..........c000 481 Arnot v. Coal Co... .e.seeeee eee 49 Arrot 0. Brown.......6. soe. 312, 813 ' Ashmore v. Towing Co....... soos 219 Aspinwall v. Torrance............ 407 Astor 0. Wells........cecceseece 231 Atlantic & P. R. R. Co. v. Reisner, 23 136 TABLE OF AMERICAN CASES. xxvii PAGE. PAGE. Auberry v. Fiske ........0006-2. 343 | Barker 0. Garvey ...-.eeeseee 414, 524 Audenried ». Betteley....... seeee 122 | ——o., Dinsmore...-......-- 543, 544 Aultman v, Lee .......- eidinlscaisies’s 159 | —— v. Ins. Cor... cece ee cece eee 250 Aurora Ag. Soc’y 0. Paddock..... 89 | ——v. Wilson ........eeceeeeeee 12 Austin 0. Daniels.......... seeeee O08 | Barkley v. R. R. Cov... seen eee 570 —— v. Steamboat Co......-6. ... 318 | Barlow v. Cong. Soc...... eaxeass Dol Averett 0. Murrell.......... -..-- 624 | Barnard », Monnot.......... 450, 454 Avery v. Halsey....... oseeee 473, 481 | —— v. Wheeler..........0e00- 601 Aycrigg v. R. R. Co.......++.+++ 625 | Bernardo v. Kobbe ........+65 oe 343 Barnes 0. Gas Co...eseseeeeceeee 232 —— 0. Means.......--- eee eseee COD Barrett v. R. R. Co....- de Wiapersracets 165 Babcock v. Deford....... Sansteee ASD: Barney ». Saunders.......ececees 884 Babin’s Succession........eeee+e. 112 | Barr v. Schroeder.........seee005 111 Bach v. Emerich...........20000 453 | Barrow v. Brown..... Beige arate 223 —— 0. Hill... ee ee eee cece eee ee 454 | Barrows 0. Cushway........eee0: 115 Bailey v. Chapman .......--....- 454 | Barry v. Berringer............065 492 —v. Mayor...... Sboemenane ee, 443 | —— v. Page.....sccsccccenenses 270 Ph SHAW ie ccecaccterw se wiarawreneasias 491 | —— 9. St. LOWS. ese. ccssaeennee 645 Bain v. Brown......-.eeese08 333, 369 | Bartholomew v. Leech....... 333, 358 Bainbridge v. Downie............ 512 | Bartlett 0. Crozier ............66 443 Baker 0, Cook yeaisvieessictelewisrau ys 498 | —— », Hamilton...... Sierras 461 10. Colbersins os ieee aacna esas 68 | —— », Tucker... .cscccccccceees 406 = 0 Dirtkes iscncavenwreoiene 149 | Barton 0. Moss...........6. 393, 358 —— v, Kennett ........ eee eens 12 | Bashore v. Whisler.............- 171 Baldwin v. Ashby ........2eee50s 220 | Bass v. R'y Co.....00e haxse ese ONE —— v. Burrows ...... ee eee eereee 85 | Bassett ». Brown....... avieteliovidy O10 — v. Leonard ....... cee ceaee 414 | —— 9, Lederer..............000 173 son) Potters. atanuwwwannieuiiir 339 | Bates v. Stanton..........seeeeee 345 Ballard ». McKenna............. 13 | Bath ov, Caton.........eeeecenene 294 Ballou v. Talbot ...........-. 249, 442 | Baxter v. Roberts......eeseeeeeee 655 Baltimore, etc. R. R. Co. ». Blocher 627 | —— v. Lamont..........+4. 185, 140 Baltzen v. Nicolay......-. 403, 406, 414 | Beach v. Branch........e.see.00 473 Bank of Beloit v. Beall........... 88 | Beal ». McKiernan........ 4, 358, 359 Bank of Br. N. Am. v. Hooper.250, 410 | Beall v. January.......eeseeeeees 85 Bank of Hamburg ¥v. Johnson. .144, 155 | Beals v. Allen......... ier Silene 135 Bank of the Metropolis v. N. Eng. $===5:) DEO wsawedawenvcusune seis 13 Bainkiiccscavinavewawsacaianiiees 492 | Bean v. Howe........-ceseeeceee 3 Bank of New Hanover v. Kenan.. 325 | Bearce 0. Bowker........seeeeeee 544 Bank of N. Y. v. Vanderhorst .... 116 | Beardslee », Richardson.......... 828 Bank of Owensboro v. Bank. .79, 88, 94 | Beardsley 0. Duntley..........0. - 525 307 | Beaubien v, Poupard...........+ 369 Bank of U.S. o. Washington..... 421 | Beckley v. Newcomb..........00 183 Banks v. Judah .........seeeeeee 372 | Bedell v. Janney............ 339, 341 Banning v. Bleakley............. 292 | Bedford Com. Ins. Co. 2. Covell.... 248 Bannon v. Warfield............665 79 | Beecher 0, Venn.......eseeeerees 166 Barber v. Britton ............ 525, 620 | Beeson », Beeson......eeeeee seem BID Bardo: Yohitisiaisos». King, 461, 535, 536, 539 | Forster 7. Fuller............. 250, 267 Farmers’, etc. Loan Co. v. Wal- Forsyth 0. Day.....eseeeseseceee 65 WOTED 0:0 tisie sieisds are ain deren wei sare 85 | Forsythe v. Beveridge........ «.- 499 Farmers’ Mut. Ins. Co. ». Taylor.. 193 | —— v. Hooper .......--seeecseee 645 Farnsworth ». Hemmer.......... 462 | Fort Wayne, etc. R. R. Co. v. Gil- Farrar 0. Duncan.......sseeee oe 142] dersleeve.......... sseeee 655, 659 Farrington v. Meek........se005- 167 | Foss 0. Chicago ....+..sseesseeee 53 — v0, Woodward.......... sees 167 | Foster v. Essex Bank......... 195, 328 Farwell 0. Howard....... seweeexis 90) ===) Perseh csecsasaeacnanee ae 415 —— 0. Meyer.......ceeeereee 49, 88 | ——o. Rockwell ......e+--seeeee 90 Fatman 0. Leet.......eeeeeeeee . 185 | ——o. Smith......... 175, 511, 531 Fawcett 0. Osborn.....- 201, 542, 543 | Fouch v. Wilson .....2eeeeeeeees 80 Fay v. Richmond.......-.ee-+ .-- 158 | Fowler. Gold Exchange Bank. .85, 89 Fearn v. Mayers.......eee0 soeee 480 344, 473 XXXIV Fox v. McGregor.... .esceeesees 491 Francis 0, Edwards.........0++++ 223 — v. Kerker ........... 89, 369, 461 Frank v. Jenkins .......... 88, 97, 174 Frank Moffat, The....cesseeseees 646 Frankfort Bank v, Johnson......-. 167 Franklin 0. Ezell ........e.00. 59, 142 — ». Ins. Co.......... aeeeee.6, 193 0), LAW ac s.cawisvenisapeie aes 443 —— 0. Osgood... ..ecceseeccecs 44, 45 Franks v. Morris ......26 seeeeee 358 Fraser 0. Wyckoff....... +e-. 449, 461 Frazier v. Erie Bank.... ......-. 524 Freelove v. Cole .......+8- +092, 398 Freeman 2. Clute.......+.- aisiewee OL -—— v. Hartman .......... sessee O00 Freese 0. Crary......- sisihiaeieietetoa.’ 272 French v, Reed....... sewing eeeee 300 Friedlander ». Cornell....... 198, 194 Frissell 0. Haile........-seeceees 499 Frothingham v. Everton..... 812, 315 Frye v. Lockwood ...... ...05 eee 420 Fullam 0. W. Brookfield......... 240 Fulton ov. Alexander .......seseee 328 Furnas 0. Frankman.......53, 57, 189 Gage 0, Allison .......cccseceeee 117 Gaines v. Briggs.......+ e++-100, 439 — >. McKinley...... wraKenemiss 158 Gale 0. Tappan....cccsesseeesees 116 Galena, etc. R. R. Co. v. Rae..... 639 Gallaher 0. Thompson .......+0+6 303 Gallup v. Lederer....... 149, 1738, 193 Galt v. Galloway...... siuuserateres 116 Galvin 0. Bacon ....e- winters eree 048 Gambert v. Hart..........-- sees 803 Gardner 0. Gardner.......eeeee0+ 26 —— v.Ogden.........20.6 se «ee 392 Garland v. Reynolds....... jesse 512 Garrett 0. Gonter.....ceessseveee 66 Gates v. Graham .......-...e0e8 % 27. Gaylord 0. Stebbins........ + coos 164 Gans v. Ins. Co... .. 00 scene neces 231 Gasway 0. R. R. Co... .eeeeeeeeee 577 Geiger v. Bolles.......+-see.0e +. 205 George ¥. Fisk.........0.eeeseee 318 Gerrard v. Moody........s00 414, 586 Qorich » Mahar 1ha 1a7 TABLE OF AMERICAN CASES. PAGE. Gettings 0. Scudder....eessseeeee 829 Gibbons v. Gibbons......ee+esees 112 Gibson 0. Colt.....eeeccene - 163, 596 — 2. Goldthwaite.....-.+- éeess: 19D — v.R.R.Co..... Sri was es 659 —— 0. Soper... ese eeeeeee sreveas: AS —— 0. Stanton.......cesseeeeeee 490 Giddings 0. Eastman ........... 899 Gilbert », Holmes ..... - 111, 117, 182 Gill o. Bicknell......... sialebevain cases 170 —— v. Middleton............ 825, 3827 Gillaspie v. Kelley .....-eeeeeseee 156 Gillenwaters v. Miller -.......... 300 Gillespie v. Wilder ...........00. 450 —— v. Worford ......6. aiviere: terete 1D Gillett ». Corum......-..seeeeee- 454 Gillis 0, Bailey ......eeccsecceess 53 Gilman v, Brown.......+. seianww 50 10) Re RiCvessciswesiccceawn 660 Gilmore v. Newton..... ie ececavaiet dae 543 Gilson v. Colling..... .ssseeeeees 314 —-. Guinn...... ssemauewtenn ASO Glenn ». Salter..... ewe. Basins 449 Glentworth v. Luther .... .....6. 172 Gogg v. Vetter...cceseccsecerees 624 Goddard v. R. R. Co.....ser sence 623 Gokey v. Knapp......+6. Wading 49 Golding v. Merchant........ 186, 189 Goodall ». Wheeler.......... ... 148 Goodenow 0. Tyler ......... 174, 175 Goodman ». Meixsel...........-- 168 Goodspeed ». Cutler ......... seee 66 — vv. Haddam Bank........ ose 628 Goodwillie » McCarthy.... 175, 179 Goodwin 0. Bowden ......ceesee0 lll Gorham 0. Gale........sceeeeees 444 Governor 0. Daily.......e.eeesee5 17 Gowen Marble Co. ». Tarrant..... 28 Grace 0. Mitchell... ....ceee.02. 473 Gracy 0. Potts .......... ieee ane 88 Grady 0. Ins. Co......-... Saisie 58 Graham v. Duckwall.... 3, 4, 178, 174 513, 527, 582 —— ». Savings Inst............. 157 Gramm 2. Boener ..... aie Ease 303 Granger 0. Hathaway............ 420 Grant 0. Hardy.......... sondeuay 463 Grape Sugar Co. 0. Small... .... 76 Anaena a Oninw ro TABLE OF AMERICAN CASES. PAGE. Graves’s Appeal ......00. so0e0) 334 Gray 0. Hook..... ececcvccceress 464 —— 0. Murray...... Saeentawnaes 57 Greely 0. Bartlett......... seaseaie LTD Green 0, Goddard .....ees senses 473 — 0. Miller.... ...... eee 44, 46 Greene 0. Haskell........ taeeene 586 Greenfield Bank ». Crafts......-.. 66 Greenfield’s Estate....... 388, 396, 397 Greenleaf v. Moody .........-. 175, 293 Greentree o. Rosenstock.......... 339 Greenwooc v. Spring .......++. 18, 370 Greer 0. Higgins....... seb eee an - 220 Gregg v. Robbins......cssceeeee - 177 Gregory v. Stryker ......esseee0. 485 Griffin 0. Colver....cssecscessees 312 Grimshaw ». Paul..... Steeewnes - 218 Grinnel v. Tel. Co............-. - 333 Griswold 0. Haven .......... 220, 605 Groover v. Warfield ...... eeereee 50D Grover & B. Machine Co. ». Pol- emus ...-..eeceveeescveee 20, 168 Grumley 0. Webb......+..++.809, 869 Grund v. Van Vleck........ .. aie he) Guernsey v. Cook..... a sees eeu 409 Guilford vo. Stacer.......-....... 147 Gulick v, Grover .....25, 135, 144, 155 Gundlach v. Fischer -........0605 104 Gunn v, Cantine .......eeeeeeeee 512 Haas 0. Damon ...eeseeseeee ooes B09 Haff v. Blossom.....scccssoessee 56 Haines v. Bequer...-secesecesees 450 Hale v. Johnson. ...e.ceesecesess 645 Hall vo. Huntoon .........eeee0ee 1271 —— 0. Marston......ccceeeveree 436 —— 0. Smith....ccesscccesvcees 156 —— 0. SHOITS ..-.eeceeeee --.149, 160 Ham 2. Boody ...cccsesesesssecs 88 Hamilton 0. Wright.......ss.ees 183 Hancock v. Gomez ....0+..-+ 343, 427 —— 0. Yunker....-seecccccccses 309 Hanford v. Shapter.......----+-- 451 Hanks 0. Drake....eseeeses cove 90 Hanlon v. Ingram.....--++ ocseee 624 Hanover Water Co. ». Iron Co.... 219 Hanson v. R. R. Co..... se eal - 628 Hapgood ». Batcheller.......-++. 175 XXXKV PAGE. Hard 0. R. BR. Co.cee-secsces cess 684 Hardee v. Hall........e.eeeeeeee 175 Hare v. Reese.......66 Sete tevev ews 829 Harkins v. Sugar Refinery........ 663 Harmon v. Houston........+6- 58, 155 Harper ». Little .........006- ooee 116 Harralson v, Stein........sceeeee 53 Harris v. Babbitt.......... vavees 208 — v. Galbraith... ....ceeeseees 183 ——», Nicholas.... ........620, 621 —— v, Simmerman ............. 159 Harrison v. Deramus ......0. .2. O74 —— v. Mitchell............ee0e 72 Harshaw v. McKesson ........... 26 Hart v. Bridgeport .......... ... 627 —v. Farmers’, etc. Bank ...... 232 50), WOOdB asses dadina serewreeue 169 Hartford Fire Ins. Co. v. Reynolds. 6 — — »v. Smith ...........00. 155 — —». Wilcox............ 23, 44 Hartley’s Appeal ............... Ill Harvey 0. Turner......ssceeasees 313 Haskit ». Elliott........ Seisneaaw DBD Hastings 0. Lovering ...........- 248 Hatch v. Bayley......0. seocsees 520 — v. Coddington.......... 166, 570 Hathaway v. Cincinnatus........ 19, 86 Hathorn v. Richmond..........6 303 Haverhill M. F. Ins. Co. o. New- Wall) ssaesisisesoxcoan win vanes 250 Hawkins v. Lange......... wavates: “90 Hawley v. James,......ee.seeeee - 53 — v. Keeler.....-s.e0 sreigiateevess 44 Haydock v. Stow ....6. wien oreras «+. 163 Hays v. Mouille......... seoreees 003 —— v. Shattock .......4.. seme 183 Hayward 2. Ins. Co. ......eeee eos 282 Hazeltine v. Miller ...... 155, 198, 206 Hazleton 0. Batchelder...... .... 85 Heard v, Brewer..........-- 486, 517 — vv. March....... ereieseme eae 44 Heath o. Glisan...............8. 803 Heddens v. Younglove........... 339 Heinemann v. Heard.... 295, 308, 312 Heinrich v. Korn....... 449, 450, 453 Helmer ». Krolik....... eiateeipeeiors 19 Henck ». Todhunter ..........00. 183 Henderson 0. Cummings..... ... 85 — »v. Ford......... vawienivsee: 129 XXxvi PAGE. Henderson v. Hydraulic Work.... 115 Heny ». Fine......-- dceeetecrone 13 Henry 0. Raiman...-..eseeeeee ». 392 — v. Warehouse Co...seeeeeee 544 Henshaw v. Noble.....---+ icsosee 408 Herrick ». Gallagher........ 420, 421 Herring 0. Hottendorf........++- - 148 Hess 0. Voss........ceeeeee aeace BOL Heubach ». Mollman.....- wees 4, 262 Hewey v. Nourse......-+- ares 622 Hewitt v. Swift....... weseeeeawsay Ao Hicks 0. Minturn... .....eeceee 297 Higgins v. Moore........-.- 173, 174 —— 0. BR. RB. Co... csc een ees +. 628 Hildebrand v. R. R. Co.....e.e- 660 Hill o, Brinkley........ iseatbieusts 499 Hilliard v. Richardson......+..-- 645 Hills v. Bannister.... ...+ wielteas: 200 —— v. Upton........06 apace 156 Hinckley v. Arey ...--sseee -. 4, 18 Hinde 0. Smith...........00.. sea) BIZ Hinds ». Harboll.......... sea 686 — »v. Henry........005 oe. 448, 449 Hitchcocks v. Burgett.......0..-- 303 Hitchings ». Van Brunt..... 887, 388 Hoadley v. Transp. Co........- -- 318 Hobart v. Lemon........ sebrarainecets 16 Hockenbury 2. Carlisle........... 395 Hodge v. Combs.......+.0¢ srmews. 206 — v. Comly......0.- SSasweater 512 Hodges v. Screw Co....-eseeeeeee 875 Hogan v. R. R. Co....--... «+. 600 Holbrook », Wight.........-.... 343 Holcroft , Holbert........ weeeeeey AIT Holdridge v. Gillespie........... 859 Holker v. Parker ........seceee0+ 165 Holland o. Hatch......0.-seeeee- 156 Holliday o. Davis..... bierasbeecernccerere 294 — ». Kennard............. voce 299 Hollingsworth v. Napier........«. 503 Holloway ». Stevens...........00. 168 Holmes v, Peck.........-.0. eseee B03 —— », Rogers ........ Sidwisie Keats 165 Holt 0. Whatley.......... ooo .645, 646 Holton v. Smith..........00. eee. 164 Home Life Ins. Co. 0. Pierce...... 139 Homer v. Lawrence........ Pwess 438 Hone v. Henriquez..... ialawiereiniciess 491 Hand 1 Rahnactarl 929 TABLE OF AMERICAN CASES. PAGE Hood ». Hallenback......- 2-200, 263 Hoover 0. Wise...+-eesecsceeceee 232 Hopkins v. Forsyth.....+.+eeseee 495 Hord v, Grimes.....-seerseeeceve 303 Horner v. Nicholson .......eeee0e 655 Horton v. McCarty....... dieiersiey veces LTO) Hortons v. Townes......-eseecees 83 Hoskins 0. Johnson..........-+-. 148 Houghton o. Nat. Bank........0. 195 Houseman ¥. Building Ass’n...... 232 Hover v. Barkhoof............-.. 443 Hovey v. Blanchard...........0-. 232 —v. Hobson........0ee00 eee 13 —— 0. Magill.......ceeereee oeee 249 Howard ». Clark ....... sidleejerieioys 473 —— 0, Duncan.........ccccceers 65 —— 0. Grover......-..eecees 803, 329 —— 0, Osceola. ..cccseccccccseas 497 Howard Ins. Co. v. Halsey........ 232 Howe v. R. R. Co... 2. ee eee eee ee 473 —— ». Southerland.......... sees 303 Howe Machine Co. ». Clark....... 22 — ». Linder ............. wwnss 5720 — »v. Soudar........ aeeeeeds «-. 220 Howell v. Baker.......20.. orients 391 === 9, RansOM. semdiscen.s gersee-e-ss 388 Howland v. Woodruff........ 547, 548 Hoy v. Reade. ........68. «+490, 492 Hoyer v. R. R. Co...... seceseess 684 Hoyt ». Shipherd........ .... oo. 461 — v. Thompson......scecesees 195 Hubbard o. Elmer...... sieieehine 206 Huber v. Zimmerman............ 154 Hughes v. Washington .......... 370 Hulse v. Young ..........0.. 171, 513 Humphrey v. Browning.......... 496 —— 0. Havens....scccecseeeses 79 Hungerford v. Scott ....... veccee O14 Hunt v. Haskell...............0. 491 —— v. Rousmanier...... 111, 116, 117 Hunter v. Iron Co.....eseeeeeeee 605 —— ». Jameson .....-.0.06 eoeee 158 —— o, Miller cccncacaewexdse tee 271 Huntington v. Knox ..... 505, 506, 581 Hurd v. Marple...... «- 79, 89, 91, 144 Hussey 0. Allen ......eceeeeseees 178 Hutchins ». Brackett...... -- 443, 444 ». Hibbard.... .... Siatavauravses 111 Thhatahin ma a Maan nnn AEN TABLE OF AMERICAN CASES, Xxxvii PAGE. PAGE. Hutchinson v. Howard.........-- 499 | Johnson ov. Barber........066 439, 624 -—— 0. Pattes...... se Baer Sete 499 | —— v. Buck.....seeceeccceeeeee 169 —o.R.R.Co......- soeessee. 627 | —— 0. Campbell........ 175, 300, 492 Huzzard vo. Trego......-- coeences BOG | — 0. Cleaves....+ secvcerecees 582 Hyde v. Cooper .....eeeeeeeeecee 89 | —— ». Cunningham........ 57, 59, 60 —— 0. Friel. .....cccccccscccses 318 —— 0. JONeS..cersccceee +2193, 596 Ill. Cent. R. RB. Co. 7. Downey.... 627 | — * O'Hara. ..seeeeeeeeeseeee 34 Indianapolis, etc. B. BR. Co. 2. An- —— v. Smith ........ eoenece 271, a05 fHGHY sos wneevreene se gee Gas | —— 7s Wate cencentansennes ae —— ov. Flamgan.......+-.ssseee 659 | —— ?% Wilcox...--.+. sereeerees 116 Se ee ves. (Gag || Oe WANE A Resters cinta 177 Ingerson v. Starkweather... ...- 369 Johnston 0. Brown....++++- Sates 37 Ingle v. Hartman. ......+00- wee. B79 | Jones 0. Adler....00 ceeeeees 451, 461 Inglehart 0. Hotel Co........+06 414 | —— ® Hart . ee 512 Ingraham v0. Whitmore.......... 17d | Hodgetts sine iat anise 544, 570 Irish 0, Webster ......+sseseeees Be ee ee ee nore ce fonda: B, Re Obs oa 020,69, Cr | Co, Peenboumeciaw eins 414, 588 Ish v. Crane ..-sseecseeee aa 116 |——? Morrill ..++++++ epee 488 Ives v, Tregent. .ecocccscceseees 170 | 7% Ransom ...+seeeseseseees 185 ; Joslin v. COWEO. ..eece sesso seen 174 Josslyn v. McAllister........- 100, 4389 Joyce v. Duplessis ........06- 142, 147 Jackson 0. Bartlett ...-sessessees 186 Judevine v. Hardwick.........89, 333 -—— 0. Hodges..... ee ceeenneeee 206 | Judson v. Sturges...... basa resaye eee 293 —— vo. Leek... .ccceseeee siete ags 231 — v. Ludeling ......eseeerenee 875 —— 0. R. BR. Co cee ee seen e eoee 620 | Kalamazoo Manufg. Co. 2. McAlis- —— 0, Sharp...csecececeeeesees Ql] terrcsseceeeeesees esa guneeiaae steed 219 — . Winslow .....-- seneeeees 281 | Kasson 2. Noltner.....++. ++ -193, 198 Jackson Ins. Co. ». Partee....117, 505 | Kehlor v. Kemble........ ... 90, 91 Jacobs v. Warfield .....-.see--0- 112 | Kiser v. State........6 Sieietes sells 5 87 Jacot 0. Hmmet...coceecscserees 835 | Kelly 0. Coal Co.....2-2 008 sie 139 Jacques 0. Hdgell......seeeeeeees 467 | —— ». Mayor..... siursiateistelsieineia e's 645 James 0. Bixby ...-+.e+. 177, 178, 414 | —— 0. Munson .........eeeeeeee 506 — ». Borgeois...... Gxer. Hollenbeck .............. 488 —— ». Manning...... Biers aee els 335 Mansfield v. Dorland ......-..005 499 — v. Mansfield. ........eeeeeee lll —— v. Watson ..... Seni eewicas 14 Mapp 2. Phillips........... o00 22, 79 Marbourg v. Smith....... sevceee 165 Marchand »v. Loan Ass’n......... 75 Markham 0. Jaudon.........00 . 149 Marlett v. Jackman............4. 116 Marsh v. Gilbert .........-ee0006 570 Marsh v. R. R. Co..........6. 49, 620 —— v. Whitmore........ 211, 369, 370 Marshall v. Beeber........eeeeeee 543 SSOP All cecssovnaaware aah geet DOS — v. Williams ......... wsounun 90) Martin v. Farnsworth...........- 135 — 0. Hawks ......cecsseceee -- 499 — v. Silliman... .cesccssvcere o- 404 —— 0; BMIth, + sdcaesecssioee care - 488 Marvin v. Elwood.......... - 843, 345 Mason v. Bauman............ 333, 361 Mass », Livingston.............6 251 Mass. L. Ins. Co. », Carpenter .... 461 — v, Eshelman ........... 231, 577 Masterton v, Mayor.........ee0.- 312 Matthews o. Fuller............ 90, 198 — 0 Light...,...ccccseesenes 358 Matthiessen, etc. Refining Co. ». McMahon.............-06 130, 131 Mattlage v. Poole......sseeeeeeee 588 Mattock v. Young..........ee.00e 205 Mauran v, Lamb..............00- 512 Mauri v. Hefferman............. 415 Maus v. Worthing............60. 26 Maxey v. Heckethorne............ 22 May ». Mitchell............. ereee 164 Maye ». Cogdell.......0...eeeees 165 Maynard v. Mercer ............45 204. Mayor v. Crowell.......... wicca 208 Oy Hort sin aisteieieis aver nels eters 208 0, Stables cvs eaiecss cas saveas: 156 05, INS CO erase sn rnesaniseawen 628 McAlpin v. Cassidy.............. 142 McBean 0. Fox. .....ssecscessees 158 xl PAGE. McCafferty 0. Spuyten Duyvil..... 645 McCants v. Wills.........4 coseee 294 McClanathan v. R. R. Co......-- 645 McClave v. Paine.......-.-6- 450, 451 McClellan v. Parker........ceeeee 414 McClenaghan »v. Brock........00- 620 McComb »v. Wright........s006+- 169 McConnel v0, Brown. .......eeeeee 183 McCormick v, Bush.......... 22. 468 —— 0. Littler........ ccc cee eee 13 — vv. Wheeler......... 2... 232 McCracken ». San Francisco...... 7 McCulloch », McKee...... siedvesttact 159 McCune ». Erfort.......-.eee.00- 449 McCurdy v. Rogers .........-.006 406 McDermid ». Cotton.. ....... 191, 307 McDonald v. Napier ..........+4- 499 McEwen v. Mayzck........ eee 53 McGavock v. Woodlief ....... 449, 450 McGenness v. Adriatic Mills...... 219 McGoldrick v. Willits............ 22 McGraw v. Godfrey........06 414, 586 McGregor v. Gardner.......+-.0- 112 McGrew 0. Stone.......ceseeeeee 318 McGuire v. Grant ....... damearcies 645 McIntyre v. Carver ...essseeeeees 485 — ». Trumbell...........+..0. 444 McKay ». Draper ....-..-.-00 «» 845 McKinley ». McGregor .......... 17 McKinzie 0. Nevins .... ..2....- 270 McLaren v. Hall ......se..seeeee 13 McMahon 2. Sloan...........e00e 544 McMurtry v. Brown .... 12.0006. 26 McNabb ». Lockhart ..........+. 328 “McNemee 2. Relf............ sees 168 McNaughton »v. Partridge ......26, 27 MeNeilly v. Ins. Co ........ eves 570 McNevins 0. Lowe ......2...0.2- 329 McPartland 0. Read..........00. 439 McVeigh v. Bank .......... 2. -- 160 McWhorter 0. McMahon.... .... 27 McWilliams ». Detroit Mills...... il Madeira v. Townsley ............ 295 Meade o. Brothers........... 205, 236 Meany v. Head............. 0008 483 Mechanics’ Bank ». Bank of Wash- NPN cesses eidnwowcawscesas « 250 ——— —. Merchants’ Bank.... 211 —— — ». Schaumberg......... 232 TABLE OF AMERICAN CASES. PAGE, Mechanics’ Bank v, Seton....-... 231 Mechanics’ & T. Bank ». Farm- ers’ & M. Bank.....-.-.00. 544, 548 Meehan v. Forrester......- ainsi 80 Meeker v. Cleghorn...... o---414, 415 Megary 0. Funtis........eeeeees- 184 Mehan v. R. R. Co... sss eee wees 682 — . Williams ..........02.005 232 Melvin v. Ins. Co...... eee 148, 165 Memphis, etc. R. R. Co.. Thomas 660 Menkens 0. Watson .......2...-. 85 Merchants’ Bank v. Hayes... .249, 250 ——— v. Rudolf............6. 195 —— — ?.State Bank.......... 167 Merchants’ Nat. Bank ». Nat. Bank ...... Mai aoseianyisiew 195 Merrick ». Wagner........... oe. 148 Merrick’s Estate.... 117, 270, 505, 506 526 Merry 0. Lynch .......e.eeeeeee 117 Merryman ». David..... a Vee eeaeistars 333 Merserau v. Ins. Co.....-eeeeceee 136 Meicalf v. Denson........0.0.00 420 Metz ov. R. RB. Co... see ceccccees 646 Meyer v. Baldwin.......... 79, 89, 168 —— ». Hanchett ............. 19, 462 —— v. Morgan .........06. 88, 90, 91 Michaels », R. R. Co ......- cseee 818 Mich. Cent. R. R. Co. ». Dolan... 660 — —— 2. Gougar ......... 155, 220 —— —— v. Leahey .... we0e oes 663 —— — ». Phillips ......... 543, 544 Mich. State Bank ». Gardner..... 542 Michoud 2, Girod........... ssc'ee BID Middleton v. Findla ............. 454 Milbank v. Dennistoun........... 293 Miles v, O'Hara..cee..eeeececeee 260 Milkman vo. Ordway ........ wawies Oa Miller v, Board of Uducation....79, 85 —— v. Excelsior Stone Co........ 91 —— 0. Findley ............ eeeee 14 —— , Gravel Road Co.......... 617 — ov. Lea............. 525, 527, 532 — v. Martin..... Wigs tetaresavereroovers 624 Milligan v. Lyle.............. eee 262 Milliken o. Byerly............... 4 Mills ». Hunt....... 248, 298, 409, 414 Oy Mills ctercrcs tee nviviasccoreracvvese 387 Milwaukee, etc. R. R. Co. o. Arms 297 TABLE OF AMERICAN CASES. xli PAGE. PAGE. Minor ». Bank ...........++02+++ 167 | Mound City Life Ins. Co. ». Huth, 53, 71 Minard v0. Mead........0: 005 e+. 203 | —— ——v. Twining ..........-. 20 Mintum 2. Main..........00. 171, 513 | Mowatt ». McLelan........++- eee 420 Missouri R. R. Co. ». Maun Co... 27 | Mullen. Keetzleb..... cervccsoee 463 Mobile, etc. R. R. Co. v. Aahenstt, 220 | Mumford v. Murray ...... aiereisiate - 335 —— v. Thomas....... singeee 231, 659 | Mundorff v. Wickersham.......- . 533 Moinett 0. Day ...... teaevecesees ood | Munn v, Commission Co.......++ 596 Monson v. Hawley.........06- 183, 185 | Murphy ». Ins. Co. ....--..+ee eee 139 Montague v. R. R. Co.... «26.66. 620 | —— »v. Ottenheimer ....... Sieewienr DAO: Monte Allegro, The. .........06 - 171 | Murray v. Brooks..... aiesmesinny 158 Monttort 0. Hughes............4. 438 | ——». Toland .......eceeece eee 512 Montgomery Bank v. Albany Bank, 438 | —— »v. Vanderbilt ........... 427, 436 Montgomery Co. v. Robinson ..... 334 | Mustard v. Wohlford .........+++ 12 Monument Bank v. Globe Works, 620 | Mutual Ben. Ins. Co. ». Carmon .. 525 Moody v. Stnith.........0e. eee 27, 851 | Myer v. Jacobs.....eeesseceeeees 492 —— 0. Webster......sceeeeereee 492 | Myers v. Walker......cseeeeeeee 460 Mooney »v. Elder..... eSasaieie 449, 454 | Myles v. Myles.....-.-eese0 sees 294 — v. Musser........ Saaipeeeens 174 Moore v. Appleton..........+ 473, 474 — 0. Barnett......06-. te eeeeee 56 | Nash v. Mitchell ......... steraiyaies 206 — 0. Bracken ...00-seeeee +--+ 391 | Nashville L. Ins. Co. 0. Ewing.... 168 — v. Gholson.....-.eee.ee eesetete: OAS = gi. (arPOll carte causeewkiccaes 684. — v. Hitchcock..... ec er ne reeee 485 Nat. Bank ». Merchants’ Bank.... 211 SP, SHON viva sincine 6 Baie wee were’s 103 | Nat. Iron Armor Co. v. Bruner ... 140 v, Thompson ...... seat eens 292 Nat. Life Ins. Co. . Minch, 89, 232, 533 Morgan v. Congdon...... pGawaleeis 485 534 —— 0. Darragh....e.eeeeeeeee 24 | Neal v. Patten .......+ Sameigerins 23 —— v. Tener... esses eevee veneers 294 | Neilson 0. Brown.....+-sseeeeeee 364 Morrall v. Dumagene .....---.+0- 467 | Nellis v. De Forrest.....0.+eeeee- 829 Morris v. Bowen....+..eseeeesees 158 | Nelson v. Cook ......0 oe 22473, 481 — v. Ruddy.....-+se00e eeeeeee 172 | —— 9, Cowing......seeeseee eee 158 —— v. Summerl.....eeeeeeeerere 300 | Nesbit v. Lockman....... 872, 387, 396 —— 0. Watson....-ccccesecesece 164 | Neuendorff v. Ins. Co.........6- 19, 20 Morrison v. Bonmay.....--++-.+++ 240 | Nevan v. Roup.....-.e-eeees 485, 486 —— 0. Davis... ecescenccccvecs 318 | Newall v. Hurlburt......... eiaiialdls 85 Mortimer v. Cornwell ......--.++- 27 | Newbert v. Cunningham........ . 498 Morton v. Dean..e.e..eeeeeee 169, 170 | Newbiggin 9. Pillans ........... 16 ats Seull. snesisrsien sie 139, 525, 577 | Newcastle Manufg. Co. ». R. R.Co. 270 Mosell v. Codding ....- cance eens 251 | Newell v. Smith..... iiauavmaes - 68 Moses 0. Bierling .....++s.+0+ 450, 454 | New Eng. Mar. Ins. Co. v. De Moss 0. R. R. Co... eeeeeseceeees 660 TWiOLE eos eeciss, "a Sub ed Ruse eremasers 85, 249 m= ©, Stat@asciswiaiesissavreere erates 208 | Newhall 0. Dunlap. . 248, 252, 262, 484 Motley v. Head....... siete cla elarets - 180 | ——». Pierce....... sea wimeiuce 451 Mott v. Foster....+-+seesee evceee 183 | ——o, Vargas ...cesseceeeeerecs 502 —— »v. Harrington..... Suish eae 396 | New Hamp. Sav. Bank v. Downing 193 — v. Hicks ....ceeseeeeeee 249, 262 | Newkirk o. Dalton.........--.06- 543 — v. Smith .........08- gra bares 205 | Newman v. Sylvester ......+--.-- 407 Mottram v. Heyer...... weeee-D02, 503] New Orleans, etc. R. R. Co. 2. Moulton v. Bowker ........-.183, 185 | Hughes ...........- sceeeeae ov GOD xlii PAGE. N. Y. Cent. Ins. Co. v. Ins. Co... 232 N. Y. L. Ins. Co. v. McGowan.... 577 New York, etc. R. R. Co. ». Schuy- Ve tics csteasssenarsesees 20, 220, 525, 611 New York, etc. Tel. Co. ». Dry- DOP sex eesqeeeieie reel scieueisias aaieisigve 832 Nichols v. Hail........0-.0002005 25 — ¥. Root ...-.cccceeccees 497, 499 Nickerson 0. Darrow.........542, 543 Nightingale v, R’y Co........ 183, 184 Nixon v. Brown ....eseeeeees 196, 544 — v. Hyserott........0000- 163, 236 Noble v. Cunningham ........... 577 Noe », Christie.........606 wbinerene 34 Nolan v. Jackson. .....-sseeeeeee 175 Norris’s Appeal .......-.5-4. 333, 335 Norris v. Taylor. .......-.seee eve O87 Norwich University ». Denny..... 58 North A. Ins. Co. v. Throop...... 6 North R. Bank ». Aymer, 144, 236, 525 596 Norton 9. Phelps..csesecsecccees 473 Nowell v., Wright......... decease 448 Noyes v. Loring ........ +oe2-406, 442 Oakey v. Bond...... wseeeee. «» 512 Oakland Cotton Manufg. Co. 2. Jennings .......0.56 saneenee 177 O'Connell v. R. R. Co... .seeeeeee 684 O'Connor v. Arnold.......-. oe.00, T1 = 0, RODCHS aa cisiawie arsine ere essere 684 O’Donnell v. Leeman ............ 169 Oelricks v. Ford......... ieevewee 270 Ogden v. Marchand....... eee 89, 97 — v, Maxwell.......... eattwwers, 444. Ohio, etc. R. R. Co. v. Kerr...... - 543 Olcott 9. Littles. cevcssiecsean +. 249 Oldham 0. Jones ...esseseseeeees 358 Oliver ». Johnson.........0 wesew QA — =f; Pia Hick scccinwmawionsawea se 333 Olmstead v. Burke........ aerahleers 312 O'Meara v. Ins. Co .......-...00- 574 Osborn v. U. 8. Bank ............ 188 Osgood v, Franklin ..........6. 44, 45 Owen v. Brockschmidt ........... 163 Owens . Roberts...........s000 231 Owings 0. Hull.........cccceees - 79 Owsley v. R. R. Cow... eevecesess 628 TABLE OF AMERICAN CASES, PAGE. Packer 2. Locomotive Works ..... 570 Paddock v. Colby.....cececcecee - 188 Padfield v, Green.....2+++-- 147, 159 Page v. Wells......- ssaieialswiecteeteOUl Paige v. Stone .....- weamasereuoes 155 Palmer 2. Cheney. .... 71, 89, 186, 139 —— »v. Hatch......... satiate 158 Pardridge o. La Prieg.....eee++++ 193 Paris v. Lewis....eeeseee- woowees “Ot Park ». Hammond .......++-. eee 329 Parker v. Brancker.......... wee 490 — ». Donaldson ..... anaes ooee 414 =), Slalbias wssiuwentees « 49 — 2. Vose......026 aie wiayacsianeeceks 369 Parkist v. Alexander....ssccesees 872 Parks v. Tel. Co......- Raisers « 833 Parsons 0. Webb.......seeecceee 164 —— v. Winchell ......0.... e000 » 4388 Paschal, In re......2.ee006 coveee 497 Passenger R. R. Co. ». Young.... 627 Patrick’s Succession .......-+e00- 183 Patten ». Wiggen...... cbeaebatsisicars 303 Patterson v. Freehold.......-..-- 203 — v. R. RB. Co... 655, 657, 659, 682 —- 2. Horsly..... aidisietaiistatatetets 169 — . Moore..... Meee aarseeriyer 159 Patton v. Ins. Co ........06 Seat 232 — ». Stewart ......... seen) LD, Paul v. Berry .......... ieee 66 Payne v. Smith......-ceeseee wee 88 Peabody v. Hoard.......seeese0- 140 Peacock ». Cummings............ 112 Pearson v. Mason.......2. «+. wee 403 Pease v. Warren..... wiicmonaaace Bb Peck v. Harriott........e.ceeeee. 148 — », Ritchey.......... 22, 91, 223 Peebles v. Guano Co...eeseesseee 611 Peel v. Shepherd...... oe eee 525, 531 Peine v. Weber.......0+. saee 26, 27 Peisch v. Dickson....... aisroaeescee 490 Pendexter vo. Vernon............. 185 Penn v. Evans ......ce0 oe. vee - 91 Penn. D. & Md. Nav. Co. o. Hun- POVOL sssemesisredscatece wcaes 620 Penn. R. R. Co.’s Appeal........ 545 Pentz v. Stanton........ eves 248, 249 People v. Stevens............ «se 636 — ». Township Board.......... 370 Pepper 0. George..ssscescccsnese 232 TABLE OF AMERICAN CASES, PAGE. Percy 0. Milloden......seseeesees 375 — 0. Willaudon............4.- 328 =)", Mirand iss: sce sarex eeeneec 293 Peries 0. Aycinena.....seeeeseee 117 Perkins 0. Ins. Co.....-+.eeeee 300 9 Ra Ri Coie ieeiecssessesee B27 —— 0. State........ Siaaiercoulhuts 3 Perminter v. Kelly......... - 100, 489 Perry 0. Jones....ceccccccsccsee 168 —— 0. Marsh..... acahe ausraneaieie uses 655 — ». Mulligan....... aapreaya 89 Persch v. Quiggle .........6. 864, 372 Person v. Warren....... tmecegs 18 Peter 0. Beverly....... eoereree 44, 45 Peters 0. Ballistier...... o 022-88, 595 Petersburg v. Applegarth ....620, 627 Peterson 1. Mayor ...-...0.. ++ 228, 68 Pfau o. Williamson .......0...6. 645 Phelan v. Gardner ........s.000- 454 Phelps 0, Wait....cs..-cesecenes 438 Philadelphia, etc. R. R. Co. ». Derby rariacersaretsvisevitarerexen - 620 —— — ». Quiglev..... socerees 628 Phillips v. Bridge....... seeeee «+ 803 —— 0, Butt vaiesvweeses saeeen eee 15 —v. Moir ...... Sidisfaveruneis eoes 149 — 0. Overton ....... 400 cooee 396 Philpot v. Taylor.......... sreeee 309 Pickering v. Holt ........e.eeees 177 —». Pickering. ... .......... 17 Pickett ». Nat. Bank........ sees 165 Pickler v. State. ......e-ceeceees 112 Pidgeon v. Williams.......... e+. 160 Pierce v. Ins. Co ......00 Saearisie 6 — v. Strickland ..........5++.. 183 Pike v. Balch..... Sreiaieiaeisiewiaie --- 169 —— v. Douglass .... .e..000..4- 89 Pillsbury v. Dugan ........ aeows 183 Pilson v. Bushing ...........02.- 183 Pinckney v. Dunn...... womoscons 4 Ol Pinkney v. Hagadorn ........ eo 172 Pinnix v. McAdoo....... eh eee 218 Pipes’ Succession..........+. sees 146 Pitsinowsky v. Beardsley......... 167 Pittsburg, etc. R. R. Co. 0. Devin- Ney as Kieeenes ovens sawenes 684 —— — »v. Gazzam......eee-- 75, 79 —— — 2, Wooley......... eee 90 Placer County v. Dickinson ...... 208 xlili PAGE. Planters’ Ins. Co. v. Sorrells..... 577 Planters’, etc. Nat. Bank o. Nat. Ban Kiseeee types aeiversais Season: OO Poillon v, Martin. ....cseseecees - 892 Pointer 0. Smith ...sceceseeesees 436 Pollard 0. Gibbs ....... ol ies 82 Poole:2. Rice sc ieccesessecceseas 414 Poree 0. Bonneval....... eoeel71, 172 Porter 0. Parks .....seccceeseves 544 Porter 0. Peckham.....-+.00 358, 391 0) DUVETS esis sarereneereneies) wns 460 Potter v. Parsons...e..eseeeeeees 165 Potts v. Rider.......... faretacelaxs 535 Powell v1. Newburgh........-.00. 473 Power ». Kent... .....e00e004-53, 499 Powers v. Briggs........249, 250, 251 Pownall v. Bair .........e00. 307, 308 Pratt 0. Beaupre ........+ Smee 409 Preston 0. Hill ....sssseceeccsees 165 Price v, Ins. Co..... oseeee ee 0547, 556 —— 0, Keyes ....cc.cseee -- 807, 308 0 RR C0 sacsesesiisncecca TL —— v. Seydell........-0.. spaene 14 Prideaux v. Mineral Point........ 634 Prime v. Cobb .........-208 eevee O43 Prince v. R. R. Co... sceesseeee «- O20 Pringle v, Dunn.... ..... eai@sicwe. QO2 Pritchett v. Sessions ............- 232 Proctor v. Williams..........00. - 6 Proprietors, etc. v. Bishop... .... 183 Proudfoot ». Wightman.......... 292 Provost v. Patchin... .....26..2. 177 Pugh v. Chisseldine ..........- -- 169 Pugsley v. Murray........-ssse06 ‘462 Putnam ». Ins. Co......... eee - 193 Quincy Coal Co. o, Hood.......+. 231 Quinn v. Carr......... sietcsensww, 160 ——v. Davis....... ereccese 040, 544 Railroad Co. v. Reeves........ oe. 318 Raisin v. Clark........00. weemnew: 469 Ramsden v. R. R. Co ....secereee 627 Ramsey v. Gardner......... eoeee 473 Rand ». Hall........ doemmessces 250 Randall v. Kehlor........ 149, 158, 175 Randolph v. Ware...s...seee+ «ee 800 xliv PAGE. Rankin v. Matthews ..... eigenen LE —— v. West........008 eapineeedts 14 Rathbum ». Budlong ......-++++- 244 Rawson v. Curtiss ..... demumavers 22 Raymond v. Crown & Eagle Mills, 415 588 Read o. French .....seecseesses 187 —— 0. Spalding ......+.++20---- 318 Redfield v. Tegg ......see0e0 337, 463 Reed v, Beardsley......eseeeeee 219 — ». Curry..... wiesbansrecar 183 — 0. Dougan ...+eesee 344 — v. Welsh..........20- dessa: LIT Reed’s Appeal ......- ig eeweren es 231 Reese v. Medlock ...... ovreesaasy, OL Reeves 0. Kelly .......ccceeeseee 25 — »v. State Bank ...........06- 605 Reid v. Glass Factory......+.+20 341 —v. Hamber......... eisai 438 Reilly v. Cavanaugh...........8 303 Reinhold v, Alberti.......-..0.85 165 Renick v. Sandford.......... eeae 283 Renard v. Turner .......... woes. 160 Repsher v. Wattson ...........2. 621 Revens 0. Lewis......-eeeeeceeee 495 Reynolds ». Ins. Co........005 o- 22 Reynolds v. Ferree ....... 79, 148, 223 =, GLaVesi swe demawietine see «. 803 Rhodes v. Lowry ......+406 eres fats 223 Rice v, Austin ..... SGubisancens 486 — ». Gove....- sie eaeR Waar cay 249 — »v. Groffman ......++.+--158, 193 — »v. Isham........ bis tiadecemams 570 0 WOU asi os averan curacy 462 Rich v. Nat. Bank..... 89, 94, 167, 195 Richardson v. Heydenfeldt........ 53 — », Kimball.............. 100, 489 —v. Whiting....... erscsiatiiay . March...... eiialanajerdiare 270, 271 Rooney v. R. R. Co... sees seeeeee 499 Rose v. Mynatt......... See «- 396 Rosenstock v. Tormey..... 57, 149, 150 Rossiter 0. Rossiter ....... 96, 155, 156 Rottman 0. Wasson......se-s.005 27 Rouillier ». Wernicki............. 16 Rounsavell v, Pease...s.seesseeee 156 Rowe v. Stevens....scsccseeeseee 462 —— 0. Ware ..cscacees sanesesire 26 Rowell v. Klein..... eeceoesevel4, 218 Rubidoex v. Parks........ aiswereier Ole Ruckman. v. Alwood.........0 «. 184 —— v. Bergholz......... +++.369, 449 Ruffin v. Mebane................ 164 Ruffner v. Hewitt .........62 .200 473 Ruggles v. Collier ..... Weiweweces OS Rupp 2. Sampson ......... eee ve 463 Rutenberg v. Main.........cce08 54 Ryan v. Fowler ..... Aediglesaroneec 685 —— 0. R. RB. Con. csecsccccccsece 684 Safety Deposit Co. 0. Smith ...... 76 Saladin v, Mitchell. .4, 5, 172, 173, 505 527, 581 Salem Bank v, Gloucester Bank... 68 Saleski o Boyd.. .... aforsisnverenssers - 165 Salisbury v. Brisbane ............ 44 Saltmarsh v. Smith.............- 118 TABLE OF AMERICAN CASES. PAGE. Sampson o. Iron Works....---+++ 460 —— »v., Singer Manufg. Co...... -. 163 Sandford v. Handy ..158, 525, 605, 606 San Diego v. R. R. Co...----- eens OID Sartwell v. Frost ...-. Srargiateaaraaenees 89 Satterfield 0. Smith.......+00- sss. Ld Savage v. Birkhead.......--e+++ . 295 aD, RIK Siac casaciee weiss 155, 249 Saveland v. Green, 57, 85, 90, 91, 197, 474 Sawyer v. Corse..ceesseeseereees 443 — ». Cutting...... Hetsiwensieion 15 — ». Joslin ..... RenieaeeReile 503 — ». Lorillard....... Siaasecaia 485, 486 ——v. Mayhew....:.- spe areies eee 198 Scammon 2. Chicago ..--.-++++++ 645 Scarborough v. Reynolds......+-+ 154 Schaefer 0. Kirk ..ee.-ssseeeree - 800 Schieftelin v. Harney -.----- weeee 444 Scheutze v. Bailey.....- agioaislalaia's 26 Schiffer v. Feagin ...-.seseeeeeee 492 Schimmelpennich 0. Bayard. ..154, 193 Schmidt 0. Sandel....---seeeeees 165 Schofield Rolling Mills v. State... 611 School Dist. v. Ins. Co....++6 suave 158 — ——». Nat. Bank.....- 335, 539 Schooner Lively, The ....+--++++++ 812 Schooner Norway %. Jenson ..---+ 655 Schroyer 0. Lynch.. .-+++++++s «- 443 Schuchardt v. Allens....-.--- 158, 175 Schwartz v. Gilmore....+---- 645, 647 Scoby 0. Woods..-.+.sseseeees -. 159 Scott v. Baker.....seseeers suet 251 —— v.Buchanan.....-. staumeviainiee's 12 —— ». Hunter......-- aoawieletereters 318 —— v. Jester....seeee seve svces 488 — v.Mann..o..--- sissies 369, 370 — v2. Seiler......-- epeiatieraeme a 187 Sea v. Carpenter...csseeseeeerees 460 Seago v. Martin...... «+» so Sisle 85 Seaman v. Whitney. ...----+-+- 435 Searing v. Butler....... «..89, 90, 473 Searle v. Scovell...sseseceseerees 179 Sears v. Shafer.....-..-e+¢ severe 000 Segar v. Parrish...--+ss++eeeeees 460 Seiple 0. Irwin....--.+0++ wees 148 Sentell v. Kennedy....--+--+220- 94 Géré o. Faurés ....0 ceeeeeeens o. 414 Sessums v0. Henry...+.++e0- wailed 249 Sewall v. Nichols..... +e. svecee 492 xlv PAGE, Sewall o. St. Paul....- ustelesasteistees 647 Sewanee Mining Co. ». McCall, 155, 156 Sexton v. Pike...... 5 jacuee yeatenalae 499 Shaffer v. Sawyer...e..scseerecee 23 Sharp 0. Emmet ......eeseeeeeee 262 Shanny v. Androscoggin Mill..... 659 Shaw v. Kidder. ......-.e0-se0% 165 Shawneetown v. Baker..... ceases 71 Sheehan v. Gleason.......++eeeee 53 Sheffer 0. Montgomery........--- 5385 Shelby v. Offult .......ee.-0- Shelton v, Transp. Co........149, 211 Sherwood ». Stone...... sais Beesiss 4 Sherman 2. Grenada....e.sseseee 627 == 0 Ri. Rui Cosenseeesenwr saw 684 Ship Fortitude, The..... 177, 178, 179 Ship Grand Turk, The........... 495 Ship Packet, The............ 178, 495 Shipherd v, Field..-.... ........ 308 Shoenfeld v. Fleisher .........4+ - 300 Short v. Millard........ seee 108, 162 — v. Skipwith......... wimessise Ole —— v. Stevenson,.....see.seeee « 884 Shriver v. Stevens .......e.eeee0e 207 Shropshire v. Burns..........000. 12 Shroudenbeck »v. Ins. Co......... 183 Siegel v. Gould .......2....2000e 463 Silliman v. R. R. Co....... sees. 140 Silvers ». Nerdlinger........ 646, 648 Simmons 0. Almy ..........-222. 498 Simondson v. Kissick .........- -. 450 Simons v. Heard........... eeseee 409 —— 2, Henry siciniewesccaveisnes 303 Simpson 2. Lombas....0....0006. 183 Sims », McLure ..........eeeeeee 13 Sinclair v. Jackson ...........00. 44. Singer Manfg. Co. v. Holdfodt, 28, 231 Skelley v. Kahn..............005 828 Slater v. Irwin. ......eeevececees 231 Slawson v. Loring.........eee06 - 250 Smedes v. Utica Bank ...... 294, 328 Smiley o. Mayor, etc..... sistoutdetoe 23 Smith v. Brotherline ........ 358, 359 — 0. Cologan.......ccseeeceee 94 — v. Commisyioners .........4 231 —— v. Coudry.. ...0. ceeeees - 312 — »v, Jones...... diners sears 169, 170 —»v. Kidd. ...... eevee 147, 160 —— pv. Lipscomh.....00 sevesces 183 xlvi PAGE. Smith v. Peoria Co .....-+6 Bisilcists 198 —— 0. BR. RB. Cor... eee eeee wxeee BOT —— ». Stevenson..... eewcee 144, 358 — »v. Sublett....... see erreaaers 53 — v. Townsend ......-0- eevee 463 —— 0. Tracy... scccsecccesees 85, 158 Smith’s Appeal......eeee-+ eoecee 202 Smothers v. Hanks ........esee0- 303 Smyth vo, Craig.....ssseeceeeeuee 111 — ». Harvie........06. Raa eae 187 Snodgrass v. Butler....ecseseseee 343 Snow v. Grace....2....6 ees 79, 89 Snyder v. Van Doren ............ 156 Soens v. Racine .... ...eseeccoes 46 So. Car. Ins. Co. v. Smith........ 208 So. Car. Soc. 0. Johnson..... +. 208 So. Exp. Co. v, Palmer......-+0-. 85 Southern L. Ins. Co. v .Booker, 186, 218 South & N. A. R. R. Co. vo. Hen- IleiNnnckwendexoncun a RE a RENEE 23 Southgate 0. R. R. Co...seesees - 167 Southwick v. Estes....-... Saloni 620 Spangler 0. Commonwealth ...... 473 Sparks v. Bank..........eeeeeee- 208 Spaulding v, Adams..........6+- 486 Spear v. Gardner.......seeeeeees 112 Spears v. Ledergerber............ 165 Spencer v. Field .....eee.eee.e. 5385 Spitler v. James.......+..- sedis oe 156 Spooner v. Thompson..... 79, 89, 165 Sprague v. Gillett ...e.,eeeeeeees 142 Spring v. Ins. Co......eeeeee 486, 492 Sproat 0. Porter.....ssesseeeseee 44 Sproul v. Hemmingway ........ - 646 Somers v. Pumphrey........-.++. 13 Southgate v. Ins. Co...ee.seseee - 28 Spear v. Tinkham........... eeee BOD Spearing’s Appeal..... acwisiomaten 375 St. Louis Nat. Stock Yards 2. ORG Fie ccsrecte sen eetii nes te 99 St. Louis, etc. Packet Gs. v. Parker, 25 St. Louis, etc. R. R. Co. v. Britz, 682, 684 — —— 2. Dalby ........ceceee 628 Stackpole v. Arnold.... 248, 249, 250 Stainback v. Read...... 144, 146, 155 Stainsby v. Life Boat Co......... 15 Stainer v. Tysen....... .... 144, 601 Standard Oil Co. v. Ins. Co....... 6 Stanley v. Chamberlin .. . TABLE OF AMERICAN CASES. PAGE. Stanley ». Gayl.ord......seeee0. 543 Stanton 2. Bell..... scgeers} gravest seve 328 State 0. Berg ....cccecee cesseee 208 —— v. Carnthers.....ceccesccees 183 —— 2. Daniel ............. seve 208 ==) Das pibi recites sieteisasig snecee 156 — . Delafield .........ceeeeee 164 ae, Billiauienaxeies cis ae asses ~. 6386 —— ». Jersey City .......- secese OD —— v. Mahoney ..........008- -- 49 —— 0; Meek wisssessccecsssccee 17 —— ». Patterson. .....seseeasee - Oo === 9, Ri Ri CO scwswsawiesweees, OB — vv. Smith...... Sistesdietere eeprrets 89 —— v. Spartansburg, etc. R.R. Co. 89 State Treas. ». Mann .......... - 208 Steamboat New World v. King.... 327 Stebbins v. Leowolf.....eseee.e05 464 Steele, In re .....cseeeoe aeeeswwe GOO Stein v. Kendall......eese-ee002 = 79 Sterling Bridge Co. v. Baker. .167, 231 Stevens v. Robbing .......-0e.00- 493 — r, Wilson........ diets aisrexecieis 547 Stevenson v. Jewett.......+-.682, 684 Stewart v. Flowers ....eeseeeeses 497 —— v. Hawley ......00. coves. 624 —— v. Mather...... 869, 451, 461, 463 =o) Re Ri CO ssissesoenacee: ox B15 ——0,, ROOTS. scree eos sid Geseceie 452 — v. Woodward.. 159, 163, 164, 166 Stewartson v. Watts........ sseae 220 Stiles o. R. R. Co... cesevcccese. 218 Stillwell », Ins. Co ...esscceesees 164 Stinchfield v. Little...... worasaeres 240 Stockton v. Ford ...e.ceccecesees 391 Stoddard v. Mcllwain.......... -» 164 Wy Ue iBiics aes sileiseciecwsie -. 99 Stoddard Woolen Manufactory 0. » HuntleVawiovusncsanes ves cass 490 Stoddart ». Warren .... ..eceees 164 Stokely v. Robinson ........-..0 165 Stollenwerck 0, Thacher. . .22, 542, 559 Stone v, Codman...... ae eere eaters - 646 Stone v, Hooker.......6 seeceee - 481 == Be Re COscsie-ciree ves oesien 645 SG, Slaten: weekwies acsaeieets 172 —— 0. Wo00d.....eceeeeee Waar 240 Stoner v. Weiser... .....08 .eee 833 Stowell o. Eldred ......+..0. 238. 410 TABLE OF AMERICAN CASES. PAGE. Strahlendorf ». Rosenthal........ 655 Strain 0: Wrighticos wise eviews. 12 Stratton 0. Hussey......seseeeee- 499 Streeter 0. Poor...... woswseans te 22 Stringham o. Ins. Co...... sna 22, 23 Stroh 0, Hinchman...........06- 89 Strong 0. Dodds...... ssssecsees 25 Strong 0. Stewart, 53, 57, 59, 142, 149 Stubbs ©. Lund......... SURewINees 503 Sturdivant 0. Hull........ aistelereras: DOO Sugg v. Stowe .......-... eine 574 Suit 0. Woodhall..........ceeee08 231 Sullivan e. Bridge Co........ sees 682 Summersett 0. Fish...........++ 683 Summerville 0. Railroad Co... 25, 570 Sumner v. Conant........ eles eas 15 —— 0. RB. RB. Co... seeee Masia AS -— ». Reicheniker.............. 460 — 0. Stewart ......eeeeee « eee 149 Supervisors v. Arrighi.......... ae ZL Surtell o. Brailsford ...........6 16 Sussdorff v. Schmidt......... 448, 451 Suydam 0. Moore......ssceeeeeee 4388 — ». Westfall........ a cpdareivinrats 449 Svenson v. Steamship Co......... 661 Swaine vo. Maryott........e0s.082 578 Swan v0. Nesmith.........eeceeee 4 Swartwout ». Evans...... ssenees (90 Bwazy v. Manufg. Co ........... 23 Sweeney o. Easter..... serewsiaae 492 Sweetland o. Tel. Co... 218, 220, 838 Swett 0. Penrice........0..065 eee 15 Sykes o. Giles......- coscccccsess 170 Tagg o. Nat. Bank...... 232, 292, 577 Taggart v. Stanberry ......... «+e 163 Taintor 0. Prendergast, 270, 409, 410 505, 506, 512, 5380 — v. Worcester.......00. e+. 168 Talley ». Reynolds..... eis aisisisisiea's 183 Tanner 0. Hastings....+++.essee- 144 Tappan v. Morseman .......-- - 147 Tarr 0. Northy...-.-++.0++ sevens 400 Tassey v. Church .....+++- «+201, 267 Tate v. Laforest. ..-ececsesees «- O87 Taul 0. Edmonson.........ee0.++ 339 Taussig v. Hart...... «. «308, 359, 361 xlvii PAGE. Taylor o. C. & N. W. R’y Co. 197, 198 —— v0. Hopkins......26 02 eens - 89 —— vo. Hudgins ......0. eevee 543 —— 0. White... ......ceceeesees 154 Taymouth v. Keehler...........71, 89 Teall v. Barton .......0.08 soeeee 624 Tenney v. State Bank. ......... « 574 Tewksbury 2. Spruance . .358, 359, 361 Thacher ». Hannahs.... ...488, 489 —— o. Kaucher ........s00.. oe» 154 Tharp v. Brenneman ........+5 - Ill Thayer 0. Meeker ........00000. 22 Thomas 0. Steel.......... eo Sustae 183 Thompson v. Cartwright......... 232 —— 0. Craig .......05. sowdieeeias 79 — 0. Fargo..... iseiiatatgneiecd 517, 520 —— v. Kelly. .......ceeee sessed — >. Perkins ........ dibs aenaae 3 —— v. Schermerhorn.... .....0. 53 —— 0. Shattuck ......0..eeecees 312 PS Bhate: eccascitasarncacaeane -. 208 Thorne v. Bell......00. cesses. 66 —— 0, Deas ..ccesceceeeeeee 800, 325 Thornton v, Boyden............. 154 Thorp 2. Burling.........052 ees 100 Thurlow v. Gilmore ............. 86 Tice v. Gallup........0..eeee eee. 158 Tide Water Canal Co. v. Archer .. 312 Tidrick ». Rice..... die ie DTierelnen. a 4G 719 Tierman v. Jackson ...... sieresins - 435 Tilley v. Spradley....eeesee seer 249 Tinges v. Moule.......... ahieseisa 451 Tippets v. Walker............ eee 248 Tisen v. Howard.......sseeeeeee 492 Titus o. Turnpike Road.......... 20 Toland 0. Murray.......sseeeeees 512 Toledo, etc. R. R. Co. v. Freder- ACK sos.assisicrereie's see Sielsioe aes 659 —— — »v. Moore.. ........... 684 —— —». O’Connor........... 684 Tome v. R. R. Co....... sowecacie OLE Tomlinson v. Holt.......... Boao LI Tompkins v. Saltmarsh .......... | 828 Toombs v. Alexander .........+.- 450 Torre. Thiele. ....isesecesss crass 544, Torry ». Bank of Orleans.... .... 359 Towell v. Pence.....seeesseeeeee 12 Towne v. Jaquith......... ‘ee 44, 46 —v. Rice ..... eeecesD0l, 262, 267 xlviii PAGE. Townes 2. Birchett........0.- 172, 298 Townsend v. Corning ....+seesees 240 === 0, COKiaxs sean ns wleeteeikoate ave 12 Tozier 0. Crafts.......cceceeceeee 23 Tracy 0. Cloyd ..ccecccccceeeees 443 Traub v. Milliken..........0. 525, 531 Travers v. Crane ......-. 111, 116, 117 Trinidad Nat. Bank v. Nat. Bank, 295 Trist 0. Child........sccceeces 48, 464 Trudo v, Anderson ........ee:eee 163 Trumbull », Nicholson ....... 185, 187 Trust ov. Person.........0.0005 0s 490 —— 0. Repoor...secceecescceees 112 Tucker v. Taylor ...... Dee ees 486 Tucker Manfg. Co. v. Fairbanks... 250 Turner v, Keller.......+. 0 os o. 156 —— »v. Turner.......... dipiptemeea B42, — v, Wilcox......... jeeieneces 79 Turnpike Road, In re.......... 44, 46 Tyler v. Alfred........e006 ween. 443 — ». Freeman ..........-eseee 171 Se PARE sce srecarsare ou siete ee 451 Tynes 0. Grimstead.......eeese06 369 Uhlich », Muhlke............. 864, 370 Ulmann v, Barnard...s.....0..6 546 Union Bank v. Middlebrook ...... 66 Union Mut. Ins. Co. ». Wilkinson, 6 7, 189 Union Mining Co. ». Nat. Bank, 25 28, 79, 81, 90, 91, 231 U.S. o. City Bank. ............. 195 — ». Fillebrown .......eseeeees 467 sO, HOWard wvicicse aieieciaaieie cine 24 — v. McDaniel........ dé wiavarpishene 467 —— v. State Bank.........6. 20 537 U.S. Bank ov. Davis,......00006. 231 U.S. Exp. Co. 0, Haines.. ....... 485 U. 8. Life Ins. Co. v. Advance Co., 135 Upton v. Gray..... Kehoe Seb sams 414 — »v. Suffolk Mills ......... 149, 158 Urquhart v. Mclver.............. 176 Utica Ins. Co. v. Lynch........... 335 Utley v. Burns. ........6 era eR 3803 Vail v. Jackson .......eesececece 165 TABLE OF AMERICAN CASES. PAGE. Vanada v. Hopkins.....2.seereee 162 Van Alan ». Vanderpool .....174, 175 Van Amringe v. Peabody ........ 176 Vance v. R. R. Co...-5-0+ -..611, 628 Vanderbilt ». Turnpike Co........ 72 Vanderpool 0. Kearney ...-...66+ 462 Van Epps v. Van Epps .......... 359 Van Schaick ». Ins. Co....57, 60, 2382 Van Winkle v. Steamship Co..... 345 Varnum 0. Martin......--.seeeee 303 Vaughan ». Parr...... MRSS 12 Vennum 0. Gregory...see0 coerce 460 Verplanck v. Ins. Co.....eeeeseee 875 Vickery 0. McClellan ...... Beware 165 Vicksburg, etc. R. R. Co. v. Rags- ALG sae eieisieeesaecceea wens 25, 28 Victor Machine Co. v. Heller, 163, 164 547 Van Hurter ». Spengeman ....... 859 Voorhees ¥. Presb. Church ....... 309 Voss v. Robertson ....... 164, 176, 544 Vreeland v. Vetterlein ....... 451, 454 Wadsworth o. Gray ...e+...see0- 370 Walcott v. Keith....... sid aietes sce 486 Walden v. Bolton ..........2.--- 165 Walker v. Carrington..... o+-000, 375 —— v. Dennison ...... «111, 112, 132 0) Derby: scans cescaeewid aioe 103 —— v. Goodman......eesseeseee 303 — »v. Goodrich....... weston 187 —— 0. Osgood ....eceeeeee wage 462 —— v. Sergeant.....eeeesececese 499 —». Tirrell........... 449, 450, 459 Soy Walker insssaeestimenerannce 95 Wallace v. Branch Bank ..... 144, 206 —— »v. Finberg .......-.... sawete, Ol Wallis v. Manhattan Co.......... 130 Walsh v. Peet Valve Co.......... 655 Walther v, Wetmore........ 483, 542 Walton v. Dickerson...........4 497 Walworth Co. Bank ». Trust Co... 90 Wanless v. McCandless ......... 55 Wapello County 0. Bingham...... 208 Ward v. Hollins..........cceseee 183 — v. Lawrence ....... o-++-450, 461 —— ». Steamboat.........ee.eee 13 wv. Williama........---- an a1 TABLE OF AMERICAN CASES. PAGE, Waring v. Mason....seeesess eons 409 Warner v. Martin, 53, 159, 176, 483, 547 = 0) Re Re Cou sata wctiwnediea cc 684 Warren 0. Ins. Co.........0000e 28 Warren Bank ». Suffolk Bank. .57, 294 Washburn v. Fletcher........... 410 Washington, etc. Tel. Co. ». Hob- SOW cuca soe ose eumincevwloe lected Waterhouse ¢. Bank. .......0005 Waters 0. Grace.... cccecececoes 499 Watkins »v. Consall.............. 462 Watkinson v. Laughton.......... 444 Watson 0. Gay...eescccesecceces 89 Weakley v. Pearce .....+..-+0.. 639 Weaver v. Jones .....46 easwaes 12 —— 0. Ogletree. .cecssee.vecseee 25 Webber v. Williams College ..... 156 Webster v. Pierce .......eseeeeee 835 —— v. Whitworth .....eeeeeeeee 160 Weckler v. Nat. Bank..........- 627 Weed v. Adams .......eseeseeee 174 ——v.R. RB. Co........ 524, 605, 620 Weise’s Appeal......++-+.0- 140, 596 Welch v. Goodwin ...........06- 414 —— v. Seymour ...-..+-- creme 208 Wells v. Am. Express Co.......+. 231 — v. Hatch ...-....-2.00) 112, 499 —— vo. Martin ........- cece eens 89 —~— 0. BR. BR. Cov. ccc eas wecceas 827 Wendell v. Van Rensselaer .....- 388 Western Bank 2. Gilstrap........ 167 Western Screw Co. v. Cousley..... 76 Western Transp. Co. v. Marshall.. 544 Western Union R. R. Co. v. Wag- MET dwiieens ae aiea sein owlins 544 West. Un. Tel. Co..v. Carew ..... 333 Weston v. Barker.......+...0006 436 o. McMillan... .........06- 410 Wheelock v. Hardwick...... 218, 220 Wheeler & W. Manfg. Co. ». Givan 163 164, 166 Wheeler v. Lynch......ee.eeeeee 312 —— v. Nevins...+++.0- deeae ene 26 —— 0. Reed..scsccccsccereee «eo. 414 ——_ 0, State ...reeeceesrecccee « 221 Whelan ». Reilly.....------- 147, 159 ‘Wheelwright ». Depeyster ...-- +» 543 White vo. Bennett....---2 «+ eee 512 — a Mhantaan rari cas ws eipae ea gteey il White o, Germ. Nat. Bank....... 221 — v. Harlow ......cecccasseee 497 -— v. Johnson....... sebiisee eras 187 —— 0. Langdon ....-seeceaseees 91 — v. Madison ..........0. 175, 406 —— 4, Mayor .: tees covesecnees 53 -—— v, Miller ........ seine 218, 220 —— v. Montgomery.........-... 24 — 0. Morgan...cs.sevccee. 196, 545 —— ov. Sawyer...... Beieisaiviceeore 606 19, SINNNEN esa sanceseis tuscan 248 ay). Ward wicasconskiaseanawders 369 Whitehead v. Potter............. 512 — vv. Wells ....... 71, 89, 231, 339 Whiteside v. U. 8.........6. 140, 220 Whitlock v. Hicks........... voce 294 Whitney v. Dutch..... wong Vistsintiars 12 Whitwell ». Warner............. 68 Wicks ». Hatch ............ 143, 205 Widner v. Lane . ......s.eee sees 85 Wieland 0. White............... 165 ‘Wieman v. Anderson...... purses 16 Wiggins v. Hathaway ........... 445 = 0 Ui Sis eanans ao Sialeelatscetss 66 Wilbur v0, Lynde.......ssseeeeee 875 Walcox: 0) Hallo. sasccasseuemabar 218 Wilder v. Weakley.........++- -- 13 Wiley v. Mahood.........0 seeee 159 Wilkinson v. Churchill........... 132 Wiley v. Knight ..............6. 232 Willard v. Buckingham, 139, 148, 218 0 DOr saneiiteioiecwnianacy 495 — »v. Goodrich ... .......-.... 187 Williams v. Butler ........-..+6- 183 —— 0. Higgins........ 198, 199, 325 — ». Littlefield........... 318, 478 —— v. Merritt... ....csecee eens 90 —— ». Poppleton ........seeseee 303 — ». Robbins.........005 eeeee 250 —— v, Storm..... area yamnaaraveeea 19 — 0. SLOITS «0 2c cececcccenacces 341 —— 2», Tatnall............. 231, 2382 —— 0. Woods .....eseeecccceces 58 Williamsburg Ins. Co. v. Frothing- ham ...... sib-euwieeeee ems axe vee 218 Williamson v. Williamson........ 334 Wilmot v. Howard ........ee.+0- 303 —— ». Richardson .............. 88 Wilson v, Codman.....seeceeee +» 526 1 TABLE OF AMERICAN CASES. Wilson v. Jennings ....-.+e.6- 185 —— v. Martin ....0. cecceoeeaee 485 —— v. Nason ...cccceseeees 547, 551 =); Peverly nacsdasaeenons ne: 620 —— 0, Smith ...ccsccccoecesesaes 57 — 0, Stewarb 16. seenesseees 116 — v. Wilson ......- wate 198, 808 Wilts v. Morrell.......eeeeeeeee- B07 Winchester v, Ayres ..-+sseeeees . 55 = Ry Ru Cove ccis sartaweasss 232 Winne v. Hammond........-.++- 492 Winnesheik Ins. Co. 2. Holzgrove, 6 ‘Winsor v. Maddock ....... eer 177 Winter v. Coit........ee00+. 486, 493 Wolf v. Koppel ....... staf elaieis wn. & Wolford v. Herrington.......ee0- 354 Wood v. Clapp .....- wisiesawrasiess 303 — ». Goodridge........ --- 164, 205 —— ». McCranie........ Sislereieiees 449 —— »v. New Bedford Coal Co..... 684 Woodbury v. Larned ........... - 159 ‘Woodbury Sav. Bank 2. Ins. Co.. 6 Woodcock o. Bennett......+..6 «+ 574 Woodford v, McClenahan........ 158 Woodruff ». McGehee............ 531 Woodstock Bank v. Downer...... 505 Woodward v. Suydam......... 88, 94 Worrall v. Munn...... setishaintajerareie 27 Worthington v. Cowles .......... 409 Wright v. Cobleigh..........008 499 PAGE. Weight 0. Deklyne...+eseesee--- 171 —— , Haton......- 100, 421, 439, 440 adarenawienie aac eieee (660 se cecceee 438, 621, 622 Wyckoff v. Bergen ....+++++-186, 187 Wryllis@:, An © «scasisscsceswesis 49 Wylie o. Nat. Bank.....449, 450, 451 —— 0. Coke. ceccccscccccecceee 498 Wyman v. Smith.......ssseceees 436 Yates v. Bond.......seeceeeeseee LIL Yauger 0. Skinner....cecsseceee 13 Yeatman v. Corder....... teoweae 473 Yerby v. Grigsby.......- Saisie 148 Yerkes 0. Nat. Bank....-.e+e006 167 York Co. Bank v. Stein. ......... 414 Youghiogheny Iron, etc. Co. o. Smith .........00. riarerle Sistersracate 414 Young v. Dearborn.....-...0600. 499 —— 1. Ins. Co............ eosnee 414 —— ». Stevens.........0. Pososses, AS Yourt v. Hopkins.......sseeeeeee 170 Zachrisson 0. Ahman.....eees 557, 559 Zaleski v. Clark .......+. vesaaaier: LOT Zeigler 0. Day .-..ssesececccsses 684 Zetelle 0, Myers .......000+40842, 353 THE LAW PRINCIPAL AND AGENT. BOOK I. OF THE CONTRACT GENERALLY: ITS ORIGIN AND DISSOLUTION. CHAPTER IL DEFINITIONS AND DIVISIONS. Agent defined..........0.eeeeeeee 1 Definition of principal, constituent, attorney, delegate, proxy, contract of agency, authority, letter or power of attormey.............. 1 Classification of agents — (a) In respect of the extent of their authority's sauces carcvinscas 2 (b) In respect of the nature of the AGENCY saakisnagiivseuasionwes 2 (c) In respect of their liability in selling (d) In respect of the skill required 2 This division not exhaustive,....... 2 PAGE. General and special agents defined.. The distinction of little value ...... Brokers — definitions and divisions. . Factors — definitions and divisions. . A broker is a mere negotiator...... Del credere agents.........00ee006 Distinction between brokers and fac- tors — opinion of Abbott, C. J... Distinction between del credere agent and vendee .........--.. scenes Ex parte White, re Neville, and Ire- land v. Livingstone examined... . Relation between branch banks and principal banks.......eesseeeees 6 oo co DO DO Yo Aw agent is a person duly authorized to act on behalf of another, or one whose unauthorized act has been duly ratified (a). In every definition of an agent, the one element in common is the recognition of the derivative authority of the agent; and this element is really the differentia of an agent (b). (a) Co. Litt. 207; Wolf v. Horncastle, ermore, 67; Story, §3; Smith, M. Law, 1 Bos. & Pul. 316. (b) Com. Dig. “ Attorney,” A.; 1 Liv- 1 109; Ind. Contract Act, s. 182, Z bo OF THE CONTRACT GENERALLY. [Book I. The person from whom the authority is derived is generally called the principal or employer, more rarely the constituent; [2*] *whilst the agent is sometimes called an attorney, delegate, or proxy. The contract which exists between the principal and agent is called a contract of agency; the right of the agent to act in the name or on behalf of another is termed his authority or power; and this, if conferred formally by an instrument under seal, is said to be conferred by letter of attorney or power of attorney. Agents are divided, (a) In respect of the extent of their authority, into Universal; General; Special or particular agents: (b) In respect of the nature of the agency, into Mercantile and Non-mercantile agents: (c) In respect of their liability in selling, into Del credere agents and Such as are not del eredere: (d) In respect of the extent of their duties, and of the amount of skill required of them, into Gratuitous.and Paid agents; Professional and Unprofessional agents. A number of other divisions might be readily framed by assum- ing other points of difference as a basis of division. General agents are such as are authorized to transact all busi- ness of a particular kind (¢); whilst a special agent is authorized to act only in a single transaction (d). The distinction between special and general agents is of little or no practical value, so far, at least, as regards the principal and third parties. "Whenever a dispute arises between them with refer- ence to the authority of the agent, the question is not simply whether the authority is special or general, but it may also be very necessary to inquire, as will appear hereafter, whether the agent’s (c) Gilman v. Robinson, Ry. & Moo. (d) Brady v. Todd, 9 C. B., N. 8.592; 227; Kaye v. Brett, 5 Ex. 269. see Whitehead v. Tuckett, 15 East, 400. cmar. I.] DEFINITIONS AND DIVISIONS. 3 acts are within the apparent scope of his authority.’ If the agent exceeds his special authority, and in so doing makes his prin- cipal liable, the latter is entitled to *claim compensation from [8*] the agent for such damages as have resulted from the un- authorized act.? A factor is an agent for the sale of goods in his possession, or consigned to him. He is often called a commission merchant or consignee.’ He is called a supercargo, if authorized to sell a cargo which he accompanies on the voyage. Del credere agents are distinguished from other agents by the fact that they guarantee that those persons to whom they sell shall perform their part of the contract. the same point, see Drennen v. Walker, 21 Ark. 5389; Seago v. Martin, 6 Heisk. 308; Newall v. Hurlburt, 2 Vt. 851; Benedict v. Smith, 10 Paige, 126; Farmers’ Loan & Trust Co. v. Walworth, 1 N. Y. 433; Elwell v. Chamberlin, 31 id. 611; Fowler v. N. Y. Gold Exchange, 67 id. 1388; Widner v. Lane, 14 Mich. 124; Henderson v. Cummings, 44 Ill. $25; Krider v. Trustees of Weston Col- lege, 31 Iowa, 547; So. Exp. Co. v. Palmer, 48 Geo. 85; Menkens v. Watson, 27 Mo. 163; New Eng. Marine Ins. Co. v. De Wolf, 8 Pick. 63; Saveland v. Green, 40 Wis. 431; Babcock v. Deford, 14 Kan. 408. A ratification by a party of an act done in his behalf by another in excess of authority, as where a person paid in behalf of another more than such other person had intended to authorize him to pay, if such ratification be made under a misapprehension of the full scope of the act, is voidable to the ex- tent of the mistake, and the party can be relieved pro tanto. Miller v. Board of Education, 44 Cal. 166. So, if the principal ratifies a sale, he will not be held to have ratified an un- authorized warranty of which he was ignorant at the time he is alleged to have ratified it. Smith v. Tracy, 36 N. Y. 79. See, also, Baldwin v. Burrows, 47 id. 199; Haseler v. Lemoyne, 5 C.B. (N. 8.) 530. (k) Wilson vy. Tumman, 6M. & Gr. 236; Smethurst v. Taylor, 12M. & W. 554; Doe v. Goldwin, 2 Q. B. 143. [Boox I. 86 OF THE CONTRACT GENERALLY. grant due to him from the agent, the principal must take the contract subject to this agreement (2). In order to amount ‘to a ratification after attaining full age, within 9 Geo. 4, c. 14, s. 5,! Chief Justice Cockburn states the rule, that “there raust be a recognition by the debtor after he has attained his majority of the debt as a debt binding upon him” (m),. A recognition when of full age, and a promise to pay it “as a debt of honour” when of ability, is not such a ratification (). By ratification is meant an admission that the party is liable and bound to pay the debt (0). When a policy of marine insurance is made by one person on behalf of another without authority, it may be ratified after the loss of the thing insured by the party on whose behalf it is made, though he knew of the loss at the time of the ratification (p). The justice as well as the authority of this principle was insisted upon by the Court of Appeal in a case decided in 1876, where [66*] Chief Justice Cockburn pointed out that, where an *agent _ effects an insurance subject to ratification, the loss insured against is very likely to happen before ratitication, and it must be taken that the insurance so effected involves that possibility of the contract (9). A set-off cannot be maintained [under Lord Tenterden’s act] of a debt contracted by the plaintiff during infancy, and not rati- fied by him in writing after full age (r). The following cases are selected as illustrative of the nature of the evidence necessary to prove a ratification: In Granby v. Allen (s), trover was brought to recover money paid by the plaintiffs wife for land conveyed to her by the defend- ant, and it was held by Holt, C. J., that the husband could recover (2) Ramozetti v. Bowring, 7 C. B., N. 8. 851, per Erle, C. J. 1 Statutes similar to Lord Tenterden’s Act, supra, have been enacted in sub- stance in Maine (Stat. 1845, c. 166; see ‘hurlow v. Gilmore, 40 Me. 378) and Kentucky (Rev. Stat. c. 22, sec. 1). See, generally, as to the doctrine of ratification at the common law and un- der the above statutes, Ewell's Lead, Cases on Disabilities, 173, 178-180. (m) Rowe v. Hopwood, L. R., 4 Q. B. 1. (n) Maccord vy. Osborne, 1 C. P. Div. 568. (0) Per Parke, B., Mawson v. Blane, 23 L. J., Ex. 342; 10 Ex. 206-210. (p) Williams v. North China Insur- ance Co., 1 C. P. Div. 757. (q) Williams v. North China Insur- ance Co., 1 C. P. Div. 757. (r) Rawleyv. Rawley, 1Q. B. Div. 460. (s) Ld. Raym, 224, CHAP, vir. | THE DOCTRINE OF RATIFICATION. 87 money so laid ont, unless he was either privy to the purchase or consented to it afterwards. In Howard v. Baillie (t), it was held that if the agent of an executor accept a bill, and the executor adinit that the bill accepted with his knowledge is for a just debt and ought to be paid, there is sufficient evidence of a ratification of the agent’s act in accept- ing the bill. In Haseler v. Lemoyne (u), A. was the general agent to manage B.’s property. He signed a warrant to distrain the goods of C., a tenant, for arrears of rent. After the goods had been distrained, B. said he should leave the matter in A.’s hands, and it was held that this amounted to a ratification of A.’s acts. Benham v. Batty (x), was an action to recover a deposit. The defendant employed an agent to sell the lease of a certain house. The latter exceeded his authority, and took a deposit for the con- veyance of a longer term than he was authorized to dispose of. The defendant refusing to complete this agreement, the plaintiff applied to the agent for a return of his deposit. Before he would do so he required an order from the defendant, and it was held that this order was evidence of a ratification of a previous general authority, so as to make the defendant liable for the deposit. Litemaurice v. Bayley (y) is an instance of a ratification with- out inquiry. An agent exceeded his authority in agreeing for *the purchase of certain buildings. A dispute having [67*] arisen, the plaintiff wrote, respecting the agent’s authority, “T left everything to him” (the agent), “desiring him to do the best he could. What he has done for me I know not; but of course I must support him in all he has done for me, except in- civility.” This was held to be a full ratification of the agent’s agreement. In Hawley v. Sentance (z),' an agent for the purchase of goods on credit paid for certain goods out of hisown money. This fact was known to the principal, who directed the agent to clear the goods at the Custon: House. In the usual course of business this would be done after payment of the price by the agent for the principal. (t) 2H. BI. 618. (y) 6 EL. & Bl. 868; 26 L. J., Q. B. 114. (u) 5C. B., N.S. 580; 28L. J., C. P. (z) 7 L. T. Rep., N.S. 745; 11 W. RB. 103. 311. (x) 12 L. T. Rep., N. 8. 266. 1See post, p. 357. 88 OF THE CONTRACT GENERALLY. [Book 1. This direction was held to be a ratification of the previous pay- ment by the agent, so as to enable him to sue the principal for the price as money paid to his use, at his request. An unauthorized order to sell given by one joint owner is rati- fied by the other joint owners joining in a power of attorney en- abling their agents to convey their respective shares (a). Previous to the passing of the Judicature Acts, a ratification might also be implied from the form of action adopted for the en- forcing of one’s rights (6). In conclusion, it may be laid down as a rule that a ratification may be inferred from acquiescence. But this acquiescence may (a) Keay v. Fenwick, 1 C. P. Div. 745, (b) See Smith v. Hodson, 4 T. R. 211, and Ferguson v. Carrington, 9 B.°& C. 59 1See Drennen v. Walker, 21 Ark. 5389 (where heirs seeking a partition among themselves of lands entered by another in their name, were held to ratify the act of location as being made by their agent); Wilmot v. Richardson, 4 Abb. App., Dec. 614; Meyer v. Morgan, 51 Miss. 21; Gracy v. Potts, 4 J. Baxter. 395, and the cases cited below. See, however, Carew v. Lillienthall, 50 Ala. 44; Peters v. Ballistier, 3 Pick. 495 (where bringing assumpsit, and subse- quently discontinuing that action and bringing trover, was held not to bea ratification, though it would have been otherwise had the action of assumpsit not been discontinued); Woodward v. Suydam, 11 Ohio, 863; Bank of Owens- boro v. Western Bank, 13 Bush, 526. The authority of an agent to make a demand is at least prima facie estab- lished by the act of the principal bringing a suit founded upon that demand; and the demand is sufficient, unless the authority of the agent be drawn in ques- tion by the party sought to be charged, at the time it is made. Ham v. Boody, 20 N. H. 411; Payne v. Smith, 12 id. 34. An action by the owner of goods, to recover their price and value from his agent, who, without proper authority, has consigned them for sale on commis- sion and received advances upon them, is prima facie evidence of a ratification of the consignment. Frank v. Jenkins, 22 Ohio St. 597. See, also, Kyser v. Wells, 60 Ind. 261. Where a principal, with full knowl- edge of a fraud perpetrated by his agent in the disposition of property purchased with his money, elects to prosecute to judgment for the money so misappro- priated, he affirms the acts of his agent, and cannot afterwards pursue the prop- erty which he had elected to treat as that of his agent. Bank of Beloit v. Beal, 34 N. Y. 473. Where a lender received a security providing for the payment of the precise amount loaned by him, with lawful in- terest, the fact that his agent, without his authority, knowledge or participa- tion, has extorted from the borrower a sum of money upon the false pretense that a portion thereof was a bonus for his principal, does not taint the security with usury; and the fact that an action upon the security is commenced by the principal, after knowledge upon his part of the exaction of the agent, is nota ratification thereof. The security com- ing to him unaffected by usury, he has the right to enforce it. Estevez v. Purdy, 66 N. Y. 446. See Farwell v. Meyer, 89 Til. 40, CHAP. VII] THE DOCTRINE OF RATIFICATION. 89 itself be either express! or it may be implied. It may be implied from an act, as in some of the above instances, or, in short, from any circumstances which clearly indicate an intention to adopt the un- authorized act or conduct of the agent.’ In all cases when the ac- quiescence has been implied from an act, it will be found that the principal has done something which assumes the authorization and validity of the act that awaited ratification; such, for instance, as bringing an action which postulates as a condition for its main- 1See Watson v. Gray, 4 Abb. App. Dec. 540. 28ee Searing v. Butler, 69 Ill. 575; Maddux v. Bevan, 39 Md. 485; State v. Spartanburg, etc. R. R.Co.,8 Rich. (8. C.) 129; Stroh v. Hinchman, 37 Mich. 490 (recognition of paper on which prin- cipal's name was used without author- ity); Burgess v. Harris, 47 Vt. 322. A ratification may be inferred from the principal's availing himself of, or claiming the benefits of, the act of one professing to act as his agent, the principal having knowledge of the facts. Rich v. State National Bank, 7 Neb. 201; Fowler v. N. Y. Gold Exchange, 67 N. Y. 188; Snow v. Grace, 29 Ark. 131; State v. Smith, 48 Vt. 266; Dunn v. Hartford, etc. Horse R. R. Co., 43 Conn. 434, Hurd v. Marple, 2 Bradwell, 402; Ogden v. Marchand, 29 La. Ann. 61; Ely v. James, 123 Mass. 36; National Lite Ins. Co. vy. Minch, 5 Thomp. & C. 545; 124 Mass. 197; Perry v. Mulligan, 58 Ga. 479 (taking the benefit of an awavd); Chamberlin vy. Collinson, 45 Towa, 429; State v. Smith, 48 Vt. 266; Aurora Agricultural Society v. Paddock, 80 Ill. 263; Eaddie v. Ashbaugh, 44 Towa, 519. See, also, Whitehead v. Wells, 29 Ark. 99. This is not, however, conclusive inthe case of torts. See Hyde vy. Cooper, 26 Vt. 552; Cooley on Torts, 128. But he must avail himself of such benefit with full knowledge of all the material facts or it will not amount toa ratification. Spooner v. Thompson, 48 Vt. 259; Meyer v. Baldwin, 52 Miss. 263; Township of Taymouth v. Koehler, 35 Mich, 22; ante, p. 61. But the use of a bridge by the people of a township when traveling upon a public highway, cannot be construed as an act of acceptance of the work done in building the bridge; the proper par- ties to ratify a contract are those only who could, in the first instance, have lawfully made the contract. Town of Taymouth v. Koehler, supra. A ratification may be inferred from Jong acquiescence. State v. Smith, 48 Vt. 266; Judevine v. Town of Hardwick, 49 id. 180. Francis v. Kerker, 85 Ill. 190; Taylor v. Hopkins, 40 id. 442. See, also, Darst v. Gale, 83 Ill. 136. So, from approval by stockholders of minutes of proceedings of unauthorized acts of directors. Aurora Agricultural Society v. Paddock, 80 Ill. 263. So, where the principal, for whom goods are purchased by another without authority, receives them and uses or sells them on his own account, after being informed that they were purchased for him. Pike v. Douglass, 28 Ark. 69; Sartwell v. Frost, 122 Mass. 184. See, also, Palmer v. Cheney, 35 Iowa, 281. As to payment by a railroad contractor of part of a bill against a sub-contractor, presented to the contractor, not being a ratification of an alleged agency of the sub-contractor in purchasing supplies, and procuring board for laborers on credit, see Wells v. Martin, 32 Mich. 478; Danaher y. Garlock, 33 id. 295. 90 OF THE CONTRACT GENERALLY. [Boor 1. tenance the recognition of a previously unauthorized act of the agent. (See the cases cited note 5.) In considering whether any given facts are sufficient evidence of a ratification, it is important to consider whether the relation of principal and agent already exists, or whether the person who has done the act awaiting ratification is a mere volunteer. The distinction inferred by Livermore (c), from this difference is [68*] *that in the former case, although in the particular trans- action the agent has exceeded his authority, an intention to ratify will always be presumed from the silence of the principal who has received a letter informing him of what has been done on his account,' whereas in the latter case there exists no obliga- (c) Law of Principal and Agent, i. 50. 1See Searing v. Butler, 69 Ill. 575; Ward v. Williams, 26 id. 451; Kelsey v. National Bank, 69 Penn. St. 426; Keh- lor v. Kemble, 26 La. Ann. 713; Pitts- burgh, etc. R. R. Co. v. Woolley, 12 Bush. 451. See, also, Williams v. Mer- ritt, 23 Il. 623; Foster v. Rockwell, 104 Mass. 167; Bogel v. Teutonia Nat. Bank, 28 La. Ann. 953; Matthews v. Fuller, 123 Mass. 446; Marshall v. Williams, 2 Biss. 255; Hanks v. Drake, 49 Barb. 186; Maddux v. Bevan, 39 Md. 485; Swartwout v. Evans, 37 Il. 442; Far- well v. Howard, 26 Iowa, 381; Clay v. Spratt, 7 Bush, 334; Walworth County Bank v. Farmers’ Loan & Trust Co., 16 Wis. 629; Cooper v. Schwartz, 40 id. 54; Meyer v. Morgan, 51 Miss. 21. See, however, contra, Bosseau v. O’Brien, 4 Biss. 395. Where the unauthorized transaction is complete before knowledge thereof comes to the alleged principal, and no change in the position of the parties can occur from his delay to approve or disap- prove it, mere silence on his part affords an inference of ratification, and is evi- dence for the jury, but no estoppel is created thereby. Union Gold Mining Co. v. Rocky Mt. Nat. Bank, 2 Col. Ter. 248, 565 (affirmed in 6 Otto, 640). (In this case there was evidence that the al- leged agent was the agent of the com- pany for some purpose, even if his authority did not extend to the act in question. ) When, however, the transaction is still in progress, or the person dealing with the alleged agent has opportunity to regain what he has parted with, or otherwise improve his position, the al- leged principal is bound to disapprove within a reasonable time after notice, and in such case silence is conclusive ev- idence of assent. Union Gold Mining Co. v. Rocky Mt. Bank, supra. See, also, Saveland v. Green, 40 Wis. 431; Haw- kins v. Lange, 22 Minn. 557. In order, however, to raise the infer- ence of acquiescence from the silence of the alleged principal, it is necessary that he should be fully informed of the un- authorized transaction; but notice there- of to another agent, where the matter is within the scope of his agency, affects the principal, though not in fact com- municated. Union Gold Mining Co. v. Rocky Mt. Nat. Bank, 2 Col. Ter. 565 (affirmed in 6 Otto, 640). The record of a deed, however, made by an agent in the name of his princi- pal, is not constructive notice to the principal of its contents, nor that the agent in executing it had exceeded the authority conferred upon him. But CIIAP. vit.] THE DOCTRINE OF RATIFICATION. 91 tion to answer such a letter, nor will silence be construed into a ratification.1 Judge Duer has suggested the same distinction (d). It is adopted by Arnould (e), with the limitation, however, that the latter part of the inference is not universally true, and by Story (7). Whether silence operates as a presumptive proof of where the agent in making conveyance of his principal's land, has exceeded his authority, the registration of the deed, and the subsequent possession of the purchaser, are facts which, in connection with all the other circumstances of the case, are proper for the consideration of the jury, in determining whether the principal had, after full knowledge, rati- fied the act of his agent by assent thereto or acquiescence therein. Reese v. Med- lock, 27 Tex. 120. See First Nat. Bank v. Reed, 36 Mich. 263, to the point that the effect to be given to the silence of the principal is one of ratification, and to be submitted to the jury as such; see, also, Cooper v. Schwartz, 40 Wis. 54. Whoever deals with an agent having only a special or limited authority, is bound at his peril to know the extent of his authority, and it is not the duty of a@ principal, who has given his agent merely a special and limited authority to sell property, upon learning that the agent has sold it in violation of his authority, to seek the purchaser, and give him notice of his claim; and his omission to do so and his mere silence, are not ordinarily to be construed as a ratification of the sale. White v. Lang- don, 30 Vt. 599. As to the time within which the prin- cipal must repudiate unauthorized acts of one assuming to actas his agent, each case must be governed by its own pecu- liar circumstances. The repudiation must be made within a reasonable time in view of all the circumstances of the case. Peck v. Ritchey, 66 Mo. 114; Meyer v. Morgan, 51 Miss. 21; Clay v. Spratt, 7 Bush, 334; Keblor v. Kemble, 26 La. Ann. 713; Union Gold Mining Co. v. Rocky Mt. Nat. Bank, 6 Otto, 640; McDermid v. Cotton, 2 Bradwell, 297; Hurd v. Marple, 1d. 402. The principle, that one for whom a contract is made is presumed to have ratified it, unless he repudiates it when informed of it, applies to principals to the parties to be bound; but it can have no application to joint agents as to the ratification of the separate acts of one by the other. It is their acts, and not their non-action, which can bind their principals. Penny. Evans, 28 La. Ann. 576. 1 Ward v. Williams, 26 III. 451, where it is said that in such a case the princi- pal will only be bound by an affirma- tive ratification. See, however, Miller v. Excelsior Stone Co., 1 Bradwell (Ill.), 279; Saveland v. Green, 40 Wis. 431, 438, where the court make no such distinction as stated in the text, but lay down the rule gener- ally: ‘‘ Where a person assumes in good faith to act as agent for another in any given transaction, but acts without authority, whether the relation of prin- cipal and agent does or does not exist between them, the person in whose be- half the act was done, upon being fully informed thereof, must, within a rea- sonable time, disaffirm such act, at least, in cases where his silence might operate to the prejudice of innocent parties, or he will be held to have ratified such un- authorized act.” (d) Duer, vol. ii. 151-154, and 178- 182, n. 5. (e) Marine Insurance, i. 151. (f) Agency, §§ 255, 258. 92 OF THE CONTRACT GENERALLY. [Book 1. a ratification may, as the latter learned author remarks, depend upon the particular relations between the parties, and the habits of business and the usages of trade. French v. Backhouse (g), decided in 1771, was one of the ear- liest cases in which the subject was mooted. The plaintiff, a ship’s husband, appointed by a deed executed by all the joint owners of the ship, was empowered generally to act in that capacity. He insured the ship, and to recover the money so paid sued two of the joint owners for the whole amount paid. The court ruled that the plaintiff could not insure for a part-owner without his particular direction, nor for the owners jointly without their gen- eral direction. There was no proof of an express direction, but it was argued by the plaintiff’s counsel that having been informed of the insurance, and having made no objection, they must be taken to have ratified the agent’s act. A verdict was given for the plaintiff. The court discharged a rule for a new trial. ‘The evidence,” said Lord Mansfield, “ brought to prove that there was a general direction given by all the owners was uot that they gave an express direction; it only proved that they were told of the in- surance, and expressed no objection to it.” In Prince v. Clark (h), decided in the Court of King’s Bench in 1823, the only point before the court related to this question _ of ratification. The plaintiff consigned certain goods for sale to the defendant, the captain of a ship bound for Caleutta, with di- rections for the disposal of the proceeds of the sale. The defend- ant exceeded his instructions by investing the proceeds in buying sugars. He informed the plaintiff by letter of the purchase. The letter was received by the plaintiff on the 29th May. [69*] *After receipt of the letter the plaintiff, on August 7th, told C., who had from time to time acted as B.’s insurance agent, that he would not accept the sugars, and advised C. to in- sure them. C. declined to interfere. The plaintiff then sued the defendant for the value of the sugars. At the trial, Chief Justice Abbott directed the jury that the plaintiff was bound to notify his dissent within a reasonable time if he had any means of doing so, and his lordship left it-to them to say (1) whether the plaintiff, knowing as he did the relationship which existed between ©. and the defendants, ought not to have notified his rejection of the (g) 5 Burr. 2727, (h) 1B. & C. 186, CHAP. vu] THE DOCTRINE OF RATIFICATION. 93 sugars to him, and (2), if so, whether the dissent was notified in time. A verdict was found for the defendants. A new trial was refused by the whole court. Abbott, C. J., said, “The plaintiff certainly was not bound to accept the sugars. It was his duty, however, to notify his rejec- tion of them within a reasonable time after he received intel- ligence of the purchase, if there was any person here to whom that notice could be given.” “The plaintiff,” remarked Bayley, J., “has no right to pause and to wait the fluctuation of the mar- ket, in order to ascertain whether the purchase is likely to be beneficial or prejudicial; he is bound, if he dissents, to notify his determination within a reasonable time, provided he has an oppor- tunity of doing so.” Holroyd and Best, JJ., concurred. The principle stated in French v. Backhouse (7) was acted upon in the more recent case of Dobinson v. Gleadow (j), decided by the Court of Common Pleas in 1835. Here acquiescence in an unauthorized insurance was inferred from the fact that the prin- cipals made no objection when they were fully aware of what was done in their behalf. The main question was whether the man- aging owner of a ship had authority to insure for the joint owners. There was no evidence of an express authority, but it was suffi- ciently proved that the other part-owners were continually visiting H’s counting-house; that they often saw and inspected his ac- counts; that the books themselves were open for their inspection; that the insurance was made for their joint account and benefit, and that they never made any objection. It was held, therefore, that the case came within the doctrine of Lord Mansfield in the above case. “They were fully informed of what was done, and acquiesced, never having made any objection” (£). * Secor. 3.— Consequences of a Ratification. [70*] The maxim of the common law, as we have seen, is that a ratification has the effect of a previous command. In order, how- ever, to see as clearly as possible the consequences which flow from a ratification, it will be well to consider separately the par- ties whose rights may be respectively affected. The relative rights then which may be affected by a ratification are those of (¢) Supra. (J) 2 Bing. N. C. 156. (k) Per Park, J. $4 [BOOK I. OF THE CONTRACT GENERALLY. (1.) The principal and the agent; (2.) The principal and third parties; (8.) The agent and third parties. In the first place, the consequences of a ratification, as it affects the relative rights of the principal and agent, will be considered. The general rule is, that if an act is done for another by a person not assuming to act for himself, but for such other person, though without any precedent authority whatever, it becomes the act of the principal if subsequently ratified by him. In such a case the principal is bound by the act, whether it be to his detriment or for his advantage, and whether it is founded on a tort or a con- tract, to the same extent and with all the consequences which follow from the same act if done by his previous authority (2).! (2) Wilson v. Tumman, 6 M. & Gr. 236; 6 Scott, N. R. 894; 1 D. & L. 513. 1See Cooley on Torts, 127; Sentell v. Kennedy, 29 La. Ann. 679; Rich v. State Nat. Bank, 18 Kan. 201, where it is said that the ratification is equivalent original authority to act in the matter ratified; and that the same rule applies to corporations which is applied to nat- ural persons. See, also, the cases there cited. Where laborers were employed by a planter in January, 1868, and shortly thereafter deserted him, and _ hired themselves to the agent of another, and the first employer arrested them and lodged them im jail, under the court contract act, from which confinement the Freedmen’s Bureau discharged them, and they then, with the sanction of the Bureau, hired themselves to the agent of the second employer, who re- tained them, and some two months afterwards informed his principal of his action, who then, for the first time, rat- ified the hiring. having previously in- structed his agent to hire no hands em- ployed by others: Helc, that such ratification did not make the latter guilty of enticing away the servants of another, so as to render him lable in an action for damages to the first em- ployer. Lee v. West, 47 Ga. 311, Where a principal, with knowledge of all the material facts, ratifies the un- authorized act of the agent, he thereby adopts the unauthorized act, and must be bound by it; and he cannot there- after hold the agent liable for damages resulting from such unauthorized act. Bray v. Gunn, 53 Ga. 144; Smith v. Cologan, 2 Term, 188, note; Cairnes v. Bleecker, 12 Johns. 300; Woodward v. Suydam, 11 Ohio, 360; Oliver v. John- son, 24 La. Ann. 460. See, also, Bell v. Cunningham, 3 Pet. 69. Where, however, an agent to loan money takes insufficient security, the principal is not bound at his peril to accept and discharge the agent, or to reject the security, and look only to the responsibility of the agent. The prin- cipal in such case may take the security, and still hold the agent bound for any deficiency which, after due diligence, he suffers on it. Bank of Owensboro v. Western Bank, 13 Bush. 526. Where an agent for the collection and transmission of a sum of money, who was instructed by his principal to remit by express, purchased a check drawn by parties in good standing and credit in New York, and forwarded the same to his principal, who sent it to New York for collection, but before it was cashed the drawers became insolvent, CHAP. VII.] THE DOCTRINE OF RATIFICATION. 95 Henee, if an agent incur expenses by departing from his instruc- tions, and the principal afterwards ratify such departure, the agent is entitled to recover the expenses so incurred (m). In Hovil v. Pack (nm), the same rule was stated more briefly. If you adopt A. as your agent on your own behalf, you must adopt him through- out and take his agency cwm onere (0). The act done must be for the benefit of the principal (p).1 A ratification must extend to the whole of a transaction. So well established is this principle, that if a party is treated as an agent in respect cf one part of a transaction, the whole is thereby ratified (g). From this maxim results a rule of universal appli- cation, namely, that where a contract has been entered into by one man as agent for another, the person on whose behalf it has been made cannot take the benefit of it without bearing its burdens. The contract must be performed in its integrity (r).? *In Bristowe v. Whitmore (s), decided by the House of [71*] Lords in 1861, the master of a ship entered into a charter- party whereby he was himself to receive the freight. As a con- sideration for this he was to convey troops, and to fit the vessel for that purpose. He advanced money out of his own pocket, and drew bills on the owner for the rest of the expenses, to enable the ship to earn the freight. The contract was ratified by the owner. The House of Lords held that the owner could not take the bene- fit of the contract and leave the onerous parts; that the master, if sued by the owner for the freight as money had and received, would have had a right at law to deduct the money so advanced without pleading a set-eff, and that he had a right in equity to be reimbursed out of the freight so earned, such a case not falling and the check was dishonored, it was (0) See, to the same effect, Ramazotti held that the agent having violated his v. Bowring, 7 C. B., N.S. 851, per Erle, instructions in respect to the mode of C. J.; Attwood v. Small, 6 Cl. & F. 282. transmitting the money, rendered him- (p) Wilson v. Barker, 4 B. & Ad. self liable to the principal for the loss 614; Goodtitle v. Woodward, 3 B. & sustained, and that sending the check Ald. 689. to New York for collection was not an 1See ante, p. 54. absolute ratification by the principal of | (g) Wilson v. Poulter, 2 Str. 859; the act of the agent buying the check. Attwood v. Small, 6 Cl. & F. 232. Walker Vv. Walker, 5 Heisk. 425. 2 See ante, p. 65. (m) Frixione v. Tagliaferro, 10M. P. —() Bristowe v. Whitmore, 4 L. T. c.¢. 175. Rep., N.S. 622; 31 L. J. Ch. 467. (n) 7 East, 164. (s) Supra. 96 OF THE CONTRACT GENERALLY. [Book 1. within the rule that the master has not, in ordinary circumstances, a lien on the freight for wages and disbursements. Lords Wens- leydale and Chelmsford dissented from the opinion of the majority of the noble lords, on the grounds that there was no question of ratification, and that the master should therefore look to the owner only for reimbursement in the usual way. They did not dissent from the principle above stated. The maxim “Qui sentit com- modum sentire debet et onus” requires little to be urged in its support, founded as it is upon just and equitable grounds. Where a ratification is proved, the principle applies, but it is not always easy to decide whether the facts in a particular case sup- port the inference of a previous but implied authority, or whether not going to that length they prove a ratification. Of course, in the former case, the principle has no application. We now come to the second question, namely, the effect of a ratification upon the relative rights of the principal and third par- ties. As soon as there is a ratification the principal steps into the place of the agent. He becomes immediately invested with all the rights and all the duties that flow from the transaction or con- duct by him ratified. The person whose conduct is ratified sinks into a subordinate position, and exchanges his original rights and duties, so far as these were due to the particular transaction, for the rights and duties of a duly authorized agent. Hence, where an unauthorized person entered into and signed as agent of the owner an agreement for the sale of an estate, and the owner [72*] afterwards signed it, expressing at the *same time on the face of the instrument his sanction and approval of the agent’s conduct, the agent could not be rendered personally liable upon the contract, the purchaser’s remedy being against the princi- pal (¢).. So if a contract in writing is‘made for a principal with- (t) Spittle v. Lavender, 2 Brod. & Bing. 452; and see Kendray v. Hodg- son, 5 Esp. 228. 1See Lucas v. Barrett, 1 G. Greene, 510. See, however, Rossiter v. Rossiter, 8 Wend. 494, where it was held that where the drawer of a note affixes his signature as the agent of another, if in an action against him personally, he claims to have had authority to sign as he did, he is bound to show such au- thority existing at the time of the making of the note; and he is not permitted to show a subsequent ratification by his principal. On the other hand, where an agent has fraudulently sold his principal's property and embezzled its proceeds, and the principal afterwards accepts CIIAP. VII.] THE DOCTRINE OF RATIFICATION. 97 out authority, and the principal subsequently ratifies the contract, the ratification renders the agent authorized to enter into the con- tract under the Statute of Frauds (w).! One of the most recent cases upon the question of the opera- tion of the Statute of Frauds in cases of ratification came before the Court of Queen’s Bench in 1875 (@). A verbal contract for the delivery of three cases of leather cloth to the defendant at Co- logne was entered into in February, 1870, between the defendant’s son, A., and the plaintiffs. The goods were to be sent from Lon- don, by Ostend. When the goods were ready, the plaintiffs had given up their Ostend route and returned to the Rotterdam route. ‘They shipped the goods in March, and sent an invoice to the de- fendant, together with a notification of the change in the route. The defendant did not answer this letter, but ordered more goods, which were forwarded in the same way. In the voyage the three cases were much damaged. The defendant, in a letter dated 5th July, refused to pay for them, on the ground that the instructions were to send them wid Ostend. Two questions on the above facts were raised at the trial; first, whether there was sufficient memo- randum in writing signed by the defendant; secondly, whether he had by his silence and subsequent conduct assented to the changed route before the loss. Both questions were answered in the affirm- ative. The full court upheld the ruling of the learned judge at the trial. “It is impossible to say,” said Lord Chief Justice Cockburn, “that there was not in this case a written memoran- dum of the original contract, and that the departure from the terms of that contract in the mode of delivery cannot be ratified something from the agent in compensa- tion for the embezzled proceeds, he thereby ratifies the sale made by the agent, and estops himself from any re- course against the innocent purchaser of his property. Ogden v. Marchand, 29 La, Ann. 61. See, also, Frank v. Jenkins, 22 Ohio St. 598, where an action against the agent for the price and value of goods wrongfully consigned by him to a com- mission merchant who had bona fide made advances to the agent thereon, was held to preclude the principal in an 7 action of replevin between the commis- sion merchant and himself from deny- ing the agent’s authority to make the consignment. (u) See Wilson v. Tumman, 6 M. & Gr. 236; Bird yv. Brown, 4 Ex. 786; 19 L. J., Ex. 786; Maclean v. Dunn, 4 Bing. 722; Hilbery v. Hatton, 2 H. & C. 822; 33 L. J., Ex. 190; Soames v. Spencer, 1 Dow. & Ry. 32. 1See ante, pp. 17 and 62, notes. (x) The Leather Cloth Co. v. Hieroni- mus, 10 L. R., Q. B. 140. 98 OF THE CONTRACT GENERALLY. [Book I. by the other party without writing. If he receives the goods, or if he has ratified the mode by which they were sent, he cannot be heard to say that it was a new contract and cannot be [73*] enforced, because it *was not in writing. There was sufficient evidence in the present case for the jury that the defendant had ratified the route by which the plaintiffs had forwarded the goods.” Mr. Justice Blackburn spoke to the same effect: “The first part of the letter of the 5th July in the most distinct terms refers to the plaintiff's letter of the Ist March, and clearly admits that all that was said in it was quite true. . . . This letter was signed by the defendant or his agent, and therefore the statute has been satisfied, and there is a memorandum in writing by the de- fendant, the party to be charged, or his agent. But it was argued that, though there was that letter of the defendant to the plaintiff, there was no assent in writing to the substituted contract.” But, as his lordship pointed out, the plaintiffs did not rely on a substi- tuted contract, but on the original contract. The same learned judge could not “see why the assent to a sub- stituted mode of performing one of the terms of a contract need be in writing, though the contract must have been in writing, there being totally different things involved — the proof of a sub- stituted contract, the proof of a ratification or approval after per- formance of the substituted mode of performance.” A careful examination of this case will show no undue relaxation of the principle requiring substantial proof of a ratification (y). In the first place, the substituted mode of delivery was the usual one when the port was open; secondly, the defendant made no objec: tion before the loss, nor for four months after receiving notice of the change; thirdly, during this period, the defendant sent several orders, and the goods were sent by the route on which the loss occurred. In Cheetham v. Mayor, ete., of Manchester (2), an attempt was made to maintain the existence of a qualified kind of ratification. A town clerk, acting on behalf of the corporation, directed the sur- veyor, who had certified, as required by 3 Vict. c. 36, s. 38, that there was imminent danger from a building of which the plaintiff was the owner and occupier, to cause the buildings mentioned in his certificate to be taken down or repaired in such manner as he (y) Vide supra. (z) L. R., 10 ©. P. 249, CHAP. VII. | THE DOCTRINE OF RATIFICATION. 99 should think fit. By sect. 89 of the above act, the expenses so in- curred may be recovered from the owner. Assuming that theacts of the officers were ratified, it was contended by the solicitor- general that a ratification might suffice to protect the agent from liability, and yet not make his acts *the acts of the [74*] corporation; that the ratification might be valid as against the defendants, and have no further effect. The argument fell to the ground. No case was cited in its support, nor, upon principle, can anything be urged in its favour. If a ratification means any- thing it means that the party ratifying has, by his act, become invested with the rights and duties of a principal in relation to third parties, and to the individual whose conduct is ratified. Wherever a ratification is proved, there can be no doubt that this is the general effect. As regards the consequences of a ratification in the case of the agent and third parties, the rule is, that wherever an agent acts without authority he is personally liable (a).t As between the principal and agent, the want of authority is entirely remedied by a subsequent ratification (>). But in considering how a ratifica- tion affects the relative rights of the agent whose conduct is rati- fied and third parties, a distinction must be made between con- tracts and torts. When the contract of an agent is duly ratified, credit having been given to the principal, his rights and liabilities arising from that contract are wholly transferred to the party rati- fying, and the agent occupies a position identical with that of one invested with full authority to do the act ratified. Hecan neither sue in his own right nor be rendered personally liable (see cases cited above).? When, on the other hand, an individual duly rati- an unauthorized act have the effect to (a) East India Co. v. Hensley, 1 Esp. 112; Polhill v. Walter, 3B. & A. 114; Bowen v. Morris, 2 Taunt. 374. 1See post, p. 800. (b) Supra. 2 See ante, p. 72. The subsequent assent of the princi- pal does not, however, relate back so as to prejudice third parties whose conduct has been guided by the transaction as it actually occurred. Lindley’s Int. to Jurisprudence, App.cvi. See ante, pp. 49-51. roan Nor will a subsequent ratification of divest rights acquired by third parties between such act and the ratification. Stoddard v. U.8., 4 Ct. of Cl. 511. Where an order is drawn in a party’s name by his son and clerk, who is at- tending to business for the father, and the latter afterwards ratifies the act, the order, on acceptance and payment, can- not be impeached or avoided by creditors, in a contest for liens under the mechan- jc’s lien law, where no fraud is shown. St. Louis National Stock Yards vy. O’Reilly, 85 Il. 546. 100 OF THE CONTRACT GENERALLY. [Book 1. fies a tort committed by another on his behalf, the ratification has not the same wide effect. For whilst on the one hand it avails to shield the agent from any liability to the principal from the con- duct so ratified, it does not take away his liability to third parties who have suffered a tort at his hands. This distinction applies universally, except in cases of ratification by the Crown (c). In Stephens v. Elwall (d), decided in 1815, Lord Ellenborough applied the principle in an action of trover brought against an agent. Wherever an agent is so sued, it is no answer that he acted under authority from another who had himself no authority to dispose of the property. So where a servant or other agent has done some act amounting to a trespass in assertion of his mas- ter’s right, he is liable, not only jointly with his master, but for every penny of the damage,’ nor can he recover contri- [75*] *bution [indemnity] (¢).° It is well established that an agent is liable in trover for a conversion to which he is a party, though it be for the benefit of his principal (7). The crown may ratify the torts of its agents, and such a ratification has a novel effect upon the relative rights of the agents and third parties. If an individual ratifies an act done on his behalf, the nature of the act remains unchanged; it is still a mere trespass, and the party injured has his option to sue either: if the crown 1 As to what will constitute a person a wrongdoer by ratification, see Cooley on Torts, 127. (c) Buron y. Denman, 2 Ex. 167. (d) 4M. & §. 256. 2See Josslyn v. McAllister, 22 Mich. 800; Wright v. Eaton, 7 Wis. 595; Thorp vy. Burling, 11 John. 285; Rich- ardson v. Kimball, 28 Me. 463; Per- minter v. Kelly, 18 Aja. 716; Gaines v. Briggs, 4 Eng. 46; Elmore vy. Brooks, 6 Heisk. 45; Burknap v. Marsh, 13 IIL. 535 (action for malicious prosecution against an attorney). (e) Ibid. 261. 3 Best, C. J., in Adamson v. Jarvis, 4 Bing. 66, 73, lays down the rule on this subject as follows: ‘‘ The rule that the wrongdoers cannot have redress or contribution against each other is con- fined to cases where the person seeking redress must be presumed to have known that he was doing an unlawful act.” If the act done by the agent was a plain and manifest wrong, he can have no indemnity, because he will be pre- sumed to have known the act to be such; but if the act directed by the principal was one which he had reason to suppose legal, and he obeyed directions on that supposition, he will be entitled to de- mand indemnity from the principal. Cooley on Torts, 145 et seq., and the cases cited in the notes, (f) Perkins v. Smith, 1 Wil. 328; Cranch v. White, 1 Bing. N. C. 414; Davies v. Vernon, 6 Q. B. 443; and Hilbery v. Hatton, 10 L. T. Rep., N.S. 389, per Martin, B. €MAP. VII.] THE DOCTRINE OF RATIFICATION. 101 ratifies an act, the character of the act becomes altered, for the ratification does not give the party injured the option of bringing his action against the agent who committed the trespass, or the principal who ratified it, but a remedy against the crown only, if there is any remedy at all, and exempts from all liability the: per-. son who commits the trespass (9). (g) Per Parke, B., in Buron vy. Denman, 2 Ex. 167. 102 [76*] OF THE CONTRACT GENERALLY. [Book I. * CHAPTER VIIL OF THE DETERMINATION OF THE CONTRACT. PAGE. Srcor. 1.— By Agreement. Contract may be determined by agreement, or by performance of the object, or by efflux of time.. Instances of unilateral agreements Lord Denman upon the construction of such agreements.....--..--- Explanation of the terms “agreed,” ‘“‘retain and employ,”’ ‘‘ perma- 76 G7 78 80 Aspdin vy. Austin and Dunn v. Sayles explained .....-..-++++ 81 Rhodes v. Forwood examined..... 81 Sxcr. 2.— By Act of Party.) When principal may revoke author- hee 83 Authority coupled with an interest 83 What authority irrevocable....... 84 Distinction between rights arising from authority to sell and author- ity coupled with an interest..... 85 Agent appointed by articles of asso- CILION 26. cece cere cree cere ee eee 86 Sxct. 8.— By Operation of Law. By change of condition producing incapacity ...+.ee see eee eee eee 87 Death of principal or agent ...... 87 Distinction of revocation by death and by act of party..........+- 88 Bankruptcy of the principal...... 88 Exception where authority coupled with interest .........-..6. .6 88 Bankruptcy of underwriter....... 89 PAGE, Powers of attorney ..-----++e+-++ 89 Exception in favour of bond fide purchaser...--..2..006 siaieia's ies 89 Set-off........205 to dls ws-aiee ee ee'ssis 90 Right of, explained.......+..-- 90 Mutual credits ........seeeeeeee 90 Meaning of ....-.-.seeeeeereee 91 Appropriation of goods or money.. 91 Cannot be defeated by member of firm, when........-...06. 92 Bankruptcy Act, 1869, sect. 39.... 92 Bankruptcy of agent ..-......0-. 92 Operates as revocation ..... teva 92 Exception ......eseeeeeeeneee 92 Summary of rules...........000. 92 Bankruptcy Act, 1869, 5s. 15...... 94 Traders... ...eeceecceeeeeeeee coe 94 Who a factor ........cceeeeeeees 95 Specific appropriation.......+.6.++ 95 Property in hands of factor..... 95 Remittances ..........c.eeeeee 95 What amounts to a..........66 96 Goods and bills received for a particular purpose.........+ 97 Trust property ........-eseeeeeee 98 Property in hands of trustee...... 98 Mixed by trustee with hisown.... 98 Marriage of feme sole... ..eee.00 99 Insanity... 0.00 cece eee cceccnece 99 of principal.........eeeeeeeeee 99 of partner........ iene 100 Of agttiti cs secsnseses saw seeds 100 Destruction of subject matter of the AGENCY ....eeeeee siieawed ede -- 100 Tur authority of an agent may be determined in one of three ways. It may be dissolved either (1) by agreement, or (2) by act 1 As to the necessity of notice of revocation, see post, p. 434, and note. OMAP. vu. ] OF THE DETERMINATION OF THE CONTRACT. 103 of party, or (8) by operation of law. These are the general heads to which may be referred all modes of putting an end to the au- thority of an agent. Under these general heads, however, *are contained others, which may be easily gathered from [77*] the following table: (a.) By agreement: 1. By performance of the object of the agency; 2. By efflux of time. (b.) By act of party: 1. By revocation of authority; 2. By renunciation of the agency. (c.) By operation of law: . By death of principal; . By death of agent; . Bankruptcy of principal; . Bankruptcy of agent; . Insanity of agent; . Insanity of principal; Destruction of the subject matter of the agency. 1 2 3 4. 5. Marriage of feme sole (principal); 6 i 8. Sect. 1— By Agreement. Wherever an express agreement exists, limiting the agency either to some definite object! or for some definite time,’ as, for instance, 1 Tf the inhabitants of a town have by vote authorized their treasurer to bor- row money for the adjustment of a state tax for the reimbursement of bounties to volunteers, and the tax has been ad- justed without the necessity of borrow- ing money, his authority to borrow money under the vote thereupon ceases. Benoit v. Inhabitants of Conway, 10 Allen, 528. If a man sells goods, acting as a broker, the moment the sale is com- pleted he is functus officio, The terms of the contract cannot then be altered except by authority of the principal, Blackburn v. Scholes, 2 Camp. 343. Where the owner of land employed an agent to sell the same, agreeing that, if the latter would find a purchaser at a fixed price, he would pay him $500, which the latter did, it was held, that as soon as the agent procured the pur- chaser, his agency ceased, and his tak- ing a retainer from the purchaser to see that the papers were properly prepared and executed, presented no ground for defeating a recovery of the price agreed to be paid him. Short v. Millard, 68 Ill. 292. See, also, Moore y. Stone, 40 Towa, 259; Walker v. Derby, 5 Biss. 134. ° A. entered into a written agreement with B., by which the former was con- stituted the agent of the latter for the sale of certain machines. The only provision in relation to the duration of the agency was as follows: ‘‘Said B., 104 OF THE CONTRACT GENERALLY. [Book 1. were a man is authorized to buy a quantity of merchandise ac- cording to sample, or to buy generally for a year, there being at the same time a condition that the employment shall continue in the one case until the merchandise has been bought, and in the other until the year has expired, the agency will be dissolved in due course by the happening of these results respectively; and, under ordinary circumstances, no question with respect to a dis- solution by act of party in the meantime can arise. It is, how- ever, rare that contracts of agency provide for all contingencies. In the cases to which reference will be made upon this head the difficulty has arisen upon the construction of the agreement. In Burton v. The Great Northern Railway Company (a), 1854, the plaintiff had agreed on the 1st October, 1851, to convey be- tween certain places named all merchandise that might be pre- sented to him for that purpose, for the sum of 5s. per ton. The agreement was to continue in force for the period of twelve months. The plaintiff purchased waggons and horses, and com- [78*] *menced carrying under the agreement. He received notice on the 18th of March of the same year that the arrangement would cease from the following 1st April. The court (consisting of Parke, Alderson, and Martin, BB.) held that the contract was unilateral. Parke, B., put as a parallel case that of a person who agreed with a wine merchant to purchase of him all the wine which the former might choose to drink during the year, and be- fore six months expired gave notice that he had given up drinking wine. An attempt was made to bring the case within the prin- ciple of Hochester v. De Latour (b). This obviously could not succeed, in the absence of proof of a breach of contract. Here the carrier was an agent to convey such merchandise as was “ pre- sented to him.” If no merchandise was presented, no part of the in consideration of the faithful perform- ance by the said A. of the obligations his duties as such agent, conditioned that he would justly and fairly account hereinafter assumed, agrees to furnish the said A. such number of machines as the said A. may be able to sell, as his agent, prior to October 1st, 1867:” Held, that by a reasonable construction of the agreement, the agency continued only till the 1st of October, 1867, and the sureties on a bond executed ly A. to secure the faithful performance of for and pay over all moneys, notes, etc., received by him for such machines ag might come to his hands as such agent, were bound only for a failure on the part of A. to account for machines re- ceived by him prior to that date. Gund- lach v. Fischer, 59 Ill. 172, (a) 9 Ex. 507. (b) 2K. & B. 678. CHAP. VIU.] OF THE DETERMINATION OF THE CONTRACT. 105 contract was violated, for the defendants were under no duty to present merchandise for carriage. In Aspdin v. Austin (¢), the plaintiff agreed to make cement of acertain quality for the defendant, who, on condition of the plaintiff ’s performing his engagement, promised to pay him 4J. weekly during the two years following the date of the agreement, and 5/. weekly during the next year following, and also receive him into partnership at the expiration of three years. The plaint- iff, on his part, engaged to instruct the defendant in the manu- facture of cement. Both bound themselves in a penal sum to fulfil the agreement. Subsequently the defendant covenanted by deed for the performance of the agreement on his part. Upon these facts the Court of Queen’s Bench held that the provisions in the agreement did not raise an implied covenant that the de- fendant should employ the plaintiff in the business during two or three years, although the defendant was bound by the express words to pay the plaintiff the stipulated wages during those peri- ods if the plaintiff performed or was ready to perform the condi- tion precedent on his part. In this case the circumstances in favour of the plaintiff are even stronger than in Burton v. Great Northern Railway Co. (d.) Lord Denman, in delivering the judgment of the court, made some observations which are appropriate to all actions of a like kind. “ Where words of recital or reference manifested a clear in- tention that the party should do certain acts, the courts have from these inferred a covenant to do such acts, and sustained actions of covenant for the non-performance; . . . where parties *have entered into written engagements with expressed [79*] stipulations, it is manifestly not desirable to extend them by any implications; the presumption is, that having expressed some, they have expressed all the conditions by which they intend to be bound under that instrument. It is possible that each party to the present instrument may have contracted on the supposition that the business would in fact be carried on, and the service in fact continued, during the three years, and yet neither party might have been willing to bind themselves to that effect; and it is one thing for the court to effectuate the intention of the parties to the extent to which they may have, even imperfectly, expressed them- (c) 5 Q. B. 671. (d) Supra. 106 OF THE CONTRACT GENERALLY. [Boor I. selves; and another to add to the instrument all such covenants as upon a full consideration the court may deem fitting for com- pleting the intentions of the parties, but which they either pur- posely or unintentionally have omitted.” The reason assigned for refusing to draw the inference that the defendant impliedly con- tracted to employ the plaintiff for three years, was that the defend- ant would in that case be obliged to continue his business for three years. Hence the court construed the contract to be a con- tract only to pay certain sums at the stated periods for three years, on condition of the plaintiff’s performing the conditions precedent, and he would be entitled to recover them on being ready and will- ing to perform those conditions if prevented by the act of the defendant. : The case of Dunn v. Sayles (e) was very similar to that of Aspdin v. Austin (f), and decided upon similar principles. The declaration stated that it was agreed by deed that the plaintiff's son should continue with the defendant as an assistant surgeon dentist for the term of five years; and that the defendant, in con- sideration of the services to be performed, covenanted to pay wages weekly, provided, inter alia, he worked nine hours a day in his employment. The breach alleged was that the defendant would not permit the plaintiff’s son to continue in his service. The court held that the breach was ill-assigned, since there was no im- plied covenant on the part of the defendant to retain him in his service during the five years. Both the above decisions have been the subject of much comment. By one learned judge it is said that they were considered by many persons as monstrosities (9). [80*] *One of the leading cases upon the question is Elderton v. Hmmens (h), decided by the House of Lords in 1853. The declaration was framed in two counts. The first alleged that in consideration that the plaintiff had agreed to become perma- nent solicitor of a company and act as such, the company, repre- sented by the defendant, promised to. retain and employ him as permanent solicitor. The breach assigned was wrongful dismissal. (e2)5Q. B. 685; 13 L. J., Q. B. 159; cher, 32 L. J., C. P. 254; 8 L. T. Rep., and see Williamson vy. Taylor, 5Q. B. N.S. 461. 175. (h)4C. B. 479, 498; 6 C. B. 160.8. (f ) Supra. C., 17 L. J., C. P., 307; in error, 13 C. (g) Erle, C. J.,in McIntyre v. Bel- B. 495; 4 H. L. Cas. 624. CHAP. VIL] OF THE DETERMINATION OF THE CONTRACT. 107 The second count alleged that it was agreed between the parties that the plaintiff should receive a salary cf 1002. per annum for his services as solicitor, and averred that “the said agreement being so made in consideration that the plaintiff had, at the request of the company, promised the company to perform and fulfil the same in all things on his part, the company promised the plaintiff to perform and fulfil. the same in all things on their part, and to retain and employ him as such attorney of the com- pany on the terms aforesaid.” The breach assigned was that the company did not continue to employ him. The Court of Common Pleas, consisting of Wilde, C. J., Colt- man, Maule, and Cresswell, JJ., held that the first count was not supported by proof of a resolution of the directors that the plaintiff “be appointed permanent solicitor to the institution.” The word permanent, it was said, denoted no more than a general employment, as contradistinguished from an occasional or special employment. With respect to the second count, the court was of opinion that the agreement did not necessarily imply a promise by the company to employ the plaintiff; and that the considera- tion being exhausted by the mutual promises, there was nothing to sustain the latter branch of the company’s promise. This count was held bad in arrest of judgment. The Court of Exchequer Chamber was unanimous in revers- ing the judgment of the Common Pleas upon the second count. “Now, in construing this argument,” said Parke, B., who deliv- ered the judgment of the court, “it is to be borne in mind that the word ‘agreed’ is the word of both, as was held in the case of Pordage v. Cole (i). . . . What, then, is the effect of an agreement to give a certain salary, for one year at least, to a per- son who engaged for it to give his services if required? We think that this creates the relation of attorney and client, and amounts to a promise to continue that relation at least for a *year.” Referring to the meaning of the words “retain [81*] and employ,” his Lordship observed, “ ‘to retain ’ is to ‘keep in pay,’ to ‘hire’ . . . If the word ‘employ’ means only ‘to en- gage in his service’ — one of the meanings of that term, — then there appears to be a promise to that effect.” This judgment was affirmed by the House of Lords, apparently on the ground (i) 1 Saund. 319. 108 OF THE CONTRACT GENERALLY. [Book I stated by Lord Truro that if a declaration contains allegations capable of being understood in two senses, and if understood in one sense it will sustain the action, and in another it will not, after verdict it must be construed in the sense which will sustain the action. ; It does not appear that any of the judges in the above case ques- tioned the decisions in Aspdin v. Austin and Dunn v. Sayles (kh), nor is there any difficulty in understanding the principle upon which those cases were determined. The observations to which they have given rise are due to contentions supposed erroneously to be made on their authority. “The cases of Aspdin v. Austin and Dunn v. Sayles,” said Maule, J., “are instances of agree- ments in which a certain duration of the relation between the parties was contemplated and provided for without binding the parties to continue it for the time contemplated.” The essential distinction between those cases and that of Hlderton v. Hmmens, if we look away from questions of pleading, is that indicated by Maule, J. Such cases, however, are of little use as authorities. | : The rule has now been settled by the House of Lords that, where the parties mutually agree for a fixed period, the one to employ the other as his sole agent in a certain business, at a cer- tain place, the other that he will act in that business for no other principal at that place, there is no implied condition that the business itself shall continue to be carried on during the period named.! (¥) Supra. 1See, however, Lewis y. Atlas Mutual Life Ins. Co. 61 Mo. 534, where it was held that the inability of a corporation to continue in business was no excuse for its breach of contract with an agent; and that where the agent agrees to act exclusively for it for a specified period, the fact that the company did not in terms agree to continue the contract for the whole of that time, will not author- ize a discontinuance in the meantime on its part. In this case the rule was laid down that, although a contract in its terms is obligatory on one party only, yet, if the intention of the parties, and the consideration upon which the obli- gation is assumed, is that there shall be a correlative obligation on the other side, the law will imply it. As, if the act to be done by the party binding himself can only be done upon a corre- sponding act being done or allowed by the other party, an obligation by the latter to do, or allow to be done, the act or things necessary for the comple- tion of the contract, will be necessarily implied—citing Pordage v. Cole, 1 Win. Saund. 319; Churchward v. The Queen, 6 B. & S. 807; Black v. Wood- row, 39 Md. 194. An employee who refuses to obey all lawful orders is liable to be deprived of his place and required to pay damages. CEAP. VIII.] OF THE DETERMINATION OF THE CONTRACT. 109 {n Rhodes v. Forwood (1), which was decided in 1876, a col- liery owner entered into an agreement with the respondents by which they were to become his sole agents for the sale of coal at Liverpool for a period of seven years. At the end of four years the appellant sold the colliery. An action was then brought by the respondents for breach of agreement. The Court of Excheq- uer, consisting of Bramwell and Cleasby, BB., decided “in favor of the appellant. Upon error to the Exchequer [82*] Chamber, this judgment was reversed by Lord Coleridge, Lush, and Archibald, JJ.; Quain, J., diss. The House of Lords reversed the latter judgment, and thus affirmed the decision of the Court of Exchequer. Lord Cairns pointed out with great clearness that several risks were left altogether uncovered in the agreement; first, the appellant might sell the whole of his coal at ports other than Liverpool, and not send a single ton to Liver- pool. This was admitted on the part of the respondents. Secondly, the coal might have been sent to Liverpool, but the ap- pellant might have taken a view with regard to the price to be obtained for it, which would have led him to place limits upon the coal, such as to prevent the agents selling any of it in any particular year, and the agents might have been left in that year without any commission, although having coals in stock; because the principal might have thought it expedient to hold the coal and wait for better prices. In this case it was admitted that the agents could not complain. Thirdly, if the colliery owner had, by reason of difficulties arising from the workers or otherwise, chosen to close his colliery for a year, or for several years, and to wait for better times or a more easy mode of working, the agree- ment contained nothing to prevent him doing so. “If that is so,” said his lordship, “if any one of these three courses might have been adopted, if all the coal after it was got out of the col- charged before the expiration of the Chicago & N. W. R’y Oo. v. Bayfield, agreed term of service, even though he 87 Mich. 205. And if a servant, with- out his master's consent, engage in any employment or business for himself or another, which may tend to injure the master’s trade or business — as in one which brings him in direct competition with his master, giving him a hostile interest —he may be lawfully dis- may so conduct such other business, by agents or otherwise, that it does not interfere with the time and attention due the business of his employer. Der- ringer v. Meyer, 42 Wis. 311. See post, p. 86. (1) L. R., 1. Ap. Ca. 256. 110 OF THE CONTRACT GENERALLY. [BOOK I. liery might have been sold elsewhere, if the colliery might not have been worked at all, if the prices required to be fetched at Liverpool might have been such that the coal could not have been sold even after it went to Liverpool, —if all that was in the favour of the colliery owner, why is it to be assumed with regard to the other, the fourth risk, namely, the risk of the colliery owner not selling his coal elsewhere piecemeal but selling the colliery itself to a purchaser, that there is an implied undertaking against that one risk, although it is admitted that there is no undertaking at all against any of the other risks?” In the court below, Lush, J., relied upon the fact that the agreement contained nothing which implied that the agency was to cease if the appellant chose to sell the colliery. But, asked Lord Chelmsford, how can an in- tention not in the contemplation of the parties be implied to have existed? AIL the noble lords agreed in holding that there was no such implied contract as that relied upon by the respondents. [83*] *The above decision illustrates the great difference that exists between such a case and all cases in which the court has held that the defendant is bound to continue a state of things which is necessary to the carrying out of his own contract (mm). In such cases, authority is of little assistance. Judicial decision on one contract can rarely help to the understanding of. another, but Rhodes v. Forwood supports the proposition, that where a principal, who wants to have a portion of his business transacted in a certain town, engages an agent, and they enter into a mutual bargain, unless there is some special term in the contract that the principal shall continue to carry on his business, it cannot be im- plied as a matter of obligation that he shall be bound to carry it ou for the benetit of the agent (7). Sor. 2.— By Act of Party. A principal may revoke the authority of his agent, unless — (a.) The authority is necessary to effectuate any security (0), or unless (m) See per Lord Penzance, ibid., p. Ch. 737; Churchward v. The Queen, L. 274; and per Cockburn, C. J., in Stir- R., 1 Q. B. 173. ling v. Maitland, 5 B. & §. 840, p. 852. (0) Walsh vy. Whitcomb, 2 Esp. (n) See Ex parte Maclure, L. R.,5 566, CHAP. ViII.] OF THE DETERMINATION OF TH CONTRACT. 111 (b.) The authority is coupled with an interest.t The determination of the question, what is an authority coupled with an interest, has from time to time given rise to much dis- cussion. The expression in itself is a vague one, and can be un- derstood, in its legal sense, only by a reference to authorities. At the first thought it might seem that any interest would suffice to make an authority irrevocable. This, however, is erroneous, and the question resolves itself into this, What is the nature of the interest which suffices to make an authority irrevocable? This is a question which has given rise to much argument, and even now it can scarcely be affirmed that the law is clearly settled, and free from reasonable doubt. ' Mansfield v. Mansfield, 6 Conn. 559; Hartley’s Appeal, 53 Penn. St. 212; Smyth v. Craig, 3 W. & 8. 14; Walker v. Dennison, 86 Ill. 142; Hutchins v. Hibbard, 34 N. Y. 24; Goodwin v. Bow- den, 54 Me. 424; Bonney v. Smith, 17 Ill. 581; Gilbert v. Holmes, 64 id. 549. Where the agency is conferred for a valuable consideration, it is held to be irrevocable. Hunt v. Rousmanier, 8 Wheat. 174, where, in pursuance of a mutual agreement, money was lent on the faith of an authority to sell a vessel belonging to the borrower, for the pur- pose of repayment. See, also, Walker v. Dennison, supra; Raleigh v. Atkinson, 6 M. & W. 670; Blackstone v. Buttermore, 53 Penn. St. 266. There must be a consideration, inde- pendent of the compensation to be ren- dered for the services to be performed. Blackstone v. Buttermore, supra. But, if such consideration fails, the power is revocable. Ex parte Smither, 1 Deac. 418. An interest in the proceeds to arise as compensation for executing the power will not make it irrevocable. Black- -stone v. Buttermore, 53 Penn. St. 266; Coffin v. Landis, 46 id. 426; Gilbert v. Holmes, 64 Ill. 549; Hartley’s Appeal, 53 Penn. St. 212; Bonney v. Smith, 17 Ill. 531; Walker v. Dennison, 86 id. 142, See, however, Merry v. Lynch, 68 Me. 94. A power coupled with an interest must create an interest in the thing it- self, upon which the power is to operate. The power and estate must be united, or be coéxistent; and this class of pow- ers survive the principal, and may be executed in the name of the attorney. Bonney v. Smith, supra; Gilbert v. Holmes, supra; Hartley’s Appeal, su- pra; Mansfield v. Mansfield, 6 Conn. 559; Walker v. Dennison, supra; Blackstone v. Buttermore, 53 Penn. St. 266; Barr v. Schroeder, 32 Cal. 609; Travers vy. Crane, 15 Cal. 12, 19. An interest in the money derived from a sale of the property will not be sufficient to make the power irrevoca- ble. Barr v. Schroeder, supra. The partnership of principal and agent will not make the authority of the agent a power coupled with an in- terest, and hence irrevocable. Travers y. Crane, supra. The execution of a simple power with- out words of conveyance, but author- izing a conveyance to be made upon certain conditions and for certain pur- poses, vests no interest in the beneficiary. Tharp v. Brenneman, 41 Iowa, 251. ge, also, Reed y. Welsh, 11 Bush, 450. 112 OF THE CONTRACT GENERALLY. [Boox 1 Where the authority given to the agent is a mere naked author- ity and not coupled with an interest, the principal may revoke such authority at any time before performance (p).’ It is not, however, competent to a principal to revoke the authority of an agent without paying for labour and expense incurred by [84*] *him in the course of the employment, unless it is other- wise provided by the terms of the agreement. A general employment may carry with it a power of revocation on payment only of a compensation for what may have been done under it; but there may also be a qualified employment, under which no payment shall be demandable if the authority be countermanded. When the authority of the agent has been revoked, he will be en- titled to damages only when the agreement so provides, or when the revocation is wrongful (g), or when his claim is supported by a custom. The Court of Common Pleas decided a case in the year 1848 (7), in which the nature of an authority coupled with an interest was elaborately discussed. The result is summarized in clear terms in the judgment of the court, which was delivered by Chief Jus- tice Wilde. “ But it is said,” observed his Lordship, “a factor for sale has an authority as such (in the absence of all special orders) to sell; and, when he afterwards comes under advances, he thereby acquires an interest, and having thus an authority and an interest, the authority becomes thereby irrevocable. “The doctrine here implied, that, whenever there is in the same person an authority and an interest, the authority is irre- (p) Mestaer v. Atkins, 5 Taunt. 381; Dalton v. Irvin, 4 C. & P. 289; Read v. Rann, 10 B. & C. 488; Broad v. Thomas, 7 Bing. 99. 1Succession of Babin, 27 La. Ann. 114; Peacock v. Cummings, 46 Penn. St. 434; Coffin v. Landis, id. 426; Blackstone v. Buttermore, 53 id. 266; Spear v. Gardner, 16 La. Ann. 883; Brookeshire v. Brookeshire, 8 Ired. Law, 74 (holding that a power of attorney, though under seal, may be revoked by parol); Pickler v. The State, 18 Ind. 266; Jacobs v. Warfield, 23 La. Ann. 395; Trust v. Repoor, 15 How. Pr. 570; Wells v. Hatch, 43 N. H. 247; Gibbons vy. Gibbons, adm’x, 4 Harr. 105. The use of the word ‘‘irrevocable” in a power, when not coupled with an interest in the agent or supported by a consideration, confers no greater author- ity upon the agent than an ordinary power of attomey. McGregor yv. Gard- ner, 14 Iowa, 326; Blackstone v. But- termore, 53 Penn. St. 266; Walker y. Dennison, 86 Ill, 142. (q) Simpson v. Lamb, 17 C. B. 603. (r) Smart v. Sandars, 5 C. B. 895, CHAP. vii.] OF THE DETERMINATION OF THE CONTRACT. 113 vocable, is not to be admitted without qualification. In the case of Lealeigh v. Atkinson (s), goods had been consigned to a factor for sale, with a limit as to price. The factor had a lien on the goods for advances; and the principal, in consideration of these advances, agreed with the factor that he should sell the goods at the best market prices, and realize thereon against his advances. The court held that this authority was revocable, on the ground that there was no consideration for the agreement. Now, in that case, there was an authority given, and one which the principal was fully at liberty to give; the party to whom it was given had an interest in it; yet the authority was held to be revocable.” His lordship having examined this case more fully, and the cases of Walsh v. Whitcomb (t), Watson v. King (uw), and Gaussen v. Morton (x), stated the result to be that, “where an agreement is entered into on a sufficient consideration, whereby an author- ity is given for the purpose of securing some *benefit to [85*] the donee of the authority, such an authority is irrevocable. This is what is usually meant by an authority coupled with an interest, and which is commonly said to be irrevocable.” ‘ Ina subsequent case before the Privy Council (y), the judge at the trial, on the authority of Smart v. Sandars, had directed the jury that, by the mere relationship of principal and factor for sale, the latter did not, by making advances, either at the time of his em- ployment or subsequently, acquire any right in derogation of the rights of principal to give directions as to the time and manner of sale, and that any such right on the part of the factor must be made out by an agreement, which might be inferred from the evi- dence, or might exist impliedly by proof of usage. Their lordships upheld this direction, and in doing so observed that mere advances made by a factor, whether at the time of his employment as such, or subsequently, cannot, according to the doctrine of Smart v. San- dars, have the effect of altering the revocable nature of an author- ity, unless such advances are accompanied by and made the consideration for an agreement that the authority shall not be revocable Such an agreement, however, might be express or inferred from the circumstances. (z) 10 B. & C. 781. : a is 670. (y) De Comas v. Prost, 3 Moo. P. C., re ; N. S. 158. (u) 4 — 272, 1 Where cotton has been shipped to a 114 OF THE CONTRACT GENERALLY. [Book 1. A distinction must be drawn between the rights which flow from such a special property in goods which an agent is employed to sell as entitles him to maintain an action against the buyer, and rights which flow from an authority coupled with an interest. In the former case the authority is revocable, in the latter it is irre- vocable. This distinction was brought out clearly in Zaplin v. Florence (2), in the year 1851. In that case it was argued that an auctioneer has an interest or special property in goods which are intrusted to him for sale, and, therefore, an irrevocable author- ity. In deciding that an auctioneer has no such irrevocable au- thority, Chief Justice Jervis distinguished the case of Wéllioms vy. Millington (a), on the ground that that case established a well- recognized principle, namely, that an auctioneer has a sufficient property in goods which he is employed to sell to maintain an action for such goods against a buyer; but all the learned judges were clear that his authority was not coupled with an interest. The following powers have been held to be authorities [86*] *coupled with an interest, and irrevocable: An authority to sell premises, and to apply the proceeds in liquidation of a debt due to the donee of the authority and his partners (¢); an authority to sell certain shares of a ship given by a person largely indebted to the donee of the power (@); a power of attorney given as part of a security for money, or to effectuate any security (e); an authority to sell in consideration of the agent forbearing to sue the principal for prior advances (f°); a power of attorney executed for valuable consideration (g). Lastly, cases may arise in which the appointment of the agent to act on behalf of a company is mentioned merely in the articles of association. A question was raised in a recent case with respect to the effect of a clause in the articles stating such appointment, and it was decided that articles of association state the arrange- ment between the members; they are an agreement inter socios, factor, and a bill drawn against the (a) 1H. BL. 81. same, with instructions to sell before or (ce) Gaussen v. Morton, 10 B. & C. 731. at the maturity of the bill, the factor (d) Watson v. King, 4 Cowp. 272. must obey the instructions of his princi- (e) Walsh vy. Whitcomb, 2 Esp. 565; pal, and, on failure to do so, will beheld Drinkwater v. Goodwin, Cowp. 251. liable for any loss accruing thereby. (f) Per Parke, B., Raleigh v. Atkin- Johnson v. Wade, 58 Tenn. 480. son, 6M. & W. 676. (z) 10 C. B. 744. (7) Bromley v. Holland, 7 Ves. 28. CHAP. viil.] OF THE DETERMINATION OF THE CONTRACT. 115 and do not constitute a contract between the company and third parties. Hence, when articles contained a clause in which it was stated that the plaintiff should be solicitor to the company, and should transact all the legal business of the company, and should not be removed from his office except for misconduet, it was held that the plaintiff could not bring an action against the company for breach of contract in not employing him as solicitor (A). In the Court of Appeal, Lord Cairns reserved his judgment as to whether such a clause is obnoxious to the principles by which the courts are governed in deciding on questions of public policy, but observed that it was a grave question whether such a contract is one that the courts would enforce. It is probable, too, that the contract alleged by the plaintiff did not satisfy the Statute of Frauds. An agent may of course renounce his agency at any stage;' but if the agency has been undertaken for a valuable consideration, he will be liable in damages to his principal,’ and the same rule will apply even in the case of gratuitous undertakings which have been performed in part by the agent (¢).? *Sxor. 8.— By Operation of Law. [87*] The law with respect to the dissolution of the contract by operation of law has been summarized in the following terms by Mr. Justice Story: “A revocation by operation of law may be by a change of condition or of state, producing an incapacity of either party. This proceeds upon a general rule of law, that the derivative authority expires with the original authority from which (h) Eley v. The Positive, etc, Assur- ance Co., 1 Ex. Div. 20, 88. 1 Where the duration of a contract of agency is not fixed, the agent may ter- minate it on giving reasonable notice. Barrows v. Cushway, 37 Mich. 481. ’ An agent may forfeit his right to his place by want of fidelity to his princi- pal, whatever may be the nature of his default, and whether it is or not a source of injury to his principal. Henderson y. The Hydraulic Works, 9 Phila. 100. So, where it was proved that A, had au- thority from B. to sell a slave, and that A. afterwards, setting up a claim to the property as his own, or upon some claim of unsettled accounts with B., ran off with the slave and sold her with a view to appropriate the proceeds to himself, it was held that the fraudulent conduct of A. worked a revocation of his authority as B.’s agent. Case v. Jennings, 17 Tex. 661. See ante, p. 81. * White v. Smith, 6 Lans. 5. (i) See chapter on Liability of Agent to Principal, Sect. 3. 38ee post, p. 235. 116 OF THE CONTRACT GENERALLY. [Boor 1. it proceeds. The power of constituting an agent is founded upon the right of the principal to do the business himself; and when that right ceases, the right of creating an appointment, or of con- tinuing the appointment of an agent already made for the same purpose, must cease also. In short, the derivative authority can- not generally mount higher, or exist longer, than the original authority ” (4). In Coombe’s case (7) it was resolved, that where a person has authority as an attorney to do an act, he must do it in the name of him who gave the authority; for he appoints the attorney to be in his place and represent his person. Hence the attorney or agent cannot act in his owa name, nor do it as his own act, but in the name and as the act of him who gave the authority. Hence if a person has a letter of attorney to receive a testator’s rents, this authority will be determined with the testator’s death, being a mere naked authority (m).! (k) Story on Agency, sect. 481. () 9 Rep. 76b. (m) Shipman v. Thompson, Willes, 105, n. 1The death of the principal operates as an instantaneous revocation of the agency, where it is a naked power un- accompanied with an interest; and every act of the agent thereafter per- formed is void so far as the estate of the principal is concerned. Clayton v. Mer- rett, 52 Miss. 353; Galt v. Galloway, 4 Pet. 332; Hunt v. Rousmanier, 8 Wheat. 174; Lewis v. Kerr, 17 Iowa, 73; Davis v. Windsor Savings Bank, 46 Vt. 728; Saltmarsh v. Smith, 82 Ala. 404; Trav- ers v. Crane, 15 Cal. 12; Rigs v. Caye, 2 Humph. 350; Gale v. Tappan, 12 N. H. 145; Harper v. Little, 2 Me. 14; Smout v. Ilbery, 10 M. & W. 1; Far- row vy. Wilson, L. R., 4 C. P. 744. See, however, contra, as to payments made to the agent in ignorance of the death of the principal, Cassidy v. McKen- zie, 4 W.& 8S. 282; Dick v. Page, 17 Mo. 934; Carriger v. Whittington, 26 Mo. 311; Ish v. Crane, 8 Ohio St. 520. “A revocation is effected by the death of the principal or a member of the firm, even though the agency arises from the fact of the existence of a part- nership between the principal and agent. Travers v. Crane, 15 Cal. 12; Marlett v. Jackman, 8 Allen, 287; Johnson vy. Wilcox, 25 Ind. 182. See, however, Bank of N. Y. v. Van- derhorst, 32 N. Y. 553, where it was held that where an agent of a firm, author- ized to draw its moneys from the bank and apply the same to the uses of the firm, continues to do so after the death of one of the members thereof, without knowledge on his part or on the part of the bank, of such death, he acts within the scope of his authority, and his acts bind the firm. See, also, Wilson v. Stewart, 5 Pa. L. J. Rep. 450. So, a dissolution of a partnership re- vokes a power of attorney given by the firm. Schlater v. Winpenny, 75 Penn. St. 321. But a mere change in the’ name of a firm, when the firm under the new name is composed of the same members as that under the old one, does not revoke an agency conferred upon it. Billingsley v. Dawson, 27 Iowa, 210. CHAP. VIII] OF THE DETERMINATION OF THE CONTRACT. 117 Mr. Justice Buller remarked, in Salte v. Field (n), that a ques- tion had been raised with respect to an agent acting under a power of attorney, whether acts which were done by him before he knew of the revocation of the power were good against the principal, and intimated that the principal in such a case could not avoid the acts of his agents done bond fide if they were to his disad- vantage, though he might consent to waive such as were for his benefit. So in another case it is ruled that the credit arising from an ostensible employment continues (at least with regard to those who have been accustomed to deal on the faith of that employ- ment) until they have notice of its being at an end, or till its termination is notorious. It is said, however, that these principles are true only of an agency terminated by express revocation, and not of an implied revocation *by the death of the [88*] principal. Thus, Lord Ellenborough ruled, in Watson v. King (0), which was decided in 1815, that a power coupled with an interest cannot be revoked by the person granting it, but that it is necessarily revoked by his death, inasmuch as a valid act can- not be done in the name of a dead man.' In Blades v. Free (p), decided in 1829, a man who had co- habited for some years with a woman as his wife went abroad and died, the Court of King’s Bench held that the woman might have the same authority to bind him for necessaries as if she had been his wife; but that his executor was not bound to pay for any goods supplied to her after his death, although the goods were supplied before information of his death had been received.’ be executed in the name of the attorney. Gilbert v. Holmes, 64 III. 548; Bonney y. Smith, 17 Ill. 531; Travers v. Crane, 15 Cal. 12; Hunt v. Rousmanier, 8 Wheat. 174; Knapp v. Alvord, 10 Paige, 205. An agent for the sale of goods, with an interest in the proceeds, is not de- prived of the power to sell, by the death of the principal. Merry v. Lynch, 68 Me. 94.- The death of the agent of course ope- rates to revoke his authority. Jackson Ins. Co. v. Parte2, 9 Heisk. 296; Gage vy. Allison, 1 Brev. 495; Merrick’s Estate, 8 WwW. & S. 402. The death of an agent acting under a letter of attorney containing a power of substitution also acts as a revocation of the authority of an agent substituted by him under the power. Lehigh Coal & Nav. Co. v. Mohr, 83 Penn. St. 228; Peries v. Aycinena, 3 W. & S. 79. (n) 5 T. R. 214. (0) 4 Camp. 272. 1 Powers coupled with an interest, however, survive the principal, and may See, however, ante, p. 83, note. (p) 9B. & C. 167. 2 See Smout v. Ilbery, 10 M. & W. 1, and cases cited ante, p. 87. 118 OF THE CONTRACT GENERALLY. [Book I. Mr. Justice Bayley said: “There is no doubt that a man may make an express contract for goods to be supplied to his wife or mistress after his death, for which his estate would be liable. But here there was no express contract. What, then, is the inference of law? That the woman had the same authority to bind the deceased by her contracts as if she had been his wife, and such an authority would be revoked by his death. It is said that this is hard upon the tradesman. But he trusts at his peril, whether the credit is given upon the order of a married woman or a mistress. If he is unwilling to run the risk, he should require an express contract; if he does not do so and sustains a loss, that is by reason of his own carelessness.” A revocation of a bare authority by death is a very different thing from a revocation by the act of the party. In the latter case the plaintiff would undoubtedly be entitled to recover the reasonable expenses he might have incurred in endeavouring to execute the authority; but in the former, the failure would be the fault of no one; and whatever might be the expense incurred, the plaintiff could not recover against the administratrix (q). The authority of an agent is, as a rule, determined by the bankruptcy of his principal, and in the absence of evidence that the trustee of the bankrupt has invested the agent with authority to act for him, or that the authority of the agent is coupled with an interest, the agent has no authority to receive money due to the principal, or to pay away his money (7).’_ In a ease (s) [89*] *where, upon the bankruptey of an underwriter, the ques- tion was whether the authority of an insurance broker to settle losses on his behalf and apply the premiums in hand to the satisfaction of the just claims of the assured was not at an end, it was observed by the court'that, “inasmuch as the bankrupt was not competent after his bankruptcy to pay or apply this fund him- self in satisfaction of these claims of the assured, it followed as a consequence, that he could not authorize his broker so to do; (q) Per Crowder, J., in Campanari v. them for an unreasonable length of Woodburn, 15 C. B. 409. time after the buyer's bankruptcy and (rv) Minett v. Forrester, 4 Taunt. 541; then sells them without notice, he must Drinkwater v. Goodwin, Cowp. 251. sustain the loss. In re Daniels, 18 Nat. A broker who holds stocks ona mar- Bank. Reg. 46. gin is bound to take notice of the buyer's (8) Parker v. Smith, 16 Hast, 382. bankruptcy; and if he continues to hold CHAP. VII.] OF THE DETERMINATION OF THE CONTRACT. 119 otherwise the derivative and implied authority would be more ex- tensive than the original and principal authority of the party him- self, which cannot be.” The consequence is that the authority of - the agent, the broker, was virtually countermanded and extinct by that act of bankruptey by which the bankrupt’s own original power over the subject-matter ceased and became transferred to others. Hence a broker who is indebted to assignees of a bank- rupt for premiums due to them upon policies subscribed by the bankrupt before his bankruptcy is not entitled to set-off returns of premiums due upon the arrival of ships which have arrived since the bankruptcy (¢). Asa general rule, a power of attorney is revoked by an act of bankruptcy committed by the giver of the power, as against the trustees under a subsequent bankruptcy; still, if after the act of bankruptcy, but before the adjudication, property is conveyed under the power toa bond fide purchaser, who has no notice of the act of bankruptcy, the purchaser may hold the property as against the trustee. A power of attorney is not revoked for all purposes by an act of bankruptcy committed by the giver of the power, because, if no adjudication follows, a sale under the power is binding on the giver himself; and wherever a sale would be binding on a bankrupt if no adjudication follows, it is binding on the trustee under a subsequent adjudication if the purchaser had no notice of the act of bankruptcy having been committed by the seller at the time of the sale (w). In Drinkwater v. Goodwin (a), decided in 1875, one Jeffries, a factor, sold as factor certain goods to the defendant. After the sale his principal became bankrupt, and the assignees gave notice to the defendant not to pay over the money to Jeffries. The de- fendant nevertheless paid over the money, and Jeffries *claimed it as having a lien upon it. The court took time [90*] to consider its decision, and ultimately gave judgment for the defendant, treating the case as one in the nature of a bill of interpleader, and the defendant as the stakeholder. “ We are all most clearly of opinion,” said Lord Mansfield, “that a factor has a lien on the price of the goods in the hands of the buyer; and in (t) Goldschmidt v. Lyon, 4 Taunt. Re Douglas, L. R., 7 Ch. 548; see 534. Hoyill v. Lethwaite, 5 Esp. 158. (u) Per Curiam, Ex parte Snowball, (a) Cowp. 251. 120 OF THE CONTRACT GENERALLY. [Book 1. this case, though he had not the actual possession of them, yet as he had a power of giving a discharge, or bringing an action, he had a right to retain the money, in consequence of his lien, as much as a mortgagee has by the title-deeds of an estate in his hands, though he is not in possession.” There was an agreement that the factor should have a lien in consideration of becoming surety for the principal. The principle of set-off in bankruptcy has, according to a high authority (y), been explained with great clearness by Baron Parke in the case of orster v. Wilson (z) in the following words: “ The right of set-off in bankruptcy does not appear to rest on the same principle as the right of set-off between solvent parties.! The latter is given by the statutes of set-off to prevent cross ac- tions; and if the defendant could sue the plaintiff for a debt due to him, not in his representative character, he might set it off under these statutes in an action by the plaintiff suing in his individual character also, though the plaintiff or defendant might claim their respective debts as a trustee fora third person. If the debts were legal debts, due to each in his own right, it would be sufficient. But, under the bankruptcy statutes, the mutual credit clause has not been so construed. The object of this clause is not to avoid cross actions—for none would lie against assignees, and one against the bankrupt would be unavailing — but to do substan- tial justice between the parties, where a debt is really due from the bankrupt to the debtor to his estate; and the Court of Qneen’s Bench, in construing this clause, have held that it did not author- ize a set-off where a debt, though legally due to the debtor from the bankrupt, was really due to him as trustee for another, and, though recoverable in a cross action, would not have been re- covered for his own benefit.” The introduction of the words mutual credit extends the right of set-off to cases where the party receiving the credit is not debtor in presenti to him who gives the credit (a). . 103| general and special agents...... 105 Aw authority is, as to its nature, either express or implied; as to its extent it is either general or special We shall first consider what is meant by the terms a general authority and a special authority. There is little difficulty in understanding the ordinary meaning of those terms. Some confusion, however, is apt to arise from the fact that what is a special authority as between the prin- cipal and the agent may be a general authority when third parties are concerned. This consequence is due to the operation of the rules established with respect to the effect upon the principal’s liabilities of allowing the agent to assume wider authority than his express instructions warranted, these instructions being un- 18ee ante, p. 2; post, p. 140. cuar. 1.] AUTHORITY GENERAL AND SPECIAL, 135 known to third parties. Taking the terms as they stand, a gen- eral authority may be defined as an authority to act in a certain character; and a special authority as an authority to do a particu- lar act. In the former case the authority — unless it is restricted to a smalier limit, and the restriction is *known [102*] or ought to be known to third parties — carries with it all the ordinary powers incident to that character; whilst in the case of a special authority, the agent’s power is directly derived from the principal, and limited accordingly. This appears to be the fundamental distinction between the two kinds of authority. In practice, nevertheless, it often becomes a matter of difficulty to determine whether an authority is special or general. And in order to determine whether or not a principal is liable it may be necessary to consider, first, whether the agent’s authority was gen- eral or special; and secondly, whether his acts were within the apparent scope of his authority. The remarks of the judges and text-writers express with suffi- cient clearness the meaning of the above expressions. They are almost uniform in distinguishing between an authority to doa single act and an authority to do all acts connected with a partic- ular employment. This will be evident from a few instances. The distinction drawn by Lord Ellenborough between a general and special or particular authority is that the former imports not an unqualified authority, but an authority which is derived from a multitude of instances, whereas the latter is confined to an in- dividual instance (a). The distinction drawn by Paley is that an authority is general or special with reference to its object, 2. e., according as it is confined to a single act, or is extended to all acts connected with a particular employment (4). Story adopts the same distinction. A special agency properly exists where there is a delegation of authority to do a single act; a general agency properly exists where there is a delegation to do all acts connected with a particular trade, business or employment (c).! (a) Whitehead v. Tuckett, 15 East, 49 N. Y. 555; Ladd v. Town of Frenk- 408 (decided in 1812). lin, 37 Conn. 53; Gulick v. Grover, 33 (b) Paley on Agency, 2. N. J. Law, 463; Dart v. Hercules, 57 (c) Story on Agency, sect. 17. Nl. 446; Baxter v. Lamont, 60 id. 237; 1See the above distinction illustrated U.S. Life Ins. Co. v. The Advance Uo. in the following cases: Beals v. Allen, 80 id. 549; Butler v. Maples, 9 Wall. 18 John. 863; Martin v. Farnsworth, 766; Fatman v. Leet, 41 Ind. 133; Cru- 136 OF THE AUTHORITY CONFERRED. (BooK m, Again, it is said by a learned writer that a comparison of the vari- ous dicta and decisions would seem to lead to the conclusion that by the term geueral agent, in our law, is meant, either first, a per- son who is appointed by the principal to transact all his business of a particular kind; or, secondly, an agent who is himself en- gaged in a certain trade or business, and who is employed by his principal to do certain acts for him in the course of that trade or business (@). This distinction, however, though it may be [103*] useful in considering the modes in which a *general author- ity may be conferred, is of no use in an attempt to define the term. The difficulties then which have arisen in considering the extent of an agent’s authority, are, as has been already remarked, due in some degree to an incongruity existing between the apparent and the express authority of the agent. In considering the extent of his authority it is not enough, under all circumstances, to ask whether the authority is general or special. We must learn whether the question at issue concerns the relative rights of the principal and agent only, or the principal and third parties. In the former case the answer to that question would mark out the limits of that authority; not so in the latter case. In Edmunds v. Bushell and Jones (e), decided in 1865, the zan v. Smith, 41 Ind. 288; Palmer v. Cheney, 35 Iowa, 281; Golding v. Mer- chant, 43 Ala. 705; Cresent City Bank v. Hernandez, 25 La. Ann. 48; Lattomus v. Farmers’ M. F. Ins. Co. 3 Houst. 404; Willard v. Buckingham, 36 Conn. 395; Atlantic & P. R. R. Co. v. Reisner, 18 Kan. 458. The facts that a person is authorized by a foreign life insurance company to solicit and take applications for insur- ance, to issue and deliver policies, and to receive premiums and deliver receipts for the company, do not, as matters of law, constitute him a general agent of the company, authorized to waive con- ditions in a policy as to payment of pre- miums. Merserau v. Phenix Mut. Life Ins. Co. 66 N. Y.274. See South- ern Life Ins. Co. v. Booker, 9 Heisk. 606; Little v. Phoenix Ins. Co. 123 Mass. 380. A live stock broker was directed by letter to buy 2,000 hogs of a certain description and price, to be delivered at a specified place and dates: Held, that if the letter was the only authority the broker had to buy the hogs for his prin- cipal, it constituted him a special agent with authority only to bind his princi- pal as specified in the letter; and that the rule that if one who is himself en- gaged in a particular calling or business, be employed to do certain acts for his employer in that trade or business, he will be with respect to his employment, a general agent, had no application to the facts of this case. Bell v. Offutt, 10 Bush, 632. (d) Russell on Mercantile Agents, 62. (e) L. R., 1Q. B. 97. CHAP. 1.] AUTHORITY GENERAL AND SPECIAL. 187 defendant J. carried on business in two different towns. In one, where he traded as B. and Oo., he employed the defendant B. as his manager, and to carry it on in his own name. It was proved that the drawing and accepting bills of exchange was incidental to the carrying on of a business of the like kind. There was an agreement between B. and J. that B. should neither accept nor draw bills. Contrary to this agreement B. accepted a bill in the name of “B. and Co.” The bill was taken by a banking company for a valuable consideration. B. was shortly afterwards dismissed. It had been further stipulated between B. and J. that B. should receive as salary one-half of the net profit derived from the busi- ness carried on in his name. At the trial, before Mr. Justice Crompton, the jury gave a verdict for the plaintiff, leave being re- served to enter a verdict for the defendant, if the court should be of opirion that there was no reasonable evidence of the defendant J.’s liability. The rule was refused. In support of the motion an attempt was made to make the liability of J. depend upon whether B. had or had not been held out as a partner; but the Lord Chief Justice pointed out that the case was not one of nominal partners, but was a question of agency. “The case,” said Cockburn, C. J., “falls within the well-established principle, that if a person em- ploys another as an agent in a character which involves a partic- ular authority, he cannot, by a secret reservation, divest him of thatauthority. It is clear, therefore, that B. must be taken to have had authority to do whatever was necessary as incidental to *earrying on the business; and to draw and accept bills of [104*] exchange is incidental to it, and B. cannot be divested of the apparent authority as against third persons by a secret reser- vation.” Mellor and Shee, JJ., concurred. “The case,” said the former learned judge, “differs from those in which the question turns upon the fact whether A. or B.is a partner in the same firm. Here J. puts forward B. as principal, and it is in the name of B. and Co. that the business is carried on. It is not a question of partnership, but whether B., who has been held out to everybody as a partner, has authority to bind J. It would be very dangerous to hold that a person who allows an agent to act as a principal in carrying on a business, and invests him with an apparent authority to enter into contracts incidental to it, could limit that authority by a secret reservation.” 188 OF THE AUTHORITY CONFERRED. [Boor m1. Here the character in which the agent was allowed to act in- volved the exercise of a larger authority than that which the prin- cipal had directly granted. In Smith v. M’Guire (f), decided by the Court of Exchequer, in 1858, the principles applicable to this branch of law were very fully considered. This was an action upon a charter-party. It appeared at the trial, before Martin, B., that the defendant had formerly carried on business at Limerick as a corn merchant. He left that place for London, but gave his brother (the defendant M.) charge of the Limerick business, and allowed his name to remain over the door. During the following three years M. bought quan- tities of corn, and chartered numerous ships on account of the de- fendant, who usually sent him special instructions upon each occasion. In 1858 M. chartered a ship to carry a cargo of oats to London, on her return from Quebec, signing the charter-party “per procuration.” The present action was brought against the defendant for not loading a cargo pursuant to the charter-party, and the learned judge left it to the jury to say whether the defend- ant had allowed M. to act as his general agent. The full court upheld the ruling. The principle of all cases of the kind was well stated by the learned Chief Baron. “If a man by his conduct holds out another as his agent, by permitting him to act in that character and deal with the world as a general agent, he must be taken to be the general agent of the person for whom he so [105*] acts, and the latter is bound, *though in a particular in- stance the agent may have exceeded his authority. It is even so in the case of a special agent; as, for instance, if a man sends his servant to market to sell goods, or a horse, for a certain price, and the servant sells them for less, the master is bound by it.” There was another question in this case which related to the effect of the expression “per procuration,” in compelling third parties to learn the extent of the agent’s authority. “I think,” said the same learned judge, “it makes no difference whatever whether the agent acts as if he were the principal, or professes to act as agent, as by signing “ A. B., agent for C.D.” The expres- sion “per procuration ” does not always necessarily mean that the act is done under procuration. All that it in reality means is this, (f) 3H. & N, 554. CHAP. I.] AUTHORITY GENERAL AND SPECIAL. 139 “Tam an agent not having any authority of my own.” There can be no doubt upon principle of the correctness of this propo- sition. The dicta to the contrary in reported cases may be ex- plained by a reference to the facts of the particular case. There appears to be some inconsistency (g) between the dicta and the above view. Probably, however, the right explanation of the law is that adopted by the Court of Exchequer in the present case. If the mere use of the words “per proc.” had at law the effect of putting third parties who dealt with him upon inquiry into his authority, it would be absurd to stop there. The princi- ple would have to be carried to the full extent that the agent’s in- structions must be inquired into upon every fresh transaction. If strictly followed the introduction of sucha rule would have the effect of crippling commercial intercourse by checking the utility of the whole body of mercantile agents. It proceeds as a corollary from what has been already said that wherever a special agent ora general agent with a secret limit to his powers has been placed by his principal in a position where his apparent exceeds his real authority, the principal is not enti- tled to be relieved against any contract entered into merely upon the ground that he had previously instructed his agent not to enter into a contract except under certain circumstances (h), these cir- cumstances being unknown to the other contracting party! The distinction between general and special agents serves, at *least, as a basis for the distribution of all varieties of [106*] authority into two classes, each (g) See per Holroyd and Littledale, JJ., in Attwood v. Munnings, 7 B. & C. 278. (h) See Duke of Beaufort v. Neeld, 12 C. & F. 248, per Ld. Campbell, 290. 1To the same point, see Union Mut. Ins. Co. v. Wilkinson, 13 Wall. 222; Cruzan v. Smith, 41 Ind. 288; Bell v. Offutt, 10 Bush, 632; Abbott v. Rose, 62 Me. 194; Bryant v. Moore, 26 id. 84; Cosgrove v. Ogden, 49 N. Y. 255; Morton v. Scull, 23 Ark. 289; Kelly v. Fall Brook Coal Co., 4 Hun, 261; Anderson v. State, 22 Ohio St. 305; Butler v. Maples, 9 Wall. 766; Home Life Ins. Co. v. Pierce, 75 Ill. 426; of which has definitely Furnas v. Frankman, 6 Neb. 429; Wil- lard v. Buckingham, 36 Conn. 395; Murphy v. Southern Life Ins. Co. 59 Tenn. 440; Engh v. Greenbaum, 4 Thomp. & C. 426; Adams Exp. Co. v. Schlessinger, 75 Penn. St. 246; Golding vy. Merchant, 43 Ala, 105; Palmer v. Cheney, 35 Iowa, 281. See, also, post, p. 440. An agent who is accustomed to make contracts for his principal, with the principal's knowledge, may bind the principal by his contracts, although the instructions of the agent are not to con- tract without his principal's knowledge. Kelly v. Fall Brook Coal Co., supra. 140 OF THE AUTHORITY CONFERRED. [Book m. marked points of contrast with respect to the liability of the prin- cipal when the authority has not been duly executed. Neverthe- less it will be borne in mind that general agents and special agents may have their powers controlled, limited or extended by the operation of certain rules which will be discussed hereafter. The resuit of the cases is that — (i.) Third parties dealing with an agent who has merely a special or particular authority must make themselves acquainted with the limits of that authority.! (ii.) If they neglect to do so, and the agent exceeds his anthor- ity, the principal will not be bound, unless he is estopped, by his conduct, from pleading the actual terms of the authority; unless, for instance, he has held out the agent as possessing a larger authority than was actually conferred (¢).* 1To the same point, see Baxter v. La- mont, 60 Ill. 237; Cruzan v. Smith, 41 Ind. 288; Blackwell v. Ketcham, 53 jd. 184; Craycraft v. Selvage, 10 Bush, 696; Dozier v. Freeman, 47 Miss. 647; Weise’s Appeal, 72 Penn. St. 351; Berry v. Barnes, 23 Ark. 411; Nat. Iron Armor Co. v. Bruner, 19 N. J. Eq. 331. See, also, Peabody v. Hoard, 46 Tll. 242; Davidson v. Porter, 57 id: 300; post, 115. If the authorization or limitation be public, or known to the person with ’ whom the special agent deals, the prin- cipal will not be bound if the authority or instructions are exceeded or violated. Bryant v. Moore, 26 Me. 84; The Floyd Acceptances, 7 Wall. 666, 680; Silliman v. Fredericksburg, etc. R. R. Co., 27 Gratt. 120, 181; Lewis v. Commission- ers, 12 Kan. 186, 216; Whiteside v. U. S., 93 U. 8. 247. (i) See Smith's Merc. Law, ch. v. sect. 4; Story on Agency, sect. 126, and cases cited. ? See ante, p. 105. CHAP. I1.] CHAPTER IL* POWERS INCIDENT TO EVERY AUTHORITY. 141 [107*] POWERS PRIMA FACIE INCIDENT TO EVERY AUTHORITY. PAGE, Sect. 1.— All the necessary and usual means of executing the au- thority with effect. The existence of these powers con- sistent with the rule that an authority should be strictly pur- sued Illustrations of these powers...... An authority to do the needful in the payment of an award...... An authority to prepare or release in accordance with the award... 108 Howard v. Baillie examined...... 109 The effect of that case .........-. Powers contained in an authority— (1.) To get a bill discounted .... 111 ce (2.) To recover a debt.........- lll (3.) To settle losses on policy.... 111 (4.) To effect a policy .......... 111 Sect. 2.— Means justified by the usage of trade. The principle long established .... 111 Rules of the Stock Exchange ..... 111 Sutton v. Tatham examined...... 111 Opinions of Littledale J., and Wiles) Diccsdwaues eke ee sree 112 Action by unlicensed broker to recover payment made according to usage of share market....... The authority of the agent will not be extended to cases where he is compelled to make a payment by reason of a default of his own.. 114 PAGE. Duncan v. Hill.......eseeeceeoee 114 Sect. 3. — Powers contained in au- thorities of a particular kind. Rule laid down in the old law GOs ata aenace. titers ealeae suits 115 If an agent acts differently from his authority the act is void........ 115 Examples of implied powers in au- thorities — (1.) To settle losses on a policy.. 115 (2.) To discount a bill or note... 116 (8.) To distrain for arrears of TON aitis oahu aia nnee 116 Authority of pawnee tosell ...... 116 Implied authority to warrant de- pends on usage ............+.- 117 An authority to receive money does not authorize the agent to set it off in accounts between the payer and himself...........e+seeeee 117 Payment by cheque......++-.+4.. 117 Authority implied, in holder of bill of lading, from principal's con- AUG tsicensnamienccaiaaur aay 117 Various examples of implied au- thority siadsccdw menses siieaa 117 Implied authority of counsel and SOLCHONS sec eevee ees see seesas 119 Evidence of agent’s authority to sell goods in his own name..... 120 Summary ........ Se HAT atin 120 Sect. 1.— Zhe necessary Means of executing the Authority with LE ffect. To arrange the numerous questions which must be considered in an examination of the nature and extent of an agent’s authority in a clear and methodical manner is a task of no small difficulty. 142 OF THE AUTHORITY CONFERRED. [BooK 11. Few, if any, divisions of the subject are quite free from the com- mon fault of containing one or more cross divisions —to use the language of logicians. In the following classification an attempt is made to simplify this branch of the law: (A) Powers primd facie incident to every ascertained authority. (a) All the necessary and usual means of executing the authority with effect. [108*] *(b) All the various means justified by the usages of trade. (c) Other powers contained in authorities of a particular kind. (B) Of the construction of an agent’s authority. (a) When the authority is given by a formal instrument. (b) When the authority is given by an informal instrument. (c) When the authority arises from implication. (d) When the instructions are ambiguous. (C) Of the limits of an agent’s authority. (1) Of the extension of an agent’s authority. (a) By parol evidence: 1. Of custom and usage; 2. In other cases. (b) By conduct of principal. (2) Of the limitations of an authority. 1. As between principal and third parties; 2. As be- tween principal and agent. There are certain powers incident to every authority unless the principal has taken the precaution of forbidding their exercise. Amongst such powers are those which enable the agent to employ all the necessary and usual means of executing the principal au- thority with effect. The reasonableness of the rule is beyond ‘To the same point see Franklin v. fits on a credit of six months, and gave Ezell, 1 Sneed, 497; Strong v. Stewart, 9 Heisk. 137; Farrar v. Duncan, 29 La. Ann. 126; McAlpin v. Cassidy, 17 Tex. 449; Valentine v. Piper, post, p. 119. See, also, Joyce v. Duplessis, post, p. 111; ante, p. 44; post, p. 487. A. and B., joint. owners of part of a vessel, authorized C., another owner, to purchase their proportion of the outfits of the vessel, but did not furnish him with the funds. C. purchased the out- a note therefor, as agent of A. and B., payable in six months. A. and B., not knowing that C. had purchased on credit, paid him the amount of the pur- chase in two months after it was made, C. did not pay the note at maturity, and the vendor of the outfits sued A. and B. therefor in an action for goods sold and delivered: Held, that he was entitled torecover. Sprague v. Gillett, 9 Met. 91. Where one authorizes another “to use ’ CHAP. I.] POWERS INCIDENT TO EVERY AUTHORITY. 143 dispute. Its operation has no effect in weakening the salutary principle so much insisted upon in the law books, to the effect that an authority must be strictly pursued; and this fact was fully recognized at an early. period (a). In Dawson v. Lawley (5), a decision of Lord Kenyon, in 1801, an attorney brought assumpsit for work done in preparing a re- lease. The facts are shortly these: An arbitrator had made an award, requiring the defendant to pay 5/., and execute a release to the other party. The defendant employed the plaintiff to pay this money, and told him to “do the needful.”! The plaintiff orsign his name’’ for the purpose of obtaining accommodation at a bank, he of necessity authorizes the execution of a note, and the law will give effect to such purpose in the usual and ordinary way. But such power does not author- ize the execution of an instrument which is not a commercial note. First Nat. Bank v. Gay, 63 Mo. 38. (a) See per Eyre, C. J.,in Howard v. Baillie, 2H. Bl. 618. (b) 4 Esp. 64. 4See Wicks v. Hatch, 62 N. Y. 535. A power ot attorney which authorizes the attorney to sell the lands of the - principal, and do whatever is necessary to carry the power into execution, does not authorize the attorney to make par- tition of lands in which the principal has an interest as tenant in common. Borel v. Rollins, 30 Cal. 408. _M. executed to H. a power of attor- ney under seal, authorizing him to seti- tle his business and collect all claims due him in the state of Illinois; which instrument conferred upon him exten- sive powers in relation thereto, giving him authority generally to do all and every act and acts, thing and things, device and devices, in the law whatso- ever, needful and necessary to be done in the settlement of such business and the collection of such claims: Held, that a replevin bond executed by H., as M.’s attorney, under this instrument, was within the scope of his authority and binding upon M. Merrick v. Wagner, 44 Til. 266. But authority, whether special or gen- eral, conferred on an agent, is to be con- strued as including only the usual means appropriate to the end. Even if a gen- eral discretion is vested in the agent, it is not deemed to be unlimited, but must be exercised in a reasonable manner, and cannot be resorted to in order to justify acts which the principal could not be presumed to intend; or which would defeat, and not promote, the ap- parent end or purpose for which the power was given. The powers of the agent are to be exercised for the benefit of the principal only, and not of the agent or of third parties. A power to do all acts that the principal could do, or all acts of a certain description, for and in the name of the principal, is lim- ited to the doing them for the use and benefit of the principal only, as much as if it were so expressed. Authority, there- fore, to a general superintendent of an express company, to employ and dis- charge agents and direct their conduct, make contracts and exercise a general supervision over the business of the company, cannot reasonably be con- strued as empowering him to license one of his co¢mployés — an assistant super- intendent — to engage in and carry on a business in competition with and in- jurious.to that of the express company. Adams Exp. Co. v. Trego, 35 Md. 47. 144 OF THE AUTHORITY CONFERRED. [Book II. prepared a release pursuant to the award. In reply to an argu- ment that the plaintiff’s authority was a special authority to pay 51., Lord Kenyon observed that the defendant having given orders to the plaintiff to do what was needful, thereby authorized him to take such steps as were directed by the award, to which [109*] the payment of the money had relation. Here the *au- thority to “do the needful” could not be carried out with effect, unless an authority to prepare a release in accordance with the award was implied. Heinrich v. Sutton (c), decided by the Court of Appeal in 1871, was more complex. The property of a banking company was vested in trustees by a deed of settlement, which provided that the court of directors should have power to direct any actions or suits to be commenced, prosecuted, or defended, on account of the property of the bank, and to direct the necessary parties to such actions or suits to carry them on or defend them, and that such parties should be indemnified out of the funds of the bank. In a suit relating to certain property claimed by the bank, the plaintiff and two others were made co-defendants. They, as well So, a power of attorney to draw, in- dorse and accept bills, and to make and indorse notes in the name of the prin- cipal, does not authorize the attorney to draw a bill in the name of the principal for the benefit of the attorney. North River Bank v. Aymer, 3 Hill, 262; Steinback vy. Read, 11 Gratt. 281; Stainer v. Tysen, 3 Hill, 279. See, how- ever, Taylor v. Hudgins, 42 Tex. 244. Nor would the attorney in such case be authorized to draw or indorse notes for the mere accommodation of third per- sons. Wallace v. Branch Bank, 1 Ala. 565; Gulick v. Grover, 33 N. J. Law, 463. See post, p. 116. Nor will a general agency for the transaction of the principal’s business, authorize the making of accommodation notes in his name by the agent. Gulick vy. Grover, supra; Bank of Hamburg v. Johnson, 3 Rich. Law, 42. Appellee, being desirous of settling certain attachment suits, authorized A. to act for him, adding that ‘‘ Whatever arrangement he (A.) made he would stand to:’’ Held, that this constituted A. the general agent of appellee in re- spect to the transaction, and gave him authority to raise money to make such settlement, by executing a note therefor as the agent of appellee. Tanner v. Hastings, 2 Bradwell, 283. Authority to invest the principal's money and look after his business gen- erally, will not authorize the agent to sell his principal’s property, even such as may be acquired as the result of the investment. Smith v. Stephenson, 45 Towa, 645, See post, p. 145, note. Where an agent, having money placed in his hands with undisputed power toloan, manage and collect as he should deem best, makes an agreement for an extension of the time of payment, such act is within the scope of his gen- eral authority, and binds the principal. Hurd v. Marple, 2 Bradwell, 402. (c) L. R., 6 Ch. 220. CAP. I1.] POWERS INCIDENT TO EVERY AUTHORITY. 145 as the plaintiff, were the trustees in whom the property of the bank was vested. The solicitors of the bank entered an appear- ance for the plaintiff in this action without his knowledge. He then applied to Malins, V.-C., to expunge the appearance as irreg- ular, on the ground that the above provision did not interfere with the plaintiff's right to appear by his own solicitor. The applica- tion was refused. Upon appeal the Lords Justices upheld the Vice-Chancellor’s decision, on the ground that the entry of this appearance was not wrong or improper, and that nothing was done by solicitors which they were not authorized in doing under the provisions of the deed of settlement. Text-writers generally refer to Howard v. Baillie (d), which was decided in 1796, by the Court of Common Pleas, as a leading authority in support of the principle under discussion. That case is rather an authority upon a question of implied ratification. Its application to the question of implied authority is confined to what can, under the circumstances, be considered as no more than a dictum which was not necessary for the decision. The defend- ant, an executrix, gave a letter of attorney to A. B., empowering him to transact the affairs of the testator in the name of the executrix, as executrix, and to pay, discharge and satisfy all debts due from the testator. A. B. accepted a bill of exchange in the name of the executrix, so making her personally liable for the amount of a debt due from the testator. The drawer of the bill sued the defendant and obtained a verdict. *An [110*] application for a new trial was made on the ground that the agent was not duly authorized to accept the bill. The court were of opinion that the case might be disposed of by the appli- cation of the rule that every authority includes all the means necessary to be used in order to attain the accomplishment of the principal power. There was, however, in the opinion of the court, evidence of a special procuration. Whilst this case was pending in the Court of Common Pleas, a similar one was pending in the King’s Bench, where Lord Kenyon presided (e). The decision in this case, that a power of attorney given by an executrix to act for her as executrix, does not authorize the accepting of bills of exchange to charge her in her own right, though for debts due from the testator, is inconsistent with the principles adopted by (d) 2 ip Bl. 613. (e) Gardner v. Baillie, 6 T. Rep. 591. 146 OF THE AUTHORITY CONFERRED. [Book I. the Common Pleas in the former case. There can, however, be no doubt that both decisions are reconcilable. The former can be supported upon the ground of ratification, a ground which was not present in the latter case. On delivering judgment in Gard- ner v. Baillie, Lord Kenyon remarked that the Judges of the Court of Common Pleas authorized him to say that they concurred in his construction of the letter of attorney; but that they thought there were other circumstances in the case which came before them. What other circumstances existed in the opinion of the Common Pleas is not easy to say. “We understand,” said Chief Justice Eyre, “that it did not appear in the case (Gardner v. Baillie) that the acceptance was given for the payment of the debt due from the testator.” But, in the report of that case, it is clearly stated that the bill was drawn and accepted for such a debt. The material point of difference between the cases appears to be that in one there was evidence of ratification, in the other there was not. This, it is apprehended, is the true distinction. What is here said of the decision in Howard v. Baillie (f) does not affect the observations of the court upon the extent of such an authority as that in question. It must occur to every man, who reflects upon the nature of this trust, that numberless arrangements would have to be made by those who execute it, aceounts to be settled, disputed claims to be adjusted, unjust ones to be resisted, actions to be instituted and defended, payments to be postponed or forestalled, according to the state of the fund, and, perhaps, if the estate should be insolvent, a dis- {111*] *tribution to be made among the creditors (g). All this may be granted; but there is no principle which enables us to deduce from an authority to bind another in his represent- ative character, an authority to bind him personally. (f) Supra. (g) Howard v. Baillie, 2 H. BI. 610, 622. 1Nor can a power of attorney, given by an administratrix of an estate, to administer her own affairs, be consid- ered to extend to the administration of the estate of her deceased husband. The power of attorney granted to a per- son to manage the affairs of a succession must be express. Succession of Pipes, 26 La. Ann. 203. A power of attorney to act in the name and in behalf of the principal, in the absence of anything to show a dif- ferent intention, must be construed as giving authority to act only in the sep- arate individual business of the princi- pal. Stainback v. Read, 11 Gratt. 281. CHAP. I1.] 147 POWERS INCIDENT TO EVERY AUTHORITY. The principle is too well founded in reason to be questioned. The difficulty here, as in all cases where principles of law are well established, is to show that particular cases come within its opera- tion. For instance, where an agent employed by the indorsees of a bill to get it discounted warranted the bill to be a good one, his principals were bound by the act, and were held liable to refund if the bill were afterwards dishonoured by the acceptor (h).! So, it is said, an authority to recover and receive a debt contains an authority to arrest the debtor (2). (h) Fenn v. Harrison, 4 T. Rep. 177. 1See post, p. 116. (i) Per Curiam, Howard v. Baillie. supra. 2 An authority given to an agent to collect a debt, carries with it the au- thority to sue for it and issue execution on the judgment obtained. Joyce v. Duplessis, 15 La. Ann. 242. See ante, p. 108., A power of attorney, authorizing an agent to sue for a specific debt, and to do all in the premises that the principal could do, carries with it the power to make the suit effective by attachment. De Poset v. Gusman, 80 La. Ann. 930. And a collection agent may sue in his own name, upon a note drawn pay- able to order, and indorsed in blank for purposes of collection. Boyd v. Corbitt, 87 Mich. 52. The fact that an attomey was em- ployed by one proposing to loan money on bond and mortgage, to draw the pa- pers, and that the money was advanced upon the securities through the attorney, gno proof of authority on his part to collect the principal, where he has not been entrusted with the custody of the securities; nor can it be inferred that the attorney was authorized to receive the principal, from the fact that he had authority to collect the interest. The possession of the securities by the attor- ney, in the absence of proof aliunde of express authority, is the indispensable evidence of his authority to collect the An authority to settle losses principal. Smith v. Kidd, 68 N. Y. 180. The inference that an agent is au- thorized to collect a written security for a debt because it is in his custody, ceases when the security is withdrawn by the creditor, and this, even though the debt may have been contracted through the agent. Guilford v. Stacer, 53 Ga. 618. If a debtor owing money on a written security, pays to or settles with another as agent, it is his duty, at his peril, to see that the person thus paid or settled with is in possession of the security. If not in possession, the debtor must show that the person to whom he made the payment, or with whom he made the settlement, had special authority, or had been represented by the creditor to have such authority. Tappan v. Morse- man, 18 Iowa, 499. The mere fact of delivering a note, unindorsed, for collection, will authorize the holder to receive payment, when due, in money, and to deliver it to the maker; but it will not authorize him to sue and obtain judgment thereon for his own use, and the assignee of such judgment occupies no more favorable position than the assignor. Padfield v. Green, 85 Ill. 529. See, also, Whelan v. Reilly, 61 Mo. 565. But in Doubleday v. Kress, 50 N. Y. 410, it was held, that the possession by an assumed agent, of a promissory note 148 OF THE AUTHORITY CONFERRED. [Book 11. on a policy includes a power to refer to arbitration (%), and an payable to the order of the payee, and not indorsed by him, is not alone suffi- cient evidence of his authority to au- thorize a payment thereof to him. When the owner of land authorizes another to make a contract for the sale thereof, the authority of the agent to receive so much of the purchase money as is to be paid in hand, is a necessary incident of the power to sell. Yerby v. Grigsby, 9 Leigh, 387; Peck v. Harti- ott, 6S. & R. 145; Goodall v. Wheeler, 11 N. H. 424. See, also, Lumpkin v. Wilson, 5 Heisk. 555. As to lack of authority to receive purchase money subsequently to become due, see ante, p. 111. So, as to mercharidise, a power to sell imports power to receive payment. Hoskins v. Johnson, 5 Sneed, 469. But a salesman authorized to make sales, and selling on credit, is not au- thonzed subsequently to collect the price in the name of his principal; and a payment to him will not discharge the purchaser, unless he can show some authority in the agent to collect, beyond that necessarily implied in a mere power to make sales. Law v. Stokes, 32 N. J. Law, 249; Seiple v. Irwin, 30 Penn. St. 513. Where A. orders goods for B., and they are shipped directly to the latter, but the bill, though made out against B., is sent to A., who forwarded the order, A. has at least prima facie a right to collect as agent of the vendor of the goods. Adams v. Humphreys, 54 Ga. 496. But where the plaintiff sold certain goods to the defendants through F., their general agent, who was fully au- thorized to make the purchase, and afterwards, upon the representation of _F. to the plaintiff that it was necessary to send a receipted bill to the defend- ants in order to obtain payment of it, the plaintiff receipted the bill of the goods and delivered it to F., who pre- sented the bill thus receipted to the de- fendants, who paid the amount to him, they having no knowledge of the cir- cumstances under which the receipt was given, and the money so received by F. was never paid to the plaintiff: Held, in an action of assumpsit brought against the defendants for the amount of the bill, that the plaintiff was entitled to recover. Willard v. Buckingham, 36 Conn. $95. A mere authority to collect debts, or to collect and distribute, does not imply an authority to release them without payment. Herring v. Hottendorf, 74 N. C. 588; Melvin v. Lamar Ins. Co. 80 Il. 446. The power to collect a note given for the payment of the purchase money of land, may be inferred from the authority to sell the land and take the note in payment for it. Rodgers v. Bass, 46 Tex. 505. One who employs a firm of collecting agents in response to an advertising card, in which they announce that they will treat his debtors ‘‘ with delicacy, so as not to offend them, or with such severity as to show that no trifling is intended,” giving no special instruc- tions, authorizes them to use such means as they see fit to adopt in the prosecu- tion of his business for his benefit, and is responsible therefor. Caswell v. Cross, 120 Mass. 545. Authority in a son to keep his father’s books and accounts, and to figure the interest due on notes, does not show authority in the son to collect and settle such notes and accounts. Reynolds v. Ferree, 86 Ill. 570, See post, p. 117, note. (%) Goodson v. Brooke, 4 Camp. 163. cmap. 11] POWERS INCIDENT TO EVERY AUTHORITY. 149 authority to effect a policy contains an authority to adjust a loss under the policy (2).! Szcr. 2.— Means justified by the usages of Trade. The rule that an agent is empowered to use all the ordinary means justified by the usages of trade in executing his authority, (1) Richardson v. Anderson, 1 Camp. 43, n. 1See post, pp. 115, 116. °To the same point, see Upton v. Suffolk County Mills, 11 Cush. 586; Am. Cent. Ins. Co. v. McLanathan, 11 Kan. 549; Randall v. Kehlor, 60 Me. 37; Rosenstock v. Tormey, 82 Md. 169; Daylight Burner Co. y. Odlin, 51 N. H. 56; Phillips v. Moir, 69 Ill. 156; Strong v. Stewart, 9 Heisk. 1387; Shelton v. Merchants’ Dispatch Transp. Co. 59 N. Y. 258; Sumner v. Stewart, 69 Penn. St. 321; Kraft v. Fancher, 44 Md. 204; Corbett v. Underwood, 83 Ill. 324. See, generally, as to the effect of custom and usage on contracts, Wigglesworth v. Dallison, Doug. 201; 1 Smith's Lead. Cas. (7th Am. ed.) 670, and notes. Where it was agreed that all trans- actions should in every way be subject to the usages of the broker’s office, the word ‘‘usages’’ was considered as meaning ‘‘ the habits, mode and course of dealing in the office.’ Baker v. Drake, 66 N. Y. 518, per Folger, J. ' No effect, however, will be given to a usage against sound policy and good morals, or unreasonable. Day v. Holmes, 103 Mass. 806; Gallup v. Lederer, 1 Hun, 282; 8. C. 8 Thomp. & C. 710. The order of a customer, therefore, to a broker to buy stock, deliverable at any time, at buyer’s option, in 60 days, does not authorize the broker to buy the stock of himself at 30 days, and deliver it to his customer at the end of 60 days, at an increased price and interest, be- sides the usual commission, and a usage of brokers so to do is bad. Day v. Holmes, supra. The usage or custom of the particular business of buying and selling stocks on orders, may be introduced in evi- dence for the purpose of showing the manner in which an order received may be performed, but not to imply an au- thority to execute it in a mode which the law would regard as unreasonable. Rosenstock v. Tormey, supra. The relation of broker and customer, under the ordinary contract for a spec- ulative purchase of stock, is that of pledgee and pledgor; and a sale of the stock by the broker, under such con- tract, without notice to the customer of the time and place of sale, is a conver- sion. Oral proof of the usage of brokers in such cases, is not (in the absence of any provision in the contract upon the subject) admissible to add to or make part of the contract. Baker v. Drake, 66 N. Y. 518; Markhamv. Jaudon, 41 id. 235. The parties to the contract may, how- ever, provide therein for any manner of disposing of the pledge to satisfy the claim upon it, which is not in contra- vention of a statute, against public pol- icy, or fraudulent. Baker v. Drake, supra. A custom of trade or business that can vary or modify the language of ex- press instructions of an agent or factor from his principal, must be established by the most certain, clear and satisfac- tory proof, and must be ancient, uni- form, notorious and reasonable. Hall y. Storrs, 7 Wis. 253, 150 OF TOE AUTHORITY CONFERRED. [Book II. was well established long anterior to the decision of the King’s Bench in Sutton v. Tatham (m), in 1839. The defendant there had employed the plaintiffs, as brokers, to sell 250 shares in a company. On the day after receiving authority they sold 109 shares, and on the following day 100 more. On the latter day, but after the sale, the defendant told the plaintiffs that he had made a mistake and intended to sell only fifty shares, and was in- formed that the sales could not be made void. The defendant left the matter in the hands of the plaintiffs to do the best they could. By the rules and usages of the Stock Exchange, if upon a sale of this description the vendor was not prepared to complete his con- tract, the purchaser may buy the requisite number of shares, and the vendor is bound to make up the loss, if any, resulting from a difference in prices. The purchaser having bought at a loss, the broker paid the difference, and then sued in assumpsit for money paid. At the trial, Lord Denman thought that the princi- [112*] pal was liable, but he left it to the jury *to say whether the bargain for the loss on the second purchase was made within a reasonable time after the mistake was discovered. The jury found for the plaintiff. A motion for a new trial, on the ground of misdirection, was refused by the full court. . The defendant re- lied chiefly upon the case of Child v. Morley (n). But itis clear, from the remarks of Lord Kenyon, that the broker had a cause of action, though there were doubts as to the form in which it should be tried. His lordship, having made some severe remarks upon the nature of the defence set up, concluded: “ But I cannot per- ceive what benefit the defendant can propose to himself by such conduct; for the court have no doubt but that, at all events, the verdict must stand for the 12d. 10s., the amount of the plaintiff's commission as broker; but as to the rest of the claim there is a difficulty in the form of action, and, perhaps, it would have been better framed ex delicto than ex contractu.” In Sutton v. Tatham (o), Littledale, J., laid down the rule in general terms: “ A person who employs a broker must be supposed to give him authority to act as other brokers do.!_ It does not mat- ter whether or not he himself is acquainted with the rules by which (m) 10 Ad. & E. 27. L. R., 7 H. L. 802. (n) 8 T. Rep. 610. 'See Rosenstock v. Tormey, 32 Md. (0) Supra; see Robinson v. Mollett, 169. CHAP. 11.] POWERS INCIDENT TO EVERY AUTHORITY. 151 brokers are governed.” The former decision does not appear to have been at all discussed by the learned judges. Taking it in its widest extent, it is only an authority limiting the scope of the action of assumpsit. In Taylor v. Stray (p), Willes, J., traces the rule applicable to such cases to the rule which pervades the whole law of principal and agent, namely, that the principal is bound to indemnify the agent against the consequences of all acts done by him in pursu- ance of the authority conferred upon him. The court decided that the defendant, by directing the plaintiffs to purchase shares, neces- sarily gave them authority to pay for them according to the rules of the Stock Exchange. Smith v. Lindo (q), decided in 1858, presents some new fea- tures. The plaintiff, though he was not duly licensed, assumed to act as broker (in London) in the purchase of shares for the defend- ant, and had been obliged to pay to the seller the price of the shares by the usage of the share market. There was nothing to show that the payment was made in pursuance of any illegal con- tract, nor was it a necessary part of the duty of a broker as such to pay the money: The plaintiff brought an *action [113*] for the amount paid by him on behalf of the principal, and for commission. At the trial a verdict was found for the plaintiff, and the Court of Common Pleas afterwards held that, although the plaintiff was, by the 6 Anne, c. 16, rendered incapa- ble of suing for commission by reason of his not being duly licensed as a broker, yet that he might recover from his principal the price which, pursuant to a usage of the share market, he had been obliged to pay to the person from whom he purchased, the statute of Anne not making the contract void, but merely pre- cluding the unlicensed broker from recovering any remuneration for his services in making it. The defendant’s appeal from this decision was heard in the Exchequer Chamber before Wightman, Erle, Crompton and Till, JJ., and Martin, Bramwell and Wat- son, BB. The decision of the court below was upheld. Cromp- ton, J., alone dissented on the ground that the payment of the cominission and the repayment of the money paid, both stood on the same footing. The view of the majority is supported by the decision of the Court of Exchequer in Pidgeon vy. Burslem (r). (p) 20. B., N. 8. 175. (@)5 C. B., N.S. 587. (r) 8 Ex. 465. 152 OF THE AUTHORITY CONFERRED. [Book It. With this decision may be compared the more recent case of Rosewarne v. Billing (s). The plaintiff sued the defendant for money alleged to be paid for the defendant at his request. To this the defendant pleaded that the money became due by reason of certain wagering contracts made by the plaintiff for the defend- ant with certain other persons since the passing of the 8 & 9 Vict. ec. 109. The plaintiff demurred. Judgment was given for the plaintiff. “Now,” said Chief Justice Erle, “the law as to gam- ing contracts is that all such contracts are null and void, and no action can be maintained upon them. But they are not therefore illegal. The parties making them are not liable to any action or to any penalties. . . . Iam clearly of opinion that if a man loses a wager, and gets another to pay the money for him, an action lies for the recovery of the money so paid.” This is con- sistent with Jessopp v. Sutwyche (2), and Knight v. Chambers (u). The effect of these cases, and others of the like kind, is that an agent’s authority to act for his principal may be implied in any case where there is no illegality proved.! [114*] *The law is now well scttled that when a contract for the purchase and sale of shares has been entered into be- tween individuals through their respective brokers, or with the intervention, as purchasers or their sellers, of jobbers, members of the Stock Exchange, the lawful usages and rules of the Stock Exchange are incorporated into and become part and parcel of all such contracts, and the rights and liabilities of individuals, parties to any such contracts, are determined by the operation upon the contracts of these rules and usages (7). z Although the authority of an agent prima facie includes an authority to act in accordance with established and reasonable usage, yet such authority will not be extended to cases where the agent is compelled to make a payment in the course of his agency by reason of a default of his own. In Duncan v. Hill (y), finally decided in 1878, the defendant (who was not a member of the Stock Exchange) instructed the (s) 15 C. B., N.S. 316; $3 L. J.,C. (x) Per Kelly, C. B., in Bowring v. Pp. 55. Shepherd, L. R., 6 Q. B. 309; Grissell (t) 10 Ex. 614. v. Bristowe, L.R., 4 C. P. 36; Coles v. (u) 15 C. B. 562; and see Beeston v. Bristowe, 4 L. R., Ch. 3. Beeston, L. R., 1 Ex. Div. 13. _y) L. R., 6 Ex. 255; L. R., 8 Ex. 1See ante, p. 36. 242. CIAY. 11.] POWERS INCIDENT TO EVERY AUTHORITY. 153 plaintiffs (brokers on the Stock Exchange) to buy certain shares for him for the account of July 15th, 1870. On that day, acting upon his instruetions, the plaintiffs carried the shares over to the account of July 29, and paid differences amounting to 1,688/. The plaintiffs subsequently became defaulters, and on the 18th were declared defaulters, and their transactions were closed in conformity with the rules of the Stock Exchange. The accounts were made up at the prices current on the 18th without the knowledge of or any reference to the defendant. The result was that the sum due, including the 1,6882., upon the whole transac- tion was 6,013/. 13s. 5d. For the plaintiffs it was argued that a defaulting broker has no right to avail himself of a usage regu- lating the mode of dealing with defaulters in order to fix his principal with an additional liability. The court below, accept- ing the principle that the whole of the usages and practice of the Stock Exchange were imported into the contract, thought that the plaintiffs had authority to bind the defendant, that the defendant being the real purchaser was so identified with the plaintiffs, his agents, as to be liable to the performance of the contract made in all its incidents, and with all its consequences, and that he was accordingly liable for any result due to the operation of those rules of the Stock Exchange which operated *only in [115*] cases of default by the agent. This decision is open to the serious objection that it makes a plaintiff liable to the agent for losses which are directly due, not to the execution of the agency, but to a default on the part of the agent. The Court of Ex- chequer Chamber, consisting of Blackburn, Keating, Grove, Brett, Quain, Archibald, and Honyman, JJ., unanimously reversed the judgment of the court below upon that ground alone. The re- sult is, that a principal is bound to indemnify his agent for losses incurred by the latter by the operation of an acknowledged usage or custom, unless the usage is unreasonable, or unless the loss is incurred by a default of the agent himself, as in this case, by rea- son of his insolvency. “It is argued,” said Blackburn, J., in delivering the judgment of the court, “that where the agent, as in this case, is subjected to loss, not only by reason of his having entered into the contracts into which he was authorized to enter by his principal, but by reason of his insolvency, brought on by want of means to meet his other primary obligations, it cannot 154 OF THE AUTHORITY CONFERRED. [Boor 11. be said that he has suffered loss by reason of his having entered into the contracts made by him on behalf of his principal, and consequently there is no promise which can be implied on the part of his principal to indemnify him. . . . These allegations, both as to fact and law, seem to us to be correct.” Secr. 8.— Powers contained in Authorities of a Particular Kind. The rule laid down in the old law books is, that if a man act differently from his authority, the act is void, as if his authority is to do any act upon condition, and he does it absolutely (z).! Thus it was said that an authority to do an act in a particular way implied that the agent should do it in no other, if any con- sequence might ensue from doing it in one way which might not ensue from doing it in the other (a).?_ This rule, however, as will be seen hereafter, must be taken subject to what is said with ref- erence to the extent and limits of the authority. But an anthor- ity to settle losses on a policy authorizes a reference of the matter to arbitration (4);? and an authority to effect a policy empowers (z) Co. Litt. 258 a. 1 An authority to subscribe for stock upon the location and erection of certain railroad improvements at a certain place, will not authorize a subscription payable on the location of such improve- ments. Drover v. Evans, 59 Ind. 454. Where agents were authorized to sell land upon certain prescribed conditions, and they, upon receiving an executed deed from the principal, without au- thority consented that the deed and pur- chase notes should be placed in the hands of a third party until an alleged lien should be removed, the transaction was held not to be a sale binding upon the principal. Taylor v. White, 44 Iowa, 295. (a) 2 P. Wms. 19; Com. Dig. ‘‘ At- torney,’’ C. 13, 2A special agent cannot bind his principal in a matter beyond or outside of the power conferred (actually or ap- parently), and the party dealing with a special agent is bound to know the ex- tent of his authority. Blackwell v. Ketcham, 53 Ind. 184, and cases cited; Lumpkin yv. Wilson, 5 Heisk. 555; Thornton v. Boyden, 31 Ill. 200; Schim- melpennich v. Bayard, | Pet. 264. See, also, ante, p. 106; post, p. 116, note; Thacher v. Kaucher, 2 Col. Ter. 698. (b) Goodson v. Brooke, 4 Camp. 163. 3 Authority to an agent ‘to settle” does not authorize him to submit to ar- bitration the matters in dispute. Huber v. Zimmerman, 21 Ala. 488; Scarbor- ough vy. Reynolds, 12 id. 252. In Scar- borough v. Reynolds, the authority was in these words: ‘If you can honorably and fairly settle with Reynolds for me, out of court, do so; if not, let the court and jury settle.” Where one sent overdue county bonds to another, requesting him to do the best he could with them in settlement, and to treat them as if they were his own, it was held that this did not au- thorize the agent to sell the bonds to a third person or to empower any other CHAP. II.] POWERS INCIDENT TO EVERY AUTHORITY. 155 the agent to adjust a loss under the policy,! and con- *sequently to use all means necessary to procure an ad- So, too, an authority to discount a bill or justment (¢).? (116*] note implies an authority to indorse it in the name of the princi- pal @).2 And a bailiff who acts under a warrant of distress for person to do so. Hannon v. Houston, 18 Kan. 561. An agent can not submit the cause of his principal to arbitration without ex- press authority from his principal to do so. Mich. Cent. R. R. Co. v. Gougar, 55 Til. 503. See post, p. 123. 1 An agent having a special authority to adjust a particular loss cannot by vir- tue thereof adjust a different loss, and whatever he may do with reference to the different loss cannot affect the prin- cipal. To bind the principal, it must be shown by competent evidence that the agent acted within the scope of his au- thority. Hartford Fire Ins. Co. v. Smith, 8 Col. Ter. 422. (c) Richardson v. Anderson, 1 Camp. 43, n. 2 The agent who makes insurance for his principal, has authority to abandon without a formal letter of attorney. Chesapeake Ins. Co. v. Stark, 6 Cranch, 268; Lattomus v. Farmers’ M. F. Ins. Co. 3 Houst. 404. See ante, pp. 5, 111. (d) Fenn v. Harrison, 4 T. Rep. 177. 2 A power of attorney to draw, indorse and accept bills, and to make and in- dorse notes, negotiable at a particular bank, in the name of the principal, does not authorize the attorney to draw a bill in the joint name of himself and his principal. Stainback v. Read, 11 Gratt. 281. Such a power does not authorize the attorney to draw a billin the name of his principal upon a person having no funds of the principal in his hands. Stainback v. Read, supra. See, also, Craighead v. Peterson, 10 Hun, 596. See post, p. 145, note. A committee appointed by a town to lay out a sum of money voted to be raised for the repair of a highway, have no power to bind the town by a prom- issory note unless thereto specially au- thorized. Savage v. Rix, 9 N. H. 263. See ante, p. 108. It is no part of the business of a clerk in a store to borrow money and draw bills or notes for it in the name of the firm. Kerns v. Piper, 4 Watts, 222. Nor has an agent employed in the manufacture of carriages, authority, by implication from the nature of his busi- ness, to bind his principal by a negotia- ble note for labor or materials. Paige v. Stone, 10 Met. 160. An agent employed for the purpose of superintending the sale of stoves and hollow ware for his principal in a given section of country, and who is author- ized to receive payment therefor in dif- ferent articles of produce, is not author- zed to execute a note payable in such wares at a future day, and thus bind his principal by his acknowledgment of value received. Denison vy. Tyson, 17 Vt. 549, A general authority to transact busi- ness and to receive and discharge debts, does not authorize the agent to accept or indorse bills or to make accommodation paper. Sewanee Mining Co. v. McCall, 8 Head, 619; Hazeltine v. Miller, 44 Me. 177; Gulick v. Grover, 33 N. J. Law, 463; Lawrence v. Gebhard, 41 Barb. 575; Robertson v. Levy, 19 La. Ann. 327; Bank of Hamburg v. Johnson, 3 Rich. Law, 42; Rossiter v. Rossiter, 8 Wend. 496. See, however, James v. Lewis, 26 La. Ann. 664. The authority to bind the principal by 156 OF THE AUTHORITY CONFERRED. [Book 11, arrears of rent has an implied authority to receive the amount of the rent and costs if tendered by the tenant; nor can such au- thority be limited by a previous express instruction given on be- half of the landlord to the bailiff not to receive the rent, but to note or bill must be express or special, or be manifestly proper and necessary to effectuate the purposes of the agency. See Hills v. Upton, 24 La. Ann. 427; Webber v. Williams College, 23 Pick. 802; Rossiter v. Rossiter, Sewanee Min- ing Co. v. McCall, and other cases cited next above. See, also, James v. Lewis, supra; Brantley v. Southern Ins. Co. 53 Ala. 554. An attorney in fact cannot bind his principal as surety, unless he is specific- ally authorized so todo. State v. Das- pit, 80 La. Ann. 1112. | The usage of the business may be ma- terial in determining whether an agent has authority to sign or indorse paperin the name of his principal. See ante, p. 111; Turner v. Keller, 66 N. Y. 66. One who is authorized to act as cashier and financial agent of a firm which is in the habit of taking commercial paper in the transaction of business, has au- thority to indorse such paper in the name of the firm. Edwards v. Thomas, 66 Mo. 468. Authority conferred on the president toactas ‘‘ business and financial agent” of a corporation is confined to the ordi- nary business of the corporation, and does not warrant the execution by him under the corporate seal of a mortgage upon a locomotive belonging to the cor- poration. Luse v. Isthmus Transit R’y Co., 6 Oreg. 125. Where a person authorizes another to sign the name of the former to a prom- issory note for a specified sum, the payee will be charged with knowledge of the extent of such authority, and the person conferring it cannot be bound for a Jargersum. Blackwell v. Ketcham, 53 Ind. 184. And authority to indorse and discount a note for one purpose cannot be extended to another. Golson, 37 La, Ann. 811. But if a person indorses or signs in blank paper or a note and intrusts it to another that he may raise money upon it, he authorizes that other person to fill all blanks which are necessary and proper to make the instrument.a perfect and complete bill of exchange or prom- issory note. Gillaspie v. Kelley, 41 Ind. 158; Holland v. Hatch, 11 id. 497; Spitler v. James, 32 id. 202; Black- wellv. Ketcham, 53 id. 184; Snyder v, Van Doren, 8S. Ct. Wis. 1 Wis. Leg. News, 259. See, also, Mayor v. The State, 57 Ind. 152; Hall v. Smith, Ct. of App. of Ky. 11 Chi. Leg. News, 284. And in the hands of bona fide holders such paper will be valid even though the blanks are filled contrary to instructions. Gillaspie v. Kelley, supra; Spitler v. James, supra; Abbott v. Rose, 62 Me. 194. Provided, of course, the stipulation written in is usual in paper of the class indicated by the blank form. Spitlerv. James, supra. If the terms of an agreement for one to act as the agent of another or pur- chaser of his goods, are verbally agreed upon and a paper is signed in blank, to be filled up by one of the parties, it is incumbent upon him to fill up the paper in the exact terms talked of and agreed upon. If, in filling up a blank, he in- serts other terms than those verbally agreed upon, it is not the contract of the persons who signed it in blank. If one agrees to the terms of a contract and sign it in blank and leave with another to fill up, and it is filled up as verbally agreed to be done, he is bound by it. It is a valid contract. Rounsavell v. Pease, Sup. Ct. of Wis., Jan. 14, 1879. 1 Wis. Leg. News, 148. Callender y. CHAP. I1.] POWERS INCIDENT TO EVERY AUTHORITY. 157 refer the tenant to the landlord’s attorney (¢). So where an an- nuity deed contained a stipulation that it might be redeemed on payment of a certain sum and all arrears, on giving six months’ notice to the grantee in writing, it was held by the Court of Com- mon Pleas that an agent of the grantee, having a general author- ity to waive and invest money for the grantee, had authority to waive the stipulation and accept the redemption money (the deed being delivered up to him), though without the knowledge of the grantee (/). In the absence of express contract, the pawnee of property cannot sell it until the debt for which it is pledged becomes pay- able; if he does sell; the owner has a right to charge the pawnee with the price for which the property sold (g). A. and B., stockbrokers, borrowed on behalf of the plaintiff a sum of money for a term of three months from the defendants, who were also stockholders, upon the security of certain railway stock which was transferred by the plaintiff into the name of one of the defendants’ firm. At the expiration of the term the loan was repaid with interest, and the defendants, who, pending the loan, had sold the plaintiff ’s stock, purchased other stock, and re- transferred a similar amount to the plaintiff. The plaintiff claimed to be entitled to the amount of profit which the defend- ants had realized on the sale. Vice-Chancellor Malins held that the defendants were not justified, either by law or by the custom of the Stock Exchange, in parting with the security during the continuance of the loan, but were bound to return the identical stock pledged; and that the plaintiff was entitled to recover from the defendants the amount of profit realized by their dealings with the stock. With respect to an agent’s implied authority to warrant, the checks is no incident of the collec- Authority given to a collector to re- ceive checks in lieu of cash in payment of bills held for collection, does not au- thorize him to indorse and collect the checks. When he receives the checks payable to his principals his duty as col- lector ceases. His next duty is to ac- count to his employers for the proceeds of his collection, and tum over the checks to them to be disposed of as they may deem proper. The indorsement of tion of the accounts. Graham v. U. 8. Savings Inst., 46 Mo. 186. “See ante, p. 111. (e) Haich v. Hale, 15 Q. B. 10; 19 L. J., Q. B. 289. (J) Webber v. Granville, 60 L. J., C. P. 62. (g) Langton v. Waite, L. R., 6 Eq. 165. 1See post, p. 264. 158 OF THE AUTHORITY CONFERRED. [Book u. [117*] the *rule stated by Mr. Benjamin (/) is, as to all contracts including sales, that the agent is authorized to do what- ever is usual to carry out the object of his agency, and it isa question for the jury to determine what is usual (¢).' This is merely an application of the general rules already dwelt upon, to the effect that an agent has primd facie an implied authority to do all things which are necessary to the due execution of the authority or which are justified by usage. Where an agent is authorized to receive money for his princi- pal, he cannot allow it by way of set-off in accounts between the payer and himself; he must receive it in money.? If, however, (A) Sales of Personal Property (2d Am. ed.), § 624, p. 580. (i) Bayliffe v. Butterworth, 1 Ex. 425; Graves v. Legg, 2 H. & N. 210; 26L.J., Ex. 316; Pickering v. Busk, 15 East, 38. 1See Ahern v. Goodspeed, 72 N. Y. 108; McBean v. Fox, 1 Bradwell, 177. Authority without restriction to an agent to sell, catries with it authority to warrant. Schuchardt vy. Allens, 1 Wall. 859; Bryant v. Moore, 26 Me. 84, 87; Randall v. Kehlor, 60 id. 37; Gaines v. McKinley, 1 Ala. 446; Bradford v. Bush, 10 id. 886; Murray v. Brooks, 41 Iowa, 45; Fay v. Richmond, 43 Vt. 25; Palmer v. Hatch, 46 Mo. 585; Mor- ris v. Bowen, 52 N. H. 416, 421; Croom v. Shaw, 1 Fla. 211; Sandford v. Handy, 23 Wend. 260; Nelson v. Cowing, 6 Hill. 837; Woodford v. McClenahan, 4 Gilm. 85; Hunter v. Jameson, 6 Ired. 252; Boothley v. Scales, 27 Wis. 626; Ezel v. Franklin, 2 Sneed. 236; Tice v. Gallup, 2 Hun, 446; 8. C. 5 Thomp. & C. 51. But in Upton v. Suffolk County Mills, 11 Cush. 586, it was held that a general selling agent had no implied authority to warrant that flour sold by him on his principal’s account would keep sweet during a sea voyage, in the absence of any usage of business to that effect, the implied authority to warrant not extend- ing to its future condition. See, also, Randall y. Kehlor, 60 Me. 37, 47. Neither does a naked general power of sale given the agent, carry with it such unusual authority as aright to war- rant against a seizure of the article sold (whisky) for violation of the revenue laws prior to sale. Palmer v. Hatch, 46 Mo. 585. An agent with express authority to sell, has, however, no implied authority to warrant where the property is of a description not usually sold with war- ranty. Thus, one employed to make a sale of bank stock is not, presumptively, empowered to warrant it in the name of his principal. Smith v. Tracy, 36 N. Y. 79. Where a principal wrote to his agent that he proposed to ‘‘ place” his goods at a certain price, it was held, that this gave the agent no authority to warrant that his principal would not sell for a less price. Anderson v. Bruner, 112 Mass. 14. Where a committee was authorized by vote of a school district to sell a school house, a sale thereof on credit, instead of for cash, is void, unless ratified by the district afterward. School District v. Attna Ins. Co., 62 Me. 330. A power to sell goods includes a power to receive payment. Rice v. Groffman, 56 Mo. 434. ? Payment to an authorized agent of a creditor by the debtor, is equivalent to omar. If.] POWERS INCIDENT TO EVERY AUTHORITY. 159 payment is made by cheque, and the cheque is duly honored, that payment to the creditor himself. Bick- nell v. Buck, 58 Ind. 354. Proof that a person is clerk for an- other does not establish his right to receive for his employer payment of demands not shown to have any con- nection with the business. Bowen v. School District, 86 Mich. 149. Where an agent authorized to take orders for safes sold a new safe and took an old one in part payment, which was reported to the principal, who accepted the old safe and sent the one sold to the purchaser, without any notice to him that the agent had transcended his au- thority, it was held, that the purchaser had a right to suppose that the agent was authorized to receive pay for the safe so sold by him, and that payment of the residue by the purchaser to such agent was good as against the principal, if made without any notice that the agent was not authorized to receive it. Harris v. Simmerman, 81 Ill. 413. An agent to collect a note has no au- thority to sell, or barter, or exchange the note to the debtor, or to any one else, for drafts, bills of exchange or real prop- erty. Rodgers v. Bass, 46 Tex. 505. An attorney employed to collect a debt has no right to accept notes, bonds, etc., of the debtor, as collateral security for the debt, without express authority from his client; and if he does so, his client will not be bound unless he assents to or ratifies the same. Wiley v. Mahood, 10 W. Va. 206. An agent who has only authority to receive payment of a debt, cannot bind his principal by any arrangement short of an actual collection of the money. Kirk v. Hiatt, 2 Ind. 322 (receipt of property); Wiley v. Mahood, supra; Drain v. Doggett, 41 Iowa, 682 (receipt of a draft); Aultman v. Lee, 43 Iowa, 404 (wheat); Padfield v. Green, 85 IIL 529; Woodbury v. Larned, 5 Minn. 339; McCulloch v. McKee, 16 Penn. St. 289 (where agent took a note to himself), See, also, Scoby v. Woods, 59 Tenn. 66; Stewart v. Woodward, 50 Vt. 78. Authority to receive the whole of a debt, embraces power to receive a part. Whelan v. Reilly, 61 Mo. 565. But authority to collect or receive payment does not include authority to extend the time of payment or to extend on the re- ceipt of part payment. Hutchings v. Munger, 41 N. Y. 153; Chappel v. Ray- mond, 20 La. Ann. 277; Gerrish v. Maher, 70 Il. 470. An agent authorized to sell land and make title thereto, can only sell for money. He cannot exchange for mer- cnandise. Lumpkins vy. Wilson, 5 Heisk. 550. Nor can a factor sell the merchandise of his principal to a creditor of the factor in payment of an antecedent debt. Such a transfer is not a sale, in the legal ac- ceptation of the term. Warner v. Mar- tin, 11 How. 209. It is competent to make a tender of money to the person to whom payment would be lawful. Whelan v. Reilly, supra. An agent authorized to settle a claim against a carrier for the loss of goods, cannot give a discharge without receiv- ing any consideration. His mere agree- ment to receive other goods in place of those lost, will not operate as a release of the carrier’s liability. Patterson v. Moore, 34 Penn. St. 69. In the absence of special instructions to an agent to collect in gold or silver currency, a payment to the agent in bank bills, or other currency generally taken and used in the payment of debts, and current in business transactions as money, would satisfy the debt. Rodgers v. Bass, 46 Tex. 505. Tested by this rule, it was held, in Rodgers v. Bass, supra, that in Feb., 160 OF THE AUTHORITY CONFERRED. [Book I is a payment in cash! There is nothing in the circumstance of a cheque being given which invalidates the payment. In Bridges v. Garrett (k), the defendant gave to an agent a cheque for an amount owing to the principal. At the request of the agent, the defendant crossed the cheque with the name of the agent’s bank. The latter paid it into his own private account on the same day. 1862, Confederate States treasury notes, in Texas, must be held to have been cur- rent tokens or bills, used and passing in business transactions as money; and that, ordinarily, an agent to collect could receive such notes in payment, unless prohibited by his principal. Sce, also, Coleman v. Wingfield, 4 Heisk. 133; Dillard v. Clements, 58 Tenn. 187. See, however, Waterhouse vy. Citizens’ Bank, 25 La. Ann. 77. Where, during the years 1861-2, notes were placed in the hands of an agent for collection, by their terms payable in U.S. currency, with no instructions as to the currency in which collections were to be made, but leaving the agent to “exercise his discretion as to the pro- cedure’ to be taken ‘‘to enforce pay- ment,’’ and thereupon the agent ac- cepted Confederate notes: Held, that the action of the agent was unauthorized and wrongful, and that he was liable to pay to his principal the full amount of the notes in U.S. currency; and this, notwithstanding Confederate money was at the time and place of payment the only currency in circulation. Mangum v. Ball, 43 Miss. 288. Where an agent, without its being necessary so to do, collected a note due his principal, and without authority re- ceived payment thereof in Confederate treasury notes, which he retained with- out effort to dispose of them till they were worthless, it was held that he must sustain the loss, and not the principal. Webster v. Whitworth, 49 Ala. 210. See, also, Patterson v. Horsley, trustee, 29 Gratt. 263; McVeigh v. Bank of Old Dominion, 26 id. 188. But where the agent was induced to re- ceive payment in Confederate money by the threat of the debtor to report the facts to the Confederate receiver, which would have exposed the agent to per- sonal danger and the debt to danger of confiscation, it was held, that, although not duress in the strict sense of the term, yet, being sufficient to overcome the agent's freedom of will, it excused his action and he was not liable for the loss. Pilson v. Bushing, 29 Gratt. 229. See, also, Davis v. Harman, 21 id. 112; Pidg- eon v. Williams, id. 251. The holder of a solidary note cannot have its solidarity impaired by the un- authorized action of his collecting agent, who receipts in favor of one of the soli- dary debtors on his note for ‘“‘ his share ’* of the debt. Cooley v. Broad, 29 La, Ann. 345, Even if an attorney have authority to receive payment of an obligation, this does not authorize him to receive it be- fore itis due. Smith v. Kidd, 68 N. Y. 130. A payment by the maker of a promis- sory note, before its transfer by the payee, to an agent of the payee, within the scope of his authority, is a good pay- ment. Renard v. Turner, 42 Ala. 117. See ante, p. 111, note. 1A sale of property for cash, means that the money shall all be paid down when the title to the property passed, and a sale and delivery for a bank check payable the next day after the sale, is not a sale for cash. Hall v. Storrs, 7 Wis, 253, (k) L. B.,5 0. P. 4.1, cae. I.) POWERS INCIDENT TO EVERY AUTHORITY. 161 The defendant’s bankers duly paid the cheque to the agent’s bank- ers, who refused to pay any part of the proceeds of the cheque, but applied them in satisfaction of the agent’s overdrawn account. The Court of Exchequer Chamber held that, assuming the agent to be duly authorized, the payment to him was a payment to the plaintiff, and that there was nothing in the mode of payment which rendered the application of any other rule necessary. An agent to whom bills of lading are handed for the purpose of obtaining possession of the cargo of a stranded vessel has im- plied authority to bind the owner by an agreement to pay, on con- dition of the cargo being given up, charges for which there is a lien on the cargo (2). Authority may, of course, be inferred from conduct. A broker who acted for the plaintiff made a contract for the sale of goods to the defendant. He sent a note to each party, but signed only that which was sent to the seller. The contract was entered in his book and duly signed. The defendant kept the note which was sent to him, and made no objection until *ealled upon to accept the goods. The court held that the [118*] conduct of the defendant amounted to an admission that the broker had authority to make the contract for him (2). An authority to commit a breach of duty will not be implied;" for instance, an agent has no implied authority to assign to others the exercise of a discretion.? Accordingly, a provision in the deed of settlement of a joint-stock company, authorizing the directors to borrow on the security of the funds or property of the com- pany, and to cause the funds or property, or property on the secu- rity of which any sums should be borrowed, to be assigned by way of mortgage, does not authorize the directors to mortgage future calls, which were, by the deed of settlement, to be made when it appeared necessary or expedient to the directors (n). “The directors,” said Lord Justice Turner, “are bound, before they make a call, to exercise their discretion upon the question whether the call should or should not be made; and how can it be possible that they can assign calls, which are to be made by (1) Hingston v. Wendt, L. R., 1 Q. B. 1See ante, pp. 36, 1138. Div. 367. See ante, p. 42. (m) Thompson v. Gardiner, L, R.,1 — (») Ex parte Stanley, Re British, &c. C. P. Div. 777. Society, 33 L. J., Ch. 585. 11 162 OF THE AUTHORITY CONFERRED. [Book . them in the exercise of their discretion, as part of the property or funds of the company ? The consequence would be that the dis- cretion which they are bound to exercise would be wholly defeated and put an end to.” “My opinion is,” said Lord Justice Knight Bruce, “that to construe the deed of settlement as warranting such an assignment as that, would be to authorize a plain breach of trust, and authorize an act inconsistent with the continuance of the society, and inconsistent probably with the lawful exercise of the powers of the directors.” The principle upon which this and similar cases were decided is, that calls should be made at the dis- cretion of the directors, and an assignment of future calls pre- vented the exercise of such a discretion (0). An authority to sell and transfer stock, “ when the funds should be at 85 per cent., or above that price,” does not allow the agent to defer selling till the funds should reach a higher price than 85, but the agent is bound to sell when the funds reach 85. Hence, when a mercantile house had accepted such a commission, and had not sold when the funds reached 85, it was held that the firm had made the stock their own from that time (7). [119*] *Vice-Chancellor Hall recently dealt, in Hamer v. ' Sharp (q), with the question of the authority of an estate or house agent to enter into a contract for the sale of property. The actual question raised was whether, when an owner of an estate puts it into the hands of an agent for sale, stating a price for, and giving particulars of, the property, to enable him to inform intending purchasers, but giving no instructions as to the absolute disposal, and none as to the title of the property, and mentioning none of the special stipulations — which it might be proper to insert in conditions in reference to the title, the agent is authorized to sign a contract for the sale of the property for the price stated in the instructions, without making any provisions as to title. His lordship decided the question in the negative, and expressed an opinion that when instructions are given to an agent to find a purchaser of landed property, but no instructions as to the condi- tions to be inserted in the contract as to title, he is not authorized to sign a contract on the part of the vendor.! (0) In re Sankey Brook Coal Co., L. C. C. 381. R., 9 Ex. 721; see per Field, J., Hughes (q) L. B., 19 Eq. 108. v. Trew, 36 L. T., N.S. 585. 1See Short v. Millard, ante, p. 77. . (») Bertram v. Godfray, 1 Knapp, P. In Vanaday. Hopkins, 1J. J. Mavsh, CHAP. IT.] — were POWERS INCIDENT TO EVERY AUTHORITY. 163 An agent employed to purchase has no authority to buy his own goods; nor, on the other hand, may an agent employed to sell purchase his principal’s goods for himself. A principal may either repudiate such transactions altogether, or he may adopt and take the benefit of them (r).1| Again, an authority to sell for money does not authorize an agent to barter (s).2 Nor does an authority to obtain orders for goods authorize an agent to receive 285, it was held that a power “‘ to sell ”’ land, implied a power to bind the prin- cipal to convey with general warranty, unless there were restraining words. So, in Le Roy v. Beard, 8 How. 451, it was held that a power of attorney ‘‘ to contract for the sale of, and tosell . . . the land . . . on such terms in all re- spects as he shall deem most advanta- geous,”’ and ‘‘ to execute deeds of con- veyance necessary for the full and perfect transfer of all our respective right, title, etc., as sufficiently in all re- spects as we ourselves could do person- ally in the premises,’’ authorized the attorney to convey with a covenant of seizing A similar ruling was made in Taggart v. Stanberry, 2 McLean, 543. The case of Nixon v. Hyserott, 5 John. 58, holds the contrary, on the principle that the authority should be strictly pursued. See, also, Gibson v. Colt, 7 John. 890, where, however, the property was not land but a ship, and which was overruled in 6 Hill, 3386. See, also, Du- pont v. Wertheman, 10 Cal. 354, where it is said that a power “to sell and con- vey’ property is special and must be strictly pursued. An agent to sell land has not, mere- ly as such, power to convey. He can bind his principal to convey, but cannot himself convey, unless authorized by power of attorney. Therefore a deed cannot be demanded of, or payment tendered to, a mere agent tosell, Force v. Dutcher, 18 N. J. Eq. 401. In Valentine v. Piper, 22 Pick. 85, however, it was held that under a letter of attorney authorizing the attorney to make sale of real estate and receive the purchase money, he had authority to execute the proper instrument (a deed of conveyance in this case) required by law to carry the sale into effect. A written instrument subscribed by. the owner of land, authorizing a real estate broker to sell it upon certain terms therein specifically set forth, and an agreement to purchase the property upon those terms subscribed by a pur- chaser, subsequently written across the face of the paper while unrevoked in the hands of the broker, do not, taken either separately or together, form a contract for the sale of the land binding upon the owner; nor does his’ subse- quent parol assent to the terms of sale give validity to the transaction. Hay- dock v. Stow, 40 N. Y. 363. (rv) Bentley v. Craven, 18 Beav. 75. 1See this subject fully considered, post, pp. 262, 272. Authority to purchase wheat necessa- rily implies and includes authority to give direction as to its delivery. Owen y. Brockschmidt, 54 Mo. 285. (s) Guerreiro v. Peile, 3 B.& Ald. 616. 2To the same point see Trudo vy. An- derson, 10 Mich. 357; Kent v. Born- stein, 12 Allen, 342; Lumpkin v. Wil- son, 5 Heisk. 55; Wheeler & Wilson Manfg. Co. v. Givan, 65 Mo. 89; Victor Sewing Machine Co. v. Heller, 44 Wis. 265. See, also, ante, p. 117; Stewart vy. Woodward, 50 Vt. 78. In Kent v. Bornstein, supra, it was held that where one is simply employed to sell goods and pay over to his em- ployer the money received from the 164 OF THE AUTHORITY CONFERRED. [Book I. payment for them,! nor does an authority to sell at a particular place authorize their sale elsewhere (¢); nor, again, does an author- ity to sell stock authorize an agent to sell on credit (w);” nor, if the authority is to sell and transfer for the principal, will it authorize a transfer by way of security for the agent’s private debt (x). An authority to buy for ready money is no authority to buy on credit (y),‘ nor is an authority to receive a payment in sales, he has no authority to exchange such money with a third person; and that, if he does so and receives in ex- change a counterfeit bill, he may main- tain an action in his own name to re- cover back the money paid out by him for it, and it is not necessary before bringing suit to offer to return the coun- terfeit bill. 1 An authority to make a contract for another is not sufficient to authorize its cancellation or surrender. Stillwell v. Mut. Life Ins. Co. 72 N. Y. 385; Stod- dart v. Warren, U. S. C. Ct. N. D. IL 7 Reporter, 517. Thus, an agent for a commercial a sale on credit was within the range of his discretion, if such sale was made in good faith and was in accordance with the course of trade at the place where the sale was made. May v. Mitchell, 5 Humph. 365. See, also, Ruffin v. Mebane, 6 Ired. Eq. 507, where the attorney was to sell to the best: advantage. (x) De Bouchout v. Goldsmith, 5 Ves. 211, 3An authority to an agent to sell goods does not authorize him to pledge them. Voss v. Robertson, 46 Ala. 483; Wheeler & Wilson Manfg. Co. v. Givan, 65 Mo. 89. See post, p. 123. house who travels and solicits orders for _~ So, an authority to sell personal prop- his principal, in the absence of proof, will not be presumed to have authority to rescind his contracts and take back goods furnished by the house for which he is agent, when they prove unsatisfac- tory to the customer. Diversy v. Kel- logg, 44 Il. 114. (t) Catlin v. Bell, 4 Camp. 183. erty for the owner’s benefit, will not authorize the agent to sell or pledge the property to his own creditor for his own debt. Parsons v. Webb, 8 Me. 38; Wheeler & Wilson Manfg. Co. v. Givan, 65 Mo. 89; Stewart v. Woodward, 50 Vt. 78; Holton v. Smith, 7N. H. 446; Victor Sewing Machine Co. v. Heller, 44 (u) Wiltshire v. Sims, 1 Camp. 258. _ Wis. 265. 2 Asa general rule, an agent for a sale must sell for cash, unless he has an express authority to sel) upon credit. State v. Delafield, 8 Paige, 527 (public stocks of a state). But an authority to sell on credit may be implied, where from the general usages of the trade in which the agent is employed, it is the custom to sell on credit. State v. Delafield, supra. See post, p. 123. Where an agent was authorized to sell personal property ‘‘for the best price he could get and return the p:o- ceeds "’ to the principal, it was held that As a general rule, a power to selland convey real estate, does not confer power to mortgage, and a mortgage executed under 4 power of attorney to sell and convey, is void. Morris v. Watson, 15 Minn. 212; Wood v. Goodridge, 6 Cush. 117; Gaylord v. Stebbins, 4 Kan. 42. (y) Show. 95; Stubbings v. Heintz, 1 Peake, N. P. 66. *To the same point, see Stoddard v. Mcllwain, 7 Rich. Law, 525. A mere agency to buy goods does not imply such an agency as authorizes a purchase on credit. Berry vy. Barnes, 23 Ark, 411, CHAP. 11.] POWERS INCIDENT TO EVERY AUTHORITY. 165 money am authority to receive a bill instead (2),! nor is an author- ity to act as scrivener an authority to agree to a composition (a), but a duly appointed counsel may bind a client by consent (0). In this case Lord Eldon observed that it was for counsel to consider whether he was authorized to *consent, and [120*] not for the court; so, too, an attorney has an implied authority to enter into a compromise on his client’s behalf (c), and if the plaintiff in an action continues the authority of his attorney after judgment, the attorney retains the power to bind his client by a compromise (d).’ With respect to the evidence of an agent’s authority to sell goods in his own name, it has been decided that the fact that a principal has entrusted an agent with the possession of goods for the purpose of selling them is, as between the agent and third parties buying the goods, primd facie evidence that the agent is authorized to sell them in his own name. Hence, if the court is satisfied that no limitation of the agent’s authority was disclosed to the buyer, a set-off of a debt due from the agent isa good Nor does an agency for buying and selling goods for the principal at the principal’s store authorize an agent to borrow money on the credit of the prin- cipal. Spooner v. Thompson, 48 Vt. 259. But one who constitutes another his agent with full power to manage his mercantile house and do all acts apper- taining to his business, makes himself liable for the value of all goods pur- chased by the agent in the line of that business. Schmidt v. Sandel, 30 La. Ann, 353. (z) Thorold v. Smith, 11 Mod. p. 2; Ld. Raym. 930. 1See ante, p. 117. (a) 2 Vern. 127. (b) Mole v. Smith, 1 Jac. & W. 673. (c) Chown v. Parrott, 14 C. B., N.S. 74; Lush Pr. 256; Prestwich v. Poley, 18 C. B., N.S. 806. (d) Butler v. Knight, L. R., 2 Ex. 109. *In the United States, the weight of authority seems to be that an attorney, by virtue merely of his retainer as such, and without the consent of his client, has not the power to bind the client by the compromise of his client’s claim or of a pending action. See Preston v. Hill, 50 Cal. 48; Spears v. Ledergerber, 56 Mo. 465; Walden v. Bolton, 55 id. 405; Maye v. Cogdell, 69 N. C. 98; Adams v. Roller, 35 Tex. 711; Derwort v. Soomer, 21 Conn. 245; Holker v. Parker, 7 Cranch, 436; Shaw v. Kidder, 2 How. 244; Lewis v. Gamage, 1 Pick. 347; Stokeley v. Robinson, 34 Penn. St. 318; Barrett v. Third Ave. R.R. Co., 45 N. Y. 685; Vail v. Jackson, 13 Vt. 214; Abbie v. Rood, 6 McLean, 106; Nolan v. Jackson, 16 Ill, 272; Mar- bourg v. Smith, 11 Kan. 562; Vickery v. McClellan, 61 Ill. 311; Melvin v. Lamar Ins. Co., 80 id. 446, 465; Saleski yv. Boyd, 32 Ark. 74; Pickett v. Mer- chants’ Nat. Bank, id. 346. See, how- ever, contra, Potter v. Parsons, 14 Iowa, 286; Wieland v. White, 169 Mass. 392; Holmes v. Rogers, 13 Cal. 191; Rein- hold v. Alberti, 1 Binn. 469; Christie v. Sawyer, 44 N. H. 298. 16¢ OF THE AUTHORITY CONFERRED. [Book IL. defence to a claim by the principal against the buyer, notwith- standing that the agent, though so entrasted with the goods, was under an agreement with his principal not to sell in his own name (e).! It may be laid down generally that the incidental authority flowing from the original authority must be so construed as not to confer a power different in kind from the power conferred by that original authority. In order, however, to apply this principle in all cases, we must understand that in the original authority here referred to is included not only the authority conferred by the actual terms in which the authority is given, but that authority extended and modified by the addition of all these powers which are by law implied from usage, mode of dealing, and other cir- cumstances of a like character.’ (e) Ex parte Dixon, Re Henley, L. R., 4 Ch. Div. 133; 46 L. J., Bank. 20; 35 L. T. Rep., N. S. 644. 1See post, p. 396. Plaintiffs, who were merchant tailors at Concord, N. H., and had a branch house at Montpelier, sought to recover in book account of defendant, a physi- cian, for clothes, etc., delivered to him by C., their general agent at Montpelier, upon the understanding between C. and defendant, that the goods should apply upon an existing indebtedness from C. to defendant for medical attendance, defendant believing C. had an interest in the business and authority so to dis- pose of the goods: Held, plaintiffs hav- ing held out C. as their general agent only, that defendant was bound to measure the scope of his authority, and was liable upon his implied promise in this form of action for the value of the goods. Stewart v. Woodward, 50 Vt. 78. See, also, Wheeler & Wilson Manfg. Co. v. Givan, 65 Mo. 89. See ante, p. 119. A party who is authorized to sell goods for another under a written con- tract not recorded, and is bound by the terms thereof to turn over the proceeds, whether in cash or notes, to his princi- Taking the word authority in pal, and after a certain specified date, to become liable for the payment of any unsold goods remaining in his posses- sion, does not, prior to that date, hold the goods under a conditional sale, nor can a purchaser insist upon an offset of any claim he may hold against the agent. Conable v. Lynch, 45 Iowa, 84. 2The following cases, in addition to those already cited in this chapter, are here cited as examples of the nature and limits of implied authority. A general power to borrow money, includes authority to give to the lender the ordinary securities for the sum bor- rowed. Hatch v. Coddington, 5 Otto, 48. Where the owner and proprietor of a hotel employs another as his agent in and about the hotel, and in running it, and holds such person out as manager of the house, the jury would be war- ranted, in an action against the owner for meat ordered for and delivered at the house, in finding from such a showing that the agent had authority to pur- chase the usual and necessary supplies for the house, and to bind his employer in making such purchases on credit. Beecher v. Venn, 35 Mich. 466. An agent having authority to sell and cHAP. 11.] POWERS INCIDENT TO EVERY AUTHORITY. 167 this sense, it would be found that any act of the agent which is not of alike kind with the acts deliver threshing machines, under con- tract giving the purchaser the right to try the machine for a certain length of time, and stipulating that, if it fails to work well, it is to be returned, has au- thority, while a machine is thus on trial, to waive such return. Pitsinowsky v. Beardsley, 37 Iowa, 9. Where an order for a plaster bust was procured by one having a general au- thority to solicit orders, but none to make a condition that the person order- ing would not be bound to take the bust unless satisfied with it: Held, that such a general authority would seem, in the absence of any limitation, to be suffi- cient to authorize such agent to agree up- on such terms; but thatif the authority was not sufficient, the result would be that there was no special contract, and as the person ordering the bust had not accepted it, there was no sale and no li- ability on his part. Zaleski v. Clark, 44 Conn. 218. Where an agent is employed merely to carry out and perform a contract al- ready made by his principal, he is not authorized to change the contract or to make a new one. Cerrish v. Maher, 70 Tl. 470. Managing officers of corporations have power to employ attorneys and counsel- lors, without express delegations of power or formal resolutions to that effect. Western Bank v. Gilstrap, 45 Mo. 419; Southgate v. Atlantic & P. R. R. Co. 61 id. 89; American Ins. Co. v. Oakley, 9 Paige, 496. Asa rule, the officers of a bank are held out to the public as having author- ity to act according to the usage and course of business of such institutions, and their acts within the scope of their authority, bind the bank in favor of persons having no knowledge to the contrary. Rich v. State Nat. Bank, 18 sanctioned by such authority in Kan. 201; Kennedy v. Otce Co. Nat. Bank, id. 59; Minor v. Mechanics’ Bank, 1 Pet. 46; Frankfort Bank v. Johnson, 24 Me. 490; Merchants’ Bank v. State Bank, 10 Wall. €04; Cooke v. State Nat. Bank, 52 N. Y. 96; Yerkes v. Nat. Bank, 69 id. 882. See post, p. 188, note. A cashier of a bank has no authority to certify a check appearing on ita face not to have been drawn in the usual course of business and not to be a com- mercial check. Dorsey v. Abrams, 85 Penn. St. 299. Where a party sends another to get certain articles for use, and he gets them, the latter as to the transaction will necessarily be the agent of the former; and if the party letting the ar- ticles go informs him what his charge is per day for their use, being about a matter affecting a special duty with which the agent is intrusted, if the ar- ticles are retained, the principal will be bound to pay such price even though the agent does not communicate the terms to his principal. Sterling Bridge Co. v. Baker, 75 Ill. 189. See Farring- ton v. Woodward, 82 Penn. St. 259. An agent at Norwich of a commission merchant in New York, to solicit and ship to the commission merchant pro- duce to be sold by him on commission, has no apparent authority to guarantee to persons shipping produce to the com- mission merchant the price it will bring, so as to bind his principal. Quinn v. Carr, 6 Thomp. & C. 402; S.C., 4 Hun, 259. From the mere fact that an agent employed to sell goods and having in his possession a horse and wagon of his principal, and also the goods offered for sale, puts up at a hotel, the law will not presume a contract by the principal to pay the hotel keeper for the board and 168 OF THE AUTHORITY CONFERRED. [BOOK IL. the wider sense of the term, is beyond the scope of the agent’s authority.! lodging of the agent and the keeping of the horse. Sampson v. Singer Manfg. Co., 5 Rich. (8. C.) 465; Grover & Baker Sewing Machine Co. v. Polhe- mus, 34 Mich. 247. Where it appeared that the amount of sales in the plaintiff's business in New York of manufacturing, advertis- ing andselling patent medicines com- pounded by him did not exceed $50,000 per annum, and the agent was author- ized to do whatever was requisite and necessary to be done in and about that business, as fully as the plaintiff might do in case he was personally present: Held, that it was not within the appar- ent scope of such agent’s authority to en- ter into contracts for advertising plaint- iff’s business in Mexico, the West Indies, and South America, at an expense of over $180,000 a year. Holloway v. Stephens, 2 Thomp. & C. 562. Authority given by a city council toa committee thereof, on a petition for a hydrant to be attached to a certain line of pipes, to purchase the pipes, does not authorize the committee to agree in be- half of the city to maintain the hydrant. Taintor v. City of Worcester, 123 Mass. ll. A general authority given a person to manage property for another, does not authorize the employment of counsel by the agent in a case concerning some other person's property, notwithstand- ing the legal questions involved therein might, as a precedent, affect some legal rights of his principal to other property not involved in the controversy. Perry y. Jones, 18 Kan. 552. A request by a principal to his com- mission merchant to buy corn to fill the balance of a quantity of corn which the former had contracted to sell to a third person, does not authorize the commis- sion merchant to pay money to the purchaser to discharge the obligation of the seller, it not appearing that the corn was deliverable under the contract at the time the money was so paid. Good- man v. Meixsel, 53 Ind. 11. Where an agent is placed in posses- sion of real estate by the owner as ten- ant, to hold possession of the property, such tenant cannot affect the rights of his landlord by attornment, or by an agreement to attorn to a stranger. McNamee v. Relf, 52 Miss. 426. A mere book-keeper, who has no au- thority to receive an overdue premium on aforfeited policy, and who had never done so except under instructions from the secretary, can not bind the company by so doing. Nashville Life Ins. Co. v. Ewing, 58 Tenn. 305. One who manages a farm for another, with authority to purchase mules, im- plements and supplies for the farm, is not thereby authorized to buy goods for the laborers on the farm. Carter v. Burnham, 31 Ark. 212. See further, as to the lack of authority of a manager of a plantation to contract debts on his employer's credit, Meyer v. Baldwin, 52 Miss. 263. An agency to receive certain articles, is no evidence of an agency to dispense with the delivery of such articles. Boyett v. Braswell, 72 N. C. 260. 'See note 2, supra. CUAP, IIL] CHAPTER IIL* IMPLIED AUTHORITY OF AGENTS. 169 [121*] IMPLIED AUTHORITY OF PARTICULAR CLASSES OF AGENTS. SEct. Implied Authority of Auctioneers. Implied Authority of Brokers. Implied Authority of Factors. Implied Authority of Partners. Implied Authority of Solicitors. I; 2. 3. 4. Implied Authority of Masters of Ships, 5. 6. Scr. 1.— Zhe Authority of Auctioneers. As a rule, one of two contracting parties cannot act as agent for the other, but in sales by auction the auctioneer is considered to be agent of both parties, so as to bind either the buyer or seller by his memorandum.' 1An auctioneer is the agent of the purchaser of either lands or goods at auction, to sign a contract for him as the highest bidder; and his writing the name of the purchaser on the memoran- dum of sale, immediately on receiving the bid, and knocking down the ham- mer, is a sufficient signing of the con- tract within the statute. Davis v. Rob- ertson, 1 Mills’ Const. 71; Morton v. Dean, 13 Met. 385; Pike v. Balch, 38 Me. 302, 811; McComb v. Wright, 4 Johns. Ch. 659; Pugh v. Chisseldine, 11 Ohio, 109; Johnson v. Buck, 85 N. J. Law, 338; Burke v. Haley, 2 Gilm. 614; Hart v. Woods, 7 Blackf. 568; Adams v. McMillan, 7 Port. 73; Smith v. Jones, 7 Leigh, 165; Inhabitants of Alna v. Plummer, 4 Me. 258; O’Donnell v. Lee- man, 438 id. 160; Episcopal Church of Macon vy. Wiley, 2 Hill Ch. 584; 8. C. Riley Ch. 156. But when the seller is himself present, directing and contracting the sale, and engages a crier simply to cry the prop- erty and knock it off to the best bidder, the seller himself standing by and do- ing everything except simply crying the bids, this is not such a sale by an auc- tioneer as to give his memorandum the effect of constituting a contract. In such case, the crier is merely an agent, with no other authority than that of securing bids and reporting the result to theseller. Adams v. Scales, 57 Tenn. 337. In assumpsit by an auctioneer against a purchaser, for goods sold, an entry in the sales book by the auctioneer’s clerk, who attended the sale, and as each lot was knocked down, named the pur- chaser aloud, and, on a sign of assent from him, made a note accordingly in the book, is a memorandum in writing by an agent lawfully authorized within Sec. 17 of the Statute of Frauds. For the clerk is not identified with the auc- tioneer, who sues, and in the business which he performs, of entering the names, etc., he is impliedly authorized by the persons attending the sale to be their agent. Bird v. Boulter, 4 B. & 170 OF THE AUTHORITY CONFERRED. [Book Im An auctioneer has a possession coupled with an interest in goods which he is employed to sell; not a bare custody, like a servant orshopman. There is no difference whether the sale be on the premises of the owner or ina publicauction room. The auctioneer has also a special property in such goods, with a lien for the charges of sale, commission, and the auction duty (a). The cata- logue and conditions may afford evidence that he has contracted personally, and so be liable for non-delivery of goods and the like (6). A bidding may be withdrawn at any time before the lot is knocked down (c).! An auctioneer has implied authority — Ad. 448; Cathcart v. Keimaghan, 5 Strobh. Law, 129. In Smith v. Jones, 7 Leigh, 165, and Alna v. Plummer, 4 Me. 258, the court laid down the proposition more broadly, that it is the same whether the note or entry is made by the auctioneer or his clerk, if it is made in the presence of the parties and of the auctioneer. See, also, ante, p. 48; Gill v. Bick- nell, 2 Cush. 355, 358. The mere putting down the name of a bidder is not, however, a sufficient memorandum in writing, unless it is under a caption stating the subject matter and terms of the sale; or on the catalogue, advertisement, or written or printed conditions of sale; or so defi- nitely referring thereto as to make the paper referred to a part of the memo- randum. Morton v. Dean, 13 Met. 385; Gill v. Bicknell, 2 Cush. 355, 859; Hor- ton v. McCarty, 53 Me. 394. A verbal authority to an auctioneer to sell lands is sufficient. Yourt v. Hop- kins, 24 Ill. 326. A guardian, however, who acts as auctioneer in selling land of his ward, under license of court, is not authorized to sign a memorandum in writing for the purchaser to take the case out of the statute. Bent v. Cobb, 9 Gray, 397. The memorandum of the auctioneer, to bind the purchaser, must be cotem- poraneous with the sale. It cannot be made afterwards, fur the moment the sale is over the auctioneer is no longer the agent of both parties, but of the seller only. Mews v. Carr, 1 H. & N. 484; Horton v. McCarty, 53 Me. 394. See, also, Sykes v. Giles, post, 122. So, till the hammer goes down, the auctioneer is exclusively the agent of the vendor. Warlow v. Harrison, 1 Ell. & Ell. 295. (a) Williams y. Millington, 1 H. Bl. 81, 84, 85. (b) Woolfe v. Horne, 2 Q. B. Div. 855. (c) Warlow v. Harrison, 27 L. J., Q. B. 18. 1To the same point, see Payne v. Cave, 3 Term, 148. Assignees in bankruptcy who have employed an auctioner to make sale of the assets of the estate, and have put him in charge, must be understood as authorizing him to speak for them; and when he accepts a bid and knocks down the property, a bargain is closed. When, at such a sale, the bids are un- derstood by the bystanders and by the auctioneer when he accepts them, the fact that the assignees are present, and through an alteration misapprehend them, does not render the sale ineffect- ual, and is no excuse for refusing to carry them out.. Ives v. Tregent, 29 Mich. 390. cIAP. 11.] IMPLIED AUTIIORITY OF AGENTS. 171 (a.) To prescribe the rules of bidding and the terms of sale (d): (b.) To bind his principal by his declarations made at the time of sale, provided such declarations are consistent with the written conditions (e):1 (c.) To sue the buyer in his own name (/):? *But he has no implied authority — [122%] (a.) To receive the purchase-money for land sold by him (g):8 (d) Paley, by Lloyd, 257; Story on Agency, § 107. (e) Ibid.; Gunnis vy. Enhart, 1 H. Bl. 289. 1 Where a house and lot are sold at auction, after advertisement, the vendor is not bound by representations made by the autioneer on the stand, unless they are ratified by the vendor, the ad- vertisement being the only representa- tion by which he is bound. Poree v. Bonneval, 6 La. Ann. 3886; Layton v. Hennen, 3 id. 1, and cases there cited; Wright v. Deklyne, Pet. C. C. 199. See, however, Rankin v. Matthews, 7 Tred. Law, 286; Satterfield v. Smith, 11 id. 60, where it was held that the advertisement or written terms of sale may be explained, added to or varied, by what is said by the auctioneer at the time of sale. In The Monte Allegre, 9 Wheat. 647, Thompson, J., lays down the rule that ‘‘sales at uuction, in the usual mode, are never understood to be ac- companied by a warranty. Auctioneers are special agents, and have only au- thority to sell, and not to warrant, un- less specially instructed so to do.” An auctioneer may, however, be held liable for his own w2rranty or false and fraud- ulent representations. Dent v. Mc- Grath, 3 Bush, 174. At judicial sales and sales for taxes, the maxim caveat emptor applies, and no warranty can be implied. Yates v. Bond, 2 McCord, 382; Bashore v. Whis- ler, 3 Watts, 490; Blackwell on Tax Titles (4th ed.), 51, 65, 442, note, and cases cited. (f) Story on Agency, ibid., and cases cited. To the same point, see Hulse v. Young, 16 Johns. 1; Minturn v. Main, 7N. Y. 220; Beller v. Black, 19 Ark. 566; Tyler v. Freeman, 3 Cush. 261, where it was held that an auctioneer who, as the agent of the owner, sells and delivers goods on a condition which is not complied with, may maintain re- plevin therefor. The above cases all related to personalty, but in Thompson v. Kelly, 101 Mass. 291, it was held that an auctioneer employed to sell real estate, on terms which contemplate the payment of a deposit into his hands by the buyer, at the time of the auction and before the completion of the sale by the delivery of the deed, may sue for such deposit in his own name, when- ever an action for it separate from the other purchase money may become needful. See, also, Bleecker v. Franklin, 2 E. D. Smith, 93. (g) Sykes v. Giles, 5 M. & W. 645. 5 In Sykes v. Giles, cited by the author, by the conditions of the sale the vendee was to pay a deposit of ten per cent. and the remainder at a certain date thereafter, and it was held, that as soon as the sale had taken place and the de- posit money paid, the authority of the auctioneer was at an end, and, there- fore, that he had no authority to make any contract for the payment of the re- bed at bo OF THE AUTHORITY CONFERRED. [Boox 1. (b.) To employ another person to sell the property intrusted to him (A):" (c.) To sell on credit (¢):? (d.) To allow the contract to be rescinded (4):8 (e.) To sell by private contract (7). It is no excuse that he has acted without fraud, and obtained a larger sum than the price fixed (m): (£) To buy property which he is commissioned to sell (n).! Szor. 2.— The Authority of Brokers, A broker has implied authority — (a.) To sign the bought and sold note, and so bind both par- ties (0):* (b.) To sell on credit in the absence of a usage to the con- trary (p): mainder; and that, even if he had au- thority, the payment required would have been a payment in cash and not by a billof exchange, as was the fact. See, also, Williams v. Evans, L. R.,1 Q. B. 352, where it was held that an auctioneer, who is authorized to sell goods on the condition that the pur- chasers shall pay a deposit at once and the remainder of the purchase money to the auctioneer on or before the delivery of the goods, has no authority to receive payment by a bill of exchange, and that such payment could not dis- charge the purchaser. See, however, Pinkney v. Hagadorn, 1 Duer, 90, where it was held that, where the terms of sale provided that 10 per cent. of the purchase money should be paid on the day of sale, the auctioneer’s authority was not limited to receiving it on that day, unless pre- viously prohibited by the seller. See ante, p. 121, note 1. (hk) Blore v. Sutton, 3 Mer. 237; Coles v. Trecothick, 9 Ves. jun. 254. 1 An auctioneer can not delegate the authority which he acquires by his license, to another. Stone v. The State, 12 Mo. 400; Commonwealth v. Ham- den, 19 Pick, 482. He may, however, employ all neces- sary clerks and servants, and relieve himself by employing others to use the hammer and make the outcry. But this should be done under his immediate direction and supervision. Common- wealth v. Harnden, supra; Poree v. Bonneval, 6 La. Ann. 886. See ante, p. 38 et seq. (i) Williams v. Millington, 1 H. Bi. 81. *See Townes v. Birchett, 12 Leigh, 173. (k) Nelson v. Aldridge, 2 Stark. 435. ®Boinest v. Leignez, 2 Rich. Law, 464. (2) Wilkes v. Ellis, 2H. Bl. 555. (m) Daniels v. Adams, Amb. 495. 4 See post, p. 272. (n) See Tate v. Williamson, L. Rep., 2 Ch. 55. (0) Parton v. Crofts, 16 C. B., N.S. 11. ’Saladin v. Mitchell, 45 Ill. 79. (p) Boorman vy. Brown, 8 Q. B. 511; Wiltshire v. Sims, 1 Camp, 258, CHAP. I11.] IMPLI“D AUTHORITY OF AGENTS. 173 (c.) To adjust a policy if employed to subscribe it (q).1 The authorities are conclusive to show that a broker acting for one of the contracting parties, making a contract for the other, is not authorized by both to bind both;* but the broker who makes a contract for one may be authorized by that person to make and sign a memorandum of the contract, and the signed entry in the broker’s book is a sufficient memorandum of the bargain to sat- isfy the Statute of Frauds (7). A broker has no implied authority — (a.) To buy or sell in his own name (s).4 The case of an in- surance broker is an exception to this rule; he need not even state that he contracts as a broker (¢). (b.) To receive payment for goods sold for his prin- cipal (zw). *But an insurance broker has au- [123*] (q) Richardson v. Anderson, 1 Camp. 43, note (a). 1See ante, p. 115. ? See ante, p. 14, and note; post, p. 335, (r) Thompson v. Gardiner, L. R., 1 C. P. Div. 777. 3 See Coddington v. Goddard, 16 Gray, 436, where an entry of a contract of sale and purchase made by a broker in his books in the regular course of his busi- ness, which stated the date, the full names of both parties connected by the word ‘‘to”’in this form: ‘‘W. W.G. to T. B. C. & Co.,"’ a full description of “the goods sold and the terms of the bar- gain, although not subscribed by any one, was a sufficient memorandum in writing within the Statute of Frauds. A broker employed to sell lands has no implied authority to sign a contract of sale in behalf of his principal. Morris v. Ruddy, 20 N. J. Eq. 236; Coleman v. Garrigues, 18 Barb. 60; Glentworth vy. Luther, 21 id. 145; Roach v. Coe, 1 E. D. Smith, 175. (s) Baring v. Corrie, 2 B. & Ald. 137. 4Gallupv. Lederer, 3Thomp. & C. 510; 8S. C.,.1 Hun, 282; Saladin v. Mitchell, 45 Ill. 79; Graham v. Duckwall, 8 Bush, 12. See ante, p. 3. The right of the brokerto make asale for and in the name of another, does not include the right to rescind the same without the knowledge or consent of his principal, unless the commercial usage was such at the place where the sale was made. Saladin v. Mitchell, supra. A merchandise broker can have no implied authority, from the usage of trade, to warrant goods sold by him to be of merchantable quality; and evi- dence to prove such usage is inadmissi- ble; and a memorandum made by such broker of a contract for the sale of goods is invalid and inadmissible in evidence, if he has inserted therein, without ex- press authority, a warranty by the seller that they are of merchantable quality. Dodd v. Farlow, 11 Allen, 426. (t) De Vignier v. Swanson, 1 B. & P. 346, note (5). (wu) Campbell v. Hassell, 1 Stark. 233. Graham v. Duckwall, 8 Bush, 12; Gallup v. Lederer, supra; Bassett v. Lederer, 3 Thomp. & C. 671; 8. C., 1 Hun, 274; Saladin v. Mitchell, 45 Ill. 79, 84; Higgins v. Moore, 34 N. Y. 417. See ante, p. 117, and note; also Evans vy. Waln, 71 Penn. St. 69. A local usage in New York, allowing brokers to receive payment for grain sold 174 OF THE AUTHORITY CONFERRED. [Book II. thority to receive payment of any loss that may occur on a policy effected by him, if the instrument remains in his lands (#): (c.) To make freight under a charter-party entered into by him for his principal, payable to himself (y) : (d.) To delegate his authority (z):* (e.) To pay losses for the underwriters who employ him (@). (£) [To bind his principal by a submission to arbitration.]* Sxcr. 3.— The Authority of Factors. A factor has implied authority — (a.) To sell in his own name (6):* by them, when the seller resides out of the city, is not admissible in evidence for the purpose of establishing authority jn the broker to receive such payment. Higgins v. Morse, supra. (x) Shee v. Clarkson, 12 East, 507. (y) Walshe v. Provan, 8 Ex. 848. (z) Henderson v. Barnwell, 1 Y. & Jer. 387. 1See ante, p. 40. (a) Bell v. Auldjo, 4 Doug. 48. 2Ingraham v. Whitmore, 75 Ill. 24. See ante, p. 115. (b) Baring v. Corrie, 2 B. & Ald. 187. 3Graham v. Duckwall, 8 Bush, 12. The nature and extent of a factor’s power to sell or dispose of goods in- trusted to him, must be determined by the law of the place where the sale or contract of disposition is made. Frank vy. Jenkins, 22 Ohio St. 597. A general consignment to a factor imports an authority to sell according to the usages of trade. But the con- signor may, at the time of the ship- ment or afterwards, if before the sale, impose terms as to time and price, to which the factor must conform. Cotton v. Hiller, 52 Miss. 7; Van Alan v. Van- derpool, 6 John. 70; Goodenow v. Tyler, 7 Mass. 36. But the right of the owner to impose terms is restricted, if he has drawn against the consignment before the in- structions are given, and he cannot in that case control the factor as to time of sale or price, unless he pays the fac- tor for the advances made or the liabili- ties incurred. The factor has by such advances or liabilities acquired a special property, and may sell so much as will reimburse him. Cotton v. Hiller, supra; Weed v. Adams, 37 Conn. 378; Brown v. McGran, 14 Pet. 479; Mooney v. Musser, 45 Ind. 115. This right of the factor to sell is, how- ever, limited to the protection of his own interest in the property, and if he sells more than is necessary for that pur- pose, contrary to the orders of his prin- cipal, he is lable for the loss incurred. Weed v. Adams, supra. Where a factor has been induced by fraud to part with the goods of his prin- cipal to an insolvent purchaser, who, before discovery of the fraud, has placed them in such a condition that it is diffi- cult, if not impossible, to follow them, and the factor, acting in good faith, takes security for the price of the goods, and thus affirms the sale, he is acting within the scope of his powers, and his principal will be bound. Joslin v. Cowee, 52 N. Y. 90. CHAP. I11.] IMPLIED AUTHORITY OF AGENTS. 175 (b.) To sell upon reasonable credit (¢):1 (c.) To warrant (d):? (d.) To receive payment and give receipts (¢):° (e.) To ensure consignments on behalf of his principal (/). Probably he may insure in his own name (g).! Circumstances may occur under which the factor will be justi- fied in effecting an insurance on cargo consigned by his principal Emergencies may arise in which an agent or a factor may, from the neces- sities of the case, be justified in assum- ing extraordinary powers, and his acts fairly done under such circumstances pind the principal. Acts done in the bona fide efforts to save perishing prop- erty (heated grain in this case), come within the rule. Jervis v. Hoyt, 2 Hun, 637; S. C. 5 Thomp. & C. 199; Green- leaf v. Moody, 18 Allen, 863. See, also, Foster v. Smith, 2 Cold. 474; Goodwil- lie v. McCarthy, 45 Il. 186; Dusar v. Perit, 4 Binn. 361; James v. Borgeois, 4 J. Baxter, 345. When goods are shipped to acon- signee, and on account of an accident to the vessel carrying the goods, it becomes necessary to execute a general average bond to the owners of the vessel, such consignee or agent has the right, and it is his duty to execute the bond in order that he may carry out the instruc- tions of his principal with regard to the shipment and sale of the goods. Har- dee v. Hall, 12 Bush, 327. (c) Houghton v. Matthews, 3B. & P. 489. 1To the point that a factor may sell on credit, unless restricted from so do- ing by the orders of his principal or a contrary usage, see Goodenow v. Tyler, 7 Mass. 36; Daylight Burner Co. v. Odlin, 51 N. H. 59; Hapgood v. Batch- eller, 4 Met. 576; Greely v. Bartlett, 1 Me. 178; Van Alen vy. Vanderpool, 6 John. 70; Robertson vy. Livingston, 5 Cow, 473; Leland v. Douglass, 1 Wend. 490; Burton v. Goodspeed, 69 Ill. 238; James v. McCredie, 1 Bay 294; Byrne v. Schwing, 6 B. Mon. 201. See ante,’ p. 119; also, Clark v. Van Northwick, 1 Pick. 343. An order to a commission merchant to sell at once, accepting a certain offer, will not authorize him to sell upon credit to a party known to him to be irrespon- sible, and he is not liable if the goods depreciate upon his hands before a sale can be effected. Durant v. Fish, 40 Towa, 589. (d) Pickering v. Rusk, 15 East, 38, 45, per Bailey, J. ?Randall v. Keblor, 60 Me. 37; Schuchardt v. Allens, 1 Wall. 359. See ante, p. 117, note. (e) Drinkwater v. Goodwin, Cowp. 256. *See ante, p. 117. (f ) Lucena v. Crawford, 2 B. & P., N. R. 269. (g) See 1 Arnould, Insurance, 301. ‘Waters v. Monarch Fire Assurance Co. 5 Ell. & Bl. 870; De Forest v. Ful- ton Fire Ins, Co., 1 Hall, 84; Johnson v. Campbell, 120 Mass. 449. But power of an agent to insure the property of his principal, does not au- thorize an insurance in a mutual com- pany which would make the principal an insurer for others. White v. Madi- son, 26 N. Y. 117. An agent for sale is not bound to in- sure for his principal unless expressly instructed so to do, or unless an under- standing to that effect exists between them. Lee v. Adsit, 87 N. Y. 78. 176 OF THE AUTHORITY CONFERRED. [Book Ir. to third parties, of which consignment the factor has merely been advised, by receiving the bill of lading and invoice with instruc- tions to transmit them to the consignee (A). A factor has no implied authority — (a.) To barter his principal’s goods (7):1 (b.) At common law, to pledge the goods intrusted to him.’ This rule still holds good except as far as it is modi- fied by statute law: (c.) To delegate his authority (£):% (d.) To receive payment in any other than the usual mode (Z):4 124*] *(e.) To compound the debt, or receive a composition in P P discharge (m): (f.) To accept or indorse bills on behalf of his principal (7).5 Secr. 4.— The Authority of Masters of Ships. The power of the master of a ship to bind his owners personally (h) Russell on Mere. Ag., p. 51, citing Wolf v. Horncastle, 1 B. & P. 316. (i) Guerreiro v. Peile, 4 B. & Ald. 616. 1See ante, p. 119. 2 To the same point see Bonito v. Mos- quera, 2 Bosw. 401; Bott v. McCoy, 20 Ala. 578; Van Amringe v. Peabody, 1 Mason, 440; Voss v. Robertson, 46 Ala. 483; Laussatt v. Lippincott, 6 S. & R. 886; First. Nat. Bank v. Nelson, 38 Geo. 391; Kelly v. Smith, 1 Blatch. 299; Macky v. Dillinger, 73 Penn. St. 8h (a decision under the Penn. Factors’ Act of April 14, 1834); Rodriguez v. Heffernan, 5 Johns. Ch. 429. See, also, Evans v. Potter, 2 Gall. 18. But though a factor cannot pledge the goods of his principal as his own, yet he may deliver them to a third per- son as security, with notice of his lien, and as his agent to keep possession for him in order to preserve that lien. Ur- quhart v. Mclver, 4 John. 103. See, also, Warner v. Martin, 11 How. 209. If a merchandise broker, to whom goods are delivered by his principal with power to sell, deliver and receive payment, deposit them in the usual course of business with a commission merchant, connected in business with a licensed auctioneer, who advances his notes thereon, the deposit binds the principal, who cannot recover the value of the goods in trover. Laussatt v. Lip- pincott, supra. (%) Cockran y. Irlam, 2 M. & S. 301. %Loomis v. Simpson, 13 Jowa, 532. See ante, p. 40, and note. (7) Underwood v. Nicholl, 17 C. B. 239, 4See ante, p. 117, and note. The circumstance that a factor has a lien on goods consigned to him, for ad- vances, will not authorize him to deliver the goods in payment of his own debt, or to sell them in an unusual and irreg- ular manner. Benny v. Rhodes, 18 Mo. 147; Warner v. Martin, 11 How. 209. (m) 3 Chitty Com. and Man. 208, cited Russell, Merc. Ag. 48. (n) Hogg v. Snaith, 1 Taunt. 247; Murray v. East India Company, 5 B. & Ald. 204. 5 See ante, p. 116, note. CIIAP. 111.] IMPLIED AUTHORITY OF AGENTS. 177 is a branch of the general Jaw of agency.’ Ifa principal gives a mandate to an agent containing a condition that all contracts which the agent makes on behalf of his principal shall be subject to a defeasance, those who contract through that agent with notice of that mandate containing such a limit on his authority cannot hold the principal bound absolutely. As regards the implied authority of the master of a ship to bind his owners personally, the flag of the ship is notice to all the world that the master’s authority is that conferred by the law of the flag, and is limited by that law (0). The master of a ship has an implied authority — (a.) To enter into lawful contracts relative to the usual em- ployment of the ship ( 7):? (b.) To give a warranty in such contracts (¢): (c.) To enter into contracts for repairs and necessaries to the ship (7); ¢. g., for the supply of things necessary to 1One dealing with a master who is acting under a special authority is bound to know the extent of it. Where, there- fore, in selling the ship under the in- struction of the owner, he exceeds his authority, the principal is not bound. Johnson v. Wingate, 29 Me. 404. (0) Lloyd v. Guibert, L. Rep., 1 Q. B. 115. (p) Maclachlan’s Merchant Shipping, p. 128; Boson v. Sandford, 1 Show. 29, 101; Ellis v. Tuer, 8 T. R. 531. 2The master of a vessel cannot by the mere virtue of his office, as such, bind the owners bya charter party un- der seal, so as to subject them to an ac- tion of covenant. Pickering v. Holt, 6 Me. 160. Nor has the master of a steamboat any authority, as master, to bind the owners by indorsing or making bills or promissory notes. Gregg v. Robbins, 28 Mo. 347 (for services as pilot); Hol- croft v. Holbert, 16 Ind. 256, If a registered owner of a vessel ap- points her master, with an agreement that the master shall have the entire control of the vessel, and victual and man her, and make contracts of af- 12 freightment, and divide the gross earn- ings with the owner, the owner is liable on contracts of affreightment made by the master with shippers who have no notice of the arrangement between the master and the owner. Oakland Cot- ton Manfg. Co. v. Jennings, 46 Cal. 175; Tomlinson v. Holt, 49 id. 310. (q) Ibid., p. 129, (r) Hussey v. Christie, 9 East, 426; Hoskins vy. Slapton, Hardw. 376. ®Holcroft v. Holbert, 16 Ind. 256; Provost v. Patchin, 9 N. Y. 235; James vy. Bixby, 11 Mass. 34; The Ship Forti- tude, 3 Sumn. C. C. 228; Winsor v. Maddock, 64 Penn. St. 231. In Descadillas v. Harris, 8 Me. 243, it was held, that the master of a vessel in a foreign port has authority to bor- row money on the credit of the owner for the necessities of the voyage, though the necessity arose from his own miscon- duct. But where a merchant in a foreign port furnished necessazy supplies to a vessel, which when she left. home was owned by A. & B., but before the sup- plies were furnished they had parted with all their interest in the vessel, al- 178 OF THE AUTHORITY CONFERRED. [Book 11. the due prosecution of the voyage, such as provisions or money (s), provided the power of communication with the owner is not correspondent with the existing necessity (¢), z. e., provided the master, in pledging the owner’s credit, acts as a prudent man would under the circumstances (2). The rule stated by Lord Tenterden in Webster v. Seekamp (c) is to the effect that the master may bind his owners for neces- sary repairs done or supplies provided for the ship. This [125*] authority *of the master is not confined to what is abso- lutely necessary. Such a rule would be too narrow, for it would be extremely difficult to decide, and often impossible, what is absolutely necessary. If, however, the jury are to enquire only what is necessary, there is no better rule to ascertain that than by considering what a prudent man, if present, would do under cir- cumstances in which the agent in his absence is called upon to act. Whatever is fit and proper for the service, on whicha vessel is en- gaged, whatever the owner of that vessel as a prudent man would have ordered if present at the time, comes within the meaning of the term “necessary” as applied to those repairs done or things provided for the ship by order of the master, for which the own- ers are liable (y). (d.) To hypothecate the ship, freight and cargo (2), if such a step is necessary, @. ¢., provided the master cannot ob- tain personal credit (@),' and provided the hypotheca- tion is made in order to meet a high degree of need though this fact was not known to the merchant, it was held, in an action brought against A. and B. for those supplies, that they were not liable. Hus- sey v. Allen, 6 Mass. 163. See ante, p. 100, note. Where the person making the repairs, gives exclusive credit to the agent em- ploying him, who has been paid in full by the owners, the person so making the repairs can not recover for them against the owners. James v. Bixby, supra. (s) Belden v. Campbell, 6 Ex. 886; Proceeds of the Albert Crosby, L. Rep., 8 Adm. 87. (t) Per Patteson, J., Johns v. Simons, 2 Q. B. 425, quoted Maclachlan’s Ship- ping, p. 134. (u) Webster v. Seekamp, 4 B. & Ald. 852. (x) Supra. (y) See The Riga, L. Rep., 8 Ad. 516, (z) The Trident, 1 W. Rob. Ad. 29. (a) Heathorn v. Darling, 1 Moo. P. C. 8. 1The Ship Fortitude, 8 Sumn. 228. In case of necessary repairs, the mas- ter may sell part of the cargo, or hy- pothecate it. The Ship Packet, 3 Mason C. C. 255; Am. Ins. Co. v. Coster, 3 Paina 292% CHAP. 111.] IMPLIED AUTHORITY OF AGENTS. 179 —a need which arises when choice is to be made of one of several alternatives, under the peril of severe loss if a wrong choice should be made (8). The existence of the necessity which validates the hypotheca- tion by bottomry is to be ascertained by evidence in the usual manner, and the meaning of the term “necessity ” in respect of hypothecation by the master is analogous to its meaning in other parts of the law (c).! The power of the master to execute a bottomry bond does not depend upon the mere locality of the transaction, but upon the difficulty of communication between the master and owners (d). If the power of communication between them is not correspond- ent to the necessity of the ship, the authority to borrow exists (e). The power of the master arises out of his relation as agent both to the owner of the ship and to the owner of the cargo.? A ma- terial distinction exists between his authority as agent for the one and as agent for the other; but in both cases his power to *hypothecate, like his power to sell, arises out of the [126*] necessity of the case. ‘Upon this cardinal principle, that necessity is the foundation of the master’s authority, — several limitations of that authority have been established, which have been stated by Sir Robert Phillimore to the following effect: — (1.) The master must endeavour to raise funds on the per- sonal credit of the owners. (2.) The money must be raised to defray the expense of necessary supplies or repairs of the ship, or to enable the ship to leave the port in which he gives the bond, and to carry the cargo toits destination. (3.) The money must have been advanced in contemplation of (b) Reg. v. Winsor, L. Rep.,1Q.B. ?Itis the duty of the master, when 894; The Karnak, L. Rep., 2 P. C. his vessel is disabled in the course of the 512. voyage, to procure another, if he can, to (c) See The Karnak, supra. take on the cargo; and he is, in such 1See The Ship Fortitude, supra. case, from necessity, the agent of the (d) Per Lord Stowell, La Ysabel Bozo, owner of the cargo, and his acts in re- 1 Dods. Ad. 273; see, too, Kleinwort & lation to the cargo are binding upon Co. v. Cassa Maritima of Genoa, L. it. Searle v. Scovell, 4 Johns. Ch. 222; Rep., 2 P. C. 156. Lemont v. Lord, 52 Me. 365. See, also, (e) Maclachlan on Shipping, p. 142. Goodwillie'y. McCarthy, 45 Tl. 186. 180 OF THE AUTHORITY CONFERRED. [Book 11, a bottomry security, or, in other words, upon the secur- ity of the ship (7). A creditor who has furnished repairs upon personal credit cannot afterwards convert the personal debt into a bottomry transaction; but in the case of a bottomry bond for money already supplied by a foreign lender without any previous agreement, there is, in the absence of all evidence, a presumption that the advances were made in contemplation of a bottomry security, and this presumption is increased where the Jew loci empowers the lender to arrest the ship in satisfaction of his demand (q). (4.) To sell the cargo, provided he establishes — (i.) A necessity for the sale: (ii.) Inability tocommunicate with the owner, and ob- tain his directions. The authority of the master of a ship to sell the goods of an absent owner is derived from the necessity of a situation in which he is placed; and consequently, to justify his thus dealing with the goods, he must establish—(i.) a necessity for the sale; and (ii.) inability to communicate with the owner, and obtain his di- rections. Under these conditions, and by the force of them, the master becomes the agent of the owner, not only with the power but under the obligation within certain limits, of acting for him; but he is not in any case entitled to substitute his own [127*] judgment for the will of the owner where it is *possible to communicate with the owner, and ascertain his will (A). When the goods are, in consequence of the perils insured against, lying at a place different from the place of their destina- tion, damaged, but in such a state that they can at some cost be put into a condition to be carried to their destination, the jury are to determine whether it is practically possible to carry them on, 4. ¢., according to the exposition in Moss v. Smith (2), whether to do so will cost more than they are worth. If the goods are in extreme and imminent danger of immediate destruction, they may be justifiably sold, although in the event it turns out that they survive the peril, to the great benefit of the purchaser (£). (f) The Alexander, 1 Dodson, 278. | Company v. Morse, L. Rep., 4 P. C. 222. (9) The Karnak, L.Rep,2A.&E. (2) 9C.B. 94; 19 L. J., C. P. 295. 289. (k) Farnworth v. Hyde, 14 C. B., N. (h) The Australian Steam Navigation S. 719. CHAP. u1.] IMPLIED AUTHORITY OF AGENTS. 181 (e.) To sell the ship; but this authority is conditional on the existence of a twofold necessity, namely, inability to prosecute the voyage, and an immediate necessity to sell (2). What may be a sufficient reason for not con- tinuing the voyage will not necessarily be a sufficient reason for the sale of the ship, ¢. g., want of funds, or inability to execute repairs on the spot (m). (£.) To borrow money on the security of the cargo for the purpose of the cargo only, ¢. ¢., on respondentia (n). (g.) To give a creditor a right im rem, in cases other than bottomry bonds and respondentia, as, for instance, to draw a bill of exchange upon the shipbroker for neces- saries supplied in a colonial port, so as to enable the shipbroker to proceed against the ship as for necessa- ries supplied in default of payment of the amount due by the shipowner, the master being otherwise unable to obtain credit (0). The master of a ship has no implied authority — (a.) To agree to the substitution of another voyage in the place of one agreed upon between his owners and the freighters (7). *(b.) To give a bottomry bond: [128*] 1. For necessaries already supplied, unless such bond had been stipulated for previous . to the supply of the necessaries (¢). 2. For his own debt (7). 3. To free himself from arrest (s). 4, For general average charges (¢). 5. To free the ship from detention (w). (c.) To mortgage the ship or to assign the freight (w). (}) See Maclachlan Marit. Ship. 154, (q) The Heresy, 3 Hagg. Ad. 404; and cases cited. and see The Lochiel, 2 W. Rob. 34. (m) Hunter v. Parker, 7M. & W.322. — (r) Dobson v. Lyall, 8 Jur. 969. (n) Cargo ex Sultan, 5 Jur., N.S. — (s) Smith v. Gould, 4 Moo. P. C. 21. 1060; The Glenmanna, Lush. 115; Mac- (t) The North Star, 1 Lush. 45. lachlan, p. 150. (u) But see per Curiam in The Kar- (0) The Anna, 34 L. T. Rep., N.S. nak, L. Rep., 2 A. & E. 289. 895; L. Rep., 1 Prob. Div. 253. (x) Willis v. Palmer, 29 L. J., C. P. (p) Burgon v. Sharpe, 2 Camp. 529. 194, 182 OF THE AUTHORITY CONFERRED. [Book II. (d.) To bind the ship or cargo to ransom either from the enemy (y). (e.) To sell the whole of the cargo for the purpose of repair- ing the ship (z); but he may sell part (@). A master cannot legally give a bond on cargo alone, or on ship and cargo without freight; or, if he does so, the ship and freight must be exhausted before recourse can be had to the cargo (8). Szor. 5.— As to the Authority of Partners. The general rule is, that the act or contract of one partner with reference to and in the ordinary course of the partnership business is the act or contract of the whole firm, and binding on them (¢).! The question whether a given act can or cannot be said to be necessary to the transaction of a business in the way in which it is usually carried on, must be determined by the nature of the business, and by the practice of persons engaged init. No answer of any value can be given to the abstract question — Can one partner bind his firm by such and such an act? Unless, having regard to what is usual in business, it can be predicated of the act in question, either that it is one without which no. business can be carried on, or that it is one which is not neces- sary for carrying on any business whatever; there are very [129*] few *acts of which any such assertions can be truly made. The great majority of acts which give rise to doubt are those which are necessary in one business but not in another (d). Sgcr. 6.— The Authority of Solicitors. A solicitor may act under a general or special retainer. A solicitor acting under a general retainer has an implied an- thority to accept service of process and appear for the client, but he has no such authority to commence an action unless such an (y) 22 Geo. 3, c. 25, 98. 1, 2. 703, 710; Fox v. Clifton, 6 Bing. 776, (z) Duncan v. Benson, 1 Ex. 555. 795, (a) The Gratitudine, 3 C. Rob. 242. "See Collyer on Part. (5th Am. ed.) (b) Per Sir Robert Phillimore, The § 195; Pars. on Part. * 95, Karnak, L. Rep., 2 A. & E. 309. (d) 1 Lindley on Partnership, 251. (c) Hawkins y. Bourne, 8 M. & W. CUAP. It.] IMPLIED AUTHORITY OF AGENTS. 183 authority may be reasonably inferred from the terms which were used in the retainer (¢).! A. placed money in the hands of his solicitor, B., to invest for him, and gave to him an unlimited discretion to do what was best. B. advanced the money to C. on mortgage, but discovering that the security was bad, he sued out a bailable writ in A.’s name against C. for the amount without A.’s knowledge. There was no doubt abont the dona jides of B. The court held that B. was not liable in an action for acting without authority (7). A solicitor acting under a special retainer must observe its terms strictly, nor has he any authority to do more than is necessary to carry out with effect the business authorized by the retainer (9). As between the client and the opponent, the former is bound by every act of his solicitor done in the ordinary course of prac- tice (provided there is no collusion of fraud), whether it is author- ized or not.? Thus, if a solicitor pleads an improper plea, or brings (e) Lush’s Practice, vol. 1, 129; Chitty’s Practice, vol. 1, 86; Anderson vy. Watson, 3 C. & P. 214. 1To the point that an appearance in an action by a regularly admitted and licensed attorney is presumed to be au- thorized by the party whom he assumes to represent, see Talley v. Reynolds, 1 Ark. 99; Beckley v. Newcomb, 24 N. H. 359; Harris v. Galbraith, 43 Ill. 309; Williams v. Butler, 35 Ill. 541; Reed v. Curry, id. 536; Leslie v. Fischer, 62 Il. 118; Hays v. Shattuck, 21 Cal. 51; Pat- rick’s Succession, 20 La. Ann. 204; Hamilton v. Wright, 87 N. Y. 502; Osborn v. U. S. Bank, 9 Wheat. 738; Pillsbury v. Dugan, 9 Ohio, 117; Thomas v. Steele, 22 Wis. 207; Ander- gon v. Sutton, 2 Duv. 480; Henck v. Todhunter, 7 Har. & J. 275; State v. Carothers, 11 G. Greene, 464; Proprie- tors, etc. v. Bishop, 2 Vt. 231. The party denying the attorney's au- thority must sustain the burden of proof. Shroudenbeck v. Phoenix Fire Ins. Co., 15 Wis. 632; Thomas v. Steele, supra. An attorney who tried a cause in the court below is not authorized to appear in an appellate court without a new re- tainer. Covill v. Phy, 34 Ill. 37. (f) Anderson v, Watson, supra. (g) See 1 Chitty’s Practice, 87, and cases cited. ? To the point that in all the ordinary incidents of an action the attorney has full control of the case and is under no obligation to consult his client as to such incidents, see Board of Commissioners v. Younger, 29 Cal. 147; McConnell v. Brown, 40 Ind. 384; Edgerton v. Brack- ett, 11 N. H. 218; Nightingale v. Ore- gon Central R’y Co., 2 Sawy. 339; Simpson v. Lombas, 14 La. Ann. 103; Pierce v. Strickland, 2 Story C. C. 292; Ward v. Hollins, 14 Md 158; Clark v. Randall, 9 Wis. 185; Moulton v. Bow- ker, 115 Mass. 86; Monson v. Hawley, 80 Conn. 51; Jenney v. Delesdernier, 20 Me. 183. The attorney of record has the exclu- sive management and control of the case, and neither the party nor his agent or attorney in fact have any authority to sign stipulations in the case; and if they do, such stipulations will be disre- garded by the court. Mott v. Foster, 184 OF THE AUTHORITY CONFERRED. [Book 11. the action in an improper form (2); or waives a judgment by default (2); or admits a fact to prevent the necessity of proving it at the trial (£); or sues out an irregular writ, whereby trespass is committed (2), the act binds the client.! In all those cases where the solicitor, through acting negligently or against his instructions, binds his client to other [130*] *parties, the solicitor of course may be liable to the client for the consequence of his negligence or breach of duty. The following are instances of implied anthority in the absence of express prohibition: An authority to sue for a debt is an authority to receive pay- ment (m) An order calling on a defendant to pay costs is an authority to pay plaintiff’s solicitors (7). An authority to bring an action authorizes the solicitor to order the sheriff to withdraw from possession under a fi. fa. (0). An authority to bring action is an authority to compromise client’s case (p).° In order to justify a solicitor to enter into a compromise it would seem that he must be prepared to show — 45 Cal. 72; Board of Commissioners v. Younger, 29 id. 147; Nightingale v. Oregon Central R’y Co., 2 Sawy. 338; Anon. 1 Wend. 108. Counsel in a suit is not authorized to represent his client except in the argu- ment or hearing before the court. Nightingale v. Oregon Central R’y Co., supra. : (h) Payne v. Chute, 1 Roll. 365. (i) La Tuch v. Pacherante, 1 Salk. 86. (k) Blackstone v. Wilson, 26 L. J., Ex. 229. (2) Parsons v. Lloyd, 3 Wils. 341. 1“Tf an attorney sues out an illegal writ, the party for whom he acts is so far identified with him in the proceed- ings that he is responsible for what is done under it; but the plaintiff is not responsible for any illegal action taken or directed by the attorney which the plaintiff did not advise, consent to, or participate in, and which was not justi- fied by any authority he had given.” Cooley on Torts, 131, and cases cited. (m) Yates v. Freckleton, 2 Doug. 623, * By virtue of his general retainer, the attorney has authority to demand and receive payment of the money of his client. Ruckman v. Alwood, 44 IIL 183; Megary v. Funtis, 5 Sandf. 376; Ducett yv. Cunningham, 39 Me. 386. But the power to receive payment ceases when the relation of attorney and client ceases. Ruckman vy. Alwood, supra. See, also, ante, p. 111. (x) Mason v. Whitehouse, 4 Bing. N. C. 632. (0) Levy v. Abbott, 19 L. J., Ex. 36. (p) Chambers v, Mason, 5 C. B., N. 8. 59. *See contra, note on page 120, ante. See its subject fully considered in Weeks on Attorneys, p. 394 et seq. omar. m1.] IMPLIED AUTHORITY OF AGENTS. 1. That he acted bond fide: 2. That he acted with reasonable skill: 3. That he did not act in opposition to his client’s express prohibition (q). It is essential that there should be no express prohibition. If there is, it is no defence to say that the compromise was entered into by the advice of counsel employed by the solicitor for the conduct of the cause (r). In an action for goods sold and delivered, the plaintiff ’s solic- itor has authority to enter into a compromise on the terms that the defendant shall return the goods and pay the costs (s). Although the authority of a solicitor is determined on final judg- ment being signed, yet if he is authorized to obtain satisfaction afterwards, he has authority to bind his client by compromise (¢).! A solicitor has full authority either to compromise or abandon the claims of his client, provided it isin a matter within the scope of the suit (wu). A solicitor authorized to enter up judgment may enter an ap- pearance (a). *One authorized to show cause against a rule nist for a [*131] mandamus may proceed to have the issue tried (y). One authorized to “do the needful” may act according to the circumstances (2).° (q) Pristwick v. Poley, 18 C. B., N. 8. 806; 12 L. P. Rep., N. 8. 890; 34 L. J., C. P. 189. (r) Fray v. Voules, 28 L. J., Q. B. 232; 33 L. T. Rep. 133. (s) Pristwick v. Poley, supra. (t) Butler v. Knight, L. Rep., 2 Ex. 109. 1 An attorney at law to whom a claim has been sent for collection, and who has reduced it to judgment, cannot without special authority receive by way of compromise notes of third per- sons in satisfaction of the judgment. Jones v. Ransom, 3 Ind. 3827; Langdon y. Potier, 13 Mass. 319. Nor depreciated money. Trumbull v. Nicholson, 27 Ill. 149. Nor can an attommey bind his client by an agreement for a suspension of pro- ceedings on the judgment on receiving other security. Pendexter v. Vernon, 9 Humph. 84. Nor can an attorney under the ordi- nary employment to collect a claim by suit, release or postpone the lien on lands resulting from the prosecution of the claim to judgment. Wilson v. Jen- ings, 3 Ohio St. 528. But he has authority before judgment to release an attachment of real or per- sonal estate. Moulton v. Bowker, 115 Mass. 36; Monson vy. Hawley, 30 Conn. 51. (u) Re Wood, 21 W. R. 104. 2 See ante, p. 120, note. (x) Richardson v. Daly, 4M. & W. (y) Reg. v. Lichfield, 10 Q. B. 534, (z) Dawson v. Lawley, 4 Esp. 65. 3 See ante, p. 108, and note. 186 OF THE AUTIMORITY CONVERRED. [Book 1, The authority of a solicitor, in an action in the Common Law Divisions of the Supreme Court, continues up to signing final judgment (@). Lord Coke says, that an attorney’s retainer to conduct a suit, enabled him to sue out execution under it at any time within a year after the judgment (7. ¢., during the period when such an action might be brought), as well as to prosecute such execution afterwards (0). Reference may also be made to the following dicta: — The authority of an attorney is in general determined after judgment,’ but he may still sue out execution and receive the money, and his receipt is then the same as that of the principal, and according to 1 Roll. Abr. 291, Attorney (M), cited in Com. Dig., Attorney B. (10), he may, after judgment, acknowledge satisfaction on the record (¢). In Bevins v. Hulme (cc), the court expressed an opinion that the original retainer of a solicitor was not determined by the judgment, but continued afterwards, as to warrant hina in issuing execution within the time limited (d). So it is said by the court in Levi v. Abbott (e): “The attorney in the suit has no right after judgment to settle the action on any other terms than payment of the debt and costs, and cannot discharge a defendant from custody on a capias ad satisfaciendum without receiving them (/);* nor, by parity of reasoning, where there has been an extent under an edegit. But he has the power to direct and manage the execution against the goods. If two writs of 7. fa. are out at the same time in different counties, there is no reason why, if one is executed and the debt satisfied, he may not order the sheriff to quit the possession of goods seized under the other. So if the seizure is met by a claim to the goods, which he thinks is not worth while to dispute, or where the land- lord’s claim for rent would absorb the value of the goods, (a) See cases cited Chitty’s Practice, (d) See per Lord Ellenborough in vol. 1, 67, Brakenbury v. Pell, 12 East, 588, (b) 2 Inst. 878. (e) 4 Ex. 588. 1Macheath v. Ellis, 4 Bing. 578. (f) Savory v. Chapman, 11 A. & E. ? Wyckoff v. Bergen, Coxe, 214. 836. (c) Per Littledale, J., Savory v.Chap- 3 See ante, pp. 117, note, 130, note; man, 11 A. & E. 8286. Jackson v. Bartlett, 8 John. 366; Weeks (cc) 15 M. & W. 96. on Att’ys, p. 411. CIIAP. 111.] IMPLIED AUTHORITY OF AGENTS. 187 [132*] *there seems no reason why he may not abandon, nor why he may not for any other cause, when he thinks it most conducive to the benefit of his client.” Mr. Justice Lush, in his work on Practice (p. 251), also ex- presses an opinion that the solicitor’s authority is not determined by the obtaining of judgment, but that it remains in force until the judgment is satisfied (¢).* A. retainer of a solicitor to act as permanent solicitor is not irrevocable; it simply denotes a general employment as contra- distinguished from an occasional or special employment. A. agreed to become permanent solicitor to B., who after em- ploying him upon that understanding for some time discharged him. In an action for breach of the agreement against B., the court held that A. could not recover (/).’ (e) So in Chitty's Practice, vol. 1, 88. 1 In this country it is believed that, by the weight of authority, the authority of an attormmey employed to collect a claim does not cease with the obtaining judgment, but continues until the pur- poses of the judgment are obtained; and that in pursuing that object, he may be regarded as authorized to collect the judgment by all the usual methods, and to use the usual means for that purpose. Wyckoff v. Bergen, Coxe, 214; Willard v. Goodrich, 31 Vt. 597; Jenney v. Delesdernier, 20 Me. 183, 198, and cases cited; Scott v. Seiler, 5 Watts, 235; Erwin v. Blake, 8 Pet. 18; Read y. French, 28 N. Y. 285; Lynch v. Com- monwealth, 16 8. & R. 888; Day v. Wells, 31 Conn. 344; Smyth v. Harvie, 81 Ill. 62; White v. Johnson, 67 Me. 287; Weeks on Att’ys, p. 414. Jf attorneys, who are copartners, ac- cept a retainer, the contract is joint, and continues till the termination of the suit; and neither can be released from the obligation or responsibilities as- sumed, either by a dissolution of their firm, or by any other act or agreement between themselves. A dissolution of a partnership between attorneys does not affect engagements made during partnership, so far as their clients are concerned. Walker v. Goodrich, 16 IIL. 341; Smyth v. Harvie, 31 id. 62. Where, therefore, a claim was placed for collection in the hands of two at- torneys, who were partners in the prac- tice of law, a judgment was obtained, land of the debtor sold on execution, and redemption made from the sale by paying the money to the sheriff, who paid it over to one of the attorneys; and prior to the redemption the law co- partnership between the attorneys was dissolved: Heid, that both the partners were liable to the client for the money thus received by one of them after the dissolution. Smyth v. Harvie, supra. The authority of an attorney to receive from the sheriff money collected on an execution in favor of his client, is re- voked by the death of his client. Risley v. Fellows, 5 Gilm. 531. An assignment of a judgment is a revocation of the authority of the plaint- iff's attorney to receive the money on the execution, or to control the judg- ment. Trumbull v. Nicholson, 27 IIL. 149, (Ff) Elderton v. Emmers, 4 C. B. 479; 16 L. J., C. P. 209. 2 See ante, p. 80. 188 OF THE AUTHORITY CONFERRED. [Book I. The following are instances where no authority was implied: — An authority to act for plaintiff is no authority to discharge a defendant before payment (9). A solicitor has no implied authority, where a defendant has been taken in execution upon a ca. sa., to discharge from custody upon any other terms than a satisfaction of the judgment (A). The possession by a vendor’s solicitor of an executed convey- ance, with the signed receipt for the consideration money indorsed, is not in itself an authority to receive the purchase-money (¢). A solicitor has no implied authority to receive purchase-money belonging to his client, or money due to him on mortgage, nor to receive money from him for the purpose of investment gen- erally (A). The solicitor in an action has no authority after judgment to settle an action on any other terms than payment of the debt and costs, and cannot discharge a defendant from custody on a cap. ad sat. without receiving them (2). Nor can he, after judgment in favour of his client, enter into an agreement on his behalf to postpone execution (2m).8 [133*] *A solicitor has no implied authority to pledge his client’s credit to counsel by an express promise to pay his fees, so as to enable the latter to sue for them (n).4 Where a solicitor brings an action without the authority of the plaintiff, the latter is entitled to have the proceedings stayed without payment of costs (0). (g) Savory v. Chapman, 3 P. & D. Barry, 5 L. Rep., Ch. 457; 39 L. J., 604. Ch. 780; 22 L. T. Rep., N.S. 461. (h) Cannop v. Challis, 2 Ex. 484; see * Paddock v. Colby, 18 Vt. 485. 15 & 16 Vict. c. 76, 8. 124. Yet if the attorney soon afterwards 1 See ante, p. 131. informs his client of such unauthorized (i) Viney v. Chaplin, 2 DeG. & J. employment, and the latter does not 468; 27 L. J., Ch. 434, dissent from it, these facts are proper to (k) Dourdillon v. Roche, 27 L. J., Ch. be submitted to the jury in an action 681; Viney v. Chaplin, supra. brought by the second attorney to re- (1) Savory v. Chapman, 11 A. & E. cover his fees, to enable them to deter- 829; Levi v. Abbott, 4 Ex. 590. mine whether the client did not assent *See ante, p. 131. to the employment. King v. Pope, 28 (m) Lovegrove v. White, L. Rep.,6 Ala. 601. See, also, Smith v. Lipscomb, C. P. 440. 13 Tex. 532, 3 See ante, p. 180, note. (0) Reynolds v. Howell, L. Rep., 8 (n) Mostyn v. Mostyn; Ex parte Q. B. 398. CIIAP. I11.] IMPLIED AUTHORITY OF AGENTS. 189 In an early case (p), it is laid down that where an attorney takes upon him to appear, the court looks no further, but leaves the party to his action against him! J2obson v. Eaton (q), a later case, is inconsistent with the former, which may be considered as overruled. Mr. Justice Blackburn, however, in Reynolds v. Howell (r), expressed an opinion that if a plaintiff after action brought in his name by an attorney without authority, hears of it, and does not repudiate it, he will be supposed to have ratified the attorney’s act. A solicitor has no implied authority to act as a scrivener. A. and B. were attorneys in partnership. A sum of 1,670. was paid by a client to A. (without the knowledge of B.) for the purpose of its being laid out on mortgage. The business of the firm was that of attorneys simply. Held, that B. was not liable to the client for the above sum (s). “J think,” said Lord Campbell, “that an attorney, gud attorney, is not ascrivener. ... A scrivener has to hold the money put into his hands until he has the means of laying it out; but this employment of scrivener is not a consequence of his acting as attorney ” (¢). A solicitor has no implied authority to undertake journeys on behalf of his client, without special instructions. In Re Snell, a Solicitor (u), the Master of the Rolls and the Court of Appeal commented on this rule at some length. A solicitor had a re- tainer to act generally for a company, and also a special retainer to conduct a chancery suit on behalf of the company. He was employed by another client to go to America, and whilst there collected information on behalf of the company in furtherance of their suit. He reported to the company what he *had done, and they made use of the information. Sub- [134*] sequently he took three journeys to Paris to conduct ne- gotiations for a compromise of the same suit. On two of these journeys he was accompanied by the chairman, and the three were undertaken with the knowledge of some of the directors. The (p) Anon., 1 Salk, 86, 88. man, L. Rep., 7 Eq. 504; St. Aubyn v. 1See ante, p. 129, note. Smart, ib., 5 Eq., 183; and the remarks (q) 1T. R. 62. of Malins, V.-C., in Plumer v. Gregory, (r) Supra. L. Rep., 18 Eq. 632. (s) Harman v. Johnson,2 E.& B.61. = (w) L. R., 5 Ch. Div. 815. (¢) See Earl of Dundonald v. Master- 190 OF THE AUTHORITY CONFERRED. [Book II. taxing master allowed the charges made by the solicitor in respect of these journeys, but on a summons being taken ont to review the taxation, the Master of the Rolls disallowed them. “I have no hesitation,” said his lordship, “in disallowing the first item. A solicitor has no right to take special journeys or to go to foreign countries at the expense of his client without special instructions: nothing is better settled; otherwise the unfortunate client, in giv- ing a retainer to a solicitor, would thereby authorize him to travel all over the world at his expense.” His lordship thought that the rule was not altered by the fact that when the solicitor re- turned he had told the client that he had obtained such informa- tion. With reference to the charge for the journeys to Paris, the Master of the Rolls went on to say —“ There is another ground on which this item should be disallowed, and it is this: Where the client’s special instructions are required, so that the general retainer of the solicitor does not cover the work done, and the solicitor swears to the special instructions, which were verbal only, and the client denies, and there is no further evidence, then, ac- cording to the rules laid down by my predecessor and constantly acted upon during the whole course of his judicial career, the solicitor cannot ask the court to establish the case against the client, it being simply oath against oath and nothing more. It is the duty of the solicitor to take instructions in writing, and if he chooses to neglect this duty and take a special journey without instructions in writing, he must take the consequences.” On ap- peal the court decided first, as to the journey to America, that although specific instructions were not formally given as to the course to be pursued by him, yet it was perfectly well understood by the directors as well as by the solicitor, that he would avail ‘himself of any information he could obtain which might aid him in the advice he should tender to the company; but that if it were necessary that the giving of specific instructions should be established in order to entitle the solicitor to make the charge, there was not sufficient evidence that such instructions were given. Secondly, as to the business done in Paris, that after the [185*] solicitor’s return from his last visit *the directors adopted and acted upon what he had done. The appeal was ac- cordingly allowed. CHAP. 11.] IMPLIED AUTHORITY OF AGENTS. 191 The following principles appear to be deducible from this case: (1.) Asa general rule a solicitor has no authority to take special journeys or go to a foreign country at the ex- pense of his client without specific instructions. (2.) Under special circumstances, however, a solicitor acting under a retainer without such instructions may be justified in incurring reasonable expenses on behalf of his client, irrespective of any subsequent adoption. (8.) In the latter case it is for the taxing master to decide what is reasonable; and the court will not be disposed to interfere with his discretion. (4.) An allegation of special instructions is not made out where the instructions sworn to by the solicitor are verbal only, and these are denied by the client. The duty of a solicitor is to take instructions in writing. (5.) The mere retainer of a solicitor to conduct a chancery suit does not give him authority to compromise it " abroad. (6.) Where a solicitor acting under a general retainer does something which his retainer does not authorize, his act may be subsequently adopted by the client. 192 OF THE AUTHORITY CONFERRED. [Book 11. [136*] *CHAPTER IV. OF THE LIMITS OF AN AGENT'S AUTHORITY. PAGE. PAGE. Sect. 1.— Of the Extension of the Sect. 2.—Of Limitations of the Authority. Authority. In questions between the principal may be extended in various ways, and the agent the true limit of and, amongst others, by the con- the authority is marked by the duct of bis principal ........... 136 | actual authority or instructions... 140 In questions between the principal and third parties the limit is the The actual authority of an agent Illustrations where the above rule has been recognized........++.+ 137 apparent authority with which Cases where the agent has been al- the agent is invested. pubis sees 140 lowed to hold himself out as the Fenn v. Harrison examined......- 140 PLINGIPAl sacsssssvcessccsscae’s 138 | Statement of the law by Lord Ellen- borough in Pickering vy. Busk; The question to be considered, so and by Lord Cottenham in Beau- far as concerns the liability of the fort ve NGC icee id ve ecce ances 142 principal to third parties, is The principle that the apparent au- whether the agent's act is within thority cannot be controlled by the scope of his apparent author- secret instructions is acted upon UY ssssg teres Sees sees holes eee 140 | both at law and in equity ...... 143 Srcr. 1.— Of the Extension of the Authority. Tue authority with which an agent is invested is not necessarily confined to the performance of those actions alone which are authorized by the bare words in which an authority is conveyed. On the contrary, it is rarely so confined. Generally speaking, the authority may be extended in a variety of ways by the operation of a number of rules and principles, some of which have already been discussed. There now remains for consideration the infln-' ence of the principal’s conduct in extending the original authority. ' The rule applicable to this branch of law has been laid down with great clearness in the work of a learned writer upon mer- cantile law. The only ground of liability on the part of a princi- pal to third parties dealing with an agent, for the acts of the agent done in excess of the power given him, and which he would be held to have even in a question between himself and the principal, 193 CHAP. Iv.] LIMITS OF AN AGENT’S AUTHORITY is such culpa or guasi-culpa on the principal’s part as would be a relevant ground for the plea of estoppel against *his pleading the actual terms of the authority given to the [137*] agent. Where the principal by his words or conduct wil- fully causes another to believe the existence of certain powers in the agent, and induces him to deal with the agent in that belief; where the principal has by words or by conduct made a represen- tation to another as to the agent’s authority in order to induce others to act upon it. And where the representation or conduct complained of, whether active or passive in its character, has been intended to bring about the result whereby that other dealing with the agent has altered his position to his ]oss —in such a case, and in such a case alone, will the doctrine of estoppel apply to bar the principal from pleading against the third party the terms of the real authority which he gave to the agent.! Mere 1See Rice v. Groffman, 56 Mo. 434; Brooks v. Jameson, 55 id. 505; John- son v. Jones, 4 Barb. 569; Kasson v. Noltner, 48 Wis. 646; Schimmelpen- nich y. Bayard, 1 Pet. 264; Farmers’ Mut. Ins. Co. v. Taylor, 73 Penn. St. 342; Bigelow on Estoppel (2d ed.), 434, and cases cited; also ante, p. 18, note. Although an agent’s authority may be special and limited, or even though he may have no actual authority, yet if the principal allows him to hold him- self out to the public as his agent gen- erally, without noting such limitation, and the agent acts outside of his actual authority, the principal will be bound thereby, unless the party with whom he deals had notice of the limitation, or want of authority. St. Louis & M. Packet Co. v. Parker, 59 Ill. 23; Kers- lake v. Schoonmaker, 8 Thomp. & C. 524; §. C. 1 Hun, 436; Gallup v. Lederer, 3 Thomp. & C. 710; 8. C. 1 Hun, 282. Where an employee of a mercantile house, occupying a responsible position, and who sometimes took charge of the delivery of goods sold, employed an ex- pressman to make deliveries, which he 18 did with the knowledge of the firm, or one of its members, and who failed to notify him that he must look to the clerk for his pay, it was held that the firm was liable to the expressman for his services, Pardridge v. La Pries, 84 Ill. 51. To the point that the authority of an agent need not necessarily be proved by an express authorization, but may be proved by the habit and course of busi- ness of the principal, see Franklin v. Globe Mut. Life Ins. Co. 52 Mo. 461; Brooks v. Jameson, 55 id. 505; Fried- lander v. Cornell, 45 Tex. 585. See, also, Engh v. Greenbaum, 4 Thomp. & C. 426; Putnam v. Home Ins. Co. 123 Mass. 324. The authority of an agent to act for and bind his principal, will be implied from the accustomed performance by the agent of acts of the same general character for the principal, with his knowledge and assent. Hazeltine v. Miller, 44 Me. 177; Friedlander yv. Cor- nell, supra; Edwards v, Thomas, 66 Mo. 468, and cases there cited; Putnam v. Home Ins. Co., supra. Thus, authority to draw a bill of ex- 194 OF (IE AUTHORITY CONFERRED. [Book 1. negligence is not of itself a ground of estoppel (a). The import- ance of the rules defining the limits of an agent’s authority will ‘fully appear when it is remembered that an agent’s power to bind his principal is limited to the scope of his apparent authority (0). It is not within the scope of a banker’s business to make invest- ments for customers. In Bishop v. Countess of Jersey (c), 1854, a bill was filed against the members of a banking firm for the purpose of making them liable to repay to the plaintiff a sum of 5,0002., of which she alleged she had been defrauded by a former member of the firm. From the evidence it appeared that A., the member in question, had advised the plaintiff, a customer of the bank, to sell out some Dutch stock. He told her the firm could procure for her better security, and that he had one in view. He told her the money was wanted by his own son, who was in trade. The plaintiff sold out the stock and paid the money into the bank; she then gave him a cheque to draw it out and invest it. Ie drew it out, misapplied it, and absconded, the interest having been regu- larly carried to her account in the meantime in the books of the bank, but it did not appear by whom. All these transactions took place at the banking house, and the plaintiff had no acquaintance or dealings with this member except as banker and a member of the firm. The other parters did not appear to have known [188*] of them at the time they took *place. The Solicitor-Gen- eral (Sir Richard Bethell), with whom was Mr. Cairns, contended, inéer alia, wpon the authority of Welett v. Chambers {d@) and Rapp v. Latham (e), that if one partner makes represen- tations to a customer of the firm, however untrue they may be, the customer has a right to be put in the same position by the other partners as if the representation had been true. Vice-Chan- cellor Kindersley was of opinion that the defendants were not liable, on the ground that it was not within the scope of the busi- ness of bankers to seek or make investments generally for their customers, nor did the partners know of the dealings before the change may be presumed from repeated (b) Olding v. Smith, 16 Jur., Q. B. acts of the agent, adopted and con- 497. firmed by the principal previous to the = (c) 23 L. J., Ch. 483. contract in which the question is raised. (d) 2 Cowp. 814. Friedlander v. Coin:ll, supra. (e) 2B. & Ald. 795, (a) Bell, Commentaries, iii, I, 3, n. 5. : CIAP. Iv.] LIMITS OF AN AGENT'S AUTHORITY. 195 other partner had absconded.! No direct reference was made to the principle that where one or two innocent persons must suffer by the fraud of a third, he who enabled that person by giving him credit to commit the frand shall be the sufferer. Jf the partner in the above case had been acting within the scope of his authority, the result would have been different. Thus in Thompson v. Bell (f), a decision of the Court of Exchequer In the same year, the manager of a joint-stock bank, at which the plaintiff kept a deposit account, represented to him that the bank had an equitable mortgage on some houses of a third person, sub- ject to a mortgage of 400/., and advised him to purchase the houses for 59527., 4002. to be paid in discharge of the mortgage, and 1952. to the bank. The plaintiff consented, and took his deposit receipts to the manager at the bank, who, on presenting them to a clerk, obtained from him 5952. The manager then gave the plaintiff a receipt in his own name, stating that 1957. was the balance of purchase-money of the houses, and that 4002. was deposited with him to pay off the mortgage. Te afterwards absconded with the 5952. The plaintiff having brought an action against the bank to recover the money, the jury found that the manager had authority to assign securities, that the manager in- tended to make the plaintiff believe, and the plaintiff did believe, that the manager was acting in this transaction as agent of the bank. The court held that the bank was responsible for the money. The obvious conclusion from the findings of the jury was that the money was paid to the manager as agent of the 1A bank is liable for the fraud or negligence or other act of its officers Bank v. Downing, 16 N. H. 187; Hoyt v. Thompson, 5 N. Y. 320; U. 8. v. when acting within'the scope of their authority. Foster v. Essex Bank, 17 Mass. 479; Andrews v. Suffolk Bank, 12 Gray, 461; Kennedy vy. Otoe Co. Bank, 7 Neb. 59; Rich v. State Nat. Bank, id. 201; Leggett v. N. J. Manfg. & Banking Co. 1 N. J. Eq. 541; Merchants’ Nat. Bank v. State Nat. Bank, 10 Wall. 47; 8. C. Thomp. Nat. Bank Cases, 47, 62, note and cases cited. But not when acting outside the scope of their authority. Foster v. Essex Bank, supra; Gibson v. Goldthwaite, 7 Ala. 281; New Hampshire Savings City Bank, 21 How. 356; Leggett v. N. J. Manfg. & Banking Co., supra; Merchants’ Nat. Bank v. State Nat. Bank, supra; and cases cited on p. 63 of Thomp. Nat. Bank Cases. See ante, p. 120, note. Representations by a bank cashier need not be made at the counter or office of the bank in order to bind it. Houghton v. First Nat. Bank, 26 Wis. 663. See, however, Merchants’ Bank vy. Rudolf, 5 Neb. 527; Kennedy v. Otoe County Nat. Bank, 7 id. 59. (f) 10 Ex. 10; 23 L. J., Ex. 321, 196 [Book II. OF THE AUTHORITY CONFERRED. bank. This distinguishes the case from Bishop v. Countess of Jersey (g). *There is a number of cases under this head in Jwhich the agent has been allowed to hold himself out as a prin- cipal.’ In Ramazotti v. Bowring (h), 1860, N., representing himself to be the proprietor of a certain business carried on under the name of the Continental Wine Company, induced the defendants to receive from him certain wines and spirits in part satisfaction of a debt previously contracted by him with them. N. was really only clerk to the plaintiff, who was the real proprietor of the establishment. The name of the plaintiff appeared over the entrance to the cellars, but it was not visible to persons going to the counting-house. The plaintiffs name also appeared (though in an ambiguous manner) upon a receipt signed by one of the defendants on the delivery of some of the goods. In an action brought for the price of the goods, the Common Sergeant left it to the jury to say whether the plaintiff or N. was the real owner of the business, and told them that if they were of opinion that N. was the real owner, they must find their verdict for the defend- ants; but that if they thought the plaintiff was the owner, they must find for him. A verdict for the plaintiff was returned. A rule nést for a new trial on the ground of misdirection was ob- tained, and afterwards made absolute. “I think,” said Erle, C. [139*] (g) Supra. horse for him, and M. bought it, paying 1Where the owner of property has for it with plaintiff's money, and took a permitted his agent in possession to represent himself as the owner of it and its proceeds, whereby he has obtained credit and incurred a debt for an im- provement upon the property, to satisfy which a levy is made upon the proceeds of the property so in the hands of the agent, the owner is estopped to deny the liability of such property to satisfy such debt. White v. Morgan, 42 Iowa, 118. But in order to work an estoppel in such case, the owner must have known of the act of the agent. White v. Mor- gan, supra. The plaintiff employed M. to buy a bill of sale in his own name. Subse- quently he informed the plaintiff of what he had done, and showed him the bill of sale; but the plaintiff per- mitted him to go away with the horse and bill of sale still in his possession. M. theroafter went to defendant, who had no knowledge of the agency, showed him the bill of sale, sold him the horse for cash, and absconded: Held, that the plaintiff could not re- cover in trover for the horse. Nixon v. Brown, 57 N. H. 34. (h) 291. J., C. P. 80; 7C. B., N.S. 85. “cuar. Iv.] LIMITS OF AN AGENT'S AUTHORITY. 197 J., “the proper question was not put to the jury. The proper question under the circumstances would have been whether Ramazotti so conducted himself as to enable Nixon to hold him- self out to be the true owner of the goods, whether Nixon did so hold himself out, and whether the defendants in dealing with Nixon believed him to be the owner.” Other points were raised in the course of the arguments, but it is not necessary to discuss them here. The Court of Queen’s Bench had a similar question before them in Hdmunds v. Bushell and Jones (i), 1865. The defendant J. carried on business at Luton and in London. The business in the latter place was carried on in the name of Bushell and Co. J. employed B. to manage his business, and carry it on in the above name. The drawing and accepting bills of exchange was inci- dental to the carrying on of such a business, but it was stipulated between them that B. should not draw or accept bills. B. accepted a bill in the name of “Bushell and Co.,” and the ecurt [140*] *held that J. was liable on the bill in the hands of an in- dorsee, who took it without any knowledge of B. and J. or the business. The question to be considered, so far as the liability of the plaintiff to third parties is concerned, is whether the agent’s act is within the scope of his authority... Thus, where the agent of a wharfinger, whose duty it was to give receipts for goods actually received at the wharf, fraudulently gave a receipt for goods which had never been received, the principal was not held to be respon- sible, because it was not within the scope of the agent’s authority in the course of his employment to give such a receipt (4). Where the defendants’ confidential clerk had been accustomed to draw cheques for them, and in one instance at least they had authorized him to indorse, and in two other instances had re- (i) L. Rep., 1 Q. B. 97. 1See Taylor v. Chicago & N. W. R’y Co. 74 Ill. 86; Fletcher v. Nibley, 124 Mass. 226; Kennedy v. Otoe County Nat. Bank, 7 Neb. 59; Saveland v. Green, 40 Wis. 431; Locke v. Stearns, 1 Met. 560; also, ante, p. 105, and note, p. 138. An agent of a corporation acting within the scope of his authority, may bind his principal in the same way as if he were the agent of a natural person, unless the charter expressly provides otherwise. City of Covington v. Cov- ington & Cin. Bridge Co., 10 Bush, 69. ‘ ae Coleman v. Riches, 24 L. J «(Gs Ps a 198 [Book I. OF THE AUTHORITY CONFERRED. ceived money obtained by his indorsing in their name, a jury is warranted in inferring that the clerk had a general authority to indorse (2);1 but a farm bailiff has no implied authority to pledge his employer’s credit by drawing and indorsing with or in his name (7).” Secr. 2.— Linutations of an Agent's Authority. Tn considering the true limits of the authority of an agent a distinction must be made. Questions may arise either between a plaintiff and third parties who have dealt bond jide with the agent of that principal, or between the principal and the agent. The construction of the authority will be different in each of those cases respectively. In the former case, the true limit of the agent’s power to bind the principal will be the apparent authority with which the agent is invested;* in the latter case, the trne limit of his authority will be marked by the express authority or instructions given to the agent; nor will it be ex- tended by the addition of any implied powers inconsistent with such authority and instructions. (1) Prescott v. Flinn, 9 Bing. 19. 1See ante, p. 137, note. (m) Davidson v. Stanley, 2 M. & G. 721. ?See ante, p. 116, note. 3 See Kasson v. Noltner, 43 Wis. 646; Taylor v. Chicago & N. W. R'y Co., 74 Til. 86; Adams Express Co. v. Schles- singer, 75 Penn. St. 246; Smith v. Peo- ria County, 59 Ill. 412; and note 1, p. 140. 4See Allen v. Suydam, 20 Wend. 321; Wilson v. Wilson, 26 Penn. St. 393; Williams v. Higgins, 30 Md. 404; Saw- yer v. Mayhew, 51 Me. 398; Lee v. Clements, 48 Ga. 128. To make instructions imperative, it is not necessary that they should be given in the form of a command; the expres- sion of a wish, where the agent has no special interest or property founded up- on advances and liabilities incurred by him, will be presumed to be an order. Wilson v. Wilson, supra; Brown vy. Mc- Gran, 14 Pet. 494. Where a principal, in a letter to his broker, expressed a decided wish to have his money put into registered bonds, and said that he was anxious to do so, ‘but after considering the matter at some length, and giving no definite instruc- tions, he concluded by saying: ‘I shall feel under many obligations if you will kindly make such sale and purchases of bonds as your good sense dictates:” Held, that, if the broker acted in good faith, a purchase of unregistered bonds was within the scope of the authority conferred upon him by the letter. Mat-: thews v. Fuller, 123 Mass. 446. The giving of prices merely in an in- voice of goods consigned to a factor, cannot be considered as a direction not to sell for less than the invoice price. Mann v. Laws, 117 Mass. 293. Ifa party undertakes, even voluntarily and gratuitously, to invest money for another, and disregards the positive in- structions given as to the specific char- acter of the security to be taken, he is CHAP. Iv.] LIMITS OF AN AGENT'S AUTHORITY. 199 Fenn v. Harrison (n), 1790, was an action brought upon a bill of exchange. L. and C. drew a bill of exchange on G. and J., in favour of N., and indorsed it to the defendants, who employed one F. Huet to get it discounted. They told him to carry it to market and get cash for it, but they would not indorse it. He *applied to his brother to get the bill discounted, in- [*141] forming him that it was the defendants’ bill, and that thongh they did not choose to indorse it, their number was on it, which was the same thing, and that he would indemnify the brother if he himself indorsed the bill. The plaintiffs discounted the bill, but only upon condition that it was indorsed by the brothers. They knew nothing of the real owner. G.and J. sub- sequently became bankrupt, and the plaintiffs having heard that the bill had passed through the defendants’ hands, applied to them for payment. At the first trial a verdict was given for the plaintiffs. The court granted a new trial, and Lord Kenyon left it to the jury to say whether J. Huet, the brother, had made him- self answerable to the plaintiffs, as agent for the defendants. They were of that opinion, and found a verdict for the plaintiffs a sec- ond time. This verdict was again set aside, and a new trial granted. Lord Kenyon was on the whole disposed to admit the plaintiffs’ claim. “The difficulty I meet with,” said his lordship, “is this: This is not an action wherein J], Huet calls on the de- fendants for an indemnity; if it were, I admit that, as he exceeded the authority of his principal, he could not recover against him. But here J. Huet, who is an innocent man, and not involved in the misconduct of his brother, F. Huet, has a claim on the de- fendants. . . . It is clear that the defendants might resort to J. Huet for payment, and that brings it to this question, whether J. Huet, who took the bill from I’. Huet, knowing him to be the agent of the defendants, has not a right to call on the defendants, who constituted F. Huet their agent, although that agent exceeded his authority. I think that he has.” The other judges were of opinion that the defendants were not liable— chiefly on the ground that F. Huet was expressly directed by the defendants not to indorse the bill. At the third trial the evidence varied, and it was not proved that the defendants told their agent that they liable if the investment should fail. (mn) 3 T. R, 757; 4 ib. 177. Williams vy. Higgins, supra. [Boox 1m. 200 CF THE AUTHORITY CONFERRED. would not indorse the bill. A verdict was again found for the plaintiffs, and a rule to grant a new trial refused. Ashurst, Buller, and Grose, JJ., said that unless the evidence on this trial had varied in the above manner from that given before, they would have continued to entertain the same opinion which they deliy- ered on the former occasion, namely, that the defendants were not liable. In Pickering v. Busk (0), in 1812, the principles ap- [142*] plicable to *this branch of law were stated clearly and explicitly. This was an action in trover. The following facts were proved at the trial before Lord Ellenborough: A broker in the hemp trade had bonght for the plaintiff a parcel of hemp, which was delivered to the broker at the request of the plaintiff by a transfer in the books of the whartinger from the name of the seller to that of the broker. The broker afterwards bought another parcel of hemp for the plaintiff. This parcel was trans- ferred to the names of “ Pickering (the plaintiff), or Swallow (the broker).” The plaintiff paid for both parcels. While the parcels were lying at the wharves, the broker sold and transferred them to H. and Co., who soon afterwards became bankrupt. The assignees refused to restore the hemp. Lord Ellenborough directed the jury that the transfer by direction of the plaintiff into the broker’s name, authorized him to deal with it as owner with respect to third persons, and that the plaintiff, who had thus en- abled him to assume the appearance of ownership to the world, must abide the consequences of his own act. The jury found for the defendants, and leave to move to set the verdict aside was reserved to the plaintiff. A rule was accordingly obtained by the Attorney-General (Sir Vicary Gibbs), and supported on the au- thority of A’Combie v. Davies (p), and Paterson v. Tash (q), but discharged by the full court, on the ground that the broker’s apparent authority could not be limited by any private communi- cations.! (o) 15 East, 38. (p) 6 East, 538. (q) 2 Str. 1178, 1Tf the real owner of goods suffers another to have possession of his prop- erty, and also delivers to him docu- mentary evidence of title, and thus, by this possession and the documents with which he endows him, enables him to hold himself out to the world as the true owner, if any loss happens, he, who has thus clothed such person with the power to deceive, ought to bear the loss. But where the vendor has but a crap. Iv.] LIMITS OF AN AGENT'S AUTHORITY. 201 ' “Strangers,” Said Lord Ellenborough, C. J., “can only look to the acts of the parties and to the external indicca of property, and not to the private communications which may pass between a principal and his broker; and if a person authorize another to assume the apparent right of disposing of property in the ordi- nary course of trade, it must be presumed that the apparent authority is the real authority. I cannot subscribe to the doctrine that a broker’s engagements are necessarily and in all cases limited to his actual authority, the realty of which is afterwards to be tried by the fact. It is clear that he may bind his principal within the limits of the authority with which he has been appar- ently clothed by the principal in respect of the subject-matter. . . The present case is not the case of a pawn, but of a sale by a broker, having the possession for the purpose of sale. The sale was made by a person who had all the ¢ndicta of property.” The case is thus *distinguished from the authorities [143*] upon which the argument in support of the rule was based. Whitehead v. Tuckett (r) was decided by the same court in the same year. The action was in trover to recover certain hogsheads of sugar, which the plaintiff purchased of the defendant’s brokers. The defence was that the brokers had been entrusted with the sugar for the purposes of sale under a limited authority. The custom was for these brokers to buy, pay for, sell or receive the value of, sugars on speculation in their own names and upon their own judgment, but for their principals. Occasionally, when the market was low, they were under an unlimited authority as to quantity and price; at other times under special instructions to buy, but guided from time to time by special instructions to sell, limited in respect of price, and advised from time to time as to the probable rise or fall of the market. They kept only a gen- eral account with their principal of the sums advanced to and re- ceived for him, without accounting separately for each particular lot purchased and re-sold. The particular sugars in dispute had been purchased and paid for in their own names by the brokers, and lodged in their own warehouse, but sold under the price di- naked possession, this cannot prevail v. Osborn, 32 Ill. 411. See, also, Com- against the right of the true owner, mercial Bank v. Kostright, 22 Wend. who is entitled to follow his property 348. and reclaim it whereverfound. Fawcett (r) 15 East, 400. 202 OF THE AUTHORITY CONFERRED. [Book I, rected by the defendant. After receipt of the money on his be- half they failed. At the trial a verdict was found for the plaintiff, and this was allowed to stand, on the ground that the limits of the brokers’ authority were to be gathered, not from their private instructions as to the particular parcels of goods, but from their general dealing. This decision was mentioned with approval by Lord Cottenham in the case of The Duke of Beaufort v. Neeld (s), decided by the House of Lords in 1845. “This principle,” said his lordship, “is acted upon at law as well as in equity, to prove which I re- ferred to Whitehead v. Tuckett (#). . . The principle is, I con- ceive, perfectly plain and well established; and can there bea question as to whether this case falls within it? Did not the paper signed by the duke hold out to all who might negotiate with Mr. W. (the agent) or the commissioner, reason to believe that the duke was willing to take any land that might be agreed upon in exchange for Dunley Gorse? Having given this general author- ity, can he be heard to say that this authority was limited by pri- vate instructions, of which those who dealt with the agent know nothing?” To the same effect are the observations of Lord [144*] *Brougham: “The duke knew, no doubt, that he had tied up W.’s hands by a particular instruction, and W. ought to have taken care that that instruction was communicated to those before whom he appeared clothed with a general author- ity, which instruction, not being communicated, would leave him clothed with an absolute authority.” In Summers v. Solomon (u), 1857, one of the defendant’s shops was under the management of his nephew, who was in the habit of ordering goods of the plaintiff in the name of the defendant, who paid for them. In November, 1855, the plaintiff received two orders for jewellery from the nephew. The goods were sent to and acknowledged by the defendant as ordered by him. On the 7th March, 1856, the nephew absconded, and obtained on the 10th, 14th and 20th of the same month, a quantity of jewellery, the subject of the action, from the plaintiff. A verdict for the ainount claimed was taken, with leave to enter it for the defend- ant if the court should be of opinion that there was not reasonable evidence to warrant a jury in finding for the plaintiff. The court (s) 12 CL. & F. 248, 290. (t) Supra. (u) 261. J., Q. B. 301. CHAP. Iv.] LIMITS OF AN AGENT’S AUTHORITY. 203 was of opinion that there was evidence, and the verdict was not disturbed. “The question,” said Mr. Justice Coleridge, “is not what was the exact relation between the defendant and Abraham (the nephew), but whether the defendant had so conducted him- self, and held the other out, as to lead the plaintiff reasonably to suppose that he was the defendant’s general agent for the pur- pose of ordering goods.” In Hazard v. Treadwell (a), an early case, 1768, Lord Kenyon held, that one instance of recognition of a servant by the master to purchase goods on his credit was suf- ficient to make the master liable for subsequent orders of the serv- ant, until the authority was known to have been withdrawn. In the present case, the nephew had previously ordered the goods to be sent to the shop —the variation in the place and mode of de- livery was held to be immaterial. The question for the jury is, whether from such a recognition a tradesman would be justified in inferring a general authority from the principal to the agent to deal for him on credit in re- spect of the same description of goods (y). For other authorities reference may be made to Prescott v. Flinn (2); Levy v. Pyne (a); Davidson v. Stanley (6). (w) 1 Str, 506. (a) Car. & Mar. 453. (y) See Paley, by Lloyd, 163. (b) 2M. & G., 721. (z) 9 Bing. 19. 204 [145*] OF THE AUTHORITY CONFERRED. [Book II. *CHAPTER V. OF THE CONSTRUCTION OF AN AGENT’S AUTHORITY.! PAGE, Sect. 1.—Where the Authority is conferred by Formal Instrument. The meaning of general words in the instrument will be restricted py the context, and construed ac- cordingly ......ceeseecceeeeeee Illustrations The authority will be construed strictly, so as to exclude the exer- cise of any power which is not warranted either by the actual terms used, or as a necessary means of executing the authority With Cflectini« casce teenie dees eecee 145 “* Power to transact all business ’’— meaning of expression......... 146 Parol evidence inadmissible to en- large the operation of a power.. 147 Construction of general powers — Hay v. Goldsmidt PAGE, Murray v. E. I. Co.......... 147 Attwood v. Munnings........ 147 Baron Alderson’s statement of the rule of construction...........+ 148 Szor. 2.—Where the Authority is ambiguous. Where the instructions are ambig- uous and susceptible of two dif- ferent meanings, the agent will be protected if he adopts one of them in good faith and acts upon Ib: eutininimtia tin aiiectn eta eee cs 149 Lord Mansfield’s statement of the law in Moore v. Mourgue ...... 149 Principle deducible from that case 150 Ireland v. Livingstone examined.. 150 Sror. 3.—Where the Authority is conferred by Informal Writing or arises by Implication......+. Secr. 1.— Where the Authority is given by a Formal Instrument. Wuen an authority is conferred upon an agent by a formal in- strument, as by a power of attorney, there are two rules of con- struction to be carefully attended to: 1A large collection of maxims and rules of interpretation will be found in Blackwell on Tax Titles, *606 et seq. In order to arrive at the intention of the parties, and to interpret the scope and meaning of the power, the court may receive evidence of the relative po- sition of the parties, their obvious de- sign as to the objects to be accomplisned, and the nature of the business or trans- action in which the principal was en- gaged, when the power of attorney relates to that. Brantley v. Southern Life Ins. Co., 53 Ala. 554; Maynard v. Mercer, 10 Nev. 83. See, also, Bissell v. Terry, 69 Ill. 184, But a power of attorney, and the writ- ten contract entered into by virtue of such power, though executed at the same time, are not necessarily to be construed as one paper. In the absenco of any ambiguity in the contract, or any reference to the power, the contract is to be construed by its own terms, and CTIAP. V.] CONSTRUCTION OF AN AGENT’S AUTHORITY. 205 1. The meaning of general words in the instrument will be restricted by the context, and construed accordingly. 2. The authority will be construed strictly so as to exclude the exercise of any power which is not warranted either by the actual terms used, or as a necessary means of executing the authority with effect.? the power is to be referred to only to show the nature and extent of the au- thority conferred. Mattock v. Young, 66 Me. 459. 1 See note 2, following. ? Bissell v. Terry, 69 Ill. 184; Chase v. Dana, 44 id. 262 (a warrant of attor- ney); Wood vy. Goodridge, 6 Cush. 117, 123; Geiger v. Bolles, 1 Thomp. & C. 129; Brantley v. Southern Life Ins. Co., 53 Ala. 554; Bosseau v. O’Brien, 4 Biss. 395; Cringhead v. Peterson, 72 N. Y. 279. Where the authority to perform spe- cific acts is given in the power, and gen- eral words are also employed, such words are limited to the particular acts authorized. Geiger v. Bolles, supra; Billings v. Morrow, 7 Cal. 171, where an instrument executed by the principal appointed one an attorney to ‘‘ superin- tend my real and personal estate, to make contracts, to settle outstanding debts, and generally to do all things that concern my interest in any way, real or personal whatsoever, giving my said attomey full power to use my name, to release others or bind myself as he may deem proper and expedient; hereby making the said S. my general attorney and agent, and by these presents ratify- ing whatsoever my said attorney may do by virtue of this power,’’ was held insufficient to authorize the attorney to convey real estate. See, however, De Rutte v. Muldrow, 16 Cal. 505, where Billings v. Morrow, supra, was commented on, a disposition manifested not to extend the above doc- trine, and the same instrument was held to authorize the agent to make a lease of real estate containing a clause giving the lessee the privilege of purchasing any part of the land during the contin- uance of the lease, at its value, in pref- erence to any other person. See, also, Lawrence v. Gebhard, 41 Barb. 575, 584; Wicks v. Hatch, 62 N. Y. 535. An authority to an agent ‘‘ to grant, bargain and sell the same [real estate], or any part or proportion thereof, for such sum or price, and on such terms as to him might seem meet,”’ will not au- thorize the making of a conveyance in consideration of love and affection in the principal for the grantee in the con- veyance. It authorizes a sale for a monied consideration only. Mott v. Smith, 16 Cal. 636. Nor for a nominal consideration of one dollar. Meade v. Brothers, 28 Wis. 689. A power of attorney authorizing the collection of debts and of personal prop- erty, contained the following clause: “Upon the receipt of any such debt, dues or issues of money, acquittances or other discharges for me, and in my name to make, seal, execute deeds of convey- ance and deliver, and generally do all and every act or acts, thing or things, device or devices, in the law, whatsoever needful and necessary to be done in and about the premises, for me and in my name to do, execute and perform:”’ Held, insufficient authority to sell real estate, and only allowing deeds of re- lease for mortgages, or to affect con- tracts theretofore made. Berry vy. Harnage, 39 Tex. 638. An authonty ‘‘to attend to the busi- ness of the principal generally,’’ or ‘‘ to act for him with reference to all his 206 OF THE AUTHORITY CONFERRED. [Book 11. With reference to the latter rule, see Book II, Pt. I, Ch. IT. With respect to the former rule, which is not confined to ques- business,’’ does not authorize the agent to sell real estate, nor does it allow him to sell or otherwise dispose of the per- sonalty of his principal, unless as a means, necessary and proper, to conduct the business to which the agency ap- phes. Coquillard v. French, 19 Ind. 274, A power of attorney to sell ‘‘ciaims and effects’’ cannot be construed to au- thorize the sale of land or real estate. De Cordova v. Knowles, 37 Tex. 19. An agent authorized to bargain and sell lands has no right under such power to grant a license to the purchaser, pre- vious to a conveyance, to enter and cut timber, although such license be given with a bona fide intent to effect the sale of the lands. Hubbard v. Elmer, 7 Wend. 446. A power of attorney to convey lands held to relate to after-acquired lands. Berkley v. Judd, 22 Minn. 288. A power of attorney to make “all such deeds of conveyance and of parti- tion to such lands as J am entitled to,” authorizes a deed of sale as well as a deed of partition. Jackson v. Hodges, 2 Tenn. Ch. 276. A power of attorney authorizing m very general terms the sale and con- veyance of real estate and the use of all due means therefor, and generally to do all matters relating to the premises as effectually as the principal, ‘‘ if pres- ent, ought or might personally, although the matter should require more special authority than is here comprised,’ held ’ to authorize a conveyance with warranty. Bronson v. Coffin, 118 Mass. 156. A general authority to an agent to collect debts and to pay and receive money, does not authorize him to bind his principal by negotiable instruments; nor can an agent having authority to collect money for his principal arising from the use or proceeds of the sale of his property, bind him by entering into contracts for which money is to be paid out. Hazeltine v. Miller, 44 Me. 177. See ante, p. 116, note. If one constitutes another his ‘‘ gen- eral and special agent to do and trans- act all manner of business,”’ this does not necessarily authorize the agent to sell stocks or other property of the prin- cipal. Hodge v. Combs, 1 Black, 192. The appointment of an attorney by writing ‘‘ with full power and authority for me and in my name, to draw or to indorse promissory notes, to accept, craw, or indorse bills of exchange,”’ does not authorize the attorney to draw, or indorse notes for the mere accommoda- tion of third persons, Wallace v. Branch Bank, 1 Ala. 565. See ante, pp. 108, 116, notes. Defendant, a married woman, executed to her husband a power of attomey, au- thorizing him ‘‘to make, sign, indorse, and accept all checks, notes, drafts and bills of exchange ” for her, which power of attorney was deposited with a bank where she kept an account. Defendant was the owner of real estate from which she received rents, but was not carrying ona trade or business. The husband gave to plaintiffs a post-dated check in the defendant’s name in exchange for their check, payable to his order. The check so given by the husband was pre- sented at maturity and payment was refused. In an action thereon, held, that the power granted to the husband was to deal with the moneys and choses in action, parts of defendant's separate es- tate, not to create a debt, or to charge such estate for a debt; and that the transaction was not within the terms of his authority. Nash v. Mitchell, 71 N. Y. 199. = Where an agent, having a power of CHAP. V.] CONSTRUCTION OF AN AGENT’S AUTIORITY. 207 tions of agency, a leading case upon the general principle is Lord Arlington v. Merricke (a), decided by the King’s Bench in 1672. An action of debt on a bond having been brought against the de- fendant, he prayed oyer of the condition of the bond. Lord Arlington, Postmaster-General for the time being, *had [146*] appointed one J. as his deputy at Oxford for the term of six months following, on condition that he would faithfully per- form all the duties of the office. One of the deputy’s duties was at the end of every month to pay into the General Post Office all moneys received by him in his office. The bond was dated and executed in 1667. Within two or three years of its execution, J. received money for which he failed to account, and an action was thereupon brought against the defendant as his surety. Hale, C. J., and the other learned judges, were clearly of opinion that the condition should refer only to the recital by which the defend- attorney to collect any and all money due or to become due his principal from any source, and especially a certain de- scribed claim, and to give for his princi- pal and in his name any and all receipts and acquittances necessary and proper on receiving or in order to receive any and all such moneys, and also to apply portions of such moneys to debts of the principal,,and generally to do and per- form any other acts in and about said business that may be deemed necessary or proper, deposits in bank to the prin- cipal’s credit some of the money arising from the claim specially mentioned in the power, and afterwards, during the existence of the agency, draws out the deposit on checks purporting to be signed by the principal and believed by the officers of the bank to be genuine, the bank is discharged, whether the checks be in fact genuine or not. They are in effect receipts and acquittances in the name of the principal. City Bank v. Kent, 57 Ga. 283. An agent of a stage company, author- ized to obtain surgical aid for a passen- ger injured by the upsetting of the coach, is not therefore authorized to employ a physician to attend one who acted as coachman, without the consent or knowledge of the company, and who had also been injured by the same acci- dent. Shriver v. Stevens, 12 Penn. St. 258. A general power authorizing the agent to represent the principal in all his interests in a given locality, does not empower him to embark the principal in a new and different business. Camp- bell v. Hastings, 29 Ark. 512. See generally, ante, pp. 108, 111, 116, notes. Where a party holding a patent from the U.S. for certain lands, authorized his agent ‘‘ to act upon the application and demand of any person actually own- ing ’’ town lots in Denver City, within the limits of the lands, and to execute and deliver deeds to such persons as **may apply for the same within three months from” a certain date: Held, that the ‘application and demand ”’ must be made within that time, but the authority of the agent to adjudicate the claims was not so limited. Clements v. Macheboeuf, 92 U. S. 418. (a) 2 Wms. Saunders, 411a. [Book It. 208 OF THE AUTHORITY CONFERRED. ant was bound for six months! In Rooke v. Lord Kensington (6) the subject was fully considered by Sir W. Page Wood, V.-C. Jenner v. Jenner (c) is a later authority; but the above principle is well established, and has been applied in a variety of cases (@). Now let us turn to the more modern cases in which the question had reference to the authority of an agent. In Hay v. Gold- smidt (e), decided by the Court of King’s Bench in 1804, the action was brought to recover money received by the defendants upon a bill of exchange. The bill was payable to the plaintiffs testator or his order. The testator had granted to J. and Ra power of attorney authorizing him to ask, demand and receive “all money that might become due to him on any account what- soever, and to transact all business, and upon non-payment or non-delivery thereof, for him, and in his name, to use all such lawful ways and means for the recovery thereof as he might or could do if he was personally present and did the same.” They received the bill above mentioned under this power, and having severally indorsed it in the name of the testator, discounted it with the defendants, who afterwards received the value from the acceptors. At the trial a verdict was found for the plaintiffs, but arule was granted for setting aside the verdict and entering a nonsuit, on the ground that J. and R. had authority to indorse and discount the bill, Upon argument the court held that the power 1See Mayor, ete. of Rahway v. Crow- ell, 40 N. J. Law, 207, where it was considered that the case was not altered by the fact that such officer holds for a definite term, and until his successor shall be appointed, such latter term ex- tending the obligation to a reasonable period only for the appointment of a successor. See, also, Chelmsford Com- pany v. Demarest, 7 Gray, 1; Dover v. Twombly, 42 N. H. 59; Welch v. Sey- mour, 28 Conn. 387; Mayor of Wil- mington v. Horn, 2 Harr. 190; Citizens’ Loan Ass’n v. Nugent, 40 N. J. Law, 215; Amherst Bank v. Root, 2 Met. 536; Commissioners v. Greenwood, 1 Dessaus. 452; Bigelow v. Bridge, 8 Mass. 275; Moss vy. State, 10 Mo. 338; State Treas- urer v. Mann, 34 Vt. 371; South Caro- lina Insurance Co. v. Smith, 2 Hill (8. C.), 550; South Carolina Society v. Johnson, 1 McCord, 41; County of Wapello y. Bingham, 10 Iowa, 40; Pat- terson v. Township of Freehold, 38 N. J. Law, 255; Kingston Mut. Ins. Co. v. Clark, 83 Barb. 196; Harris v. Babbitt, 4 Dill. C.C.185. See, however, contra, State v. Berg, 50 Ind. 496; Thompson v. State, 37 Miss. 578; Placer County v. Dickinson, 45 Cal. 12; State v. Daniel, 6 Jones’ Law, 444; Sparks v. Bank, 9 Am. Law Reg. (N. 8.) 865. (0) 2K. & J. 758. (c) L. Rep., 1 Eq. 361. (d) See per Lovd Mansfield in Moore v. Magrath, 1 Cowp. 9. (e) Referred to in Hogg v. Snaith, 1 Taunt. 349, CHAP. v.]| CONSTRUCTION OF AN AGENT’S AUTHORITY. 209 “to transact all business” did not authorize the indorsement, and that inasmuch as the largest powers must be construed with refer- ence to the subject matter, the words “all business ” must be confined to all *business necessary for the receipt of [147*] money. So in Hogg v. Snaith (f), decided in 1808, where the power of attorney authorized the agent to receive all salary and money, to compound, discharge, give releases, and appoint substitutes, it was held that the power did not authorize the negotiation of bills received in payment, nor the indorsing of them in the agent’s own name. It was further held that evidence of an usage at the navy office to pay bills indorsed by the attorney in his own name, and negotiated by him under such a power, could not be received to enlarge the operation of the power.? The above decisions were approved of in Murray v. Hast India Company (9), decided in 1821, in which it was held that a power of attorney empowering an agent to demand, sue for, recover and receive all moneys, debts and dues, and to give discharges, did not authorize him to indorse bills for his principal. Similar questions were again raised in Attwood v. Munnings(h), decided in 1827. The defendant, a member of a firm of mer- chants, on going abroad, granted a power of attorney to A., B., and C. his wife, jointly and severally for him and in his name, and to his use, to sue for and get in moneys and goods, “ to in- dorse, negotiate and discount, or acquit and discharge the bills of exchange, promissory notes, or other negotiable securities which were or should be payable to him, and should need and require his indorsement.” By another power of attorney subsequently executed, he gave to his wife C. amongst other powers, authority for him and on his behalf to pay and accept such bills of exchange as should be drawn or charged on him by his agents or corre- spondents as occasion should require, and generally to do, negotiate and transact the affairs and business of him, defendant, during his absence, as fully and effectually as if he were present and acting therein. While he was abroad, A., who was also one of the part- ners in the same business, and who acted as the defendant’s agent, (f) Supra. *See ante, p. 116, note, 1See ante, p. 17, note. (2) 7 B. & C. 278, (9) 5 B. & Ald. 204, 14 210 OF THE AUTHORITY CONFERRED. [Book 11. drew four bills of exchange upon the defendant for the purpose of paying creditors of the partnership business. They were accepted by the defendant’s wife in his name, and the proceds applied in payment of the partnership debts. The plaintiffs were indorsees of the bills. The court decided upon these facts, first, that the right of the indorsee depended upon the authorities given [148*] by the attorney; secondly, *that the powers applied only to the defendant’s individual and not to his partnership affairs; thirdly, that the special power to accept extended only to bills drawn by an agent in that capacity, and that A. did not draw the bill in question as agent, but as partner; and, lastly, that the general words in the powers of attorney were not to be construed at large, but as giving general powers for carrying into effect the special purposes for which they were given. This decision of the Court of King’s Bench was mentioned with approval in the Court of Common Pleas two years afterwards in the case of Withington v. Herring (t), 1829, where, however, owing to the different facts of the case, a different ratio decidendi applied. C. entered into an agreement with the defendants in which he undertook to carry on certain mining speculations for them in America. He was furnished with instructions and a letter of authority to draw on the defendants for 10,0002. By a power of attorney, he was authorized “to take and work mines, to purchase tools and materials, and erect the necessary buildings, and to execute any deeds or instruments he might deem necessary for the purpose.” After he had raised the 10,0002. under the let- ter of authority, he obtained 1,5002. of the plaintiff in America, and applied the money to the use of the defendants. He did not show the letter of authority to the plaintiff, nor did it appear that the plaintiff knew that money had been previously raised by O. The court was of opinion that the plaintiff was entitled to recover the 1,500/. from the defendants as money had and received to their use. The court was of opinion that the agent had an im- plied authority to raise the money advanced, for the reason appar- ently that the exercise of authority in raising the money was an act necessary for executing the original authority with effect. This seems to be the true ground of the decision. The rule was stated hy Baron Alderson in a later case (7) to (i) 5 Bing. 442. (%) Esdaile vy, La Nauze (1835), 1 Y. & C. 394, cmap. v.] CONSTRUCTION OF AN AGENT’S AUTHORITY. 211 the effect that general words must be construed with respect to the antecedent matter which states the purpose for which the letter of attorney was given. Perhaps they would be sufficient to confer all powers not specifically enumerated, but necessary to carry the principal purpose of the letter of attorney into effect. *Sror. 2.— Where the Authority is ambiguous. [149*] When the instructions given to an agent are clear and defined, his duty is to observe them faithfully. He will not be allowed to violate them in any particular, provided they may be lawfully carried out. On the other hand, if the instructions are given in such uncertain terms as to be susceptible of two different mean- ings, and the agent bond fide adopts one of them and acts upon it, it is not competent to the principal to repudiate the act as authorized because he meant the instructions or orders to be read in the other sense of which they are equally capable. It is a fair answer to such an attempt to disown the agent’s authority to tell the principal that the departure from his intention was occa- sioned by his own fault, and that he should have given his order in clear and unambiguous terms (().! (2) Per Lord Chelmsford in Ireland v. Livingstone, L. Rep., 5 H. L. 416. 1§ee National Bank v. Merchants’ Bank, 91 U. 8. 92, 104. For mere error in judgment an agent with authority to do the best he can, is not liable. Long v. Pool, 68 N. C. 479. Factors have a right to definite in- struction from their principals, and in case their instructions are obscure or contradictory, they may exercise their honest discretion upon the subject mat- ter without becoming liable. Bessent v. Harris, 63 N. C. 542. The giving of prices merely in an in- voice of goods consigned, cannot be considered as a direction not to sell for less than the invoice price. Mann v. Laws, 117 Mass. 293. An agent employed to ship goods to the owner has authority to make such contract with the common carrier, as in the honest exercise of his discretion he sees fit. Shelton v. Merchants’ Dis- patch Transp. Co., 59 N. Y. 258, An agent is liable to his principal for injuries that are caused by want of reasonable skill and ordinary diligence in the exercise of his agency, but not for injuries that are caused by his mis- take in a doubtful matter of law. Me- chanics’ Bank v. Merchants’ Bank, 6 Met. 18. An attorney cannot be charged with negligence when he accepts as a correct exposition of the law a decision of the supreme court of his state upon the ques- tion of the liability of stockholders of corporations of the state in advance of any decision thereon by the supreme court of the U.S. Marsh v. Whitmore, 21 Wall. 178. See ante, p. 140, note, 212 OF THE AUTHORITY CONFEERED. [Book In. In one of the earliest reported cases, Moore v. Mourgue (m), de- cided in 1776, the action was for negligence in not insuring a cargo of fruit according to the plaintiff’s directions. At the trial it did not appear that the plaintiff had given any particular directions how or with whom to insure. The instruction was a general one to insure the cargo. The defendant insured with a company which always in policies on fruit inserted the clause “free from particular average.” After insurance a partial loss occurred. The proceeds of the damaged part of the cargo were insufficient to pay the salvage claim. There were apparently two offices in which the exception was never put in policies. “To maintain this action,” said Lord Mansfield, “the defendant must be guilty either of a breach of orders, gross negligence or fraud... . In delivering their verdict they (the jury) say they did not think the defendant guilty of gross negligence, or that he acted mald fide. The court, therefore, will not say so. . . . He (the plaintiff) gives no directions at all. Therefore he left it to the discretion of his correspondent, who, if he meant no fraud, was at liberty to elect between the underwriters. . . . If upon all the circumstances the jury had found for the plaintiff, it might have been a cast whether the court would have granted a new trial. A fortiori ina hard action, where as no particular orders were given, there has [150*] certainly been no *breach of orders; where the defendant appears to have acted bond jide, and where the plaintiff has himself been guilty of the first omission in giving no direc- tions at all, there seems to be no ground for the court to interfere against the defendant.” The other judges concurred, and a rule for a new trial was discharged. The principle deducible from this case is that where the instrue- tions are ambiguous, an agent will be protected if he acts in a way warranted by one of the constructions to which the instruc- tions are susceptible, provided he is guilty of neither mala fides nor gross negligence. The Court of Common Pleas decided in 1851 a case in which a similar principle was involved (m). The defendant was employed by the plaintiff to sell for him a quantity of coal at such a price as would realize “not less than 15s. per ton, net cash, less your commission for such sale.” The defendant sold one hundred tons (m) 2 Cowp. 479, (n) Boden y. French, 10 C. B. 886. CHAP. V.] CONSTRUCTION OF AN AGENT’S AUTHORITY. 213 of the coal at 15s. 6d. per tonat two months’ credit. The plaintiff then sued 7m asswmypsit, averring in his declaration that the de- fendant promised the plaintiff that he would not sell the coals otherwise than for ready money. At the trial before Chief Jus- tice Jervis, the plaintiff was nonsuited, the learned judge being of opinion that the instructions did not bear the construction put upon them in the declaration. It was customary in the coal trade to sell coals at a credit of two months, except on the wharf. Leave was reserved to move to enter a verdict for the plaintiff, if the court should be of opinion that the evidence sustained the declaration. The rule was discharged by the full court. “The letter of instructions,” said Chief Justice Jervis, “will admit of at least three significations. It may mean sell for cash down, 15s., or at such price as will eventually realize 15s., or a del cre- dere (0). . . . It is the plaintifi’s duty to make out that the con- struction which he has put upon it in declaring is the true one; and this he has failed to do if the matter be at all doubtful.” This case was decided upon more technical grounds than the former; there is, nevertheless, a similarity in the ratio decidendi. The decisions of the Court of Queen’s Bench, the Exchequer Chamber, and the House of Lords in Jreland v. Livingstone ( p), the final decision being given in 1872, should be carefully *studied. The defendant wrote to the plaintiffs, who [151*] were commission agents at Mauritius, “Should the beet crop prove less than usual there may be a good chance of some- thing being made by importing cane sugar, at about the limit I am going to give you as a maximum, say 26s. 9d., for Nos. 10 to 12, and you may ship me 500 tons, to cover cost, freight, and insurance; 50 tons more or less of no moment if it enables you to get a suit- able vessel. I should perfer the option of sending a vessel to London, Liverpool, or the Clyde; but if that is not compassable you may ship to either Liverpool or London.” According to the ordinary course of purchasing sugars in the Mauritius, it was not usual, or even possible, to buy the whole of the sugar at once. The usage there was to make shipments of less than the whole quantity ordered. The plaintiffs accordingly purchased about 400 tons, being unable to get any more within the defendant’s limit. (0) Ibid., p. 887. (p) L. Rep., 2Q. B. 99; 5 ib. 516; L.R., 5 H. L. 395. 214 OF THE AUTHORITY CONFERRED. [Book m. They were shipped about the end of September. The prices of sugar fell in England in the meantime, and the defendant wrote a coun- termand of his order, which was received by the plaintiffs on the 20th October. The defendant refused to accept the 400 tons when they arrived in England on the ground that his order had not been complied with. The Court of Queen’s Bench, consisting. of Chief Justice Cockburn, Justices Mellor and Shee, decided that the defendant was bound to accept and pay for the 400 tons. Nothing turned upon any ambiguity on the instructions. The grounds upon which the court decided were simply that a dis- cretion was given to the plaintiffs by the words “fifty tons more or less,” and that the defendant must be taken to have given the order with reference to the circumstances of the Mauritius market. On appeal to the Court of Exchequer Chamber, Baron Cleasby and Mr. Justice Montague Smith were of opinion that the judg- ment of the Queen’s Bench should be affirmed, whilst the major- ity, Chief Baron Kelly, Barons Martin and Channell, and Mr. Jus- tice Keating, reversed that judgment on the ground that the in- structions gave no discretion; that the order being unambiguous for asingle cargo of 500 tons in a single ship, no question could be raised respecting the custom at the Mauritius. On behalf of the respondent it was contended, on the authority of Buyliffe v. Butterworth (q), that inasmuch as the order was not so unambig- uous as to exclude the custom, the custom of the market [152*] *at Mauritius must be referred to, to explain it. This was the opinion of Mr. Justice Montague Smith, one of the minority. In the House of Lords this opinion prevailed, and it was held by the Lords present, namely, Lords Chelmsford, West- bury and Colonsay, to be sufficient for the decision of the case. The judgment of the Court of Exchequer Chamber was reversed. After hearing the opinion of the judges the learned lords de- cided that the ambiguity of the order justified the mode of execut- ing it. The case was thus brought within the operation of a well- established rule. The difference of opinion upon this question was remarkable. In the Queen’s Bench, Chief Justice Cockburn, Justices Mellor and Shee were of opinion that the words “ fifty tons more or less ” (q) 1 Ex. 425; 17 L. J., Ex. 78. 1 As to the effect of usage and cus- tom, see ante, p. 111. , .CHAP. V.] CONSTRUCTION OF AN AGENT’S AUTHORITY. 215 gave a discretion, and that they had reference to the advantage of getting a suitable vessel. In the Exchequer Chamber this was substantially the opinion of Baron Cleasby, Mr. Justice Montague Smith, Chief Baron Kelly. Barons Channell and Martin, and Mr. Justice Keating, on the other hand, thought that the authority pointed to a single shipment of one cargo and by one vessel. The judges having been summoned to the House of Lords, Barons Cleasby and Martin supported their former opinions. Justices Byles, Blackburn and Hannen supported the judgment of the Queen’s Bench. Sect. 8.— Where the Authority is conferred by Informal Writ- ing or arises by Implication. The rules under this head may be briefly summarized. (a.) A written instrument will be so construed as to give au- thority to do only such acts as are within the scope of the partic- ular matter to which the instrument refers (7). (b.) Where orders and instructions are free from ambiguity, they will be construed according to their obvious meaning. As to the rules where they are not, see Sect. 2 of this chapter. The construction of mercantile instruments and instructions may be guided by the usages of trade; and for that purpose the evidence of persons conversant with mercantile affairs is received (s). (c.) With reference to the construction of an authority which arises by implication, see Book II, Part I, Chap. II. (r) Story’s Agency, s. 69, See Sect. (s) Paley, by Lloyd, 198; Story, s. 75, 1 of this chapter. 77. 1See ante, p. 145, notes. 216 [153*] OF THE AUTHORITY CONFERRED. {Book 11. *CHAPTER VI. ADMISSIONS AND DECLARATIONS BY AGENTS. PAGE. " PAGE, The admissions and declarations of Admissions which consist of hear- an agent acting within the scope say evidence are not receiy- of his authority bind the princi- AIO: ee s¥ cee eeee. soa ee aks 155 Dales see sing wxtee nes Res owes eee s 153 | When the agent resides abroad the Time when admissions must be same rules apply............66. 156 WHAM Coe vases edicie dns cutie seats x 154 | Agent's letters to his principal.... 156 Maestars vy. Abram, and Johnson v. Admissions by a trespasser........ 156 Ward, considered........--000. 154 | Admissions by station-master..... 156 Are an agent’s admissions by letter Statements of agent's interpre- admissible when he may himself ter, acting as such, when admis- beealled): ss % essed eset sews 154; Sible-saes eave ceevteertceee te 157 Result of the cases.......... 155 | Admissions by directors .......... 157 It is not within the scope of an There must be proof of agency... 157 agent’s authority to make admis- The tendency of the courts is to limit sions with reference to bygone the admissibility of evidence of transactions........cecceeeseee 155 | this nature... ...... eee ee ee ees 158 As a general proposition, what one man says, not upon oath, can- not be evidence against another man. The exception must arise out of some peculiarity of situation, coupled with the declarations made by one. An agent may undoubtedly, within the scope of his authority, bind his principal by his agreement, and in many © cases by his acts. What the agent has said may be what consti- tutes the agreement of the principal; or the representations or statements made may be the foundation of the inducement to the agreement. Therefore, if writing is not necessary by law, evidence must be admitted to prove that the agent made a certain statement. So with regard to acts done, the words with which these acts are accompanied frequently tend to determine their quality. Never- theless the admission of the agent cannot be assimilated to the admission of the principal. A party is bound by his own admis- sion, and is not permitted to contradict it; but it is impossible to say a man is precluded from questioning or contradicting anything any person has asserted as to him, as to his conduct, or his agree- CHAP. VI.] ADMISSIONS AND DECLARATIONS BY AGENTS. 217 ment, merely because that person has beer an agent of his (z). An agent can act only within the scope of his authority; hence declarations or *admissions made by him as toa particular [154*] fact are not admissible as evidence against the principal, unless they fall within the nature of the agent’s employment as agent; unless, for instance, they form part of the contract which he has entered into and is employed to negotiate on behalf of the principal (c). Hence, what is said by an agent respecting a con- tract or other matter in the course of his employment, is good evidence to affect the principal, but not if it is said on another occasion (@). Hence, too, an admission by the servant of a com- pany as to the ferocious habits of a dog which had bitten the plaintiff, was rejected in the absence of proof that the servant had the care of the animal, or control of the place where the dog was kept (¢). The ruling in two old cases (7) is calculated to throw some difficulty upon the subject of admissions and declarations. The proposition which may be inferred from these decisions is that where an agent can himself be called, evidence of his admissions will not be received as evidence against his principal, unless the principal’s acquiescence in such admissions may be reasonably in- ferred. In Maestars v. Abram the agent was in the box as a wit- ness, and it was urged on behalf of the defendant that a letter written by the agent to the principal should not be produced, as the agent was there in person. Lord Kenyon ruled that the agent’s statement of what he had done on account of the defendant was admissible; but that it should be learned from himself, and not by the letter. To the same effect Mr. Justice Chambre ruled (g) that an affidavit of an agent cannot be used to prove a fact against his principal when the agent himself can be called; but, where the principal has used an affidavit of the agent in an application to the court in which a particular fact is stated, the affidavit of the agent may be used as evidence of that fact. In neither of these cases was there any necessity to apply the (a) Per Sir William Grant, M. R., tion Company, 33 L. J., Q. B. 310, Fairlie v. Hasting, 10 Ves. 123, 126. (f) Maestars v. Abram, 1 Esp. 874, (c) Betham v. Benson, Gow. 45. and Johnson v. Ward, 6 Esp. 47. (d) Peto v. Hague, 5 Esp. 134. (g) Johnson v. Ward, supra. (e) Stiles v. The Cardiff Steam Naviga- 218 OF THE AUTHORITY CONFERRED. [Book I. first part of the above proposition. In the one case (/) the letter was not contemporary with the transaction to which it referred; in the other the agent’s affidavit was admitted because the princi- pal had acquiesced in it. The difficulty here referred to has been touched upon by [155*] *Sir W. Grant, M. R. (): “If any fact material to the interest of either party rests in the knowledge of an agent, it is to be proved by his testimony, and not by his mere assertion. Lord Kenyon carried this so far as to refuse to permit a letter by an agent to be read to prove an agreement by the principal; hold- ing that the agent himself must be examined. If the agreement was contained in the letter, I should have thought it sufficient to have proved that letter was written by the agent, but if the letter was offered as proof of the contents of a pre-existing agreement, then it was properly rejected.” This doctrine was discussed inci- dentally in Bawerman v. Radenius (k), where, upon reference to the case of Biggs v. Lawrence (2), in which Mr. Justice Buller held that a receipt given by an agent for goods directed to be de- livered to him was admissible against the principal, it was ob- jected that Lord Kenyon had frequently ruled the contrary since at Nisi Prius, and this was not denied. The result of the cases appears to be that if it is shown that an admission has been made by an agent acting in a matter within the seope of his authority, and that it is a part of the res geste, and does not relate to bygone transactions, then such admission is receivable in evidence against the principal, and the agent himself need not be called.t (h) Maestars v. Abram, supra. (i) Fairlie v. Hastings, 10 Ves. 127. (k) TT. R. 663. (1) 3 T. R. 454. 1To the same effect, see Byers v. Fow- ler, 14 Ark. 86; Corbin v. Adams, 6 Cush, 95; Stiles v. Western R. R. Co., 8 Met. 46; Baring v. Clark, 19 Pick. 220, 226; La Fayette & Ind. R. R. Co. v. Ehman, 30 Ind. 83; Pinnix v. Mc- Adoo, 68 N. C. 56; Anderson v. Rome, Watertown & O. R. R. Co., 54 N. Y. 334; Willard v. Buckingham, 86 Conn. 39; Sweatland v. Ill. & Miss. Tel. Co., 27 Iowa, 484; Rowell v. Klein, 44 Ind. 290; Robinson v. Walton, 58 Mo. 880; Burnham y. Grand Trunk R’y Co., 63 “Me. 298; Campbell v. Hastings, 29 Ark. 512; Wilcox v. Hall, 53 Ga. 635; Wheelock v. Town of Hardwick, 48 Vt. 19; Southern Life Ins. Co. v. Booker, 9 Heisk. 606; White v. Miller, 71 N. Y. 118. See, also, Williamsburg Ins. Co. v. Frothingham, 122 Mass. 391, en- tries in a book by clerks; Grimshaw v. Paul, 76 Ill. 164, as to admissions of deputy revenue collector not being ad- missible to bind his principal. See ante, p. 188, note. In Linblom y. Ranney, 75 Ill. 246, CHAP. VI.] ADMISSIONS AND DECLARATIONS BY AGENTS. 219 It is not within the scope of an agent’s authority to make admis- the rule is stated to be that where the acts of the agent will bind the principal, there his representations, declarations and admissions, respecting the subject matter, will also bind him, if made at the same time and constituting a part of the res geste, and in that case it was held that declarations of an agent not made in the presence of the principal, nor while theagent was doing any act in re- spect to the subject matter of the agency, would not bind the principal or his privies, and was not evidence against either. See the rule similarly stated in Ashmore v. Penna. Steam Towing Co., 38 N. J. Law. 13; Dickman v. Williams, 50 Miss. 500; Coyle v. B. & O. R. RB. Co., 11 W. Va. 94. There is no difference between the binding effect of the admissions of a general and special agent. Ashmore y. Penna. Steam Towing Co., supra. A trustee holding the legal title to land merely for convenience of transfer in case of sale, and who deeded it toa vendee by direction of the owner by whom the sale was made, cannot bind ‘the vendor by declarations respecting the consideration. A conversation be- tween the vendee and such trustee con- cerning the consideration, in the ab- sence of the vendor, is not admissible in evidence againsthim. Reed v. Beards- ley, 6 Neb. 493. It is not within the general power and province of the treasurer of a corpora- tion, without special authority, to issue written admissions, which shall bind the company, of the amount due upon a disputed claim for salary of other agents of similar grade. Kalamazoo Novelty Manfg. Co. v. McAlister, 36 Mich. 327. In an action against a railroad com- pany for the nondelivery of lost freight, the declaration of their freight agent, that he ‘‘ thought perhaps the Thomp- sons had got it,’’ made in answer to an inquiry by the consignee, is admissible in evidence against the company. Lane v. Boston & A. R. R. Co., 112 Mass. 455, 8. was acting for an iron company in carrying on their works at their ore- bank, and an offer was made to prove a statement he had made to ore miners in reference to the cost of mining the ore per ton: Held, that this declaration was not within the scope of his author- ity as superintendent, and was incom- petent. Hanover Water Co. v. Ash- land Iron Co., 84 Penn. St. 279. In Malecek v. Tower Grove & L. R’'y Co. 57 Mo. 17, language used by the su- perintendent of a street railway com- pany, admitting and justifying an as- sault by one its drivers, was held to bind the company. So, in an action against a manufac- turing corporation for nuisance, it was held that a statement of its superin- tendent that the nuisance existed and would be remedied, and that ‘he would not have it around his place for $509,’ was competent evidence against the corporation. McGenness vy. Adri- atic Mills, 116 Mass. 177. Different rules prevail in respect to the acts and declarations of public agents, from those which ordinarily govern in the case of mere private agents. As to the latter, the princi- pals are in many cases bound where they have not authorized the declara- tions and representations to be made. But in the case of publicagents, the gov- ernment or other public authority is not bound, unless it manifestly appears that the agent is acting within the scope of his authority, or he is held out as hay- ing authority to do the act, or is em- ployed in his capacity as a public agent, to make the declaration or representa- tion for the government. Individuals as well as courts must take notice of the extent of authority conferred by law 220 OF THE AUTHORITY CONFERRED. [BooK 1. sions with reference to bygone transactions.’ Hence, in an action against a railway company for not conveying cattle to market in a reasonable time, evidence of a conversation which took place a week after the alleged cause of action arose, between the plaintiff and one of the defendants’ servants, with respect to the negligence was not admitted (m). So admissions by the under-sheriff not accompanying an act done in his official character, are not admis- upon a person acting in an official ca- pacity. Whiteside v. U. 8.93 U.S. 247; Bouton v. McDonough Co., 84 Ill. 384. Third persons have a, right to rely on the statements of an agent as to the ex- istence of such extrinsic matters relat- ing to his agency as lie within his own peculiar knowledge. Edwards v. Thomas, 66 Mo. 468. Where the authority of an agent de- pends upon some fact outside of the terms of his power, and which from its nature rests particularly within his knowledge, the principal is bound by the representation of the agent although false, as to the existence of such fact. Griswold v. Haven, 25 N. Y. 595; N. Y. &N.H. BR. R. Co. v. Schuyler, 34 id. 30, 68. 1To the same point, see Corbin v. Adams, 6 Cush. 95; Robinson v. Fitch- burg & W. R. RB. Co., 7 Gray, 92; Bennett v. Holmes, 32 Ind. 108; Sweat- Jand v. Ill. & Miss. Tel. Co., 27 Iowa, 434; Anderson v. R. W. & O. R. R. Co., 54 N. Y. 3384; Chicago, B. & Q. R. R. Co. v. Lee, 60 Ill. 501; Chicago, B. & Q. RB. RB. Co. v. Riddle, 60 id. 534; Stewartson vy. Watts, 8 Watts, 392; Greer v. Higgins, 8 Kan. 519; Mich. Cent. R. R. Co. v. Gougar, 55 Il. 503; Wheelock v. Town of Hardwick, 48 Vt. 19; Central R. R. Co. v. Kelly, 58 Ga. 108; Bowen v. School District, 36 Mich. 149; White v. Miller, 71 N. Y. 118. See, however, Howe Machine Co. v. Soudar, 58 Ga. 64. Thus, in an action against a railroad corporation for damages sustained by the negligence of their engineer, his statement as to the accident, made afew days afterwards, are inadmissible in ev- idence against the corporation. Robin- son v. Fitchburg & W. R. R. Co., supra. So, the declaration of the driver of a street car after an accident had occurred and the car had been stopped, but be- fore he had left it, that he could not stop the car because the brakes were out of order, is mere hearsay, and not admissible in evidence against his em- ployer. Luby v. Hudson River R. R. Co., 17 N. Y. 181. Declarations made by the conductor of the train to a passenger, a moment before the accident, of the bad condi- tion of the road, and his train having run off the track five consecutive times next preceding the present trip, are not admissible in proof of negligence, either as ves geste, or as admissions of an agent binding on the principal. Mobile & Mont. R. R. Co. v. Ashcroft, 48 Ala. 15, But declarations made by an agent after the contract is made by him, are held admissible against his principal, where the agency still continues, and the declarations form part of a conver- sation between the parties, mutually explanatory of the contract just entered into, or form part of the agent's report to his principal. Baldwin v. Ashby, 54 Ala. 82. (m) Great Western Railway Company vy. Willis, 18 C. B., N. S. 748. CUAP. VI.] ADMISSIONS AND DECLARATIONS BY AGENTS. 291 sible against the sheriff (n). Again, a letter by an agent was held not to be admissible as evidence of a pre-existing agreement, though it may be evidence of an agreement contained in that letter (0). This is probably the true ground of the decision in Maestars v. Abram (p). Admissions which consist of hearsay evidence are not receivable against the principal. Thus, the letters of an agent of an *assured in a foreign country, stating the contents of let- [156*] ters from another agent of the assured, were not admitted as evidence against the principal (g). The rules respecting the admissibility of the agent’s declarations are the same whether the agent resides abroad or not (7). Letters of an agent to his principal, in which the former is rendering an account of the transaction he has performed for him, are not admissible against the principal (s).! What a principal has said respecting goods sold to him is not evidence to charge the surety, so as in an action against the latter to dispense with proof of the delivery of the goods (¢).? Evidence of an admission made by one of several defendants in trespass will not establish the others to be co-trespassers; but if they are established to be co-trespassers by other competent evi- dence, the declarations of the one as to the motives and circum- stances of the trespass, will be evidence against all who are proved to have combined together for the common object (7). The case of The Kirkstall Brewery Company v. The Furness Railway Company (a), which was decided in 1874, affords a good illustration of the rules that regulate the admission of statements made by agents. An action was brought for the loss of a parcel containing money. The defendants pleaded the Carriers’ Act; and plaintiffs replied that the parcel was lost by the felonious act of one of the company’s servants. At the trial the evidence (n) Snowball v. Goodriche, 1 N. & M. 1See Baldwin v. Ashby, ante, p. 155. 234, (t) Evans v. Beattie, 5 Esp. 26. (0) Fairlie v. Hastings, 10 Ves. 128; ®See Wheeler v. The State, 9 Heisk, Kahl v. Jansen, 4 Taunt. 565. £93; White v. German Nat. Bank, id. (p) 1 Esp. 375. 475. (g) Kahl v. Jansen, 4 Taunt. 565. (u) R. v. Hardwick, 11 East, 578, per (r) Per Chief Justice Mansfield, Lang- Lord Ellenborough. horn v. Allnutt, 4 Taunt. 517. (x) L. R., 9 Q. B. 468; 43 L. J., Q. (s) Ibid. B. 142. 223 OF THE AUTHORITY CONFERRED. [Book 1. showed that the parcel was sent on the 27th of July, by the de- fendants’ railway, addressed to the plaintiffs’ clerk at Ulverston; that the parcel was not delivered, and on the same day a porter at the Ulverston Station disappeared. The superintendent of police at Ulverston stated that the station-master gave information that the porter had absconded; that a parcel of money was miss- ing, and that the porter was suspected of the theft. He wished the superintendent to make inquiries. The court decided that this evidence was rightly admitted. “There is no principle,” said Cockburn, C. J., “on which this would not be admissible evidence. Then, if P. (the station- master) was the agent of the defendants, and if it was within the scope of his duty and authority as agent to do what the [157*] *principal, if on the spot, would have done, what he says whilst he is so acting is equally admissible as if said by the principal himself. Now it is impossible to say that the man who has the sole management of the station has not authority to cause a person to be apprehended whom he has reasonable ground to suspect has stolen a parcel from the station.” If the statements of the agent are admissible, the statements of the agent’s interpreter, acting as such in the agent’s presence, are admissible without calling the interpreter; and it must be assumed as against the principal that the interpreter interpreted faithfully (y). The admissibility of this evidence was placed by Mr. Justice Wightinan (y) on the ground that when a commu- nication is to take place ina foreign country, and both parties know that an interpreter will be wanted, it must be taken that both parties agree upon the interpreter who professes to interpret. The admission or declaration of the directors of a company made in the discharge of their duty are admissible against the company.' Hence when the directors of a joint-stock company, (y) Reid v. Hoskins, 26 L. J., Q. B. 5. 1See the cases as to misrepresenta- tions by the projectors of corporate un- dertakings published in prospectuses, and as to the liability for false reports by managers of corporations, collected in Cooley on Torts, 494, 495. See, also, ante, p. 155, note. An insurance company is bound by rep- resentations in reference to the amount of its capital stock which is paid in and invested,made in reply to the inquiries of applicants for insurance, by an agent duly appointed under its by-laws, whose business it is to solicit risks, receive and transmit applications, receive back and deliver policies and receive the premi- ums; especially if it appears that he CHAP. VI.] ADMISSIONS AND DECLARATIONS BY AGENTS. 225 with a view to raise its shares in the market, represent the con- cern as prosperous, and offer money to the shareholders to buy further shares, the House of Lords, in an action by the company to recover the money advanced, held that the company could not succeed (2). Soa letter written by the secretary of a company, by order of the acting directors, stating the number of shares held by A., was admitted on behalf of A.’s executors in proceed- ings against them, upon the winding-up of the company, and after the distribution of the assets (7). Admissions or declarations of an agent cannot, of course, be received if there is no sufficient proof of agency.t’ Thus, whena policy was signed by A., professing to act on behalf of such agent, and a witness was called to prove the agent’s handwriting, and swore that he had often seen him sign policies for the defend- ant: the witness had seen no general power of attorney; nor did he know whether the defendant had given the agent authority to sign the policy in question; nor was he accquainted with any instance in which the defendant had paid a loss upon a policy so subscribed: Lord Ellenborough accordingly ruled [158*] *that the proof of agency was not enough (0). So one promoter of the company is not as such the agent of the others (c), though this presumption may of course be rebutted (@). The tendency of the courts is to limit the admissibility of evi- dence of this nature. The reasons upon which they so act have been forcibly summed up by the Court of Common Pleas (e), in a case in which it was decided that the statement of a pawn. broker’s assistant with reference to a private loan in which he was expressly authorized to make the representations by the officers of the ante, p. 16, note. But the error of admitting such dec- company. Fogg v. Griffin, 2 Allen, 1. (z) National Exchange Company of Glasgow v. Drew, 2 Macq. 103. (a) Meux’s Executor’s case, 2 D. M. & G. 522. 'To the same point, see Campbell v. Hastings, 29 Ark. 512; Rhodes v. Low- rv, 54 Ala. 4; Peck v. Ritchey, 66 Mo. 114; Coon v. Gurley, 49 Ind, 199; Francis v. Edwards, 77 N. C. 271; Rey- nolds v. Ferree, 86 Ill. 570. See, also, Barrow v. Brown, 23 La, Ann. 459; larations or admissions, before the. proper foundation has been luid, is cured by subsequent proof of his agency. Rhodes v. Lowry, supra. (b) Courteen v. Touse, 1 Camp. 43 n; but see Lord Kenyon’s decision in the earlier case of Neal v. Irving, 1 Esp. 61. (c) Reynell v. Lewis, 15 M. & W. 517. (d) Ibid.; Collingwood v. Berkeley, 15 C. B., N.S. 145; Lindley on Partner- ship, 253. (e) Garth vy. Howard, 8 Bing. 451, 294 OF THE AUTHORITY CONFERRED. [Boor 1. was not concerned as agent was rejected.. “It is dangerous,” said Chief Justice Tindal, “to open the door to declarations of agents, beyond what cases have already done. The declaration itself is evidence against the principal, not given upon oath; it is made in his absence, when he has no opportunity to set it aside, if incor- rectly made, by any observation or any question put to the agent; and it is brought before the court and a jury frequently after a long interval of time. It is liable, therefore, to suspicion origi- nally, from carelessness or misapprehension in the original bearer, and again to further suspicion from the faithlessness of memory in the reporter, and the facility with which he may give an un- true account. Evidence, therefore, of such a nature, ought al- ways to be kept within the strictest limits to which the cases have confined it.” CHAP. VII.] *CHAPTER VII. THE DOCTRINE OF CONSTRUCTIVE NOTICE. 225 [159*] THE DOCTRINE OF CONSTRUCTIVE NOTICE. PAGE. When notice to agent is notice to the principal.......-...-.ee0e- Statements of the law by Lord Hard- wicke, Lord Eldon, Leach, V.-C., and Wigram, V.-C..........+. Time when notice should be given 160 Conclusions to be deduced from the judgment of Wigram, V.-C., in Fuller v. Bennett . 161 General rule stated by Wilde, C. J. 162 Does any distinction exist between PAGE. Dicta of Lord Westbury and Kin- dersley, V.-C.....ceee sees scene The tendency of the courts is to limit the application of the doc- trine of constructive notice...... The notice must be of facts material to the employment of the agent. Illustrations............... Consideration of the circumstances that constitute notice........... When it is sought to affect a pur- chaser with constructive notice the question is, whether the omis- sion to obtain it is an act of cul- 163 163 163 163 the rules of law and those of pable negligence ........+.-4-+ 164 QL EYP a ceravascecsiaussolacosesauaie iol eievovaye 162 | Summary of propositions deducible Dresser v. Norwood........... 162} from the cases .......-.eee eee 164 Lorp Harpwicxe stated, in the year 1746, that it was settled law that notice to a person “who was employed in the thing by an- other person, or in another business and at another time,” is no notice to his principal who employed him afterwards, basing the reason of the rule on the ground that it would be very mischiev- ous if it was so, for the man of most practice and greatest emi- nence would then be most dangerous to employ (a). So to the same effect Lord Eldon observed, in Hiern v. Afill (6), which was decided in 1806, “notice to an agent is notice to the principal, if the agent comes to the knowledge of the fact while he is concerned for the principal, and in the course of the very transaction which becomes the subject of the suit.” So Vice-Chancellor Leach, in Mountford v. Scott (c), decided in 1818, observed that although notice to an agent is notice to a principal, the latter cannot stand (b) 13 Ves. 120, (c) 3 Mad. 34, (a) Worsley v. Earl of Scarborough, 8 Atk. 892; and see Warrick v. War- rick, ibid. 294. & 226 OF THE AUTHORITY CONFERRED. [Book 1. in the place of the principal until the relation of principal and agent is constituted; and as to all the information which he has previously acquired, the principal is a mere stranger. On [160*] appeal to Lord Eldon (@), the case was *decided upon a point which rendered the question of notice immaterial, namely, that a lien cannot be claimed where the terms upon which deeds are received are inconsistent with such lien. The principle which ultimately prevailed appears to have been first mentioned in the year 1706, in Brotherton v. Hatt (e); but that case is too loosely reported to be of practical use. In Mouwntford v. Scott(f), Lord Eldon, in commenting upon Sir John Leach’s remarks, ob- served: “The Vice-Chancellor in this case appears to have pro- ceeded upon the notion that notice to a man in one transaction is not to be taken as notice to him in another transaction; in that view of the case it might fall to be considered whether one trans- action might not follow so close upon the other as to render it impossible to give a ran credit for having forgotten it. I should be unwilling to go so far, or to say that if an attorney has notice of a transaction in the morning he shall be held in a court of equity to have forgotten it in the evening; it must in all cases depend upon the circumstances.” This statement was quoted with approval by Vice-Chancellor Sir James Wigram (9). The question was definitely raised in 1836 in a case heard by Lord Langdale (A), and it was decided that where one transaction was closely followed by and connected with another, or where it was clear, as in the case before the court, that a previous transac- tion was present to the mind of the solicitor when engaged in another transaction, there was no ground for the distinction by which the rule, that notice to the solicitor is notice to the client, had been restricted to the same transaction. This principle, how- ever, has not been adopted as a statement of the law. In Perkins v. Bradley (i), a solicitor, who prepared a deed of charge on behalf of a mortgagor and mortgagee, was held to have notice of that incumbrance on the occasion of taking a subsequent mortgage of the same property to himself. In a later case (h), (d) 1 Turn. & Russ, 274, (h) Hargreaves vy. Rothwell, 1 Keen, (@) 2 Verm. 574. 154. (f)1 Turn. & Russ, 274. (i) Supra. (g) Perkins v. Bradley, 1 Ha. 219. (&) Faller vy. Bennett, 2 Ha. 294. CHAP. VII] TUE DOCTRINE OF CONSTRUCTIVE NOTICE. 227 decided in 1843, Vice-Chancellor Wigram considered at length the authorities bearing upon the subject, and expressed an opinion that Lord Eldon did not by his dicta in Mountford v. Scott (2) intend to shake the general doctrine which he, as well as Lord Hardwicke and other judges, had so often *insisted [161*] upon (m). The facts of Puller v. Bennett are shortly these: During negotiations, in which A. agreed to sell and B. to buy an estate, A. agreed to mortgage the estate to C. for an old debt, notice of the agreement being given to B.’s solicitors. All nego- tiations for the sale remained then in abeyance for five years, at the end of which time A. died; B. then bought the estate at a lower price from A.’s devisee, and mortgaged it to D. The same solicitors were employed for B. and D. throughout the whole trans- action. It was urged in support of C.’s claim to a lien upon the estate to the amount agreed to be secured by the mortgage, that where one of two matters transacted by the same solicitor follows so close upon the other that the earlier transaction cannot have been out of the mind of the solicitor when engaged in the latter, there is no ground for restricting the notice to the client to the second transaction only; on the other hand, it was urged that the knowledge which the solicitor has must be acquired after and during the retainer, or it will not affect the client. The Vice-Chancellor refused to accede to either proposition in its full extent, but he held that, under the circumstances of the case, B. and D. had con- structive notice of the agreement with C. The conclusions to be deducted from his judgment are: (1.) The question is not simply one of memory on the part of the solicitor. (2.) The rule that notice to the solicitor will not bind the client, unless it is in the same transaction, or during the time of the solicitor’s employment in that transaction, is a rule positivi juris, but it certainly has no application when the same solicitor is employed by both parties, the vendor and purchaser. (3.) No solution, however, is offered of the abstract question, whether a purchaser, who for the first time employs a (2) Fuller v. Bennett, 2 Ha. 294. 220; Hiern v. Mill, 13 Ves. 120; Ken- (m) Warrick v. Warrick, 3 Atk. 294; nedy v. Green, 3 My. & K. 699, Steed v. Whitaker, Barnard, Ch. Rep. 228 OF THE AUTHORITY CONFERRED. [Book m1. solicitor (not being also the solicitor of the vendor), can be affected with constructive notice of anything known to the solicitor, save that of which the solicitor acquires notice after his retainer, and during his employment by the purchaser. Where there is a difference between an agent’s apparent and his real authority, the question of notice is of importance. [162*] *A general rule, as stated by Lord Chief Justice Wilde (m), is that where goods are placed in the hands of a factor for sale, and are sold by him under circumstances that are calculated to induce, and do induce, a purchaser to believe that he is dealing with his own goods, the principal is not permitted afterwards to turn round and tell the vendee that the character he himself has allowed the factor to assume did not really belong to him. But the case is different where the purchaser has notice at the time that the seller is acting merely as the agent of another. In Fish v. Kimpton (o), decided by the Court of Common Pleas in 1849, the jury found that the defendant bought goods with the knowledge that the sellers were merely factors in the sale, and the court held that if A. buys goods of B. knowing that B. is selling them as factor, he cannot in an action by the principal for the price, set off a debt due to him from B., although A. made the purchase bond fide. The Court of Common Pleas decided the case of Dresser v. Vor- wood (p), in the year 1863, on the ground that a distinction ex- isted between the doctrine of courts of law and courts of equity, and held that at law a principal is only affected with notice of those facts which come to the knowledge of the agent in the course of his employment; and not with knowledge acquired by him previously. In that case an agent of the defendant bought timber of the agent of the plaintiff, who sold in his own name. The former ageut knew that the latter was an agent in the transaction, but the defendant did not, and the court held that the defendants could not be affected with the knowledge of their agent, inasmuch -as his knowledge was acquired in the course of another employ- ment. This decision was reversed in the Exchequer Chamber, where Chief Baron Pollock said, “We think that in a commercial (n) Fish v. Kimpton, 7 C. B. 687. (p) 14 C. B., N.S. 574; in error, 17 (0) Supra. ibid. 466, CHAP. VII.] THE DOCTRINE OF CONSTRUCTIVE NOTICE. 229 transaction of this description . . . the knowledge of the agent, however acquired, is the knowledge of the principal,” and the court explained that the judgment was not understood as admit- ting that the case would have been different if the factor had been ignorant that the knowledge of the fact that the buyer’s agent was aware that he was only a factor was present to the mind of the buyer’s agent, provided it really was so present. *In a case decided by Lord Westbury, C., in 1863 (g), [163*] there is a dictum to the effect that in order to affect a prin- cipal with constructive notice of facts within the knowledge of the agent, the knowledge of the agent should be derived from the same transaction. To the same effect are the remarks of Vice- Chancellor Kindersley in Boursot v. Savage (r). But neither of these cases limit the decision in Puller v. Bennett (s). The doctrine of constructive notice, it has been said, ought not to be extended, but ought to be reduced within clear and definite principles; and in order to affect a principal with such notice of facts within the knowledge of an agent, it is necessary that the knowledge must be of facts which are material to that transaction, and which it was the duty of the agent to communicate (¢). And if a solicitor is employed todo a mere ministerial act, such as the pro- curing the execution of a deed, that fact does not so constitute him an agent as to affect his client with constructive notice of matters within the knowledge of the solicitor (w). Hence the tranferee of a mortgage is not affected by the knowledge of the solicitor (who acted for him in the transfer) of an incumbrance subsequent to the original mortgage so as to prevent him from making further advan- ces. Such knowledge is not material to the transfer(v). Hence, too, where W. wishing to take a transfer of a mortgage, employed A. and B. as his solicitors to investigate the title and conduct the negotiations, and C., the solicitor to the mortgagors, was employed to procure the execution by W. of the deeds of transfer, C. being aware of a judgment debt registered against the mortgagors, it was held (1) that the employment of the latter did not affect W. (q) Wyllie v. Pollen, 32 L. J., Ch. v. Pollen, 32 L.J., Ch. 782; and per 782. Lord Lyndhurst, Jones v. Smith, 1 Ph. (r) L. Rep., 2 Eq. 184, 142. 244; 12 L. J., Ch. 381. (s) 2 Ha. 394. (u) Ibid. (t) See per Lord Westbury, Wyllie (v) Wyllie v. Pollen, supra. 230 OF THE AUTHORITY CONFERRED. [Book 11. with notice of the debt; (2) that, even if he had been W.’s agent, the knowledge of the debt not being material to the business for which he was employed, it could not have been O.’s duty to commu- nicate it to W. W. was accordingly held entitled to tack further advances (w). The grounds upon which the doctrine rests have been differently stated. Thus it has been said in the case of a so- licitor that the probability is so strong that he will tell his {*164] client what he knows *himself, that it amounts to an ir- resistible presumption that he did tell him. Vice-Chan- cellor Kindersley stated the principle to be that a solicitor is an alter ego; he is another self; his client stands in precisely the same position as he does in the transaction, and therefore his knowledge is his client’s knowledge (y). When a person has actnal notice of any matter of fact, there can beno danger of doing injustice, if he is held to be bound by all the consequences of that which he knows to exist. But where he has not actual notice, he ought not to be treated as if he had act- ual notice, unless the cireumstances are such as enable the court to say, not only that he might have acquired, but also that he ought to have acquired, the notice with which it was sought to affect him; that he would have acquired it but for his gross neg- ligence in the conduct of business in question (z). The question, when it is sought to affect a purchaser with constructive notice, is not whether he had the means of obtaining, and might by pru- dent caution have obtained the knowledge in question, but whether the not obtaining it was an act of gross or culpable neg- ligence (2). Thus the imputation of culpable negligence cannot be fixed on a purchaser, merely because it did not occur to him or his advisors to enquire whether a transaction, legally valid, and under which there had been long enjoyment, e. g., for thirty-three years, might not have been so conducted in its origin as to have given to third persons equitable rights, of which there was no trace on the face of the abstract (2). ' The following principles appear to be deducible from the cases: (1.) As to knowledge acquired by an agent during his em- ployment as agent. It is well settled, and is univers-. (x) Wyllie v. Pollen, 32 L. J., Ch. 782. (z) Per Lord Cranworth, Ware v. (y) Boursot v. Savage, L. Rep.,2 Kg. Lord Egmont, 4 De G., M.& G. 473. 142. CHAP. VI] THE DOCTRINE OF CONSTRUCTIVE NOTICE. 231 ally true, that a principal is affected with constructive notice of all such knowledge (a), provided the knowl- edge is of facts which are material to the transaction in which the agent is employed, and which it was the duty of the agent to communicate (0) : (2.) As to knowledge acquired by an agent otherwise than in the business for which he was employed. In *commercial transactions the knowledge of [(165*] the agent, however acquired, is the knowledge of the principal (c). Where the same solicitor is em- ployed by a vendor and purchaser, the latter will be affected with constructive notice of the knowledge possessed by the solicitor, although that knowledge was acquired before the retainer by the purchaser (@):" (a) Fuller v. Bennett, supra, and cases there quoted; Wyllie v. Pollen, supra; Boursot v. Savage, supra. (b) Wyllie v. Pollen, supra; Jones v. Smith, 1 Ph. 244. (c) Dresser v. Norwood, 14 C. B., N. S. 574; in error, 17 ibid. 466. (d) Fuller v. Bennett, 2 Ha. 394. 1The rule is generally stated to be that notice to an agent, of any fact con- nected with the business in which he is employed, is notice to the principal. Wade on Notice, § 672; Bracken v. Miller, 4 W. & 8S. 102; Astor v. Wells, 4 Wheat. 466; Reed’s Appeal, 34 Penn. St. 207; Jackson v. Sharp, 9 Johns. 162; Jackson v. Winslow, 9 Cow. 13; Jack- son v. Leek, 19 Wend. 339; Bank of U. S. v. Davis, 2 Hill, 451; Mechanics’ Bank v. Seton, 1 Pet. 309; Sterling Bridge Co. v. Baker, 75 Ill. 189; Will- jams v. Tatnall, 29 id. 553; Mobile & O. R. R. Co. v. Thomas, 42 Ala. 672; Flower v. Ellwood, 66 Ill. 441; Singer Manfg. Co. v. Holdfodt, 86 id. 455; Farmer v. Willard, 71 N. C. 284; Owens v. Roberts, 36 Wis. 258; Union Gold Mining Co. v. Rocky Mountain Nat. Bank, 2 Col. Ter. 565; Whitehead v. ‘Wells, 29 Ark. 99; Suit v. Woodhall, 118 Mass. 391; Quincy Coal Co. v. Hood, 77 Il. 68; Allen v. Poole, 54 Miss. 323; Mass. Life Ins. Co. v. Eshelman, 30 Ohio St. 647; Gans v. St. Paul F. & M. Ins. Co., 43 Wis. 108; Slater v. Irwin, 33 Iowa, 261. But the principal will not be affected by notice to the agent of any fact out- side the scope of his agency. See Roach v. Karr, 18 Kan. 529; Adams Exp. Co. v. Trego, 85 Md. 47; Congar v. C. & N. W. R'y Co., 24 Wis. 157; Smith v. Water Commissioners, 38 Conn. 208; Mound City Life Ins. Co. v. Twining, 19 Kan. 380; Wells v. Am. Exp. Co., 44 Wis. 342. Thus, a railroad company is not liable for a mistake made by its agent in Chi- cago, in forwarding goods directed te a point near the line of its road in lowa (such agent having used proper care and diligence), although its agents in Iowa knew the proper route for sending the goods. Congarv.C. & N. W. R’y Co., supra. ; : The rule that notice of facts to an agent is constructive notice thereof to the principal himself, has no application to a case of a sale to a corporation, by its president, of property purchased by him in his private capacity. In such a transaction, the officer, in making the 232 OF THE AUTHORITY CONFERRED. [Book 1. It is assumed, however, that in both these cases the knowledge acquired must be material to the transac- tion for which the solicitor or other agent is employed. (3.) When it is sought to fix a purchaser with constructive notice, the question is whether the not obtaining the sale and conveyance, stands as a stran- ger to the company. Barnesv. Trenton Gas Light Co., 27 N. J. Eq. 33. The rule is for the protection of inno- cent third persons. If a person col- ludes with an agent to cheat the princi- pal, the latter is not responsible for the act or knowledge of the agent. Nat. Life Ins. Co. v. Minch, 53 N. Y. 144. The notice, to be effectual, must be to the principal’s agent, and not to an agent or attomey employed by the prin- cipal’s agent. Hoover v. Wise, 91 U. 8. 308; S. C. 3 Cent. Law Jour. 277; 14 Nat. Bank. Reg. 264. * As respects the place, manner and time of acquiring the knowledge, Mr. Wade lays down the rule in his work on the Law of Notice, that ‘‘ where, at the time of a transaction by one acting in the capacity of agent, the recollection of the fact, with notice of which it is sought to charge the principal, is pres- ent to the mind of the agent, whereso- ever, howsoever, or whensoever the knowledge of such fact was obtained, such knowledge will be the knowledge of the principal, provided it came to the agent in a manner that he might com- munjcate it or act upon it, without be- ing guilty of a positive violation of duty.”’ Wade on Notice, § 687, citing Le Neve v. Le Neve, 3 Atk. 646; Broth- erton v. Hatt, 2 Vern. 574; Dresser v. Norwood, 17 C. B. (N. 8.) 466; Will- jams v. Tatnall, 29 Ill. 553; Wiley v. Knight, 27 Ala. 336; The Distilled Spirits, 11 Wall. 856; Hart v. Farmers’, etc. Bank, 33 Vt. 252; Patton v. Ins. Co. 40 N. H. 375; Pritchett v. Sessions, 10 Rich. Law, 293. See, also, to the same effect, Dunlap v. Wilson, 32 IL. 517; Hovey v. Blanchard, 13 N. H. 145; Van Schoick v. Niagara Fire Ins, Co., 68 N. Y. 434; Tagg v. Tenn. Nat. Bank, 9 Heisk. 479; Curts v. Cesna, 7 Biss. 260. The above doctrine is, however, ques- tioned by a large class of cases, some of which insist that the knowledge shall be acquired by the agent during the agency. Wade on Notice, § 688, citing Hood v. Fahnestock, 8 Watts, 489; N. Y. Cent. Ins. Co. v. Nat. Prot. Ins. Co., 20 Barb. 468; Smith’s Appeal, 47 Penn. St. 128; Mehan v. Williams, 48 id. 228; Day v. Walmsley, 33 Ind. 145; Blumenthal v. Brainard, 38 Vt. 402; Hayward v. Nat. Ins. Co., 52 Mo. 181; Warwick v. Warwick, 3 Atk. 291; Norris v. Le Neve, id. 26; Mechanics’ Bank v. Shaumburg, 88 Mo. 228; How- ard Ins. Co. v. Halsey, 8 N. Y. 271; McCormick v. Wheeler, 36 Ill. 115; Houseman v. Mut. Building Ass'n, 81 Penn. St. 256. To the same effect, see, also, Pepper v. George, 51 Ala. 190; Pringle v. Dunn, 37 Wis. 451. See, also, Stanley v. Chamberlin, 39 N.° J. Law, 565. Some hold that it should come to him in such a manner and under such circumstances that he may be presumed to have communicated it to his principal. Wade on No- tice, § 688, citing Winchester v. Bal- timore R. R. Co., 4 Md. 231; La Forge Ins. Co. v. Bell, 22 Barb. 54; Thomp- son v. Cartwright, 33 Beav. 178; Ken- nedy v. Green, 3 Myl. & K. 699. The subject will be found more fully considered in Wade on Notice, §§ 687 et seq. See, also, a paper on the sub- ject in 16 Am. Law Reg. (N. 8.) 1. CHAP. ViI.] THE DOCTRINE OF CONSTRUCTIVE NOTICE. 233 knowledge was an act of culpable negligence on the part of his agent, and not whether the agent had the means of obtaining that knowledge (e). (e) Ware vy. Lord Egmont, 4 De G., M. & G. 460. 234 [166*] OF THE AUTHORITY CONFERRED. *BOOK IL.— [BOOK m1: PT. 1. PART IL OF THE EXECUTION OF THE AUTHORITY. CHAPTER IL OF THE EXECUTION OF THE AUTHORITY GENERALLY. PAGE. Twofold inquiry in considering whether an agent has contracted so as to bind the principal. An authority may be sometimes well executed though not strictly pur- sued The true principle stated by Holt, 166 Mote aeadiy see Pesee Peave Ns 167 A circumstantial variation in the execution of an authority is not material .......0-ese cess eee eee 167 What a material and substantial VAYIANCE . 2. sc csee ccc aces eee 168 PAGE, When the agent has done more or less than his authority re- quired Opinions of Sir Thos. Clarke and Sir W. Page-Wood, V.-C When there is a complete execution and something ex abundanti is added, the excess is void When there is an incomplete exe- cution, or when the boundaries between the excess and the exe- cution cannot be distinguished, the execution is bad steer ccreee In considering whether the contract of an agent is binding upon his principal, a twofold inquiry arises. The first concerns the form in which the contract is executed — Is it such as is binding upon the principal? The second relates to the authority of the agent — Has he authority, and, if so, how has he observed it? By pursuing the latter inquiry, it will be seen that an agent may profess to act on behalf of a principal, and in so doing he may either act altogether without authority, or, having an authority, he may execute it more or less completely. In short — (a) He may execute an authority strictly, or with only a cir- cumstantial variance (a); or (b) He may act entirely without authority; or (a) Com. Dig. ‘‘ Attorney,’’ c. 15. OUAP. IJ EXECUTION OF THE AUTIORITY GENERALLY. 235 (c) Having authority, he may do something in excess in executing his authority, or he may do less than his authority justifies. If an agent strictly observes his authority, it will depend upon the form and construction of the contract into which he enters, *whether his act will bind his principal and not [167*] himself. Although an act varying in substance from the authority is void so far as the principal is concerned (6), yet there are a number of cases in which an authority will be deemed to be properly executed though it is not strictly pursued. Thus, if ex- ecutors have authority to sell land, and one of them refuse, the others may sell-(c); or if one dies (d). So, if one devises to A., B. and C. in fee for sale, and makes them executors, if A. refuses, B. and C. may sell (ec). It is sufficient if the words and intent of the authority are generally pursued; as if a man devise land to A. for life, and afterwards to be sold by his executors generally; if one dies before A., the rest may sell (7). So, too, if the agent does ail that the law requires, the authority is well executed, though the direction of the principal is not strictly pursued; as if a man has an authority to enter into land, if he comes as near as he can for doubt of death or bodily hurt, and makes claim, it is suffi- cient (7). This latter principle is too generally worded. The correct principle is undoubtedly that laid down by Chief Justice Holt, who delivered the opinion of the court in Parker v. Kett (h), 1701, where it is laid down that a circumstantial varia- tion in the execution of an authority is not material. “ Author- ities by letter of attorney,” said his lordship, “are either general or special; thus a letter of attorney may be to sue in omnibus causis motis et movendis, or to defend a particular suit. Sir Philip Sydney, when he went to travel, gave a letter of attorney to Sir Thos. Walsingham to act and sell all his goods and chattels; and this was held good. Where the authority is particular the party must pursue it. If the act varies from it, he departs from his authority, and what he does is void; but that must be intended of a variance not in circumstance, but of a variance material and substantial.” b) Com. Dig. “ Attorney,” c. 13. (f) Co. Litt. 112b, 13a. (c) Co. Litt. 113 a. (g) Co. Litt. 258 a, (d) R. Cro. Car. 382. (A) 1 Salk. 95. (e) B. Cro. Eliz. 80. 236 OF THE AUTHORITY CONFERRED. [BOOK II: PT. IL. This distinction has been adopted by Mr. Justice Story (2): he observes that “it may be Jaid down as a general rule that in order to bind the principal (supposing the instrument in other respects to be properly executed), the acts done must be within the scope of the authority committed to the agent;! in other [168*] *words, his authority or commission must be punctiliously and properly pursued, and its limitations and extent duly observed, although a circumstantial variance in its execution will not defeat it. If the act varies substantially (and not merely in form) from the authority or commission in its nature, or extent, or degree, it is void as to the principal, and does not bind him.” ? Such being the principle, it would be very desirable to define the words “ material and substantial variance.” To do so with pre- cision is, perhaps, impossible. It is evident to anyone who considers the matter, that the vari- ance between the act done by an agent and the act authorized by the principal, may range through every degree of difference. The variance may be infinitesimal, or it may be so great as to mark an absolute departure from the authority conferred. To determine the exact point between those two extremes at which a variance becomes substantial and material, often gives rise to difficult ques- tions. The result in each case must depend upon the circum- stances of the particular case. Certain cases are sufficiently clear. Thus, if a person is authorized to contract for the erection of a church, and he contracts for the erection of a dwelling-house; or if his commission is to sell a quantity of corn, and he sells a quan- tity of bread; or if he has authority to buy unsawn timber, and he buys furniture, the variance is manifestly material. The cases already referred to in the chapter upon the implied authority of agents may be usefully consulted in further illustration of this subject. The following cases also may be referred to: A power of attor- ney empowering an agent “to demand, sue for, recover and receive, by all lawful ways and means, all moneys, debts and dues whatso- ever, and to give sufficient discharges,” does not authorize him to (i) Story on Agency, § 165. note; Nixon v. Hyserott, 5 Johns. 58; 1See ante, p. 105 and note, pp. 138, North River Bank v. Aymer, 8 Hill, 140, 262; Meade v. Brothers, 28 Wis. 689. 3 See ante, pp. 108, 115, note, 145, CHAP. LL] EXECUTION OF THE AUTHORITY GENERALLY. 237 indorse bills for his principal (7); but where an agent is author- ized to act for the principal generally, in his absence, the agent has authority to instruct a solicitor to appear on behalf of the principal to show cause against an adjudication of bankruptey (A). In Willis v. Palmer (1), a shipowner authorized an agent to sigu any bottomry bond or instrument of hypothecation on the vessel or her cargo, and to sell and dispose of either absolutely, or by way of mortgage or otherwise, as he *should think [169*] proper, the vessel or any share thereof, and to execute all instruments and to do all acts which should be requisite and necessary for completing such sales, transfers, mortgages, or any of them, and generally to do all the acts about the business and the affairs aforesaid, which the owner, if present, could have done, The Court of Common Pleas held that this power authorized the agent to assign the passage money of the passengers on board by way of security for the repayment of 4,0002. advanced for the purpose of enabling the ship to sail. So where certain shipowners whose vessel had once been classed A 1 at Lloyd’s in London, em- powered their agent by letter of attorney to charter the vessel or to employ her as a general ship on any voyage, on such terms and in such manner and in all respects as he should think proper, and generally to represent the owners in relation thereto, and in relation to her management or sale, as fully as if the owners were personally present, and so do all things necessary for that purpose, the Court of Exchequer held that the agent had duly executed his authority, though he gave a warrant in a charter-party that the ship was A 1 at Lloyd’s at the time of the charter-party, though she was not so described in the power of attorney (m). As to implied powers to indorse, see further E'sdaile v. La Nauze (n); Bank of Bengal v. M’ Leod (0). As to the second class of cases, the rule is that a person who enters into a contract as agent, and without authority, renders himself liable (7). (j) Murray v. East India Company, 5 (m) Routh v. McMillan, 2 H. & C. B. & Ald. 204. 750; 33 L. J., Ex. 38. 1See ante, pp. 111, 116, notes. (n) 1 ¥. & C. 394, (k) Ex parte Frampton, 1 De G., F. (0) 7 Moore, P. C. C. 35. & J. 263. (p) See Book III, Chap. IV, post, p. @ 70. B., N.S. 340; 291. J.,C. P. 299. 194, 238 OF THE AUTHORITY CONFERRED. [Book II: Pr. 11. As to the third class of cases, one of the earliest authorities is contained in Lord Coke’s “Commentary upon Littleton,” where it is said: “Regularly, it is true, that where a man doth less than the commandment or authority committed unto him, there (the commandment or authority being not pursued) the act is void. And when a man doth that which he is authorized to do, and more, there it is good for that which is warranted, and void for the rest: yet both these rules have divers exceptions and limita- tions” (g). The instance given by Littleton of an exception in the former rule, is that if a man be so languishing or decrepit that he cannot by any means come to the land, nor to any parcel of it, or if there be a recluse, which may not, by reason of - [170*] his *order, go out of his house, if such manner of person command his servant to go and make claim for him, and such servant dare not go to the land, nor to any parcel of it, for doubt of beating, mayhem, or death, and for this cause the ser- vant come so near to the land as he dares for such doubt, and makes the claim for his master, it seems that such claim for his master is strong enough, and good in law” (rv). The summary of the law by Sir Thos. Clarke, in Alewander v. Alewander (s), is to the effect that where there is a complete execution of a power and something ex abundanti added, which is improper, there the exe- eution is good, and only the excess is void; but where there is not a complete execution of a power, or where the boundaries be- tween the excess and execution are not distinguishable, it will be bad. Hence, where an appointment has been made to the objects of a power, and a restriction in excess of the power has been superadded, the restriction is void and the appointment is good (¢). In Re Brown’s Trusts (uv), where an appointment under a power was held void zm toto, Sir W. Page-Wood, V.-C., observed, “I think the case is quite clear. It is obvious that as to some of the (q) Co. Litt. 258 a. (r) Co. Litt. 258 a. (s) 2 Ves. 644. If a contract which need not be un- der seal, is executed by an agent hay- ing authority to execute simple con- tracts, but not sealed contracts, and has a seal affixed to it, it will be valid as a simple contract. Dickerman v. Ashton, 21 Minn. 538. See, also, Stowell v. El- dred, 389 Wis. 614; Evans v. Weils, 22 ‘Wend. 341. See generally as to the execution of powers, Sugd. on Powers, ch. 6. (t) Kampf v. Jones, 2 Keen, 756; Harvey v. Stracey, 1 Drew, 73, 138; Churchill v. Churchill, L. Rep., 5 Eq. 44. (u) L. Rep., 1 Eq. 74. cmap. 1.] EXECUTION OF THE AUTHORITY GENERALLY. 239 objects of it the appointment is in excess of the power, as to others it may be within it; but as I cannot possibly define the class which may fall within the power and those which must be with- out it, I cannot make any distinction, and must therefore hold that the whole gift fails.” 240 OF THE AUTHORITY CONFERRED. [Book m: pr. 1. [171*] *CHAPTER IL OF THE EXECUTION OF AUTHORITY BY INSTRUMENT UNDER SEAL, PAGE. PAGE, A deed may be so executed as to sumed to do something which he bind the principal only, or the had no power to do............ 172 agent only, or it may be void... 171 | Contracts by agent to do what he When it binds the principal...... 171 cannot perform to be distin- An agent may make himself a con- guished from cases where he con- tracting party, although he pro- tracts to do something on behalf fesses in the instrument to con- of another..........esceeesees 172 tract on behalf of another...... 172 | The signature ‘‘ A. B. for C. D.”... 173 Deeds void at common Jaw on the Non-liability of principal where ground that the agent has as- agent contracts personally by deed 174 In executing his authority an agent must take care so to execute it as not to render himself personally liable. There is a great number of authorities reported under this head, but inasmuch as different rules apply to different sets of circumstances, it will be convenient to consider the authorities in the following order: A. In the case of instruments under seal. B. In the case of instruments other than deeds, 1. Bills of exchange. 2. Promissory notes. 3. Charter-parties not under seal. 4. Bought and sold notes. C. In other cases. First as to deeds. A duly authorized agent may so execute a deed that — (a.) It will bind the principal, and not himself; or (b.) It will bind himself, and not the principal; or (c.) It will be void. A deed will bind the principal if executed in his name and on his behalf, and this fact appears on the face of the instrument "In order to bind the principal by an may, 29 id. 837; Lutz y. Linthicum, 8 instrument under seal, the instrument Pet. 165; Stinchfield v. Little, 1 Greenl. must purport to be made and sealed in 231; Stone v. Wood, 7 Cow. 452; Ful- the name of the principal. Echols v. lam y. West Brookfield, 9 Allen, 1; Cheney, 28 Cal. 157; Morrison v. Bon- Townsend v. Corning, 23 Wend. 435; CHAP. I1.] As to the signature, sealing, EXECUTION OF AUTHORITY UNDER SEAL. 241 and delivering, a rule has been laid down in an early case for the guidance of the agent. If A. B. duly authorize C.D. to execute a deed for him, C.D. may do this either by writing “A. B. by C. D., his attorney,” or by writing “C. D., for A. B.,” provided he delivers the instrument as the deed of A. B. (a). *If an agent makes himself a contracting party he will [172*] be liable on the deed, aithough he may profess in the in- strument to contract on behalf of a third party.?, The main ques- Briggs v. Partridge, 64 N. Y. 358; Hopkins v. Mehaffy, 11 8. & R. 126; Hancock y. Yunker, 83 Ill. 208; Ein- stein v. Holt, 52 Mo. 840; Grubbs v. Wiley, 17 Miss. 29; Webster v. Brown, 2 Rich. (N. 8S.) 428; City of Providence v. Miller, 11 R. I, 272; Elwell v. Shaw, 16 Mass. 42; Brinley v. Mann, 2 Cush. 337. See, also, cases cited in note, p. 172. It is not necessary to the proper exe- cution of a deed by an attorney-in-fact, that he should sign his name to it; the name of the principal alone is sufficient. Devinney v. Reynolds, 1 W. & 8S. 328; Forsyth v. Day, 41 Me. 382; Hunter v. Giddings, 97 Mass. 41. See, also, Daniel's Neg. Inst. § 299. See, how- ever, contra, Wood v. Goodridge, 6 Cush, 117. In Townsend v. Corning, 23 Wend. 435, it was held, that if the attorney affix only his own name the covenant is void, although in the body of the in- strument it is stated that it is the agree- ment of the principal by A. B., his attorney, that the principal covenants, etc., and in the in testimonium clause it be alleged that A. B., as the attorney of the principal, hath set his hand and seal. See Bogart v. De Bussy, 6 John. 94. But where a contract is entered into or a deed executed in behalf of the government by a duly authorized public agent, and the fact so appears, notwith- standing the agent may have affixed his own name and seal, it is the contract or 16 deed of the government, and not of the agent. Stinchfield v. Little, supra; City of Providence v. Miller, supra; Hodgson v. Dexter, 1 Cranch, 335; Walker v. Swartwout, 12 John. 444; Freeman v. Otis, 9 Mass. 272. Nevertheless, if such an officer chooses to contract personally, he will be per- sonally bound. Sheffield v. Watson, 3 Cai. 99; Gill v. Brown, 12 John. 385; Horsley v. Bell, 1 Bro. C. C. 101, note; City of Providence v. Miller, supra. It has been held, however, that the rule in regard to public officers does not apply in favor of the officers of a mu- nicipal corporation which is capable of making contracts for itself, and is liable to be sued thereon. City of Providence v. Miller, supra; Simonds v. Heard, 23 Pick. 120; Hall v. Cockrell, 28 Ala. 507. (a) Wilks v. Back, 2 East, 142. 1Grubbs v. Wiley, supra. ? Where the deed purports to be made by the agent and to be sealed by him, and not to be made and sealed by his principal, the agent will be personally liable, and the description of himself as agent will not exclude his personal re- sponsibility. ‘Lutz v. Linthicum, 8 Pet. 165; Stinchfield v. Little, 1 Greenl. 231; Fullam v. West Brookfield, 9 Allen, 1; Duvall v. Craig, 2 Wheat. 45; Deming v. Bullitt, 1 Blackf. 241; White v. Skin- ner, 13 John. 307; Tippets v. Walker, 4 Mass. 595; Quigley v. De Hass, 82 Penn. St. 267; Kiersted v. Orange & A. R. R. Co., 69 N. Y. 343; City of Provi- 249 OF THE AUTHORITY CONFERRED. [BOOK If: PT. 11. tion to be decided in all these cases is this: Do the terms of the instrument disclose a personal undertaking or not? There are numerous instances in which agents have contracted on behalf of others but in their own name, and have accordingly been held personally liable (). There is another class of cases, in which deeds executed by an agent have been declared void at common law, on the ground that the agent has by the words of the deed assumed to do something in his own name with the property of his principal which he had no power to do in his own name (¢). The following cases illustrate the above propositions: In Cass v. Rudele (d), 1692, defendant covenanted on behalf of dence y. Miller, 11 R. I. 272; Stone v. Wood, 7 Cow. 453; Taft v. Brewster, 9 John. 334; Hancock v. Yunker, 83 IIl. 208; Ulam v. Boyd, 8. Ct. Penn, 7 Re- porter, 408. See, also, Menard v. Crowe, 20 Minn. 448. Thus, a contract in this form: ‘‘ We, the undersigned, a committee chosen by the town of A. to finish a basement of their town-house, do hereby agree to pay,’’ etc., for the finishing of said basement, and signed and sealed by the committee as ‘‘committee for the town,”’ is not the contract of the town, but of the individuals who sign it. Fullam v. West Brookfield, supra; Ulam v. Boyd, supra. Where an agent made a written con- tract for his principal and also for him- self in his own right, purporting to be a contract under seal, and affixed the seal opposite his own signature: Held, that such seal might be regarded as the seal of the principal as well as of him- self. The State v. Spartansburg & U. R. R. Co. 8 Rich. (N. §.) 129. The rule that a contract under seal executed by an agent in his own name, does not bind nor confer any rights upon the principal in whose behalf it was really made, when he is not named therein, is, however, subject to excep- tions. Thus, where the instrument would be valid without a seal, it is to be treated, though in fact under seal, as mere evidence of a simple contract. Stowell v. Eldrid, 89 Wis. 614; Evans v. Wells, 22 Wend. 341. See, also, Dubois v. Delaware & H. Canal Co., 4 Wend. 285. ‘When a deed is executed in behalf of a state by a public officer duly author- ized, and this fact appears upon the face of the instrument, it is the deed of the state, notwithstanding the officer may be described as one of the parties, and may have affixed his individual name and seal. In such case the state alone is bound by the deed and can alone claim its benefits. Sheets v. Shel- den, 2 Wall. 177. In Daughtrey v. Knolle, 44 Tex. 450, a deed by one who signed as attorney- in-fact for another, for land which in the body of the deed appeared as the property of the principal, to whom also the purchase money was secured by notes payable to him, as recited in the deed, and which was acknowledged by the maker as attorney-in-fact for the principal, but which deed, in the grant- ing and warranty clauses, appeared to be the act of the attorney, was held in equity to be the deed of the principal, and the warranty clause not to be bind- ing upon the attorney. (b) See cases infra, (c) Frontin v. Small, infra. (d) 2 Vern. 280, omar. 11.] EXECUTION OF AUTHORITY UNDER SEAL. 243 another person to purchase certain houses for 8002., and he was held personally liable. The case is badly reported in Vernon. Where a bond, reciting that differences subsisted between A. B. and the plaintiff, was conditioned to be void if the defendant “ for and on behalf of A. B.,” should perform the award of certain arbi- trators, the court held that an award directing payment of a sum of money by the defendant, made in accordance with the submis- sion, was binding on the defendant (e). M. Frontin v. Small (f'), 1726, was an action in covenant. In the declaration the plaintiff stated that by a deed made between herself, “ attorney of James Frontin of the one part,” and the de- fendant of the other part, she “for and in the name and as attorney of the said James,” demised a house to the defendant, who agreed to pay rent “to the said James Frontin.” The deed was declared void by the whole court, on the ground that an agent has no power to exeente a deed for another in his own name. Appleton v. Binks (g), 1804, was an action in covenant. Cer- tain covenants were expressed to be made between the plaintiff on the one part, and the defendant, by the name of J. Binks, *of, etc., “for and on the part and behalf of the Right [173*] Hon. Lord Viscount Rokeby,” of the other part. The deed was sealed with the defendant’s seal. In consideration of 6,0002. paid by Lord Rokeby, the plaintiff covenanted to make certain conveyances to the said Lord Rokeby. In consideration of this covenant, the defendant “for himself, his heirs, ete., on the part and behalf of the said Lord Rokeby,” covenanted with the plaintiff that Lord Rokeby should pay to the plaintiff the amount of 6,0002. purchase money at the time of sealing and ex- ecuting the conveyances. The plaintiff averred that the money had not been paid. The defendant demurred, and urged first, that a deed could not be made by an agent as such; or, secondly, if it could, covenant did not lie against him, upon articles describing him to be merely agent for another. Judgment, however, was given for the plaintiff. Lord Ellenborough and the other judges were of opinion that it could not be contended that where one covenants for another he is not bound by the act, the covenant (e) Clayhill v. Fitzgerald, 1 Wils. 28, (f) 2 Ld. Raym. 1419; 8. C. 2 Str, 58; and see Bacon v. Dubarry, 1 Ld. 705. Raym. 246; 8. C. 1 Salk. 70. g) 5 East, 148, 244 OF THE AUTHORITY CONFERRED. [Book II: Pr. 1, being in his own name, “for himself, his heirs, etc.;” that there was nothing unusual or inconsistent in the nature of the thing that one should covenant to another that a third person should doa certain thing. The party to whom a covenant is made may pre- fer the security of the covenantor to that of his principal; and it was quite possible in the present case that the defendant con- sented to bind himself upon an indemnity. Wilks v. Back (h), 1802, was a motion to set aside an award. The sole question was whether the bond of submission to arbitra- tion had been duly executed. Wilks was duly authorized by one Browne to submit certain matters in dispute to arbitration. By virtue of this authority he executed the bond in this form: “For J.B. M. W. (1.8) Wilks, being a party, signed, sealed and delivered for himself as well. Grose, J., observes: “No doubt the award must be mutual. . but this is sufficient execution by both. I accede to the doctrine in all the cases cited, that an attorney must execute his power in the name of his principal, and not in his own name; but here it was so done, for where is the difference between sign- ing ‘J. B., by M. W., his attorney’ (which must be admitted to be good), and ‘M. W., for J. B.” ?” Lawrence, J., distinguishing the case from /’rontin v. Small (0), said: “This is not like the case in Lord Raymond’s Re- [174*] ports, *where the attorney had demised to the defendant in her own name, which she could not do; for no estate could pass from her, but only from her principal. But here the bond was executed by Wilks, for and in the name of his princi- pal; and this is distinctly shown by the manner of making the signature. Not that even this was necessary to be shown; for if Wilks had sealed and delivered it in the name of Browne, that would have been enough, without stating that he had so done. There is no particular form of words to be used, provided the act be done inthe name of a principal.” In Gardner v. Lachlan (k), 1888, the Lord Chancellor (Brougham) says: “The whole question turns upon the charter- party and the rights and liabilities under it. It is an instrument under seal, and the parties to it are the Commissioners of the Navy, (Ah) 2 East, 142. (k) 6 Sim. 407; 8 Sim. 123; 4 My. (‘) Supra. oe & C. 129. CHAP. I1.] EXECUTION OF AUTHORITY UNDER SEAL. 245 and the defendant L., who is described in the deed as acting for and on behalf of the owners, but he only is the party to it.” In Lanner v. Christian (1), 1855, an agreement in writing was expressed to be made “between Christian, for and on behalf of Norris, of the first part, and Tanner of the second part.” By it Christian, on the part of Norris, agreed to let to Tanner certain premises for a term of years, Tanner paying rent to Christian for the use of Norris, Tanner to take a lease when called upon to do so by Christian on the part of Norris. The defendant signed this agreement in his own name. In an action for not completing the lease, the court held that it sufficiently appeared to be the in- tention of the parties that the defendant shonld himself contract, and that therefore he was personally liable. Lewis v. Nicholson (m), which was decided on the authority of Downman v. Williams (n), was distinguished by Lord Campbell on the ground that the defendants there were not in any way to act in carrying out the agreement. They were solicitors who signed for and on behalf of their clients. Pickering’s claim (0), decided in 1871, was an appeal from a decision of Vice-Chancellor Stuart, rejecting a claim of 292,0000. in the winding up of the International Contract Company. By two agreements under seal, J. P. assigned certain concessions to *E. Pickering (the managing director of the above com- [175*j pany) for a large consideration. The only parties to the deeds were J. P. and E. Pickering, nor did it appear from the in- struments that E. P. was acting on behalf of the company. Evi- dence, however, was given that the negotiations for the assignments were in great part conducted in the presence of several directors of the company, and that J. P. was informed by E. Pickering be- fore the execution of the agreements, that the latter was acting on behalf of the company. The company paid part of the amount, and was subsequently ordered to be wound-up. The lords justices affirmed the decision of the court below, rejecting the claim for the residue of the amount. For the appellant it was urged that he had dealt with E. Pickering as a trustee for the company, and that although the deeds were under seal, yet in equity the sub- stance rather than the form of the transaction would be regarded. (1) 4E. &B. 591. (n) 7 Q. B. 103. (m) 18 Q. B. 503. (0) L. Rep., 6Ch. 525, 246 OF THE AUTHORITY CONFERRED. [BOOK II: PT. it. Their lordships did not call upon the counsel for the official liqui- dator. ‘The deed being under seal, the appellant has elected to charge E. Pickering alone. If a lessee assigns the lease to a trustee for a third party, and the trustee covenants with the as- signor to indemnify him, the assignor has accepted the trustee as the party liable, and cannot sue the cestut gue trust.” Lord Jus- tice James thought the case thus put by Lord Justice Mellish precisely in point. CUAP. III. ] *CHAPTER III. EXECUTION OF PAROL CONTRACTS. OF THE EXECUTION OF PAROL CONTRACTS. PAGE. Srcr. 1.— The drawing and ac- cepting Bills of Exchange. - Digest OF RULES........-+ee ee 177 Lord Ellenborough’s statement of the universal rule...........--- 177 Bill drawn on officer of company ac- cepted personally, he is liable .. 178 So where the bill is drawn upon the agent in person.....++sseeeeees No one is liable as acceptor but the person to whom the bill is ad- dressed, unless he is acceptor for HOvOUE ss49 sesers weeawoe ote es Acceptance by the hand and in the name of the drawee’s agent .... 179 Bill drawn on partnership.... ... 179 Bill drawn on several and accepted by one, the latter liable........ 180 Rules where the mode of acceptance is prescribed by statute......... Where a bill drawn on one is ac- cepted by him on behalf of others, the drawee is liable............ How far an agent will be allowed to allege want of consideration.. 183 Bill drawn by broker ........---- 184 Bill drawn on company accepted by GirectOrs......seeeeeececeevece 185 Srct. 2.— Promissory Notes. Digest oF RULES........----+- Personal promise, but signature on behalf of others...... ..--..5- Joint and several promise to pay on behalf of others, signed as agents 188 Promise on behalf of company..-. 188 ‘Written instrument may be shown to contain no agreement, by evi- dence dehors the instrument .... 189 247 [176*] PAGE. Joint promise to pay on behalf of OLLOHS savsvessiacattcericay' scares ata avecoce avavous 189 Liability depends on expressed in- tention of maker of note........ 190 Examples of personal promises.... 190 Effect of affixing the seal of a com- pany to a note made by directors 191 Srct. 3.— Bought and Sold Notes. Dicgest of RULES...........65. Various illustrations of improp- er modes of executing those Where broker executes without dis- closing his principal, evidence of usage is admissible to render him personally liable.............45 Doubts thrown by the Court of Ap- peal upon the decision in Paice v. Walker If the broker is described as broker and the principal is named, the former is not liable The authorities relating to the effect — (1) Of entries in a broker’s book. (2) Of bought and sold notes, present a great conflict... 199 Chronological review of the cases from the year 1809 The principles fully considered in Sievenwright v. Archibald, by the Court of Queen’s Bench..... Propositions deducible from that meee mere mene e cr aee Custom in the City of London when payment is to be made by Dilles se ceseveesesasisisvesons 248 Sect. 4. — Charter Parties not under Seal. Digest OF RULES.......eeeeeee Agent may so execute as to make himself a contracting party .... 208 Modes of execution which render him go liable........eeseeerees OF THE AUTHORITY CONFERRED. 208 [Book Ir: Pr. m1. Agent may be the contracting party though he names his principal .. 208 207 | Ambiguous statement as to the per- son contracting is construed against the person signing ..... 210 Custom admitted to render agent of undisclosed principal liable..... 211 Secr. 1.— The drawing and accepting Bills of Exchange. In the following summary an attempt is made to digest the rules relating to the drawing and accepting bills of exchange by an agent. (177*] *Tt is assumed in this and the following summaries, that the agent has full authority to contract on behalf of his principal. (a.) If a bill is addressed to a principal and accepted by his agent on behalf of that principal, the principal and not the agent will be liable as acceptor (@).* : (a) Halford v. The Cameron, &c. Co., 16 Q. B. 442. 1 Judge Story in his valuable work on Agency (§ 155) says: ‘If, from the nature and terms of the instrument, it clearly appears not only that the party is an agent, but that he means to bind his principal, and to act for him, and not to draw, accept, or indorse the bill on his own account, that construction will be adopted, however inartificial may be the language, in furtherance of the actual intention of the instrument. But if the terms of the instrument are not thus explicit, although it may ap- pear that the party is an agent, he will be deemed to have contracted in his per- sonal capacity;”’ and the general rule does not seem susceptible of more accu- rate and definite statement. See Stack- pole v. Arnold, 11 Mass. 29; Tippets v. Walker, 4 Mass. 595; Hastings v. Lov- ering, 2 Pick. 221; Pentz v. Stanton, 10 Wend. 271; Dusenbury v. Ellis, 3 John. Cas. 70; White v. Skinner, 13 John. 307; Mills v. Hunt, 20 Wend. 431; Aikin v. Bedford, 17 Martin, 502; Newhall v. Dunlap, 14 Me. 180; Bed- ford Com. Ins. Co. v. Covell, 3 Met. 442; King v. Handy, 2 Bradwell, 212, and the cases hereinafter cited. The rule respecting written instru- ments not under seal is thus laid down in Key v. Parnham, 6 Har. & J. 418: ‘“ Where, upon the face of an agree- ment, a party contracting plainly ap- pears to be acting as the agent of an- other, the stipulations of the contract are to be considered as operating solely to bind the principal; unless it mani- festly appears by the terms of the in- strument that the agent intended to superadd or substitute his own responsi- bility for that of his principal. In such case, and in such case only, if acting within the scope of his powers, is he per- sonally answerable.’’ See Draper v. Mass. Steam Heating Co., 5 Allen, 338. But where one makes a written con- tract intending to act therein as agent of another, and to bind his principal, it is necessary, in order to bind the princi- OMAP. I1.] EXECUTION OF PAROL CONTRACTS. 249 , It is not necessary that the agent should state on the face of pal, that it should appear in the con- tract itself that he acts as such agent. Stackpole vy. Arnold, 11 Mass. 27 (prom- issory notes); Brown y. Parker, 7 Allen, 337 (promissory note). In the case of a bill or note, the agent must either sign the name of the princi- pal to the bill, or it must appear on the bill itself, in some way or another, that it was in fact done for him, or the prin- cipal will not be bound. The particu- lar form of the execution is not material, if it be substantially done in the name of the principal. Pentz v. Stanton, 10 Wend. 271. See, also, Savage v. Rix, 9 N. H. 263, The whole liability must be made out on the instrument itself. Merchants’ Bank v. Hayes, 7 Hun, 530. In Powers v. Briggs, 79 JI. 493, the rule is laid down that where the names of the principal and agent both appear upon an instrument, it will be held to be the bill or note of him who signs it, unless it satisfactorily appears that he signed it in a mere ministerial charac- ter, intending to bind another. The rule that an attorney or agent in executing an instrument or written agreement for his principal, must sign his name, does not apply to instruments or agreements not under seal. New Eng. Marine Ins. Co. v. De Wolf, 8 Pick. 56 (a guaranty). In Texas, it is held that where a, per- son acting in the capacity of agent or partner, with full authority from his principal or copartners, in the purchase of property, gives a note or other obliga- tion for the purchase money in his own name, and the property is received for the benefit of all, all will be equally bound as makers of the obligation. Sessums v. Henry, 88 Tex. 87. In the following cases, the agent being duly authorized to act, the princi- pal was held bound and not the agent. Tilley v. Spradley, 39 Ga. 35; Hovey v. Magill, 2 Conn. 680, and Ballou v. Talbot, 16 Mass. 461, where a note in the usual form was signed, ‘B., agent for A.”; King v. Handy, 2 Bradwell, 212, where an order was signed ‘‘S. W. K. for A. & R.” Roberts v. Button, 14 Vt. 195, where the contract commenced: ‘‘ We, the agents of the Wallingford Manfg. Co., promise,” etc., and was signed by the defendants, with the words, ‘‘ agents of the Wallingford Manfg. Co." added at the right of their signatures. Emerson v. Prov. Hat Manfg. Co., 12 Mass. 237, and Long v. Colburn, 11 id. 97, where a note in the usual form was signed, ‘‘ ProW. G. ——J.8.C.” See, also, Campbell v. Baker, 2 Watts, 83. Olcott v. Little, 9 N. H. 259, ““ W. 8, for himself and G. L.” Rice v. Gove, 22 Pick. 158, where the note was signed, “P. & J. for G.” Mann v. Chandler, 9 Mass. 335, where the note was in the following form: ‘‘I, the subscriber, treasurer of the Dorchester Turnpike Corporation, promise,”’ etc., **G. L. C., treasurer of Dorchester Turnpike Corporation.” Lacy v. Dubuque Lumber Co., 43 Ia. 510, where the note purporting to have been made in the defendant’s office, was in form: ‘‘I promise to pay,’’ etc., and signed ‘“‘H. M. Moore, P. D. L. Co.” Rathburn vy. Budlong, 15 John, 1, where a note in the form: ‘‘I promise to pay, etc, for the 8. C. & W. Mantg. Co.,” and signed, °‘S. B., agent,’ was held not to bind the agent, but the principal. Mott v. Hicks, 1 Cow. 518, where an indorsement of a promissory note by the payee, who was known to be an agent, thus, ‘‘J. H., agent,’’ was held not to make the agent personally liable, the indorsement being regarded as restrict- ive. A promissory note in which no prin- 250 OF THE AUTHORITY CONFERRED. [Boor I: PT. 1. the instrument any words to the effect that he accepts on behalf cipal is mentioned, and signed ‘A. B., agent,” binds A. B. only. Williams v. Robbins, 16 Gray, 77; Bickford v. First Nat. Bank, 42 Ill. 238, where a check was signed ‘‘R. K. B., agent;’” Rand vy. Hale, 3 W. Va. 495, where a bill of exchange was signed ‘‘ C. F. H., Pres’t;”’ Collins v. Buckeye State Ins. Co., 17 Ohio St. 215. Parol evidence is inadmissible in such a case to show that it was not the in- tention of the agent to make himself personally liable. Collins v. Buckeye State Ins. Co., supra; Stackpole rv. Arnold, 11 Mass. 27; Sturdivant v. Hull, 59 Me. 172; Tucker Manfg. Co. v. Fairbanks, 98 Mass. 101. Where, however, it is doubtful from the face of the contract, whether it was intended to operate as a personal en- gagement of the party signing it, or to impose an obligation upon some third person as his principal, parol evidence has been held to be admissible as against others than bona jide indorsees of negotiable paper, to show the true character of the transaction. Mechanics’ Bank yv. Bank of Washington, 5 Wheat. 826; Brockway v. Allen, 17 Wend. 40; Lazarus v. Shearer, 2 Ala. 718. See, also, Hood v. Hallenbeck, 7 Hun, 362. Other cases, and perhaps the weight of authority, hold that where the note or bill does not purport to be the note or bill of the principal, and contains no other expression of an intention to bind the principal than may be deduced from the mere use of the words ‘“‘ agent for A.”’ (the principal), after the signature of the agent, the agent is personally liable and not the principal, and the words ‘‘agent,"’ etc., are mere words of description. De Witt v. Walton, 9 N. Y. 571; Tucker Manfg. Co. v. Fair- banks, 98 Mass. 101 (a bill of exchange); Slawson vy. Loring, 5 Allen, 340 (a bill of exchange); Bank of Br. N. Am. v. Hooper, 5 Gray, 567; Merchants’ Bank v. Hayes, 7 Hun, 580. A bill of exchange, drawn by an agent in his own name, does not bind his prin- cipal, though made for his benefit, and containing a direction to the drawee to charge the amount thereof to his ac- count. Bank of Br. N. America vy. Hooper, 5 Gray, 567. See, also, Tucker Manfg. Co. v. Fairbanks, 98 Mass. 101; Slawson v. Loring, 5 Allen, 340. \ Where the note ran thus: ‘‘ For value received, we, the subscribers, jointly and severally, promise to pay to A. or order, for the Boston Glass Manufac- tory,’’ etc., and was signed by K., treas- urer of the corporation, and two sure- ties, without annexing to their names any words designating a connection with the corporation, it was held that it was the note of the individual signers and not of the corporation. Bradlee v. Boston Glass Manufactory, 16 Pick. 347. So, in Fiske v. Eldridge, 12 Gray, 474, a note in this form: ‘‘One year after date I promise to pay to the order of myself,” etc., signed ‘J. S., trustee of Sullivan Railroad,’’ and indorsed, “J. S., trustee,’ was held to bind J. S. personally. See, also, Haverhill Mut. F. Ins. Co. v. Newhall, 1 Allen, 130; Barker v. Mechanic F. Ins. Co.,3 Wend. 94; Sturdivant v. Hull, 59 Me. 172. So, in Hills v. Bannister, 8 Cow. 31,’ a note signed by defendants, with the addition, ‘‘ Trustees of Union Religious Society, Phelps,’’ which was a corpora- tion, was held to bind them personally. See, also, Powers vy. Briggs, 79 Ill. 493; Burlingame v. Brewster, id. 515, See, however, Hood v. Hallenbeck, 7 Hun, 362, where, however, the corporate seal was affixed. So, a note in the form: “I, T. F., as guardian of E. 8. H., promise,” etc., and signed “‘T. F., guardian,"’ binds T. F. personally. Forster v. Fuller, 6 Mass. 58. OHAP. 11. ] EXECUTION OF PAROL CONTRACTS. 251 of the drawee (4). This decision considerably limits the “uni- versal rule” mentioned by Lord Ellenborough in Leadbitter v. Farrow (ec)! The drawee of a bill may accept it by the hand and in the name of his agent (d). (b.) If the bill is drawn upon an agent in a personal character, he will be liable as acceptor, although he accepts for or on behalf of his principal (¢). This rule seems to be the result of the operation of two other rules, the first being that no one can be liable as acceptor but the person to whom the bill is addressed, unless he is an acceptor for honour (f); the second, that the words of an instrument must not be construed so as to make it void, if they will reasonably bear an interpretation making it valid (g). So, in case of an acceptance signed “J, T., administrator.” Tassey v. Church, 4 W. & S. 346. So, a promissory note indorsed ‘‘L. R., receiver,’ binds him personally. Towne v. Rice, 122 Mass. 67. A note in this form: ‘ We, the pru- dential committee for and in behalf of the Baptist Church in Lee,"’ etc., signed by the makers without addition to their names, binds the signers personally. Mosell v. Codding, 4 Allen, 403; Fogg vy. Virgin, 19 Me. 852. And in Chick v. Trevitt, 20 Me. 462, and Powers v. Briggs, 79 Ill. 493, the signers were held personally liable though they added the word ‘‘trustees”’ after their signa- tures. See, also, Brigham v. Stewart, 13 Minn. 106. See, however, Bellinger v. Bentley, 4 Thomp. & C. 71; 8. C.1 Hun, 562. But where the words are: ‘‘ We, as trustees, etc., promise,’’ etc., the case is different, and there is no per- sonal liability. Leach v. Blow, 16 Miss. 221; Barlow v. Cong. Society, 8 Allen, 460; Blanchard v. Kaull, 44 Cal. 440. Nor was there any personal liability when the signers promised “‘in behalf "’ of a certain school district, adding the word “committee,” after their signa- tures. Andrews v. Estes, 11 Me. 267. Where a note in the form: ‘We promise to pay,’’ etc., was signed, ‘‘ W. S., President Blannerhasset Oil Co.; W. H. H.; Treasurer,”’ the signers were held to be individually liable. Scott v. Ba- ker, 3 W. Va. 285. See, also, Mass v. Livingston, 4 N. Y. 208; post, p. 186 et seq. (b) Okell v. Charles, 34 L. T. Rep., N. S. 822, a decision upon the 47th sec- tion of the Companies Act, 1862. (c) 5M. & S. 345. 1The case of Okell v. Charles, referred to in the text, was decided under sec. 47 of the Companies Act of 1862, which enacts that ‘‘a promissory note or bill of exchange shall be deemed to have been made, accepted, or indorsed on behalf of any company under this act, if made, accepted, or indorsed in the name of the company by any person acting under the authority of the com- pany, or if made, accepted, or indorsed by or in behalf or on account of the company, by any person acting under the authority of the company.” (d) Lindus v. Bradwell, infra, (e) Thomas v. Bishop, 2 Str. 955; Nichols v. Diamond, 9 Ex. 154; Mare y. Charles, 5 E. & B. 978, (f) Polhill v. Walter, 3B. & Ald. 164. (g) Mare v. Charles, supra. 252 OF THE AUTHORITY CONFERRED. [BOOK Il: PT. Ir. (c.) If a bill is drawn by an agent in his personal character, he will be personally liable as drawer (A).' It is doubtful whether the principle of Okell v. Charles (7) could be applied to the case of a drawer of a bill. The tendency of the Court of Appeal has certainly been not to increase the stringency of the rule that parol evidence cannot be given dehors the instrument. (d.) If a bill is drawn upon several, one of whom accepts, he is liable as acceptor (7). So, if more accept, they are liable (4). (e.) The debt of a third person is a good consideration, for which a man may bind himself by giving a bill of ex- change (2). [178*] *This branch of law may be illustrated by a reference to the following cases: In Thomas v. Bishop (0), 1784, a bill was drawn and accepted in the following terms: “Pay to J. 8. or order , value received of him, and place the same to the account of the York Building Company, as per advice from Charles Mildmay. “To Mr. Humphrey Bishop, cashier of the York Building Company. “ Accepted per H. Brsnop.” At the trial it was proved that the letter of advice was ad- dressed to the company, and that the defendant was ordered to accept the bill. A verdict was entered for the plaintiffs, and the court refused to grant a new trial, holding that the defendant was personally liable, because the bill on the face of it imported to be drawn upon him, and was accepted by him generally. In Leadbitier v. Farrow (m), 1816, the plaintiff had sent 507. to the defendant, the agent of a county bank, in order to procure a bill of exchange. A bill in the following form was returned: “Forty days after date pay to the order of Mr. Thos. Leadbitter (hk) Leadbitter v. Farrow, 5M. &S. but an agent. Newhall v. Dunlap, 14 345, Me. 180. ‘Tf one draws a billinhisownname, (i) Supra. without stating that he acts as agent, (j) Owen v. Van Uster, infra. unless when acting for the government, (k) Bult v. Morrell, infra. he is personally liable, although he may (2) Popplewell v. Wilson, infra. direct it to be paid out of a particular (1) 2 Str. 955. fund, and although the personin whose (m) 5M. &§S, 345. favor it is drawn, knows the drawer was v CHAP. IIt.] EXECUTION OF PAROL CONTRACTS. 2538 fifty pounds, value received, which place to the account of the Durham Bank, as advised. “Messrs. Wetherall and Co., bankers, London. (Signed) “Curistr. Farrow.” At the trial a verdict was entered for the plaintiff, subject to the opinion of the court upon a special case. The liability of the defendant was urged upon the ground that as there was nothing on the face of the bill to show that it was drawn by him as an agent, this fact could not be shown by parol evidence dehors the instrument. Judgment was entered for the plaintiff. “Ts it not an universal rule,” said Lord Ellenborough, “that a man who puts his name to a bill of exchange makes himself per- sonally liable, unless he states upon the face of the bill that he subscribes it for another, or by procuration of another, which are words of exclusion? Unless he says plainly, ‘I am the mere scribe,’ he becomes liable.” The question whether an action would or would not lie against the Durham Bank was considered *immaterial; nor do the words indicating the account to [179*] which the amount of the bill was to be placed affect the legal obligation of the promissor (7). It is laid down generally in Polhill v. Walter (0), “that no one can be liable as acceptor but the person to whom the bill is ad- dressed, unless he be an acceptor for honour.” In Davis v. Clarke (p) one John Hart drew a bill payable to himself or order, addressed to John Hart. The defendant wrote across it: “ Ac- cepted, H. J. Clarke,” and the court held that Clarke could not be sued as acceptor. In Lindus v. Bradwell (q), 1848, a bill addressed to the de- fendant by the name of “William Bradwell” was accepted by his wife by writing across it her own name, Mary Bradwell. There was no evidence of any express authority in the wife so to accept the bill. But after it became due it was presented to the husband. He then said he knew all about it, and would pay it very shortly. The husband was held liable as acceptor.! (n) Per Kelly, C. B., in Alexander v. 'See, however, Minard v. Mead, 7 Sizer, L. Rep., 4 Ex. 105. Wend. 68, where it was held that au- (0) 3B. & Ad. 114. thority by a husband to his wife to give (p) 6 Q. B. 16. notes, would not subject him to the pay- (q) 5C. B. 583; 17 L. J., C. P. 12; ment of a note given by the wife in her 12 Jur. 230. own name, without reference in the 254 OF THE AUTHORITY CONFERRED. [Book IL: IT. IL. Mr. Justice Maule observed: “It is said that a drawee cannot bind himself otherwise than by writing his name on the bill. But suppose the drawee with his own hand accepts the bill by writing another name across it, will he not be liable? Here the defendant has, by the hand of his wife, written ‘Mary Bradwell’ on the bill. If he had done that with his own hand, it clearly would have been his own acceptance. . . . Nobody but the defendant could accept this bill so as to charge him, but he has accepted it by the hand and in the name of his wife, and that I think is a sufficient acceptance to bind him.” The other judges concurred. The authority relied upon by the court was the case of Cotes v. Davis (r), where Lord Ellenborough held that the court might presume that a husband had authorized his wife to indorse notes in the name by which she herself passed in the world. The hus- band was estopped from contesting her authority (s). Where a bill drawn on a firm is accepted by one partner, either the acceptor or the firm may be sued (¢). Care must, how- ever, be exercised in distinguishing between incorporated [180*] *companies and partnerships. The above rule is true only of the latter. Owen v. Van Uster (uw), 1850, was an action by the drawer against defendant as acceptor. A bill was addressed to the Allty- Crib Mining Co., and accepted by the defendant, as follows: “ Per proc. The Allty-Crib Mining Co. W. T. Van Uster, London Manager.” At the trial, proof was given that four persons, one of whom was the defendant, had agreed to work a mine under the name of the above company, and had for some time worked it accordingly, and that the bill in question had been accepted by the defendant without the authority of his co-partners. The court held upon motion for a new trial that the defendant was liable as acceptor. In the argument for the defendant reliance was chiefly placed upon the law merchant, which required identity in drawee body of the note, or in the signature, to (vr) 1 Camp. 485. the husband; and that a note, to be (s) See, too, Prestwick v. Marshall, binding in such case, must purport on 7 Bing. 565; Prince v. Brunatte, 1 Scott, its face to have been given by the wife 342. as the agent, or on behalf of the hus- (t) Mason v. Rumsey, 1 Camp. 384. band, (u) 10 C. B. 818; 20 L. J., C. P: 61. CMAP. 11.] EXECUTION OF PAROL CONTRACTS. 255 and acceptor. “An acceptance by one,” said Maule, J., “of a bill of exchange addressed to four, renders the actual acceptor person- ally liable. . . When the bill is offered for acceptance, it is an. inchoate contract. If the bill is addressed to four, and one con- tracts, why should he not be liable?” The reporters sum up the principles laid down by Beawes and Molloy in a note at the end of the case. Beawes impliedly, and Molloy expressly, draw the distinction between an acceptance by one of two joint drawees who are partners, and an acceptance by one of two joint drawees who are not partners. In the former case, there being an implied authority arising out of the partnership relation, an acceptance by one is the acceptance of both; in the latter case, an acceptance by one would be void as against the drawer, and against all indorsers preceding the party who obtained and acquiesced in the defective acceptance. Halford v. Cameron Coalbrook, dc. Company (x), 1851, was a decision upon 7 & 8 Vict. c. 110, s. 45, which provides, “Ifa bill of exchange drawn upon a joint-stock company, regulated by that act, be accepted by two of the directors, the acceptance is void as against the company, if not “expressed . . . to be accepted ” by such directors “on behalf of such company,” though the clause does not contain any words of nullification. A bill was directed to the company by their corporate name, and sealed with the corporate seal, which had the name of the company circumscribed. It was accepted by two persons *describing themselves “directors of the O. C. &e. Co., [181*] appointed to accept this bill” The acceptance was coun- tersigned by the company’s secretary. Assewmpszt on the bill was brought against the company. Verdict having been entered for the plaintiff, the court, after deliberation, refused to set it aside. Having referred to the words of the above section, Lord Camp- bell, who delivered the judgment of the court, went on to say: “We think there is no necessity for the very words and syllables here mentioned to be written by the two directors on the face of the bill. . . . The bill is drawn on the company by its corporate name; it is sealed with the corporate seal, having the corporate name of the company circumscribed, and it is countersigned by the secretary of the company, who so describes himself. Then (x) 16 Q. B. 442; 20 L.J., Q. B. 160. 256 OF THE AUTHORITY CONFERRED. [Book Ir: PT. 11. the two directors write upon the bill ‘accepted,’ sign their names under that word, and add the above statement.” These circum- stances were held sufficient to indicate that the bill was accepted by them on behalf of the eompany. Nichols v. Diamond (y), 1853, was an action upon two bills of exchange drawn by the plaintiff upon the defendant and accepted by him. The bills were addressed to “J. D., Purser, West Downs Mining Company,” and accepted in the following form: “J. D., accepted, per proc. West Downs Mining Company.” The defend- ant was a shareholder in the company. It was incorporated. The court refused to grant a rule to set aside the verdict, which had been entered for the plaintiff. “The bills,” observed Alderson, B., “are drawn upon the defendant in his personal character, and he choses to accept them for himself and others. He had no right to accept them for the other persons; but it is not less a good acceptance as against him, because he happens to do something, in addition to accepting the bills for himself, which he had no right to do.” To the argument that the defendant by his acceptance shows that he did not intend to bind himself personally, Parke, B., re- plied: “The legal effect of this acceptance is that the defendant accepts the bills in his own right as principal, and as agent for all the other members of the firm. If the firm consists of several other members, they would not be bound, for nothing is more clear as a general rule than this, that no person but the drawee of a bill is bound by the acceptance, and here the rest of the com- pany are not drawees.” [182*] *dMare v. Charles (2), 1856, was an action against the defendants as acceptors of three bills; one was in the fol- lowing form: “Three months after date pay to our order in London the sum of one hundred and two pounds and sixpence value received in machinery supplied the adventurers, etc. “To Mr. W. Charles. J. E. Mars & Co.” “ Accepted for the company. Payable at the Union Bank. “Wa. Coarres, Purser.” The two other bills were in a similar form. At the trial, Mr. Justice Crompton directed a verdict for the plaintiffs, with liberty (y) 9 Ex. 154; 231. J., Ex. 1. @) 5E. & B. 978; 25L. J., Q. B. 119. CHAP. 11. ] EXECUTION OF PAROL CONTRACTS. 257 to move to enter a nonsuit. Rule discharged. Lord Campbell said: “The bill is drawn on the defendant as an individual... . Tf the words of an instrument will reasonably bear an interpreta- tion making it valid, we must not construe them so as to make it void: ‘Benigne faciende sunt interpretationes, ut res magis valeat quam pereat; et verba intentione, non é contra debent in- servire.” Ifa bill be drawn on me I must accept it so as to make myself personally liable or not at all: for no one but the drawee ean accept. I think, therefore, that when a drawee accepts a bill, unless there be on the face of the bill a distinct disclaimer of per- sonal liability, he must be taken to accept personally. In the present case the acceptance is not per proc. the company. If it were, perhaps that might have some weight, as amounting to such an absolute disclaimer of personal liability. It appears on the face of the bill that it is drawn on account of a debt of the com- pany; it is very likely that the drawee accepted on account of the company, and on an engagement from them that they would keep him in funds to meet the bills. In that case he may well be said to accept for the company; but then it is an acceptance making himself personally liable.” In Bult v. Morrell (a), a bill was drawn on “the directors of the Imperial Salt and Alkali Company,” and accepted by three of them. Above their acceptance one of the defendants, who was a shareholder, signed his name “Richard Parker, manager.” . The jury found that Richard Parker, as a manager, was not an acceptor; and it was held that he was not liable. It will be observed, however, that the bill was addressed solely to the directors of the company, and that therefore the only drawees were the directors. \ *Mabier v. Massias (b), 1776, was an action against the [183*] acceptor of an alleged bill of exchange. W., a merchant, employed the defendant as his agent to consign goods to different places for sale. W. drew on the defendant a bill in the following form: “Pay to Mesers. Mabier, or order out of the produce of goods you have of mine. Wituram Warts. “To Mr. Moses Massias.” (a) 12 A. & E. 745, (6) 2 W. BI. 1072. 17 258 OF THE AUTHORITY CONFERRED. [800K Il: PT Il. The defendant wrote underneath this bill: “I agree to conform to this order.— Mosss Massras.” At the trial evidence was given that at the time of the accept- ance a balance far in excess of the bill was due to the defendant from his principal. A verdict, however, was entered for the plaint- iff, and a new trial refused on the ground that the defendant had accepted generally, and not specially, as he should have done had he meant to reserve his own balance. There can be no doubt that the above instrument is not a valid bill of exchange, since it is made out of a particular fund (¢). Lord Ellenborough says, in E'mly v. Lye (d), 1812, “ unques- tionably on a bill of exchange, drawn by one only, it cannot be allowed to supply by intendment the names of others in order to charge them.” In Sowerby v. Butcher (e), 1834, a bill was drawn on the con- signees of a cargo of coals, shipped by the broker, who had ef- fected the purchase at Newcastle. That bill was returned to the payees, the coal owners, unaccepted, on account of the date being too short. The payees prepared another bill at a longer date. They did so, and sent it to the counting-house of the broker for his signature. Meantime he had left the place in pecuniary diffi- culties, and his brother, the defendant, had come to the counting- house to investigate his affairs. The defendant, in the absence of his brother, and at the request and for the convenience of the plaintiffs, signed the bill as drawn without qualification of his lia- bility. At the trial Lord Lyndhurst, ©. B., refused to nonsuit the plaintiff, but gave leave to move to enter a nonsuit. The rule was afterwards discharged. Bayley, B., thonght “ there was in this case no question for the jury whether value had passed from the plaintiff to the defend- ant for the bill. . . . we cannot say there was no con- [184] *sideration for so signing it. If drawn to accommodate any person, it was drawn not for the accommodation of the plaintiff, but of Rt. Butcher. The plaintiffs had supplied goods consigned to D. and Co., for which R. Butcher was liable, and for which he drew a bill on the consignees which made him respon- sible as drawer, if they did not pay. The bill was returned un- (c) Daukes v. Deloraine, 2 W. BI. (d) 15 East, 7. 1782; and see Byles on Bulls, p. 97. (e) 4 Tyr. 320. CmAaP. 11.] EXECUTION OF PAROL CONTRACTS. 259 accepted; the plaintiffs then had a right to sue R. Butcher for not procuring D.’s acceptance, or to have a new bill from him. They elected a new bill at a longer date. . . . . On application at Rt. B.’s counting-house, they saw the defendant, and on his stating his brother R.’s absence, requested him to sign the bill as drawer. It was then in his discretion to sign the bill or not, and if he signed it, he might state on the face of it that he did so as agent for Rt. B., or have signed it by procuration R. B., John Butcher... . It is no answer to say that he had no considera- tion for binding himself personally, if he has professed to do so.” The debt of a third person is a good consideration for which a man may bind himself by giving a bill of exchange (f). Though an acceptor may purport to accept in some manner limiting his personal liability, he hecomes liable personally upon his acceptance. He cannot vary or limit his liability on the con- tract; by his acceptance of the bill which is addressed to him, it becomes his contract, and words of mere description or qualifica- tion are not enough, according to the usaye of merchants, to ex- onerate him. Bills of exchange are il drawn on the intended acceptor in a personal character .ud if he accept them he must be held to have done so in that character, and will be held liable, no matter what words vf mere description are added to his name (g). ' In Re Fevre v. Lloyd (h), 1814, the Court of Common Pleas decided that if a broker draws in favour of his principal upon the buyer of goods which he has sold for his principal, to whom he indorses the bill, he is liable as a drawer to such indorsee. The defence set up was that the agent having drawn the bill only as agent without any consideration for so doing, was not liable. The court, however, thought that the broker by giving this bill put an end toall doubt as to the buyer’s responsibility, [185*] and caused his principal to dismiss all concern about the solvency of the purchaser. In Téague v. Hubbard (i), a member of a Cornish Tin Smelting Company was employed by the company as their agent to sell goods, receiving a commission for his trouble. W. having sold (f) Popplewell v. Wilson, Stra. 264. (h) 5 Taunt. 749, (g) Per Kelly, C. B., in Alexander v. (i) 8B. & C, 345, Sizer, infra, 260 OF THE AUTHORITY CONFERRED. [BOOK II: PT. Ir. goods on account of the company, drew on the purchaser a bill of exchange, payable to his (the drawer’s) own order, and after it had been accepted indorsed it to the actuary of the company, and the latter indorsed it to another member, who was the managing director, and who purchased goods for the company; the company being then indebted to him ina larger amount than the sum men- tioned in the bill. The acceptor having become insolvent before the bill became due, the drawer received from him 10s. in the pound upon the amount of the bill by way of composition, and the court held that the indorsee, being a member of the company, could not sue the drawer of the bill, inasmuch as it was drawn by the latter on account of the company; and that he could not recover the sum received by the drawer on the bill, because that money must be taken to have been received by him in his char-. acter of a member of the company, and not on his own account. In Okell v. Charles (k), 1876, an action was brought against two. directors upon the following bill: “Pay to my order the sum of , for value received. “Tomas Youna. “To the Great Snowdon Mountain Copper Mining Company (Limited), Lombard Street. “ Accepted, payable at Messrs. Barclay, Bevan & Co. “J. MacDonaxp, ) Directors of the “Ros. CHarRiEs, Great, &e. Co. “D. B. Crosnin, Secretary.” The plaintiff was nonsuited at the trial. The Common Pleas discharged a rule obtained pursuant to leave reserved to enter a verdict for the plaintiff, on the ground that the directors were not drawees. In the Court of Appeal the case turned entirely upon the con- struction of the 47th section of the Companies Act, 1862, which enacts that “a promissory note or bill of exchange shall be deemed to have been made, accepted, or indorsed in the name of the company by any person acting under the authority of the [186*] *company; or if made, accepted, or indorsed by or on be- half, or on account of the company, by any person acting under the authority of the company.” It was admitted as a mat- ter of fact that the directors had authority to accept the bill. (k) 34 L. T. Rep., N. 8. 822. CHAP, 111.] EXECUTION OF PAROL CONTRACTS. 261 “In the 45th section of the prior act” (2), said the Master of the Rolls, “it is required not only that bills shall be accepted on behalf of the company, but also that it shall be by such directors expressed to be made or accepted by them on behalf of the com- pany. But these words are left out in the later act; in other words, they are repealed.” To the same effect were the remarks of Chief Baron Kelly. “No terms need appear on the face of the acceptances implying that it is on behalf or by authority of the company. The bill shall bind the company if made by its authority or on its behalf.” In other words, no statement of agency need appear on the face of the bill. The question is authority or no authority, and the fact may be proved by evidence dehors the instrument. Referring evidently to an argument based on Dutton v. Marsh (m), it was observed by Chief Baron Kelly, “A promissory note is a totally different thing from an accept- ance of a bill of exchange.” The latter incorporates in the ac- ceptance the person on whom the bill is drawn. The appeal was dismissed. Srcr. 2.— Promissory Notes. Summary of Lules.|—(a.) Where a person promises and signs in the character of agent he will not be personally liable, nor where the agent uses words importing agency in the signature only, and not in the body of the instrument, will he be held to be a party to the contract (m). Care must be taken to distinguish be- tween words descriptive of the agent’s office or employment, and words importing agency. The former have no influence upon the contract, whereas the latter indicate that the agent is no party (0). (b.) As a general rule, an agent who makes a note cannot relieve himself of liability unless the fact that he made it as agent appears on the face of the instrument. This doctrine, *however, would probably be qualified in accordance with a [187*[ decision of the Court of Exchequer in 1861 (p), in which (2) 7 & 8 Vict. c. 110. (0) See Dutton v. Marsh, L. R., 6 Q. (m) L. B., 6 Q. B. 36; 24 L. T. Rep., B. 361; and cases infra. N. 8. 470; 40 L. J., Q. B. 175. 1 See the cases collected ante, p. 177, (n) Alexander v. Sizer, L. Rep., 4 Ex. note. 105; Ex parte Buckley, 14 M. & W. = (p) Wake v. Harrop, 30 L. J., Ex. 469, overruling Hall v. Smith,1B.& 273. C. 407. 262 OF TUE AUTHORITY CONFERRED. [Book 1: PT. I. that court decided that where a defendant on the face of a writ- ten agreement had contracted as a principal, it was competent to him to show that in fact he signed as agent for a third party, and that the plaintiffs verbally agreed that he should not be responsi- ble as principal! (c.) Confusion has sometimes been introduced into arguments owing to a mistaken identification of the principles applicable to 1In Mott v. Hicks, 1 Cow. 513, an in- dorsement of a promissory note by the payee (who was known to bean agent), thus, “J. H., agent,’ was held not to make J. H. personally liable, it being regarded as analogous to a special indorsement, declaring that the note should be at the risk of the indorsee. But in Towne v. Rice, 122 Mass. 67, the indorsement, ‘‘ L. R., receiver,” was held to bind L. R. personally. As between principal and agent, the indorsement by the agent of a bill or note by the agent, without restriction, imports a prima facie liability on the part of the agent. But he is entitled to show as matter of defence that it was not the intention that he should be per- sonally charged by his indorsement, and if there was no intention to create a personal liability, none should exist as between himself and his principal. Lewis v. Brehme, 33 Md. 412. See, also, Castrique v. Buttigieg, 10 Moore P. C. C. 94; Newhall v. Dunlap, 14 Me. 180. Whether such intention exists or not, will in all cases depend upon the cir- cumstances of the transaction; but it is said that the circumstances must be clear and strong to remove the presumption which arises from the indorsement. Lewisv. Brehme, supra. See Castrique v. Buttigieg, 10 Moore P. C. C. 94, commenting on Goupy v. Harden, 7 Taunt. 159, in which latter case an agent purchasing foreign bills for-his principal, taking them payable to him- self and indorsing them to his principal without qualification, was held liable to ‘his principal on his indorsement, how- ever small his commission upon the purchase might be. In Sharp v. Emmet, and Byers v. Harris, intra, the rule is stated to be, that “‘the indorsement of the factor must be construed by the circumstances under which it is made; and unless there be something to show that in in- dorsing he intended to render himself personally liable, or that he was bound to do so, it ought not to be so in- tended.”” The drawer of a bill of exchange may rebut the presumption of his lia- bility, in case of nonpayment by the drawee, by proving that between the payee and himself there was no consid- eration, or that it was the general un- derstanding that he was merely an agent, and not to be held responsible; but he is not bound to show a special agreement to exonerate him. Miles v. O'Hara, 18. & R. 32. See, also, Mil- ligan v. Lyle, 24 La. Ann. 144; Byers y. Harris, infra. In Sharp v. Emmet,5 Whart. 288, and Byers v. Harris, 9 Heisk. 652, it was held that a factor who remits a bill to his principal in payment for goods sold on his account and indorses the bill, does not thereby become personally liable to his principal, if he receives no consideration for guaranteeing and does not expressly undertake to do so. See Sharp v. Emmet, criticised in Heubach y. Mollman, 2 Duer, 227, 260. CIIAP. r11.] EXECUTION OF PAROL CONTRACTS. 263 bills of exchange with those that are applicable to promissory notes. Two distinctions between these instruments should never be lost sight of. The first is that a bill of exchange incorporates in the accept- ance the person on whom the bill is drawn. The second is that an acceptor cannot limit or vary his liability by addition of words of description. If the names of the drawee and acceptor are not the same, the rule that the acceptor and drawee must be identical is not neces- sarily infringed. Parol evidence may be given to show that the acceptor has authority from the drawee to accept on his behalf. If this evidence is given the Dill is valid and binding on the drawee (g), for he is incorporated in the acceptance. The mean- ing of the second distinction is clear: an acceptor who is drawn upon personally cannot exempt himself from liability by ac- cepting on behalf of another person to whom the bill is not addressed. The dictum of Lord Ellenborough in Leadbitter v. Farrow (7), though inapplicable to acceptances of bills of exchange by agents, is still good law in the case of promissory notes (s). i The following cases illustrate the liability of agents upon promissory notes:! In Ex parte Buckley (¢), 1845, one of a firm of bankers signed the following promissory note: “T promise to pay the bearer on demand, ete. “For A. B., C. D. ve. ML” In holding that the firm, and not the agent, was liable, the *Court of Exchequer overruled the authority of Hall v. [188*] Smith (uw). “The partner in making the promise,” said Parke, B., “is only an agent for the firm. . . . No doubt the in- strument was intended to bind the firm, and as he had authority to do it, it had that effect” (x). (g) Lindus v. Bradwell, supra, and found referred to, ante, p. 177, note. see Okell v. Charles, supra. (t) 14M. & W. 469. (r) Supra. (wu) 1B. & Cr. 407. (s) See the remarks of Chief Justice (x) Approved per Pollock, C. B., in Cockburn in Dutton v. Marsh, supra. Nichols v. Diamond, 9 Ex. 136. 1The cases upon this subject will be 264 OF THE AUTIORITY CONFERRED. [BOOK IU: PT. 1. Healy v. Story (y), 1848, was an action by the payee against the makers of a note in this form: “On demand, we jointly and severally promise to pay to j value received, for and on behalf of the Wesleyan Newspaper Association. “Prrer STorY, “Jas, Ware, | Directors.” At the trial the plaintiff had a verdict, and a rule to set it aside was refused on the ground that a joint and several promise is a personal promise. This decision was approved of in Lindus v. Mebrose (2), though it was not material to the decision there. In Penkivil v. Connell (a), 1850, the defendant, a director and shareholder in a joint-stock company, together with three others, made the following promissory note: “We, the directors of the Royal Bank of Australia, for our- selves and the other shareholders of this company, jointly and severally promise to pay , for value received on account of the company. (Signed) “A.B, C. D., E. F., G. H., Directors.” This case comes within the principle of Healy v. Story (6). In Maclae v. Sutherland (ec), 1854, the directors of an unin- corporated and unregistered joint-stock banking company, called the R. Bank of A., made and issued promissory notes in this form: “We, directors of the R. Bank of A., for ourselves and other shareholders of the said company, do jointly and severally promise to pay » for value received, on account of the company. (Signed) “A., Chairman, “B. and C., Directors.” The court held, that, assuming the parties signing to be author- ized to sign promissory notes on account of the partnership, this form of note showed sufficiently an intention to bind the [189*] *partnership jointly, and that, thongh the attempt to bind the shareholders severally was ultra vires and void, yet they were bound jointly. (y) 8 Ex. 3; 18. J., Ex. 8. () Supra. (z) 2H. & N, 293. (c) 3 EL. & B.1. (a) 5 Ex. 381; 19 L. J., Ex. 305. CHAP. 11.] EXECUTION OF -PAROL CONTRACTS. 265 In Aggs v. Nicholson (d), 1856, the note was in the following terms: “We, two of the directors of the Ark Life Assurance Society, by and on behalf of the said society, do hereby promise to pay to M. or order the sum of , value received. MAN Dig sa Se Be This note was held to be binding on the company, and not on the directors, it having been expressed to be made by them on behalf of the company. In Wake v. Harrop (e), 1861, the court decided that where a defendant, on the face of a written agreement, has contracted as a principal, it is competent to him, by way of equitable plea to an action against him, to show that in fact he signed as agent for a third party, and that the plaintiffs verbally agreed that he should not be responsible as principal.t Lindus v. Melrose (f), 1857, was an action upon the following note: “ £600. “Three months after date we jointly promise to pay Mr. F. Shaw, or order, £600, for value received in stock, on account of the London and Birmingham Iron and Hardware Company, Limited. “Jas. MELRoss, “GQ. N. Woon, | Diet “Joun Harris, “Tndorsed, F. Saaw.” “Epwin Guess, Secretary. An action upon the note was brought by an indorsee against the directors. At the trial before Channell, B., a verdict for the plaintiffs was given, leave being reserved to the defendants to move to enter the verdict for them. The rule was made absolute. “This promissory note,” said Pollock, C. B., “cannot bind at once the individual directors and the company for which they were acting as agents; and the question is, what is the most rea- sonable construction to be put upon it?” “If,” observed Bram- well, B., “we suppose a personal liability on the part of *the directors, there would be a promise by them to pay [190*] (dq) 1H. & N. 165. 1The instrument in question in this (e) 80 L. J., Ex. 273; affirmed, 1 H. case was a charter-party. & CO. 202, (f) 2H. & N. 293. } Directors.” 266 OF THE AUTHORITY CONFERRED. [BOOK II: PY. Ir. for value received on account of the company, and the note would be bad on the face of’ it, as showing a consideration to the company and not to the directors.” The expression, “for value received in stock,” was read in a parenthesis. In the Exchequer Chamber (g), the judgment of the court be- low was affirmed by Coleridge, Cresswell, Williams and Crowder, JJ.; Crompton and Willes, JJ., dubstantebus. The company had been established under 19 & 20 Vict. ¢. 47, the 43d section of which act provided for the making, accepting or indorsing of notes or bills bya company. The note in question did not satisfy the requisitions of this section; “it does not, there- fore, follow conclusively,” said Coleridge, J., delivering the judg- ment of the Court of Appeal, “that the directors are personally liable; for the case was properly argued, and must be decided on what appears to be the expressed intention of the makers of the instrument.” In Price v. Taylor (h),1860, the note was as follows: “Midland Counties Building Society. “Two months after demand in writing we promise to pay Mr. Thomas Price the sum of one hundred pounds, with interest after the rate of six pounds per centum per annum, for value received. Wels } Trustees On. Ts , “W. F., Secretary.” The defendants were held to be personally liable. “It does not appear,” said Baron Bramwell, “that the defendants undertake for anybody but themselves. If there was anything to show that the note would be binding on the building society, we might hold that the note was the note of the society, and not of the defendants alone, as in Aggs v. Nicholson” (2). In Bottomley v. Fisher (k), 1862, the note was as follows: “ Midland Counties Building Society, No. 3. “One month after date we jointly and severally promise to pay Mr. J. B. Yaum, the sum of , for value received. 6 ‘ ae | Directors, “W. D. F., Secretary.” (g) 83H. & N. 177. (i) 1H. & N. 165; see Forbes v. Mar- (hk) 5 H. & N. 540; 29 L. J., Ex. shall, 11 Ex. 166. 331. (k) 1H. & C, 211; 31 L. J., Ex. 417, CHAP. 111.] EXECUTION OF PAROL CONTRACTS. 267 *Action against the society by the payee. At the trial a [191*] verdict was entered for the plaintiff, but leave was re- served to the defendant, apparently for the purpose of having the decision of the court upon the question whether the defendant’s liability as maker was removed by the fact that he had signed as “secretary.” This fact was held to be immaterial. In Gray v. Roper (1), 1866, defendants, who were members of an unregistered society, enrolled and certified under 15 & 16 Vict. ce. 31, gave a promissory note in the following form for a debt of the society: “Twelve months after date, we, the undersigned, being mem- bers of the executive committee, on behalf of the L. & 8. W. Rail- way Co-operative Society, do jointly promise to pay,” ete. At the trial, Mr. Justice Keating directed the jury to find for the plaintiffs. This ruling was upheld by the whole court, on the ground that the defendants were personally liable. In Childs v. Monins (m), 1321, the Court of Common Pleas held the makers of the following promissory note personally liable: “ As executors to the late , we severally and jointly prom- ise to pay to the sum of on demand, together with law- ful interest for the same. “J. M. | Bxecutors.” Eb: Dallas, ©. J., suggested that they might have limited this lia- bility by adding the words, “out of the estate of T.,” to the words “as executors.” ! In Crew v. Pettit (n), 1834, a parish vestry resolved to borrow money from H. N., who advanced it, and took promissory notes for the amount made by P. W. and F., who were churchwardens and overseers. The notes were in the ordinary form, except that they were signed by the defendants as “churchwardens and overseers.” The question of personal liability was only a collat- eral issue. The makers of the notes were held to be personally liable. (l) L. B.,1C. P. 694. sonally. Forster v. Fuller, 6 Mass. 58. (m) 2 Brod. & Bing. 460. An indorsement of a promissory note 1An acceptance, signed “J. T., ad- thus, “L. R., receiver,” binds L. R. ministrator,"’ binds J. T. personally. personally. Towne v. Rice, 122 Mass. 67. Tasey v. Church, 4 W. & 8. 346. See ante, p. 177, note. So, a note in the form, “I, T. F., (n) 1 A. & HE, 196; affirmed, 3 N. & guardian of E. S., promise,” etc., signed M. 456. “7 F., guardian,” binds T. F. per- 268 GF THE AUTHORITY CONFERRED. [BOOK TI: PT. IL. Dutton v. Marsh (0), 1871, was an action by the payee of a promissory note against the defendants as makers. Four directors of a joint-stock company signed their names to the following promissory note: “We, the directors of the Isle of Man Slate and Flag [192*] Com*pany, Limited, do promise to pay J. D. the sum of 1,600/. sterling, with interest, etc., for value received.” At one corner of the note the company’s seal was affixed, with the words, “Witnessed by L. L.” At the trial before Baron Cleasby, a verdict was entered for the plaintiffs, with leave re- served to the defendants to move to enter a verdict for them on the ground that they were not personally liable. The main con- tention on behalf of the defendants was that personal liability was excluded by the fact that the company’s seal was attached. As- suming that the seal had not been affixed, the court had no doubt of the liability of the defendants; the only question was that raised by the above contention. Upon consideration, the court unanimously held that the mere affixing of the company’s seal did not affect the liability of the directors.! “Tt does not purport in form,” said Chief Justice Cockburn, in delivering the judgment of the court, “to be a promissory note made on behalf or on account of the company. So far as the written portion of it goes, it is totally without any such qualifying expression, but some doubt was raised in my mind whether the affixing of the seal might not be taken as equivalent to a declara- tion in terms on the face of the note that the note was signed by the persons who put their names to it on behalf of the company, and not of themselves . . . that effect cannot be given to the placing of the seal of the company upon the note. It may be that that was simply for the purpose of marking the transaction, or, in fact, showing as to the directors that, as between them and the company, it was for the company they were signing the note, and that it was a transaction in which the proceeds to be received (o) L. R., 6 Q. B. 361. five hundred and fifty dollars, with in- 18ec, however, Hood v. Hallenback, terest, for value received. 7 Hun, 362, where, upon a note in this R. HALLENBACK, ) Trustees of form: [corpo- HenrySnexpon, | St. John's “ 8550. Hopson, June 1, 1871. rate R. ALLISON, nee Pes 4 seal.| N. G. Putz, Hudson, Six months after date we promise W. SHorts. Neyo” to pay to the order of Peter J. Bachman, pon proof that the corporation was in- CITAP. III] EXECUTION OF PAROL CONTRACTS. 269 upon the note would operate to the benefit of the company; but there is no case that goes the length of saying that the affixing the seal, where the parties do not otherwise use terms to exclude their personal liability, would have that effect.” The rule obtained pursuant to leave reserved was discharged. In Alexander v. Sizer (p), the following promissory note was signed by the secretary of an incorporated company: “1,5002. On demand, I promise to pay Messrs. Alexander and Co., or order, the sum of one thousand five hundred pounds, with legal interest thereon until paid, value received the 16th Aug., *1865. For Mistley, Thorpe and Walton Ry. Co. [193*] John Sizer, secretary.” In an action on the note by the payees against the secretary, it was held that he was not personally liable, though Baron Cleasby was inclined to think that the defendant had incurred a personal liability because of the pronoun “I” in the body of the instrument. Courtauld v. Sanders (q), 1867, was an action by an indorsee of a promissory note against the makers. “Three months after date we promise to pay,” etc., and signed by the defendants, who described themselves in signing as “ direct- ors of the Financial Insurance Company (Limited).” The note was countersigned “O. G. G., manager.” Verdict for plaintiff. It was argued in support of a rule obtained pursuant to leave re- served, that the note was on the face of it made on behalf of the company, and that if it was not so it still bound the company if in fact it was made on its behalf. indus v. Melrose (r), which was not before the court in Gray v. Foper (s), was cited in sup- port of the argument. Mr. Justice Willes distinguished the former case on the ground that the question there was whether the words “on account of” were equivalent to “on behalf of.” Chief Jus- tice Bovill thought that while the present case was distinguishable from Lindus v. Melrose, it was undistinguishable from Gray vy. Loper. debted to the payee, who requested a = See ante, p. 177, note. note for the amount of his claim, where- (p) L. R., 4 Ex. 105. upon the note in suit was executed to (gq) 16 L. T. Rep., N. S. 562. him, it was held, that the signers were (r) 2H. & N. 293; 3 H.& N. 177, not personally liable. (s) L. R., 1 C. P. 694. 270 OF THE AUTHORITY CONFERRED. [BOOK II: PY, 11. Secr. 3.— Bought and Sold Notes. Summary of Rules.) —(a.) The material question is, What is the intention expressed in the contract? Whether an alleged principal is an Englishman or a foreigner resident abroad is in itself immaterial (¢).!| This must be taken subject to what is said (t) Mahoney v. Kekulé, 14 C. B. 390; Green v. Kopke, 18 ibid. 549. 1The rule upon this subject is laid down by Judge Story, that ‘‘agents or factors acting for merchants resident in a foreign country are held personally liable upon all contracts made by them for their employers; and this without any distinction, whether they describe themselves in the contract as agents or not. In such cases, the ordinary pre- sumption is, that credit is given to the agents or factors; and not only, that credit is given to the agents or factors, but that it is exclusively given to them, to the exoneration of their employers. Still, however, this presumption is la- ple to be rebutted, either by proof that credit was given to both principal and agent, or to the principal only; or that the usage of trade does not extend to the particular case.” See Story on Agency, § 268, and authorities there cited; Merrick’s Estate, 5 W. & 8. 9; 8. C. 2 Ashm. 485; Newcastle Manfg. Co. v. Red River R. R. Co., 1 Rob. La. 145; McKinzie v. Nevins, 22 Me. 108; Rogers v. March, 33 id. 106. The doctrine thus broadly stated has, however, been questioned. Senator Verplanck, in Kirkpatrick v. Stainer, 22 Wend. 244, 259, says: ‘I amsatis- fied that Judge Story has stated the doctrine in too strong and unqualified terms, as if this presumption were a universal inference of law, applicable everywhere. I think, on the contrary, that it is a presumption founded alto- gether upon usage and the particular course of trade, and arises only, when and where that usage is known or proved to exist; of course, then, that is not an unvarying legal presumption, to be applied to any contract, made anywhere, by a factor or agent repre- senting a person or commercial house in some foreign country.’’ See, also, 2 Kent Com. *630, 631, note (a); Taintor v. Prendergast, 3 Hill, 72; Oelricks v. Ford, 23 How. (U. 8.) 49, 64; Bray v. Kettell, 1 Allen, 80; Barry v. Page, 10 Gray, 398, where it is held that a for- eign principal may maintain an action in his own name for goods sold by his agent here, although no agency is dis- closed at the time of the sale. Bige- low, J., in this case, referring to the al- leged presumption at law that exclusive credit was given to the agent, said: “The later and better opinion is, that there is no such absolute presumption, and that a principal, whether foreign or domestic, may sue to recover the price of goods sold by his factor, unless it is made affirmatively to appear that exclusive credit was given to the agent, by proof other than the mere fact that the principal resided in another state or country.”” In Green y. Kopke, cited in the text, Jervis, C. J., said: ‘‘It is in every case a question of intention to be gathered from the contract itself and the sur- rounding circumstances. No doubt, as has been said by learned judges more than once, the fact of the principal’s being a foreigner is entitled to some weight, but there is no rule of law that the agent isin all cases liable personally where the principal is a foreigner abroad. It is in all cases a question of intention capable of being explained by omar. m1.] EXECUTION OF PAROL CONTRACTS. 201 upon the question whether an agent has implied authority to pledge his foreign principal’s credit (x). This intention is in all cases capable of being explained by a custom or usage of trade, when any such can be shown to exist (”), provided such custom or usage is not inconsistent with the written contract ().1 *(b.) If the contract is signed without the use of any [194*] words importing agency, the person so signing is by virtue of the contract both entitled and liable, unless in the body of the contract a contrary intention is clearly shown (y).? The accuracy ofithis principle is not affected by the doubt thrown on the de- cision in Gadd v. Houghton (2), where the Court of Appeal ex- presses an opinion differing from that adopted by the Court of Exchequer. (c.) An agent, then, may free himself from personal liability either by signing as agent (@), or by using in the body of the con- the custom or usage of trade where any such can be shown to exist.”’ Both Green v. Kopke and Mahoney v. Kekulé, make a distinction between contracts without and those in writing, both of these cases being of the latter description. In the latter case, Jervis, C. J., said: ‘‘Ordinarily, where an English agent contracts on behalf of a principal residing abroad, the agent is prima facie considered to pledge his own credit, because it is highly improb- able that the person he is contracting with would give credit to a foreigner. But that is not like this case. Here is a written contract, the meaning of which is to be collected from the face of it.” See, also, Rogers v. March, 33 Me. 106; Bray v. Kettell, supra, where a written agreement signed ‘A. B. by C. D., agent,” was held not to bind the agent personally, although the principal resided beyond the seas. The weight of modern authority, both English and American, seems clearly to support the rule laid down in the text. See 2Kent Com. 631, note, and other authorities cited above. See post, p. 444. (w) See Armstong v. Stokes, L. R., 7 Q. B. 605. (v) Green v. Kopke, supra. («) Humphrey v. Dale, 7 E. & B. 266; E. B. & E. 1004; Fleet v. Murton, L. B., 7 Q. B. 126. 1See ante, p. 111, note. (y) Per Kelly, C. B., in Paice v. Walker, L. R., 5 Ex. 173. The agent becomes personally liable only where the principal is not known, or where there is no responsible princi- pal, or where the agent becomes liable by an undertaking in his own name, or where he exceeds his power. 2 Kent Com. 630, and authorities cited. See, also, Hall v. Huntoon, 17 Vt. 244; Chase v. Debolt, 2 Gilm. 371; Hunter v. Miller, 6 B. Mon. 621; Andrews v. Allen, 4 Harr. 452; Johnson v. Smith, 21 Conn. 627. See generally, as to the liability of agents to third persons, post, p. 299 et seq. (z) 1 Ex. Div. 357. (a) Fairlie v. Fenton, L. R., 5 Ex. 169. 272 OF THE AUTHORITY CONFERRED. [BOOK Il: PT. II. tract words importing agency (0).1_ If, however, the principal is not disclosed the agent may be himself liable (¢) by a usage of trade. The following cases have been arranged in chronological order, and thus show the development of this branch of law. Green v. Hopke (d), 1856, was an action brought against the agent of a merchant at Gothenburg, to recover damages for the breach of a contract for the sale of a quantity of tar. At the trial it appeared that the contract was made by means of bought and sold notes. The bought note ran thus: “Bought through Mr. H. Kopke, of Mr. Leonard Roos, Gothen- burg,” ete. And the sold note: “Sold on behalf of Mr. Leonard Roos, Gothenburg,” ete. Signed “ H. Kopke, as agent.” The defendant contended that as the contract plainly expressed that he was dealing as agent for a principal named, he was not personally liable, though the principal was a foreigner. Alderson, B., reserved the point for the opinion of the court, and a verdict was found for the plaintiff. This verdict was subsequently set aside by the Court of Common Pleas without calling upon the defendant’s counsel. Referring to the case of Jfahoney v. Kekulé (e), Chief Justice Jervis remarked: “We have in effect decided that it makes no difference whether the principal be an Englishman or a foreigner resident abroad; in either case it is equally a question of intention. This is now settled law.” In this view of the law there could be no doubt that the defendant was not personally liable. The intention is in all cases [195*] capable *of being explained by the custom or usage of trade when any such can be shown to exist (7). Humphrey v. Dale (g), 1858, is a leading case. This was an action for the non-acceptance of a quantity of linseed oil. The defendant’s London brokers, being employed to buy oil for their principal, gave to the vendors a note, of which the material part was as follows: “Sold this day for Messrs. Thomas and Moore to (b) Gadd v. Houghton, supra; and (c) Humphrey v. Dale, supra. see Sharman v. Brandt, L.R.,6 Q.B. (d) 18C. B. 549; 25 L. J., Q. B. 274. 720. (e) 14 C. B. 390. 1See ante, p. 177, note; Freese v. (Ff ) Thid. 559. Crary, 29 Ind. 524, an agreement to (g)7E. & B. 266; affirmed, E. B. & sell land signed, ‘* A., per B., agent.” E. 1004. CHAP. 111] EXECUTION OF PAROL CONTRACTS. 273 our principals, ten tons of linseed oil. Dale, Morgan & Co., brokers. Quarter per cent. brokerage to D., M. & Co.” At the trial it was proved that the defendants did not disclose the name of their principal at the time of entering into the contract; and the plaintiffs gave evidence that, according to the usages of the trade, whenever a broker purchased without disclosing the name of his principal, he was liable to be looked to as the purchaser. A verdict was taken for the plaintiff, leave being reserved to move to enter a nonsuit. Practically two objections were taken to the verdict — namely, that there was no evidence of the contract of sale and purchase; and that evidence of the custom was not admis- sible. The first objection was mainly one of fact, and soon dis- posed of. The judgment of the court was delivered by Lord Campbell, C. J. In dismissing the second objection his lordship went on to say: “The truth is, that the principle on which the evidence is admissible is that the parties have not set down on paper the whole of their contract in all its terms, but those only which were necessary to be determined in the particular case by specific agreement, and which, of course, might vary infinitely, leaving to implication and tacit understanding all those general and unvarying incidents which a uniform usage would annex, and according to which they must in reason be understood to contract unless they expressly exclude them. To fall within the exception, therefore, of repugnancy, the incident must be such as, 7f expressed in the written contract, would make it insensible or inconsistent.” The custom objected to here, if incorporated into the contract, would read thus: “Sold . . . to our principals, ten tons of lin- seed oil. If we do not disclose their names within a reasonable time you may treat us as the purchasers.” This rule was dis- charged. On appeal to the Exchequer Chamber, a majority of the judges, consisting of Chief Justice Cockburn, Chief Baron Pollock, and *Justices Williams and Crowder, affirmed the judg- [196*] ment of the court below; a minority, consisting of Justice Willes, Barons Martin and Channell, dissented. The chief con- tention in favour of the appellants was, that there was no writing to satisfy the Statute of Frauds. “If this argument were well founded,” said Mr. Justice Williams, “it would go to prove that the Statute of Frauds excludes parol evidence to show that one or 18 art OF THE AUTHORITY CONFERRED. [BOOK II! PT. Ir. both the contracting parties to an agreement for the sale of goods were agents for other persons, and acted as such in making the contract.” It has been settled (2) that such evidence is admissi- ble, so as to give the benefit of the contract to the unnamed prin- cipal, or to charge him with liability. So parol evidence has been admitted to show that he who, on the face of the contract, appears to be the agent of an unnamed principal, is, in truth, himself the principal (2). In eid v. Dreaper (k), 1861, the defendant had entered into the following contract with the plaintiffs: “From J. D., corn broker. I have this day sold to you two cargoes of French maize . . » payment in London less sixty days’ interest and 1 per cent. brokerage. Mr. J. Walker, of London, will send contracts.” Walker forwarded contracts on the following day for the two car- goes, on behalf of T., of Bordeaux, the owner of the maize, but he omitted the stipulation as to the brokerage. The plaintiffs objected, and the defendant said he would write to Walker. In order, how- ever, to obtain the cargoes, the plaintiffs were afterwards com- pelled to pay the value without any deduction for brokerage. Upon these facts the assessor of the Court of Passage at Liverpool non- suited the plaintiffs in an action to recover the amount of the brokerage. A rule nist having been granted to enter a verdict for the plaintiffs, the Court of Exchequer made it absolute. “If the defendant had authority to sell in the way in which he did,” said Baron Wilde, “T. was his principal, but undisclosed. When the principal was disclosed the plaintiff might have had an option, if the maize was not delivered or the contract otherwise not per- formed, to sue either the principal or the agent. The defendant was either authorized to make the contract or not. If he was authorized ... the plaintiffs might have sued him at their election. If not, the defendant was liable for having assumed to make a *contract for his principal which he had not authority [197*] to make. Therefore, I think that the defendant would have been Jiable on either branch of this contract, viz., as well for a failure to deliver the maize as for the breach of his agreement that written contracts should be sent by Walker.” The question whether the plaintiffs’ retention of the contracts sent by Walker (h) Wilson v. Hart, 7 Taunt. 295, Carr v. Jackson, 7 Ex. 882. (i) Schmalz vy. Avery, 16 Q. B. 655; (k) 6H. & N. 818; 20 L. J., Ex. 208. | CHAP. 111.] EXECUTION OF PAROL CONTRACTS. 275 varied the defendant’s liability was not raised by the pleadings, but both Baron Martin and Baron Bramwell expressed an opinion in the negative. Paice v. Walker (1), 1870, was an action for the non-delivery of wheat according to sample. The defendants signed a contract for the sale of wheat in the following form: “Sold to A. T. Paice (the plaintiff), London, about 200 quarters of wheat (as agents for John Schmidt & Co., of Danzig), signed Walker & Strange.” At the trial a verdict was entered for the plaintiff. A rule to move to enter a nonsuit was granted, but discharged on the ground that the defendants were personally liable. The rule in cases of this description was thus given by Kelly, C. B.: “Where a contract is signed by a person without any words im- porting agency, the person so signing is, by virtue of the contract, both entitled and liable, unless in the body of the contract a con- trary intention is clearly shown.” And he goes on to say, “The contract before us is so signed, and there is nothing tending to show a contrary intention, except words which, on the authority of decided cases, have not that operation.” The cases here referred to are those similar to Leonard v. Lobinson (m), which have been already noticed. airlie vy. Menton (n) was distin- guished on the ground that the plaintiffs there signed as bro- kers (0). In Fairlie v. Fenton (p), 1870, the note was in the following form: “TI have this day sold you on account of . . . Signed, E. F., broker.” The Court of Exchequer held that the broker was not a contracting party, and therefore had no right of action. against the defendants for breach of the contract in refusing to accept the cotton. Here the plaintiff described himself as broker, and named his principal. Martin, B., pointed out that in Ham- mond on Parties, in Chitty on Pleading (vol. i. p. 7), and in Lush’s Practice (8rd edit. p. 11), it is wrongly stated that a broker can sue in hisown name. Humphrey v. Dale (q) was fol- [198*] *lowed by Jleet v. Murton (r), 1871. In that case an (1) L. R., 5 Ex. 178. and the Concordia, &c. v. Squire, 34 L, (m) 5 E. & B. 125; 24 L. J. Q. B. T. Rep., N. S. 825. 52. (p) Ubi supra. (n) L. R., 5 Ex. 169. (q) 7E. & B. 266, (0) But see Gadd v. Houghton, supra; (r) L. B., 7 Q. B. 126. 276 OF THE AUTHORITY CONFERRED. [Book It: pr. m. action for non-acceptance of goods was brought against the defendants, brokers, upon the following contract: “We have this day sold for your account to our principal . . . tons of raisins. Signed, M. and W., brokers.” Evidence that in the London fruit trade it was customary, if the brokers did not name their principal in the contract, to hold them personally liable was admitted, on the authority of Humphrey v. Dale (8), as not being inconsistent with the written contract. “I take it,” said Blackburn, J., “that there is no doubt at all in principle, that a broker as such, merely dealing as broker and not as purchaser of the article, makes a contract from the very nature of things between the buyer and the seller, and he is not himself either buyer or seller, and that, consequently, where the contract, as in the present case, in terms says “sold to A. B.,” or “sold to my principals,” and the broker signs himself simply as broker, he does not make himself by that either purchaser or seller of the goods; he is simply the broker making the contract; . . . but then there comes the evidence of custom. . . . The custom is, that if the broker does not disclose his principal’s name on the contract he is per-' sonally liable. The custom did not go to the extent, and there is not the slightest ground for saying that the custom went to show that the principal was not liable also, or that the principal was discharged. It was simply this, that if the broker did not name the principal in his contract he incurred a personal liability.” : In Sharman v. Brandé (t), 1871, the Court of Exchequer Chamber, affirming the judgment of the Queen’s Bench, held that where a broker made and signed a contract note thus: — “Bought for Messrs. B. and H. of our principals 200 tons of hemp. W.S. & Co.” he could not sue as principal. Southwell v. Bowditch (u), decided in 1876, was an action against a broker on a contract of sale. The contract relied on was a sold note, of which the material part was as follows: “I have this day sold to your order and for your account to my prin- cipals, about five tons of pressed anthracene. W.A. Bowditch.” There was no proof of usage to render a broker personally liable upon such a contract. A verdict was entered for the plaintiff, and a rule obtained pursuant to leave reserved to enter a (s) 7E. & B. 266; E.B. & E. 1004. = (w) L. R., 1 C. P. Div. 100; in error, (é) L. R., 6 Q. B. 720. ibid. 374, CHAP. Ir] EXECUTION OF PAROL CONTRACTS. 277 nonsuit *was discharged by a court consisting of Lord [199*] Coleridge, Justices Grove and Denman. The questions raised by the court for decision were, first, was the document here a contract of purchase? and, secondly, what is its effect? The court was unanimous in holding that the sold note was a contract of purchase, and not merely a record for the information of the principal of the manner in which his instructions had been carried out, and that it bound the defendant upon the authority of reported cases. The chief justice thought the former question disposed of by Humphrey v. Dale (v), and the latter by Paice v. Walker (@). Considerable doubt has, however, been thrown upon the authority of Paice v. Walker (y), by the Court of Appeal, in Gadd v. IToughton (2). The latter case was an action for the nondelivery of oranges. The defendants, fruit brokers, sent the plaintiff the following note: “We have this day sold to you on account of M. & Co., 2,000 cases of oranges. J. CO. Houghton & Co.” The court, consisting of Lords Justices James and Mellish, Baggallay (Justice of Appeal), and Justices Quain and Archibald, held, revers- ing the decision of the Exchequer Division, that the words “on ac- count of,” showed an unmistakable intention that the defendants should not be personally liable. The learned judges likewise ex- pressed an opinion that they should have interpreted the expres- sion “as agents for,” in Paice v. Walker, to mean the same thing as “on account of,” and should, therefore, have held Walker not liable. The mode in which brokers should execute their authority in bought and sold notes having been dealt with, there remains to be considered the authorities relating to the effect of entries in the broker’s books, as well as the effect of the bought and sold notes. These authorities present as great a conflict perhaps as is to be found in any branch of Englishlaw. Isolated dicta may be found in support of positions which are quite opposed to each other. The following cases illustrate the various views that have pre- vailed: Lord Ellenborough ruled in 1809, Heyman v. Neale (a), that an entry by a broker in his book of a sale, signed by him, is a (v) E. B. & BE. 1004; 27 L.J.,Q.B. — (y) Supra. 3890. (2) 1 Ex. Div. 357. (x) L. R., 5 Ex, 173, (a) 2 Camp. 337, 278 OF THE AUTHORITY CONFERRED. [BOOK II: PT. IL. binding contract between the parties, and that the bought and sold note, which is a copy of this entry, is not sent to the [200*] *parties for their approbation, but to inform them of the terms of the contract. The action was for not accepting a quantity of hemp. “ After the broker has entered the contract in his book, I am of opinion,” said his lordship, “ that neither party can recede from it, The bought and sold note is not sent on ap- probation, nor does it constitute the contract. The entry made and signed by the broker, who is the agent of both parties, is alone the binding contract. What is called the bought and sold note is only a copy of the other, which would be valid and bind- ing although no bought or sold note was ever sent to the vendor or purchaser. The broker is equally liable on this case as if he had signed the entry in the broker’s book with his own hand.” The plaintiff, however, was nonsuited upon another point. The plaintiffs in Powell v. Divett (5), 1812, offered in evidence a note signed by the broker, the entry in his book not having been signed. He was, however, nonsuited on the ground that he had made an alteration in the note. In Thornton v. Kempster (c), decided in 1814, the broker ne- gotiated a sale of hemp, but by mistake delivered to the parties bought and sold notes differently describing the contract as Riga Rhine hemp and St. Petersburg clean hemp. Chief Justice Gibbs ruled, in an action for non-acceptance, that there was no mutuality, and the ruling was upheld by the court on the ground that the contract must be on the one side to sell, and on the other to ac- cept, one and the same thing. No other evidence of the contract appears to have been offered. Chief Justice Gibbs ruled, in a case decided in 1816 (@), that if a broker delivers a different note of the contract to each party contracting, there is no valid contract, and mentioned his belief that the case which decides the entry in the broker’s book to be the original contract had been contradicted. It does not appear from the report that there was any entry in the broker’s book, or that any evidence besides the notes was offered. No such case as that mentioned is to be found in the reports. In Thornton v. Meux (e), which was decided in 1827, there was (b) 15 East, 29. (d) Cumming v. Roebuck, Holt, 172. (c) 5 Taunt. 786. (e) Moo. & M. 43. CAP. 1.] EXECUTION OF PAROL CONTRACTS. 279 a variance, and plaintiffs counsel proposed to show the entry in the broker’s book as evidence to prove which of the two notes was correct. To this it was objected, that although it is the duty of the broker to enter the contract in his books *for the convenience of the parties, the notes are what [201*] bind them, and if the notes vary from the book, the parties are only bound by what they receive. Chief Justice Abbott re- fused to admit the evidence, remarking that he had changed the opinion he had formerly held, namely, that the broker’s book was the proper evidence of the contract. This case is sometimes cited to show that the original contract is not contained in the broker’s book; but this ruling does not proceed from the judgments that had Jately preceded it —it avows a late change of opinion; it was not acted on in the ease so as to nonsuit the plaintiff, but the trial proceeded, and the plaintiff was nonsuited on another ground, therefore there was no opportunity to review the ruliag in bane (/). The plaintiff in Grant v Fletcher (g) proved a verbal contract of purchase by the broker, and, to comply with the statute, gave in evidence an unsigned entry in the broker’s book, and imperfect bought and sold notes. A nonsnit was supported on the ground that the notes did not constitute a sufficient memorandum in writing within the statute. In the judgment it is stated that the entry in the broker's book is the original, and the bought and sold notes ought to be copies of it; and, further, that a valid contract may probably be made by perfect notes, signed by the broker, and delivered to the parties, although the book is unsigned. In Goom v. Aflalo (h), 1826, the entry in the broker’s book was not signed, whereas the bought and sold notes were properly signed. “A signed entry in the broker’s book,” observed Chief Justice Abbott, by whom the judgment of the court was deliv- ered, “and signed notes conformable to each other delivered to the parties, are spoken of as making a valid contract; the entry in the book has been called the original, and the notes copies, but there is not any actual decision that a valid contract may not be made by notes duly signed, if the entry in the book be unsigned; and in one ease the late Lord Chief Justice Gibbs is reported to (f) Per Erle, J., Sievewright v. (g) 5B. & C. 486. Archibald, ubi supra. (h) 6B. & C. 117. 280 OF THE AUTHORITY CONFERRED. [Book I: Pr. 1. have spoken of some supposed decision to that effect as having been overruled.” The objection that the entry in the book was the original, and that the notes were consequently inadmissible, was overruled only after argument on a special case. The (202*] inference to be drawn from this is, that the *court was still far from recognizing the doctrine that the bought and, sold notes constituted the original contract (¢). The signature in the broker’s book has been held not to be essential to the validity of the contract on the ground that a rule making such a signature essential would be followed by serious inconvenience, since the validity of the contract would then de- pend upon some private act, of which neither of the parties to the contract would be informed, and it would thus be in the power of a negligent or fraudulent man to render the engagements of parties valid or invalid at his pleasure (7). In JZawes v. Forster (k), decided in 1834, there was a memorandum signed in the broker’s book. There were also bought and sold notes tally- ing with each other, but varying from the book. On the first trial, Lord Denman ruled that the bought note, produced by the buyer, the plaintiff, was sufficient, and was the proper evidence of the contract, and not the book, and that no notice to produce the sold note need be given to the defendant. The court granted a new trial, holding that this evidence was not the proper evidence of the contract, unless there was a custom of trade that the bought and sold notes, and not the signed broker’s book, were the contract. This is the explanation of the case given by Baron Parke in Thornton v. Charles (1), and in Pitts v. Beckett (m), and by Mr. Justice Patteson in Sievewright v. Archibald (n). On the new trial, the jury found the custom that the notes, and not the broker’s book, constituted the contract. A bill of excep- tions was tendered, but the defendant did not proceed with the matter to argument. “ Possibly,” observed Mr. Justice Patte- son (0), “if he had, it might have been held that the bought and sold notes acquiesced in constituted a new contract; but that they | (i) Per Erle, J., Sievewright v. Arch- (m) 13M. & W. 748, 746. ibald, ubi supra. (n) 20L. J., Q. B. 529; 17 Q. B. 108, (j) Ubi supra. 115. (k) 1 Moo. & Rob. 368. (0) Ibid. (1) Infra, OWAP. u1.] EXECUTION OF PAROL CONTRACTS. 281 could ever be treated under such circumstances as the original contract seems to me impossible.” The verdict may well be sup- ported on the facts of the case, as the acceptance of the notes without objection was evidence for the jury of mutual assent to a contract, upon the terms expressed in those writings which agreed (7). Thornton v. Charles (q), in the year 1842, was an action for tallow *sold and delivered. The bought note described [203*] the transaction as a purchase of fifty casks, the sold note as a sale of two hundred casks. In the broker’s book the sale was entered as fifty, the remainder of the two hundred being allotted to other purchasers. The fifty casks were never actually delivered to the defendant. It was objected on this evidence that the plaintiff ought to be nonsuited on the grounds, first, that as there was a variance between the bought and sold notes, the entry in the broker’s book not being admissible, no valid contract had been proved; and secondly, that there was no evidence to show any delivery of the fifty casks to the defendant. The broker, in a con- versation with the defendant, had offered to “put off” those fifty casks. “Whether enough has been done to satisfy the Statute of Frands,” observed Mr. Baron Parke, “is a point that we need not discuss at present. But I apprehend it has never been decided that the note entered by the broker in his book, and signed by him, would not be good evidence of the contract so as to satisfy the Statute of Frauds, there being no other. The case of Hawes v. Forster underwent much discussion in the Court of King’s Bench when I was a member of that court, and there was some difference of opinion amongst the judges. . . . Certainly it was the impression of part of the court, that the contract entered in the book was the original contract, and that the bought and sold notes did not constitute the contract. The jury found that the bought and sold notes were evidence of the contract, but on the ground that those documents, having been delivered to each of the parties after signing the entry in the book, constituted evidence of a new contract made between the parties on the foot- ing of those notes.” Lord Chief Baron Abinger adhered to his opinion that when the bought and sold notes differ materially (p) See per Erle, J., Sievewright v. ubi supra. Archibald, ubi supra, and Parke, B., (q) 9M. & W. 802. 282 OF THE AUTHORITY CONFERRED. [Book I: PT. IL. from each other, there is no contract, unless it is shown that the broker’s book was known to the parties. The case was sent for new trial to determine the meaning of the expression “put off.” In Yownend v. Drakeford (r), 1848, there was a material dif- ference between the bought and sold notes. No mention is made of any entry of the sale in the broker’s- book. Lord Denman ruled that there was no contract. Hullock, B., said, in Henderson v. Barnewall (s): [204*] “ Bought *and sale notes are not essential to the validity of the contract; the entry signed by the broker is alone the binding contract” (7). In Pitts v. Beckett (u), 1845, two parties agreed to make a con- tract. They employed a broker to draw it up. In doing so, he omitted a stipulation agreed upon, without communicating with the parties. The vendee refused to be bound, and the court held that he was not liable. “The parties meet and enter into a con- tract,” said Mr. Baron Rolfe, “and they authorize another to draw it up, and he, behind the back of one of them, draws up a differ- ent contract and never communicates to him that he has done so. Surely that cannot bind him?” The Court of Common Bench held, in Parton v. Crofts (), 1864, that in an action for non-acceptance the sold note is a mem- orandum sufficient to satisfy the requirements of the 17th section of the Statute of Frauds. The proposition to be inferred from Hawes v. Forster (y) in conjunction with this case is, that where one of the notes only is put in, the court will assume that to be a true representation of the contract between the parties, in. the absence of proof that the other contained different terms. An action was brought in Scevewright v. Archibald (2), which was decided in 1851, for non-acceptance of pig iron. At the trial, before Lord Campbell, the bought note was produced. It differed materially from the sold note, and there was no signed entry in the broker’s book. The jury found that the defendant had rati- fied the contract in the terms stated in the bought note. See post, p. 290. 1 See post, p. 263. (g) Segrave v. Kirwan, Beat. 157. (e) See Hitchins v, Congreve, 4 Russ. 4See post, p. 295. 562. (A) Pratt v. Barker, 4 Russ. 507, *See post, p. 265. 5 See post, p. 297. (f) Hunter vy. Atkins, 3 M. & R. 140. CHAP. 1.] RIGHTS OF AGENT — DIGEST OF RULES. 297 one another. They may be all referred to the principle that where any relation exists by means of which a person is able to exercise a dominion over another, the court will annul a transac- tion under which a person possessing that power takes a benefit, unless he can show that the transaction was a righteous one. i (i.), (k.) As to the other duties of agents, it will be seen, when their liabilities are considered, that an agent can neither refuse to account nor mix his principal’s and his own goods and money with impunity (7). Sgor. 2.— Duties of Particular Classes of Agents. The duties of an agent may be varied and modified by con- tract, but it is none the less convenient to show briefly the appli- cation to particular classes of agents of the rules which define the duties of agents in general. An auctioneer is bound: (a.) To use reasonable skill and diligence in his business.! In Denew v. Deverell (k), the plaintiff, an auctioneer, had neglected to insert a usual clause in particulars of sale, by reason of which omission the sale was fruit- less. The plaintiff accordingly failed to recover com- mission, although the particulars were shown to the defendant. “I pay an auctioneer,” said Lord Ellen- borough, “as I do any other professional man, for the exercise of skill on my behalf which I do not myself possess, and Ihave a right to the exercise of such skill as is ordinarily possessed by men of that profes- sion or business. If from his ignorance or careless- ness he leads me into mischief, he cannot ask for a recompense, although from a misplaced confidence I followed his advice without remonstrance or sus- picion.” (i) See Book III., Chap. 2. Held, that the auctioneer being liable 1 Where an auctioneer in making an only for gross negligence or ignorance, entry of asale in his sale-book omitted was not liable in damages, the act hav- to comply with the requirements of the ing been recently passed, being of statute regulating sales at public auc- doubtful construction, and not having tion, in consequence of which the sale ing received a judicial interpretation. could not be enforced, and the owner of Hicks v. Minturn, 19 Wend. 550. the property suffered a loss on a re-sale: (k) 3 Camp. 491. 298 [217%] RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Book II. *(b.) To sell to third parties, 2. ¢., not to purchase him- self.t This disability to purchase may continue after the date of the auction. Thus, the Court of Ex- chequer held, in Oliver v. Court (0), that an auctioneer employed to sell cannot be permitted on equitable prin- ciples to purchase the property himself; and that if the person so employed has also been in other respects con- nected with the interests of the vendor, as, for instance, by having been concerned in valuing the property, and purchases the estate next day by private contract, the property not having been sold at the auction, the pur-' chase will be set aside. In this case the purchase was set aside after the lapse of more than twelve years. In ordinary cases, however, the disqualification to pur- chase does not continue after the auctioneer has de- scended from the rostrum (2): (c.) To sell only for ready money unless otherwise author- ized (m):* (d.) To keep the deposit until completion of contract (n). An auctioneer is a stakeholder (0): (e.) To disclose the name of his principal ( p):8 18ee post, p. 272 et seq. (2) 8 Price, 127; Dan. 801. (m) Williams v. Millington,H. BL. 81. 3 See ante, p. 122. Auctioneers employed to sell goods, with discretion to sell on credit, take notes from certain buyers to themselves, payable at a future day, and the makers of these notes fail before they come to maturity: Held, thatthe principal and not the auctioneers should bear the loss, unless it appear that the auctioneers appropriated the notes to their own purposes; and though the auctioneers procure such notes to be discounted for their accommodation, yet if at the time they were in advance to their principal to an equal or greater amount, this will not be such an appropriation to their own use as will make them liable to bear the loss. Townes v. Birchett, 12 Leigh, 173. (x) Edwards v. Hodding, 5 Taunt, 815; Gray v. Gutteridge, 1 M. & R. 614. (0) Burrough v. Skinner, 5 Burr, 2639, (p) Peake, 120; Franklyn v. La- mond, 4 C. B. 367. * An auctioneer, acting as the agent of another in the sale of property, is personally liable as vendor, unless at the time of the sale he discloses the name of his principal. His general employ- ment as auctioneer is not per se notice that he acts as agent. Mills v. Hunt, 20 Wend. 431. . It seems that even when an agent dis- closes the name of his principal, he is personally liable when he signs in his own name a written contract which does not upon its face show that he contracts as agent. Mills v. Hunt, supra, cHAP. 1.] RIGHTS OF AGENT— DIGEST OF RULES. 299 (f.) To sell in person, 2. ¢., not to delegate his authority (g):1 (g.) To account to his employer, but not for interest (7), un- less it was his duty to make investment (s): (h.) To keep the goods entrusted to him with the same care that a prudent man would exercise (¢). In case of fire, robbery, or other damage due to wis major or accident, he is not liable, provided he has been guilty of no default (2): (i.) Lastly, with respect to his duty at sales. An auctioneer should obtain the best price, and not sell for a less price or in a different manner from that specified in his instructions;* or, if no instructions are given, *from that justified by usage; but if obedience to [218*] his instructions would involve a fraud on a third per- son, he must not obey them, since no contract can oblige a man to make himself the instrument of fraud (x) As to bill brokers or agents employed in negotiating bills of exchange, Such an agent is bound without delay — (1.) To endeavor to procnre acceptance: (2.) On refusal, to protest for non-acceptance when necessary: (3.) To advise the remitter of the receipt, acceptance, or pro- testing, and (4.) To advise any third person who is concerned (y). As to mercantile agents — The following is given merely as a brief summary of the duties, inasmuch as they are more fully treated elsewhere. Where the agent’s instructions are express, he must obey them (q) Cockram v. Irlam, 2M. & 8. 301; may render himself personally liable to Coles v. Trecothick, 9 Ves. 251. thé highest bona jide bidder, by know- 1See ante, p. 122. ingly knocking the property of on a (r) Harrington v. Hoggart, 1 B. & higher bid by the owner of the prop- Ad. 577. erty. Warlow v. Harrison, 1 Ell. & (s) 8 Ves. 72. EIl. 295. (t) See Coggsv. Bernard, 2 Ld.Raym. —(w) Guerreiro v. Peile, 3 B. & A. 616; 917. and see Bateman’s Law of Auctions, (uw) See Davis v. Garrett, 6 Bing. 723; 161. Cafirey v. Darby, 6 Ves. 496. 3 See ante, p. 36. 2 An auctioneer, advertising to sell (y) Beawes, 431; Paley by Lloyd, 5. the property of another without reserve, 300 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Itt. in substance, except where they are illegal, in which case per- formance itself would be wrong (2). Where the instructions are general, he must follow the usage and custom, provided that course would not be injurious to his principal, or, in the absence of such usage, act to the best of his judgment and bond fide (a)? With respect to the duty to insure the goods of the principal,’ (z) Holman v. Johnson, Cowp. 341; Ex parte Mather, 3 Ves. 373. 1 See ante, p. 36. (a) Comber v. Anderson, 1 Camp. 523; Lambert v. Heath, 15 M. & W. 486. ?See ante, p. 111. ® Factors having the goods of their principals in their possession may in- sure them, but they are not bound so to do, unless they have received orders to insure, or promise to insure, or the usage of trade, or the habit of dealing between them and their principal, raises an obligation to insure. See Sheenfeld y. Fleisher, 73 Ill. 404; Scheeffer v. Kirk, 49 id. 251; Brisban v. Boyd, 4 Paige, 17; Lee v. Adsit, 87 N. Y. 78. If a factor, who is in any case re- quired to insure the goods of his prin- cipal, fails to do so, he becomes the in- surer himself and liable as such in the event of loss, and is entitled to credit for the premium which should have been paid. Shenfeld v. Fleisher, supra; De Tastet v. Crousillat, 2 Wash. C. C. 182, 136; Morris v. Summerl, id. 203. See, also, Perkins v. Washington Ins. Co., 4 Cow. 645. Aletter issued by a firm of commis- sion merchants, inviting consignments of goods and stating that they ‘ will be covered by insurance as soon as re- ceived in store,” does not import that they personally were to be the insurers of such goods, and is fulfilled by their obtaining reasonable and proper insur- ance against fire. Johnson v. Camp- bell, 120 Mass. 449. The insurance in such case need not be in the name of the consignor, nor need the policy be placed in his custody or control. Johnson v. Campbell, supra. Where it is the general custom of con- signees to insure for the security of the owner of the goods, tie consignee will be placed in the situation of an insurer in case of loss, if he fails to protect the goods by an insurance. Kingston v. Wilson, 4 Wash. C. C. 310, 315. See, also, DeForest v. Fulton Ins. Co., 1 Hall, 84; French v. Reed, 6 Binn. 308. But if the custom has a view merely to the security of the consignee, he may, if he choose, waive the benefit of it. Kings- ton v. Wilson, supra. But where there is no general usage to insure, and the merchant’s custom is never to insure without orders, a prom- ise by his factor that he will write to his principal to get insurance made, does not bind the principal to insure. Ran- dolph v. Ware, 3 Cranch, 503. If a person who is under no obliga- tion to execute an order of insurance, nevertheless undertakes it and executes jt defectively, he is answerable for the loss. French v. Reed, 6 Binn. 308. But where A. & B. were joint owners of a vessel and A. voluntarily under- took to get the vessel insured, but neg- lected to do so, and the vessel was lost, it was held that no action would lie against A. for the nonperformance of his promise, though B. sustained a dam- age by the nonfeasance, there being no consideration for the promise; but a factor or commercial agent, who is en- titled to a commission, will be answer- able for not executing an order to in- sure. Thorne v. Deas, 4 John. 84. CHAP. 1.] DUTIZS OF AGENT— DIGEST OF RULES. 801 the rule is thus stated by Mr. Justice Buller: “It is now settled as clear law, that there are three instances in which an order to insure must be obeyed: “First, where a merchant abroad has effects in the hands of his correspondent here, he has a right to expect that he will obey an order to insure, because he is entitled to call his money out of the other’s hands, when and in what manner he pleases. “The second class of cases is where the merchant abroad has no effects in the hands of his correspondent; yet, if the course of dealing between them is such, that the one has been used to send orders for insurance, and the other to *comply with them, the former has a right to [219*] expect that his orders for insurance will still be obeyed unless the latter give him notice to discontinue that course of dealing. “Thirdly, if the merchant abroad send bills of lading to his correspondent here, he may engraft on them an order to insure, as the implied condition on which the bills of lading shall be accepted, which the other must obey if he accept them, for it is one entire transaction ” (d). With respect to the other duties of mercantile agents, viz., the duty to account, to keep their principal’s money distinct from their own, to act in good faith, to use due diligence and the like, nothing further need be said here. The master of a ship is bound — (a.) To give all his time to his employer (c). (b.) To accept no interest in conflict withhisduty. Hence he may not make profits in the course of his agency (¢).! But if there is no agreement to the contrary he may claim “primage accustomed,” when inserted in the charter-party (d). A commission merchant having in his Kline v. Queen Ins. Co., 7 Hun, 267. possession the goods of his principal de- (b) Smith v. Lascelles, 2 T. R. 187. posited with him for sale, has an inter- (c) Thomson v. Havelock. 1 Camp. est in the property which entitles him to 527; Maclach. Mer. Ship. 172. insure the same against fire inhisown ‘See Berthoud y. Gordon, 6 Miller name to the full value of the goods. (La.), 579. DeForest v. Fulton Ins. Co., 1 Hall, 84; (d) Best v. Saunders, M. & M. 208; Brisban v. Boyd, 4 Paige, 17. See, also, Scott vy. Miller, 3 Bing. N. C. 811. 502 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIT, The ship’s husband is bound — (a.) To select tradesmen and appoint officers without par- tiality (e): (b.) To see that the ship is properly repaired, equipped, and manned (f): (c.) To procure freights or charter-parties (7°): (d.) To preserve the ship’s papers (/): (e.) To make the necessary entries (7): (f£.) To adjust freight and averages (f°): (g.) To disburse and receive moneys, and keep and make up the accounts as between all parties interested (9): (h.) To act in person: (i.) To account. If he refuses or delays to do so, he will be liable to pay interest on the money in his hands (A)'. His duties are thus summarized in Bell’s “Principles of the Law of Scotland,” p. 449: “1. To arrange everything [220*] for the *outfit and repair of the ship—stores, repairs, furnishings; to enter into contracts for affreightment; to superintend the papers of the ship. 2. His powers do not extend to the borrowing of money; but he may grant bills for furnish- ing stores, repairs, and the necessary engagements, which will bind the owners, although he may have received money wherewith to pay. 3. He may receive the freight, but is not entitled to take bills instead of it, giving up the lien by which it is secured. 4. He has no power to insure for the owner’s interest without special authority. 5. He cannot give authority to a law agent that will bind his owners for expenses of a lawsuit. 6. He cannot delegate his authority.” As to solicitors — A solicitor who accepts a retainer to do any business as solic- itor, contracts to carry on the business to its termination, provided the client supplies him with reasonable funds (2), viz., such funds as enable the solicitors to proceed with the cause by meeting the expenses as they arise (4). (e) Card vy. Hope, 2 B. & C. 661; (h) Pearce v. Green, 1J. & W. 135, Darby v. Baines, 9 Ha. 372; Abbott, 139, Shipping, 79. 1See post, p. 254 et seq. (f) Abbott, Shipping, 79. (i) Whitehead v. Lord, 7 Ex. 791. (y) Abbott, Shipping, 79; Sims y. () Haslop v. Metcalf, 1 Jur. 816. Brittain, 4B. & Ad. 375, *See the duration of authority con- CHAP. I.] His duty is— (a.) To exercise reasonable fession.! DUTIES OF AGENU — DIGEST OF RULES. 803 skill and diligence in his pro- The measure of damages recoverable in consequence of a breach of duty by a solicitor is the loss or damage to which the client has been subjected directly by reason of the solicitor’s de- fault or neglect. In Stannard v. Ullithorne (1), A., the assignee of a lease, em- ployed B. as an attorney to peruse, on his behalf, the draft of an sidered at length in Weeks on Attys. § 248. . 1Cooley on Torts, 649; Weeks on Attys. § 284 et seq. The rule upon this subject is thus stated in Leighton v. Sargent, 27 N. H. 460, 469: ‘By our law a person who offers his services to the community generally, or to any individual, for em- ployment in any professional capacity asa, person of skill, contracts with his employer: 1. That he possesses that reasonable degree of learning, skilland experience which is ordinarily possessed by the professors of the same art or science, and which is ordinarily regarded by the community and by those conver- sant with that employment as necessary and sufficient to qualify him to engage in such business... . 2. That he will use reasonable and ordinary care and diligence in the execution of his skill and the application of his knowledge to accomplish the purpose for which he isemployed. He does not undertake for extraordinary care or extraordinary diligence, any more than he does for uncommon skill. . . . 3. Instipulating to exert his skill and apply his diligence and care, the medical and other profes- sional men contract to use their best judgment.’’ The action in this case was against a surgeon, but the court say that the duties of lawyers and physi- cians, engineers, machinists, shipmas- ters, builders, brokers, etc., are governed by the same general rule. See, also, Cooley on Torts, 648. Judge Cooley lays down the rule that ‘the practitioner must possess at least the average degree of learning and skill in his profession in that part of the country in which his services are offered to the public; and if he exercises that learning and skill with reasonable care and fidelity, he discharges his legal duty.”” Cooley on Torts, 649; Walker v. Goodman, 21 Ala. 647; Landon v. Humphrey, 9 Conn. 209; Patten v. Wiggen, 51 Me. 594; Simonds y. Henry, 39 id. 155; Howard v. Grover, 28 id. 97; Barnes y. Means, 82 Il. 379; Utley v. Burns, 70 id. 162; Ritchey v. West, 23 id. 385; Holmes v. Peck, 1 R. I. 243; Hathorn v. Richmond, 48 Vt. 257; Wilmot v. Howard, 39 id. | 447; Branner v. Stormont, 9 Kan. 51; Craig v. Chambers, 17 Ohio St. 253; Gallaher v. Thompson, Wright, 466; Smothers vy. Hanks, 84 Iowa, 286; Wood v. Clapp, 4 Sneed, 65; Hitchcocks v. Burgett, 88 Mich. —; Long v. Mor- rison, 14 Ind. 595; Reynolds v. Graves, 3 Wis. 416; Gramm v. Beener, 56 Ind. 497; Reilly v. Cavanaugh, 29 id. 435; Varnum v. Martin, 15 Pick. 440; Phil- lips v. Bridge, 11 Mass. 242; Carpenter v. Blake, 60 Barb. 488; Bellinger v. Craigue, 81 id. 534; Gambert y. Hart, 44 Cal. 542; Heath v. Glisan, 3 Oreg. 64; Boydston v. Giltner, 3 id, 119; Williams v. Poppleton, 3 id, 189; Hord v. Grimes, 13 B. Mon. 188, (2) 10 Bing. 491. 304 RIGITS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL. assignment. B. allowed A. to execute an unqualified covenant that the lease was valid (an unusual covenant) without informing him of the consequences. B. was accordingly held liable for such damages as A. had suffered. It is extremely difficult to define the exact limit by which the skill and diligence which a solicitor undertakes to furnish in the conduct of a case is bound, or to trace precisely the dividing line between that reasonable skill and diligence which appears to sat- isfy his undertaking, and that crassa negligentia or lata culpa, mentioned in some of the cases, for which he is undoubtedly re- sponsible (mm). *Solicitors who undertake to act for a client are pre- sumed to know the duties imposed upon them by act of parliament and rules of court, as well as by the ordinary practice and routine of professional duty, and will be liable to their clients for want of such knowledge; but they are not liable for mistakes upon difficult points of law, unless they undertake to act upon their own opinion (z). Except in those cases where there is a legal presumption that a solicitor has the requisite knowledge, he may free himself from responsibility by following the advice of counsel (0). Solicitors have been held guilty of actionable negligence: Where proceedings were taken in a court that had no jurisdic- tion, which fact was patent (p), or before the necessary prelimi- naries had been observed (g); in suffering judgment to go by default (7); in failing to deliver brief to counsel in time (s); in failing to be present at trial with the witnesses (¢); where the client’s papers have been lost (7) or mislaid («).! (b.) To observe the utmost good faith and fidelity towards his client. [421] (m) Per Chief Justice Tindal, Gode- froy v. Dalton, 6 Bing. 467. (n) Kemp v. Burt, 1 Nev. & M. 262; Pitt v. Zalden, 4 Burr. 2060; Hart v. Frame, 6 Cl. & F. 193; Stevenson v. Rowland, 2 Dow. & C. 119. (0) Godefroy v. Jay, 7 Bing. 413; Bracey v. Carter, 12 Ad. & E. 3873. (p) Williams v. Gibbs, 5 Ad. & E, 208. (q) Hunter v. Caldwell, 10 Q. B. 69. (r) Godefroy v. Jay, supra. (s) Lowry v. Guildford, 5 C. & P. 234. (¢) Hawkins v. Harwood, 4 Ex. 503; Reeve v. Rigby, 4 B. & Ald. 203. (w) Reeve v. Palmer, 5 C. B., N.S. 91. ; (x) Wilmoth vy. Elkington, 1 N. & N. 749. 1See the English cases collected in Cooley on Torts, 648; Weeks on Attys. p. 483, cuar. 1.] DUTIES OF AGENT—DIGEST OF RULES, 305 Hence it is his duty to avoid the acceptance of interests con- flicting with those of his client, and to advise his client with a due regard to the latter’s interest. (c.) To preserve an inviolable secrecy with respect to the comniunications of his client, made to him whilst act- ing as solicitor, whether the communications relate to an action existing or in progress at the time they are made (y). Provided the communication does not make the solicitor a party to a frand (2), and it is received in the ordinary scope of his pro- fessional employment, either from a client, or on his account, or for his benefit in the transaction of his business; or if he com- mits to paper, in the course of his employment on the client’s behalf, matters which he knew only through his *profes- [229*] sional relation to the client, he is bound to withhold them, and will not be compelled to disclose the information or to pro- duce the papers in any court, either as party or witness, unless the evidence required of him relates only to collateral matters («). The privilege of secrecy, on the ground of professional confi- dence, extends to business communications between solicitor and client, and solicitor’s agent, client’s agent and solicitor, and be- tween solicitor and his agent. The practitioner’s mouth is shut forever. The protection does not terminate with the death of one of the parties to it; if the solicitor becomes an interested party, or ceases to practise, it may be enforced by injunction (0). (y) Cromack v. Heathcote, 4 Moo. (b) Hare on Discovery, 2nd ed., p. 857; Clark vy. Clark, 1M. & Rob. 3. 163; as to the extent of the privilege. (z) Gartside v. Outram, 26 L. J., Ch. see Fenner v. South-Coast Rail. Co., L. 114, R., 7 Q. B. 77; Simpson v. Brown, and (a) Doe v. Andrews, Cowp. 845; and Hampson v. Hampson, 26 L. J., Ch. see per Lord Brougham, Greenough v. 612; as to its duration, see Chomondley Gaskell, 1 My. & K. 98. y. Clinton, 19 Ves. 268, 20 306 [223*] RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [B00K I. * CHAPTER IL. LIABILITIES OF AGENT TO PRINCIPAL ON CONTRACTS. PAGE. Sect. 1.— Of the Liability Generally. An agent is liable, whenever he vio- lates his duties, to indemnify the principal for loss or damage occa- sioned by such breach of duty... 224 Test of liability upon contracts.... 225 Suer. 2.— Measure of Damages. The measure is ascertained by the application of rules common to the whole law of contracts...... 226 Rules stated in Hadley v. Baxendale 226 Primé facie the damages which ac- tually result from the breach of contract are recoverable ........ 227 Effect of notice in increasing meas- ure of damages.....-++.+eese0e 227 Observations of Martin, B., and Blackburn, J.....-.-seeeeeceee The damages may be nominal or substantial Opinion of Mr. Justice Story...... Where substantial damages are claimed the measure is the actual anew e mn w ere eeerene Aamage .. eee ceeeeeecceeeereee 229 Webster v. De Tastet and Van Wart v. Woolley explained..... 229 No conflict between cases which negative a right to recover sub- stantial damages and cases which affirm aright to nominaldamages 229 Further illustrations of the measure of damage......ecceeeeeeceeee Summary of principles........... Sxct. 3.— Omission to Perform Gratuitous Undertaking. When an agent is bound to per- form a gratuitous undertaking.. 235 Jiustrations......cessseeeeeaseee 235 2s PAGE. The distinction between paid and unpaid agents vanishes. in con- sidering their liability for mis- FEASANCE.. cece cece ee cseeceeee Action negligence variable Meaning of the expression — gross negligence.......sesscececeeee Sect. 4. — Negligence in Perform- ing Undertaking. Failure to exercise the degree of skill which the agent holds him- self out as possessing........... Illustrations of the skill and dili- gence required .........c essen Action against gratuitous agent for loss due to a wrong entry at the custom house........esseeeeeee Negligence in insuring........... Skill required of an arbitrator..... Distinction when the agent holds himself out as possessed of skill. 242 Result of the cases............00 242 Srct. 5.— Profits made in course of Agency. Profits made in course of agency be- long to the principal........... Earlier cases refer to master and apprentice .........eseeeeeeeee Profits made by use of principal’s MHONCY ew eresernarsens rare a aveieacede es 243 Illustrations of the principal’s claim 244 Profit made on re-sale of shares... 245 Claim by purchaser of commission received by his broker from the vendor allowed. .....+.see vere Acquiescence on the part of the principal affords the agent a good ELEN CEs ai. aicinoeewemossamdoie 246 The profits must be made in em- ployment as agent.......ee0+e- ouap. 11] PAGE. Sscr. 6.—Liability of Agent to Account, Agent is bound to account for prin- cipal’s property.............68- ‘When for interest.............00 247 Decisions present great difficulties. 248 Rule laid down by Lord Ellenbor- OUP siscecietck neers srces ses Liability of agents retaining princi- pal’s money by his authority.... 248 Agents accountable to their princi- \Sub-agents to agent....... [224*] *Fiduciary relation a good ground for an account..... Neglect to account renders agent liable to forfeit commission..... 250 Effect of mere irregularity.... LIABILITY OF AGENT TO PRINCIPAL. 807 : _ .PAGE, Agent cannot dispute principal's title to money paid on behalf of PENGIPAL eos ss ee se aneenaspaseaces 250 Application of the rule to bro- kers, warehousemen, and wharfingers and others..... 250 Cases to which the rule does not apply — determination of bail- ment by title paramount....... 250 When a bill for an account lies.... 251 Grounds upon which the equitable jurisdiction is founded.......... Distinction between cases of general agency and cases of agency in single transactions............. 252 Effect of pleading account stated.. 252 Effect of proof of mistakes and omis- sions only in the account stated.. 252 Effect of proof of fraud........... 252 Sscr. 1.— Of the Liability Generally. Aw agent may be personally liable upon his contracts to his prin- cipal or to third parties. First, then, as to his liability to his prineipal. Whenever an agent violates his duties to his principal, he will be liable to indemnify the latter for any loss sustained by him, provided the loss is a natural result of such violation of duty (a). (a) Paley on Agency, by Lloyd, 9, 10, 16, 17, 'Bell v. Cunningham, 3 Pet. 69; Dodge v. Tileston, 12 Pick. 328; Clark v. Roberts, 26 Mich. 506; Pownall v. Bair, 78 Penn. St. 403; Howe v. South- erland, 39 Iowa, 484; Price v. Keyes, 62 N. Y. 878; Wilts v. Morrell, 66 Barb. 511; Johnson v. Wade, 58 Tenn. 480; McDermid v. Cotton, 2 Brad- well, 297. One who bargains to render services for another, undertakes for gcod faith and integrity but not for infallibility. An employee is liable to his employer for negligence, bad faith, or dishonesty, but not for losses incidental to errors of judgment. Page vy. Wells, 37 Mich. 415, But the good faith of the agent will not exonerate him from liability to his principal, if he has in fact been neg- ligent or has disregarded orders. Bank of Owensboro v. Western Bank, 13 Bush, 526. Thus, if an agent, in- trusted with the property of his princi- pal, parts with it in a way or for a pur- pose not authorized, he is liable for a conversion, although there was no wrongful intent on his part. Laverty y. Snethen, 68 N. Y. 522. In an action against an agent for vi- olation of instructions, evidence that the deviation from the instructions was ad- vantageous to the principal, is not ad- missible. McDermid v. Cotton, 2 Brad- well, 297. Where an agent for another for the 808 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Book Mf. This rules applies wherever the agent, not being a gratuitous sale of property, who has agreed not to sell for credit, except to those who are good and responsible, and to take no paper but good, first class collectible paper, and such as he is willing to guar- antee, takes paper which he knows to be worthless, and turns it over to his employer, who is ignorant of its char- acter, he mekes himself liable as guar- antor of the paper; and he is not en- titled to have the paper returned to him as a condition precedent to judgment against him on such guaranty. Clark v. Roberts, 26 Mich. 506. If a party engaged in the business of loaning money on real estate security, solicits money to loan, promising to take a first mortgage on real estate in value double the sum loaned, and ob- tains the money, which he loans, tak- ing a mortgage on real estate which is subject to prior incumbrances, which are unknown to the party advancing the money, and under which the property mortgaged is sold, whereby the debt is lost, such agent will be liable to the party advancing the money in an action on the case. The fact in such case that the mortgaged property was of double the value of all the incumbrances on it, will not relieve the agent of liability to his principal, who had no knowledge of any prior liens until the property was lost by sale under a prior deed of trust. Shipherd v. Field, 7¢ Ill. 438. ; Instructions to remit money through the mail in notes of a specified denom- ination, are not complied with by remit- ting notes of a smaller denomination and a greater number. Wilson v. Wil- son, 26 Penn. St. 393. In an action by a factor against his principal to recover a general balance, the plaintiff's negligence in selling the defendant's goods may be given in evi- dence in mitigation of damages, and to bar all charges for commissions, and all charges for interest, storage, etc., caused by plaintiff’s negligence. Dodge vy. Tileston, 12 Pick. 328. Proof that an agent has exceeded his authority and that a loss has re- sulted therefrom, though actionable, will not alone support an action by the . principal against him for fraud. It is competent evidence on the issue of fraud in an action by the principal against him, and with other circum- stances may satisfactorily establish it, but it does not ipso facto constitute fraud. Price v. Keyes, 62 N. Y. 378. Where an agent has become respon- sible to his principal by the misconduct of his own sub-agent, and hag been compelled to pay his principal, he may recover from the sub-agent. Pownall v. Bair, 78 Penn. St. 4038. The burden of proving negligence alleged by the plaintiff is with the plaintiff, and so remains through the trial. Heinemann v. Heard, 62 N. Y. 448, reversing 8.C. 2 Hun, 324. Bank officers who abuse their powers must personally account to the bank for what it shall suffer. Austin vy. Daniels, 4 Den. 299; First Nat. Bank v. Reed, 36 Mich. 263. See, generally, Ang. & Am. on Corp. sec. 312. Where a customer of a bank in Chicago had railroad stocks which were held by the bank in its name in other banks in New York, and during the great Chicago fire, directed his banker to telegraph immediately and have them sold, and directed his dispatch to be sent from a, station outside the city, | under the belief that none could be sent from the city, and after this the bank sent a dispatch from the city, un- der which more stocks were sold than those it held for such customer, and, on the next day, sent another dispatch from the station outside the city, which did not get through for some time, and CIIAP. I1.] LIABILITY OF AGENT TO PRINCIPAL. 309 agent,’ neglects to enter upon the performance of what he has un- dertaken (6); or where the agent fails to exercise that degree of skill which is imputable to his situation or employment (c)*; or where he neglects the express instructions of his principal, or duties that may be reasonably inferred (d) either from the princi- pal instructions (¢), or from usage of trade or mode of dealing ();? provided the deviation from his duties implied or express is not of a slight and unimportant character,’ or occasioned by a sud- den and unforeseen emergency (9), or justified by the illegality ° of _ the instructions, in which cases the agent will not be liable. The same rule applies where the agent neglects to keep regular ac- counts (A),@or to account for profits made in the course of his agency (z),” or when he mixes the property of his principal with his own (Z). And where an individual is known to be contract- under which other railroad stocks were sold at a much lower price than the first: Held, that the customer was en- titled to recover of his banker for his stocks sold, the price received at the first sale, as he was the first to give a direction to sell. Follansbee v. Parker, 70 Til. 11. One may also be liable for falsely pre- tending to be and acting as the agent of another without authority. Thus where a party, falsely pretending to be an agent of the owner of land to sell the same, executes a contract for its sale, which is recorded, and upon which the purchaser brings suit for a specific per- formance, whereby the owner is put to trouble and expense in defending the same, such pretended agent will be liable to the owner in an action on the case for the damages sustained by him in defending the suit. Philpot v. Tay- lor, 75 Ill, 809. The remedy against one for falsely assuming to act as agent of an individ- ual or a public corporation, is an action on the case and not on the contract made by him. Hancock yv. Yunker, 83 Tl. 208. A defaulting agent cannot make good his default as between himself and his sureties on the one hand and his prm- cipal on the other, by taking the prin- cipal’s money for that purpose. City of Detroit v. Weber, 29 Mich. 24. 1S8ee post, p. 235. (b) Elsee v. Gatward, 5 T. R. 143. (c) Shiells v. Blackburn, 1 H. BI. 158. 2 See ante, p. 214. (d) Smith v. Lascelles, 2 T. R. 187; Wallace v. Telfair, 2 T. R. 188, note. (e) Park v. Hammond, 4 Camp. 344. (f) Ex parte Belchier, Ambl. 218; Moore v. Morgue, Cow. 480; Paley, 9. 3 See ante, p. 111. 4See ante, p. 167. (g) Catlin v. Bell, 4 Camp. 183. 5 See ante, p. 36. (hk) White v. Lady Lincoln, 8 Ves. 363. 6 See post, p. 247. (i) Rogers v. Boehm, 2 Esp. 702; Thompson v. Havelock, 1 Camp. 527; Turnbull v. Garden, 388 L. J., Ch. 331. 1See post, p. 247. (k) Rogers v. Boehm, supra; Travers yv. Townsend, 1 Bro. Ca. Ch. 384; Caf- rey v. Dazby, 6 Ves. 496; Wren v. Kir- ton, 11 Ves. 377, 282; Darke v. Martyn, 1 Beay. 525. 310 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIT. ing on behalf of a known principal, he will, as a general [225*) rule, incur *no personal liability upon such contract (J, unless such liability is necessarily implied from his con- duct or the form of the contract into which he has entered. An agent may contract orally or in writing. If he contracts orally, his liability or non-liability will depend upon the answer to the question, — to whom was credit given? This is a question of fact (m). If the agent acts within the scope of his authority, and credit is given to the principal alone, the former will incur no personal liability; but if credit is given to the agent alone, or to him and his principal jointly, he will be personally liable (nm). If the agent contract in writing or under seal, his liability or non- liability will, as a general rule, depend upon the true construction of the writing, thongh, as will be seen hereafter, a primd facie liability upon a written instrument may in certain cases be re- butted (0).! If a principal has entrusted goods to his agent for sale, and that agent wrongfully raises money upon such goods, the princi- pal is at liberty, at any time after he discovered the fact, in taking the accounts between himself and his agent, to abandon the goods altogether, and to treat the money so raised as money had and received to his own use.” This principle was carried to its full extent by the House of Lords in 1834, in the case of Keating v. Marsh (p). From the facts set out in a special verdict, it appeared that one Fauntleroy, a partner in a banking house, transferred stock belonging to the plaintiff by a forged power of attorney. The proceeds were paid to the account of the partnership, and afterwards appropriated by Fauntleroy, who was subsequently executed for other forgeries. The other partners were ignorant of the transaction, but with (1) Paterson v. Gandasequi, 15 East, parties, see post, p. 299 et seq. As to _ 62; Ex parte Hartop, 12 Ves. 352. agent's liability on instruments under (m) Serace v. Wittington, 2 B. & C. seal, see ante, p. 171. 11; Iveson v. Connington, 1 B. & C. 2 The right to waive a tort and sue in 160. assumpsit will be found treated at (n) Ex parte Hartop, supra. length by Judge Coonry in the Bench (0) See Wake v. Harrop, 1H. & C. and Bar for January, 1871 (Vol. 2, p. 202; and Lindus v. Bradwell, 5 C. B. 218); and see Cooley on Torts, 91 et seq. 583. (p) 1M. & Ayr. 582, 1 As to the liability of agents to third CHAP. 11.] LIABILITY OF AGENT TO PRINCIPAL. 811 common diligence would have known it. The Court of King’s Bench gave judgment for the plaintiff. This judgment was af- firmed by the Exchequer Chamber, whose judgment was itself affirmed by the House of Lords, the judges having been first sum- moned. In delivering the unanimous opinion of the judges who were summoned, Mr. Justice Park examined in order the several objections raised to the plaintiff’s right to recover, one of which was that the proceeds of the sale of the *stock [226*1 never came into the hands of the defendants so as to be money received by them to the use of the plaintiff. The objec- tion was held to be untenable, as the money had actually come into the possession of the defendants; and, secondly, as the de- fendants had the means of knowing, whilst it remained in their hands, that it was the plaintiff’s money. Tindal, C. J., deliver- ing the judgment of the Court of Common Pleas in a subsequent case (g), said: “ We conceive, on the principle laid down in Marsh v. Keating (r), that Messrs. Bonzi were at liberty, at any time when they found their factors had wrongfully raised money on their goods, in taking the accounts between themselves and their factors, to abandon their goods altogether, and to treat the money so wrongly borrowed by the factors on the pledge of the goods as money had and received to the use of themselves.” Secor. 2.— Measure of Damages. The liabilities of an agent commence from the moment he con- sents to act as agent for a lawful consideration. THis liability is dependent upon the duties undertaken by him; but the measure | of the damages to which he may be liable must be ascertained by the application of rules common to the whole law of contracts. ! The general rule of law upon the subject was laid down by the Court of Exchequer in the often-quoted case of Hadley v. Baxen- dale (s)1 The rule enunciated by the court in that case is, that (q) Bonzi v. Stewart, 5 Scott, W. R. 1. (r) Supra. defendants, who were common carriers, to be conveyed by them; and the de- (s) 9 Ex. 341,354; 23 L. J., Ex. 182. 1 Tn this case, which will also be found in Sedgwick’s Leading Cases on the Measure of Damages, p. 126, the plaint- iffs, the owners of a flour mill, sent a broken iron shaft to an office of the fendants’ clerk, who attended at the office, was told that the mill was stopped, that the shaft must be delivered imme- diately, and that a special entry, if necessary, must be made to hasten its delivery. The delivery of the broken 312 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Boox mI. where two parties have made a contract, which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly shaft to the consignee, to whom it had been sent by the plaintiffs as a pattern by which to make a new shaft, was de- layed for an unreasonable time, in con- sequence of which the plaintiffs did not receive the new shaft for some days after the time they ought to have re- ceived it, and they were consequently unable to work their mill from want of the new shaft, and thereby incurred a loss of profits: Held, that, under the circumstances, such loss could not be re- covered in an action against the defend- ants as common carriers. See, also, Fleming v. Beck, 48 Penn. St. 309, and the cases cited next below. See, how- ever, Davis v. Talcott, 14 Barb. 611; reversed on another point in 12 N. Y. 184. Speculative damages dependent upon possible, successive schemes, ought not to be given for violation of orders by a correspondent in commercial transac- tions; but positive and direct loss re- sulting plainly aad immediately from the breach of orders may be taken into the estimate. Bell v. Cunningham, 3 Pet. 69. See, also, Tide Water Canal Co. v. Archer, 9 Gill. & Johns. 479, 535; Brown v. Smith, 12 Cush. 366; Fleming v. Beck, supra; The Amiable Nancy, 3 Wheat. 546; The Schooner Lively, 1 Gill. 315; Smith v. Coudry, 1 How. 28; Thompson v. Shattuck, 2 Met. 615; Blanchard v. Ely, 21 Wend. 342; Olm- stead v. Burke, 25 lll. 86; Masterton v. The Mayor, 7 Hill, 61. A loss of profits within the contem- plation of the parties at the time of en- tering into the contract, and a direct consequence of the breach, and not speculative and contingent, may, how- ever, be recovered. Heinemann v. Heard, 2 Hun, 324; reversed on another point in 62 N. Y. 448. See, also, Short y. Skipwith, 1 Brock. 103, 109; Griffin v. Colver, 16 N. Y. 489; Freeman vy, Clute, 3 Barb. 424. In an action against a factor charging him as purchaser because of neglect to obey the instructions of his principal directing a sale, the measure of liability is the market value of the goods at the time of the receipt of the order, or within a reasonable time thereafter, to be allowed for sale. A charge, there- fore, allowing the highest market price between the time of the receipt of the order and that of the commencement of the action, is erroneous. Wheeler v. Lynch, 60 N. Y. 469. The measure of damages recoverable from a commercial factor or agent who sells goods intrusted to him for sale at a specified price, for less than the price authorized, is the actual damage sus- tained. Hinde v. Smith, 6 Lans, 464; Blot v. Boiceau, 3 N. Y. 78; Frothing- ham vy. Everton, 12 N. H. 239. It is therefore competent for the fac- tor in such a case to show in reduction of the damages, that the goods at the time of the sale, and down to the time of the trial, were worth no more than the price at which they were sold. Blot v. Boiceau, supra. See, also, Frothingham yv. Everton, supra. The general rule is, that for an agent's omission to keep the principal regularly informed of the agent's transactions and the state of the interests intrusted to him, the measure of damages is to be proportioned to the actual loss sus- tained by the principal. Arrott v. Brown, 6 Whart.. 9. An exception to this rule is where the information transmitted is such as to induce the principal, in adaptation of his operations to his means, to rely on an outstanding debt as a fund on which CHAP. 1.] LIABILITY OF AGENT TO PRINCIPAL. 3813 and reasonably be considered either arising naturally, z. ¢., accord- ing to the usual course of things from such breach of contract it- self, or such as may reasonably be supposed to have been in the contemplation of both parties at the time they made the contract, as the probable result of the breach of it. Here two modes of estimating the damages resulting from a breach of contract are suggested. The measure given by the one is the damage result- ing naturally from the breach; according to the other, it is the damage contemplated by both parties at the time of mak- ing the contract. *The criterion given by the second part [227*] of the rule has never been sanctioned by a direct author- ity. Wherever it has been appealed to, the judges have shown pretty clearly that it is to be considered as no more than a dictum. Primé facie the damages which actually result from a breach of contract are recoverable, provided that they are such as may fairly and reasonably be considered as arising directly and natur- ally, that is to say, in the ordinary course of things, from such a breach of contract. The amount of them may be unexpectedly large, but still the defendants must pay. If a man contracts to carry a chattel, and loses it, he must pay the value, though he may discover that it was more valuable than he had supposed. But when the damages sought to be recovered are not those which in the ordinary course of things would naturally arise, but are of an exceptional nature, arising from special and peculiar circum- stances, it is clear that in the absence of any notice to the defendant of any such circumstances, such damages cannot be recovered (¢). As to the intimation in the case of Hadley v. Baxendale (7), to the effect that “plaintiff might recover exceptional damages, apart from all question of a contract with regard to amount of damages, provided there was a special notice of the circumstances,” it was suggested in the same case, by Baron Martin and Mr. Justice Blackburn, that, in order that the notice may have any effect, it must be given under such circumstances as that an actual contract arises on the part of the defendant to bear the exceptional loss (a). he may confidently draw; in whichcase Midland Railway Company, L. Rep., 8 the agent makes the fund his own. C, P. 140. Arrott v. Brown, supra. See, also, (u) Supra. Ha ‘vey v. Turner, 4 Rawle, 228. (x) The following cases may be re- (¢) Per Blackburn, J., in Horne v. ferred to upon this question in addition 314 RIGHTS, ETC., ARISING OUT OF THE CONTRACT [BOOK III. Upon a review of the authorities, the appropriate rules seem to be the following: (1.) The measure of damages recoverable by a principal from his agent in consequence of a breach of duty by the latter is the loss or damage to which the principal has been subjected directly by reason of the agent’s default or neglect; in other words, it is the loss or damage which the agent’s breach of duty is the proximate of cause.! (*2.) The damages may be nominal or substantial — nominal where there is proof cf a breach of con- tract only, but not of resultant damage or loss; substan- tial where there is proof both of a breach and of resultant loss or damage. Mr. Justice Story remarks, in his excellent work on Agency: “There must be a real loss or actual damage, and not merely a probable or possible one (y). It is a good defense, or rather ex- cuse, that the misconduct of the agent has been followed by no loss or damage whatever to the principal; for then the rule applies that, though it is a wrong it is without any damage, and to main- tain an action both must concur, for damnum absque injurid and arjurid absque damno are equally objections to any recovery.” If the author meant it to be inferred that a principal has no right of action against his agent unless there is proof of a real loss or actual damage, he is in error, for such a proposition is at variance with authorities. Thus, in replying to an argument that the action in Ashby v. White (2) was not maintainable because there was no proof of hurt or damage to the plaintiff, Lord Holt ob- served: “Surely every injury imports a damage, though it does not cost the party one farthing, ... but an injury imports a damage.” So it is said by Lord Tenterden, in Marzetti v. Will- to those cited: Cory v. Thames Iron- works, &c. Co., L. Rep., 3 Q. B. 181; [228*] 1 The loss or damage need not be di- rectly or immediately caused by the act British Columbia Saw Mill Company v. Nettleship, L. Rep., 3 C. P. 499; Tyers v. Rosedale Iron Co., L. Rep., 8 Ex. 305, 10 ibid. 195; Gee v. Lancashire and Yorkshire Railway Company, 6 H. & N. 211; 30 L. J., Ex. 11; Wilson v. New- port Dock Company, L. Rep., 1 Ex. 177; 35 L. J., Ex. 97, which is done or omitted to be done. It will be sufficient if it be fairly attrib- utable to it as a natural result or a just consegence. Gilson v. Collins, 66 Dl. 186. (y) Story on Agency. sect. 222. (z) 2 Ld. Raym. 955. CUAP. I1.] LIABILITY OF AGENT TO PRINCIPAL. 815 tams (a), that a plaintiff is entitled to have a verdict for nominal damages, although he does not prove any actual damage at the trial (6). The measure of damages to which agents are liable is illustrated by the following cases: The right of the principal to nominal damages is recognized in Van Wart v. Woolley (c), in 1830. An agent was employed to present a bill for acceptance; he failed to do so, and Lord Ten- terden held that his principal was entitled to nominal damages, although no real damage was occasioned by the neglect, the bill and costs having been paid by other persons liable on it? “The opinion which I expressed in the former case,” said his lordship, referring to the case as reported in 3 B. & C. 439, “that the plaintiff was, at all events, entitled to *nominal dam- [229*] ages, was not my opinion only, but that of the whole court. (a) 1B. & Ad. 423, (b) See also Fray v. Voules, 1B. & E. 839; 28 L. J., Q. B. 282; and Van Wart v. Woolley, 1 M. & M. 520; Rus- sell on Mercantile Agents, 220; Mayne on Damages, 415. 1The last sentence in the above quo- tation is not to be found in seclion 222 of Story on Agency, but in section 256, and Judge Story, both in section 222 and in section 217 c, lays down the rule that where the breach of duty is clear it will, in the absence of all evidence of other damage, be presumed that the party has sustained a nominal damage. See, also, Blot v. Boiceau, 3 N. Y. 18; Frothingham v. Everton, 12 N. H. 239; ante, 226, note. Referring to the above quotation from sec. 236, Mr. Sedgwick, in his work on Damages, page *337, very correctly says: ‘‘I submit, however, that this language has probably been used with reference to the compensation than to the right of action; that no distinction can be taken in this respect between the breach of an agent's engagements and that of any other contract; and that if the inference of nominal dam- age from any illegal act is correct and logical, it should be applied uniformly to all transactions embraced within the wide domain of the law.’’ See, also, Cooley on Torts, 63 et seq. If insurance directed to be effected by an agent pursuant to instructions from his principal would have been void, no action lies for the principal against the agent for not procuring such insur- ance according to his instructions. Alsop y. Coit, 12 Mass. 40. See, also, De Tastet v. Crousillat, 2 Wash. C. C. 182. (c) 1M. & M. 520. 2In an action against an agent for negligence in omitting to present a draft for acceptance, where it appears that the draft would not at any time have been accepted, and that the draw- er's credit was not good at the time, so that it was highly improbable that he would pay the draft if sent back pro- tested at an earlier day, the plaintiff is entitled to recover only nominal dam- ages, or, at most, only such damages as the evidence renders it probable that the plaintiff has sustained by the delay in presenting the draft for acceptance immediately. Allen v. Suydam, 20 Wend. 321. 316 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. I now entertain the same opinion.” Injury imports damage, as Lord Holt said, in Ashby v. White (d). The measure of damages where substantial damages are claimed is the actual and not merely the possible loss or damage sustained by reason of the agent’s neglect.1 Thus, where a mate of a ship, who was to receive certain slaves at the end of the voyage in lien of wages, instructed his agent to effect an insurance on the slaves, the Court of King’s Bench held in an action against the agent for not insuring, that the plaintiff could not recover more than he could have recovered in an action against the underwriters, which in the case of the slaves was nothing, as they were not the subject of insurance (¢c). The same principle was applied in Yomin v. Oswell (f). Lord Tenterden said, in an often-quoted case, that “upon breach of contract a plaintiff is entitled to have a verdict for nominal damages, although he did not prove any actual dam- age at the trial. JI cannot think there can be any difference as to the consequences resulting from a breach of contract by reason of that contract being either express orimplied. The only difference between an express and an implied contract is in the mode of sub- stantiating it. An express contract is proved by an actual agree- ment; an implied contract by circuinstances and the general course of dealing between the parties; but whenever a contract is once proved, the consequences resulting from the breach of it must be the same, whether it be proved by direct or circumstantial evi- dence” (g). As will be at once seen, the question may well be raised whether there is any conflict between those cases which come within the authority of Webster v. De Tastet, and those which come within the principle enunciated by Lord Tenterden in Marzetti v. Williams and Van Wart v. Woolley (h). The solution of the difficulty appears to be that the former class of cases negatives a plaintiffs right to recover substantial damages where there is no proof of loss or damage, whilst the latter affirms his right to nominal damages, though there is merely proof of a breach of contract. Hence the conflictis more apparent than real, An insurance to commence from the loading of goods (d) Supra. (f) 3 Camp. 357. 1See ante, pp. 226, 228, note. (g) Marzetti v. Williams, 1B. & Ad. (c) Webster v. De Tastet, 7 T. Rep. 427. 157. (h) 1 Moo. & M. 520, CHAP. I1.] LIABILITY OF AGENT TO PRINCIPAL. 817 at a *certain point will not attach on goods previously [230*] laden (¢). Henze, where an insurance broker, employed to insure goods from a certain point on their voyage home, effected a policy “at and from ” that point, “ beginning the adventure from the loading thereof on board,” the Court of Common Pleas held him guilty of gross negligence. ‘The amount of the insurance was 1,000/, Of this sum 400/. had been paid by two underwriters for 200. each. Another underwriter for 2002. had become bank- rupt, and Gibbs, C. J., directed this sum, as well as the 4002., to be deducted from the damages. The plaintiff thus obtained a ver- dict for 4002. Nothing appears to have been said about deduct- ing the premium (f). In Davis v. Garratt (1), 1830, the defendant had undertaken to carry the plaintiffs lime from the Medway to London. The mas- ter of the barge in which it was stored deviated unnecessarily from the usual course. A storm came on during the deviation, and the lime was wetted. Owing to the wetting of the lime the barge caught fire, and the whole cargo was lost. The underwriters re- fused to pay, alleging the deviation. A verdict having been found for the plaintiff, the defendants applied for a new trial, on the ground that the deviation was not the cause of the loss of the lime sufficiently approximate to entitle the plaintiff to recover, inasmuch as the loss might have been occasioned by the same tempest if the barge had proceeded in her direct course. A new trial was refused. The court took time to deliver its judgment, which was delivered by Chief Justice Tindal, and is valuable as indicat- ing the connection that must exist between the damage suffered and the agent’s act or omission. To the above objection, to the right of the plaintiff to recover, his lordship replied: “ We think the real answer to the objection is that no wrongdoer can be allowed to apportion or qualify his own wrong, and that as a loss has actu- ally happened whilst his wrongful act was in operation and force, and which is attributable to his wrongful act, he cannot set up as an answer to the action the bare possibility of a loss, if his wrong- ful act had never been done. It might admit of a different con- struction if he could show, not only that the same loss might have (i) Robertson v. French, 4 East, 130; 8. C. Taunt. 495, 815. [See post, 234, Mellish v. Allnutt, 2M. & S. 106. 242] (k) Park v. Hammond, 4 Camp. 344; — (1) 6 Bing. 716. 818 [BOOK mt. RIGHTS, ETC., ARISING OUT OF THE CONTRACT. happened, but that it must have happened, if the act complained of had not been done.”? *Where goods destined to a foreign port are captured in consequence of a deviation, the owners of the goods are entitled to recover from the owners of the ship only the prime cost of the goods, together with the shipping charges, and not the expense of effecting a policy of insurance upon them, without di- rect proof that the goods at the time of the loss were enhanced in value beyond their first price to the amount sought to be recov- [231*] ered (m). Mallough v. Barber (n), 1815, was an action against insurance brokers for negligence in effecting a policy of insurance. The de- fendants were instructed by the 1 See Williams v. Littlefield, 12 Wend. 862; Johnson v. Friel, 50 N. Y. 679; Condict v. G. T. R. R. Co., 54 id. 500; Lamb v. Camden & A. R. R. Co., 46 id. 271; Michaels v. N. Y. Cent. R. R. Co., 30 id. 564; Read v. Spaulding, id. 630; Bostwick v. Baltimore & O. R. R. Co., 45 id. 712. In an action to recover damages for injuries received from a collision, the defendant cannot excuse himself upon the plea of inevitable accident, where, by his own negligence, he has placed himself in a position which renders a collision inevitable. He must exercise care and foresight to prevent reaching a point from which he is unable to ex- tricate himself; and omitting these, the greatest vigilance and skill on his part subsequently, when the danger arises, will not avail him. Austin vy. N. J. Steamboat Co., 43 N. Y. 75. The rule of the cases above cited is not, however, followed in all the states. Thus, where common carriers under- took to transport goods from Philadel- phia to Pittsburgh by canal, and while en route the goods were destroyed by the wrecking of the boat by an extraor- dinary flood; and there was evidence that the goods would not have been at the place of injury, but for their having been plaintiff to effect “a policy for delayed by the lameness of a horse at- tached to the boat, it was held, that the defendant was not liable. Morrison v. Davis, 20 Penn. St. 171. See, also, Den- ny v..N. Y. Cent. R. R. Co. 18 Gray, 481; Hoadley v. N. Y. Transp. Co., 115 Mass. 304; Railroad Co. v. Reeves, 10 Wall, 176; McGrew v. Stone, 53 Penn. St. 436; George v. Fisk, 82 N. H. 82; Mc- Clary v. Sioux, etc. R. RB. Co., 3 Neb. 44; Daniels v. Ballentine, 23 Ohio St. 589; “Alston v. Herring, 11 Ex. 822; Cooley on Torts, 72. But, if the property had been exposed to the flood by a wrongful act concur- rent in point of time, the defendant would have been liable. Scott v. Hun- ter, 46 Penn. St. 192. An agent having charge of cotton purchased, is bound to exercise a pru- dent care over it, and preserve and ship it to his principal, but he is not respon- sible for the results of an overpowering force, whereby the cotton is destroyed. Clark v. Norwood, 19 La. Ann. 116, See, also, Watkins v. Roberts, 28 Ind. 167. (m) Parker v. James, 4 Camp. 112. In Max v. Roberts, 12 East, 89, there were material defects in the declaration. (n) 4 Camp. 150. CHAP. 11.] LIABILITY OF AGENT TO PRINCIPAL. 819 5502. on the ship Lapedition and her freight at and from Teneriffe to London.” They effected the policy, but did not in- sert a clause allowing liberty “to touch and stay at all or any of the Canary Islands.” Proof was given at the trial that where orders were given to effect such a policy, it was the invariable custom to insert, without instruction, such a clause, inasmuch as ships seldom took in the whole of their cargoes at Teneriffe. Whilst the ship was proceeding to one of those islands, to com- plete her cargo, she was captured, and the underwriters refused to pay, on the ground of deviation. Lord Ellenborough held that the defendants were liable for not having inserted the clause in the policy, and the plaintiff recovered the sum directed to be in- sured, deducting the premium. In Godwin v. Francis (0), decided in 1870, the defendant and four others being jointly interested in an estate, were desirous of selling the property. An advertisement was issued with the in- timation, “To treat and view the property, application to be made to (amongst others) Mr. B. Francis (the defendant).” The plaintiff, after the appearance of the advertisement, wrote to the defendant offering him 10,0002. for the estate; the defendant asked 11,0002. After some correspondence, during which the plaintiff offered 10,5002., the plaintiff received the following tele- gram: ‘- The following telegram has been received . . . from Berry Francis to Charles Godwin: “Your offer for the Liddington estate is accepted; confirm yours by first post.” Upon its receipt the plaintiff sent the confirmation. This was on the 23rd October, 1867. The abstract of title was sent to the *plaintifi’s solicitor on the 29th October. On [232*] the 8th November the plaintiff was informed by the so- licitors of the supposed vendors that the defendant had acted without authority. The plaintiff sued the vendors, and, continu- ing the action after they had sworn in answer to interrogatories that the defendant had no authority, assuming that they were bound under the terms of their advertisement, was nonsuited. The plaintiff then brought an action against Francis for misrep- 1See ante, p. 228, note. As toduty (0) L. Rep., 5 C. P. 295, to insure, see ante, p. 218, and note. 320 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK mI. resentation of authority,! and claimed damages to the amount of 7261. 10s. 6d.,a sum made up of the following items: Costs of investigating title; loss of bargain; costs paid to the former de- fendant; costs of Francis; plaintiff's own costs in same action; loss on re-sale of stock. At the trial a verdict was taken for the plaintiff, subject to a question whether there was a valid contract under the Statute of Frauds, and to a motion to reduce the damages, the court to draw inferences of fact. The tirst question having been decided in the affirmative, the Court of Common Pleas decided that the defendant was liable to pay — 1, the cost of investigating the title; 2, the costs incurred and paid by the plaintiff in the action against the vendors down to the time when the answers to the interrogatories had been re- ceived and considered by the plaintiff's legal advisers (p); 3, the difference between the contract price and the market price of the estate—the sum for which it was sold being primd facie evi- dence of the latter (g). The loss on the re-sale of stock which had been bought without notice to the defendant, and before the title had been investigated or possession of the land given, was held to be too remote. The defendant’s liability on the first point was admitted; his liability upon the second point was put on the ground that in the position in which he was placed by the de- fendant, it was reasonable for the plaintiff to commence proceed- ings against the vendors, and that this course continued reason- able until the answers to the interrogatories left no room to doubt what the evidence at the trial would be. By relying on the ad- vertisements after the interrogatories were answered, he acted upon a wrong view of the law, and not upon any mistake as to the authority conferred in fact upon the defendant (r). [233*] *The plaintiff was also entitled to recoup himself for what he lost by the contract not being fulfilled. In the present case, that was the difference between the contract price and market price, though it is quite conceivable that the damages under this head might possibly have been nzl., e. g., in the event of bank- 1 See ante, p. 224, note. (q) See Engell v. Fitch, L. Rep., 4 (p) See Spedding v. Nevell, L. Rep., Q. B. 659. 4C. P. 212. (r) See per Chief Justice Bovill. CHAP. 11] LIABILITY OF AGENT TO PRINCIPAL. 821 ruptey of the vendors (s), since a third party who contracts with an authorized agent can recover from him only what he would be entitled to recover from the vendors, if the defendant had had the authority he warranted, and the vendors refused to perform (¢). In Russell v. Palmer (u), 1767, an action on the case was brought against a solicitor to recover the sum of 3,500/. and costs. The plaintiff having employed the defendant to proceed at law against a debtor, obtained a judgment. By a rule of court it was the duty of the defendant to cause the debtor to be charged in execution within a certain period after surrender. The defend- ant neglected this duty, and the debtor was discharged by swper- sedeas. The plaintiff alleged that he was thereby hindered from obtaining his debt and damages, and had thus suffered a loss to the amount of the sum claimed by reason of the defendant’s negligence. At the trial Lord Camden directed the jury to give a verdict for the whole debt. A new trial was afterwards granted on the ground that his lordship had misdirected the jury, for the jury ought to have been left to find what damages they thought fit, inasmuch as the action merely sounded in damages. There was some evidence that the debtor was not totally insolvent, and that the plaintiff probably might be able in time to obtain some part of his debt by execution against his goods. The jury being told they might find what damages they pleased, found a verdict for the plaintiff for 5007. The Court of King’s Bench subsequently held that the action lay. Mr. Sedgwick (w) infers from this case that the jury had in early cases, growing out of the contract of agency, an un- limited control over the amount of compensation which should be awarded as damages. The case, however, is not reported fully enough to justify the conclusion. If such a rule existed, it has long been abolished, and the measure of damage fixed by the law.! (s) See per Mr. Justice M. Smith, supra, and per Mr. Justice Blackburn in Richardson v. Williamson, L. Rep., 6 Q. B. 279. (t) See per Mr. Justice Brett in Good- win v. Francis, supra. (uw) 2 Wils. 325. (x) Damages, p. *336. }'Where the negligence of attorneys 21 has been such as to furnish a right of action against them, the rule of dam- ages is the same as in like actions against sheriffs. Sedgw. on Damages (6th ed.), *508, note. And notwith- standing the proof of the debt and the sheriff's neglect, the inquiry is permitted whether the debt could have been col- lected, and it is said to be settled in 322 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. (234*] *In Wallace v. Telfair (y), 1786, Mr. Justice Buller ruled that where an agent having accepted an order for insurance, limits the insurance broker to too small a premium, in consequence of which no insurance could be procured, the agent is liable to make good the loss to his correspondent. In the Stearine, dc. Company v. Heintemann (2), 1864, the defendants were instructed by the plaintiffs not to part with goods to a customer named except for cash; they violated these instruc- tions, and Sir W. Erle, C. J., left the whole case to the jury; a ver- dict for the plaintiffs was returned for the value of the goods and expenses incurred by them in respect of a bill of exchange drawn for the price in accordance with the instructions. A rule fora new trial was refused by the full court. “In coming to the con- clusion that there was evidence on which the jury might find that the contract was made in substance as alleged,” said Chief Justice Erle, in delivering the judgment of the court, “we have in effect decided that there was also evidence on which they might find that the breach was proved. It also follows, in our opinion, that the jury were right in giving the value of the goods, which were lost to the plaintiffs, and the expenses incurred by them in respect of the Lill of exchange for the price drawn according to the terms of the letter of the 19th June.” The principles which may be taken as the result of the cases already quoted with respect to the measure of the damages to which an agent is liable are the following: (1.) Nominal damages may be recovered against him upon proof of breach of contract. (2.) Substantial damages will be recovered against him upon proof that his principal has suffered actual loss by reason of the agent’s breach of duty; and the measure of these damages will be the actual loss of which the agent’s con- duct has been the proximate cause. (3.) It follows as a corollary from the second proposition that this country, that the plaintiff after sustained no actual loss. Sedgw. on proving his debt against the prisoner, Damages (6th ed.), *508, 510, and cases the custody, and escape, is entitled to there cited. recover as his damages the amount of (y) 2'T. Rep. 188, note [see post, 242]. his debt, unless the officer can show that 1See ante, p. 218, and note. the defendant was insolvent, orin any (z) 170. B., N.S. 56, other way prove that the plaintiff has CHAP. I1.] LIABILITY OF AGENT TO PRINCIPAL. 323 the agent will not be liable in substantial damages if he proves that implicit obedience to the instructions of his principal could have been attended with no advan- tageous result. (4.) Itis submitted, however, that the agent under those cireum- stances would still be liable in nominal damages. *Srcr. 3.— Omission to perform Gratuitous Undertaking. [235*] In order to maintain an action against an alleged agent for omitting to perform something undertaken, the principal must show that the agent was bound either by custom, or by some duty imposed on him by law to do the particular thing. "When there has been no consideration for his promise, it cannot be said that the agent has been bound by contract. This was laid down clearly in the old law books. Thus it was said, if a person promises to build a house within a given time, no action lies for non- performance, unless a consideration be alleged for it (a). To the same effect are the observations of Lord Ilolt in the case of Coggs v. Bernard (b). Such a custom exists in the case of a ferry- man, carrier, porter or innkeeper (c¢), but not in the case of an attorney (d). There are but few reported cases in which any question of the liability of an unremunerated agent for nonfeasance has been raised. The most recent appears to be that of Baife v. West (e). The law was settled at an early period, and has so remained. In Elsee v. Gatward (f), 1798, it was alleged in the declara- tion that the plaintiffs being about to build a warehouse, and to rebuild certain parts of a dwelling-house, were desirous of having the necessary work completely finished by a certain day mentioned. It was further alleged that the plaintiffs, at the special instance and request of the defendant, a builder, who had full notice of the premises, retained and employed the defendant to do and perform all the bricklayers’ and carpenters’ work which should be requisite, and within the time mentioned. The alleged breach was that the defendant neither did nor would finish the work as agreed. In (a) 1 Rol. Abr. 9 E. 41. (@) Fish v. Kelly, 17 C. B., N.S. 194, (b) 2 Ld. Raym. 909; see, too, Leavy. (e) Infra. [13 C. B. 466.] Welch, 2 Ld. Raym. 1516. (f) 57. R. 143, (c) See Elsee v. Gatward, 5 T. R. 143. 324 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Book Im, consequence of the defendant’s neglect, it was alleged that the walls of the premises in question were greatly sapped and rotted, and the ceilings damaged and spoiled. The defendant demurred, and the demurrer was allowed. A second count, which stated that the plaintiff being possessed of some old materials, retained the defendant to perform the carpenters’ work on certain build- ings of the plaintiff, and to use those old materials, but [236*] that the “defendant, instead of using those, made use of new ones, and thereby increased the expense, was held to be good. The judgments in this case contain full exposition of the law upon the subject. Lord Kenyon said: “If this had been an action of asswmpsit, it could not have been supported for want of a consideration; it would have been nudum pactum. . . . Ido not think that the first count in the declaration is good in law. It states that the defendant, who is a carpenter, was retained by the plaintiffs to build and repair certain houses; but it is not stated that he was to receive any consideration, or that he entered upon his work. No consideration results from his situation as a carpenter, nor from the undertaking is he bound to perform all the work that is tendered to him; and therefore the amount of this is that the defendant has merely told a falsehood, and has not performed his promise; but for his non-performance of it no action can be sup- ported. . . . Upon the authority of Coggs v. Bernard, and the cases there noticed, not contradicted by any other decision, I think that the first count for nonfeasance is bad, but that the second count may be supported. . . . This comes within the case mentioned by Lord Holt in Coggs v. Bernard, speaking of the same case in the Year Books (A), he said: ‘But there the question is put to the court, What if he had built the house un- skilfully? and it was argued in that case an action would have lain,’ for the defendant could not have been compelled to build this house, and to use the old materials, yet, having entered upon the contract, he was bound to perform it; and not having per- formed it in the manner proposed, an action lies against him.” Mr. Justice Ashurst said: “In this case the defendant’s un- dertaking was merely voluntary, no consideration for it being stated. There was no custom of the realm, or any legal obliga- (4) 11 Hen. 4, 33. CIAP. I1.] LIABILITY OF AGENT TO PRINCIPAL. 825 tion to compel him to perform this work, and that distinguishes this case from those of a common carrier, porter, and ferryman, who are bound, from their situations in life, to perform the work tendered to them. It is, indeed, alleged that he (the de- fendant) did not finish the work, from whence the plaintiffs wish the court to infer that he had begun it; but as that is the gist of the action, it should have been stated expressly. . . But it has been contended that it was not necessary to allege that the * defendant was employed to perform this work [237*] for hire and reward, it being stated that he was retained. . . The word ‘retain’ does not necessarily show that there was a consideration.” In Balfe v. West (2), 1853, the defendant, who had, without remuneration, accepted the office of steward of a horse-race, was held not to be responsible for a loss suffered by the defendant, who entered a horse for the race, and alleged that the loss was due to the steward’s nonfeasance in omitting to appoint a judge to determine the winner, there being no allegation that the steward had entered upon the duties of his office. It may be taken as a universal proposition that an agent, whether remunerated or unremunerated, is liable to his principal for the loss suffered by the latter owing to the negligence of the agent in performing the duties undertaken. The distinction be- tween paid and unpaid agents vanishes in considering their lia- bility for misfeasance.1 No universal rule, however, can be laid down to determine what amount of negligence will render each and every agent liable. Actionable negligence is not a constant but a variable quantity. Actionable negligence varies with the (i) 13 C. B. 466. 1See this subject fully considered in Edwards on Bailments, §§ 77 et seq.; Story on Bailments, §§ 165 et seq.; 2 Kent Com. *569 et seq.; Thorne v. Deas, 4 Johns. 84. See, also, Benden v. Manning, 2 N. H. 289; Gill v. Middle- ton, 105 Mass. 477; Bank of New Han- over v. Kenan, 76 N. C. 540. If a party undertakes, even volun- tarily and gratuitously, to invest money for another, and disregards the positive instructions given as to the specific char- acter of the security to be taken, he is liable, if the investment should fail. Williams v. Higgins, 30 Md. 404. But where there is no consideration the action should be a special action on the case and not assumpsit; for in as- sumpsit, although the breach of the promise is a misfeasance injurious to the plaintiff, yet a consideration for the promise must be alleged in the declara- tion, and must be proved as alleged. Benden v. Manning, supra, 326 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. amount of skill any particular agent or class of agents is presumed to bring to bear upon the performance of the duties he has under- taken. Tf the expression “ gross negligence ” is intended as a definition, it wholly fails of its object. But as there is a practical difference between the degrees of negligence for which different classes of bailees are responsible, the term, it has been said, may be of use if retained as ashort and convenient mode of describing the degree of responsibility which attaches upon a gratuitous bailee (4). Baron Rolfe’s remark with reference to the expression “ gross negligence ” has been accepted expressly by several judges. Mr. Justice Willes (2) said: “ Confusion has arisen from regarding neg- ligence as a positive instead of a negative word. It is really the absence of such care as it was the duty of the defendant to use.” The remark of Baron Rolfe (m) is to the effect that negligence and gross negligence are the same thing, the latter merely having. a vituperative epithet added.? The expression, however, has no fixed and certain meaning as an accurate test of liability, and it would be well if it were abolished. [238*] *The confusion which has been introduced into English law by questions with reference to gross negligence is not hard to account for. Lawyers who recognized and adopted the phrase, observing that actionable negligence was of various degrees, were content to accept the expression as being sufficiently descriptive of one form of actionable negligence. Upon this ground it was that Lord Chelmsford wished to retain the expression (m). The use of the expression has, however, tended to introduce confusion, and that of necessity. The gratuitous bailee, like any other agent, is liable for breaches of duty; but his duties differ from those of other bailees, hence there are varying degrees of actionable negli- gence. The duties of any agent or class of agents are either known or easily discovered; but it is hard to say what meaning the word “ gross” has as applied to negligence. The confusion would be entirely got rid of if we said that every agent is liable for a breach 1See ante, p. 214, and note. (m) Wilson y. Brett, 11 M. & W. 113, (&) See per Lord Chelmsford in Giblin *See Campbell on Negligence, p. 11, v. M’Mullen, L. Rep., 2 P. C. 336. § 11. (2) Grill v. General Iron Screw Col- (n) See Giblin vy. M’Mullen, L. aay ? liery Co., L. Rep., 1 C. P. 612. 2 P. C. 386. CHAP. Ir.] LIABILITY OF AGENT TO PRINCIPAL. 827 of duty, and considered the liability of the agent by reference to his duties and the amount of care, diligence and skill required of him by law. The same result would also be obtained if the main division of negligence adopted was that which distinguished neg- ligence into actionable negligence and non-actionable negligence. Tf this plan was adopted, the simple question to be considered in any question as to the liability of a defendant would be, not whether the negligence was gross or otherwise, but whether the facts showed that there had been a breach of duty. Practically, of course, that is the question raised in every action for negligence.' Sect. 4.— Wegligence in Performing Undertaking. An agent is liable for misfeasance in performing a gratuitous undertaking if he fails to exercise that degree of skill which is imputable to his situation or employment. Any failure on his part to fulfil the obligations imposed upon him as being possessed of the skill which he holds himself out to the world as possessing is actionable negligence.” 1 There seems a growing tendency in the authorities to discard the division of negligence into the three degrees of gross negligence, ordinary negligence and slight negligence, and to adopt the views stated in the text. And, as stated by Judge Cooley in his recent work on Torts, pp. 630,631, ‘‘this classification only indi- cates this: that under the special circum- stances great care and caution were re- quired, or only ordinary care, or only slight care. If the care demanded was not exercised, the case is one of negli- gence, and a legal liability is made out when the failure is shown.”’ ‘For neg- ligence in a legal sense is no more nor Jess than this: the failure to observe, for the protection of the interests of another person, that degree of care, pre- caution and vigilance which the circum- stances justly demand, whereby such other person suffers injury.” It seems, therefore, an inaccurate use of language to transfer to the term, negligence, those epithets which only have force when ap- plied to the degree of care requisite under the particular circumstances of the case. As indicating a disposition to discard the above division of negligence into degrees, see Hinton v. Dibbin, 2 Q. B. 646, 661; Austin v. Manchester, etc. R. 8. Co., 10 C. B. 454, 474; Perkins v. N. Y. Cent. R. R. Co., 24 N. Y. 196, 206; Wells v. N. Y. Cent. R. R. Co., 24 id. , 181; Smith v. N. Y. Cent. R. R. Co. , 24 id. 222, 241; Beal v. S. Devon R.R. Co., 3 H. & C. 337; Steamboat New World v. King, 16 How. 474; Mil- waukce & C. R. R. Co. v. Arms, 91 U. 8. 494; Cass v. Boston & L. R. R. Co., 14 Allen, 448; Gill v. Middleton, 105 Mass. 477, 479; Lane v. Boston & A. R. R. Co., 112 Mass. 455; Briggs v. Taylor, 28 Vt. 180. This division has, however, been recognized in quite a large class of cases, which will be found collected in Shear- man and Redfield on Negligence, §§ 16, 17, note, who also advocate such classification. *See this subject considered at length and the authorities collected in Edwards 828 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Book mt. The following cases sufficiently illustrate the above proposi- tions: In Shielis v. Blackburne (0), decided 1789, in the defend- ant, a * general merchant, undertook without reward to enter [239*] a parcel of goods of G. together with a parcel of his own of the same sort at the custom house for exportation. In order to save the expense and trouble of a separate entry at the custom house, he by agreement with G. made one entry of both the cases, but did it under the denomination of wrought leather instead of dressed leather. Owing to this mistake the two cases were seized, and the assignees of G., who had become bankrupt, brought an action to recover the value of G.’s parcel. The defendant’s lia- bility was urged on the ground that although an action would not lie for nonfeasance, it would for a misfeasance. Lord Loughborough agreed with Sir William Jones (7) that when a bailee undertakes to perform a gratuitous act, from which the bailor alone is to receive benefit, there the bailee is only liable for gross negligence; but ifa man gratuitously undertakes to do anything to the best of his skill, where his situation or profession is such as to imply skill, an omission of that skill is imputable to him as gross negligence.’ His lordship acknowledged, too, that if in this case a ship broker or a clerk in the custom house had undertaken to enter the goods, a wrong entry would in them be gross negligence, because their situation and employment neces- sarily imply a competent degree of knowledge in making such entries; but when an application under the circumstances of this case is made to a general merchant to make an entry at the cus- on Bailments, §§ 77 et seq. As to at- torneys and physicians, seeante, p. 220, and note. . (o) 1H. Bl. 158. (p) Law of Bailments, p. 120. 1See Stanton v. Bell, 2 Hawks, 145; Beardslee v. Richardson, 11 Wend. 25; Lampley v. Scott, 24 Miss. 528; McNabb vy. Lockhart, 18 Ga. 495; Skelley v. Kahn, 17 Ill. 170; Kemp v. Farlow, 5 Ind. 462; Fulton v. Alexander, 21 Tex, 148; Percy v. Willaudon, 20 Mart. 75; Tomp- kins vy. Saltmarsh, 148. & R. 275; Fos- ter v. Essex Bank, 17 Mass. 479; 2 Kent. Com. *570 et seq.; Story on Bail- ments, §§ 174 et seg.; Edwards on Bailments, §§ 78 et seq. Thus, where a person or a bank re- ccives a note or bill to collect gra tuitously, the effort to collect must be made with ordinary diligence, and if through negligence the claim is lost, the person or bank will be liable for the damages sustained. Moore v. Gholson, 34 Miss. 372; Smedes v. Bank of Utica, 20 Johns. 372; 8. C. 8 Cow. 662, CIIAP. I.] LIABILITY OF AGENT TO PRINCIPAL. 829 tom house, such a mistake as this is not to be imputed to him as gross negligence. Mr. Justice Heath said: “The defendant in this case was not guilty either of gross negligence or fraud; he acted bond fide. If aman applies to asurgeon to attend him in a disorder, for a reward, and the surgeon treats him improperly, there is gross neg- ligence, and the surgeon is liable to an action; the surgeon would also be liable for such negligence if he undertook gratis to attend a sick person, because his situation implies skill in surgery; but if the patient applies to a man of a different occupation for his gratuitous assistance, who either does not exert all his skill, or administers improper remedies to the best of his ability, such per- son is not liable.” ! Wilkinson v. Coverdale (q), 1793, was an action against a per- son who had gratuitously undertaken to procure an insur- ance against * fire for certain premises belonging to the [240*] plaintiffs, but who, in effecting it, acted so negligently that the plaintiff lost the benefit of it, and suffered a total loss. Lord Kenyon, before whom the case was tried, expressed a doubt whether any action could be maintained on such an undertaking. Erskine for the plaintiff thereupon cited a manuscript note of the case of Wallace v. Telfair, decided at Nisi Prius before Mr. Jus- tice Buller, when it was ruled in a similar action, “that though there was no consideration for one party’s undertaking to procure an insurance for another, yet where a party voluntarily undertook to do it, and proceeded to carry his undertaking into effect, by getting a policy underwritten, but did it so negligently that the party could derive no benefit from it, in that case he should be liable to an action.”? Lord Kenyon acquiesced, but the plaintiff failing to prove any promise to insure on the part of the defend- ant, was nonsuited. ‘See Carpenter v. Blake, 60 Barb. 488; S. C. 50 N. Y. 696; Howard v. Grover, 28 Me. 97; McNevins v. Lowe, 40 IIl. 209; Hare v. Reese, 7 Phila. 188; Craig vy. Chambers, 17 Ohio St. 2538. See, also, ante, p. 220, note. (q) 1 Esp. 74. *See Park vy. Hammond, 4 Camp. 844; Mallough v. Barb, id. 150. The question may be affected by the right tocommissions. See Nellis v. De Forest, 16 Barb. 61. Where a deed of trust gives the trus- tee full power to select the company or companies in which to insure the trust property, he will be required to exercise due care in the selection of good and solvent companies, but he is nota guar- antor of their. solvency. Gettings v. Scudder, 71 Ill. 86, 830 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. If, however, there had been any duty incumbent upon the defendant to insure and he had failed to do so, he would be liable. Thus, in Smith v. Lascelles (r), 1788, Ashurst, J., says: “ One person cannot compel another to make an insurance for him against his consent; but if the directions to insure be given to him, to whom the application would naturally be made in the usual course of trade, and he do not give notice of his dissent, he must be answerable for his neglect, because he deprives the other of any opportunity of applying elsewhere to procure the insur- ance.” } In Coplett v. Gordon (s), decided in 1813, the plaintiff, residing in South America, sent a bill of lading of certain bales of cotton to the defendants, who were merchants in London, and requested them to effect insurance to the full amount. The defendants had not done business for the plaintiff before, and had given no prom- ise to act as his consignees, nor did they wish to do so. On re- ceiving the bill of lading they indorsed it over to M., a friend and creditor of the plaintiff. M. procured the insurance, and received the goods, but afterwards became insolvent, with the proceeds in his possession. The plaintiff then sued the defendants for the value. The case was tried before Lord Ellenborough, who told the jury that the defendants had no right to indorse the bill of lading, though he was not quite clear what they ought to [241*] have done. “They had their election,” said his * lordship, “either to take or reject the bill of lading. If they took it, they were bound to take it according to the terms of the con- signment, by which they themselves were to insure and sell the goods.” A verdict for the value of the goods was entered for the plaintiff. In Pappa v. Rose (t), the defendant was a broker employed by the plaintiff to sell some raisins on the the terms of the following sale note: “Sold by order, and on account of P. (the plaintiff), to arrive, to my principals H. and Son, 500 tons of black Smyrna raisins, 1859 growth, fair average quality, in the opinion of the selling broker;” signed J. R. (the defendant). Upon the arrival of the raisins, H. and Son objected to their quality; the defendant (r) 2T. R. 187. (t) L. Rep., 7 C. P. 32; affirmed, See ante, p. 218, and note. ibid. 525, 1872. _(s) 3 Campb. 471. CHAP. I1.] LIABILITY OF AGENT TO PRINCIPAL. 831 accordingly examined them, and decided that they were not of the quality mentioned in the sale note. The buyers accordingly refused to accept them. The plaintiff then brought an action against the broker on the ground that he had shown want of skill in deciding upon the quality of the currants. The Chief Justice of the Common Pleas (Sir W. Bovill), after consulting Mr. Justice Willes, ruled, so far as the ruling is material to the present ques- tion, that the defendant was appointed to act as an arbitrator or judge of the quality, and was, therefore, not liable for an error in judgment or want of skill in certifying the quality if he acted honestly and bond jide. The plaintiff elected to be nonsuited. A rule for a new trial was discharged by the Common Pleas, the judgment of which court was affirmed in the Exchequer Chamber. Mr. Justice Brett said: “I think it is quite unnecessary for us to determine what is the true construction of the contract, because I think the Lord Chief Justice was clearly right on the second point. The ruling upon that was not that the defendant was in the strict sense of the term an arbitrator, but that he was a person filling a position which brought him within an exception well known to the law of England, viz., that a person who is appointed and is acting as an arbitrator to determine a matter in difference between two or more persons does not enter into an implied promise to bring to the performance of the duty entrusted to him a due and reasonable amount of skill and knowledge. The ques- tion is merely one of implied undertaking, and the law says there is none such. Was, then, the defendant within that ex- ception? I *apprehend that every person falls within it [242*] who has taken upon himself to determine a disputed mat- ter between two persons who have agreed to be concluded by his opinion.” In the Exchequer Chamber, Chief Baron Kelly said: “It is the duty of the broker to make the contract, and he must enable his principal to enforce it, which he cannot do unless he (the broker) expresses his opinion on the goods. But having entered into an implied contract to give that opinion, is he bound to exer- cise skill in the matter? He may have impliedly contracted to do all that is necessary to enable him to give an opinion, that is to say, he is bound to examine the goods, as no one can give an opinion on goods without looking at them. . . . The position of 832 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK I. an arbitrator was used in the court below only as an illustration, and to assist the court in determining the nature of the contract. . . . If two parties agree to submit a question to a third, the third party is not bound to give an opinion. But if this third party is in any way a party to the transaction, and is acting for hire and reward, he is just as much bound to give his opinion as the other two are to abide by it... . If the arbitrator agrees to give an opinion, I deny that there is any contract to use skill.” Jenkins v. Bethan (u) was distinguished on the ground that the defendant, who was employed as a valuer, was a valuer, and thereby held himself out as a person possessing skill in the sub- ject-matter. The result of the cases may be stated in the following terms: (1.) An agent, whether remunerated or unremunerated, may be liable for negligence in performing an undertaking. (2.) Actionable negligence in the case of an unremunerated agent consists in a failure to exercise that skill which is imputable to his situation or employment, or which he holds himself out to the world as possessing. Telegraph companies are at most mere forwarders of messages, and are not bound to understand the object of the sender, nor do they profess to carry on the business of agents to make contracts any more than does the Post Office. Hence, such companies do not guarantee to mere receivers the accuracy of telegrams passing over the wires («).! (w) 15 C. B. 160; 24 L. J., C. P. 94. (x) Dickson v. Reuter’s Telegraph Company, 2 C. P. Div. 62; 46 L. J., C. P. 197; 85 L. T. Rep., N. 8. 842. [See the above case annotated by Judge Bennett in 17 Am. Law Reg. (N. 8.) 222, 227.] 1By the English and Canadian law it is considered that the liability of the telegraph company arises only from contract, and that the only duty owed by the telegraph company is to the sender of the message, there being no privity between the company and the receiver, Playford v. United Kingdom Tel. Co., L. R., 4 Q. B. 706; Feaver v. Montreal Tel. Co., 23 Upper Canada, C. P. 150. In this country, however, the tele- graph company is also liable to the person to whom the message is trans- mitted, upon delivery thereof, in case of an error in transmission attributable to the fault of the company, when the error is attended with damage tothe person receiving it. Bigelow on Torts, 277; Bigelow’s Lead. Cases on Torts, 619, 621; New York & W. Tel. Co. v. Dryburg, 35 Penn. St. 298; Elwood v. W. U. Tel. Co., 45 N. Y. 549; Ellis v. Am. Tel. Co., 13 Allen, 226. Telegraph companies are bound to OHAP. I1.] * Secor. 5.—Profits made in course of Agency. LIABILITY OF AGENT TO PRINCIPAL. 303 [243*] All profits directly or indirectly made in the course of, or in connection with, his employment by a servant or agent without the sanction of the master or principal, belong absolutely to the master or principal (y).! exercise reasonable care and diligence in the transmission of messages. If a message is not sent and delivered within a reasonable time under the circum- stances, or if errors occur in the trans- mission, which are attributable to the negligence of the company, it is liable for all consequent damages. Cooley on Torts, 647; Bigelow on Torts, 275; Western Union Tel. Co. v. Carew, 15 Mich. 525; Aiken v. W. U. Tel. Co., 5 Rich. (8. C.) 858; Parks v. Alta Cal. Tel. Co., 13 Cal. 422; Grinnell v. W. U. Tel. Co., 113 Mass. 299; Washing- ton, etc. Tel. Co. v. Hobson, 15 Gratt. 122. Telegraph companies are not, how- ever, insurers, and are not liable for errors happening without their fault. Cooley on Torts, 647; Bigelow on Torts, 276; Sweetland v. Ill. etc. Tel. Co., 27 Towa, 433; Breese v. U.S. Tel. Co., 48 N. Y. 182. For a further consideration of this subject, see Cooley on Torts, 646, 647, 687; Bigelow on Torts, 276, 277; Bige- low’s Lead. Cases on Torts, 619-626, and the authorities there cited. As to the negotiation of contracts by tele- graph, see 14 Am. Law Reg. (N. 8.) 401 et seq. (y) Massey v. Davis, 2 Ves. jun. 317; Williamson v. Barbour, 37 L. T., N.S. 698. 1 Any advantage gained by the agent, whether it is the part of performance or violation of duty, belongs to the princi- pal. See Dodd v. Wakeman, 26 N. J. Eq. 484; Judevine v. Hardwick, 49 Vt. 180; Lafferty v. Jelley, 22 Ind. 471; Ackenburg v. McCool, 36 id. 473; Camp- bell v. Penn. Life Ins, Co., 2 Whart. 64; So, whenever the earnings acquired in Bartholomew v. Leach, 7 Watts, 472; Norris’s Appeal, 71 Penn. St. 106; Oli- ver v. Piatt, 3 How. 333; Dutton v. Willner, 52 N. Y. 312; Leake v. Suth- erland, 25 Ark. 219; Barton v. Moss, 32 Ill. 50; Masor v. Bauman, 62 id. 76; Ely v. Hanford, 65 id. 267; Clark v. Anderson, 10 Bush, 99; Krutz v. Fisher, 8 Kan. 90; Stoner v. Weiser, 24 Iowa, 434; Moinett v. Day, 57 Tenn. 431; Coursin’s Appeal, 79 Penn. St. 220; Jefiries v. Wiester, 2 Sawy. 135; Bain v. Brown, 56 N. Y. 285; Bell v. Bell, 3 W. Va. 183. The rule is the same although the agent may have contributed his own funds or responsibility in producing the result, and although no risk or expense was incurred by the principal. Dutton v. Willner, supra. Where an agent is authorized to sell at a fixed price, and sells for a greater, he must account to his principal for the excess. Kerfoot v. Hyman, 52 Ill. 512; Merryman v. David, 31 id. 403; Brown yv. Post, 1 Hun, 303. But, in the absence of fraud, he is not amenable to the purchaser for such ex- cess. Merryman v. David, supra. But the relation of principal and agent does not necessarily exclude the latter from reaping, in the purchase of certain real estate for his principal, the benefit of a contract with the principal wherein he stipulates to pay the agent a given sum for the land, whatever it may cost the latter. Anderson v. Weiser, 24 Towa, 428. Where one employs another to pursue and capture a horse-thief, and pays the expenses, he will be entitled to the re- ward offered by the county for the ap- 334 [Book 3. RIGHTS, ETC., ARISING OUT OF THE CONTRACT. the service of a third person have reached the hands either of the servant who acquired them or of the master, they belong to the master. These principles apply to all cases of employment as servants or agents, the profits acquired by the servant or agent in the course of, or in connection with, his service or agency, belong- ing to the master or principal (z). There is a legal duty incum- bent on the agent to pay over such profits to his principal (2). The above principles are illustrated by a variety of cases of which it will suffice to select the following. Some of the earlier cases refer to apprentice and master. In Barber v. Dennis (a), decided in 1703, the widow of a waterman, by the usage of Water- men’s Hall, had taker an apprentice. This apprentice was im- pressed, taken from her, and put on board a Queen’s ship, where he earned two tickets, which came to the hands of the defendant, and it was held that the widow was entitled to maintain trover against the defendant, on the ground that the possession of the apprentice was that of the master, and that whatever he earns shall go to the master. So it was said in asubsequent anonymous case (6), that trover lies by the master for the ticket or other writing entitling his apprentice to money earned by him during his apprenticeship, although upon the particular facts of the case the action was held not to be maintainable. In a case decided in 1799 (c), Lord Kenyon ruled at Nisi Prius that interest made by an agent by the use of his principal’s money, belonged to the principal, ‘and. might be recovered by him in an action for money had and received. His lordship also ruled that where money is remitted to an agent, and he suffers it to remain dead in his hands, he is not liable to pay interest,’ but that if he mixes it with his own, or makes use of it, he is liable to pay in- terest (d). prehension and conviction of the thief, on the familiar maxim, ‘ Qui facit per alium, facit per se.’”’ Montgomery County v. Robinson, 85 Ill. 174. (z) Per Cockburn, C. J., in Morison v. Thomson, L. Rep., 9 Q. B. 483. (a) 6 Mod. 69. (b) 12 Mod. 415. (c) Rogers v. Boehm, 2 Esp. 702. lWhere funds are held by a trustee, which it is his duty to invest, he will be liable for interest if he neglects to in- vestthesame. Williamson v. William- son, 6 Paige, 298; De Peyster v. Clark- son, 2 Wend. 77; Graves's Appeal, 50 Penn. St. 189; Barney v. Saunders, 16 How. 535, 542. (d) See Travers v. Townsend, 1 Bro. C. C. 384; Franklin v. Frith, 3 Bro. 433. See post, p. 247. ° The same rule applies to executors, trustees, etc. Barney v. Saunders, su- CHAP. I1.] LIABILITY OF AGENT TO PRINCIPAL. 835 *This subject is illustrated by Thomson v. Havelock (c), [244*] decided in 1808. The plaintiff, the captain of a ship, brought an action to recover from the shipowner money paid to the latter by a third party for services performed by the captain in the course of his employment; and it was held that, as between him and his employers, the money belonged to the shipowner. “Tt is contended,” Lord Ellenborough directed the jury, “that a servant who has engaged to devote the whole of his time and atten- tion to my concerns, may hire out his services, or a part of them, to another. . . . No man should be allowed to have an interest against his duty.” ' The same learned judge ruled to the same effect in Diplock v. Blackburn (f), decided in 1811. There the master of a ship in a foreign port claimed to retain for his own benefit the premium received by him upon a bill drawn on account of the ship, on the ground that there had been a usage for masters of ships to appro- priate such premiums to their own use. Lord Ellenborough ruled that the money belonged to the owner and not to the captain. “ If a contrary usage has prevailed,” said his lordship, “it has been a usage of fraud and plunder. What pretence can there be for an agent to make a profit by a bill upon his principal? This would be, to give the agent an interest against his duty.” The cases in equity are to tha same effect. No case has gone further than that of Turnbull v. Garden (9), decided in 1859. There an army agent and contractor was em- pra; Kerr v. Laird, 27 Miss. 544; Mum- ford v. Murray, 6 Johns. Ch. 1; Manning v. Manning, 1 id. 527; Jacot v. Emmett, 11 Paige, 142; Clemens v. Caldwell, 7 B. Mon. 171; Brown v. Ricketts, 4 Johns. Ch. 303; Utica Ins. Co. v. Lynch, 11 Paige, 520; Spear v. Tinkham, 2 Barb. Ch. 211. Where a trustee speculates with trust funds, he may be held liable for profits if the investment has been successful; for interest, if disastrous. Norris’s Ap- peal, 71 Penn. St. 106. See 1 Story’s Ea. Jur. § 465, and note. The same rule applies in the case of guardians. Bond v. Lockwood, 33 IIL. 212. An agent or trustee has no right to mix the funds of his principal or cestui que trust with his own, and then hold his principal or cestui que trust liable for the depreciation of moneys in his hands. If the agent seeks to make his principal liable for losses in bank failures, or other losses as moneys of his principal, he must keep the moneys of his principal separate and distinct from his own. Webster v. Pierce, 35 lll. 159; School District v. First Nat. Bank, 102 Mass. 174; 2 Story’s Eq. Jur. §§ 1270 et seq. (e) 1 Camp. 527, (f) 3 Camp. 43. (g) 88 L. J, Ch. 881. 836 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Ir. ployed by the plaintiff to provide for her son a reasonable outfit for India. The articles composing such outfit were accordingly paid for through the agent, who debited the plaintiff in account with the full amount of the invoice prices charged by the trades- men supplying the outfit, though discount had been allowed him in each instance. This was done by him on the ground, as alleged, that it was the universal practice as between tradesmen and army agents. The plaintiff had no actual knowledge of such practice. An action was commenced by the defendant in the Mayor’s Court against the plaintiff to recover the balance of his account, and certain moneys deposited by her with her bankers were attached to answer the claim. The plaintiff thereupon filed a bill praying a general account, and an injunction to restrain the further prosecution of the action. The court directed the account to be rectified by disallowing as against the plaintiff the [245*] *full amount of the discounts retained by the defendant. “What appears in this case,” said Vice-Chancellor James, “shows the danger of allowing even the smallest departure from the rule that a person who is dealing with another man’s money ought to give the truest account of what he has done, and ought not to receive anything in the nature of a present or allowance without the full knowledge of the principal that he is so acting.” The next case is that of Aimber v. Barber (h). There the plaintiff being desirous of procuring shares in a company, the defendant had represented to-him that he could procure some at 81. per share; plaintiff agreed to purchase at that price, and cer- tain shares were thereupon transferred, part to the plaintiff and part to his nominee, and were paid for at 3/. per share. The plaintiff afterwards discovered that the defendant was himself the owner of the shares, having lately purchased them for 20. per share. On appeal it was held (reversing the decision of the Master of the Rolls), that the defendant was an agent for the plaintiff, and he was ordered to pay back the difference in the price of the shares. The whole subject was ably discussed in 1874, and the authori- ties examined in a judgment of the Queen’s Bench, delivered by Lord Chief Justice Cockburn in the case of Morison v. Thomp- son (2). This was an action by the purchaser of a steamship to (h) L. Rep., 8 Ch. 56. (i) L. Rep., 9 Q. B. 480. CHAP. II] LIABILITY OF AGENT TO PRINCIPAL. 337 recover from the broker, employed to purchase the ship as cheaply as possible, the sum of 2252. received by him from the broker of. the vendor by way of commission. At the trial a verdict was entered for the plaintiff, with leave to enter a verdict for the defendant, if the court should be of opinion that money had and received could not be maintained on the facts. A rule obtained accordingly was discharged. “In our judgment,” said his lord- ship, “the result of these authorities is, that whilst an agent is bound to account to his principal or employer for all profits made by him in the course of his employment or service, and is com- pelled to account in equity, there is at the same time a duty, which we consider a legal duty, clearly incumbent upon him, whenever any profits so made have reached his hands, and there is no account in regard to them remaining to be taken and ad- justed between him and his employer, to pay over the amount as money absolutely belonging to his employer.”! Acquiescence on the part of the principal affords the agent a good defence.2 In Great Western Insurance Company v. Cunliffe (kh), *decided in the year 1874, a marine insur- [246*] ance company in New York appointed a firm of mer- chants in London their agents for settling claims in England and for effecting re-insurances. For settling the claims the agents were to receive a fixed percentage, but nothing was provided as to remuneration for re-insuring. According to custom as between underwriters and brokers, the agents were allowed by the under- writers 5 per ceut. on each re-insnrance, and also, at the end of the year, on the general balance between the underwriters and the broker, 12 per cent. on the profits of the year if there were profits. The firm in London were in the habit of receiving both these percentages, but only the 5 per cent. was mentioned in their accounts sent to the insurance company. The company discov- ered this in 1866, but made no objection to it until 1868. In 1869 the company filed a bill against the firm in London for an account in which the 12 per cent. should be accounted for, and it was held that the firm in London were entitled to retain the 12 1See ante, p. 14, note, and post, p. also, ante, p. 48 et seq., concerning the 335 et seq. subject of ratification. 5 See Redfield v. Tegg, 38 N. Y. 212; () L. Rep., 9 Ch. 525, 22 038 RIGHTS, ETC., ARISING OUT OF THE ConTRACT. [Book m1. per cent. received and the interest charged by them as re- muneration. The principle of Great Western Insurance Company v. Cun- liffe was applied in 1877 to the case of Baring v. Stanton (1), and the custom was held binding upon a foreigner. The Court of Appeal again affirmed the rule, that if a person employs another to do certain work for him, as his agent with other persons, and does not choose to ask him what his charge will be, and in fact knows that he is to be remunerated not by him but by the other persons, and does not choose to inquire what the amount is, he must allow the ordinary amount which agents are in the habit of charging. There a shipowner, who for ten years had employed a firm to effect insurances on his ships, and from time to time had settled accounts without inquiring as to the custom, was held not to be entitled to call upon the firm for an account of deductions made to the firm, viz., 5 per cent. brokerage, and 10 per cent. discount for cash, payments which had been allowed by the un- derwriters on each transaction. To entitle the principal to recover, it would seem to be essential that the profits should be made by the agent in his employment as agent. For instance, if a person employed to sell a stack of hay finds a purchaser who commissions the same agent to find him a buyer for a plot of ground, for which service he is to re- ceive 1002., the first principal, assuming that he bought [247*] *land in question, having received offers from the agent, would not be entitled to claim this sum as profits made in the course of the agency. Again, if an agent employed to buy a horse is promised by third parties a bonus if he succeeds in induc- ing his employer to buy a certain machine or the like, the latter probably could not claim the bonus as profits made in the course of the agency, unless the agent had undertaken to give all his time to his employer. Furthermore the principal will not be en- titled to claim the profits made by the agent when, having com- missioned the latter to sell for a price named, he agrees that the agent shall retain all money received over that amount.’ By the application of this principle the Court of Appeal reversed the decision of Vice-Chancellor Malins in Morgan v. Elford (m). (2) L. R., 3 Ch. Div. 502; 35 L. T. 'See Anderson v. Weiser, ante, 243, Rep., N.S. 652. note. (m) L. R., 4 Ch. Div, 352, CUAP. 11.] LIABILITY OF AGENT TO PRINCIPAL. 839 From the circumstances of the case the court held that no fiduciary relation existed between the plaintiff and the defendant. Inas- much, however, as the case has been carried on appeal to the House of Lords, it would be premature to do more than briefly mention the facts. The defendant was employed by the plaintiff to sell a colliery on the terms that whatever he received in addi- tion to 25,0000. should be his remuneration. He sold to C. and others for 30,000/., but those named as purchasers other than C. were really sub-purchasers for 40,0002. The question for the de- cision of the House of Lords is whether the principal is, under the circumstances, entitled to call upon the defendant and C. to refund the 10,0002. received by them in addition to the 5,000/. as profits made in the course of the defendant’s agency. Szcr. 6.— Liability of Agent to account. An agent may be bound to account — (1) For the property of his principal. (2) For interest in some cases. Executors in all cases must account for interest if they have used the money in trade, or received any interest for it (7).* 18ee Greentree v. Rosenstock, 61 N. Y. 583. An agent is bound to account to his principal for money received by him in the course of his agency, for goods sold by his principal on orders obtained by him as such agent, on commission, al- though such sales, as between the prin- cipal and purchaser, be illegal and void. Baldwin v. Potter, 46 Vt. 403. See Taul v. Edmonson, 87 Tex. 556. As a general rule a demand should be made for money collected by an agent for his principal before bringing suit. The collector, it is presumed, after de- ducting a reasonable compensation, will transmit the money by the earliest safe opportunity. Bedell v. Janney, 4 Gilm. 193; Armstrong v. Smith, 3 Blackf. 251; Heddens v. Younglove, 46 Ind. 212, and cases there cited; Jett v. Hempstead, 25 Ark. 462; Whitehead v. Wells, 29 id. 99; Haas v. Damon, 9 Iowa, 589. But where so long a time has elapsed since its collection as to rebut such pre- sumption, he may be considered as hav- ing appropriated it to his own use, and a demand is not required. Bedell v. Janney, supra. See, also, Jett v. Hemp- stead, supra; Whitehead v. Wells, supra. In Leake v. Sutherland, 25 Ark. 219, it is said that an agent is not bound to account to the principal until the time fixed by the terms of the agency, or a demand by the principal, and that in such a case the commencement of the suit is a sufficient demand. (n) Ratcliff v. Graves, 1 Vern. 196. 2See cases cited ante, p. 243, note 3. See this subject fully considered in 2 Wns. on Ex’rs (6 Lond. ed.), p. 1702 et seq. 3840 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK MI. If in any case an executor or trustee makes any advantage of the trust money, the cestwi que trust is entitled to it; and if he incurs any loss by undue management or wilful neglect, he must answer for it to the cestui que trust (0)." [248*] *So a receiver of a public trust who made interest of the balances in his hands (); an administrator who retained and made use of the undistributed property (7); mercantile agents who made use of remittances as their own (7); a person bound by recognizances to account annually, though he had made no use of the money (s); and a receiver keeping money in his hands after it was due (¢), have been held accountable for interest. An auctioneer being, as a rule, only a stakeholder, is not liable to pay interest on money in his hands, whether he has used the money or not (w). Few branches of English law have presented greater difficulties in the attempt to reduce the decisions to consistent principles than that which relates to the principal’s right to interest on ac- count of money in the hand of his agent. Lord Ellenborough, in a case decided in 1807 (a), stated the rules to which he intended to adhere. “J want very much,” said his lordship, “to lay down a certain rule respecting the payment of interest. I recollect some extremely conspicuous determinations on this subject; and on all occasions as little as possible should be left in the discretion of a judge. It appears to me that interest ought to be allowed only in cases where there is a contract for the payment of money on a certain day, as on bills of exchange, promissory notes, etc.; or where there has been an express promise to pay interest; or where, from the course of dealing between the parties, it may be inferred that this was their intention; or where it can be proved that the money has been used and interest has been actually made.” An agent, who by the authority of his principal keeps large sums of money in ‘his hands for which he was to be responsible, and for (0) Lowson v. Copeland, 2 Bro. C. C. (r) Rogers v. Boehm, 2 Esp. 702. 156; Hill v. Simpson, 7 Ves. 152; Lee = (s) Dawsonv. Massey, 1 Ball & B. 219. v. Lee, 2 Vern. 548. (t) Fletcher v. Dodd, 1 Ves. jun. 85. 15ee note 2 on next page ante. (uv) Harrington v. Hoggart, 1B. & Ad. (p) Earl of Lonsdale v. Church, 3 577. Bro. C. C. 41. (x) De Havilland vy. Bowerbank, (q) Stacpoole v. Stacpoole, 4 Dow, 209. Camp. 49. cuap. u.] LIABILITY OF AGENT TO PRINCIPAL, 341 which he duly accounted, is not liable to pay interest, even sup- posing he employs such money (y).! As a rule an agent is liable to account to his principal only. It is immaterial that the principal is trustee of a charity, and man- ages its affairs by an agent, who receives the income, and *has in his possession the title-deeds (z). Hence, where in [249*] such a case the agent was made a party to an information for an account and ascheme, Lord Romilly held on demurrer that he was not a proper party (2), inasmuch as the trustee was the person to be called upon to account. So, too, as a rule, when asub-agent is employed by an agent, he is only liable to account to the agent and not to the principal (a)2 (y) Lord Salisbury v. Wilkinson, cited by Lord Eldon in Lord Chedworth v. Edwards, 8 Ves. 47. Interest is to be allowed where the law, by implication, makes it the duty of the party to pay over the money to the owner without any previous demand on his part. Dodge v. Perkins, 9 Pick. 368. Where, therefore, an agent, having received money, unreasonably neglects to inform his employer of it, he is liable for interest from the time that he ought to have given information. Dodge v. Perkins, supra. If an agent improperly withholds the money of his principal, he is liable for interest thereon. Anderson v. The State, 2 Kelly, 370; Bedell v. Janney, 4 Gilm. 193. Where an attorney or agent is au- thorized to sell land for the plaintiff and to collect money on a bond and mort- gage, etc., it is sufficient if he keeps the money received by him safely, and is ready to pay it over on demand to the party entitled to it. He is not charge- able with interest on the moneys of his principal, unless in default or unless he has employed the money for the pur- pose of gain to himself. Williams v. Storrs, 6 Jobns. Ch. 353. See the general principles governing the allowance of interest, considered at length in Reid v. Rensselaer Glass Fac- tory, 13 Cow. 393; S. C. 5id. 527. (z) Attorney-General v. Chesterfield, Earl of, 18 Beav. 596. (a) Attorney-General v. Chesterfield, Earl of, supra, and cases there cited. *Cartwright v. Hateley, 1 Ves. Jr. 292; Stephens v. Badcock, 3 B. & Ad. 354. Thus, where J., an attorney, who was accustomed to receive certain dues for the plaintiff, his client, went from home, leaving B., his clerk, at the office; and B., in the absence of his master, re- ceived money on account of said dues for the client (which he was authorized to do), and gave a receipt signed ‘' B., for Mr. J.,"’ and J., being in bad cir- cumstances when he left home, never returned; but it did not appear that his intention so to act was known at the time of the payment to B.; and B. after- wards refused to pay the money over to the client; on assumpsit against him for money had and received, it was held, that the action did not lie; the defend- ant received the money as agent of his master, and was accountable to him for it, the master on the other hand being answerable to the client for the sum received by his clerk; and there was no privity of contract between the present plaintiff and defendant. Stephens v. Badcock, supra. See, ante, p. 42, note; post, p. 317. 842 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK MII. A banker received a sum of money from A., who was the agent of B.,C. and D. ; A. being charged to divide it amongst them in dis- tinct proportions known to the banker. Part of the money was drawn out and distributed by the agent, and Chief Justice Gibbs ruled that the banker was answerable to A. only. Theaction was brought by B. alone. Hence it would have been sufficient to say that he could not revoke a joint authority (6). A son employed under, paid by, and accountable to his father, is not accountable to his father’s principal (c). Wherever a fiduciary relation exists between the principal and agent, the latter may be called upon to account in equity.t Reci- procity of accounts between the parties is not an essential condi- tion (@).” In Makepeace v. Rogers (e), decided in 1865, a bill was filed by a landowner against a person whom he had employed as agent and manager of his estates, and whom he charged with having received moneys while acting in that employment, and with not having rendered proper accounts of those moneys. An account and delivery of documents belonging to the principal and in the possession of the agent was prayed. Vice-Chancellor Stuart, in See, however, Turner v. Tumer, 36 Tex. 41, where it was held that a per- son who, as agent of the guardian of a minor, collected money belonging to the minor, assumed a twofold responsibility, and was liable not only as agent for his principal, but also as a trustee for the minor. When a party has contracted with another to do a particular work, either at its cost or at a fixed price, a sub-con- tractor cannot resort to the principal for his compensation, but must look to his immediate employer. Cleaves v. Stock- well, 33 Me, 341. Where authority to employ sub- agents is shown to exist, either ex- pressly or by implication, a privity is created between the principal and the sub-agents so appointed, which makes them directly liable to the principal for negligence or misconduct; and the agent, unless he, with a knowledge of their incompetency or dishonesty, had fraudulently procured their appoint- ment, or was implicated in their im- proper acts, would not himself be re- sponsible for their commission. Louis- ville, etc. R. R. Co. v. Blair, 4 J. Bax- ter, 407. (b) Pinto v. Santos, 5 Taunt. 447. (c) Cartwright v. Hateley, 1 Ves. jun. 292; Le Texier v. Margravine of Ans- pach, 5 Ves. 322. ? To the same effect see Zetelle v. My- ers, 19 Gratt. 62, where it was held that an agency to manage, lease, and sell property, and pay the expenses upon it, to collect debts and pay over the moneys received to the principal, was of a fidu- ciary character. (d) Phillips v. Phillips, 9 Hare, 471; 8. C., 22 L. J., Ch. 141, explained in Makepeace v. Rogers, 34 L. J., Ch. 367. >See post, p. 251. (e) Supra. CHAP. 11.] LIABILITY OF AGENT TO PRINCIPAL. 843 overruling a demurrer, said: “I conceive that, wherever the rela- tion between the person who seeks an account and the person against whom it is sought arises out of a fiduciary character, the fiduciary character of the employment imposes upon the person employed the duty of keeping accounts and of preserving vouch- ers, and, according to the old law, a bill in such a case for an account in equity may be sustained.” In the court above, where the vice-chancellor’s decision was * affirmed, Lord [250*] Justice Knight Bruce remarked that the fiduciary charac- ter of the relation between the parties sufficed to support a bill for an account. An agent who fails to account is liable to forfeit remuneration for his labour (ce)! Mere irregularity, however, in the account will not suffice to work such forfeiture. If the agent can make out his claim by satisfactory evidence he will be paid (e).1 An injunction to restrain the transfer of stock standing in the name of a steward was granted upon evidence that it was the pro- duce of his master’s property, and received for many years with- out account rendered; but refused as to money at the steward’s bankers in his own name, the last payment having been made two years before the application to the court (/). It is a settled rule of law that an agent shall not be allowed to dispute the title of his principal.” Hence, after accounting with (e) White v. Lady Lincoln, 8 Ves. 363, 1 Willard’s Eq. Jur. *104. (f) Lord Chedworth vy. Edwards, 8 Ves. 47. 2See Holbrook v. Wight, 24 Wend. 169; Barnardo v. Kobbe, 54 N. Y. 516; Collins v. Tillou, 26 Conn. 368; Aubery vy. Fiske, 86 N. Y. 47; Jenks v. Man- son, 53 Me. 209; Hancock v. Gomez, 58 Barb. 490; Marvin v. Elwood, 11 Paige, 865; Edwards on Bailments, § 73. An agent who has collected money for his principal cannot interplead his principal and a third party who is an adverse claimant. Snodgrass v. Butler, 54 Miss. 45. But a bailee or agent, who has re- ceived property as such, is at all times at liberty.to show that his bailor or prin- cipal has parted with his interest in the property subsequent to the bail- ment, or to the delivery to the agent. Marvin v. Elwood, supra. See Edwards on Bailments, § 73. A factor or commission merchant, who has cotton consigned to him by tenants with knowledge that one-fourth belongs to the landlord, and with in- structions to place it to the landlord's credit, when sold, cannot apply it to the payment of commissions, storage, etc.; he must hold the balance of the pro- ceeds for the landlord. Branch v. Du Bose, 55 Ga, 21. Plaintiffs contracted to sell $50,000 of gold at 14144 currency, to be delivered September 24, 1869; defendant was the common agent for dealers in gold, em ployed in the settlement of their con- 844 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II, his principal, and receiving money as agent, he cannot afterwards say that he did not receive it for the benefit of his principal, but for that of some other person (g). So where a ship originally belonged to one of the partners, and had been conveyed to A. for securing a debt, and A. became sole registered owner of the ship, and afterwards as agent for both partners insured the ship and freight and charged them with the premiums, the court held, on a loss happening, the money being paid to A. by the underwriters, that he was accountable to the assignees of the surviving partners for the surplus, after payment of his own debt, and not to the executors of the deceased partner, to whom the ship originally belonged (g). The same rule applies in the case of brokers (A), warehousemen, and wharfingers (2). This rule, however, is not of universal application, for the es- toppel ceases when the bailment on which it is founded is deter- tracts. Plaintiffs did not furnish the gold to fulfill their contracts, but de- fendant furnished and delivered it, re- ceiving the currency agreed to be paid therefor. Plaintiffs thereafter tendered to defendant the amount of gold so de- livered, and demanded the currency received, which the latter refused to pay. In an action to recover the same, held, that while the defendant was not bound to perform the contract on be- half of plaintiffs, as they did not fur- nish the gold, yet, having done s0, it was estopped from denying plaintiffs’ right to the benefit of the contract; that plaintiffs by asserting their claim to the money received, adopted and ratified defendant's act, and the rights and ob- ligations of the parties were to be deter- mined by the rules governing the rela- tion of principal and agent. Fowler v. N. Y. Gold Exchange Bank, 67 N. Y. 138. Where, during a delay occurring be- tween the date of the sale and the con- veyance of the real estate of the defend- aut to a third person, the plaintiff, being a tenant of the defendant on such real estate, makes certain improvements thereon without authority from any one, and the defendant undertakes with the plaintiff to collect, and does collect of such third person the value of such im- provements, for the plaintiff, the de- fendant thereby becomes the agent of the plaintiff, and is liable to the latter for the amount so collected, in an action therefor, and cannot introduce evidence on the trial to show that such improve- ments were made without authority, Reed v. Dougan, 54 Ind. 306, Where an agent receives money from his principal to be invested in goods for him, and uses the money so furnished (with his own money) in making the purchase, but takes the title in his own name, and repudiates the trust, a court of equity will enforce the trust against him, and will not allow him to set up the Statute of Frauds in his defense, on the ground that his agency was without written authority. Firestone v. Fire- stone, 48 Ala. 128. : (g) See per Abbott, C. J., Dickson v. Hamond, 2 B. & Ald. 310. (A) Roberts v. Ogilby, 9 Price, 269. (i) Betterley v. Read, 4 Q. B. 511. CHAP. 11.] LIABILITY OF AGENT TO PRINCIPAL. 845 mined by what is equivalent to an eviction by title paramount (4). A bailee has no better title than the bailor, and conse- quently, if a person entitled as against the bailor to the *prop- [251*] erty claims it, the bailee has no defence against him (Z).! This exception to the rule must in its turn be distinguished from those cases where the estoppel proceeded on a representation by the agent, which was analogous to a warranty of title for good consideration to the purchaser (m). Although an auctioneer has a right of action for goods sold by him in the course of his business, yet when the right of a third person intervenes, and such right is established, and the person employing the auctioneer is proved not to be the owner, it then becomes clear that the auctioneer, who can have no interest in the goods but what he receives from his employer, has no longer any claim upon the property against the right owner (2). The proposition, that wherever the relation of a principal and agent for sale exists, there a bill for an account will lie, appears to have been first laid down by Vice-Chancellor Sir John Leach in 1819 (0). In the case then before him it was contended that the plaintiff might file a bill for discovery only, but not for relief, as there was only one article to account for, viz., a cargo of earth- enware. A question which has been much debated is, whether the mere relation of principal and agent entitled the former to come into equity for an account, if the matter could be fairly tried at law.’ (k) Biddle v. Bond, 34 L. J., Q. B. 137, and cases there cited; Dickenson v. Naul, 4B. & Ad. 638. (2) Wilson v. Anderton, 1 B. & Ad. 450; Biddle v. Bond, supra. 1The bailee will not be excused from his duty to restore the property bailed, to his bailor, unless he shows that it was taken from him by one possessing a paramount title, or by due process of law, or that the title of his bailor is ended. See Burton y. Wilkinson, 18 Vt. 186; McKay v. Draper, 27 N. Y. 256; Bliven v. Hudson R. R. R. Co., 36 id. 403; Bates v. Stanton, 1 Duer, 79; Van Winkle v. U. S. Mail Steamship Co., 87 Barb. 122; Marvin v. Elwood, 11 Paige, 365. (m) See Stonard v. Dunkin, 2 Camp. 344; Gosling v. Birnie, 7 Bing. 339; Howes v. Watson, 2 B. & C. 540. (x) Dickenson v. Naul, 4 B. & Ad. 638, per Curiam. (0) Mackenzie v. Johnston, 4 Mad. 373. 2 See ante, p. 249. 2In Makepeace v. Rogers, 34 L. J. (N. 8.) Ch. 395, Lord Justice Turner said: ‘‘ As to the matter of the accounts, J think that principal and agent are in a relation of trust to each other; and I never heard of a case of general agency where a bill would not lie, although there may be a difference in cases of agency in single transactions only.” 346 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK 11. A number of authorities and dicta may be cited to negative this proposition. Thus Lord Redesdale has stated the jurisdiction of equity to rest upon the ground, “that the account has become so complicated that a court of law would be incompetent to examine it upon a trial at Nisi Prius with all necessary accuracy” (p). To the same effect Lord Langdale said, in Darthez v. Clemens (q), that “if the account can be fairly taken in a court of common law, this court will not interfere, even in the case of merchants’ accounts consisting of mutual dealings.” So Lord Justice Tur- ner observed in another case (7), that “the circumstance that a party may have been agent of the other in receipt of a [252*] certain sum of money, or in *one particular matter, does not necessarily render the case one in which a bill in equity may be brought for an account. This is the view taken at common law (s). In Barry v. Stevens (¢), decided by Lord Romilly in 1862, an author had agreed with a publisher for the publication of 500 copies of his work. The work was published and an account rendered, presenting no intricacy. After action brought by the publisher to recover the balance, the author filed a bill to have an account taken. ‘No error was specified or fraud alleged. A demurrer was allowed. In support of the bill it was contended that an account will be granted, first, where the accounts are mu- tual; secondly, where they are complicated; and, thirdly, where the parties stand in a fiduciary relation. The plaintifi’s claim was based upon the third ground. The Master of the Rolls thought that such action could not be sustained where the matter is com- prised within certain specified limits, and the account as it stands a mere money account, for which an action at law may be well brought and tried. In a subsequent case (w), Lord Justice Tur- (p) O’Connor vy. Spaight,1 Sch. & where it was held that a land owner Lef. 309. may maintain a suit in equity against (gq) 6 Beav. 165. the agent and manager of his estates, if (r) Phillips: v. Phillips, 9 Hare, 474; the object of such suit is either to ob- and see per Lord St. Leonards, Navul- tain an account (and in that case alle- shaw v. Brownrigg, 2 D., M. & G. 441. gations of fraud or special circum- (s) See per Alexander, C. B., King vy. stances are unnecessary), or to obtain Rossett, 2 Yo. & Jer. 35. the delivery up by the agent of docu- (t) 31 Beav. 258. ments in his hands belonging to the (u) Makepeace v. Rogers, 34 L.J., land owner.] Ch. 396. [S.C., 4 DeG., J., & S. 649, CHAP. 11.] LIABILITY OF AGENT TO PRINCIPAL. 347 ner drew a distinction between cases of general agency and cases of agency insingle transactions only. See Mfoxvon v. Bright (a), where a bill for an account of royalties was dismissed. Where a bill is brought for an account, and the defendant sets forth a stated one, the latter is prima facie a bar (y). If it ap- pears that there are only mistakes and omissions in the stated ac- count, the party objecting will be allowed no more than to sur- charge and falsify; but if it is apparent to the court that there has been fraud and imposition, the whole account will be opened (z). Where there is fraud the account may be opened after an indefinite time. In Vernon v. Vawdry the stated ac- count was of twenty-three years’ standing. An agent cannot be compelled to account for profits which were made by him before the relation of principal and agent ex- isted. Thus, where contracts were entered into by a person who knew that it was intended to incorporate a company to take them over, and who subsequently upon the formation and incorporation of the company became a director of the company, the *Master of the Rolls held that the company was not enti- [253*] tled to claim the profits so made by the director previous to the incorporation of the company (#). This class of cases must be distinguished from those in which shareholders may proceed against the officers of a company under sect. 88 of the Companies Act, 1867 (2). 1The same distinction was made in cases cited in note 2. Coquillard v. Suydam, 8 Blackf. 24. (z) Vernon v. Vawdry, 2 Atk. 119, See the general subject of account as and cases in note. : between principal and agent full con- (a) Albion Steel and Wire Company sidered in 1 Story’s Eq. Jur., § 462 et v. Martin, 1 Ch. Div. 580. seq.; Willard’s Eq. Jur. *104. (b) 80 & 81 Vict. c. 181; see Twycross (x) L. Rep., 4 Ch. 292, vy. Grant, 2 C. P. Div. 469. (y) Dawson v. Dawson, 1 Atk. 1, and 348 [254*] RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Book Il, *CHAPTER III. DUTIES AND LIABILITIES OF AGENT IN FIDUCIARY POSITION. PAGE. Srcr. 1.—Of the Fiduciary Rela- tions generally. No opposition between the terms “agent” and ‘‘ trustee ’’.....-- 255 Fiduciary and fiduciary relation de- ATC sais wie 'sccecas oe sees ote 255 Wide application of the principles relating to the relation......... General rules with respect to the dealings of persons in fiduciary relationS...--+-eeseeeeeeee Bate Relation of principal and agent... Cases illustrating the nature of the evidence to prove the relation... 257 Instances where no such relation exists Opinion of Lord Thurlow in Fox v. Illustration of the rule that requires dealings to be at arm's length .. 260 Szor. 2.— Agent employed to pur- chase. Classification of cases.......+-+++- When the agent buys for himself he is a trustee for the principal... 263 Illustrations................. 263 When the agent sells his own prop- erty. Tyrrell v. The Bank of Secret profits made by agent out of the conduct of his agency ...... Agent who conceals the fact of his ownership will be allowed only to charge the principal the amount paid to the vendor............. Cases illustrating the principle ap- plied where the agent sells his own property. Rothschild v. Brookman ..........ceeeeeeees PAGE. Intent of the agent immaterial.... 269 No loss need be proved .......... 270 Where the principal re-sells the Property wesw wich sew eoowsawew 270 Sale by agent of property acquired by gifbissareste chin ciseaeas sas 270 Srcr. 3. — Agent employed to sell. Necessity of good faith........... 272 The position of an agent for sale.. 272 His right to contract...........+- 275 The courts watch transactions even after relation has ceased ....... 275 Sror. 4.— Directors and Pro- moters. DIRECTORS .......-ee e000 aisaysiees 276 The office one of trust............ 276 Nature of the duties ..........06- 276 Distinction between directors who are trustees and directors who are simply agents or mandatories... 277 Directors will not be allowed to make a secret profit out of their office.. 277 Where directors share with a stran- ger the benefit of a bargain made between the stranger and the company, the profits made by the directors belong to the company, Their power to make calls is a fidu- CIATY POWEY.... veces eee eee Not liable for mere default of judg- Carling, Hespeler, and Walsh's cases discussed ..........e-.00 True limits of the doctrine that di- rectors are agents in a fiduciary POSHEION sso: verses vine escie ee oa e's 5 PROMOTERS... ....cccseeceeeeees CIALP. rt. | DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. PAGE. Sect. 5.— Fiduciary Position of Legal Advisers. Transactions between solicitor and client subject to strict tests ..... 286 In matters of contract..........4. 287 849 PAGE. When the client makes a gift to his adviser.........e.eee.e0 290 As a rule, gifts during continu- ance of relation cannot stand.. 290 Lord Brougham’'s statement of the Sale of annuity set aside....... 287] counsel and dlentess--s...,.., 201 Lord Eldon’s observations on the A mere explanation of the effect right to contract............. 287 of the gift by an independent Purchase at auction............ 288 solicitor is not enough to rebut (255*] *In matters of contract: presumption of undue influ- CCE Ss ee eres an ea eeeon ees 293 Examination of the authorities by Lord Cranworth and Lord Justice Turner in Holman v. Exorbitant payments by clients will be set aside or reduced... 293 In respect to rendering service.... 294 LOYNGS isons vies censeas grasses 288 : 1 advi When a solicitor may deal with Benefits resulting to legal advis- ik aleat 989 ers from deeds prepared by Reet i tN ag ere them for clients ............ 295 Application of principles....... 289} Revocation of a will........... 295 Claim to relief after lapse of ten Bulkley v. Milford............. 295 VOAlS isaiueddunuhienniee sees: 290 Medical man and patient ...... 297 Sror. 1.— Liduciary Relations generally. Tue terms “trustee” and “agent” are frequently used in a loose way as though those terms marked off absolutely distinct and separate duties and liabilities. All trustees, however, are agents; but all agents are not trustees. A trustee is an agent and some- thing more. An agent is simply one placed in the stead of an- other; he is a trustee only so far as there is vested in him for the benefit of another some estate, interest, or power in or affecting property of any description; and an agent, who is in a fiduciary position, is a trustee in this sense of the word; in other words, fiduciary and trustee are convertible terms. This will appear more clearly hereafter from the remarks of Lord Chelmsford, in Tate v. Williamson (a), to which attention will be directed shortly. A. fiduciary is one who holds anything in trust for another; a fiduciary relation is the relation in which a fiduciary or trustee stands towards the beneficiary; the term trustee being here used in its widest sense, which includes not only trustees in the narrow sense of the word, but also those persons who are, for certain pur- poses, trustees in the contemplation of law. The relation is one (a) L. Rep. 2 Ch. 61. 350 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIT. of confidence; it was upon the principal of correcting abuses of this confidence that the jurisdiction of equity was founded (0). We are not concerned here with considerations of the extent to which the principle ought to be applied, or of the ques- [256*] tions whether the nature of the confidence *reposed, or the relation of the parties between whom it has subsisted, makes any difference. The principle is of very wide, if not of universal application, and has been applied in cases, between a trutee and cestud gue trust, guardian and ward,’ surgeon and patient,? as well as in other relations (c). Wherever there isa relation which puts one party in the power of the other, there exists a fiduciary relation. Wherever two persons stand in such a relation that while it continues confidence is necessarily possessed by one, and the influence which naturally grows out of that con- fidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his posi- tion will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed (d).‘ (b) Billage v. Southee, 9 Ha. 534. 1See Bond yv. Lockwood, 33 Ill. 212; In re Steele, 65 Ill. 322. 1See Cadwallader v. West, 48 Mo. 488; Crispell v. Dubois, 4 Barb. 393. (c) Huguenin v. Basely, 2 White and Tudor’s Leading Cases, 556, and cases there cited. 2 Sears v. Shafer, 6 N. Y. 268, and Freeman v. Hartman, 45 Ill. 57, where the relation was that of brother and sister; see 1 Story’s Eq. Jur., 8§ 218, 309 et seq., where the authorities upon the general subject and the different relations are collected and considered. There is not any such peculiar rela- tion of trust or confidence between parties sustaining to each other the relation of son-in-law and mother-in- law, as to impose upon the former any legal or equitable obligation to make disclosure to the latter, or to authorize the latter to act upon the presumption that there would be no concealment of any material fact from her; and a court of equity cannot in such a case afford relief on the mere ground of non-dis- closure — where there is no misrepre- sentation —in the absence of any alle- gation that the relationship occasioned any confidence between the parties, and that she acted on such presumption, and where there is no evidence from which that fact can be inferred. Fish v. Clel- and, 33 Ill. 237; 8. C., 43 id. 282. (ad) Per Lord Chelmsford, C., Tate v. Williamson, L. Rep., 2 Ch. 61. 4See Gillenwaters v. Miller, 49 Miss. 150, and, also, generally, 1 Story’s Eq. Jur., §§ 218, 309 et seq. But where a principal has expressly authorized his agent to act or contract in his business to the benefit of the agent, the principal is bound. In such case the rule that he who undertakes to act for another shall not act for his own CHAP. I1.] DUTIES, ETC., OF AGENT IN FIDUCIARY Position. 851 No hard and fast precise rule is laid down for the regulation of the dealings of persons in a fiduciary position. Where the known and defined relation exists, the conduct of the party benefited must be such as to sever the connection and to place him in the same circumstances in which a mere stranger would have stood, giving him no advantage, save only whatever kindness or favour may have arisen out of the connection. Where, on the other hand, the only relation between the parties is that of friendly habits or habitual reliance on advice and assistance, accompanied with partial employment in doing some sort of business, care must be taken that no undue advantage shall be made of the in- fluence thus acquired. The limits of natural and often unavoid- able kindness, with its effects, and of undue influence exercised or unfair advantage taken, cannot be more rigorously defined. Nor is it, perhaps, advisable that any strict rule should be laid down —any precise line drawn. If it were stated that certain acts should be the only tests of undue influence, or that certain things should be required in order to rebut the presumption of it, such as the calling in a third person, it would be easy for cunning men to avoid the one, or protect themselves by means of the other, and so place their misdeeds beyond the denunciations of the law, and secure the fruits of them out of its reach. If auyone should say that *a rule is thus recognized which [257*] from its vagueness cannot be obeyed because it cannot well be discerned, the answer is plain. All men have the interpreter of it within their own breasts; they know the extent of their in- fluence, and are conscious whether or not they have taken advan- tage of it in a way which they would feel indignant that others similarly circumstanced should do with regard to themselves (¢). A moment’s consideration will suffice to show that the relation of principal and agent is a relation which may put one party in the power of the other to a greater or less extent according to the circumstances of the case! The confidence reposed in the agent might be abused with impunity in a variety of ways, did not the doctrines of equity intervene. The rules which have been gradu- ally formed for the regulation of the conduct of agents in fiduciary benefit and to the detriment of his (e) Per Lord Chancellor Brougham, principal, has no application. Moody in Hunter v. Atkins, 3M. & K. 118, 141. y. Smith, 70 N. Y. 598. 1See 1 Story’s Eq. Jur., §§ 315, 316. 852 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOX IIT, relations, and checking of breaches of confidence, proceed from principles of the highest importance in social as well as in com- mercial intercourse. In illustrating these rules, a convenient mode of dividing the subject may be attained by considering in their order cases where an agent is employed to buy or sell, where he receives a voluntary donation from his principal, and cases where he stands in the position of a legal adviser or a director. Before entering upon these qnestions it will not be amiss to cite a few cases by way of illustrating the nature of the evidence required in proof of a fiduciary relation. In Tate v. Williamson (f’), A., a young man entitled to a moiety of a freehold estate, the whole of which brought in about 4402. a year, was pressed for payment of his college debts, amounting to about 1,0002. Being on bad terms with his father, he wrote to his great uncle, who had been the trustee and manager of the prop- erty, and receiver of the rents, for advice and assistance as to pay- ment of the debts. The latter sent his nephew W., the defendant, to see A. on the subject. When they met, A. would not permit any attempt to compromise the debts, but said he would sell his estate. W. then offered him 7,000/. for it, payable by instalments. This offer was accepted by A. next day. Before the signing of the agreement the defendant obtained a surveyor’s valuation, in which the value of the mines under the entirety was estimated at 20,0002. A. was not informed of this valuation. Upon [258*] these facts it was *held by Vice-Chancellor Page Wood that a fiduciary relation existed between A. and W. This decision was upheld by Lord Chancellor Chelmsford. The chief circumstances upon which the decree was founded appear to be the youth and embarrassments of A., the duties which the defend- ant had undertaken of advising him with respect to the arranging of the claims of his creditors, and the secret information obtained by the defendant. The promoters of a company, who make representations in a prospectus, and invite the confidence of the person to whom it is addressed, contract fiduciary relations with such persons, and if they have bargained to retain part of the money subscribed, they must disclose that fact (g).! (f) L. Rep., 2 Ch. 55. N. 8. 653, 730; 6 Ch. Div. 371. (g) Bagnall v. Carlton, 36 L. T. Rep., 1See post, p. 276, CHAP. I11.] | DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 3053 A tenant for life does not stand in a fiduciary relation towards the remainderman (A), nor does a mortgagee stand in an unquali- fied fiduciary relation towards the mortgagor. For instance, he may purchase the equity of redemption from the latter (2), or from a prior mortgagee, who sells under a power of sale (4). With respect to the existence of such a relation between land- owner and the agent of his estate, see Makepeace v. Togers (1); a banker and his customer, see /oley v. Hill (m); a master and his servant, see Smith v. Leveauc (n). In Guest v. Smythe (0) an attempt was made to set aside a pur- chase on the ground that a fiduciary relation existed between the parties to the sale. The purchase was made by W.., a solicitor in an auction, consequent upon a foreclosure suit. W.’s name ap- peared on the particulars of sale as one of several solicitors from whom particulars of sale could be obtained. He was solicitor not to any party in the suit, but to some creditors of the mortgagee, one of whom had obtained a decree for administration of G.’s, the mortgagee’s, estate. W. neither prepared the particulars of sale, nor was he consulted about them, nor had he anything to do with fixing the reserved bidding. He neither knew nor had the means of knowing anything about the amount of the bidding. Two days before the sale W. had taken out a summons for the plaintiff in the administration suit to attend proceedings in the fore- closure suit. This summons *was returnable on the day [259*] after the sale. Lord Romilly, M. R., being of opinion that the case was governed by the principle laid down by Sir John Leach in Grover v. Hugald (p), decided that W. was represent- ing the creditors in the cause, and that as they could not in their character of creditors have appointed a person to purchase the property without the leave of the court, he was not able to buy. His lordship’s judgment was reversed in the Court of Appeal. (h) Dicconson v. Talbot, L. Rep.,6 (7) 34 L. J., Ch. 396. Ch, 82. 1See Zetelle v. Myers, 19 Gratt. 62; (2) Knight v. Majoribanks, 2 Mac. & ante, p. 249, note. G. 10. (m) 2 H. L. C. 28. (k) Shaw v. Bunny, 2 D. J. & S. 468; (n) 2D. 5. &8. 1. : 83 Beav. 494; and Kirkwood v. Thomp- (o) L. Rep., 5 Ch. 551. son, 2D. J. & 8. 618; 2 Hem. & Mill, (p) 3 Russ, 428. 392. 23 854 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. “The case is of considerable importance,” said Sir G. Giffard; “on the one hand, it is of great importance that the rules of the court on this subject should in no way be relaxed; but, on the other hand, it is equally important that sales by the court should not be more easily impeached than ordinary sales. As regards the rules of this court, it is, of course, well known that a person who has the conduct of a sale under the direction of the court cannot himself buy; and of course it is equally well known that parties to the suit cannot buy without the special leave of the court; and because they cannot buy, their solicitor also cannot buy. There are also other well-known rules, such as that a trustee for sale, an assignee under a bankruptcy, or the solicitor of an assignee, cannot buy. IfI thought that this case came with in any of those well established rules, I should undoubtedly af. firm the decision under appeal.” The learned judge, on the con- trary, thought that if the decision were affirmed the rules would be carried to such an extent as to make it difficult to say where the court is to stop. With respect to the particular grounds upon which the Master of the Rolls based his decision, his lordship proceeded: “Can I possibly say that persons in the position of the creditors of G. — who had nothing to do with the preparation of the particulars, and who were not consulted in any degree — can I say that they would be precluded from purchasing? If they were not precluded from purchasing, why should their solicitor be precluded, this application being not by them against their own solicitor, but by parties in the cause, who had all the means of seeing that the particulars were properly prepared, and all the means of seeing that a proper reserved bidding was fixed, and that the sale was properly conducted?” The argument that no solicitor, whose name appears as one from whom the particulars of salemay be obtained, [eould [260*] himself purchase] was very *quickly disposed of. His lordship thought it neither essential for the ends of jus- tice, nor requisite for the purpose of ensuring a fair sale, that if one of the solicitors referred to as a person who will supply par- ticulars or conditions of sale — although he had neither been con- sulted, nor had any right to interfere with the conduct of the sale, and although he was not responsible—happen to bid, the sale ‘OHAP. Ill.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 855 may be set aside by parties to the suit, even after the confirmation of the purchase (q).' The reasoning with which Lord Thurlow begins his judgment in the important case Pox v. Mackreth (r) cannot be too carefully studied upon this subject: “I do not agree,” said his lordship, “with those who say that wherever such an advantage has been taken in the course of a contract by one party over another, as a man of delicacy would refuse to take, such a contract shall be set aside. Let us put this case: suppose A., knowing of a mine on the estate of B., and knowing at the same time that B. was ignor- - ant of it, should treat and contract with B. for the purchase of that estate at only half its real value, can a court of equity set aside this bargain? No; but whyis it impossible? Not because the one party is not aware of the unreasonable advantage taken by the other of this knowledge, but because there is no contract existing between them by which the one party is bound to dis- close to the other the circumstances which have come within his knowledge; for if it were otherwise, such a principle must extend to every case in which the buyer of an estate happens to have a clearer discernment of its real value than the seller. It is, there- fore, not only necessary that great advantage should be taken in such a contract, and that such an advantage should arise from a superiority of skill or information, but it is also necessary to show some obligation binding the party to make such a disclosure.” The existence of a fiduciary relation implies the existence of ob- ligation. In other words, there can be no fiduciary relation where there is no obligation. The relief given is not co-extensive with the promptings of honour. Vice-Chancellor Bacon dealt, in the recent case of The Chester- field and Bythorpe Colliery Company v. Black (8), with that branch of law, the application of which determines whether the dealing of a person who has occupied a fiduciary position (q) Per Sir G. Giffard, at p. 558. 1“The policy of the law forbids, as conducive to fraud and inimical to fair dealing, the purchase by masters, trustees, executors, administrators, guardians, and all others, at their own sales, as alsoall agents, public and pri- vate, who are concerned in selling, whether such purchase be direct or in- direct; and, if made, such sales will be set aside on application of the parties interested.”” Rorer on Jud. Sales (2d ed.), § 413, where a large collection of cases upon the point will be found. (r) 2B. C. C. 420. (s) 37 L. T. Rep., N. 8. 742. 356 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Itt. [261*] has *taken place under such circumstances as render such dealing valid and binding upon the cestuc gue trust. The facts of the case may be thus briefly stated. ‘Two of the directors of the plaintiffs’ company bought an adjoining colliery for 53,0002., and being about to offer it for sale for 100,000/., were asked by the plaintiffs’ secretary to give the first offer to the plaintiffs’ com- pany. The subject was afterwards mentioned at a board meeting. In order, however, to enable the negotiations to proceed, one of the two directors resigned his post, at the suggestion, it was alleged, of the company’s solicitor, and purchased the moiety of the other, on the terms that the payment was to be half the sum given by the plaintiffs’ company. The offer having been made to the company, the plaintiffs’ engineer was sent to inspect and report. He valued the colliery at 173,000/., and a full investiga- tion into the state and condition of the property was made by the directors. A meeting of the shareholders was subsequently called, and a resolution unanimously passed, authorizing the directors to purchase of the former director for 100,0002. The purchase was completed in December, 1873. The directors and shareholders knew that the defendants had a joint interest, and that a profit was being made on the re-sale to the company, but no inquiry was made as to the price given by the defendants. The present action for an account of profits was commenced in December, 1875, the plaintiffs alleging that the sale of his interest by the director who retained office, was a mere contrivance to give an assumed validity to the sale, and that he had concealed his real interest in the colliery at the time of the sale to the company. They relied upon the Zhe Imperial Mercantile Credit Associa. : tion v. Coleman (t), which, though not a direct authority in sup- port of their claim, contained certain dicta to the effect that it is. necessary for a person in a fiduciary position to say not merely that he has an interest, but to state exactly what is his interest. His lordship, however, whilst agreeing with the proposition that a person in a fiduciary relation is not at liberty to make a bargain, or enter into any relation with his cestui que trust by which he might gain a profit, thought the case decided in the House of Lords inapplicable, inasmuch as the defendants had, by their conduct in the transaction, shown that they had dealt with () L. Rep., 6 H. L. 189. CHAP. UI.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 357 the *plaintiffs’ company at arm’s length, and had made [262*] no misrepresentation. ‘The weak point in the defendants’ case is undoubtedly the fact that the director who remained in office had an interest in the purchase in conflict with his duty, but even here there was no concealment, and the other circumstances of the case are consistent with wberrima fides? Official liquidators, who are placed in a fiduciary relation towards the creditors and shareholders, are bound like other agents faithfully and honestly to perform their duty, and to abstain therefore from placing themselves in a position in conflict with their duty. In Le Devonshire Silkstone Coal Company (u), a motion was made to remove the official liquidators of the com- pany. The charge was that they had sold the colliery and prop- erty for 8,0002., although they were worth at least 40,0007.; and that by taking shares in the new company, which had been formed for working the Devonshire Colliery, they had rendered them- selves incapable of fulfilling their duties to the shareholders and creditors of the old company. The evidence showed, however, that no higher price could be got at the time of the sale; that the purchaser was acting independently of any connection with the liquidators; that publicity had been given to the intention to sell; that only two of the liquidators had taken any shares; that the large profit realized arose solely from the unexpected and unprece- dented rise in the price of coals, and that six years had elapsed since the sale. The application was heard by Malins, V.-C., and was successful. Sror. 2.— Agent employed to purchase. The cases that have reference to the fiduciary relation of agents employed to make a purchase may be classed for convenience into three classes, according as they refer to different sets of circum- stances in the conduct of the agent: (1.) Where the agent prevents the principal beneficiary or cestut que trust from purchasing property, and purchases it himself for the purpose of gaining a profit for himself: (2.) Where the agent sells his own property to the prin- cipal, *cestwi que trust, or beneficiary, but con- [263*] ceals the fact that it is his own:? 1See post, p. 283, and note. (uw) W.N. p. 71, March 28, 1878. *See post, 463. 358 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. (3.) Where the agent is expressly authorized to buy, and he does so at a certain price, and then misrepresents to his principal what has been done, thereby gaining for him- self a profit in the transaction." We shall now consider the first class of cases. The restrictions imposed by law upon all transactions of the nature here indicated are founded upon the principle that no agent shall place himself in a position in which his duty and interest are in conflict —in a situation which, under ordinary circumstances, would tempt a man to do that which is not the best for his principal, since it is the plain duty of every agent to do the best he can for his principal (@).? An agent who is employed to make a purchase for his princi- pal will not be permitted either to purchase for himself* or to make a feigned purchase for his principal from himself without the consent of his employer.t If such an agent becomes a pur- 1See ante, p. 248. (a) See Bentley v. Craven, 18 Beav. 76. 2S8ee ante, p. 14, and note. 3 Nor can an agent whose duty it is to pay his principal's taxes, acquire a valid tax deed for the same when they have been sold for such taxes. Curts v. Cisna, 7 Biss. 260; Franks v. Morris, 9 W. Va. 664; Barton v. Moss, 32 Il. 50; Old- ham v. Jones, 5 B. Mon. 458; Krutz v. Fisher, 8 Kan. 90; Matthews v. Light, 82 Me. 305; Huzzard v. Trego, 35 Penn. St. 9; Bartholomew v. Leech, 7 Watts, 472; Blackw. on Tax Titles (4th ed.), *401 and notes. Where one is buying at a tax sale for himself, and is also acting in some pur- chases as the agent of another, it will be presumed that the purchases made in his own name, and upon which he takes the certificates, are not made for his principa! but for himself. Smith v. Stephenson, 45 Iowa, 645. A counsel or an attorney employed and consulted as such to draw a deed, or an application for an original title for land, is in the line of his profession, and is precluded from buying in for his own use any outstanding title. Smith v. Brotherline, 62 Penn. St. 461. But if an attorney at law is consulted as to the legal effect of a power of at- torney given to the one who seeks his advice, and is directed, as a conveyancer, to prepare a deed of land to be executed by the one who gave the power to the attorney in fact, and the attorney at law performs the duty devolving on him by the employment, and in so do- ing derives no information from his em- ployer relative to the land, and the parties refuse to execute the deed, these facts do not make the attorney at law the trustee of his employer, 1f he after- wards buy the land. Porter v. Peck- ham, 44 Cal. 204. See post, p. 290, note. 4Taussig v. Hart, 58 N. Y. 425; Tewksbury v. Spruance, 75 Ill. 187; Ely v. Hanford, 65 id. 267; Conkey v. Bond, 36 N. Y. 427; Beal v. McKiernan, 6 La. (O. 8.) 407; Dorris v. French, 4 Hun, 292; 8. C., 6 Thomp. & C. 581. Thus, a stock-broker employed to pur- chase stock for a customer, cannot buy CHAP. IlI.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 3359 chaser for himself, he will be considered as a trustee for his prin- cipal.!. Thus, where an attorney, employed to buy an estate for his client, contracted in his own name, and insisted upon retain- ing his purchase, the Master of the Rolls made a decree declaring the defendant a trustee for the client of all the right and interest he had acquired in the estate (y). The reason of the rule is a matter of easy inference from the observations of Lord Cotten- ham in Reed v. Norris (2): “Why,” said his lordship, “is an agent precluded from taking the benefit of purchasing a debt which his principal was liable to discharge? Because it is his duty, on behalf of his employer, to settle the debt upon the best terms he can obtain; andif he is emplorved for that purpose, and is enabled to procure a settlement of the debt for anything less than the whole amount, it would be a violation of his duty to his employer, or at least would hold out a temptation to violate that duty, if he made an assignment of the debt, and so made himself of himself, and when such a transaction comes to the knowledge of the customer he can repudiate it. Taussig v. Hart, supra. And in such case it is no answer that the intention of the broker was honest, and that he did better for his principal by selling him his own stock, than he could have done by purchasing it in open market. Taussig v. Hart, supra. See, also, Tewksbury v. Spruance, supra. A commission merchant, who has an order to purchase cotton, cannot fill the order with his own cotton or with cotton that he has tosell. Beal v. McKiernan, 6 La. (0. 8.) 407. 1 Firestone v. Firestone, supra; Ringo v. Binns, 10 Pet. 269; Von Hurter v. Spengeman, 17 N. J. Eq. 189; Wolford vy. Herrington, 74 Penn. St. 311; Van Epps v. Van Epps, 9 Paige, 237; Tor- rey v. Bank of Orleans, id. 649; Voor- hees y. Presbyterian Church, 8 Barb. 136; Dobson v. Racey, 3 Sandf. 61; Fisher v. Krutz, 9 Kan. 501; Eshleman y. Lewis, 49 Penn. St. 410; Smith v. Brotherline, 62 id. 461. An agent employed for a remunera- tion to collect the rents and exercise control over his principal's leasehold property in his absence, the principal relying entirely on his discretion, judg- ment and integrity, who purchases the property on execution against the prin- cipal under such circumstances, makes himself liable as a trustee in relation thereto for the benefit of his principal. Grumley v. Webb, 44 Mo. 444. So, also, where the agent, before the expiration of the term, procures a re- newal of the lease in his own name. Grumley vy. Webb, supra. See Hold- ridge v. Gillespie, 2 Johns. Ch. 30. So, where an attorney, who was em- ployed to collect or foreclose a mortgage, instead of foreclosing the same, took a conveyance of the equity of redemption to himself instead of his clients, it was held, that he took the legal title asa trustee for his clients. Giddings v. Eastman, 5 Paige, 561. See post, p. 290, note; also, Case v. Carroll, 35 N. Y. 885, a case where an attorney employed to take up an outstanding mortgage on his client's property, took an assignment of it to himself. (y) Lees v. Nuttall, 1 Russ. & My. 53; 1 Taml. 282. (z) 2 My. & Cr. 374. 360 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [ZOOK IIL a creditor of his employer to the full amount of the debt which he was employed to settle. In Tyrrell v. The Bank of London (a), a case decided in 1862, the above principle was abundantly and fully affirmed. T. [264*] *acted as solicitor for the promoters of an intended com- pany. It was understood that he should be the solicitor of the new company when formed. Although employed in this capacity, he entered into an arrangement with R., who had pur- chased some property suitable for the company, for the sum of 49,2002.; that the speculation should be on their joint account; and that all negotiations relating to the property should be in the name of R. alone, T.’s name being kept a secret. The company, knowing nothing of T.’s interest, acted upon the advice of the firm of which he was a member, and purchased from R.a portion of the property for 64,5002. The profit was divided between R. and T. When the company learnt the circumstances of the case, they claimed the profits made by T. upon the transaction, as profits nade in the course of his agency. The House of Lords decided unanimously that the company were entitled as against T. to the benefit of his contract with R., so far as related to the premises sold to them. Lord Chancellor Westbury, having ex- pressed an opinion that the case rested on very clear principles, the application of which it would be in the highest degree mis- chievous to weaken, went on to say: “In my view of the case, it is only necessary to ascertain that at the time when the appellant agreed to take from R. one-half of his purchase, he (the appellant) was acting in the capacity of solicitor to the respondents, and that he had advised, or intended to advise, his clients to purchase that part of the property which was ultimately bought by the clients, It is, I think, immaterial whether a solicitor had, before his own contract, advised the client to buy, and the client had agreed to act under such advice, or whether the solicitor intended only to give the client such recommendation, if in the result we find the client buying the property whilst acting under the advice of the solicitor. The consequence is, I think, the same, namely, that the solicitor shall not be permitted to make a gain for him- self at the expense of his client. The client is entitled to the full benefit of the best exertions of the solicitor. The relation of (a) 10 H. L, Ca. 26; 81 L. J., Ch. 369, 361 CHAP. u1.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. solicitor and client involves, of course, the relation of principal and agent. The duties of the first relation include all those of the second, and something more.”! Lord Cranworth having ac- quiesced fully in the principles stated by the Lord Chancellor, pointed out another ratio decidendi: ‘There has appeared to me from the beginning,” said the learned lord, “to be one short ground upon which this case *might rest. Through- [265*] out the whole of the dealings and the negotiations for this purpose T. represented to his clients, the company, that R. was the sole owner of the property. To that representation the company are entitled to hold him bound.” The decision in the leading case of (ow v. Mackreth (6) is a good illustration of the principle upon which the court will proceed in investigating alleged violations of fiduciary duties. The above cases are sufficient to show the solicitude of our courts for the interests of persons who, from the relations existing between themselves and others, are forced to trust to the good faith of those others; wherever there exists a relation between any individuals by reason of which one is placed in a position of advantage over the other or others, the court will be vigilant in watching and controlling transactions between them. This prin- ciple is so fully recognized in its application to purchases by an agent as to render unnecessary any elaborate consideration of the authorities. An obvious deduction from the general principle that an agent will not be allowed to make a secret profit out of the conduct of his agency * is, that an agent employed to purchase will not be allowed to sell to his principal ata higher price than he gave himself? This principle is well established. In Hitchins v. Congreve (c), decided in 1828, the bill prayed, mortgage for sale, was offered $4,800 therefor, and afterwards purchased the 1See ante, p. 243. (b) 8.C., 4 Bro. P. C. 258; Cox, 320. 2 See ante, p. 248, and note. 3 Ely v. Hanford, 65 Ill. 267; Collins v. Case, 23 Wis. 230; Cottom v. Holli- day, 59 Ill. 176. See. also, Tewksbury v. Spruance, 75 id. 187; Armstrong v. Elliott, 29 Mich. 485, and Taussig v. Hart, 58 N. Y. 425, ante, p. 263, note. Where an agent, holding a note and same of his principal for $4,500, with- out disclosing the offer he had had: Held, that he failed to acquire a com- plete title and was bound to account to his principal for whatever sum he realized out of thesale. Mason vy. Bau- man, 62 IIL. 76. (c) 4 Russ. 562. 362 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II. amongst other things, that the defendants might be ordered to pay to the plaintiffs the sum of 15,0002. The owner of some mines proposed to Sir W. Congreve, in June, 1824, the formation of a joint-stock company for working the mines. In the same month a memorandum of agreement in accordance with the above object was drawn up, but not signed, the owner of the mine stipu- lating that he would treat with no other parties until it should be found impracticable to form a company. The terms of purchase were afterwards put into writing. By them the owner was to receive 10,0002. and one-fifteenth of the profits of the concern, besides a thousand shares in it. C. and two others, who took part in the undertaking to form a company, arranged between themselves that the mines so purchased should be charged to the company at 25,0002., and that the surplus over 10,0002. should be divided amongst them. In the second agreement of pur- [266*] chase from the owner of the mines it was stated that *the mines had been assigned to a nominee of C. and the others, and that they, by such nominee, had agreed to sell them to the intended company for 25,0002. This, it was contended, was totally untrue. A demurrer to the bill was overruled by Vice-Chancellor Sir Anthony Hart. His honor’s decision was, on appeal, con- firmed by Lord Chancellor Lyndhurst. “Upon the face of this bill,” said his lordship, “I cannot help considering the transactions stated in it to be fraudulent. . . . The object (of the negotia- tions for purchase of the mines) was that they might be conveyed to a company by whom they were to be worked, and the company was to consist not of Congreve and the Clarkes alone, but of a considerable body of shareholders. It appears that in the course of these negotiations Congreve and the Clarkes became desirous of making a profit out of the original transaction for the purchase of F.’s, the owner’s, interest in the mines. The first plan which occurred to them was that a conveyance for the sum of 10,0002. should be made to persons nominated by them, who were after- wards to convey to the company for 25,0002. If such a trans- action had taken place, and the particulars had been concealed from the company, it could not have been sustained.” The de- fendants appear to have been aware of this, and the proceedings took another form. “The plan now adopted was this—that a conveyance should be executed directly from F. to trustees for the CHAP. II1.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 363 company, and although F. had agreed to convey the property for 10,0002. that in this conveyance it should be stated that the pur- chase money was 25,000/., in order that the difference might be put into the pockets of Sir W. Congreve and the two Clarkes, and some other individuals whom they might choose to nominate. Such a transaction is so incorrect that it is quite impossible that any court of justice should permit it to stand; and if after the conveyance had been so made, reciting that the price paid to F. was 25,000/., a company of shareholders was formed, who acted upon that representation, they could in justice be chargeable only with the money actually paid to F., and if a larger sum was taken out of their funds, they would be entitled to call on the individ- uals into whose hands it came to refund it.” The case of Kimber v. Barber (d), decided in 1872, shows in the clearest manner the extent to which the above prin*ciple will be carried. The plaintiff, defendants, and [267*] others, wished to reorganize a company and become direct- ors. ‘The defendants, aware that the plaintiff would soon require the qualifying number of shares, wrote on the 13th of January, 1870, to J., the owner of certain shares, asking, as for a friend, whether he would sell his shares. On the 17th of this same month, the agreement to purchase 264, at 27. each, was completed, and a blank transfer sent by J. to the defendant. On the 19th, the defendant called upon and told the plaintiff that he knew of 264 shares for sale at 37. The plaintiff then authorized the de- fendant to buy them at that price. Before coming into court, the plaintiff had transferred 210 out of the 264 shares. When the circumstances of the transaction became known to the plaintiff, he filed a bill praying for a declaration that he was entitled to the benefit of the purchase of the 264 shares from J., or otherwise that the sale of the shares might be set aside. Lord Romilly, Master of the Rolls, was of opinion that the case was governed by The Great Luxembourg Railway Company v. Magnay (e). His lordship refused either relief prayed for in the bill; the first, because to accede to it would be to make a new contract for the parties; the second, because the plaintiff by transferring a num- ber of the shares had rendered it impossible to restore the parties to the position in which they were before the suit.. This judg- (d) L. Rep., 8 Ch. 56. (e) 25 Beay. 586. 864 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK mt. ment was reversed by Lord Chancellor Selborne. “To my mind,” said his lordship,“ . . this is a very clearly-established case of agency. That being so, I see no difficulty in the relief which is asked by the first part of the prayer. It seems to me the common relief, the relief which was given in Hitchins v. Congreve (f), Tyr- rell.v. Bank of London (g), and in other cases too numerous to mention. Itis unnecessary to inquire, therefore, whether, if I had been obliged to consider the alternative part of the prayer, I should have been pressed with the difficulties which weighed upon the Master of the Rolls. J will not go into that matter further than to say that, as it appears to me, the case of The Great Lux- embourg Railway Company v. Magnay (h) is, assuming it to be well decided, a case in its circumstances very different from the present case. On the view which I take of the facts in this case, there is no difficulty in granting the relief sought by the [268*] *first portion of the prayer.” The case here referred to by the Lord Chancellor will be made the subject of comment in another place. One of the established rules of law is that where an agent is employed to make a purchase, there must be wherrima fides. The latter must know the circumstances under which he is deal- ing. If the agent is in a situation which is not fairly disclosed to the other, it is only reasonable to say that if the knowledge of that situation would have prevented the other from confiding in his judgment and advice, or acting upon or adopting it, transac- tions between them would be set aside (z). Hence the dealings of an agent with his principal will not in any case be deemed valid, unless they are accompanied with the most entire good faith, and unless there is a full disclosure of all facts and circumstances, as well as an absence of all undue influence, advantage, or imposi- tion (4).! (Ff) 4 Russ. 562. also, post, p. 274; Neilson v. Brown, 29 (g) 10 H. L. Ca, 26. (h) Supra. (i) See per Lord Wynford in Roths- child v. Brookman, 5 Bligh, N. 8. 202. (k) Story, Eq. Jur. 315, and ‘cases there cited. 1 See this subject considered at length in 1 Story’s Eq. Jur. § 315 et seq. See, Gratt. 732; Bell v. Bell, 3 W. Va. 183; Cook v. The Berlin Woolen Mill Co., 43 Wis. 483; Persch v. Quiggle, 57 Penn. St. 247; post, p. 274, and note. In Uhlich v. Muhlke, 61 Ill. 499, the authorities are extensively considered, and the following rules laid down: Where a conveyance is made to a con- CHAP. II.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 365 The first case to which reference will be made is that of Roths- child v. Brookman (1), decided by the House of Lords in 1831. Sir L. Shadwell, V.-C., relieved a purchaser from certain sales and purchases. Upon the motion of Lord Wynford, the House of Lords affirmed the decree without calling upon the respondent’s counsel. Although the proceedings in that cause were of a most voluminous character, the material facts are of the simplest kind. The respondent, who lived at Southampton, wrote to the appellant for his advice with respect to dealings in the funds. He stated that he had 20,000 livres of rentes. The appellant then advised him to sell them, and purchase Prussian bonds. Now comes the part of the transaction which is important in the present question. Acting upon the suggestions of the appellant, the respondent em- ployed him to purchase accordingly. Accounts of the transaction were thereupon transmitted to him by Rothschild, with brokers’ notes, as if the purchase had been made from third parties. From the evidence, it was clear that no stock or bonds were purchased; neither were any transfers made, nor brokers’ notes passed. There had been no more than a nominal sale of stock and bonds which belonged to the appellant. Upon the general question of the fidential agent and advisor of the grantor, itis not void merely by reason of the relation thus existing between the grantor and grantee. Nor does it devolve upon the grantee, standing in this relation, to prove in the first in- stance that he did not use the influence he possessed over the grantor to induce the deed; that-he did not abuse the confidence reposed inhim. A confiden- tial relation gives cause of suspicion, and the circumstances under which a deed is made, during such a relation, must be closely scanned; and if a rea- sonable suspicion exists that confidence has been abused where reposed, the deed should be set aside. But the sus- picion may be removed, and to render such a transaction valid, it is only necessary to show that the other party had competent and disinterested advice, or that he performed the act or entered into the transaction voluntarily, delib- erately and advisedly, knowing its na- ture and effect, and that his consent was not obtained by reason of the power and influence to which the relation might be supposed to give rise. There- fore, a gift by one to another, who has been for many years his confidential agent and adviser, is valid, unless the party who seeks to set it aside can show that some advantage was taken by the agent, of the relation in which he stood to the donor. The fact that one is requested to as- certain and report to the owner, who lived in another state, the amount of taxes due on a piece of land, which he does, does not constitute him an agent with respect to the land, soas to charge him with fraud in buying the same himself for less than half its value, Collar v. Ford, 45 Ill. 331. (1) 2D. & C. 188; 5 Bligh, N.S. 165. 366 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IL jealousy of the law where a fiduciary relation exists, Lord [269*] Wynford remarked, “That he *has acted in most of these transactions under the advice of Mr. Rothschild, cannot be denied. But I do not mean to say that Mr. R. gave him that advice with any dishonest view whatever; I have no doubt he acted fairly and properly . . . . but the law which your lordships are to administer is a law of jealousy; it will not allow any man to be trusted with power that will give him an opportunity of taking advantage of his employer.” “With respect to the pur- chase,” it is observed by the same learned lord, “Mr. R. says, ‘Buy Prussian bonds;’ if he had gone into the market and bought, it would have been all right; he must have paid for those Prus- sian bonds according to the market price; but instead of that, Mr. R., being in possession of the Prussian bonds, sells his own Prus- sian bonds, and makes it appear like a transfer which had taken place in the market to the respondent.”! Sir E. Sugden, who had been one of the counsel for the respondent, when commenting upon the decision in his work upon the Law of Property (p. 663), expresses satisfaction at the decree, but mentions that from the novelty and the very complicated nature of the case it was con- sidered a subject of regret at the time that it did not undergo more examination in the House of Lords. In Gillett v. Peppercorn (m), decided in 1840, the authority of Lothschild v. Brookman (n) was manifestly applicable. The defendant, a stockbroker, was employed by G. to buy some canal shares. These shares were transferred to the plaintiff by three persons from whom apparently the defendant purchased them for the plaintiff. The plaintiff, however, discovered after the trans- fer that at the time of the sale the shares belonged actually to the defendant, and that they had been transferred into the names of the apparent vendors as trustees for P. The purchases were made in May, 1826, December, 1830, and January, 1831. The discov- ery was made in 1837, and in 1888 a bill was filed to set aside the transactions. There was no evidence of an extravagant price being charged, or of any intended fraud. Lord Langdale, M. R., thought the question avery simple and short one. “I am of opinion,” said his lordship, “that these transactions cannot be supported; not only are they in themselves so extremely likely to 1 See ante, p. 263, note. (m) 3 Beav. 78. (n) Supra. CHAP. IIl.] DUTIES, ETC., OF AGENT IN FIDUCIARY PosITIon. 867 lead to the commission of fraud, as to make them directly against the policy of the law, but in those cases which have oeca- sionally come to the knowledge *of the court, and which [270*] fortunately have not been frequent, it has invariably been found that fraud has been the result of such transaction. It is not necessary to show that fraud was intended, or that loss after- wards took place in consequence of these transactions, because the defendant, though he might have entertained no intention what- ever of fraud, was placed in such a situation of trust with regard to the plaintiff that the transaction cannot, in the contemplation of this court, be considered valid.”! Here, again, the fiduciary position of the agent is beyond doubt. Lord Justice James stated the rule of law in a recent case (0) to be, that if one person invites another to join him in purchasing what really belongs to the former, and does not disclose that fact, the pretended purchase and sale cannot stand.” Sir John Romilly, M. R., decided, in 1858, The Great Luxem- bourg Railway Company v. Magnay (p), in which a new ele- ment was introduced, namely, a sale by the plaintiff after the pur- chase. The plaintiffs granted to a director a sum of money to enable him to purchase the “concession” from the Belgian gov- ernment of another line. The director proved to be the owner of the concession. Though he presided at the meeting of sharehold- ers at which the money for the purchase was granted, he kept the fact of his ownership secret. He obtained from the Belgian gov- ernment a transfer of the concession to the plaintiffs’ company. In 1856, the plaintiffs filed a bill against the defendant. In the same year, and pending the suit, the plaintiffs sold the concession for the amount granted to the defendant to purchase it. This latter circumstance was, in the opinion of the Master of the Rolls, sufficient to disentitle the plaintiffs to any claim to relief; the relief claimed being an account against the defendant of the shares, 500 in number, granted for the purchase of the concession, and of his application thereof; the plaintiffs being willing to make all just allowances. The argument upon which his lordship’s judg- ment was based may be thus stated: A director is a trustee for 1See ante, p. 263, note. 2See ante, p. 262, note. (0) New Sombrero Phosphate Com- (p) 25 Beav. 586. pany v. Erlanger, L. R., 5 Ch. Div. 73. 3868 RIGHTS, ETC., ARISING OUT OF THE conTRaAct. [rook m1, the shareholders in regard to all matters entered into on their be- half; hence he cannot personally derive any benefit from any con- tract entered into for the company. If, when employed to pur- chase, he sells his own property to the company, the company have a right either to adopt the transaction or to repudiate [271*] it, but the adoption *must go to the whole transaction.’ In this case the plaintiffs framed their bill upon the assump- tion that the whole transaction was to be set aside, and that the defendant ought to account for the money he had received in re- spect of the shares assigned for the purchase of the concession. What relief can they demand under these circumstances? This question led the learned judge to consider the meaning of the proposition that an agent or trustee cannot retain any benefit from such a transaction. No doubt if a director of a company enters into a contract for the purchase of a quantity of iron rails, but be- fore they are wanted, and before they have been actually delivered, the price of iron should happen to rise, the trustee is not at liberty to put into his pocket the difference between the market price of the iron when delivered, and that at which it was purchased. “But suppose,” he continued, “an iron smelting company were desirous of buying an adjoining estate which contained limestone rock, which was essential to enable them to smelt their iron with suc- cess, and that the trustee undertook to buy it for them, concealing the fact that it was his own estate, and if he then sell it to the company, of which he is a director, for double its value, the court would not allow the transaction to stand. If we say to the com- pany, ‘You may either repudiate the bargain altogether, or you may adopt it if you think fit,” but if, from any circumstance whatever, it becomes impossible to return the estate, all that the trustee would be entitled to would be the full value of the estate sold; but when it is said that he cannot make any profit by the transaction, it is not meant that he is not to have the proper value of the property which is actually taken and adopted by the com- pany; nor does it mean that he is to give up his own property to the company, although he has given no valuable consideration for it.” But it is a principle of equity to endeavour to place the par- ties in exactly the same situation as they were before. The intro- duction of that principle was impossible here, owing to the sale 1See ante, p. 65. CAP, II.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 369 of the concession by the plaintiffs; therefore “no relief,” said the Master of the Rolls, “can be given to the plaintiffs, because they have rendered it impossible.” The decision of Sir J. Romilly amounts to this, that where an agent sells to his principal property for which he has given no valuable consideration, the principal cannot retain the property unless he pays its proper value (¢). Some doubt seems to be *thrown upon the decision itself by Lord Selborne (r), [272*] but probably the doubt is due to the general terms in which the decision is framed. Szcr. 3.— Fiduciary Relations where the Agent is appointed to sell. The policy of the law is to prevent any person placing himself in a position where his interests conflict with his duty. If it is the duty of one individual to act for another, he must act in per- fect good faith. He cannot take advantage of a confidence reposed in him. He cannot enrich himself by a violation of his duty in the smallest particular.1_ The cases in the reports upon the present question are very numerous. (q) See Lindley on Partnership, p. 604, n. (e), and 605. (r) Kimber v. Barber, L. R., 8Ch. 59. 1See ante, pp. 14, 248. An agent can not be allowed to pur- chase an interest in property where he has a duty to perform which is incon- sistent with the character of a pur- chaser. Grumley v. Webb, 44 Mo. 444. While a mere agent is absolutely dis- qualified from purchasing property of his principal only where his agency is so connected with the sale as to make it his duty to obtain the best terms for his principal on such sale, yet equity re- gards with great jealousy any purchase by an agent from his principal. Cook vy. The Berlin Woolen Mill Co., 43 Wis. 433. _ An agent can not, without the con- sent of the principal, become the pur- | chaser of property which he is author- ized to sell for his principal. Ruckman 24 v. Bergholz, 37 N. J. Law, 487; Bain v. Brown, 56 N. Y. 285; Tynes v. Grimstead, 1 Tenn. Ch. 508; Cumber- land Coal Co. v. Sherman, 30 Barb. 553; Copeland v. Mercantile Ins. Co., 6 Pick. 198; Kerfoot v. Hyman, 52 Ill. 512; Parker v. Vose, 45 Me. 54; White v. Ward, 26 Ark. 445; Stewart v. Mather, 82 Wis. 344; Clute v. Barron, 2 Mich. 102; Dwight v. Blackmar, id. 330; Beaubien v. Poupard, Harr. Ch. 206; Ingerson v. Starkweather, Walk. Ch. 846; Ames v. Port Huron Log Driving, ete. Co., 11 Mich. 189; Marsh v. Whit- more, 21 Wall. 178; Scott v. Mann, 36 Tex. 157. See, also, Jeffries v. Wiester, 2 Sawy. 135. The rule is the same where the em- ployment is to sell at a stipulated price. Ruckman v. Bergholz, supra. So, also, where the agent to sell sells to a firm of which he is a member. Francis vy. Kerker, 85 Il. 190. 370 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. Fou v. Mackreth (s), finally decided in 1798, is the leading au- thority. It is so not so much because it contains the enunciation of new principles, as because the law relating to the duties of trustees for sale towards the beneficiaries is very fully discussed in the arguments and judgment. The facts of the case, so far as they are here necessary, may be briefly stated. The plaintiff had various dealings with the defendant. Their first transaction ap- pears to have been in 1777, shortly after the plaintiff came of age. Being pressed for money, he obtained from the defendant the sum of 5,1002., and granted two annuities of 5002. and 3500. each for his life. In the same year, being again in difficulties, and threat- ened with arrest, the plaintiff mortgaged his Surrey estates to Mackreth for the sum of 3,0002. Mackreth, D. his friend, and F., acted as trustees for payment of the debts, and redeeming the an- nuities. About the same time the plaintiff gave to Mackreth a Or to a third person for the joint ben- pal. Cleveland Ins. Co. v. Reed, 1 efit of himself and such third person. Biss. 180. Hughes v. Washington, 72 Ill. 84. Public officers are agents within the rule. People v. Township Board, 11 Mich. 222. Where two persons own real estate, and are desirous of raising money by its sale, and one of them is entrusted with its sale, and has it conveyed toa third person for the price agreed upon, but the money is paid by the joint owner himself with the view of ac- quiring the entire title to the property, such an arrangement is a fraud upon the party owning the other moiety. In such a case the owner entrusted with the sale occupies the same relation to the other owner as his agent, and an agent cannot occupy the relation of both seller and purchaser of the same property. Eldridge v. Walker, 60 Ill. 230. ; So, where an agent by virtue of a power of attorney, conveys the property of his principal and takes a conveyance to himself and then mortgages it, such use of the power of attorney would not give him the title as against his princi- But the purchase from himself by an agent appointed to sell will not be ab- solutely void, but voidable only; it will be valid against all the world, except the principal, who may set it aside within a reasonable time. astern Bank v. Taylor, 41 Ala. 93; Marsh v. Whitmore, 21 Wall. 178; Bassett v. Brown, 105 Mass. 551. See, also, Greenwood y. Spring, 54 Barb. 375 (ante, p. 14, note); Uhlich v. Muhlke, 61 Ill. 499; Leach v. Fowler, 22 Ark. 143; Estes v. Boothe, 20 id. 583; Wadsworth v. Gay, 118 Mass. 44. The mere fact that the purchaser is the brother-in-law of the agent does not imply any such confidence as to pre- clude him from purchasing. Walker v. Carrington, 74 Ill. 446. Where an agent sells the property by public outcry and in the manner usual at trust or judicial sales, there is no le- gal principle prohibiting him from bid- ding it off for a third party. Scott v. Mann, 36 Tex. 157. (s) 2 Bro. C. C. 400; 2 Cox, 320. CHAP. 1.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 871 rental of the Surrey estate, and a valuation of the whole, amount- ing to 45,0002. The latter sent down a man to inspect the prop- erty. There was no proof of the amount of his valuation, or of his having communicated it to Mackreth. The next step was the preparation of a trust deed by which the estates were conveyed to Mackreth and D. in trust, to sell or mortgage the same, and pay the debts and redeem the annuities granted by the plaintiff. Be- fore the execution of the trust deed an ineffectual attempt was made by the defendant to purchase the Surrey estate for 39,5007. The trust deeds were then executed. Soon afterwards, the defendant’s *offer of 39,5002. was accepted on condition [273*] that he subjected himself to the payment of the plaint- iff’s mother’s jointure in case she survived. The purchase-money was to be paid not later than the 25th of March. After con- veyance of the estate to the defendant, he gave to the plaintiff a common accountable receipt for 28,4032, the rest being retained by him in satisfaction of debts of the plaintiff. The latter ob- jected to the security, whereupon the defendant charged his estates in Surrey with the payment of the 28,4032. with interest. He had no other such estate than that purchased by him of the plaintiff. On the 2ist of March the defendant had sold the estate for 50,5002. Sir Lloyd Kenyon, M. R., decreed that undue advan- tage had been taken by the defendant of the contidence reposed in him, and that he should be considered as a trustee of the estate. The case was accordingly referred to the Master to take an account of the money received by the defendant from his pur- chaser, and to compute interest thereon at five per cent. from the time of its receipt. An injunction also was granted to restrain the defendant from proceeding at law touching any matter in question in the cause. Lord Chancellor Thurlow aftirmed this decree, though not without a lung deliberation; it was also upheld by the Honse of Lords (7).1. In reference to the conduct of Mackreth in bargaining for the estate and beating down the price, Lord Thurlow observed: “The first question to be asked is whether the character of a trustee shall vary the consequence of this transaction from what it would be in the case of a stranger? 2 If a trustee, though strictly honest, buys an estate him- self, and then sells it for more, yet according to the rule of a court (r) 4 Bro. P. C. 258, Toml. edit. 1See ante, p. 243, 372 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK I. of equity, from general policy, and not from any peculiar imputa tion of fraud, a trustee shall not be permitted to sell to himself, but shall remain a trustee to all intents and purposes.' It is not, therefore, in that view that Mackreth, being called a trustee, can operate. It does not rest on the name of a trustee, or in the legal or equitable selection of trustee, but on the familiar intercourse between him and Fox. Now, can I, putting myself in the place of a juryman, pronounce that Fox agreed to the price, trusting that Mackreth knew the price, and represented it fairly to him? If A. says to B., I know the value of the subject, and if you will trust me, I witl fairly tell you what it is worth, and A. at (274*] the same time knows the value to be double *what he represents it to be, this is such an abuse of confidence as shall be relieved against, not because A. is a trustee, but because he stipulated with B. to tell him fairly the value, and he broke that stipulation; and then, to be sure, it makes as strong a case as that of a trustee.” There was plainly much doubt in the mind of the Lord Chancellor with respect to several points discussed in the judgment. For instance, he dissolved the injunction, though he afterwards acknowledged he was wrong in doing so (s).' The fact that the agent has used the name of another person as the purchaser instead of his own is sufficient to invalidate the transaction in equity (¢).2 Proof of undervalue is not neces- sary (w). In order that an agent, employed to sell, may purchase 1See ante, p. 260, note. é Banks vy. Judah, 8 Conn. 146; Central (s) Ex parte Lacey, 6 Ves. 626. Ins. Co. v. National Ins. Co., 14 N. Y. (t) Trevelyan v. Carter, 9 Beav. 140; Lewis v. Hillman, 3 H. L. Ca. 607. 2 See Davoue v. Fanning, 2 Johns. Ch. 252; ante, p. 260, note. (uw) Murphy v. O’Shea, 2 J. & L. 420. 3Tn the case of a contract of purchase and sale between attorney and client, or principal and agent, or of an agree- ment giving benefits and advantages to the agent or attorney, the burden of establishing its perfect fairness, ade- quacy and equity, is thrown upon the at- torney or agent, and in the absence of such proof, courts of equity treat the case as one of constructive fraud. Condit v. Blackwell, 22 N. J. Eq. 481, citing Parkist v. Alexander, 1 Johns, Uh. 394; 91; Huguenin v. Baseley, 14 Ves. 273; Lowther vy. Lowther, 18 id. 102; Sel- sey v. Rhodes, 2 Sim. & Stu. 41; Fox v. Mackreth, 2 Brown's Ch. 400; Gib- son v. Jeyes, 6 Ves. 278; 1 Story's Eq. Jur. § 311. See, also, Cook v. The Ber- lin Woolen Mill Co., 48 Wis. 483; Persch v. Quiggle, 57 Penn. St. 247; Rubidoex v. Parks, 48 Cal. 215; Brock v. Barnes, 40 Barb. 521; Nesbit v. Lockman, 34 N. Y. 167. See ante, p. 268, note. The rule is the same as to dealings between principal and agent, as be- tween client and attorney. Brock v. Barnes, supra. Where the trustee himself becomes a CAP. IIL.] DUTIES, ETC., OF AGENT IN FIDUCIARY PosITIon. 3873 himself, he should disclose to his principal all the knowledge which he himself possesses ().! In Ee parte Lacey (y), 1802, Lord Eldon laid down a rule which marks with sutticient exactness the limits of the doctrine that a trustee cannot buy from his cestwi gue trust. Properly stated, a trustee cannot buy for himself. A trustee, who is en- trusted to sell and manage for others, undertakes in the same moment in which he becomes a trustee, not to manage for the benefit and advantage of himself. It does not preclude a new contract with those who have entrusted him. It does not preclude him from bargaining that he will no longer act as a trustee. The cestur que trust may, by a new contract, dismiss him from that character, but even then, that transaction by which they dismiss him must, according to the rules of the court, be watched with infinite and the most guarded jealousy. This case is also an author- ity for the principle that it is quite immaterial what value a trustee gives for the estate of his cestwt que trust. The House of Lords again confirmed the principle of the above cases in Hamilton v. Wright (2), 1842. In 1815, the appellant assigned all his property in trust for the benefit of his creditors. Wright became a trustee in 1818. Meantime the appellant had become surety for the Earl of Strathmore in a bond for the payment of an annuity during his life. T. ad*vanced [275*] purchaser of the trust estate, the cestui que trust is not bound to prove, nor is the court bound to judge that the trustee has made a bargain advantageous to himself. The cestui que trust is permit- ted to come at his own option, and, with- out showing actual injury, insist upon having the sale vacated. Davoue v. Fanning, 2 Johns. Ch. 252; Condit v. Blackwell, supra; 1 Story's Eq. Jur. §311. See, also, Beeson v. Beeson, 9 Penn. St. 279. (x) Lowther v. Lowther, 18 Ves. 103. 1Farmer v. Brooks, 9 Pick. 213; Ingle v. Hartman, 387 Iowa, 274; Brown v. Post, 1 Hun, 303. See ante, p. 268. But where the subject matter of the bargain is of acomplicated nature, such as an account running through many years and many volumes, and relating to transactions which may in a measure have gone out of memory, all that fair- ness requires would seem to be to give in- formation sufficient to lead the party into an inquiry, a willingness to answer all questions, and a submission of all the materials of knowledge by the purchaser to the seller. Farnam v. Brooks, supra. See, however, Collar v. Ford, 45 Towa, 331, where it was held that an agent for the sale of land will not be charged with the duty of informing his principal of the value of the land in direct negotiations for its purchase him- self, When he becomes the buyer, and the principal the seller, his agency with respect to the property closes. (y) Supra. (z) 901. & F. 111. a4 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II. the money. In 1822, Wright obtained an assignment of the bond for a valuable consideration. The main question for deci- sion was whether he as trustee had a right to purchase for his own benefit this annuity payable by the appellant. “The ordinary case,” said Lord Brougham, “has been when the question arose upon a purchase of debts owing at the time of the trust being cre- ated. But the purchase of a debt subsequently incurred, if that be relied on as taking the present case out of the general rule, gives the trustee, whose duty it is to keep the residue as large as possible for the debtor, an interest in cutting it down, at least by the amount of his own debt; it also gives him an interest in keep- ing as large a fund as possible free from the operation of debts prior to his own, in order that his own may be the more surely and speedily satisfied, and this is an interest directly in conflict with his duty under the trust to the prior creditors.” The rule that no agent in the course of his agency, and in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal, is an inflexible rule (@).! With respect to the question how far a trustee or agent for sale is precluded from purchasing from his own purchaser the property which he is entrusted to sell, there is a question closely connected upon which Lord Justice Mellish has made some opposite remarks in a recent case (@). “In my opinion,” said his lordship, “as long as the contract remains executory, and the trustee or agent has power either to enforce it or to rescind or alter it—as long as it remains in that state he cannot repurchase the property from his own pur- chaser, except for the benefit of his principal. It seems to me that that necessarily follows from the established rule that he can- not purchase the property on his own account. There may, of course, be cases of agents for sale who, when they have once made the contract, have concluded their agency, such as the case of an auctioneer — when he has knocked the estate down and made the written contract, it may be said that his contract has terminated. I should suppose that even in that case the court would look with considerable suspicion on a repurchase by such an agent as an auc- tioneer from the person to whom he sold the estate, because (a) Per Lord Justice James, Parkerv. Rep., N. 8. 745. McKenna, L. R., 10 Ch. 96; 81 L.T. = See ante, p. 243. CHAP, II.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 375 *it would always be extremely difficult to find out whether [276*] there had not been some previous concert and understand- ing between them.” Srcr. 4.— Fiduciary relation of Directors. Directors are persons selected to manage the affairs of a com- pany for the benefit not of themselves but of the shareholders. Their office is one of trust. If they undertake the office, their duty is to execute it fully and entirely. If that office requires all their time and attention, it is their duty to give them (c). Their fiduciary character is well established, nor can they by any subter- fuge, however skilful and however coloured, take advantage of their position to the detriment of the shareholders. This principle has been recognized by the legislature, which has provided that 1While it is true that a trustee or agent cannot be interested in a sale made by himself, yet when he has fully discharged his trust and sold property to a third person in good faith, having no interest in the same at the time, he may afterwards acquire the title from the purchaser, and such fact, or the fact that his wife acquires the title, will not afford ground for avoiding his sale. ‘Walker v. Carrington, 74 Ill. 446. ? Equity deals with the directors of a private corporation as trustees of the corporation; but with merely ministerial officers (in this case the superintendent of the company’s mills) as agents. Cook vy. The Berlin Woolen Mill Cv., 43 Wis. 433; Cumberland Coal Co. v. Sherman, 80 Barb. 558; Cumberland Coal Co. v. Hoffman Steam Coal Co., 18 Md. 456; Michoud v. Girod, 4 How. 554; Hodges vy. New Eng. Screw Co., 1 R. I. 321; Rob- inson v. Smith, 3 Paige, 222; Verplanck v. Ins. Co., 1 Edw. Ch. 84; Percy v. Millodon, 3 La. 568; Jackson v. Ludel- ing, 21 Wall. 616; Ang. & Am. on Corp. § 312. The same rules are applicable to the contracts of directors with the corpora- tion, as are applicable to the dealings of other parties holding a fiduciary relation to each other. See Perry on Trusts, § 207, and the above cited authorities. An express contract between a di- rector and his company is not void, but voidable at the option of the cestui que trust exercised within a reasonable time. Stewart v. Lehigh Valley R. R. Co., 38 N. J. Law, 505. The law does not permit one who acts in a fiduciary capacity to deal with him- self in his individual capacity, and ex- press contracts thus made are contrary to public policy. A promissory note, therefore, made by a corporation, pay- able toits acting trustees, is void. Wil- bur v. Lynde, 49 Cal. 290; San Diego vy. San Diego, etc. R. R. Co., 44 id. 106, 112. But the doctrine that the directors of a corporation are trustees for the stock- holders, has relation only to the acts of the directors in connection with the property held by the corporation itself, and to their management of its business. Commissioners of Tippecanoe County v. Reynolds, 44 Ind. 559. See, also, Sper- ing’s Appeal, 71 Penn. St. 11. (c) See per Sir J. Romilly, The York and North Midland Rail. Co. v. Hudson, 16 Beav. 485; Bennett's case, 4 De G. & M. 297. 876 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL, where it appears in the course of the winding-up of a company that any officer of the company has been guilty of any misfeasance or breach of trust in relation to the company, the court may ex- amine into his conduct, and compel him to contribute such sums of money, by way of compensation in respect of the misfeasance or breach of trust, as the court thinks just (d). One of the earliest reported cases decided under this head was ‘The Charitable Corporation v. Sutton (e), decided by Lord Hard- wicke in 1742. “I take the employment of a director to be of a mixed nature,” said his lordship; “it partakes of the nature of a public office, as it arises from the charter of the crown, but it can- not be said to be an employment affecting the public government. . .. Therefore, committeemen are most probably agents to those who employ them in this trust, and who empower them to direct and superintend the affairs of the corporation. In this respect they may be guilty of acts of commission or omission, of mal- feasance or nonfeasance. Now, where acts are executed within their authority, in such cases, though attended with bad conse- quences, it will be very difficult to determine that these are breaches of trust. For it is by no means just in a judge, after bad conse- quences have arisen from such executions of their power, [277*] to say that they foresaw at the time what must *neces-. sarily happen; and, therefore, were guilty of a breach of trust. Next as to malfeasance and nonfeasance. For instance, in non- attendance; if some persons are guilty of gross negligence, and leave the management entirely to others, they may be guilty by this means of the breaches of trust that are committed by others. By accepting a trust of this sort, a person is obliged to execute it with fidelity and reasonable diligence; and it is no excuse to say that he had no benefit from it, but that it was merely honorary.” Lord Chelmsford has distinguished between directors who are trustees and directors who are simply agents or mandatories in Overend, Gurney & Co. v. Gibb (f). The above case of Charitable Corporation v. Sutton settled the principle that a corporation can sue its directors or other persons for a breach of duty towards it (7). Cases such as Zhe Joint . (d) Companies Act, 1862, s. 165. (g) See Phosphate Sewage Co. v. | (¢) 2 Atk. 400. Hartmont, L. R., 5 Ch. Div. 394, (f) L.R., 5H. L. 480. CHAP. 11.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 377 Stock Discount Company v. Brown (h), The Land Credit Com- pany v. Fermoy (i), and The Panama case (%), were all in- stances of the misapplication of funds of the company, for breach of duty towards it after its formation, and not in its formation. Directors, it is said, are, in a sense, trustees for the shareholders. Hence, where a director shares with a stranger the benefit of a bargain made between the stranger and the company the direct- or’s share belongs to the company.!' This is well established, and as sound upon authority as it isin principle (2). Hence, where articles of association empowered the directors to pay 10,0002. to the promoters of the company upon the first allotment of shares, and, the promoters having 5,000/. out of the first money sub- scribed, and having paid 5002. to each of four directors, the latter were ordered to refund to the company the money so received (m). Again, a power to decide whether at a particular time a call ought or ought not to be made, is a fiduciary power. If persons having to exercise a fiduciary power choose to place themselves in a posi- tion where their interests pull one way while their duty is plainly to do something quite different, and for that reason abstain from exercising that power, they must be held to all the same conse- quences as though that power has been exercised (7). And it may be *stated generally that courts of equity are ex- [278*] ceedingly reluctant to exonerate directors in any way from performing their duties; hence, since it is the duty of directors to be on the alert, they will not be exempted from liability for the consequences of not attending to the business of the company simply on the ground that they slept on their duty (0). On the other hand, directors are not liable for the consequences of un- wise, absurd, or ridiculous conduct, where ‘the conduct is entirely due to a mere default of judgment. Thus it is said if a director (h) L. R., 8 Eq. 381. (i) Ibid., 5 Ch. 763. (k) L. R., 10 Ch. 515. 1* All advantages, all purchases, all sales, and all sums of money received by directors in dealing with the prop- erty of the corporation, are made and received by them as trustees of the cor- poration, and they must account for all ‘such moneys, or advantages received by them by reason of their position as trust- ees."’ Perry on Trusts, § 207, and cases cited. (1) Re Brighton Brewery Co., 37 L. J., Ch. 278. (m) Madrid Bank v. Pelly, L. R., 7 Eq. 442. (n) Per Sir G. M. Giffard, L. J., Gil- bert's case, L. R., 5 Ch. 559. (0) See Land and Credit Company of Treland v. Fermoy, L. R., 5 Ch. 770, per Lord Hatherley. 3878 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II. upon his appointment finds a state of things which had existed for some time with the assent of all parties, it could hardly be said that he was in the position of a trustee who, finding the trust fund lost, does not take steps to recover it (p). Again, whatever may be the case with a trustee, a director cannot be held liable for being defrauded (g). Nor because a man is a director is he necessarily a trustee of the shares which he holds for the general body of shareholders (r).! Directors will not, any more than other agents, be allowed to make a secret profit out of their office, or in transactions with the company.’ Few principles of law are better established than the rule that an agent cannot be allowed to make any profit out of the matter of his agency, without the knowledge and consent of his princi- pal, beyond his proper remuneration as agent.’ J7ay’s case (s) is not only one of the most recent, but also one of the best illustra- tions of this principle. Sir John Hay was invited by the agent of the promoter of a company for the purchase of certain oil springs to become a director of the projected company. The property was to be purchased from the promoters. It was understood and agreed that the necessary qualification of forty 252. shares would be provided for Sir John, who thereupon signed the memorandum of association for forty shares. These shares were to be provided out of certain fully paid-up shares which the vendor was to receive in part payment of the purchase-money. Sometime afterwards it was doubted whether this tranfer by the vendor of the [279*] property would be a discharge * under the memorandum of association. To set the matter right, when the vendor’s agent received the balance of the purchase money he gave to Sir John a cheque for the value of the forty shares, and the latter himself paid for the shares. Vice-Chancellor Malins decided that his liability to pay for the shares continued; the Court of Appeal upheld the decision. In speaking of the above rule, Lord Justice (p) See Turquand v. Marshall, L.R., directors to the corporation for their 4 Ch. 376. waste or misapplication of corporate (q) Per Lord Hatherley, in Land property, Ang. & Am. on Corp. §$ Credit Company of Ireland v. Fermoy, 312-315. supra, p. 772. 2 See ante, p. 243. (r) Per Sir G. M. Giffard, supra. (s) 83 L. T. Rep., N.S. 466; L. R., 1See generally, as to the liability of 10 Ch. 593, CHAP. IlI.] DUTIES, ETC., OF AGENT IN FIDUCIARY Position. 379 Mellish made some important observations: “There is no doubt at all, and it is perfectly settled law,” said his lordship, “ that that rule applies with peculiar stringency to the directors of all joint- stock companies, who are the agents for the company in carrying out the sales or purchases made by the company; and the only question that we have to decide in this case is, whether that prin- ciple applies to it, and whether Sir John Hay has made a profit out of his agency without the knowledge of his principals.” Then follows the equally important rule that there is no difference be- tween a profit made by an agent after he has become an agent, and a profit made by an agent at the time he becomes an agent by means of a bargain made not with his principal, but with a person who is proposing to enter into a contract with his princi- pal; “that is to say, if, while negotiations are in course, and be- fore any contract is concluded between the vendor and the pur- chaser, the vendor says to some particular person: ‘If you will become the agent of the purchaser, and if you succeed, on becom- ing the agent of the promised purchaser, in carrying out the con-— tract with me, then I will make you a payment out of the pur- chase money which shall ultimately be paid’ ” This puts the case very clearly, and leaves no doubt of the applicability of the prin-. ciple under discussion. Lord Justice James was quite as em- phatic in support of the principle. “That,” he said, “was a prin- ciple repeated by me, and repeated most emphatically by the full court, in the case of Parker v. McKenna (t); and I again desire to repeat that this court will never sanction anything of that kind, and will make the persons who engage in schemes such as this that has been brought before us pay back to the uttermost farthing what they have received.” If any further decision were necessary this alone would suffice to show that directors will not, any more than other agents, be allowed to take advantage, with impunity, of the confidence reposed in them. *The principle adopted in Hay’s case (w), namely, that [280*] all the remuneration which the agent of a purchaser re- ceives secretly from the vendor is received for the benefit of the purchaser, was acted upon in 1875 by the Court of Appeal in McKay's case (v). In that ease the owner of a mine agreed with M., who was acting on behalf of a company, to sell the mine to (@) LR. 10h. 96. (uw) L. R., 10 Ch, 598, (x) L.R., 2 Ch. Div. 1, 380 RIGHTS, ETC., ARISING OUT CF THE CONTRACT. [BOOK II. the company for an amount made up of cash and paid-up shares. By another secret agreement the owner was to give M. 600 paid- up shares for his trouble. The company was formed, and whilst M. was secretary to the company the shares were allotted to the vendor, who transferred the 600 shares to M., in whose name there were 500 when the company was ordered to be wound up. The court held, first, that M. had been guilty of misfeasance towards the company, and could, under sect. 165 of the Companies Act, 1862, be made to contribute in respect of such misfeasance; sec- ondly, that the measure of damages to be contributed by M. was the highest value of the shares transferred to him, and that, as some of the shares had been allotted to solvent shareholders, the value must be taken to be the amount unpaid on the shares. In Pearson’s case (w) a director of a company received from one of the promoters a number of paid-up shares sufficient to qual- ify him as a director, and then took an active part in carrying out a conditional coatract for the purchase by the company of a col- liery belonging to the promoters, and for purchasing and working which the company was formed. The Court of Appeal (affirming the decision of Vice-Chancellor Bacon) held that the director was liable under the 165th section of the Companies Act, 1862, to pay to the liquidator the value of the shares; and that in the present case the shares were to be taken as having been worth their nom- inal amount. The following principles may be gathered from the judgment of the Court of Appeal: (1.) A director in the above position, who has received a pres- ent of a part of the purchase-money, and being know- ingly in the position of agent and trustee for the pur- chasers, cannot retain that present as against the actual purchasers. (2.) Whether such a purchase is or is not an advantageous one for the company, — whether the property is [281*] or is not *worth the increased price paid for it by the company —is wholly immaterial. (8.) A director in such a case will be deemed to have ob- tained the present under circumstances which made him liable at the option of the cestuis gue trust to account («) L. R., 5 Ch. Div. 336, CHAP. II.] DUTIES, ETC., OF AGENT IN FIDUCIARY PosITION. 381 either for the value at the time he received the present, or to account for the thing itself and its proceeds if it has increased in value. An important distinction has been recently drawn by the Court of Appeal in Carling, Hespeler, and Walsh’s cases (y), under circumstances which may well claim attention. On the 23rd De- cember, 1871, the Western of Canada Oil, &c. Company (limited) was registered under the Companies Acts for the purpose of carry- ing on a trade in oil. The capital was to consist of 4,500 shares of 1007. each. The agreement to purchase the oil works neces- sary for carrying on the trade was made on behalf of the com: pany on the 18th December. They were to be sold for 400,0002., of which 150,0002. was to be paid in cash, and the remaining 250,0002. by the allotment to the vendors or their nominees of 2,500 fully paid-up shares in the company. The minimum qual- ification of a director was the holding of five shares. No shares were allotted in 1871, but money was raised by the issue of de- bentures. Early in 1872 the vendor of the oil works arranged with Messrs. Carling, Hespeler and Walsh that he would transfer to them a sufficient number of shares to qualify them as the Canadian directors, on condition that they would. act in that ca- pacity. The offer was accepted, and the directors in England, upon receiving instructions from the vendor, allotted to the new directors thirty shares apiece as fully paid up out of the vendor’s fully paid-up shares. The company was unsuccessful, and in 1873 ordered to be wound up. An application was made on behalf of the official liquidator to place Messrs. Carling, Hespeler and Walsh on the list of contributories in respect of thirty shares each. The Master of the Rolls was of opinion that the company were en- titled to say that the purchase money of the property had been increased by the amount of the shares so alloted, and consequently that the shares should be treated as not having been paid for at all. His lordship thought the agreement between the vendors and the Canadian directors did not free the latter from liability in respect of the shares, because the company were *to pay the real vendor, and their directors were the agents (282*] and trustees of the company. “You cannot,” proceeded the Master of the Rolls, “take part of the purchase-money as (y) L. B., 1 Ch. Div. 115. 882 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II. against the company; you cannot claim the benefit of the pur- chase-money, the amount of which you yourselves stipulated for and agreed to on behalf of the company. The company have a right to say that the purchase-money, as between them and Mr. Walker (the vendor), is to be treated as diminished by the sum which you as their agents agreed to keep for yourselves. ... Whether you look at the 165th section of the Companies Act of 1862, under which it conld be recovered back as money paid, or whether you look at the contributory clauses under which it can be treated as never having been paid at all, which is the more ad- vantageous way of looking at it for the directors, in either way they would be liable to contribute the sum of 3,000/. each.” The Canadian directors appealed, and this decision was reversed by the court above simply on the ground that the shares could not be treated as unpaid shares. It is apparent from the remarks of the several judges who constituted the Court of Appeal, viz., Lords Justices James and Mellish, Baron Bramwell, and Mr. Justice Brett, that the court regretted the impossibility of sus-' taining the judgment of the Master of the Rolls. All were agreed that the appellants never made themselves liable for any shares at all, that their contract was to take fully paid-up shares, and that although the appellants might be held to be trustees of the company for paid-up shares, they could not be considered as holders of unpaid shares. The learned judges were equally agreed in considering that a breach of trust had been committed by the appellants. The chief question is, then, what remedy is provided? Lord Justice Mellish answered this question. The company might adopt any one of three courses. (1.) They might cancel the allotment to these directors. (2.) If the shares were sold the company might call upon them to account for the profits. (3.) If no profit had been made on the sale the company could compel the directors to give to the company an indemnity for the loss incurred by reason of their misfeasance in depriving the company of the power of allotting the shares to other persons, | In other words the directors could only be made to pay to the company in respect of a breach of trust. Should the case again come before a court of the Chancery Division, it may be dis- puted whether the breach of trust was confined to the [283*] *five shares or extended to the thirty. Lord Justice CHAP. I1L.] DUTIES, ETC., OF AGENT IN FIDUCIARY Position. 383 Mellish was of opinion that more facts, as well as a much more careful examination into the state of things between the company and the vendor, would be necessary for the decision of the question when it arose. No doubt the considerations here mentioned are more often material in proof of the existence of a fiduciary relation, than for the discovery of the extent of such a relation. It is not to be supposed that these remarks of the lord justice have any tendency to recognize the qualification shares as the limit of a director’s fiduciary relation. Upon a survey of the whole case it is impossible to question the substantial justice of the decision of the Court of Appeal. The shares could not, without a violent perversion of language, be called unpaid-up shares; yet there had none the less been a breach of trust, and for that breach of trust a liability to indemnify the company was incurred. The true limits, then, of the doctrine that directors are agents in a fiduciary position may be expressed in the following way: Directors, in contemplation of the law, are trustees of the powers vested in them, but their liability towards the shareholders is not coéxtensive with that of trustees to their cestuz gue trust. They are not liable for results wholly due to default of judgment, such default not being itself due to crassa negligentia (2). Secondly, as to promoters. When it is once established that promoters are in a fiduciary position, they cannot become vendors to the company unless they make a full disclosure. So, if A. purchases a horse in the name of B. for 100 guineas, and invites some one else to join him in a purchase from B. without disclosure of the fact that A. is really the vendor, the latter sale cannot stand (q)." (z) Overend, Gurney & Co. v. Gibb, L.B., 5 H. L. 480; Turquand v. Mar- shall, L. R., 4 Ch. 376. (a) See per Lord Justice James, New Sombrero Phosphate Co. v. Erlanger, 46 L. J., Ch. 425, and L. R., 5 Ch. Div. 73. 1The owner of any property may fcrm an association or partnership with others and may sell the property to the company at any price agreed on, pro- vided there be no fraudulent represen- tations made by them, and no such con- fidential relation arises, as to make them liable to account for any profits realized on such sale. Densmore Oil Co. v. Densmore, 64 Penn. St. 43; S. C., 9 Am. Law Reg. (N. 8.) 96. But where persons have formed an association, or are dealing in contem- plation of one, then they stand ina confidential relation to each other and to all who may subsequently become members; and they cannot purchase any property and sell it to the company at an advance without a full disclosure of all the facts. If they do so, the 384 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. In New Sombrero Phosphate Company v. Erlanger (6), which was decided in 1877, the action was brought by a limited liability company against certain persons who were the promoters of that company, and who were the vendors to the company of a mineral working. The property in question was bought in the name of an agent for 55,000/., from an official syndicate formed for the purpose. A few days afterwards a new company was registered by the syndicate, and a provisional contract bearing even [284*] date *with the articles was executed for the sale of the property to a trustee for the company so formed for 110,0002. Of the five directors named in the articles, and of whom two formed a quorum, one never acted, and another was abroad at the time of the incorporation. Of the three directors who re- mained one was the nominal vendee, and another appeared to be the mere nominee of the vendors. Nine months after the forma- tion of the company a committee of investigation was appointed, and a bill was filed six months afterwards by the company for the purpose of setting aside the sale to the company. The defences raised were, that the contract was fairly obtained; that whether it was unfairly obtained or not, the company had by its laches or acquiescence precluded itself from suing; and thirdly, that whether or not the company had so precluded itself the transaction was not one which in law could be ripped up or set aside by the company, but that only damages could be claimed in an action by individual shareholders against those persons who made the misrepresenta- tion to them to induce them to accept the shares. The Court of Appeal ordered the contract to be set aside. The following prop- ositions may be gathered from the opinions delivered by the learned Lords Justices: (1.) A promoter is in a fiduciary relation to the company which he causes to come into existence. IZfhe has a property which he desires to sell to the company, it is quite open to him to do so, but upon him, as upon any other person in a fiduciary position, it is incumbent to make full and fair disclosure of his interest and position with respect to that property. There is no difference in this re- company may compel them to account Stevenson, 63 Penn. St. 95; Doris v. for the profit. Densmore Oil Co. v. French, 4 Hun, 292; 8. C., 6 Thomp. Densmore, supra. See, also, Shortv. & C. 581. CUAP. I1.] DUTIES, ZTC., OF AGENT IN FIDUCIARY POSITION. 385 spect between a promoter and a trustee, steward or other agent. (2.) It is not merely a technical rule which requires that a vendor in any respect in a fiduciary position should tell the ex- act truth as to his interest (c). (3.) A contract entered into by one agent of the promoter of a company to sell with another agent of the promoter to buy, is a mere pretence or sham contract (d). (4.) The company being the body with whom, by its agents, the contract is entered into, must be the body to set it aside, and although individual shareholders who were parties to the fraud may be benefited, yet it is not the *doctrine of courts of equity to hold its hand and [285*] avoid doing justice because it cannot apportion the punishment (@). (5.) All members of a syndicate, under circumstances such as are above stated, are liable jointly and severally (d). The Companies Act, 1867 (80 & 31 Vict. c. 131, s. 38), pro- vides that every prospectus of a company, and every notice in- viting persons to subscribe for shares in any joint-stock company, shall specify the dates and the names of the parties to any con- tract entered into by the company, or the promoters, directors or trustees thereof, before the issue of such prospectus or notice, whether subject to adoption by the directors, or the company, or otherwise; and any prospectus or notice not specifying the same shall be deemed fraudulent on the part of the promoters, directa ors and officers of the company knowingly issuing the same, as regards any person taking shares in the company on the faith of such prospectus, unless he shall have had notice of such contract. In Grover’s case (e), Lord Justice James and Baron Bramwell agreed that the 38th section required only those contracts to be speciiell in the prospectus which were entered into by the com- pany, or by a person who, at the time of entering into the con- tract, was a promoter, director or trustee. Lord Justice Mellish, on the other hand, thought that the section ought to be held to extend to every contract made with a person who afterwards (b) Supra. (d) Per Jessel, M. R. (c) Per James, L. J. (e) L. R., 1 Ch. Div. 182; 45 L. J., (@) Per Jessel, M. R. Ch. 83. 25 3886 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Im. becomes a promoter, director or trustee, provided the company has become entitled to the benefit, or liable to the provisions, of the contract before the prospectus is issued. Lord Justice Brett, too, thought that it was immaterial whether the contract was made before such person became promoter, trustee or director. The three former agreed, however, in the opinion that where a prospectus omits to specify a contract, which under the 38th sec- tion ought to be specified, the remedy of the person taking shares on the faith of the prospectus is by action personally against the promoter, director or trustee who issued the prospectus. But under such circumstances, the section gives no right to the share- holder as against the company to have his name removed from the register. Promoters, like trustees, who lend themselves to a fraud [286*] by *their cestuis gue trust, and receive money thereby from the defrauded party, cannot escape from the liability which attaches alike to them and to their cestwis gue trust. That liability is a joint and separate liability of all the accomplices. In Phosphate Sewage Co. v. Hartmont (f), certain persons who were owners of a concession from a foreign government combined together to form a company to purchase the concession, knowing at the time that through their default it was voidable and liable to forfeiture. The owners and others who were promoters of the company fraudulently sold the concession, being aware of the infirmity of the title, to trustees for the intended company, who were to be paid a portion of the purchase money for their share in the transaction. The solicitors for the vendors, who were also the solicitors for the company, concealed the invalidity of the title, and the trustees neglected to require evidence to establish the title. A bill was subsequently filed by the company against the owners of the concession, the promoters, the trustees, the directors and the solicitors; and the Court of Appeal, affirming the decision of Malins, V.-C., held that the owners and promoters must repay the whole purchase-money; that the trustees who received money in the nature of a bribe for neglecting their duty, must repay what they had so received; and that all the defendants, including the solicitors, must pay the costs of the suit. (f) L. R., 5 Ch. Div, 394, CHAP. II.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 387 Secr. 5.— The Fiduciary Position of Legal Advisers. (a.) In matter of contract. The general rule of law, equally applicable to all trustees and persons in a fiduciary position, is, that no person in such a position may take advantage of the confidence reposed in him. The sound policy upon which the rule is based is nowhere more apparent than in transactions between parties standing in the relation of solicitor and client or counsel and client. Whatever may be urged in defense of the rule in other cases may here be urged with even greater effect, for the relation is one of great confidence, giving to the adviser more than: ordinary influence over the client. Hence it is that the law is exceedingly suspicious of all transactions between the parties! The rule which thus * subjects transactions between solicitor and client to other [287*] and stricter tests than those which apply to ordinary trans- actions is not an isolated rule, but a branch of a rule applicable to all transactions between man and man, in which the relation between the contracting parties is such as to destroy the equal footing on which such parties should stand (g). In treating the question now before us we shall find that the fiduciary position of legal advisers may be considered from three aspects. It may be considered in its consequences: (1.) In matters of contract; (2.) Where the client makes a gift; (3.) In the matter of giving professional service. The rules upon the first head were laid down by Lord Eldon, in Gibson v. Jeyes (A), decided in 1801, in which case the sale of an annuity by an attorney to his client was set aside. Legal advisers may contract with their clients provided the relation is dissolved, provided the duties attaching to their position are satis- fied. “Ido not mean to contradict the cases of trustees buying from their cestuzs gue trust,” said the Lord Chancellor, “but the relation between the parties must be changed; that is, the con- 1There are a0 transactions which Nesbit v. Lockman, 34 N. Y. 167; courts of equity will scrutmize with Hitchings v. Van Brunt, 38 id. 335, 342; more jealousy than dealings between Downing v. Major, 2 Dana, 228. attorneys and their clients, especially (g) Per Wigram, V.-C., in Edwards where the latter are persons of inferior v. Meyrick, 2 Hare, 69. capacity and inexperienced in business. (h) 6 Ves. 266. Mills v, Mills, 26 Conn, 213. See, also, 383 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK ilr. fidence in the party, the trustee or attorney, must be withdrawn. That is the principal of the cases of a trustee buying for himself. . . An attorney is not incapable of contracting with his client; a trustee also may deal with his cestui que trust, but the relation must be in some way dissolved, or if not the parties must be put so much at arm’s length, that they agree to take the character of purchaser and vendor.” The application of this principle to the present case is very instructive. Obviously there was nothing to prevent the attorney dealing with his client, but, as Lord Eldon' pointed out, when the client asked him to deal he should not con- tract with her, though she insisted —the relation still subsisting —unless she obtained the advice of another attorney. The same learned lord gave the same rule in other words: “An attorney | buying from his client can never support it unless he can prove that his diligence to do the best for the vendor has been as great as if he was only an attorney dealing for that vendor witha stranger. That must be the rule.”* The proof of actual frand or incapacity on the part of the attorney, is not necessary [288*] in order to set aside *the contract (A). Again, in a case which came before him in 1803 (7), he says: “The princi- ple is that as the trustee is bound by his duty to acquire all the knowledge possible, to enable him to sell to the utmost advantage for the cestwt que trust, the question what knowledge he has ob- tained, and whether he has fairly given the benefit of that knowl- edge to the cestui que trust, which he always obtains at the In the case of a contract of purchase selaer, 1 Johns. Ch. 344; Bib v. Smith, 1 and sale between attorney and client, or of an agreement giving benefits and advantages to the agent or attorney, the burden of establishing its perfect fairness, adequacy, and equity, is thrown upon the attorney, and in the absence of such proof, courts of equity treat the case as one of constructive fraud. See Condit v. Blackwell, 22 N. J. Eq. 481, and other cases cited ante, p. 274, note; Jennings v. McConnel, 17 Ill. 148; How- ell v. Ransom, 11 Paige, 5388; Evans v. Ellis, 5 Den. 640; Dunn v. Record, 63 Me. 17; Brock v. Barnes, 40 Barb. 521; Greenfield’s Estate, 14 Penn. St. 489; Hitchings v. Van Brunt, 38 N. Y. 335; 1 Strong’s Eq. Jur. § 310, note, § 811. See, however, Wendell v. Van: Rens- Dana, 580. To set aside a conveyance made upon a sale to his attorney by a party in em- barrassed circumstances, it must be shown that he has been consulted in regard to the particular transaction, or that he was in a position to take an un- fair advantage. Jenkins v. Hinstein, 3 Biss. 128. See, also, Wendell v. Van Rensselaer, 1 Johns. Ch. 344. The fact that their relations were in- timate, and that the vendor expected to be able to re-purchase on favorable terms, does not make the conveyance a simple security for indebtedness, Jenk- ins v. Einstein, supra. (h) 6 Ves. 270. (i) Ex parte James, 8 Ves. 843. CAP. I1.] DUTIES, ETC.) OF AGENT IN FIDUCIARY PosITION. 389 expense of the cestui gue trust, no court can discuss with compe- tent sufficiency or safety to the parties.” The purchase may be made at an auction, but that circumstance, though evidence of fairness, makes no difference in the principle (2). An instructive case was decided in 1854 by Lord Chancellor Cranworth and Lord Justice Turner, on appeal from a decree of Vice-Chancellor Stuart (/), setting aside, at the suit of the heir-at- law of the vendor, two purchases of real estate by the defendant. The defendant, an attorney, was engaged in the sale of his client’s property by auction; only one of the lots was then sold. In 1848 the first sale to the defendant took place, the second in 1850. The consideration for the first purchase was stated to be 6001., that for the second 2087. Only 260/. was paid, the residue being made up by two annuities, one for 402., the other for 262., for the vendor’s life. These annuities fairly represented an equivalent for the residue of the consideration according to the value of such an annuity on the average life of a person of the vendor's age, according to the government annuity tables. But the vendor’s life was not a good average life, and this fact was either known to the defendant or easily within his knowledge. As a matter of fact the vendor died in about a third of the time for which the annuities had been calculated. The Lord Chancellor raised two questions for solution: Did the relation of attorney and client subsist at the time of the transaction? Was there any neglect of duty on the part of the defendant? His lordship answered both questions in the affirmative. There was a manifest neglect of duty on the part of the defendant in not endeavouring to get a higher annuity for the vendor. This he could have done by reason of the vendor’s intemperate habits. Lord Justice Turner entered very elaborately into an examination of the meaning and applica- tion of the phrase “ attorney in hdc re.” After a summary *of the authorities upon the point the judgment of Lord [289*] Eldon in Montesquieu v. Sandys (1), of Sir James Wigram in Edwards v. Meyrick (m), and of Lord Abinger in Jones v. Thomas (n), the conclusion drawn by his lordship was that the cases in which it had been hitherto held that an attorney might deal (k) Thid. 348. (m) 2 Hare, 60. (1) Holman v. Loynes, 4 L. J., Ch. 209. (n) 2 Y. & C. 498. (2) 18 Ves. 313. 390 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. with his client as a stranger might do, were not cases in which the attorney had been concerned in any previous attempted sale, or in which any confidence as to sale had been reposed in him as attorney; or cases in which the attorney had acquired, or had had the means of acquiring, any peculiar knowledge as to the property, the subject of the sale to him. “The result of them, stated favourably to the defendant, and without reference to the important observations upon the subject of influence made by Sir James Wigram in Edwards v. Meyrick, cannot be put higher than this— that an attorney may deal with a client as a stranger where the circumstances are not such as to put him under the duty of advising the client.” The sales were set aside. It will be observed that the rule prohibiting a trustee for sale from pur- chasing himself is more stringent than that regulating the con- tract of the attorney with the client. The former must divest himself of the character of trustee (0).1 The above principles have been applied in a variety of cases. Thus, where a bankrupt’s estate was purchased by the solicitor to the commission, the sale was set aside, and Lord Eldon refused to allow him to bid upon the resale, without the consent of the per- sons interested, after full information given, though the relation of solicitor and client were at an end (py). So where the peti- tioner to the fiat prayed for leave to bid at the sale of part of a bankrupt’s property, without showing any peculiar circumstances, é.g., that the solicitor was mortgagee, the court refused leave, though the assignees did not oppose the prayer (g). On the same ground, where a solicitor, the party to a suit, had the conduct of a sale decreed by the court, and purchased at the sale under a feigned name, the sale was set aside, though confirmed by an order, and the estate was again offered for sale at the price given by the de- fendant. If there was no higher bidder the defendant was to be held to his purchase (7). So, too, the purchase of a client’s [290*] equity of redemption by solicitors was set “aside, although another solicitor had been called in, and although the defendants had ceased to act as solicitors just before the contract (s). (0) See per Lord Eldon in Cane v. () Ex parte James, 8 Ves. 337. Allen, 2 Dow, 299. (q) Ex parte Town, 2 M. & Ayr. 29. 'See ante, p. 274, note; 1 Story’s Eq. (r) Sidney v. Ranger, 12 Sim. 118. Jur. § 310, note, § 311. (s) Gibbs v. Daniel, 4 Giff. 1, CHAP. IIl.] DUTIES, ETC., OF AGENT IN FIDUCIARY PosiTION. 391 In this case, however, the solicitor called in had not performed his duty, and the defendants were aware of the fact. So a pur- chase by a solicitor from his client may be set aside, though the purchase is confirmed by the client’s will. “I do not impute fraud or the exercise of undue influence to B.,” said the Master of the Rolls, “in this transaction; but I rest my decision on the ground that he has incautiously involved himself in a transaction which throws on him the burthen of proving the correctness of it, which he has failed in doing” (¢). Upon the same principles, the House of Lords decided that where a solicitor purchased the prop- erty of his client at a public sale, he was a trustee for the client, unless he could prove that he was neither an agent nor retained the relation (w).! In the same case, it was also held that an in- quiry into the value of the client’s interest was immaterial, and (t) Waters v. Thorn, 22 Beav. 547. (u) Austin v. Chambers, 6 Cl. & F. 1. 1 An attorney conducting the sale of real estate upon an execution,cannot pur- chase the land for his own benefit to the prejudice of his client, for a less sum than the amount of the claim upon which it js being sold. Leisenring v. Black, 5 Watts, 303. Where the attorney of a party be- comes the purchaser at a forced sale, he stands in the shoes of his client; and though he designed to purchase for his own benefit, the client may claim the purchase for himself. Moore v. Brocken, 97 Ill. 23. See, also, Howell v. Baker, 4 Johns. Ch. 118. But an atttorney by the mere act of purchasing property sold on his client's judgment,does not thereby make himself his client's trustee, for the client may de- cline the relation. He may put himself in the way of being made a trustee at his client’s election. Downey v. Ger- yard, 38 Grant’s Cas. 64. So, where an attorney, who had re- covered and had charge of a judgment for the purpose of its collection, after the judgment had been assigned by his client, the plaintiff therein, for the pay- ment of his debts, the remainder, ifany, to be paid to the plaintiff, purchased the same at a sale on execution against his client, the plaintiff in the judgment: Held, that a court of equity would fasten upon the purchaser a trust for the benefit of his client. Stockton v. Ford, 11 How. 232. In Hess y. Voss, 52 Ill. 472, however, it is said that there is no rule of law which prohibits an attorney in a cause from becoming a purchaser at the mas- ter’s sale under a decree therein, even of land belonging to his client; though in such cases his conduct will be closely scrutinized, and if he has not acted with strict fairness, the purchase will be held to have been made for his client. If a party who has an undivided in~ terest in a tract of land employs an at- torney to act for him in relation to his interest in a partition suit, and at the same time, as the agent of another party who also has an undivided inter- est, employs the attormey to act for such other party in relation to his interest, the relation of attorney and client does not exist between the employer and at- torney as to the interest of the party for whom the employee acted as agent. Porter v. Peckham, 44 Cal. 204. See ante, p. 263, note, p. 286, note. 392 RIGHYS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. that the plaintiff's right to relief was not barred merely by the lapse of ten years from the purchase. (b.) Where the client makes a gift to his adviser. The principle established by the House of Lords in Ifiddleton v. Welles (x), decided in 1785, is substantially that which prevails at the present day. No gift or gratuity to a legal adviser, beyond his fair professional demand, made during the time that he con- tinues to conduct or manage the affairs of the donor, will, as a rule, be permitted to stand, more especially if such gift or gratuity arises immediately out of the subject then under the adviser’s conduct or management, and the donor is at the time ignorant of the nature and value of the property so given.! The reported cases in which this principle is either adopted or referred to ex- tend as far back at least as 1735 (y). In Hunter v. Atkins (z), decided in 1834, a bill was filed to set aside a deed by which Admiral Hunter, when upwards of ninety years of age, gave a gift to the defendant, subject to a power of appointment by the donor. The facts of the case will not assist us, the defendant being a banker, but the judgment of Lord , Brougham, C., is worthy of careful perusal: “I take the [291*] rule *to be this,” said his lordship; “there are certain re- lations known to the law as attorney, guardian, trustee; if a person standing in those relations to a client, ward or cestui que trust takes a gift or makes a bargain, the proof lies upon him that he has dealt with the other party, the client, ward, etc., exactly as a stranger would have done, taking no advantage of his influence or knowledge, putting the other party on his guard, bringing every- thing to his knowledge which he himself knew.? In short, the rule, rightly considered, is that the person standing in such rela- (x) 1 Cox, 112; 4 Bro. P. C. 245. 1A grantee, not in fact a licensed at- torney, but only practicing as counsel in justices’ courts, is in principle clearly within the rule applicable to attorneys. Freelove v. Cole, 41 Barb. 318; Buffalow v. Buffalow, 2 Dev. & Bat. Eq. 241. The same principle applies to the managing clerk in a solicitor’s office, who in that capacity has acquired the confidence of the client, and who deals with the client in a matter with which he became acquainted as such clerk, Poillon v. Martin, 1 Sandt. Ch. 569. See, also, Gardner v. Ogden, 22 N. Y. 827, a broker's clerk. (y) Proof v. Hines, Ca. in Eq., Talbot, ce. 115. (z) 3M. & K. 118. ‘See ante, pp. 274, 287, notes. CHAP. III.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 393 lation must, before he can take a gift, or even enter into a trans- action, place himself in exactly the same position as a stranger would have been in, so that he may gain no advantage whatever from his relation to the other party, beyond what may be the natural and unavoidable consequence of kindness arising out of that relation. A client, for example, may naturally entertain a kindly feeling towards an attorney or solicitor by whose assistance he has long benefited; and he may fairly and wisely desire to benefit him by a gift, or, without such an intention being the pre- dominating motive, he may wish to give him an advantage of a sale or a lease. No law that is tolerable among civilized men, who have the benefits of civility without the evils of excessive refine- ment and overdone subtlety, can ever forbid such a transaction, provided the client be of mature age and of sound mind, and there be nothing to show that deception was practiced, or that the attor- ney or solicitor availed himself of his situation to withhold any knowledge, or to exercise any influence hurtful to others and advantageous to himself.” The same learned lord summed up the authorities (a), and stated as their effect that inasmuch as a solic- itor stands in the relation in which he does stand to his client, the proof lies upon him (whereas in the case of a stranger it would lie on those who opposed him) (6), to show that he has placed himself in the position of a stranger, that he has cut off, as it were, the connection which bound him to the party giving or contracting, and that nothing had happened which might not have happened, had no such connection subsisted (c)." The above principles are no less applicable to the relation of counseland client. Brown v. Kennedy (d), 1864, was a suit *instituted by a husband and wife to set aside a deed exe- [292*] cuted by the wife before this her second marriage, in favour of the defendant who had acted as her counsel. There is no diffi- culty about the facts in the case. Mrs. S., who was involved in litigation of an intricate character, consulted the defendant on the subject in 1856. Being impressed with his views, she requested (a) Gibson v. Jeyes, supra; Wright v. Toker v. Toker, 31 Beay. 629. Proud, 13 Ves. 40; Hatch v. Hatch,9 (c) Hunter v. Atkins, 3 M. & K. 136, id. 296; Harris v. Tremenheere, 15 id. 1See ante, pp. 274, 287, notes. 34. (d) 33 Beay. 188; affirmed, 4 De G., (b) Villiers v. Beaumont, 1 Vern. 100; J. & S. 217. 394 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. her solicitor to retain him as counsel. This was done, and the defendant refused to take any fees. He brought the litigation to a successful close by his exertions and ability, and the title of Mrs. S. to the matter in dispute was finally established in March, 1859. In the following May the deed in question was executed, convey- ing to the defendant the reversion of an estate. The consideration mentioned in the deed was services as counsel, esteem and friend- ship. In 1861 Mrs. 8. married B. The legality of the deed was argued before Sir J. Romilly, M. R. In support of the deed it was urged (1) that the deed was well understood by the plaint- iff, and obtained by no undue influence; (2) that it was founded on a contract in which the plaintiff agreed to give him 20,0002. for his services; and (3) that it was only adue and just return and remuneration for the services he had rendered her. Upon the first point the Master of the Rolls decided that there had been undue influence. From the defendant’s answer, it appears that he asked the plaintiff if she considered herself indebted to him in the 20,0002., which she had so often referred to. She replied, “Certainly.” He then wished for some security, and she told him she had left him by will the whole estate charged with 10,0002. The defendant told her that a will was no security, and suggested that she should convey to him by deed what she meant to give by | will. She agreed, and wished the deed to be a deed of gift, reserv- ing to herself a power of sale conditioned upon her giving the defendant the money. The defendant next day drew a draft of the proposed deed, and left it with her. Some alterations were made, but she would not ask her own solicitor to attest the deed, though the defendant wished it. The deed, however, was fully explained to her by a solicitor named by herself. “But this is not sufficient to support the transaction,” said his Honour. “A father may obtain from his child the grant of her whole estate, the child may perfectly understand what she is about, but this will not enable the father to hold the property, and turn [293*] his son or his daughter penniless on the *world. The influence so possessed, and however acquired, must not be exercised for the benefit of the person possessing it.” But more than this, no one had explained to the plaintiff the full effect of the deed. No one had considered that she could not during her life, supposing the deed to be valid, enjoy the estate as she had CHAP. IlI.] DUTIES, ETC., OF AGENT IN FIDUCIARY PosITION. 3895 hitherto done, with the same power of granting leases, cutting trees, opening mines and quarries, pulling down cottages, and the like. The defendant, during the progress of the case, suggested that the deed might be reformed for the purpose, but permission was refused, because, as pointed out by the learned judge, the court cannot compel the grantor to alter the grant; and if the grantor contests it, the deed must stand or fall in its actual con- dition without alterations. The second contention was disposed of by Kennedy v. Brown (¢), where it was held that such prom- ises, if established, constitute no obligation on which an action could be maintained; @ fortiori, then, the third contention could not avail the defendant. The defendant relied aiso upon the fact that no fiduciary relations existed at the time when the deed was executed. To this Sir J. Romilly replied that the court “did not proceed on the mere technicality of the existence of such a rela- tion at that moment, if the fact were so, but upon the proof of the degree of influence existing at the time.”* The decision was up- held by the Lords Justices. “The decree appealed from,” said Lord Justice Turner, “is in such entire conformity with the prin- (e) 13 C. B., N. 8. 677. 11 Story’s Eq. Jur. § 329 a. Contracts made after the attorney’s services are completed, are not liable to objection on account of the pre- vious relationship of the parties. Bib vy. Smith, 1 Dana, 580. See, however, 1 Story’s Eq. Jur. § 329 a, and cases cited. But where the relation of confidence is in regard to the title to lands, the ob- ligation of fidelity upon the counsel follows such title into whosesoever hands it may go,and good faith and public policy require that such obligation should never be violated. An attorney, there- fore, who has been employed profes- sionally to sustain a title to land can- not either before or after the cause is ended, or during the continuance or after the termination of the relation of counsel and client, while the client holds or after he has conveyed his interest, purchase for himself the opposing or any outstanding title, but such purchase will inure to the benefit of the client or his vendee. Henry v. Raiman, 25 Penn. St. 354. See, also, Brown v. Bulkley, 14.N. J. Eq. 451; Hockenbury v. Car- lisle, 5 W. & 8. 348. See, however, Dobbins v. Stevens, 17 8. & R. 18, where 1t was held that a counsel who had been consulted con- cerning the title to lands about to be sold under an execution, and who stated correctly that it was subject to liens, by which purchasers were deterred from bidding, was notthereby precluded from becoming a purchaser himself. Also Devinney v. Norris, 8 W. & S. 314, where it was held that the employment of an attorney to prevent the condem- nation of land upon an execution, did not create such a relation between him and his client as to preclude him from becoming a purchaser of the estate when sold by the sheriff. See ante, p. 263, note. 396 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. ciples and decisions of the court that its validity cannot, in my opinion, be doubted” (/). The principle upon which the decisions in these cases rests has never been contested successfully. Hence, where a solicitor made an absolute conveyance by deed to himself of 1,0002. from the plaintifi’s wife, who, by virtue of her marriage articles, had a power to charge certain premises with 1,000/., the consideration expressed in the deed being services done and favours shown, Lord Hardwicke, on all the circumstances of the case, decreed the deed should stand only as a security for such sum as was justly due to the defendant (g). “If an attorney, pendente lite, prevails upon a client,” argued his lordship, “to agree to an exorbitant reward, the court will either set it aside entirely, or reduce it to [294*] the standard of those fees to which he is properly *enti- tled”!(A). So, where an attorney took securities from his client during the continuance of the relation, partly for a gift and (f)4DeG., J. & 8. 228. (g) Saunderson v. Glass, 2 Atk. 296. 1 A court of equity will not enforce in favor of a solicitor, a security taken from his client pending a suit, for any- thing beyond the sum actually due the solicitor. Mott v. Harrington, 12 Vt. 199. See, also, Phillips v. Overton, 4 Hayw. 291; Downing v. Major, 2 Dana, 228; Geeenfield’s Estate, 14 Penn. St. 489; Lecett v. Sallee, 3 Port. 115; Rose v. Mynatt, 7 Yerg. 30. Where a security is taken by the so- licitor from his client, as a compensation for his services, the presumption is that the transaction is unfair, and the onus of proving its fairness is upon the so- licitor. Brown v. Bulkley, 14N. J. Eq. 451. But such security will not be set aside as void, but will be suffered to stand as security for the amount justly due upon it. Brown v. Bulkley, supra. If it be claimed that the instrument was intended to provide a remunera- tion for past services, then the services must be proved; that there existed at the time of giving it at least a just and moral obligation to pay; that the in- strument was fully understood by the person executing it, and was made in pursuance of, and in accordance with, a well considered, definite and settled pur- pose. Brock v. Barnes, 40 Barb. 521. See, also, Nesbit v. Lockman, 34 N. Y. 167. A provision in a voluntary deed in favor of the counsel who drew or ad- vised it, for his services to be performed as a trustee under it, with the further provision that the said trustee might resign the trust to the other trustees without forfeiting his compensation, is void, at least unless it be proved that the grantor knew of the particular pro- visions and without influence from those interested, assented to them. If a doubt exists in this respect, the provision for compensation is invalid, and the pro- vision in favor of the other trustees who acted in the arrangement of the matter, through the counsel, or in connection with him, is also invalid. The trustees may, however, be decreed compensation by the proper tribunal. Greenfield's Estate, 14 Penn. St. 489. (h) 2 Atk. 297, CHAP. I.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 397 partly for the balances of accounts settled, costs and business done, as well as for the price of a horse, Lord Loughborough ordered the accounts to be again opened, and declared the voluntary con- veyance void (¢). Again, where, in consideration that a solicitor would not call for immediate payment of the several bills of costs due from certain clients, one of them agreed to pay the several bills as they were then made out, though one had not been deliv- ered, the agreement was declared void (j). Nevertheless, the court does not approve of clients entering into transactions with their solicitors, whereby they obtain from him present relief, and, at the same time, indulge the expectation that the court will after- wards, at their instance, annul the whole transaction on the ground of the relations subsisting between them (%). Upon the same principle, where a client told his solicitor to retain a sum of 3002. out of moneys coming to the client, the court, on a bill of the client, decreed a general account, with a direction that the defend- ants were not to be allowed the 300/., and ordered the defendants to pay the costs of the suit, there being no evidence of circum- stances to remove the pressure which the court always presumes where a fiduciary relation is proved to exist (2). The rules with regard to gifts are more stringent than those with regard to purchases. The rules against gifts, it has been said, are absolute; the rules against purchases are modified (mm). Parol evidence is admissible to prove that no consideration passed between solicitor and client, although a consideration appears on the face of the conveyance (7). Whenever a case comes before the courts it must stand upon its own circumstances, and the court will try the application of the principles (0).? (i) Newman v. Paine, 2 Ves. Jun. man v. Loynes, 18 Jur. 543; and see per 199. (j) Gardner v. Ennor, 35 Beav. 549. (z) Per Sir J. Romilly, ibid. p. 558. (1) O’Brien v. Lewis, 4 Giff. 221; 32 L. J., Ch. 569. 1In Greenfield’s Estate, 14 Penn. St. 489, 506, Bell, J., observed that where the question agitated is of a gift, the rule would seem to be more stringent than where the advantage flows from a contract or mutual arrangement. (m) Per Lord Justice Turner, in Hol- Lord Thurlow, in Welles v. Middleton, 1 Cox, 112; per Lord Eldon, in Hatch v. Hatch, 9 Ves. 296; and per Lord Erskine, in Morse y. Royal, cited 3 Drew. 315. (n) Tompson y. Judge, 3 Drew. 806, (0) Ormond v. Hutchinson, 13 Ves. 47, per Lord Erskine. *The rule prohibiting an attorney from obtaining any advantage in a transaction with his client, must prevail, and the attorney must reconvey land 398 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III . (c.) In respect to rendering services. The principle of the cases to which we are now about to refer is obviously a deduction from the general principle which [295*] *regulates the dealings of persons in fiduciary positions with their beneficiaries. The principle is, that wherever a pro- fessional man is called in to give his services to a client, whether to prepare a deed or will, the law imputes to him a knowledge of all the legal consequences likely to result, and requires that he should distinctly and clearly point out to his clients all those consequences from whence a benefit may arise to himself from the instrument so prepared; and if he fails to do so, he will not be allowed to retain the benefit. In Watt v. Grove (p), decided in 1805, Lord Redesdale, C., said that when a deed is prepared by the person who seeks the benefit of it without the intervention of any other person, that circum- stance alone raises a suspicion of fraud; hence “instruments ob- tained by attorneys from their own clients are always viewed with extraordinary jealousy ” (q). In Bulkley v. Wilford (r), decided in 1834, the House of Lords entered fully into the question. A testator being owner of two estates, bequeathed them by will to his wife and her heirs. The appellant, a solicitor, was the testator’s heir presumptive. Before making his will the testator had contracted to sell a part of his real property to the Commissioners of the Royal Hospital at Chelsea. Owing, however, to some complications in the title, it was agreed that the testator should levy a fine of the land con- tracted to be sold, with a view to the completion of the contract. The appellant had been the respondent’s regular attorney for some years. He was now employed to complete the sale, and induced the respondent to levy a fine upon the whole of his real property. This was equivalent toa revocation of the will, of whose existence he was probably aware. The respondent did not know that a fine conveyed to him by his client without Cole, 41 Barb.318; Ford v. Harrington, consideration, or for a grossly inade- 16 .N. Y. 285. quate consideration, upon repayment of (p) 2 Sch. & Lef. 491. such consideration, notwithstanding the (g) See per Lord Chancellor Hart, conveyance was made to defraud cred- Segrave v. Kirwan, Beat. 157. itors of the client andupon parolagree- (r) 20. &F. 102. ment for its reconveyance. Freelove v. CUAP. I.] DUTIES, ETC., OF AGENT IN FIDUCIARY POSITION. 899 had this consequence, nor did the attorney explain to him this cir- cumstance. The testator died without declaring the uses of the fine, and without republishing his will. The attorney, after the testator’s death, claimed the estate as the heir-at-law, and brought action of ejectment to recover possession. Upon a bill for relief being filed in chancery by the widow, an issue was directed. The jury found that the attorney fraudulently omitted to tell the ven- dor what effect the fine would have upon a devise of the property comprised init. *The Court of Chancery then [296*] decreed him to be a trustee for the devisee. The House of Lords affirmed the decree. Sir E. Sugden, one of the counsel for the respondent, contended that the authorities went only to the length that if a testator was prepared to do a thing which he had power to do, and the person who would take his property if he omitted to do the act, dissuaded the testator from taking any trouble, and engaged to take care of the property, he would be compelled to do what the testator would himself have done. The same learned counsel urged that this was the first case in which a man’s legal right had been taken away from him, not upon any- thing he had done — the jury found he had done nothing improp- erly —not upon anything he had said; not upon any misrepre- sentation; not upon any concealment, for nothing was sought to be known; but upon an omission to make a declaration. It was apparent before the judgment of the House of Lords was delivered that Lord Eldon maintained the doctrine that an attorney should not have the benefit of anything, where he derives that benefit from ignorance of that which he ought to know. This view would probably have made his lordship refuse to direct an issue had he sat at the original hearing. Neither Lord Brougham, C., nor Lord Lyndhurst took any part in deciding this case, as they had both been engaged in the action of ejectment. The Earl of Eldon and Lord Wynford were quite at one upon the principles applica- ble. “Ihave taken great pains,” said Lord Eldon, “to look into this subject, and I do profess myself, if I had heard the cause in the year 1823, it would have been utterly impossible for me to direct an issue toa court of law consistently with my habit, if possible, to save parties the expense of trials of issues, if the case afforded a clear ground of equity between the parties; and in this case I think such clear ground was afforded. I should have thought 400 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. it my duty, upon the principle which I am now about to state, at once to have said, ‘ Whether you meant frand, whether you knew that you were the heir-at-law of the testator or not, you, who have been wanting in what I conceive to be the duty of an attorney, if it happens that you get an advantage by that neglect, you shall not hold that advantage, but you shall be a trustee of the property for the benefit of that person who would have remained entitled to it if you had known what you ought as an attorney to [297*] have known: and not knowing it, because * you ought to have known it, you shall not take advantage of your own ignorance’” (s). This view proceeds from a consideration of the dangers which would otherwise arise to the interests of mankind if advisers were allowed to take advantage of their own ignorance. The same principle was stated by Lord Hardwicke (¢) and Lord Chancellor Hart (w). Attorneys then must not only give all the information they ought to give; but they shall not plead igno- rance of what they ought to know. In Billage v. Southee (v), decided in 1852, when relief was granted toa patient from whom a medical man had taken a prom- issory note for an amount beyond what was due to him, and upon the most extraordinary charges, and at a time when the patient’s position in life was about to be changed, Turner, V.-O., said: “I am of opinion a court of equity will not permit this. No part of the jurisdiction of the court is more useful than that which it exercises in watching and controlling transactions between persons standing in a relation of confidence to each other, and, in my opinion, this part of the jurisdiction of the court cannot be too freely applied, either as to the persons between whom or the cir- cumstances in which itis applied. The jurisdiction is founded on the principle of correcting abuses of confidence, and I shall have no hesitation in saying it ought to be applied, whatever may be the nature of the confidence reposed, or the relation to the par- ties between whom it has subsisted. I take the principle to be one of universal application, and the cases in which the jurisdic- tion has been exercised — those of trustee and cestud que trust, guardian and ward, attorney and client, surgeon and patient — to (s) 2C. & F. 177. (») 9 Ha. 534. (t) See Barnesley v. Powell, 1 Ves. 1See Cadwallader v. West, 48 Mo. O84, 483; Crispell v. Dubois, 4 Barb. 393; 1 (wu) Segrave v. Kirwan, supra. . Story’s Eq. Jur. § 314. o SUAP. UI.] | DUTIES, ETC., OF AGENT IN FIDUCIARY Position. 401 be merely instances of the application of the principle . . . and when a gift is set up between parties standing in a fiduciary rela- tion, the onus of establishing it by proof rests upon the party who has received the gift.” But in Pratt v. Barker (a), decided in 1828, Lord Lyndhurst refused to set aside a voluntary deed, executed by an old and in- firm man in favour of the surgeon who attended him, and who had occasionally been consulted by him respecting his property. In this case, however, it was proved (1) that there was no undue influence, the execution of the deed and transfer of property being the voluntary acts of the grantor; (2) that the grantor *was acquainted with the nature and effect of what he did; [298*] (8) that there had been in the affair the intervention of a disinterested third person. Where any relation exists by means of which a person is able to exercise a dominion over another, the court will annul a trans- action under which a person possessing that power takes a benefit, unless he can show that the transaction was a righteous one (y). But it has been held that this proof is given if it be shown that the donor knew and understood what it was that he was doing in making the gift (z). “Insuch cases,” said Lord Eldon, “the ques- tion is not whether the donor knew what he was doing, but how the intention was produced” (a). To the same effect are Walker v. Smith (b); Billage v. Southee (c). The authorities are not at one upon the question whether a gift made by a client to his legal adviser is absolutely void (d), if made during the continuance of the relation. In one of the latest cases —Woodward v. Hum- page (e), decided in 1861 —Stuart, V.-C., expressed an opinion that, although the principle of influence vitiated the gift, yet the presumption might be rebutted by circumstances short of the total dissolution of the relation of solicitor and client. (x) 4 Russ. 507. (c) 9 Ha. 534. (y) Cooke v. Lamotte, 15 Beav. 234. (d) See per Kindersley, V.-C., in (z) Hoghton v. Hoghton, 15 Beav. Tompson v. Judge, 3 Drew. 314, and 278. cases there cited. (a) Huguenin v. Basely, 14 Ves. 273. (e) 3 Giff. 337. (b) 29 Beay. 394, 26 402 [299*] RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [pooxk m1. *CHAPTER IV. LIABILITY OF AGENTS TO THIRD PARTIES. PAGE. Srcr. 1.— On Contracts. (a.) Where Agent contracts with- out Authority. Classification of cases Agent contracting after death of principal Baron Alderson’s statement of the law in Smout v. Ilbery......... Summary of rules deducible from that: CASO sie os iescrnseewawesw The fact that the agent makes a mistake bond fide, no de- (b.) On Contracts made in his own Name. Prim@ facie agent liable...... vee 804 Admissibility of parol evidence to vary liability........eeceseeeee 305 Cases in which the agent has con- tracted in his own, but sets out the fact of his agency.......... As arule an agent cannot escape personal liability by proving BQCNCY oe ees ee rc orececrscenene Agent of undisclosed principal may be made liable by evidence of custom Summary of rules Agent may show when an instru- ment does not contain the agree- Principles stated by Bramwell, B., and Kelly, C. B.........+..06. 310 Result of cases on latter point.... 312 PAGE, (c.) Where money is paid to the Agent for the use of his Principal. Summary of authorities The money must be received by agent as agent................ Cases where the money is obtained Te Bal ys o.cisss sere Sietece ais seve oaene Ss Money paid over to principal with- out notice...... vis sees seahawesd 315 The action cannot be brought to try the right to a hereditament..... Money placed by agent to account of principal..........sceeeeeee When money paid by mistake is recoverable Effect of want of privity between agent and third person......... Ifthe agent has paid over to his principal money which he had no right to withhold, he cannot be called upon to restore it........ Questions where the agent was a stakeholder ............ceeeeee (d.) Where the Principal directs the Agent to make a Payment. There must be a specific appropri- ation to the use of the third per- son assented to by the agent.... 320 Illustrations of the evidence required 320 Cases relating to bills of exchange 321 Distinction between specific appro- eee ecccsce priation and a remittance...... 824 Opinion of Eyre, C. J......... 00 324 Summary of propositions deducible from the authorities............ 326 Srct. 2.—In Tort........ aioe 828 cHaAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 403 Secr. 1.— On Contracts. Havine considered the liability upon deeds, bills of exchange, promissory notes, bought and sold notes and charter-parties, which may attach to an agent (a), there remain for consideration *several other questions. These questions will now be treated [800*] in order. (a.) Where Agent contracts without Authority. When an agent assumes to act as agent without authority the following cases may arise: He may after the determination of his authority act upon a belief that his authority is still in force. 1. Acting upon such belief he may omit to give to the other contracting party such information as would enable that other equally with himself to judge as to the authority under which he proposed to act. 2. Acting upon such a belief he may give to the other contract- ing party all such information. The agent may be aware that he has no authority at the time of entering into the contract, or he may act upon a bond fide belief that he has authority where none has in fact been conferred, such want of authority not being known to the person with whom he contracts. The leading case upon the first point is that of Smout v. Iibery (6), decided in the year 1842. This was an action for goods supplied to a married woman by the plaintiff, who had been in the habit of supplying the defendant’s husband, and who contin- ued to supply the wife after her husband went abroad, where he died. The question for the court to determine was, whether the wife was liable for the goods supplied from the date of her hus- band’s death until the arrival of the news of the death. A verdict the cases cited post, p. 302, note. In order, however, to make the agent (a) See Book II., Part Il. 1 An agent who makes a contract not binding upon his principal by reason of the fact that it was unauthorized, is lia- ble in damages to the person dealing with him upon the faith that he pos- sessed the authority assumed. See Baltzen v. Nicolay, 53 N. Y. 467, and liable, the unauthorized contract must be one that could be enforced against the principal if authorized. Baltzen v. Nicolay, supra; Dung v. Parker, 52 N. Y. 494. (b) 10M. & W.1. 404 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. having been given for the plaintiff, a rule was obtained to show cause why the verdict should not be set aside and a new trial had, on the ground that the defendant was not liable for the meat sup- plied after but before she had any knowledge of her husband's death. It had been previously decided that a principal’s executor is not liable under the circumstances! The court, having taken time to consider its judgment, which was delivered by Baron Alderson, held that the wife was not liable, on the ground “ that there must be some wrong or omission of right on the part of the agent, in order to make him personally liable on a contract made in the name of his principal.” ? “There is no doubt,” said the learned Baron, “ that in a case of a fraudulent misrepresentation of his authority, with [301*] an *intention to deceive, the agent would be personally responsible. But, independently of this, which is per- fectly free from doubt, there seems to be still two other classes of cases, in which an agent who without actual authority makes a contract in the name of his principal, is personally liable, even where no proof of such fraudulent intention can be given. First, when he has no authority, and knows it, but, nevertheless, makes the contract as having such authority. In that case, on the plain- est principles of justice, he is liable. For he induces the other party to enter into the contract on what amounts to a misrepre- sentation of a fact peculiarly within his own knowledge; and it is but just that he who does so should be considered as holding himself out as one having competent authority to contract, and as guaranteeing the consequences arising from any want of such authority. But there is a third class, in which the courts have held, that when a party making the contract bond jide believes that such authority is vested in him, but has no such. authority, he is still personally liable. In these cases, it is true, the agent is not actuated by any fraudulent motives, nor has he made any statements which he knows to be untrue. But still his liability depends on the same principles as before. It is a wrong, differ- ing only in degree, but not in its essence, from the former case, 1 As to revocation of authority by the Mr. Parsons in his work on contracts. death of the principal, see ante, p. 87, 1 Pars. Cont. (6th ed.) *67, note v. See, and note. however, Story on Agency, § 264, note. *The law of this case is doubted by CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES, 405 to state as true what the individual making such statement does not know to be true, even though he does not know it to be false, but believes without sufficient grounds that the statement will turn out to be correct. And if that wrong produces injury to a third person who is wholly ignorant of the grounds on which such belief of the supposed agent is founded, and who has relied on the correctness of his assertion, it is equally just that he who makes such assertion should be personally liable for its conse- quences.” The same judge, in continuation, remarked that on examina- tion of the authorities the court was satisfied that all the cases in which the agent has been held personally responsible will be found to arrange themselves under one or other of these three classes. The present case was distinguished from all these authorities. Here the agent had in fact full authority originally to contract, and did contract, in the name of the principal. There is no ground for saying that in representing her authority she did any wrong whatever. There was no mala fides on her part— no want of due diligence in acquiring knowledge of the *revocation, no omission to state any act within her knowl- [802*] edge relating to it, and the revocation itself was by the grace of God. “The continuance of the life of the principal was, under the circumstances,” said the same judge, “a fact equally within the knowledge of both contracting parties. If, then, the true principle derivable from the case is that there must be some wrong or omission of right on the part of the agent in order to make him personally liable on a contract made in the name of his principal, it will follow that the agent is not respon- sible in such a case as the present.” And to this conclusion the court came. Some light is thrown upon the latter remarks by an observation made by the same learned judge in the course of the argument: “The question is this, whether where an agent con- tracts in the name of a principal, and it turns out afterwards that there is no principal, and there is no fraud in the case, the agent is liable as the principal.” The judgment of the court was also supported by a reference to the ordinary case at common law of a wife who makes a contract in the lifetime of her husband with- out authority. This case was referred to in argument in a subse- 406 [Book MI. RIGHTS, ETC., ARISING OUT OF THE CONTRACT. quent case (c), when Chief Justice Jervis remarked, that there was no representation at all by the defendant (Ilbery), and that the plaintiff was misled by circumstances equally without the knowledge and beyond the control of both parties. From the above judgment it is clear that the court considered that all cases in which an agent has been rendered liable for mis- representation of authority, viz.,assuming to act as agent without authority, may be reduced to some one or other of the three classes following: 1. Where the agent has made a fraudulent misrepresentation. x 2. Where he has no authority, and knows it, but nevertheless makes the contract as having such authority. 3. Where, acting as agent under a bond fide belief that he has authority, he omits to give to the other contracting party such information as would enable that other equally with himself to judge as to the authority under which he pro- posed to act. Secondly, the fact that a person assumes to act as agent owing to an honest mistake, is not any ground to free him from liability. The test, in the opinion of the court, whether a person whose (c) Randall v. Trimen, 18 C. B. 786. 1Mr. Bigelow, in his collection of Leading Cases on Torts, says that ‘‘ it is settled law that if a person honestly assume to act for another in respect of a matter over which he has no authority, he renders himself liable to an action; the action bemg sometimes said to be for the breach of an implied warranty of authority, and in others for a false representation.” Big. Lead. Cases on Torts, p. 22, citing Collen v. Wright, 8 Ell. & B. 647; Randell v. Trimen, 18 C. B. 786; Cherry v. Colonial Bank, L. R. 8P.C. App. 24; Pow v. Davis, 1B. & S. 220; Spedding v. Nevill, L. R.4C. P. 212; Godwin v. Francis, L. R. 5 C. P. 295; Richardson v. Williamson, L. R. 6 Q. B. 276; White v. Madison, 26 N. Y. 117, 124; Jefts v. York, 4 Cush. 871; 8. C. 10 id. 392; Bartlett v. Tuck- er, 104 Mass. 336; Johnson v. Smith, 21 Conn. 627; Noyes v. Loring, 55 Me. 408; McCurdy v. Rogers, 21 Wis. 197, 202. In Baltzen v. Nicolay, 53 N. Y. 467, the better opinion is said to be that the ground of liability rests upon an implied warranty of authority. See, however, Noyes v. Loring, 55 Me. 408. For a general discussion of the doc- trine of deceit, see Bigelow’s Lead. Cases on Torts, pp. 1-72, and especially pp. 20-42, where the cases, English and American, will be found well collected and considered. In the case of a public agent, where his authority, or that of his principal, to contract, is derived from a public stat- ute, the party contracted with, is pre- sumed to know the limitations of such authority; and the doctrine that an agent by contracting for his principal, affirms his authority, does not apply. McCurdy v. Rogers, 21 Wis. 197. CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 407 assumption of authority was due to an honest mistake is liable *for the consequence of his want of authority is, [803*] whether or not he has stated as true what he did not know to be true, omitting at the same time to give such information to the other contracting party, as would enable him equally with himself to judge as to the authority under which he proposed to act. In Polhill v. Walter (d), which was decided in 1832, an action was brought against the defendant for falsely, fraudulently and deceitfully representing that he was authorized to accept a bill of exchange by procuration. A bill was presented for acceptance at the office of the drawee, when he was absent. The defendant, who lived in the same house with the drawee, being assured by one of the payees that the bill was perfectly regular, was induced to write on the bill an acceptance as by the procuration of the drawee, believing that the acceptance would be sanctioned, and the bill paid by the latter. The bill was dishonoured when due, and the indorsee brought an action against the drawee, and on proof of the above facts was nonsuited. The indorsee then sued the defendant. At the trial the jury negatived all fraud in fact, and found a verdict for the defendant according to the direction of Lord Tenterden, leave being reserved to enter a verdict for the plaintiff if the court should be of opinion that he was entitled thereto. The verdict was directed to be so entered for the plaintiff, formation or otherwise, is fully informed. 1S8ee Aspinwall v. Torrance, 1 Lans. of the authority possessed or claimed 881; Newman v. Sylvester, 42 Ind. 106. In Newman v. Sylvester, supra, the rule is laid down as follows: ‘‘One as- suming to act as agent for another with- out authority, does not necessarily render himself liable. It is when he knowing- ly or carelessly assumes to act without being authorized, or conceals the true state of his authority, and falsely leads the party with whom he thus contracts to repose in his authority, that he may be liable. If he enters into the contract in the name and as the agent of another, and does it honestly, fully dis- closing all the facts touching the au- thority under which he acts, so that the one contracted with, from such in- by him, he is not liable on the ground of deceit or for misleading the other party. It is material in such cases that the party complaining of a want of au- thority in the agent should be ignorant of the truth touching the agency.- If he has a full knowledge of the facts, or of such facts as fairly and fully put him upon inquiry for them, and he fails to avail himself of such knowledge, or the means of knowledge reasonably ac- cessible to him, he cannot say that he was misled, simply on the ground that the party assumed to act as agent with- out authority, in the absence of fraud.” (d) 3 B. & Ad. 114, 408 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL the court holding that the defendant had made himself liable on the ground that he had made a representation knowing it to be untrue, and which was intended or calculated from the mode in which it was made to indnce another to act upon it to his damage, such representation being a fraud in law. The court relied on the fact that the defendant knew his representation to be untrue. It was said in the course of the judgment by Lord Tenterden, “Tf the defendant had had good reason to believe his representa- tion to be true, as for instance, if he had acted upon a power of attorney which he supposed to be genuine, but which was in point of fact a forgery, he would have incurred no liability, for he would have made no statement which he knew to be false.” This is merely an ob¢¢er dictum at variance with subsequent authorities (e). Randall v. Trimen (f), decided in 1856, was an action for a false and fraudulent misrepresentation. The declaration stated that the defendant, who was employed as an architect by [804*] A. *and others to superintend the building of a church, falsely and fraudulently represented and pretended that he was authorized by A. to order, and did order, stone of the plaintiffs for the building of the said church, for and on account of A., and that the plaintiff, relying on that representation, and believing that the defendant had authority from A. to order the stone on his account, delivered the same, and it was used in building the church; whereas the defendant was not, as he well knew, authorized to order the same. There was another averment that A., refusing to pay for the stone, the plaintiff, trusting in the defendant’s rep- resentation, sued A, for the price, but failed in the action, and had to pay the cost. Mr. Justice Crowder, before whom the cause was tried, told the jury that if they believed that the defend- ant represented that he had the authority of the person named to order the stone in his name, and that that representation was un- true, the plaintiffs were entitled to recover the price of the stone, and also the whole taxed costs of the former action. A rule fora new trial was discharged. It was argued in support of the rule. that the defendant, being honestly mistaken, could not be held liable for misrepresentation. The Lord Chief Justice, however, intimated that such a view was wrong, and distinguished Smout (e) See Godwin v. Francis, L.R.5C. (f)18C. B. 786. P. 295; and Randall y. Trimen, infra. CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIRS. 409 v. Llbery (g),on the ground that the defendant in that case had made no representation at all. (b.) Where an agent contracts in his own name. Where an agent enters into a contract in his own name, he is prima facie liable upon that contract, and the question arises whether parol evidence is admissible to relieve the agent of this prima facie liability. It may be laid down generally that, wherever an agreement is (g) 10M. & W. 1. 1See Bigelow’s Lead. Cases on Torts, p. 22. 2See Guernsey v. Cook, 117 Mass. 548. Where words are affixed to the name of a party on a contract which may be either descriptive of the person, or in- dicative of the character in which he contracts, prima facie they are descrip- tive of the person only; but the fact that they were understood as determin- ing the character in which the party contracted may be shown by extrinsic evidence. But the burden of proof rests upon the party seeking to change the prima facie character of the contract. Pratt v. Beaupre, 13 Minn. 187. Whether the agent binds himself per- sonally or not is always a question of the intention and understanding of the parties. Worthington v. Cowles, 112 Mass. 30. To relieve an agent, a note broker, from liability upon an implied warranty of the genuineness of a prom- issory note sold by him, which after- wards proves to be forged, the transac- tion must have been such that the pur- chaser understood, or ought as a reason- able man to have understood, that he was dealing with the principal. Worth- ington v. Cowles, supra. If an agent engages expressly in his own name to pay a sum of money or perform other obligations, he is person- ally responsible in such engagement, although he describe himself as agent, and be duly authorized by the principal to enter into such engagement on his behalf, and although he might have avoided such personal liability by acting in the name of the principal. Sim- onds v. Heard, 23 Pick. 120. See, also, Mills v. Hunt, 20 Wend. 481; Waring v. Mason, 18 id. 425; Kirkpatrick v. Stainer, 22 id. 255; Taintor v. Prender- gast, 3 Hill, 72. Thus, where a committee chosen by a town to rebuild a bridge, entered into a contract not under seal, for that pur- pose, in which, after describing them- selves as- a committee of such town, “said committee’? agreed to pay the contractor a, certain sum when the work should be completed, it was held that the members of the committee were per- sonally liable on such contract. Sim- onds v. Heard, supra. An agent of an insurance company, who, on delivering a policy of fire insur- ance to a broker, receives a check from him for the premium, and agrees not to send the check to the company until it can be ascertained whether the policy is satisfactory to the broker's principal, is liable for breach of such agreement, although he receives nothing for his services in the transaction, and the broker, on ascertaining that the policy is not satisfactory, does not tender the policy back. Dobson vy. Jordan, 124 Mass. 542. See the subject of the personal liabil- ity of the agent when he contracts in his own name considered ante, p. 176 et seq., and notes, 410 [Boo mI. RIGHTS, ETC., ARISING OUT OF THE CONTRACT. made, parol evidence may be given to show that one or both of the contracting parties were agents for other persons, and acted as such agents in making the contract so as to give the benefit of the contract on the one hand to, and charge with liability on the other, the unnamed principal; and this whether the agreement be or be not required to be in writing by the Statute of Frauds.? This evidence in no way contradicts the written agreement. It does not deny that it is binding on those whom, on the face of it, it purports to bind, but shows that it also binds [305*] *another, by reason that the act of the agent, in signing the agreement in pursuance of his authority, is in law the act of the principal (A).? In other words, where an agent contracts in his own name, parol evidence is admissible to charge the princi- pal, but not to discharge the agent, except in the cases to be noticed hereafter. Norton v. Herron (i), 1825, was an action for breach of the following agreement: “Memorandum of anagreement ... . between George Herron (the defendant) on behalf of Edward Barron, of the one part, and J. Norton of the other . . . . the said G. H. doth hereby agree to execute a lease . . . . to hold from.” The tenant in possession refused to quit, and the plaintiff could not obtain the lease. “It is said,” remarked Chief Justice ! Weston v. McMillan, 42 Wis. 567. See post, p. 379. (h) Per Cur. in Higgins v. Senior, 8 M. & W. 844. 2 See Eastern R. R. Co. v. Benedict, 5 Gray, 561, and cases there cited; Bank of B. N. A. v. Hooper, id. 567; Taintor v. Prendergast, 3 Hill, 72; Stowell v. Eldred, 89 Wis. 614; Washburn v. Fletcher, 42 id. 152; Weston v. McMil- lan, 42 id. 567; Chandler v. Coe, 54 N. H. 561; Coleman vy. First Nat. Bank, 53 N. Y. 388; Beckham vy. Drake, 9 M. & W. 79; 2 Kent’s Com. *631; Smith on Contracts (6th ed.), *406, note. See, also, Blakely v. Bennecke, 59 Mo. 193. The case of bills of exchange is an exception which stands upon the law merchant, and promissory notes another, for they are placed on the same footing by the Statute of Anne. Parke B., in Beckham v. Drake, supra; Bank of B. N. A. v. Hooper, supra; Chandler v. Coe, supra; Anderton v. Shoup, 17 Ohio St. 125, and cases there cited; ante, pp. 176, 186, and notes. The defendant is not, however, when sued by the principal in his own name, by the mere form of the action to be cut off from any equities he may have against the agent. Taintor v. Prender- gast, supra. ‘Where a principal carries on business in the name of his agent as a business name, the principal is liable upon a con- tract made by his agent for him in the agent’s name, whether it is verbal or written; and if written, whether it is negotiable or not, and whether the agent disclosed his agency or not. Chandler v. Coe, 54 N. H. 561. () 1C. & P. 648, CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 411 Best, “that as the defendant entered into the contract on behalf of Barron, therefore the action should be brought against Barron. The case of the deed (7) is stronger than this; but the last case cited (£) was that of a simple contract. In that case, it was held that the word solicitor was mere description, and I cannot dis- tinguish between that case and the present; and I am of opinion that the agreement is binding on the defendant. The cases of brokers are different, because there the fact of agency is known to every one; but, in this case, the man, after describing himself as agent, goes on to contract in his own name.” The case of Wilson v. Hart (1), 1817, has caused some con- fusion by being referred to as one of the earliest cases illustrating the liability of agents. The decision, in that case, is one upon the liability of undisclosed principals only. The marginal note is quite misleading. In Jones v. Littledale (m), decided in 1837, the question was definitely raised. This was an action for non-delivery of hemp. The defendant’s brokers at Liverpool sold hemp by auction at their rooms, and gave the following invoice: “-—— Jones. Bought of J. and H. Littledale. Sixty-four bales of hemp. . . . Settled, Nov. 26.” (Signed by defendant’s clerk.) It was argued that parol evidence was admissible not only to charge a party not mentioned in the contract, but also to exonerate the seller named on proof of his agency. Such evidence was hed not to be admis- sible to free the defendant from liability. *In a considered judgment of the court, it was observed [306%] by Lord Denman: “There is no doubt that evidence is admissible, on behalf of one of the contracting parties, to show that the other was an agent only, though contracting in his own name, and so to fix the real plaintiff; but it is clear that if the agent contracts in such a form as to make himself personally responsible, he cannot afterwards, whether his principle were or were not known at the time of the contract, relieve himself from that re- sponsibility.” It was observed by the court, in Higgins v. Senior (0), that the decision in this case might be supported on the ground that the agent really intended to contract as principal. (j) Appleton v. Binks, 5 East, 148. (m) 6 Ad. & El. 486, (k) Burrell v. Jones, 3 B. & A. 47, (0) 8 M. & W. 845. (2) 7 Taunt. 295. 412 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIT. Jones v. Littledale was commented upon in Holding v. Elliott (_p), in which case, however, the point was whether an invoice was in itself a contract, or merely evidence of a contract. In the latter case, the jury found that the real contract was not contained in the invoice; and the court decided that a mere invoice is not itself a contract, so as to exclude parol evidence to the effect that the name stated as vendor is, in fact, not that of a contracting party. “ Tt is said,” remarked Baron Martin, “that it is difficult to dis- tinguish this case from Jones v. Littledale; it may be so, but it seems to me a mistake pervades that judgment. It supposes that if there be a parol contract which does not satisfy the Statutes of Fraud, an invoice afterwards sent becomes the contract.” Baron Channell distinguished the latter case, on the ground that the sale there was by broker and by auction, that there was evidence of custom at Liverpool to contract as principal, in order to insure the money passing through their hands. He also thought that the decision in that case might be supported on the ground (sug- gested by Mr. Justice Coleridge) that, as brokers, the defendants, by their dealing, undertook to deliver. In. Weidner v. Hoggett (q), which was decided in 1876, the plaintiff had refused to sign a charter-party without an under- taking from the charterers that there should be no undue deten- tion of his ship. The defendant, who was a clerk employed to arrange the terms for loading, accordingly gave the following undertaking: ‘I undertake to load the ship in ten colliery work- ing days, on account of Bebside Colliery, W. 8. Hoggett.” Upon a claim being made by the captain for demurrage, the defend- ‘ant denied liability, but offered a sum in satisfaction [807*] *The jury found that the contract was between the captain and the defendant, that there was sufticient consideration for it, and that the contract was with the defendant personally. The court held that the admission and contract fully sustained the findings of the jury. In Magee v. Atkinson (r), 1837, evidence of usage to exonerate an agent from personal liability was rejected. The defendants were “sharebrokers, one of whom, T., sold to the plaintiff, through his broker, §., fifty South Western "Railway shares. An entry “of this sale was made on the defendants’ books as of a sale from (p) 5 H. & N. 117, (g) 10. P. Div. 583, (r) 2M. & W. 440. CIar. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 413 them to S. A contract note to the same effect was sent to 8. T. afterwards sold other shares to B., and directed notes to be sent to him as well as to S. Finding that the note had already been sent to S., and in the defendant’s name, he altered the entry in the book, inserting the name of J., his principal, for fifty shares, as sellers, and directed another note to be sent to S., with J.’s name as seller. §. received the two notes together; neither note was returned, nor did the defendants wish to have the first re- turned. Mr. Justice Patteson left it to the jury to say whether the second note was a correction of a mistake in the first, and told them that if the defendants signed the contract in their own names, they were liable, although known to be agents, but rejected evidence to show that it was the custom in Liverpool to send in broker’s notes without disclosing the principal’s name. Verdict was given for the plaintiff. A rule for a new trial, on the grounds of misdirection and rejection of evidence, was refused. “The custom offered to be proved,” said Baron Alderson, “is a custom to violate the common law of England.” The court ‘held that it was properly left to the jury to say whether the sec- ond note was a disclosure of the plaintiff’s name at the time of the contract, or whether it was adopted as a variation of the contract. Higgins v. Senior (s), 1841, was an action for the non-delivery of iron. The defendants, iron merchants and iron commission agents, gave to the plaintiffs’ agent a sold note, in the following terms: “We have this day sold through you to Messrs. V. Hig- gins and Son. John Senior & Co., Wm. Senior.” Baron Rolfe, before whom the trial was heard, told the jury that if the above note was the contract the defendant was liable, *whether he intended to act for himself or the com- [808*] pany; that the defendants were notoriously agents; but if they chose to sign a contract in their own name they were respon- sible. The learned judge refused to admit evidence to prove that the contract was entered into on behalf of a third party. The jury found for the plaintiffs. A rule obtained for a nonsuit or a new trial was discharged, the court holding that Magee v. Atkinson (t) was a direct authority, and undistinguishable from this case. There is no doubt at all in principle that. an agent as such (s) 8M. & W. 834. (t) 2M. & W. 440. 414 [Boor 111° RIGHTS, ETC., ARISING OUT OF THE CONTRACT. merely contracting as agent and not as principal, makes a con- tract, from the very nature of things, between his principal and the other contracting party, and incurs no personal liability upon the contract himself. Consequently, when a contract in terms says, “Sold to A. B.” or “Sold to my principals,” and the agent signs himself as “broker,” he does not make himself by that either purchaser or seller of the goods; he is simply the broker making the contract. On the other hand, it is equally clear that the rule of law laid down in the case of Higgins v. Senior (w) is perfectly correct, namely, that where the agent of the purchaser, though really making the contract between two principals, chooses to make the contract in writing in a form in which he declares himself to be the contracting party, he thereby says, “I am to be liable” (a). Then there is another class of cases, in which an agent who enters into a written contract as agent for an undisclosed princi- pal may be made personally liable upon the contract, upon the evidence of a custom recognizing such liability (y).1 (u) 8M. & W. 834. (x) See per Hill, J., in Deslandes v. Gregory, 2 E. & E. 607; 80 L. J., Q. B. 36. (y) Humfrey v. Dale, 27 L. J., Q. B. 390; Fleet v. Murton, L. R., 7 Q. B. 126. 1Jt is a settled rule in verbal contracts that, if the agent does not disclose his agency and name hi: principal, he binds himself personally, and becomes sub- ject to all liabilities, express and im- plied, created by the contract and transaction, in the same manner as if he were the principal in interest. Wheeler v. Reed, 36 Ill. 82; Gerrard v. Moody, 48 Ga. 96; Poole v. Rice, 9 W. Va. 73; Baldwin v. Leonard, 39 Vt. 266; Mills v. Hunt, 20 Wend. 431; Baltzen v. Nicolay, 53 N. Y.470; Jones v. Atna Ins. Co., 14 Conn. 501; York County Bank v. Stein, 24 Md. 447; Beymer v. Bonsall, 79 Penn. St. 298; Séxré vy. Faurés, 15 La. Ann. 189; Mc- Clellan v. Parker, 27 Mo. 162; Cobb v. Knapp, 71 N. Y. 348; Welch vy. Good- win, 123 Mass. 71. See, also, Emerson v. Patch, 123 Mass. 541. In such case, the principal, when dis- covered, is also liable, and is entitled to sue thereon. McGraw v. Godfrey, 14 Abb. Pr. N. 8. 397; 8. C., 56 N. Y. 610; Poole v. Rice, 9 W. Va. 78; Chandler v. Coe, 54 N. H. 561; Upton v. Gray, 2 Me. 372; Jones v. Aitna Ins. Co., supra; York County Bank v. Stein, supra; Meeker v. Cleghorn, 44 N. Y. 349; Parker v. Donaldson, 2 W. & 8. 9; Youghiogheny Iron, etc. Co. v. Smith, 66 Penn. St. 340; Beymer v. Bonsall, supra; Barker v. Garvey, 83 Ill. 184; Inglehart v. Thousand Island Hotel Co., 7 Hun, 547. See post, p. 448. See, also, Young v. Hartford Fire Ins. Co., 45 Iowa, 377. But this rule does not apply to the case of a contract under seal for the conveyance of real estate. Briggs v. Partridge, 7 Jones & Sp. 339. See ante, pp. 171, 172, and notes. It is not sufficient to clear the agent CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 415 Fleet v. Murton was followed in 1873 by what must be con- sidered as a much stronger case. In Hutchinson v. Tatham (2) the action was brought on a charter-party, which was expressed to be made between the plaintiffs and the defendants, “as agents to merchants,” the defendants signing “as agents to merchants.” At the trial it was proved that in making the charter-party they had acted as agents for L., and were authorized to do so; but evidence of a trade usage was admitted, to the effect that if the plaintiffs name is not disclosed within a reasonable time after the signing of the charter-party, the broker shall be per- sonally *liable. The Court of Common Pleas held that [809*] this evidence was admissible, on the authority of Humfrey v. Dale and Fleet v. Murton. “It does seem a strong thing,” said Mr. Justice Brett, “when a person expressly says to another in a written document that he is not contracting with him as prin- cipal, and in signing that writing states the same thing again, to hold that it can be any evidence, and afterwards be established, that he is liable not as agent butas principal. . . . So strong do I consider the terms of the contract in this respect, taking the from liability, that the seller has the means of ascertaining the name of the principal; he must have actual knowl- edge. Cobb v. Knapp, supra; Ray- mond y. Crown and Eagle Mills, 2 Met. 319. ) Where the vendor at the time of the sale knows the principal, and under- stands that the buyer is the mere agent of another, and elects to give credit to the agent, making him the debtor, he cannot aftedwards resort to the prin- cipal. Raymond v. Crown and Eagle Mills, 2 Met. 319; James v. Bixby, 11 Mass. 34; Mauri v. Hefferman, 13 Johns, 58. } But where goods are sold to an agent of a known principal, the legal pre- sumption is that the credit is given to the principal, and entries on the books of the vendor charging the goods to the agent, though of much weight upon the question, are not conclusive evidence that the credit was given exclusively to him. Meeker v. Cleghom, 44 N. Y. 352; Foster v. Persch, 68 id. 400. The agent is personally liable, also, where there is no responsible principal. 2 Kent’s Com. 630; Blakely v. Bennecke, 59 Mo. 193, where the action was upon an instrument signed by a person as captain of a military company; Eich- baum v. Irons, 6 W. & 8. 67, where it was held that the members of a com- mittee, appointed by a public political meeting to provide a free dinner for the party, are personally liable for the bill. The deacons of an unincorporated re- ligious society, who are ea officio agents for the management and control of its property and effects, cannot be held personally liable on a contract made by other agents of the society, unless it is shown that the former participated in the appointment of the latter, or in some way ratified such contract. De- voss v. Gray, 22 Ohio. St. 159. (z) L. B., 8 C. P. 482. 416 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. terms in the body and the signature together, that were evi- dence offered to show that from the beginning the defendants were liable as principals, I should be prepared not to admit it; but the cases have gone very far lately as to the admissibility of evidence of custom.” The evidence of custom that is inadmissi- ble must be evidence of something inconsistent and irreconcilable with the written contract. Lastly, with respect to the admissibility of parol evidence to vary an agent’s primd facie liability upon a written contract, it may be said that an agent may show by parol evidence: (1.) That although a written instrument, purporting to bea contract, has been signed by himself and the other con- tracting party, it was not their intention in signing that it should operate as a contract (a): (2.) That although he has signed a written contract apparently as principal, he in fact signed as agent for a third party, and the plaintiff verbally agreed that he should not be responsible as principal (0): (3.) That he entered into the contract through duress,! mistake, or fraud. These exceptions to the general rule that a party may be added but not discharged by parol evidence, are in truth not exceptions at all, for the reasons stated by the Lord Chief Baron (c). The first question only will be dwelt upon here; the second has already been examined (@), whilst the third belongs rather to the general law of contracts than to that of agency. It may then be laid down as a rule that an agent may show by parol evidence, that, although a written instrument pur- [310*] porting *to be a contract has been signed by himself and the other contracting party, it was not their intention in signing that it should operate as a contract, and that the real con- tract was not in writing. This is a departure from the general rule, that, although parol evidence which goes substantially to alter a written agreement cannot be received, yet collateral circum- (a) See Rogers v. Hadley, 2 H. & C. in Ewell’s Leading Cases on Disabili- 227. ties, under the head, ‘‘ Duress.” (b) Wake v. Harrop, 30 L. J., Ex. 273; (c) Davis v. Symonds, infra. affirmed 31 id. 451; [1 H. & C. 202.] (d) See Book II., Part II., Ch. IIL, 1See the subject of duress considered sect. 2 [p. 189]. CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 417 stances may be proved by parol as a defense. Thus duress, fraud and circumvention may be proved by parol; for although they affect the validity of the agreement, they do not vary it (e). The principle has been thus stated by Baron Bramwell in Rogers v. Hadley (f): “Where the parties to an agreement have professed to set down their agreement in writing, they cannot add to it, or subtract from it, or vary it in any way by parol evidence; other- wise they would defeat that which was their primary intention in committing it to writing. But where at the time when a docu- ment, which is apparently an agreement, was signed, the parties expressly stated that they did not intend it to be a record of any agreement between them, though this is a conclusion of fact which a jury should adopt with extreme reluctance, the parties would not in such a case be bound by the document. Whether the sig- nature is or is not the result of a mistake is immaterial. The reasoning proceeds on this ground, that the parties never intended that the document should contain the terms of an agreement be- tween them” (9). In Davis v. Symonds (h), 1787, which, though not a question in agency, bears directly upon the question, a bill was brought to compel the specific performance of an agreement by which the defendants, 8., H. and O., agreed, in consideration of 800/., to con- vey certain premises to the plaintiff and H., H. being a joint con- tractor with the plaintiff Orwell as one of the defendants. The contract was made with §.; O. was a mortgagee under H. The latter had taken a conveyance from §. to himself. The plaintiff alleged that this had been done in breach of the agreement, and that O. took under H. with notice of the plaintifi’s right, and, therefore, could not affect the plaintiffs interest. The material defense was, that though this agreement purported to be an agree- ment by which H., one of the defendants, and D., the plaint- iff, were to be joint purchasers of the estate for asum *of [811*] money to be advanced by them jointly, yet that the real meaning of it was that H. should be the purchaser, and D. was only to have some intere+t in the premises by way of security for such part of the purchase-money as he should advance for H. (e) See Sugden’s Vendors and Pur- = (g) See Pym v. Campbell, infra. chasers, p. 159, 14th ed. (A) 1 Cox, Eq. Ca. 402. (f) 2H. & C. 249. 27 478 RIGHTS, ETO. ARISING OUT OF THE CONTRACT. [BOOK UI. The defendants, therefore, contended that these facts might be proved by parol evidence, and the court held that they might do so. “ At nisi prius,” said the Lord Chief Baron, “when an agree- ment is spoken of, the first question always asked is, whether the agreement is in writing; if so, there is an end of all parol evi- dence, for when parties express their meaning with solemnity, this is very proper to be taken as their final sense of the argument [?agreement]. . . . In this way only is the Statute of Frauds ma- terial, for the foundation and bottom of the objection is in the general rules of evidence. I take this rule to apply in every case | where the question is, what is the agreement? And this rule ap- plies no further than this precise question; for as often as the question is, what were the collateral circumstances attending the agreement? so often may such collateral circumstances be proved by parol evidence. There is no law which says such collateral circumstances may not be proved by parol evidence. If any of the collateral circumstances are reduced into writing, then the same rule applies to them as to the original agreement; but if not, both at law and in equity such collateral circumstances may be proved by parol.” Rogers v. Hadley (i), decided in 1863, affords a good illustra- tion of the principle under examination. The action was brought not against an agent, but by a person who professed to act as agent. The plaintiff sued upon what purported to be a written eontract, in which he, as C.’s agent, sold a quantity of bark to the defendants at a price to be subsequently ascertained by C. in a manner agreed on. At the trial it appeared that the plaintiff induced the defendants to sign a bought note, which described the plaintiff as the seller at an ascertained price per ton, by rep- resenting that this price was nominal, and that as the defendants were dealing with the crown, whose officer C. was, they would in- cur no risk. A day was fixed by the note on which a deposit of 20 per cent. was to be paid. The plaintiff had in fact bought the bark from C. by verbal contract, but had not paid for it. Before the deposit was paid, the plaintiff sent the defendants an [312*] invoice on the basis of the terms mentioned *in the bought note, and requested them to pay the deposit toC. They did so. The plaintiff afterwards treated thesaleas a sale by him- (i) 2H. & C. 227, CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 419 self as principal, at the price in the bought and sold notes, and the Court of Exchequer held that parol evidence was admissible to show that the bought and sold notes did not really contain the contract between the parties. , In an earlier case (7) it had been decided that parol evidence is admissible to show that a document, apparently a written ‘ agreement, was signed without any intention of making a present contract, but that it was to be conditional upon the happening of an event which had not occurred. The result of the authorities is, then, that an agent cannot, any more than any other contracting party, give evidence to vary the terms of a written agreement; but he, like any other contracting party, may give evidence to show that the written agreement con- tains no contract. (c.) Where the agent has recewed money. When a sum has been paid into the hands of an agent for the use of his principal, or by his principal for third parties, it may become important to consider, under what circumstances that sum, or any part of it, may be recovered from the agent person- ally. A variety of cases are possible. For instance, when the money has been paid for the use of the principal, the money may have been paid through fraud or by mistake. The agent may have transferred it to his principal, and the transfer again may have been with or without notice, or the agent by reason of the payment to him, may have done something which will be to his prejudice if the payment to him is declared void. Further, the agent may be in the position of stakeholder; or again he may claim to retain the money in satisfaction of an illegal demand; or whilst acting for an undisclosed principal, he may hold himself out to be a principal. Such are some of the possible combina- tions of cireumstances which might have to be considered before a decision could be arrived at of the question whether, in a given case, an agent was personally liable to repay money which had been handed over to him. The result of the authorities may be thus summarized: *First, as to cases where money is paid to the agent for [313%] the use of his principal. An agent to whom money has been mispaid for the use of his (j) Pym v. Campell, 6 El. & BL. 370; 25 L. J., Q. B. 277. 420 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Book m1. principal is not personally liable to the person who makes the pay- ment — (1.) Where the agent has paid over the money to his princi- pal without notice (£);7 In one case (2) where the agent or clerk in an office gave a re- ceipt for the money received, and subsequently received notice, the court held that the receipt given was the receipt of the principal. (2.) Where, before notice, the situation of the agent has been altered by anything done by him upon the assumption that the payment was good (m).? The agent will be personally liable to the third party — (1.) Where the agent pays over the money to his principal after notice; * (k) Pond v. Underwood, 2 Raym. 1210; East India Company v. Trilion, 3B. & C. 280. 1 Elliott v. Swartwout, 10 Pet. 137; Granger v. Hathaway, 17 Mich. 500; Mowatt v. McLelan, 1 Wend. 178; Carew v. Otis, 1 Johns. 418; Herrick v. Gallagher, 60 Barb. 566; La Farge v. Kneeland, 7 Cow. 456; Ripley v. Gel- ston, 9 Johns, 201; Frye v. Lockwood, 4 Cow. 454; Metcalf v. Denson, 4 J. Baxter, 565. The above rule does not extend to an agent who obtains money illegally by compulsion or extortion, though no no- tice is given not to pay it over. Ripley v. Gelston, supra; Frye v. Lockwood, supra; Metcalf v. Denson, supra. But in case of a voluntary payment by mere mistake of law, no action will lie to recover back the money. Elliott v. Swartwout, 10 Pet. 137. The question in these cases is, what amounts to a payment over? Where the account between the principal and agent has been settled and closed, the agent is discharged. The retaining by the agent of a portion of the money re- céived, with the assent of his principal, in payment of a demand against the principal, is equivalent to the whole sum’s having been paid over to the principal, and the demand of the agent satisfied by the principal. Mowatt v. McLelan, supra. Where K., as agent of B. & A., as- signed goods to L. & P., on advances from the latter; and immediately cred- ited the advances to B. & A., to whom a balance was still due from K.; and then B. & A. consented that K. should transfer this credit to his private account against B. alone, who would still owe him a balance on private account be- tween them; which was done: Held, that this was equivalent to actual pay- ment of the money; and though the goods sold for less than the advance, yet held, that K. was not liable for the dif- rence. Otherwise, if the credit had remained a simple and direct one to B. & A. La Farge v. Kneeland, 7 Cow. 456. An action will not lie against a dep- uty sheriff to recover money rightfully received by him in that character, al- though on demand of him while the money is yet in his hands, he refuses to pay it to the person to whom it belongs. Colvin v. Holbrook, 2 N. Y. 126. (1) Stephens v. Badcock, 8 B. & Ad. 304. (m) Buller v. Harrison, Cowp. 565. ? Herrick v. Gallagher, 60 Barb. 566; La Farge v. Kneeland, 7 Cow. 456. *Hearsey vy. Pruyn, 7 Johns. 179; CAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 491 (2.) Where the agent, being a stakeholder, receives a deposit, which he pays over before the conditions upon which it is to be paid are fulfilled (m);1 (8.) Where the agent retains money in satisfaction of an ille- gal claim, and pays it over to his principal, provided the maxim 7m pari delicto does not apply (0).? Where money has been paid to an agent, the courts have de- clined to allow an action to proceed against the agent for the purpose of trying the validity of a right claimed by the princi- pal (p). An agent who receives money for his principal is liable as prin- cipal so long as he stands in his original situation, and until there has been a change of circumstances by his having paid over the money to his principal, or done something equivalent to it (¢); but the mere forwarding of his account to the principal, and the plac- ing the sum to his credit, is not such a change of circumstances as would free the agent from liability (r).’ To entitle an agent to a defence of payment over to his princi- pal, it must appear that the money was received by him as agent. In Mewall v. Tonlinson (s), where the defendants, acting *for an undisclosed principal, received a greater sum than [314*] was due upon a sale of cotton to the plaintiffs, which sum was settled in account between themselves and their principals, to whom they had made advances, Mr. Justice Willes stated to the jury that every agent for the sale of goods, who has advanced money upon them and has them in his possession, has a right to sell them as owner, unless his authority is countermanded. -Hol- Herrick vy. Gallagher, 60 Barb. 566; Pet. 8. Bend v. Hoyt, 13 Pet. 263. (x) See cases, infra. But where the defendants in an exe- cution paid to the agents of the plaintiff the amount of the debt, and gave a verbal notice that it was their intention to sue out a writ of error to reverse the judgment; and this was afterwards done and the judgment reversed; but the agents of the plaintiff paid over to him forthwith the amount received, and the defendants then brought suit against the agents to recover the sum paid them: Held, that they could not recover. Bank of U. 8. v. Bank of Washington, 6 1See Carew v. Otis, 1 Johns. 418. See post, p. 319. (0) Towson v. Wilson, 1 Camp. 396, and cases infra. *See Wright v. Eaton, post, p. 329, note. (p) Sadler v. Evans, 4 Burr. 1984, (q) Per Lord Ellenborough, Cox v. Prentice, 3 M. & S. 348. (v) Ib.; Buller v. Harrison, Cowp. 565. 3See La Farge v. Kneeland, supra, note. (s) L. R., 6 C. P. 405, 422 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III." land v. Russell (t) and Shand v. Grant (a) were distinguished on the ground that in both of them the persons who dealt with the agent knew that they were dealing with one who represented an undisclosed principal, whereas the defendants in the present case, though general brokers, acted as principals. He, therefore, di- rected the jury to find for the plaintiffs. The Court of Common Pleas upheld the ruling on the ground that, as between themselves and the plaintiffs, the defendants were principals. The reason of the rule upon which this case was determined is obvious. In cer- tain cases, an agent is protected where his principal would not be protected; but this protection ought not to be extended to cases where the ageut assumes the character of a principal, and after- wards offers evidence of the fact of his agency. There is the same reason for the rejection of such evidence in this case, as there is where an agent seeks to free himself from liability upon a con- tract by evidence that he was the agent of an undisclosed prin- cipal. Where a person gets money into his hands illegally, he cannot discharge himself by paying it over to another; provided the maxim in pari delicto does not apply, he will, on the contrary, be compelled to repay it... This has been ruled by Mr. Justice Law- rence (a), by Lord Ellenborongh (y), by Lord Kenyon (2), and is well established (a). Hence, if a revenue officer seize goods as forfeited which are not liable to seizure, and take money of the owner to release them, it is no answer to an action by the owner to recover the money as paid that he has paid the money over to his superior (4). See per Parke, B., in Attlee v. Backhouse (ec). So where the wrongful seizure was made by, and the payment made to, a bailiff (d@). [315*] *In Towson v. Wilson (e), the action was to recover back money paid to parish officers by the plaintiff, who had been taken into custody as the putative father of a bastard child. This money had been paid for the purpose of meeting all (t) 1B. & 8. 424; 32 L. J., Q. B. 297. (b) Irving v. Wilson, 4 T. R. 483. (u) 15 C. B., N.S. 324. 2See the subject of duress of goods, 1See ante, p. 313, note. considered in Ewell’s Lead. Cases on (2) Anon., 1 Camp. 397, n. Disabilities, under the head, ‘* Duress.” (y) Towson v. Wilson, 1 Camp. 396. (ec) 83M. & W. 648. (z) Miller v. Aris, 1 Selw. N. P. 92. (d) Snowdon v. Davis, 1 Taunt. 359. (a) See Clark v. Johnson, 3 Bing. 424. — (e) Supra, CHAP. Iv.] LIABILITY OF AGENTS TO THIRD PARTIES. 423 future charges in respect of the child. Before all the money was expended the child died, and the defendants, the overseers, had paid over the surplus to their successors. It was ruled by Lord Ellenborough that the action lay, the contract being illegal, as it gave the parish an interest in abridging the life of the child. “When this question first came before me, on account of its nov- elty, I consulted the other judges upon it; and I found that they (including a noble friend of mine, now no more) were of the same opinion. The chief objections to the action appear to be, that the parties may be represented as in pari delicti; but that cannot be said in this instance, as the plaintiff had been arrested, and was under duress when he deposited the money with the de- fendants.” In another case (f), the plaintiff, whilst imprisoned, contracted with the defendant, who was the governor, for the purchase of an annuity. The annuity was afterwards set aside, but the defendant, when called upon to refund, claimed a sum as rent for the room which the plaintiff had been allowed to occupy whilst in prison. The governor accounted for the sum received at the quarter ses- sions. Lord Kenyon directed a verdict for the plaintiff. The gaoler had no authority by the regulations of the prison to let rooms. The ratio decidendi adopted in the case of Pond v. Under- wood (g), decided in 1705, is applicable in the present day. This case overruled Jacod v. Allen (h). It was an action by an exec- utor for money received by the defendant and owing to the testa- tor. At the trial, it appeared that before the will was found ad- ministration was granted to the testator’s sister, who gave to the defendant a warrant of attorney to receive the money in question. He received the money accordingly, and paid it over to the ad- ministratrix before any notice of the will. Lord Holt nonsuited the plaintiff, on the ground that no action lay against the defend- ant, as he had paid the money over to his principal without notice. Where an action is brought against an agent, not on the ground that the payment was made by mistake, but for the purpose of testing a right claimed by the principal, the action will *not lie. Thus it was ruled in an old case, that where a [316*] (f) Miller v. Aris, supra. (g) 2 Lord Raym. 1210. (h) 1 Salk. 27. 494 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. man receives money for another under pretense of right (¢. ¢., for tithes), the court will not suffer the principal’s right to be tried in an action against the collector or receiver, if the de- fendant can show the least colour of his right in his principal, as, for example, by having been for some time in possession (2). In Sadler v. Hvans (&), decided in 1766, the action was brought with the intention to try the right of Lady W. to a certain quit rent. Barron Perrott nonsuited the plaintiff, being of opinion that the right to an inheritance of the principal could not be tried in an action for money had and received brought against the agent. ) See Read v. Rann, 10 B. & C. 438. CIIAP. v.] RIGHTS OF AGENT AGAINST HIS [CRINCIPAL. 449 It may be only partially executed. It may not be executed. It may be so executed that the agent’s services are useful to the principal. The act authorized may be illegal. The authority may be revoked before execution — (a) by act of principal; (b) by death of principal. The amount to which an agent is entitled will, in the absence of an [express] contract or custom,' be fixed by a jury.? | When the authority has been duly executed, the agent is enti- tled to his commission, unless the services performed are illegal. 1See Suydam v. Westfall, 4 Hill, 211; Kock v. Emmerling, 22 How. 69; Glenn vy. Salter, 50 Ga. 170; Robinson v. Mor- vis, 51 How. Pr. 442. Parties in charge of gold dust as fac- tors for another, have no right to take their compensation out of the gold dust, The gold dust is to be treated as prop- erty, and their compensation must be estimated in money. McCune v. Er- fort, 48 Mo. 134. °The amount in such case must be determined on a quantum meruit. See Briggs v. Boyd, 56 N. Y. 289; Ruck- man y. Bergholz, 38 N. J. Law, 531; Glenn v. Salter, supra. In the absence of any understanding between the principal and agent as to whether the latter is to be paid for his services, the law by implication supplies the omission, holds him an agent for hire, and makes him accountable ac- cordingly. Mangum v. Ball, 43 Miss. 288. See Wood v. McCranie, 21 La. Ann. 557, 3 A broker to be entitled to his com- missions for negotiating a sale of prop- erty, must find a purchaser in a situation and ready and willing to complete the purchase according to the terms agreed on. Kimberly v. Henderson, 29 Md. 512; McGavock v. Woodlief, 20 How. 221; Mooney v. Elder, 56 N. Y. 238; Hinds y. Henry, 86 N. J. Law, 328; Cook v. Kroemeke, 4 Daly, 268; Hein- 29 rich v. Korn, id. 74; Fraser v. Wyckoff, 63 N. Y. 445; Wylie v. Marine Nat. Bank, 61 id. 415. See, also, Walker v. Tirrell, 101 Mass. 257. But it is not necessary for the broker . in an action for commissions to prove in the first instance that the person intro- duced was of sufficient pecuniary abil- ity to pay the price. On this question the burden of proof is on the defendant to prove the contrary. Cook v. Kroe- meke, 4 Daly, 263. See, however, Coleman vy. Meade, 13 Bush, 358, where the rule is laid down that if the principal rejects the pur- chaser, and the broker claims his com- mission, he must show not only that the person furnished was willing to accept the offer precisely as made, but in addi- tion that he was an eligible purchaser, and such a one as the principal was bound, as between himself and the broker, to accept. Where a party is produced and acon- tract entered into through the agency of the broker, but the contract is of such a character that the party contract- ing by the exercise of an option given him, relieves himself of the obligation to complete the purchase, and does not in fact become the purchaser, the broker js not entitled to commissions. Kim- berly v. Henderson, supra. See, how- ever, Leete v. Norton, 43 Conn. 219. When a real-estate broker under- 450 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. {Book II. The question whether the authority has or has not been exe- _cuted is, of course, one which must be decided by a reference to the facts of each particular case. The test to be applied in such eases is supplied by asking whether the agent has performed all the services for which he was employed. If the agent has done takes to furnish a purchaser, he is bound to act in good faith in presenting a person as such, and when one is pre- sented, the employer is not bound to accept him, or to pay the commission, unless he is ready and able to perform the contract on his part according to the terms proposed. Coleman v. Meade, 13 Bush, 358. A broker has earned his commission when he procures a party with whom his principal is satisfied and who actual- ly contracts for the property at a price satisfactory to the owner. Keys v. Johnson, 68 Penn. St. 42; Cooke v. Fiske, 12 Gray, 491; Simonson v. Kis- sick, 4 Daly, 148; Haines v. Bequer, 9 Phil. 51. See, also, Toombs v. Alexan- der, 101 Mass. 255; Coleman v. Meade, 13 Bush, 358. Under a written agreement of a landowner to pay a broker a certain sum if he should send or cause to be sent to the landowner a person with whom the latter ‘‘may see fit and proper to effect a sale or exchange” of the land, the broker can not recover the sum stipu- lated, without proof of a sale or ex- change of the land. Walker v. Tirrell, 101 Mass. 257. It is notnecessary that the parties toa contract for the sale of land should sign a written agreement before the broker is entitled to his commission. Barnard v. Monnot, 1 Abb. App. Dec. 108; Heinrich v. Korn, 4 Daly, 74. See, also, Ward v. Lawrence, 79 Ill. 295; Dennis v. Charlick, 6 Hun, 21. See, however, Toombs yv. Alexander, supra; Coleman v. Meade, supra. See, also, Chapin v. Bridges, 116 Mass. 105; Simonson y. Kissick, supra. But he has performed his undertak- ing when he produces a proper party ready to make the purchase at the price and terms for which he was authorized to negotiate. Moses v. Bierling, 31 N. Y. 462; Barnard v. Monnot, supra; McGavock v. Woodlief, 20 How. 221. But the broker’s services, however slight, must be the efficient cause of sale. Earp v. Cummins, 54 Penn. St. 394; McClave v. Paine, 2 Sweeny, 407; 8. C.,49 N. Y. 561; Wylie v. Marine Nat. Bank, 61 id. 415. See, also, Keys v. Johnson, 68 Penn. St. 42; Gil- lespie v. Wilder, 99 Mass. 170; Toombs y. Alexander, supra; Briggs v. Rowe, 1 Abb. App. Dec. 189; Lloyd v. Mat- thews, 51 N. Y. 124. And if the services of the broker do not accomplish a sale, and after the proposed purchaser has decided not to buy, other persons induce him to buy, the broker has no right to commissions. Earp v. Cummins, supra; Chandler v. Sutton, 5 Daly, 112. So, where the broker opens negotia- tions, but, failing to bring the customer to the specified terms, abandons them, and the employer subsequently sells to the same person at the price fixed, he is not liable to the broker for his commis- sions. Wylie v. Marine Nat. Bank, supra. If property is put into the hands of a real-estate agent to sell, he is entitled to his commissions if the sale is brought about by his advertisements or exer- tions, or if he intvoduces the purchaser or discloses his name to the seller, and through such introduction or disclosures the sale is effected, even though the sale may in fact be made by the owner. cIIAP. v.] RIGUTS OF AGENT AGAINST HIS PRINCIPAL. 451 everything he was bound to do, then it is immaterial, in the ab- sence of a contract or custom to the contrary, so far as his right to commission is concerned, that his services have been fruitless, whether this result is brought about by the conduct of his prin- cipal or by that of third parties. Tyler v. Parr, 52 Mo. 249; Jones v. Ad- ler, 34 Md. 440; Lincoln v. McClatchie, 36 Conn. 136; Sussdorff v. Schmidt, 55 N. Y. 319; Hanford v. Shapter, 4 Daly, 243, If the purchaser is found through his instrumentality, he is entitled to a com- mission, although the owner himself negotiates the sale and although the purchaser is not introduced to the own- er by the broker, and the latter is not personally acquainted with such pur- chaser. Sussdorf v. Schmidt, supra. See, also, Newhall v. Pierce, 115 Mass. 457. A general usage, however, of a sea- port that if the seller of a ship there accepts the services of a broker, who introduces him to and brings him into negotiation with the ultimate buyer, and who is ready to continue his ser- vices until a sale is effected, he shall pay the broker a commission, whether or not the sale is completed through his agency, is a reasonable usage, and binds such seller, notwithstanding his residence elsewhere and ignorance of the usage. Loud v. Hall, 106 Mass. 404. All that is requisite to entitle the broker to compensation, is that a sale be effected through his agency as its pro- curing cause. Lloyd v. Matthews, su- pra; Jones v. Adler, 34 Md. 440; Lin- coln v. McClatchie, 36 Conn. 136; Stew- art v. Mather, 82 Wis. 344; Sussdorff v. Schmidt, 55 N. Y. 319. And the broker may recover his com- missions from the party at whose re- quest the services were rendered, whether he held the legal title of the property beneficially or in trust for his wife. Jones y. Adler, 34 Md. 440. In the following cases, the agent It is not necessary that the purchaser be made known to the owner, as the broker’s customer, if he is so in fact. Lloyd yv. Matthews, supra; Hanford v. Shapter, 4 Daly, 248. See, also, Born- stein v. Lans, 104 Mass. 214. But where a real estate broker reports an offer for property to his principal without stating by whom the offer is made, and afterwards a sale of the same property is effected through another broker at the same price first reported, and to the same purchaser, and he receives a commission therefor, the first broker cannot recover in an ac- tion against the vendor for the commis- sions, unless it appears that the latter at the time of the sale was aware of the facts above stated, or that notice of the same was given him by the plaint- iff before the completion of the contract with and payment of commissions to the second broker. Tinges v. Moule, 25 Md. 480. Where several brokers are openly employed, the entire duty of the seller is performed by remaining neutral be- tween them, and he has aright to make a sale to a buyer produced by any of them, without being called upon to de- cide between these several agents as to which of them was the primary cause of the purchase. Vreeland v. Vetter- lein, 33 N. J. Law, 247. A party who has employed a broker to sell real estate, may, notwithstand- ing, negotiate a sale himself, and if he does so without any agency of the broker, he is not liable to the latter for acommission. McClave v. Paine, su- pra; Wylie v. Marine Nat. Bank, 61 N, Y. 415. 452 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II. was held to be entitled to recover, because he had performed all he had undertaken to do. These cases must not be [387*] *confounded with the cases in which, by reason of the principal’s interference, the agent is prevented from carry- ing out his authority. In Lockwood v. Levick (c), decided in 1860, the plaintiff, a commission agent, was employed by the defendant, a manufacturer, to procure orders for him upon the terms contained in a written proposition as follows: ‘We expect to receive our commission on all goods bought by houses whose accounts are opened through us.” The plaintiff introduced to the defendant a dealer, who gave an order for a large quantity of web. The defendant accepted the order, and undertook to execnte, but for want of adequate ma- chinery he was unable to complete, and the order was ultimately withdrawn. The plaintiff thereupon claimed the amount, to which he would have been entitled if the order had been executed by defendant, at the trial. The jury found that the commission was payable when the order was accepted, and that it did not de- pend upon whether it was executed or not. A rule was subse- quently granted to enter the verdict for the defendant, if the court should be ultimately of opinion that the learned judge at the trial had misconstrued the contract, or for a new trial. The rule was discharged. Erle, C. J., said: “It is urged on the part of the defendant that it would be unreasonable that he should be held liable to the payment of a commission upon an order which yielded him no profit. But here he had an opportunity of making profit. The plaintiff performed all the service for which he was employed, and the defendant had the option of delivering the goods and so making a profit. But I do not agree that the profit to the manu- facturers is to be the criterion of the agent’s right to commission.” # (c) 8C. B., N.S. 603. net profits arising therefrom, charging 1 Where the clause of an agreement, for our services such usual commissions relating to the compensation of the as are generally charged:”’ Held, that agents, was: ‘‘ We hereby agree and the agents’ commission did not depend oblige ourselves to manage the said ves+ on the profitable result of any venture sels to the best advantage, according to if they discharged their duty faithfully. our judgment, for the owner, and to Stewart v. Rogers, 19 Md. 98. pay to him or his order, from time to | Where the parties are brought to- time, as they may accrue, any and all gether, the price and terms agreed up- CHAP. V.] RIGUTS OF AGENT AGAINST HIS PRINCIPAL. 453 This view of the law, ‘that the agent’s rights are not affected by the loss or gain to his principal upon any transaction, is strictly in accordance with equity and justice. The principal must be taken to know his own business best, and if he makes a miscalculation he has no more right to visit it upon the agent than he has upon his butcher or baker. In Lara v. Hill (d), decided in 1863, the plaintiff was employed by the defendant to sell an advowson upon the terms that the commission should become due and payable upon the adjustment of terms between the contracting parties in every instance in which any information had been arrived at, or any *particulars had been given by the plaintifi’s office, not- [838%] withstanding the business might have been taken off the books subsequently. It was further stipulated that no accommo- dation that might be afforded as to time of payment or advance should retard the payment of commission. A contract of sale was arranged through the plaintiff’s agency. It was duly executed, and a deposit paid on the 14th October, 1862, the residue of the purchase-money being payable on the 31st December. The court held that the plaintiff was entitled to his commission, at all events, on the 31st December, although the full purchase-money had not been then paid. The principle laid down by a learned author with respect to the law of commissions is, that “the whole service or duty must be performed before the right to any commission attaches, either ordinary or extraordinary; for an agent must complete the thing required of him before he is entitled to charge for it. But cases miay occur in which an agent may be entitled to a remuneration for his services in proportion to what he has done, although he has not done the whole service or duty originally required! This may arise either from the known usage of the particular business, on and the contract signed, the cireum- § But where by complicity between the stance that the contract is not per- broker and the pretended purchaser the formed by the purchaser does not affect pretended purchaser had no intention the broker’s right to compensation. to fulfill the contract, the broker is not Bach v. Emerich, 3 Jones & S. 548; entitled to commission. Bach vy. Love v. Miller, 53 Ind. 294; Pearson v. Emerich, supra. Mason, 120 Mass. 53; Heinrichv. Korn, (d) 15C.B., N.S. 45. 4 Daly, 74; Leetev. Norton, 43 Conn. See ante, p. 336, note. 219. 454 RIGHTS, ETC., ARISING OUT OF TIE CONTRACT. [BOOK III. or from theentire performance being prevented by the act or neg- lect of the principal himself” (¢). It should be observed, how- ever, that the agent cannot recover commission when completion of the business undertaken is prevented by the act of the princi- pal, unless that act is wrongful.’ The question was very fully discussed by the Court of Common Pleas in Simpson v. Lamb (f), decided in 1856. This was an action by two clerical agents to recover the sum of 7502. for com- mission alleged to be due to them for negotiating (unsuccessfully) the sale of an advowson for the defendant. The defendant em- ployed the plaintiffs to offer an advowson for sale, upon an un-_ derstanding that in the event of a sale being effected through their agency, the latter should receive a commission of five per cent. upon the amount of the purchase-money. Before the plaint- iffs had sold the advowson the defendant himself soldit. The for- mer, in answer to inquiries, had informed the latter that their terms were three guineas for registering, and five per cent. upon (e) Story’s Agency, s. 329. 1 When a broker, authorized to sell at private sale, has commenced a nego- tiation, the owner cannot, pending the negotiation, discharge the broker, take it into his own hands and complete it either at or below the price limited, and then refuse to pay the commissions. Keys v. Johnson, 68 Penn. St. 42; Gil- lett v. Corum, 7 Kan. 156; Martin v. Siliman, 53 N. Y. 615. See cases cited next below. Nor if the owner employ a broker to make a sale at an agreed 1ate of com- mission, and the broker finds a pur- chaser who is willing to purchase at the price fixed, can the owner, by a refusal to sell to him, or by a sale to another, avoid the contract and escape the payment of the commission. Phelan v. Gardner, 438 Cal. 306; Kock v. Emmerling, 22 How. 69; Bailey v. Chapman, 41 Mo. 536; Barnard v. Minnot, 1 Abb. App. Dec. 108; Vree- land v. Vetterlein, 33 N. J. Law, 247; Mooney v. Elder, 56 N. Y. 238. See, also, Cooke v. Fiske, 12 Gray, 491; Briggs v. Rowe, 1 Abb. App. Dec. 189; Mosesv. Bierling, 31 N. Y. 462; Bach v. Hill, 62 Ill. 216; Lane v. Albright, 49 Ind. 275; Bennett v. Kidder, 5 Daly, 512. As to the effect of a custom or usage that unless the brokers earn their com- mission by completing the negotiations, they are not be paid anything, see Dur- kee v. Vt. C. R. BR. Co., 29 Vt. 142, per Redfield, C. J. Nor can one, representing himself as the owner of real estate, who employs an auctioneer to sell the same under an agreement that in the event of a sale the auctioneer shall receive for his ser- vices a percentage on the amount bid, after a sale by the auctioneer avoid pay- ing him for his services because the purchaser refuses to take the property, owing to a real or alleged defect in the title. Middleton v. Findla, 25 Cal. 76. See, also, Budd v. Zoller, 52 Mo. 238. See, however, Blankenship v. Ryer- son, 50 Ala. 426. (f) 17 C. B. 608; 25 L. J., C. P. 603, CHAP. V.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL 455 the amount of the purchase-money, payable when the contract of sale was completed. The payment of the registration *fee was waived. There was no evidence of any specific [3839*] endeavours on the part of the plaintiffs to sell the advow- son, or of their having incurred any expense in reference to it. At the trial Mr. Justice Cresswell ruled that the defendant was justitied in selling the living himself; that it was fair to presume that the large amount of commission was taken in successful cases as a sort of compensation for the risk incurred; that the plaintiffs could not recover anything unless they sold; and that what was done by the defendant did not amount to a wrongful revocation of the plaintiff’s authority to sell, He thereupon directed a non- suit. Chief Justice Jervis said: “I take it to be admitted that it is not competent to a principal to revoke the authority of an agent without paying for labour and expense incurred by him in the course of his employment. The right of the agent to be reim- bursed depends upon the terms of the agreement. A general em- ployment may carry with it a power of revocation on payment only of a compensation for what may have been done under it; but there may be also a qualified employment under which no payment shall be demandable, if countermanded. In the present case, I think the evidence showed that the employment was of that qualified character — like the case of the house agent or the ship- broker — the plaintiffs undertaking the business upon an under- standing that they were to have nothing if they did not sell the advowson, taking the chance of the large remuneration they would have received if they had succeeded in obtaining a purchaser.” And it was said by Mr. Justice Crowder: “If it could be shown that the agent is, by the wrongful act of the principal, prevented from carrying out the work on which he is employed, he would be entitled to a reasonable remuneration for what he had done.” A rule nis? for a new trial was discharged. Green v. Lucas (g) was decided in 1876. The defendant author- ized the plaintiffs, who were mortgage agents, to procure for him on loan the sum of 20,0002. upon the security of certain leasehold property, and undertook upon their obtaining that, or any other amount agreed upon, to pay them a commission of 21. per cent. upon the amount so procured by them, and a survey fee of 1052. (g) 31 L. T. Rep., N.S. 731; affirmed, 33 id. 584, 456 RIGHTS, ETC., ARISING OUT OF TIE CONTRACT. [BOOK It. Three days before this agreement was entered into, the defendant furnished the plaintiffs with two valuations of the property, each of them setting the value at about 37,0007. One of them [840*] assumed that the lease “contained no arbitrary or *restrict- ive clauses, but only the usual covenants.” Relying upon these valuations, the plaintiffs applied to a society for a loan. The directors agreed to advance it, “subject to the title and all other questions proving to be satisfactory.” When the lease was examined it was discovered to contain a proviso which prevented the direct- ors advancing the money. The plaintiffs thereupon brought their action, and the jury found in their favour. A rule to enter the verdict for the defendant or to enter a nonsuit was discharged by the Court of Common Pleas, whose judgment was upheld by the Court of Appeal. In the court below, Lord Coleridge based his opinion upon the authority of Prickett v. Badger (h) and Green v. Bartlett (2), holding that the defendant was liable to pay a reasonable remuneration, inasmuch as the plaintiffs had done all they were bound to do, but the negotiation had gone off in conse- quence of the defendants having concealed a material fact. In the Court of Appeal the Lord Chancellor (Cairns) said: “ It appears to me that the plaintiffs had done everything which agents in this kind of work are bound to do, and it would be forcing their liability if they were to be held answerable for what happened after. If the contracts afterwards were to go off from the caprice of the lender, or from the infirmity in the title, it would be imma- terial to the plaintiffs.” His lordship also pointed out that it was immaterial, so far as the plaintiffs were concerned, whether the society was or was not justified in refusing to advance the money. The opinion expressed by Bramwell, B., and Blackburn, J., that the word “procure” in the contract meant to procure the lender and not the money, was the opinion upon which both the courts acted. Green v. Reed (k), decided in 1862, was an action to recover 2002. as commission for negotiating and procuring a loan for the ‘defendant. The plaintiff had procured an insurance company to advance 20,0007. on real security, and so far as the plaintiff and the company were concerned the negotiation was complete. The advisers of the company, however, deemed the security invalid, and they declined to carry out the loan. The defendant eventu- @)10.B,N.8.296. (i) 82. J.C. P2861, () SF. & F226, CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 457 ally obtained the loan from another company. ‘The plaintiff's case was that the commission was to be paid if the loan was procured by him. Prickett v. Badger (1) was cited *in [841*] support of his claim. There it was held that where an agent employed for an agreed commission to sell lands at a given price, succeeds in finding a purchaser at the stipulated price, but the principal declines to sell, and rescinds the agent’s authority, the agent is entitled to reasonable remuneration for his work and labour. The jury were directed that the question involved de- pended upon the contract. A verdict for 907. was found for the plaintiff. So, in an action by an agent who had been employed to procure a loan, and had procured it, it was ruled that he was entitled to recover, not necessarily the full commission, but a reasonable remuneration, in case the loan was not accepted and received by his employer (m). In considering whether an agent is entitled to commission for the introduction of a purchaser or capital, the question is whether the purchase or advance was the result of that introduction, or of an independent negotiation between the parties. Causa proxima is not the question; the agent must show that some act of his was the causa causans.' In Tribe v. Taylor (n) the defendant agreed to give the plaintiffs a commission of 5 per cent. on pur- chase-money or on capital introduced into his business. They introduced a person who advanced 10,000/., and who in the course of afew months entered into an agreement of partnership, on making a further advance of 4,0002. by way of capital to the con- cern. Commission on the former sum was duly paid; but the court held, in an action to recover commission on the 4,0002., that the plaintiffs could not recover, inasmuch as the latter was not made in consequence of their negotiations (0). The principles of law applicable to claims for commission where the agent’s work is useless, were laid down fully by Lord Ellenborough in Denew v. Deverell (p), decided in 1813. The plaintiff, an auctioneer, employed by the defendant to sell for him a leasehold house, made out the conditions of sale, omitting the (1) 1C. B., N.S. 298. (n) 1C. P. Div. 505. (m) Topping v. Healey, 3 F. & F. (0) See Bayley v. Chadwick, 37 L. T., 825. N. 8. 740. 1See ante, p. 326, note. (~) 8 Camp. 451. Ar8 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II. usual proviso that the vendor was not to be called upon to show the title of the lessor. Owing to this omission, the defendant had been put to great expense, the Court of Chancery, upon a bill being filed by the vendee, holding that the vendor was bound, in the absence of the proviso, to show the title of the lessor. [842*] This he could not do, and the vendee recovered back *his deposit. In the present action the auctioneer claimed 24 per cent. commission upon the sum for which the lease was sold. Evidence was given that it had been the constant usage of auc- tioneers, when employed to sell leasehold property, to insert such a proviso in the conditions of sale. Lord Ellenborough directed the jury that, if the plaintiff's services are found to have been wholly abortive, he is entitled to recover no compensation. “By the omission,” said his lordship, “the defendant has the house thrown back upon his hands, with expensive litigation. It is no answer that the particulars were shown to him, and that he made no objection to them. I pay an auctioneer, as I do any other pro- fessional man, for the exercise of skill on my behalf which I do not myself possess; and I have a right to the exercise of such skill as is ordinarily possessed by men of that profession or business. If, from his ignorance or carelessness, he leads me into mischief, he cannot ask for a recompence, although, from a misplaced con- fidence, I followed his advice without remonstrance or suspicion.” ? The jury found for the defendant. Lord Ellenborough said again, in White v. Chapman (q), de- cided in 1815, that where an agent was sued for money had and received for his principal, he would be entitled to deduct the amount of his commission on sales, unless it appeared “that he had grossly misconducted himself as agent.” So it was ruled by Chief Justice Best (7), that if the duties of a sworn broker are executed in such a manner that no benefit results from them, he is not entitled to recover either his commission or a compensation for his trouble. So, too, the Court of Common Pleas decided (s), that in considering an attorney’s bill the jury were at liberty to discard an item for work entirely useless. So an auctioneer em- ployed to sell an estate cannot claim commission if the sale becomes nugatory by reason of his default (¢). 1See post, p. 357. (r) Hammond v. Holiday, 10. & P.384. (q) 1 Stark. 113. " (s) Shaw v. Arden, 9 Bing. 287. (é) Denew v. Deverell, 3 Camp. 451. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 459 If the agent’s work is not entirely useless, he will be entitled to claim on aguantum meruit, in the absence of any special contract or custom to the contrary. In Hammond v. Holiday (u), heard at the Guildhall, 1824, where a broker’s claim for commission was disallowed, Chief Justice Best said: “It is the broker’s duty to draw up the bar- gain in*teliigibly, and if he dves not, he is entitled to noth- [843*] ing. I agree with the law laid down in the case ected (a). There the contract was clear and intelligible, and the broker was allowed a compensation, he having done all that he was bound to do. But has this broker done all that he was bound to do?. . . If the defendant has received advantage from the acts of the broker, then the verdict should be for the plaintiff with propor- tionate compensation; but if the business has been performed in so slovenly a manner that no advantage has been derived from it, then the verdict must be for the defendant.” In Dalton v. Irvine (y), the plaintiff, a broker, was employed by a shipowner to procure a charter-party for one of the defend- ant’s vessels. In a charter-party which was drawn up, the plaintiff inserted as terms of freight one guinea instead of five guineas per ton, whereupon the defendant refused to sign, and the bargain went off between the defendant and the intended charterer. The plaintiff had incurred expenses, and had been desired by the de- fendant to use all expedition in the matter. In an action brought to recover commission, with counts for money paid, work and labour, Chief Justice Tindal ruled that commission could not be recovered as the subject-matter out of which it was to arise, viz. freight, was never obtained, and left it to the jury to say, first, whether there was any particular contract in the case to take it out of the ordinary rule; and, secondly, whether the defendant, by desiring the plaintiff to use all expedition, induced the plaintiff to lay out the money before the usual time; and, thirdly, whether, 1 See ante, p. 336, and note. or exchange,” without proof that such There can be no recovery by a broker negotiations were rendered fruitless by on a quantum meruit, for services in the fault of the landowner. Walker vy. negotiations for a sale or exchange, Tirrell, 101 Mass. 257, where the agreement was to pay a cer- (wu) 1C. & P. 884. tain sum if the broker should send a (x) Haines v. Busk, 5 Taunt. 521. person with whom the landowner (y) 4C. & P. 289, “may see fit and proper to effect a sale 460 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. when the charter-party was presented to him for signature, the de- fendant had a justifiable cause for refusing to sign it, on the ground that it was not the contract he was entitled to expect. His lordship directed them, that “in ordinary cases, if the charter-party is not carried into effect, the broker would not be entitled to recover for the incidental expenses, for they would follow the same course as the claim for the work and labour which, in such a case, has become altogether useless to the principal, and that, if the defendant was right in rescinding the contract, that would be an answer to the claim for expenses. A verdict was found for the defendant. In a case where a solicitor’s charges in respect of bills of costs for business done as solicitor (z¢) were disallowed, Lord [844*] Eldon *decided that a confidential agent in that character, and not simply as a solicitor, is bound to keep regular accounts, and where such an agent neglected to do so, or to pre- serve vouchers against himself, though he had preserved those in his own favour, his lordship, on the ground of gross neglect of duty, would not allow a charge in respect of bills of costs in respect of work done as a solicitor.? (z) White v. Lady Lincoln, 8 Ves. 363. 1 Where an agent is unfaithful to the trust and abuses the confidence reposed in him by his principal; where he mis- conducts himself in the business of his agency, he may be deprived of commis- sion and compensation. Sea v. Carpen- ter, 16 Ohio, 412; Vennum v. Gregory, 21 Iowa, 326; Cleveland & St. L. R. R. Co. v. Pattison, 15 Ind. 70; Porter v. Silvers, 35 Ind. 295; Sumner v. Reich- eniker, 9 Kan. 320. Thus, where goods are 2ntrusted to an agent to be sold on commission, the proceeds to be accounted for month- ly; if he sells the goods and converts the proceeds to his own use, rendering no account, he will be entitled to no commissions. Brannan v. Strauss, 75 Ill. 284; Sumner v. Reicheniker, supra. See, also, Segar v. Parvish, 20 Gratt. 672. So, where a party purchases grain for another under an agreement that he is to receive a certain commission therefor, he is not entitled to the commission for making the purchase if he fails to de- liver the grain or appropriates it to his own use. Myers v. Walker, 31 Ill. 354, The neglect of the agent to keep ac- curate acounts of his dealings, where such neglect involves no gross careless- ness or dishonesty on his part, may, how- ever, be explained by the agent, and if satisfactorily explained, he will not lose kis compensation. Jones v. Hoyt, 25 Conn. 375. In Sampson v. Somerset Iron Works, 6 Gray, 120, it was held that, under a written contract to perform, for a fixed quarterly salary, all the duties of gen- eral agent of a manufacturing corpora- tion, one of which, specified in the con- tract, was to render monthly accounts of the funds in his hands, a failure so to render accounts would not defeat his CHAP. V.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 461 An agent who confounds his principal’s property with his own, not only will not be entitled to any commission, but will be bound to account for the whole property, except what he can prove to be his own (a).! The rules which provide that an agent is not entitled to com- mission, either where his authority is revoked before execution, or where the services performed are not those authorized,’ are both illustrated by the case of Toppin v. Healey (5), decided by the Common Pleas in 1863. In that case, the plaintiff was em- ployed by the defendant to negotiate a loan on the terms that he was to be paid commission if he procured the loan, but none if he did not. Before the plaintiff had done anything in the matter the defendant wrote to him varying the terms on which he would accept the loan. The plaintiff tried to obtain it on the latter terms. He could not succeed, but he had the offer of a loan on the terms of the first authority. This the defendant refused to accept. The court held that the plaintiff could not claim any commission, as the first authority was revoked, and as he did not procure the loan under the substituted terms. When an agent is employed to sell, he cannot sell to a com- pany in which he is interested or a shareholder; ? if he does, he is not entitled to any commission from his principal in respect of the sale. Nor will the fact that the seller agrees to abide by the sale make any difference in this respect. To hold otherwise would right to recover his salary while he re- mained their agent. The stipulation for rendering accounts was considered as one the breach of which would give an action only to the injured party, and not as a condition precedent. (a) Lupton v. White, 15 Ves. 482. 1See Bartlett v. Hamilton, 46 Me. 435; Farmers’ & Mechanics’ Bank v. King, 57 Penn. St. 202; Mass. Life Ins. Co. v. Carpenter, 2 Sweeney, 734; Cartmell v. Allard, 7 Bush, 482; Pinckney v. Dunn, 2 Rich. (8. C.) 314. 2 Where, by a special contract, a bro- ker is not to be paid commissions unless he sells the property at a stipulated price, the sale by him at such a price is a condition precedent to his right to compensation, unless pending the nego- tiations and while his agency remains unrevoked, the owner consents to a sale at a different price. Jones v. Adler, 34 Md. 440. See Stewart v. Mather, 32 Wis. 344, The sale must be such as the agents were authorized to make, or in the ab- sence of proof of a ratification, they will not be entitled to the commissions agreed on. Hoyt v. Shipherd, 70 II. 309; Ward v. Lawrence, 79 id. 295, See, also, Frazer v. Wyckoff, 63 N. Y. 445; Carman v. Beach, id. 97; Coffin v. Coke, 6Thomp. & C.71;8.C., 3 Hun, 396, (b) 11 W. R. 466. 3 Francis v. Kerker, 85 Ill. 190. See ante, p. 272, note. 462 [Book mt RIGHTS, ETO., ARISING OUT OF THE CONTRACT. be a departure from the general principles governing such a case, that a person cannot in the same transaction buy in the character of the principal, and at the same time charge the seller as his agent. Salomons v. Pender (c) is an authority upon this point. There an agent who was employed to sell land sold it to a com- pany in which he was interested as shareholder. The court held that he was not entitled to any commission from his principal in respect of the sale, although he proved that he had [3845*] *no commission from the company. Baron Martin ruled at the trial that the plaintiff had become a purchaser, and could claim no commission, and this ruling was upheld by the Court of Exchequer. An agent cannot claim commission upon a transaction which has been entered into in violation of his duties to his principal.t (c)3 H. & C. 6389; 34 L. J., Ex. 95. 18ee ante, p. 14, note; p. 344, note. A broker employed to sell land can- not recover compensation from both parties. Watkins v. Consall,1E. D. Smith, 65; Vanderpool v. Kearney, 2 id. 170; Everhart v. Searle, 71 Penn. St. 256; Bennett v. Kidder, 4 Daly, 512; Meyer v. Hanchett, 39 Wis. 419; S. C., 43 id. 419; Lloyd v. Colston, 5 Bush, 587. And the rule is the same where an ex- change of property is effected by a broker. Pugsley v. Murray, 4 E. D. Smith, 245; Farnsworth v. Hemmer, 1 Allen, 494; Walker v. Osgood, 98 Mass. 348; Raisin v. Clark, 41 Md. 158; Meyer v. Han- chett, 43 Wis. 246; S. C., 39 id. 419; Lynch v. Fallen, 11 R.I. 311; Rice v. Wood, 113 Mass. 133. See, also, Car- man v. Beach, 63 N. Y. 97. Nor could an action for the recovery of commissions be maintained in such case against: the owner of the property exchanged for, although by custom or’ usage among brokers in the place where the exchange was effected, they were entitled in exchanges of real estate to a commission of 214 per cent. from each party on the value of the property ex- changed. Raisin y. Clark, 41 Md. 158, See, also, Lynch v. Fallon, supra. If the broker in such a case exacts from a customer a promise of compen- sation additional to that promised by the person employing him to sell or ex- change, before sending the customer to the owner, he cannot recover any com- pensation from the owner for services, although a sale or exchange is effected with such customer. Walker v. Osgood, supra. The fact that no loss is suffered from such action of the broker does not vary its effect, the transaction being against public policy. Everhart v. Searle, supra. Evidence in behalf of the broker to show a.custom among brokers to charge a commission to both parties in such cases is inadmissible. Farnsworth v. Hemmer, supra. Where each owner, with lnowledge that the broker was employed by both, promises to pay him a commission, such promise may be enforced. Pugsley v. Murray, 4 E. D. Smith, 245; Rowe v. Stevens, 53 N. Y. 621; Alexander v. N. W. Christian University, 57 Ind. 466. See, also, Meyer v. Hanchett, supra. And when a middleman brings to- gether a buyer and seller, each of whom omar. v.] RIGHTS OF AGENT AGAINST IIS PRINCIPAL. 463 In Fina Insurance Company (Limited ), Ie Owens (a), the facts are somewhat complicated: C. was manager and paid and confi- dential agent of the fire business of the European Insurance Society. This society, through C., negotiated with the Etna com- pany, through their paid and confidential agent O., a transfer by the latter of a branch of their business to the former for the sum of 15,0007. C. demanded from the Etna company 2,0002., as a commission or bonus for his services in the transaction. The Etna company refused to grant the sum, whereupon he contrived that the purchase-money to be paid by his employers should be 17,0002, out of which the Etna company secretly agreed to give him the 2,0007. On the winding-up of the latter company O. alleged that there was an agreement between C. and himself that he should get half of the commission, and made a claim of 1,000Z. against the latter company. This was disallowed by Vice-Chancellor Chatterton, on the ground that whatever doubt there might be to C.’s right to it, there could be none that O., a paid officer of the company, could not be allowed to receive anything upon such a transaction. He was, under the circumstances, bound to account to his employers for any sums he so received. Upon appeal (ce), this decision was affirmed. “Between the claimant and the com- pany,” said Lord O’Hagan, “the relation of employer and em- ployed, or principal and agent, clearly subsisted. His obligation was to serve them to the best of his ability. He was not at liberty to make commodity of his position, and aggrandize himself by a has agreed, without the knowledge of kers as to the time when a commission the other, to pay the middleman a com- mission on any contract which may be made between them, in the making of which the middleman takes no part as agent for either, it is held that the con- duct of the middleman in concealing from each his agreement with the other, is not fraudulent, and is no defense to an action brought by him against either for the commission agreed upon. Rupp y. Sampson, 16 Gray, 398; Siegel v. Gould, 7 Lang. 177; Mullen v. Keetzleb, 7 Bush, 253. See, also, Redfield v. Tege, 38 N. Y. 212. Inan action against the seller, however, upon such contract, evidence to prove a usage among bro- is to be considered earned, is inadmissi- ble. Rupp v. Sampson, supra. An agreement by a person desiring to purchase land, to convey a part of it to the seller’s broker, cannot be enforced by the broker, if one of the consider- ations of the agreement was that he would put such person in communica- tion with the seller. Smith vy. Town- send, 109 Mass. 500. As to whether the broker is entitled to commissions when he offers himself ag a purchaser, see Stewart v. Mather, 32 Wis. 344; Grant v. Hardy, 33 id. 668, (d) Ir. R., 7 Eq. 235. (e) Ib. p. 424. 464 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IL. secret bargain detrimental to them. The principles enunciated in the case of Tyrrell v. Bank of England (f) are clearly applica-. ble here, and it is the duty of the court to apply them strictly. The whole transaction is impeachable in the gravest way as a vio- lation of the responsibility involved in the fiduciary relation which subsisted between C. and O. and the two companies.” An attempt to show valuable consideration for the claim failed. [846*] *An agent cannot claim commission upon an illegal transaction (g),' but this rule does not apply when the contract procured by the agent is not in itself illegal, although it may become so by the conduct of one of the parties. In Haines v. Busk (h), decided in 1814, the action was for com- mission for procuring freight. At the trial it appeared that the plaintiff had procured for the defendant an agreement for a char- ter-party for a Russian vessel called the “ Amalia,” of which the defendant was the correspondent. By the charter-party the de- fendant agreed that the ship should proceed to Charlestown, and there take in a complete cargo of permitted goods, and proceed thence to Lisbon, Cadiz, or one port of the United Kingdom, “either to be named, if possible, before leaving Charlestown.” There were other alternative provisions. The agreement was signed by both parties, but they afterwards differed upon the draw- ing up of the charter-party by a notary, and never executed it, nor did the ship ever sail on the voyage. The plaintiff then sued for his commission of 2} per cent. on the amount of the freight. The defendant’s counsel objected that the plaintiff could not recover because the voyage contemplated was illegal by 43 Geo. 3, c. 153, which forbids the importation into England or Ireland of any pro- duction of America by ships other than British ships. The point was reserved for the court, and decided in favour of the plaintiff. “Tt is a very dishonest defence,” said Chief Justice Gibbs, “but it must prevail if it is good in law. The ship is Russian. What is the contract? That she shall proceed to Charlestown, and there take in a cargo of permitted goods. There it stops; what (f) 10H. of L. ©. 26. Trist v. Child, 21 Wall. 441; ante, p. 36, (9) Josephs v. Peters, 38 B. & C. 639; andnote. See, also, Collins v. Blantern, Loonie v. Oldfield, 9 Q. B. 590. 2 Wils. 341; 1 Smith’s Lead Cases, *489, 1See Stebbins v. Leowolf, 3 Cush. and notes, 187; Gray v. Hook, 4.N. Y. 449; Clip- (h) 5 Taunt. 521. pinger v. Hepbaugh, 5 W. & S§. 3815; CUAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 465 those goods shall be is not defined; it is left to the persons who are to load her. . . . Neither the goods to be laden, nor the port to which the ship is to go, are fixed. Is it then necessary that she must at all events make an illegal adventure? . . . If this agreement, such as it is, could have been legally performed by tak- ing certain steps afterward, the plaintiff is in that case entitled to recover a compensation for procuring the contract. Von constabat at the time when the plaintiff discharged his duty, that whatso- ever was necessary to legalize the voyage would not be gotten.” Mr. Justice Heath, replying to an arguinent that it was the plaintiff ’s duty to see that the matters requisite to *legal- [847*] ize the adventure were complied with, asked whether it was ever said that an attorney who drew an agreement on un- stamped paper, which might be stamped afterwards, was bound to see that it was stamped, and that if he omitted he was therefore not entitled to recover for drawing the agreement because it was not stamped? The present case, however, is even stronger than that put by the learned judge, for a solicitor is presumed to have a special legal knowledge, and owes duties towards his client differ- ing in kind from those due from a broker to his principal. It has been suggested that the authority of this case has been shaken by Holland v. Halt (2), but there appears to be no conflict between them. Premiums paid in respect of an illegal insurance cannot be re- covered back, for the whole transaction is void, and the law will not aid any of the parties (7). Where the agent’s right to commission depends upon a written contract, some nice questions of construction arise.' Thus, where A. entered into a contract with B. to proceed to the coast of Africa, and there procure and ship for B. in England, palm oil and other produce, A. to receive as a remuneration for his services a com-_ mission of 62. per cent. on the net proceeds of the dry merchant- able palm oil received by B.; and the agreement further provides that A. should not be entitled to any commission on “any wet, dirty, or unmerchantable palm oil” that might be received, the (i) 1. B. & Ald. 53. terpretation in Parsons on Contracts; (j) Allkins v. Jupe, 2 C. P. Div. 375. also, a large collection of rules upon the 1 See this subject considered atlength subject in Blackwell on Tax Titles, *606 in the chapter on Construction and In- et seq. 30 466 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK I. court held that A. was entitled to no commission in respect of palm oil which was in the understanding of the trade “wet” oil, though such wetness did not render the oil unmerchantable (/). So, too, where by an agreement between A. and B. it was stipu- lated that A. should for a term receive half the profits from the sales of an article called Russian black, manufactured by him from the produce of certain quarries of B., it was held that A. was not entitled to any commission from his employer in respect of Rus- sian black not sold as such, but used by B. in proportion of about one-third mixed with cement and manufactured and sold by him (2). Where a letter was addressed to the agent in the following terms, “Your commissions are 62. per cent. on the net proceeds of your homeward cargo, after deducting the usual charges,” the court held that the commission was payable only on the sums [348*] *actually realized after deducting bad debts and the charges (m). There was evidence that in ordinary mer. cantile language “net proceeds” meant proceeds exclusive of bad debts. Where, on the contrary, by an agreement an agent was to have a commission on sales effected or orders executed by him, the plaintiff to be responsible for bad debts, and the agent to draw his commission monthly, it was held that the agent was en titled to commission on bad debts, althorgh by the custom of trade commission was not allowed on sales which produced bad debts (7). A. acted under a written agreement as the cominission agent of B. in the sale of goods, and was paid a commission. J. was a contractor with the Admiralty for the supply of a variety of arti- cles, on the sale of which A. was paid his commission. A. attended several times at Somerset House, where the patterns of the articles were inspected by the government officers. In an action by A. to recover for these attendances from B., Baron Rolfe ruled that if in giving these attendances A. was only acting in the discharge of his business as an agent, he could not charge for the attend- ances; but that if these attendances were matters beyond his (k) Warde v. Stuart, 1C. B., N.S. 88. (m) Caine v. Horsfall, 1 Ex. 519; 17 (2) Fullwood v. Akerman, 11 C. B., LL. J., Ex. 25. N.S. 787. (x) Bower y. Jones, 8 Bing. 65, CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 467 duty as an agent he was entitled to be paid for them sep- arately (0).! A., a supercargo, sailed to Calabar in charge of a ship called the “ Magistrate,” his commission being 5 per cent. Some time after his departure the plaintiffs despatched another ship, the “ Winder- mere,” to Calabar, with instructions to A. to find a cargo for her, and “to consider her in one turn” with the “Magistrate,” and offering him, in respect of this second ship, a commission of 2$ percent. A. wrote to the plaintiffs rejecting the 24 per cent. com- mission, but he proceeded to load the “ Windermere” nevertheless, * acting as he thought best in the interests of his employers. In an action for commission for loading the latter ship, it was ruled that he was entitled only to 24 per cent. commission (p). When a claim to commission is founded upon a custom, and the custom proved is inconsistent with the claim, no part of the claim will be allowed on a quantum meruit.” Hence where a ship- broker had negotiated the hire of a vessel, and a memorandum for a charter was signed by the parties, but the bargain after- wards went off owing to differences between the charterer *and the owner, the court held that the broker could not [849*] maintain an action against the shipowner to recover a com- mission fixed by custom or a compensation for work and labour, the custom relied on being to the effect that the broker was entitled to receive commission from the owner on the amount of freight if the contract was perfected, but not otherwise (g). “Usage,” said Mr. Justice Bayley, “is the legal evidence of custom, and (0) Marshall v. Parsons, 9 C. & P. 656. 1 Where the principal, having his agent in his employ at a fixed rate, im- poses upon him additional duties and enlarges his powers without stipulating that he is to receive additional compen- sation, the agent cannot recover any extra wages for the additional services. Moreau v. Dumagene, 20 La. Ann. 230. See, also, Dill. Mun. Corp. §§ 172, 178; City of Decatur v. Vermillion, 77 Il. 315. This rule may, however, be modified by usage. See U. 8. v. Macdaniel, 7 Pet. 1; U.S. v. Fillebrown, id. 28. Where an agent acts for a reasonable compensation, or where there is no con- tract for a reasonable compensation, he will not be allowed to retain profits in- cidentally made in the execution of his duty, although it may have the sanction of usage. Where a person is actually or constructively an agent, all profits made in the business, beyond his ordi- nary compensation, are for the benefit of his employers. Jacques v. Edgell, 40 Mo. 76. See ante, p. 243. (p) Moore v. Maxwell, 2 C. & K. 554, ? As to the effect of custom in deter- mining the amount of the agent’s com- pensation, see the cases cited in note, ante, p. 336. (gq) Read v. Rann, 10 B. & C. 488, [Book m1. 468 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. upon the evidence it does not appear that there was any such cus- tom as supported the plaintiff’s claim. The whole rested in custom, and that failing, he was not in a situation to claim any- thing.” To the same effect it was said by Mr. Justice Parke: “The claim of the plaintiff rests on the custom, and not on a quantum meruit. The custom supposes a special contract be- tween the parties, and if that is not satisfied, no claim at all arises, for no other contract can be implied.” The case of Read v. Rann was decided in the King’s Bench in 1830. Broad v. Thomas (r), a decision of the Common Pleas in the same year, was decided upon the same principle. The mere taking of a bill from one of several joint owners of a ship, who is also the ship’s husband, is no legal release of the liability of his co6wners. Hence in an action for commission brought by shipping agents against all the codwners of a ship, with the exception of one, D., the ship’s husband, the mere fact that the plaintiffs, knowing that the defendants were codwners of a ship with D., took a bill from him for the amount due to them, and proved against his estate in respect of such bill, is not suf- ficient to discharge the defendants (s). There is a class of cases in which the agent has been engaged for a definite period ata fixed salary, with or without an addi- tional commission, varying with the amount of business trans- acted by him on behalf of his principal. If the agent is pre- vented by the principal’s default or bankruptcy from completing his services under the agreement, the amount he will be entitled to claim must depend upon the terms of the agreement. If it fixes the amount payable upon the happening of any such an event, further calculation will not be needed, and he will be en- titled to claim the sum named in the agreement (¢).’ It is pre- (r) 7 Bing. 99. (s) Bottemley v. Nuttall, 5 C. B., N. S. 122; 28 L. J., C. P. 110; Keay v. Fenwick, 1 C. P. Div. 745. (t) Ex parte Logan, L. R., 9 Eq. 149. 1Where by the terms of a contract between principals and their agent, itis stipulated that the agent should receive ten per cent. on the entire amount of sales made by him, and that, if the principals should resume control so that the agency would cease, then the agent should be paid ‘‘ in proportion to the ser- vices rendered by him previous to the closing of his connection with their business,’’ it is error to instruct the jury ina suit by the agent whose agency has been so terminated, that he is en- titled to recover whatever the evidence might show that his services actually performed were reasonably worth. McCormick v. Bush, 47 Tex. 191. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 469 sumed, however, that this will be the rule only when the amount named in the agreement can be taken to be the reasonable damages, “and not greatly in excess of the sum to which [350*] the agent would become entitled in the event of the agree- ment being fully performed. If, on the other hand, the agreement makes no provision for the happening of such an event, then the agent will be entitled to the value of his salary for the full period of his engagement, subject, it may be, to certain deductions, as in Yelland’s case (u). But if the agent is to be paid a commission, he may make no claim in respect of prospective commission, but will be limited to what he has actually earned (z). In Yelland’s case (y), 1867, Y. was engaged as manager of a bank for a term of five years, with liberty to act as agent for another company, ata salary of not less than 500/. a year. Before the expiration of the agreement the bank stopped payment, and Sir W. Page-Wood, V.-C., held that Y. was entitled to claim the value of an annuity of 500/., terminating on the day on which the agreement expired, subject to a deduction, the amount of which was calculated at chambers, by reason, first, of his having been at liberty to act as agent for another company under the agreement; and, secondly, of his freedom upon the winding-up of the bank to seek fresh employment.’ This decision was acted upon in 1869 by Vice-Chancellor James, in Hu parte Clark (2), although some doubts existed whether the agreement in that case was not wltra vires. The question came before the court on an application by the liquida- tors of a limited trading company, that C. might be ordered to pay the sum of 1,0002. in respect of a call of 207. per share. O. (u) Infra. (a) Ex parte Maclure, infra. (y) L. R., 4 Eq. 350. 'In an action by an agent against an insurance company for damages result- ing from his discharge during the term of his engagement, his measure of damages is the amount he has lost in consequence, and the testimony of ac- tuaries as to the probable value of re- newals for the remainder of his term, on policies already obtained, is import- ant in arriving at the result. But an estimate of his probable earnings there- after derived from proof of the amount of his collections and commissions be- fore the breach, without other proof re- lating thereto, would be too speculative to be admissible. In such action, the defendant may show in mitigation of the damages that the plaintiff was em- ployed elsewhere after the breach, and the amount of compensation received by him while so engaged. Lewis v. Atlas Life Ins. Co. 61 Mo. 534. (z) L. R., 7 Eq. 550. 470 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. at the same time made an application under an agreement be- tween himself and the company by which he had been appointed their agent, at a salary, for five years, in addition to commissions. It was further agreed that he should take fifty shares of 100/. each, and pay up at once 2/. per share; but the company agreed that he should not be called upon to make any further payment in respect of those shares. The call was made in respect of those shares. The company was wound up within fifteen months of the date of the agreement, and the agent’s services put an end to in January, 1868. It was then agreed that 4,0002. was to be re- served out of the proceeds of the goods to meet C.’s claims against the company. Of this sum, 1,000/. was to be paid to C. on account of his claims, without prejudice; the remain- [851*] ing 3,0002. *was to be deposited in the Victoria Bank in the joint names of the liquidators and C., to abide the result of proceedings in a colonial court. The Vice-Chancellor held that, independently of the agreement, the liquidators had by their conduct precluded themselves from enforcing against C. the payment of the call without bringing debts due to him into account, and that he was entitled to his full salary to the end of the five years. The question raised in the two cases, so far as they relate to the agent’s right to the payment of salary, was decided the same way in Hx parte Maclure (a) by the Master of the Rolls; but the Court of Appeal was asked to say that an agent might also claim for prospective commission. The agent, in addition to his salary, was to be paid a commission of ten per cent. on all business trans- acted. The Master of the Rolls disallowed the claim, and this decision was affirmed on appeal. Reliance was placed on the principle that if A. sells a man all the apples from his apple tree, he has no right to cut down that tree; if he does so, he is guilty of a breach (4). But, as Lord Justice James pointed ont, the prin- ciple was inapplicable in the claim for commission. “That,” said his lordship, “is essentially different from a man saying, ‘I am going to try and sell apples, and I will give you ten per cent. upon the profits of the sale of them.’ That must, of course, de- pend upon the amount of apples which the man who enters into the speculation will buy, and what price he will be able to sell (a) L. R., 5 Ch. 787. (b) See McIntyrye v. Belcher, 14 C.B., N.S. 654. - CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 471 them at. In such a case, the other party could not say, ‘You are not making profits because you are going to a wrong market, and buy upon bad terms. You have not sufficient capital, and you are selling at a loss in order to get money. Therefore, I am enti- tled to damages for the improper mode in which you carry on your business.’ ” Where the agreement provides for the payment of a liquidated sun to the agent in the event of his being deprived or removed from his office, no deductions will be made, as in Yelland’s case (c); but the whole amount named may be claimed (d). Where an agent contracts to do an entire work for a specific suin, he can recover nothing unless the work is done, or unless it can be shown that it was the defendant’s fault that the work was incomplete, or that there is something to justify the con*clusion that the parties have entered into a fresh con- [852*] tract. Hence, when a sailor hired for a voyage took a promissory note from his employer for a certain sum, provided he proceeded, continued, and did his duty on board for the voyage, and before the arrival of the ship he died, it was held that no wages could be claimed either on the contract or on a guantum meruit (e)." So where a seaman entered into articles of agreement to serve on board a ship bound from the port of London to the South Seas, to procure a cargo of sperm oil and to return, and was to receive a share of the profits in lien of wages, it was stipulated in the agreement that no one of the officers or crew should be entitled to his share of the net proceeds of the cargo until the money had been received by the sellers, nor unless all stipulations had been performed under the agreement. On her voyage home the vessel was disabled and condemned in a foreign port. The cargo was transhipped, and, with the exception of a small portion sold for repairs, was delivered in London and the freight upon it paid. The seaman accompanied the cargo in the vessel to which it was transhipped, but died before it reached London; and the Court of Exchequer held that the representatives of the seaman were not (c) Supra. 'S. C., 2 Smith's Lead. Cases, 17, 22. (d) Ex parte Logan, L. R.,9 Eq. 149. This subject will be found fully consid- (e) Cutter v. Powell, 6 Term Rep. ered in the notes to this case on p. 22 320. et seq. 42 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. entitled to his share of the proceeds of the cargo under the agree- ment, but only to a guantwm meruit for his services on board the second vessel (f°). In a later case, it was stipulated by a building agreement be- tween A. and B., that A. should complete for a specified price certain works on certain houses of B., the whole to be completed on a specified day, and to be done to the satisfaction of a surveyor named, upon whose approval payment was to be made. A. failed to complete the work. He sued B. upon the agreement for the price agreed, and on a common count, for a reasonable price ac- cording to measure and value. At the trial there was evidence that B. had resumed possession of the houses. It was held that there was no evidence to go to the jury in support of the plaintiff's claim; for that he could not recover on the special count, not having fulfilled it, and that the mere fact of B.’s taking possession of his own land on which buildings had been erected, or where repairs had been done or alterations made to a building thereon, did not afford an inference that he had dispensed with the condi- tions of the special agreement under which the works had [353*] been done, or of a contract to pay for the work *actually done according to measure and value (g). So, where the plaintiff undertook for a specific sum of money to repair and make perfect a chandelier, then in a damaged state, and did repair it in part, but did not make it perfect, it was held, that he could not, in an action of asswmpsit, recover for the value of the work done and materials found (A). ' A case much in point was referred to Mr. Justice Lawrence in Cutter v. Powell. Debt was brought upon a written instrument by which the defendant’s testator had appointed the plaintiff's tes- tator to receive his rents, and promised to pay him 1000. per an- num for his service; the plaintiff proved that the defendant’s testator died three-quarters of a year after, during which time he served him, and he demanded 75/. for the three-quarters. Judg- ment having been given for the plaintiff in the Common Pleas, the defendant brought a writ of error, and it was argued that without a full year’s service, nothing could be due, and the court reversed the judgment (¢). Thesame learned judge distinguished (f) Jesse v. Roy, 1 C. M. & R. 816. (hk) Sinclair v. Bowles, 9 B. & C, 92. (g) Munro v. Butt, 8 E. & B. 738. (i) Salk. 65. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 473 the case of a common hired servant, on the ground that he is con- sidered to be hired with reference to a general understanding that a servant shall be entitled to his wages for the time he serves. AAs to cases where the subject-matter on which the agent is em- ployed is destroyed, see Appleby v. Myers (k). Srcr. 2. — Right to be indemnified. A rule of law which pervades the whole law of principal and agent is that the principal is bound to indemnify the agent against the consequences of all acts done by him in pursuance of the au- thority conferred upon him (/), provided the act is not illegal. (k) L. R., 1 C. P. 615; in error, 2 id. 651. (l) Taylor v. Stray, 2 C.B., N. 8. 175. 1 Generally it is the right of an agent to be reimbursed all his advances, expenses and disbursements, made in the course of the agency, on account of or for the benefit of his principal, when the ad- vances, expenses and disbursements have been properly incurred and reason- ably and in good faith paid, without any default on the part of the agent. Ruffner v. Hewitt, 7 W. Va. 585; Beach v. Branch, 57 Ga. 362; Searing v. But- ler, 69 IIL. 575; Elliott v. Walker, 1 Rawle, 126; Maitland vy. Martin, 86 Penn. St. 120. See, also, Fowler v. N. Y. Gold Ex. Bank, 67 N. Y. 188. Trustees, also, have an inherent right to be reimbursed all expenses properly incurred in the execution of the trust, and no express declaration in the trust instrument is requisite to create that right. Norton v. Phelps, 54 Miss. 467; 2 Perry on Trusts, § 910. Where an agent is employed by his principal to do an act which is not mani- festly illegal, and which he does not know to be wrong, the law implies a promise of indemnity by his principal for such losses and damages as flow di- rectly and immediately from the exe- cution of the agency. Moore v. Apple- ton, 26 Ala. 633; Ramsey v. Gardner, 11 Johns. 489; Coventry v. Barton, 17 id. 142; Powell v. Newburgh, 19 id. 284; Howe v. Buffalo, N. Y. & E.R. R. Co., 37 N. Y. 297; Green v. Goddard, 9 Met. 212; Drummond v. Humphreys, 39 Me. 347; Spangler v. Commonwealth, 168. & R. 68; Bond v. Ward, 7 Mass. 125; Commonwealth v. Van Dyke, 57 Penn. St. 84; Howard v. Clark, 43 Mo. 344; Tarr v. Northy, 17 Me. 113; Cham- berlain v. Beller, 18 N. Y. 115; Nelson v. Cook, 17 Ill. 443; Long v. Neville, 36 Cal. 455; Grace v. Mitchell, 31 Wis. 5338; Yeatman v. Corder, 33 Mo. 337. See, generally, also, Cooley on Tor's, 144, as to contributions and indemnity as between wrongdoers. Thus, he is entitled to indemnity when compelled to pay damage for taking personal property by order of his princi- pal, which, though claimed adversely by another, he has reasonable ground to believe belongs to his principal. Moore v. Appleton, supra; Avery v. Halsey, 14 Pick. 174. So, where an agent, acting under the direction of his principal, cuts timber by mistake partly upon the land of another, which his principal receives and dis- poses of, the agent can recover of his principal what he is obliged to pay as damages in a suit for such trespass, Drummond y. Humphreys, supra. 474 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. In the earlier cases one of the defences raised by the principal when sued for such indemnity, was that the promise was not in writing as required by the Statute of Frauds (m). Thus, in a case (7), decided in 1794, the plaintiff brought an action to re- cover from the defendant money expended on behalf of the latter. The plaintiff had, out of motives of friendship, and merely to accommodate the defendant, accepted several bills [854*] *of exchange on his account. These bills had all been regularly taken up when they became payable by the de- fendant, except the last, which was for 207. This bill had come into the hands of G., and the defendant being unable to take it up when due, had prevailed upon G. to accept 162. in part, and the plaintiff’s acceptance for six guineas, the balance of the bill with interest. The latter bill was not paid when due, and G. sued the plaintiff and recovered, having been requested by the present defendant to defend. The present action was brought to recover the amount with costs. Lord Kenyon overruled an objection, that the Statute of Frauds required writing, and ruled that as the defendant was personally interested, and had directed the defence to be made, the money must be taken to have been laid out by the plaintiff on the defendant’s account and to his use. The act by the performance of which the expense was made or damage sustained, must have been performed in pursuance of the On such implied promise, case and assumpsit are equally maintainable; but in either action, the declaration must allege a breach. Moore v. Appleton, supra. If the declaration is in case to recover indemnity from the principal for dam- ages vecovered in trespass against the agent by the true owner of the property taken, it must negative the existence of any knowledge on the part of the agent, at the time of the taking, that he was committing a trespass, although the onus of proving such knowledge may be on the principal. Moore v. Appleton, supra. The agent need not wait to be sued by the third party for damages, but may * pay them to the third party and there- upon maintain an action against his principal to recover the same. Save- land v. Green, 36 Wis. 612. But in such action against his princi- pal the agent can recover only the dam- ages actually sustained by such third party, though the agent may have paid him a larger sum, Saveland vy. Green, supra. An agent authorized to draw upon his employer for moneys becoming due to him, e. g., expenses, may maintain an action against the employer for mali- ciously refusing to honor drafts drawn accordingly. Levy v. Curtis, 1 Abb. New Cases, 189. (m) 29 Car. 2, ¢. 3. (n) Howes v. Martin, 1 Esp, 162. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 475 authority or have been duly ratified.t 2Zurst v. Holding (0), de- cided in 1810, was an action for money lent. The defendant, at Liverpool, requested the plaintiff to buy certain Surat cottons, upon a month’s credit. The plaintiff bought them upon those terms, paying 872. 12s. custom house duties, and sent them to Liverpool with instructions that they were to be delivered only to his order. The seller afterwards hearing many things disadvan- tageous to the credit of the defendant, procured the plaintiff to stop the cottons and delay them until the month’s credit had ex- pired, and to tender them to the buyer on payment of the price. The latter refused to accept them. The plaintiff had already paid the sellers. An action was thereupon brought by the broker to recover the price of the cottons paid by the plaintiff; the duties paid at the custom honse; certain allowances paid to the E. I. Co., and his own commission for purchasing them. Chief Justice Mansfield ruled that he was not entitled to recover, and the jury, under his direction, found a verdict for the defendant, with lib- erty to move to enter a verdict for the plaintiff for the amount of the duties paid at the customhouse. A rule yranted in accord- ance was discharged. “The plaintiff,” said his lordship, “ pays voluntarily for the goods, not in consequence of any direction from the defendant. So long after [the 11th of March] as the 19th of May the plaintiff himself takes the goods and sells them. .. . Having himself taken possession of the goods, [855*] what right has he to charge the commission? As for the duties, he is paid them in the increased price of the goods which he receives.” In this ease there could be no question that the agent had violated his duties. One of the earliest cases in which the general principle was applied was Adamson v. Jarvis (p), decided in 1897, in the Com- mon Pleas. The plaintiff was an auctioneer whom the defendant 1 Tn order to constitute the relation of master and servant between an em- in the place of the employer, in accord- ance with and representing the em- ployer and an employee so as to render the former liable to indemnify the latter for damages to which he has been subjected on account of injuries committed by him while using ordinary care in the employer's business, the em- ployee must be acting at the time strictly ployer’s will and not his own, and the business must be strictly that of the employer, and not in any respect the employee's. Corbin v. American Mills, 27 Conn, 274. (0) 3 Taunt, 32. (p) 4 Bing. 66. 476 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK UZ. had directed to sell certain cattle by auction. The plaintiff there- upon sold them, and it turned out that they did not belong to the defendant, but to another person. The owner brought an action against the plaintiff to recover the value of the cattle sold, and having obtained judgment for the amount, the plaintiff brought the present action against the defendant for an indemnity. On behalf of the defendant it was contended that the parties were joint tor¢ feasors, and that consequently the plaintiff could not recover indemnity; or at any rate the plaintiff should have required a bond of indemnity before he sold. The court, however, held that there was evidence on the facts from which the jury might say that the plaintiff, having acted on the request of the defend- ant, was entitled to assume that if what he did turned ont to be wrongful as against a third party, he would be indemnified by the defendant. The case was determined by an application of the principle that every man who employs another to do an act which the employer appears to have a right to authorize him to do, un- dertakes to indemnify him for all such acts as would be lawful if the employer had the authority he pretends to have. This decision of the Common Pleas was followed in 1831 by Humphreys v. Pratt (q), decided in the House of Lords. There the plaintiff was the sheriff to whom the defendant had given a ji. fa. to execute. The sheriff, acting upon the representation of the defendant, seized certain cattle, and damages were recovered against him by a third person, who claimed to be the true owner. The cattle in question were pointed out to the sheriff by the de- fendant as being the property of the debtor. The House of Lords held that an indemnity might be implied, but there is no record of the reasons given. The reporter remarks that he was privately informed by Lord Tenterden that his lordship put the case upon the ground that the sheriff was a public officer and was placed between two fires. [356*] *Mr. Justice Brett, in a subsequent case (7), remarked that in neither of these cases is it stated that the plaintiff at the time he committed the tortious act knew of any claim by a third person, nor was any such fact relied on in the judgments. The implication is not made to rest on the fact of the plaintiff's being an agent, or on notice of the third party’s claim, but merely (q) 5 Bli., N. 8. 154. (r) Dugdale v. Lovering, L. R., 10 C. P. 196. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. ATT on the fact of the plaintiff having done an act at the request of the defendant, which was not manifestly illegal or tortious to his knowledge, but which exposed him to an action. In the next case (s), which was decided by the King’s Bench in 1834, the defendant had sold ten casks of goods to A., and sent them to plaintiffs with notice that they were for A., and ordering plaintiffs to separate them from other articles sent at the same time. After they were separated, A. took away two casks; the defendant then ordered the plaintiffs not to deliver the remaining eight to A., but to another person. The order was obeyed. A. afterwards became bankrupt, and his assignee having sued the plaintiffs in trover for the eight casks, and recovered, the plaintiffs sued the defendant for the amount recovered and the costs of the action. The court held that a promise to indemnify to the full amount might be implied from the facts. ‘The general rule,” said Lord Denman, “is that between wrongdoers there is neither indemnity nor contribution; the exception is where the act is not clearly illegal in itself.” The principles of law applicable to an agent’s right to indem- nity were subsequently stated in an elaborate judgment of the Court of Common Pleas delivered by Chief Justice Tindal in Toplis v. Crane (t), 1839. The defendant was an attorney to A.; he authorized the plaintiffs, as brokers, to distrain the goods on B.’s premises for rent due to A. The distress was thereupon made. Some of the goods being privileged from distress and claimed by the owners, the plaintiffs required an indemnity. The defendant gave one on the part of A., and afterwards said he would give a further security. The owners of the goods sued and recovered against the plaintiffs, and the court held that the de- fendant was liable to make good the loss sustained. Having referred to the facts of the case, his lordship went on to say: “We think this evidence brings the case before us within the principle laid down by the Court of Queen’s Bench in * Betts v. Gibbins (u), that where an act has been done by [857*] the plaintiffs under the express directions of the defendant, which occasions an injury to the rights of third persons, yet if such act is not apparently illegal in itself, but is done honestly and (s) Betts v. Gibbins, 2 Ad. & El. 57. (f) 5 Bing. N.C. 636. (w) Supra. ATS RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. bond fide in compliance with the defendant’s directions, he shall be bound to indemnify the plaintiff against the consequences thereof.” An agent who executes his duties in such a manner that his services are of no use, cannot recover commission or compensation.! Moneypenny v. Hartland (x), decided before Chief Justice Abbott in 1824, was an action by a surveyor for work and labour. The ruling of his lordship was in effect that if a surveyor employed to make an estimate is so negligent as not to inform himself, by boring or otherwise, of the nature of the soil of the foundation, and it turns out to be bad, he is not entitled to recover anything for his plans, specifications, or estimates made for the work. A nonsuit was entered. A rule to set aside the nonsuit was refused by the full court. “Ifa man,” said Chief Justice Abbott, “em- ploys a person to make an estimate, who tells his employer that the work will cost 10,0002, and it costs 15,0002. and it appears that the surveyor did not use due diligence, can it be contended that the employer is bound to pay for such information?” And Mr. Justice Bayley, referring to a claim for particular items, said: “The plaintiff’s demand is for one entire account, and if from his negligence the whole of his work is worth nothing, he cannot re- cover for a particular item, as a journey, as it was still part of an entire claim.” : The rules laid down by Chief Justice Best in Hammond v. Holiday (y) are as follows: “A man must complete the thing required of him before he can be entitled to charge for it. If the defendant has received advantage from the acts of the broker, then the verdict should be for the plaintiff, with propor- tionate compensation; but if the business has been performed in so slovenly a manner that no advantage has been derived from it, then the verdict must be for the defendant.” Of course it is immaterial, so far as concerns the agent’s right to recover, whether his authority is express or implied. Thus, in Sentance v. Hawley (2), decided in 1863, the plaintiff was [858*] em*ployed as broker on the 14th May, 1861, to buy three lots of sugar, numbered 67, 68 and 69, at a public sale, for 'See Dodge v. Tileston, 12 Pick. 328; (2) 10. & P, 352. Williams v. Littlefield, 12 Wend. 862; (y) 10. & P. 384. also, ante, p. 224 and note; p. 841. (z) 18 C. B., N.S, 458, CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. A479 the defendant. By the conditions of sale, the lots were to be paid for by cash on the 20th July, by acceptance at seventy days from the day of sale, or on delivery of the warrants, interest at the rate of 51. per cent. per annum being allowed to the expiration of sev- enty-three days from the day of sale, if payment were made within twenty-one days. The plaintiff paid for the lots he bought for the defendant within the twenty-one days, and took the discount for his own benefit. THe had authority from the defendant at that time to take up and pay for lot 67, but not for lots 68 and 69. On the 22nd of June, the defendant sent the plaintiff an order to get lot 68 cleared. On the day on which the order was given, and before the payment could be made and the clearing performed, a fire oc- curred at the warehouse where the sugars (lot 68) were stored, and they were destroyed. The action was brought to recover the value of the lot. It was proved at the trial to be the common course for brokers, when so employed, to clear, before prompt, one of sev- eral lots of sugar in bags, bought under contract, to pay the price and obtain warrants for all the lots, the broker taking the discount under the conditions of sale. The defendant was aware of the cus- tom, and received notice that the plaintiff had so paid the price of lots 67 and 68, and obtained the warrants. A verdict for the plaintiff was upheld by the full court. “The question is,” said Chief Justice Erle, “ whose was the loss? If there had been no prepayment it would have been the seller’s. Ifthe money was paid without the authority of the plaintiff, it would be the broker’s. But if the broker had the authority, express or implied, of his principal for making the payment as he did, the loss must fall upon the principal. Now, knowledge on the part of the principal that it was the ordinary course of business for the broker to make the prepayment, and acquiescence by silence, seems to me to amount to a specific permission to the broker todo so.”* The other judges concurred. Where the subject matter upon which an agent has been em- ployed for a longer or shorter period is destroyed before his con- tract is completed, some nice questions may be raised.” In Appleby v. Myers (a), decided in 1867, the plaintiffs con- 1See ante, p. 67. (a) L. R., 1 C. P. 615; in error, 2 ib. 2See notes to Cutter v. Powell, 2 651. Smith’s Lead. Cases, 22 et. seq. 480 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. tracted with the defendant to erect upon premises in his [859*] posses*sion a steam engine and machinery, the works be- ing by the contract divided into ten different parts, and separate prices fixed upon each part, no time being fixed for pay- ment. All the parts of the work were far advanced towards com- pletion, and some of them were so nearly finished that the defendant had used them for the purposes of his business, but no one of them was absolutely complete, though a considerable portion of the necessary materials for making them so was upon the premises, when the whole premises, with the machinery and materials, were destroyed by an accidental fire. A case stated for the court raised the question whether, under the above circumstances, the plaint- iffs were entitled to recover the whole or any part of the contract price. The Court of Common Pleas, consisting of Chief Justice Erle, Justices Byles, Keating and Montague Smith, unanimously gave judgment in favour of the plaintiffs for the value of the work done. The grounds upon which this judgment was based may be thus summarized. The plaintiff cannot recover the whole contract price, for that was to be paid on the completion of the works, but they are entitled upon an implied contract to be paid the value of the work done. The principle stated by the Queen’s Bench, in Taylor v. Caldwell (6), to the effect that “in contracts in which the performance depends on the continued existence of a given person or thing, a condition is implied that the impossibility of performance arising from the perishing of the person or thing shall excuse the performance,” was not applied to the present case, because, in the opinion of the court, it fell within the qualification of the principle, the qualification being that the principle shall apply only in the absence of any express or implied warranty that the thing shall exist. This qualification was recognized by the Queen’s Bench in the above case. The Court of Common Pleas was of opinion that there was such an implied warranty here. The judgment was reversed in the Exchequer Chamber, consisting of Barons Martin and Bramwell, and Justices Blackburn, Shee and Lush. “The whole question,” said Mr. Justice Blackburn, by whom the judgment of the court was delivered, “depends upon the true construction of the contract between the parties. We (b) 8B. & 8.326; 32 L. J., Q. B. 164. CIIAP. V.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 481 agree with the court below in thinking that it sufficiently appears that the work which the plaintiffs agreed to perform could not be performed unless the defendant’s premises continued in a fit *state to enable the plaintiffs to perform the work on [360*] them; and we agree with them in thinking that if by any default on the part of the defendant his premises were rendered unfit to receive the work, the plaintiffs would have had the option to sue the defendant for his default, or to treat the contract as rescinded and sue on a quantum meruit. But we do not agree with them in thinking that there was an absolute promise or war- ranty by the defendant that the premises should at all events con- tinue so fit. We think that where, as in the present case, the premises are destroyed without fault on either side, it is a misfor- tune equally affecting both parties, excusing both from further performance of the contract, but giving a cause of action to neither. .... On the principles of English law laid down in Cutter v. Powell, Munroe v. Butt, Sinclair v. Bowles, and other cases, the plaintiffs having contracted to do an entire work for a specific sum, can recover nothing unless the work. be done, or it can be shown that it was the defendant’s fault that the work was incom- plete, or that there is something to justify the conclusion that the parties have entered into a fresh contract.” The judgment of the Common Pleas was reversed. Where a person has been induced ignorantly to commit an illegal act, an express promise of indemnity has been held to be valid (c); but an express promise to indemnify against that which from the na- ture of his office he must be taken to have been conscious was against the law, is void (d);1 nor, again, is any promise implied on the part of a sheriff to indemnify an auctioneer who sells goods seized under a 7. fa., when employed so to do by the sheriff's officer to whom the warrant was directed, and by the plaintiff's attorney in (c) Fletcher v. Harcot, Hutt. 55. (d) Martyn v. Blithman, 1 Yelv. 197. 1Tf one requests or directs another to do an act which the latter knows at the time to be unlawful, and promises to in- demnify him, the promise is void. Cov- entry v. Barton, 17 Johns. 142; Atkins vy. Johnson, 43 Vt. 78; Arnold v. Clif- ford, 2 Sumner, 238; Nelson v. Cook, 31 17 Ill. 448; Cooley on Torts, 146, 147. But if the party who does the act at the instance or command of another, does not know at the time that he is committing an unlawful act, the promise to indemnify is valid. Coventry v. Bar- ton, supra; Avery v. Halsey, 14 Pick. 174; Stone v. Hooker, 9Cow. 154; Arm- strong v. Clarion Co., 66 Penn. St. 218, 482 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOCK Im. the original action, although the sheriff certified that he himself had seized and sold the goods, and he in fact received his pound- age from the produce of the sale. Hence, where an action of tres- pass was brought by the owner against the auctioneer, the sheriff and others, and all the damages awarded were levied upon the auctioneer alone, he has no action for a contribution against any of his co-defendants (e). Lord Ellenborough appears to have been inclined to stop the last case, on the ground that there is no con- tribution between joint wrongdoers when judgment has been ob- tained against them jointly, and all the damages are levied [861*] against one of them, *and that a promise to indemnify is not to be implied if one man committed a trespass at the request of another. The trial, however, was allowed to proceed, and as there was no evidence that the defendants employed the plaintiff to sell the goods in question, his lordship ruled that the action was an attempt to obtain indemnification against the con- sequences of the agent’s blunder. An agent against whom an action is brought may take advan- tage of Order XVI. r. 17, which provides that where a defendant is or claims to be entitled to contribution or indemnity, or any other remedy or relief over against any other person, or where from any other cause it appears to the court ora judge thata question in the action should be determined not only as between the plaintiff and the defendant, but as between the plaintiff, de- fendant and any other person, or between any or either of them, the court or judge may, on notice being given to such last'men- tioned person, make such order as may be proper for having the question so determined. | In order to entitle a defendant to serve notice on a third person under the above rule, it is not necessary that the whole question between the plaintiff, the defendant and the third person should be identical; it is sufficient if it be prima facie made out that a material question in the action is also a question between the de- fendant and the third person; and under such circumstances the court will order service of the notice, if the plaintiff will not be prejudiced or delayed by the introduction of the third person. Hence, where an action had been brought against the defendants (e) Farebrother vy. Ansley, 1 Camp. 348. CHAP. V.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 483 for breach of charter-party, by which they agreed to discharge a cargo of nitrate of soda as fast as the custom of the port of dis- charge would allow, and the defendants had sold at Liverpool, to a company carrying on business in Scotland, the cargo to arrive; and it was shown that by the custom of the trade, of which the company was aware, on such a sale, the buyers would be bound to discharge in accordance with the custom of the port; it was held that the defendants were entitled to an order citing the company to appear (f). In Bower v. Hartley (g), the plaintiff claimed damages for the negligence of the defendants, who were insurance brokers, in effecting a policy of insurance [on cargoes] shipped by him abroad. The defendants had effected one of the poli- cies through insurance brokers at * Liverpool, and alleged [862*] that they claimed from the latter an indemnity in respect of such policy. An application to serve notice on the latter was disallowed on the ground that the convenience of having the ques- tion determined once for all in this action was not enough to out- weigh the injury to the plaintiffs which might result from the introduction of third parties. Szcr. 3.— Light to lien. A lien at common law is aright to retain possession of the property of another until some claim is satisfied! Equitable liens are such as were recognized only in courts of equity. The main distinction between common law liens and other liens is, that pos- session is essential in the former case, but not in the latter. Another division framed upon this distinction is that which distributes liens into possessory and non-possessory. The lien of agents, as agents, is for the most part of the former kind. A lien has been defined as an obligation which, by implication of law and not by express contract, binds real or personal estate (f) The Swansea Shipping Co. v. sonal property, or as a chose in action, Duncan, Fox & Co., 1 Q. B. Div. 644; of the person entitled to it. Lovett v. 45 L. J., Q. B. 638. Brown, 40 N. H. 511; Meany v. Head, (g) 1Q. B. Div. 652. 1 Mason, 319. See, also, Ames v. Palm- 13 Pars. on Cont. #234. er, 42 Me. 197; Walther v. Wetmore, 1 It isasimple right of retainer, per- E. D. Smith, 7. sonal to the party in whom it exists, and See, however, Warner v. Martin, 11 is not assignable or attachable as per- How. 209; ante, 123, note. 484 RIGHTS, ETC., ARISING OUT OF THE conTRACT. [BOOK II. for the discharge of a debt or engagement, but does not pass the property in the subject of the lien (2). Mr. Justice Story also insists that all liens arise by operation of law, and that where they arise by a contract, express or implied, they are more properly pledges or hypothecations (¢). On the other hand, a number of judges have declared that liens may be created by contract as well as by operation of law (£).' It does not appear that any practical good would be attained by limiting the meaning of the word lien in the way indicated. Moreover, when it is remembered that a lien exists wherever there is aright to retain possession until some claim is paid, and that a pledge is merely one of the modes by which such a right to retain possession may be created, Mr. Jus- tice Story’s criticism loses its force. A lien confers a definite right, but it cannot be said to indicate the mode by which the right is to arise. A lien then may be created by express contract, or it may be implied from the usage of trade or mode of dealing between the parties, or it may arise by operation of law.’ [363*] *To establish a right to a common law or possessory lien certain conditions must be fulfilled: (1) Possession by the claimant or his agent. (2) The possession must be continuous. (3) Possession must be acquired in good faith, and in the ordinary course of business or dealing. (4) If possession is acquired through the owner’s agent, he must be acting with authority. (5) The claimant must obtain possession and claim lien in the same character; and conversely the owner must give possession and be indebted in the character. In other words, the claim must not be inconsistent with the terms upon which possession was obtained. Liens are either general or particular. A general lien is a (h) Fisher on Mortgages, s. 149. land, a certain portion of the net profits, (i) Story on Agency, s. 356. is only a personal contract, and gives (i) Scarfe v. Morgan, 4 M. & W.278; the agent no interest in the and. Le- Smith v. Plummer, B. & Ald. 582; Moyne v. Quimby, 70 Ill. 399. Cowell v. Simpson, 16 Ves. 275; Chase *3 Pars. on Cont. *238. v. Westmore, 5 M. & 8. 180. The death of the principal does not 1 A contract that, if land is sold at a deprive the agent of his lien. Newhall specified price, the owner will allow to v. Dunlap, 14 Me. 180. his agent in the purchase and sale of the CHAP. v.] 485 RIGHTS OF AGENT AGAINST HIS PRINCIPAL. right to retain the property of another on account of a general balance due from the owner to the person who has possession. A particular or specific lien is a right to retain the property of an- other for charges incurred or trouble undergone with respect to that particular property (2). The former is not favoured by courts of law or equity; it can, in the absence of express contract, be claimed only as arising from dealings in a particular trade or line of business in which the existence of a general lien has been judi- cially proved and. acknowledged, or upon express evidence being given that according to the established custom a general lien is claimed and allowed (m). When a general lien has been judicially ascertained and established, it becomes a part of the law merchant which the courts are bound to know and recognize (nm). Particu- lar liens, on the other hand, are favoured. Thus it is said, by the court in Scarfe v. Morgan (0): “The principle seems to be well laid down in Bevan v. Waters (p), that where a bailee has ex- pended his labour and skill in the improvement of a chattel delivered to him, he has a lien for his charge in that respect. Thus the artificer to whom the goods are delivered for the pur- pose of being worked up into form; or the farrier, by whose skill the animal is cured of a disease; or the horsebreaker, by whose skill he is rendered manageable, have liens on the chattels in re- (2) Bevan v. Waters, 3C. & P.520. See Ang. on Car. § 357, note a. Orin (m) See per Lord Campbell, Bock v. Gorrissen, 30 L. J., Ch. 42. (n) Brandao v. Barnett, 12 Cl. & F. 787. (0) 4M. & W. 283. (p) Moo. & Malk. 235. 1See Gregory v. Stryker, 2 Den. 628; Moore v. Hitchcock, 4 Wend. 292; Mc- Intyre v. Carver, 2 W. & 8. 392; Mor- gan v. Congdon, 4.N. Y. 552; Farring- ton v. Meek, 30 Mo. 578; Lovett v. Brown, 40 N. H. 511; Wilson v. Mar- tin, id. 88; Nevan v. Roup, 8 Iowa, 207; Danforth v. Pratt, 42 Me. 50. The lien extends not only to the com- pensation for the agent’s own services, but also to payments made by him for the services of others upon the goods. U. 8. Expr. Co. v. Haines, 67 Ill. 188, " charges advanced to another company. the case of a factor, for advances and disbursements made to preserve the property, and all other necessary ex- penses and charges that are certain, and not sounding in damages merely, as well as for his commissions. Sawyer v. Lorillard, 48 Ala. 332. Trustees have a lien on the trust fund for costs and expenses incurred in its administration; but agents employed by them must look alone to the trustees for payment of their services and ex- penses in the management of the trust estate. Fearn v. Mayers, 53 Miss. 458. An agent employed to collect a claim against the U. 8. for a certain per cent, of the amount realized, whether in bonds, drafts, or cash, has a lien upon the fund for his compensation. Dowell y. Cardwell, 4 Sawyer, 217. 486 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK I. spect of their charges. All such specific liens being con- (864*] sistent with the principles of natural *equity, are favoured by the law, which is construed liberally in such cases.” It is said in the same judgment, that whoever relies upon a general lien not recognized judicially is held to strict proof of such lien. First, then, as to the necessity of possession.1 In Wilson v. Balfour (q), decided in 1811, certain bankers fraudulently sold out stock belonging to a customer which stood in their names, and applied the proceeds to their own use. While they remained sol- vent they wrapped up certain bonds belonging to them in an envelope inscribed with the customer’s name, and inclosing a memorandum, stating that they had deposited the bonds with him as a collateral security for his stock, which they promised to re- place; this parcel they in fact deposited among the securities belonging to other persons who dealt with them, but gave no in- formation of any of their circumstances to the customer till the eve of their bankruptcy, when they sent him the parcel with the bonds, saying they must stop payment next morning. It was ruled that the customer could not retain the bonds against the assignees of the bankers. “A lien,” said Lord Ellenborough, “means aright to hold. But the defendant never held these bonds; he had no possession of them till the very eve of bank- ruptcy, when the bankrupt could not give a preference to one creditor over the other.” Secondly, the possession must be continuous.? Hence, where is gone, unless it is consistent with the contract, the course of business, or the ' As to the necessity of possession, see Nevan v. Roup, 8 Iowa, 207; Collins v. Buck, 63 Me. 459; Allen v. Shortridge, 1 Duv. 34; Robinson v. Larrabee, 63 Me. 116; Rice v. Austin, 17 Mass. 197; Winter v. Coit, 7 N. Y. 288; Tucker v. Taylor, 58 Ind. 93; Heard v. Brewer, 4 Daly, 186; Sawyer v. Lorillard, 48 Ala. 832; Elliott v. Bradley, 23 Vt. 217. As to when a constructive possession is sufficient, see Heard v. Brewer, supra; Elliott v. Bradley, supra. (q) 2 Camp. 579. ? Walcott v. Keith, 22 N. H. 196; Collins v. Buck, 63 Me. 459. If the bailee parts with his possession before payment of his charges, his lien intention of the parties, that it should continue. Robinson v. Larrabee, 63 Me. 116; Spaulding v. Adams, 32 Me. 212. And his lien will not be reinstated by his again coming into possession of the goods, without the consent or agree- ment of the bailor. Nevan v. Roup, 8 Towa, 207; 3 Pars. on Cont. *238. Sea Spring v. 8. C. Ins. Co.,8 Wheat. 268. An agent has an implied or equitable lien, enforcible within proper time, in equity, for advances, expenses, com- missions, etc., made in the purchase of lands for his principal, and this lien is incident to the debt, and continues in CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 487 a person who had a lien on goods in his possession afterwards de- livered them to a ship carrier, to be conveyed on account and at the risk of his principal, though unknown to the carrier, he can- not recover his lien by stopping the goods, and procuring them to be re-delivered to him by virtue of a bill of lading, signed by the carrier in the course of the voyage (7). “The right of lien,” said Lord Kenyon in that case, “has never been carried further than while the goods continue in the possession of the party claiming it.” It was argued in Kinloch v. Craig (s), that the right of lien extended beyond the time of actual possession; but the contrary was ruled by the Court of King’s Bench, and after- wards in the House of Lords, although the factor had then ac- cepted bills on the faith of general consignments, and had paid part af the freight after the goods arrived. . Thirdly, possession must be acquired in good faith, and in the *ordinary course of business. Hence, if an indi- [865*] vidual obtains possession of a thing by misrepresentation, he cannot retain it as having a lien upon it, although he might have done so had he come by it fairly. Thus, where A., who had accepted an accommodation bill for 60/7. for B., his former prin- cipal, obtained a cheque from C., the newly appointed agent of B., for the amount, upon the representation that ‘there was a balance for 602. due to him from B., Lord Ellenborough ruled that, in an action brought by C. to recover the amount, B. could not retain the money (¢). So where a shipowner’s factor obtained the certificate of the ship’s registry from the master, upon the representation that he required it to enable him to pay the ton- nage duties at the custom house, it was held that he could not retain it against the assignees of the shipowner for his general balance (2). Fourthly, if the possession is acquired through the owner’s agent, no lien can be claimed unless the agent acted with his principal’s authority, or within the scope of his apparent authority.’ the agent so long as he has possession (s) 3 T. R. 119, 783. of the lands or title papers, but if he 13 Pars. on Cont. * 242. parts with possession, or the debt be () Madden v. Kempster, 1 Camp. 12. paid or barred by the statute of limita- (w) Burn v. Brown, 2 Stark, N. P. C. tions, the lien isgone. Byersv. Danley, 272. : 27 Ark. 77. * In Yorke v. Grenaugh, 2 Ld. Raym. (r) Sweet v. Pym, 1 East, 4. 867, it was held that an innkeeper may 488 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL. Liens, it has been said, may be derived through the acts of ser- vants or agents, acting within the scope of their employment. If a servant delivers cloth to a tailor to make his master’s liveries, the tailor will have a lien on the cloth for the value of his work; but though the servant pays the tailor his charge, that will not give him a lien on the liveries (v). A case, put by Gibbs, J., in Hollis v. Claridge («), illustrates the principle fairly. Suppose one having a diamond offers it to another for sale for 100/., and gives it him to examine, and he takes it to a jeweller, who weighs and values it; he refuses to purchase, and, being asked for it again, he says the jeweller must be first paid for the valuation; as between the jeweller and the purchaser, the jeweller has a lien; but as against the lender, he has no right to retain the jewel. The principle deduced in the marginal note from this case is, that the lien which an attorney has on the papers in his hands is only commensurate with the right which the party delivering the papers to him has therein. This is not strictly accurate, since it leaves out of sight the effect of an agent’s act within the scope of his apparent anthority. Lastly, where a person claims a lien upon a specific chattel, the chattel must have come to him in the course of the em- [866*] ployment *in respect of which he claims the lien.t Hence a factor can only claim a lien for his general balance upon detain for his keep, against the right owner of a horse left with him to be kept, though the persons who left him had no right with him; and such ap- pears to be the law. See Threlfall v. Boswick, 26 L. T. (N. 8.) 689; Snead v. Watkins, 1 C. B. (N. S.) 267; Jones v. Morrill, 42 Barb. 623; Manning v. Hol- lenbeck, 27 Wis. 202; Johnson v. Hill, 3 Stark. 172. The English authorities lay down the rule that common carriers being obliged to receive and convey goods for hire, need not inquire into the title of the person delivering them, and may hold them against the real owner until the freight is paid. Yorke v. Grenaugh, 2 Ld. Raym. 867, per Holt, C. J.; Whit- aker on Lien, 92; Cross, id. 286. The rule in this country, however, seems to be settled, that no lien ‘exists in favor of the carrier in such case against the real owner, notwithstanding he has received the goods, without fault on his part, from a wrongful pos- sessor. See Robinson v. Baker, 5 Cush. 137; Fitch v. Newbury, 1 Doug. 1; Gilson v. Guinn, 107 Mass, 126; Clark v. Lowell, etc. R. R. Co., 9 Gray, 231; Everett v. Saltus, 15 Wend. 474; Brower v. Peabody, 13 N. Y. 121; Mar- tin v. Smith, 58 id. 672. (v) See per Lord Ellenborough, in Hussey v. Christie, 9 East, 433. (a) 4 Taunt. 810. 1See Scott v. Jester, 138 Ark. 438; Thacher v. Hannahs, 4 Robert. (N. Y.) 407. CAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 489 goods which come to his hands as factor (y).! So if a solicitor claims a lien upon deeds, they must have come to his hands in the character of a solicitor (2). Dizon v. Stansfield (a), decided in the year 1850, was an action of detinue to recover a policy of insurance. A. and Co., who carried on business at Hull as merchants, factors, ship and insur- ance brokers and general agents, had had various dealings as factors with B. and Co., of London. Whilst these dealings were going on between them, B. and Co. wrote to A. and Co., request- ing them to get a policy of insurance effected for them on a ship for a voyage named. A. and Oo. procured the insurance, and received the premiums from B. and Co. A. and Co. afterwards claimed a lien upon the policy for the general balance due to them as factors. The Court of Common Pleas gave judgment for the plaintiffs, on the ground that a man is not entitled to a lien simply because he happens to fill a character which gives him such a right, unless he has received the goods or done the act in the particular character to which the right attaches.” The question was much discussed in Houghton v. Matthews (6), decided in the year 1803. This was an action in trover fora quantity of indigo, brought by the assignees of a bankrupt prin- cipal against his factor. The factor had sold goods of B. in his own name to the bankrupt. The latter, without paying for these goods, sent the indigo in question to the factor for sale, and after- wards became bankrupt. He had never employed the factor before. Upon his assignees making a claim to the indigo which still remained unsold, the factor set up a lien for the balance of the price of the former goods sold before the relation of factor and principal existed between himself and the bankrupt. The consignees tendered the charges with respect to the indigo. At the trial, before Mr. Justice Rooke, a verdict was found for the plaintiff, leave being reserved to the defendants to move to set that verdict aside and enter a nonsuit. A majority of the court, Chambre, Rooke and Heath, JJ., upheld the verdict, Lord Al- vanley dissenting. The form taken by the question in this case (y) Drinkwater v. Goodwin, Cowp. 535. 251. (a) 10 C. B. 398. 1See Thacher v. Hannahs, supra. *See 1 Pars. on Cont. 98; 3 id. 258. (z) Stevenson v. Blakelock, M.&S. (b) 3B. & P. 485. 490 [Book II RIGHTS, ETC., ARISING OUT OF THE CONTRACT. was, whether, when an agent receives goods to sell for A., he is entitled to retain them, though unsold, after a tender (3867*] of all *charges due in respect to those goods, on the ground of a lien for the price of other goods sold by him for B. to A. under a general authority from B. to sell, there being no general balance due from A. to the broker, and the broker not having sold the goods of B. under a del credere commission. This rather involved question was answered in the negative by a majority of the judges. The rule that the claim to lien must be consistent with the terms upon which possession was obtained is well established.t If a debtor deposits goods or chattels with a creditor for a special ' purpose, or upon an understanding inconsistent with a claim to lien, the latter, by accepting the goods or chattels for that pur- pose, or upon that understanding, waives any right to lien which he might otherwise have. This is merely another application of the maxim “ Lapressum facit cessare tacitum.” Hence, if securities are deposited in a box with a banker for safe keeping only (c), or if placed in his hands to receive the interest on them (d), no lien can be claimed. A claim to a lien is not a waiver of personal remedies against the debtor.? Hence, where a factor makes advances he has a per- sonal remedy against the principal, as well as a lien on the funds in his hands; and this is the same whether the factor has or has not a del credere commission, except that where the factor having a del credere commission has sold the goods, he cannot sue the principal for advances which are covered by the price of the goods, that price being warranted to the principal by the guarantee arising of the commission (e). 1The Stoddard Woolen Manufactory v. Huntley, 8 N. H. 441; Trust v. Pers- son, 1 Hilt. 292. (c) Leese v. Martin, L. R., 17 Eq. 224. (d) Brandao v. Barnett, 12 Cl. & F. 787. 2In Gibson v. Stanton, 9 N. Y. 476, it was held that where a commission merchant makes advances upon the faith of goods consigned to him for sale, by the payment of asight draft drawn upon him by the consignor, the proceeds of the consigned property, when it has come to his hands, are the primary fund to which the acceptor must look for reimbursement; and it is incumbent upon him to show that fund to be insufficient, before he can recover against the consignor personally. See, also, Peisch v. Dickson, 1 Mason, 9; Burrill v. Phillips, 1 Gall. 360; Parker v. Brancker, 22 Pick. 40, there cited; also, Hoy v. Reade, 1 Sweeny, 626. (e) Graham y. Ackroyd, 10 Ha. 192. cap. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 491 For a distinction between a claim to a lien by an agent and a mortgage, under the 43rd section of the Companies Act, 1862, reference may be made to In re Pavy’s Patent Felted Fabric Co. (f). An innkeeper has a lien upon his guest’s horses and carriages, as well as upon his guest’s personal luggage, for the whole of his bill for the guest’s entertainment, and not merely for the keep and care of the horses and carriages;' but if he sells the goods upon which he has a lien, the lien is destroyed, and he is guilty of a conversion, for which the owner of the goods can maintain an ac- tion against him, and recover the whole of the proceeds of the sale as damages (g).” *Sxor. 4.— Liens of particular classes of agents. [868*] First, as to the lien of auctioneers: An auctioneer has a special property in the goods sold by him and a lien on goods in his possession, or on the proceeds thereof, for his commission and expenses. He may retain his commission and expenses out of any deposit or sale proceeds which have been paid to him on account of his principal (A).? If by reason of a defect in the title, the auctioneer is compelled to repay the deposit, his action is against the vendor (2). (f) L. B., 1 Ch. Div. 681. 18ee the subject of the lien of inn- keepers considered in Story on Bail- ments, 8§ 476, 476 a; Edwards on Bail- ments, § 473 et seq. (g) Mullinger v. Florence, W. N. 1878, p. 19; 88 L. T., N. 8. 167. 2No right of sale exists to enforce a mere lien. Briggs v. Boston & 8. R. R. Co., 6 Allen, 246; Fox v. McGregor, 11 Barb. 41; Hunt v. Haskell, 24 Me. 339; Crumbacker v. Tucker, 9 Ark. 365; Bailey v. Shaw, 24 N. H. 297; Leckey v. McDermott, 8S. & R. 500. (hk) Drinkwater v. Goodwin, Cowp. 251; Hammond v. Barclay, 2 East, 227; Story, Agency, s. 27. 3 But where a voluntary assignment was executed, and a portion of the as- signed property was placed by the as- signee in the hands of an auctioneer to be sold, who sold the same and received the proceeds thereof, and the assign- ment was subsequently decreed void, and a receiver appointed to take charge of the assigned property: Held, that the auctioneer had no lien upon the proceeds of the goods, but was bound to pay over the same to the receiver for the benefit of the creditors of the as- signor, who had filed creditors’ bills, although the auctioneer was a creditor of the assignor, and the money came to his hands prior to the filing of the bills by the creditors, to whose use the money was directed to be paid—the auctioneer having become a party to the assignment, by signifying his assent to the same by a formal acceptance. Hone v. Henriquez, 13 Wend. 240. (7) See Spurrier v. Elderton, 5 Esp, 1. 492 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. Secondly, as to bankers: Bankers have a general lien upon all notes, bills, and other secu- rities deposited with them by their customers, for the balance due to them upon the general account (4). Thirdly, as to brokers: Brokers do not, as brokers, possess a general lien.” Insurance brokers are an exception to this rule, inasmuch as a custom exists to intrust them with the possession of policies of insurance effected by them (2). As to insurance brokers in the city of London, see Hewison vy. Guthrie (m). In Jones v. Peppercorne (n),a number of bonds payable to bearer had been deposited: with bankers for safe custody. The bankers fraudulently deposited them with their brokers for the purpose of raising money upon them. The brokers accordingly raised money upon them, and it was held that the bonds were subject to the general lien of the brokers for all money advanced by them to the bankers; and not merely for the advances made on the security of these particular bonds, Fourthly, as to factors: Factors have a general lien for the balance of the account (0).' (k) Paley by Lloyd, 131; Story, Agency, s. 880; Bolland v. Bygrave, Ry. & Moo. 271. 1Bank of the Metropolis v. New Eng. Bank, 1 How. 234; 17 Pet. 174. But in the case of mutual dealings between two banks, a bank to which paper is transmitted for collection can not retain the proceeds to answer a balance against the bank sending the paper, where the paper belongs to third parties and is known to be sent for col- lection merely. Sweeny v. Easter, 1 Wall. 166. 2 Barry v. Berringer, 46 Md. 59. (1) See Phillips on Insurance, vol. 2, p. 575; Snook v. Davidson, 2 Camp. 218, 3See Cranston v. Phila. Ins. Co., 5 Binn. 588; Spring v. 8. C. Ins. Co., 8 Wheat. 268; Moody v. Webster, 3 Pick. 424. (m) 3 Scott, 298. (n) 28 L. J., Ch. 153. (0) Kruger v. Wilcox, Amb. 252. 4Winne v. Hammond, 87 Ill. 99; Sewall v. Nichols, 84 Me. 582; Myer v. Jacobs, 1 Daly, 32; Knapp v. Alvord, 10 Paige, 205; Bryce v. Brooks, 26 Wend. 367; Hoy v. Reade, 1 Sweeny, 626; Schiffer v. Feagin, 51 Ala. 335. See, also, Burns v. Kyle, 56 Ga, 24; Tison v. Howard, 57 id. 410. He cannot assert this lien in opposi- tion to the terms of a special contract under which he received the goods. Schiffer v. Feagin, supra. A consignee, who has made advances upon goods consigned to him, and ef- fected insurance for the benefit of the consignor, has upon the destruction of the goods by fire without his fault, the sane lien upon the insurance money that he had upon the goods themselves. Johnson v. Campbell, 120 Mass. 449. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 493 Fifthly, as to common carriers: A common carrier has a particular or specific lion at common law which empowers him to retain goods carried by him until the price of the carriage of those particular goods has been paid (p)." *A claim toa general lien can be supported only by proof [3869*] of general usage, special agreement, or mode of dealing supporting such claim (gq). Where goods are consigned to an individual, or to his order, the carrier has a right to consider him as the owner of the goods for the purpose of delivery, but not for the collateral purpose of cre- ating a lien on the goods as against the owner in respect of a gen- eral balance due from the consignee.? Hence, wherea carrier had given notice that all goods would be subject to a lien, not only for the freight of the particular goods, but also for any general bal- ance due from their respective owners, and goods were sent to the order of J. S., a factor, the court held that the carrier had not, as against the real owner, any lien for the balance due from J. S. (7). Questions may arise between consignors and carriers wherein the latter, upon the exercise of the right of stoppage zn transitu, claim to retain the goods until a debt due to them from the con- signee has been discharged. It was for some time doubted whether the exercise of the right of stoppage in transitu, which appears to have been first recog- nized in the year 1690 (s), could affect the rights of third parties. Factors acquire no lien for their gen- eral balance before the property is act- ually received by them, unless in pur- suance of an express agreement or one implied from their dealings with their principal. The existence of such an agreement is a question of fact. Win- ter v. Coit, 7N. Y. 288. Where one has contracted for the purchase of merchandise, as the agent of another, a part only of which has been delivered to the agent; and the agent has received from his principal more money than the cost of that part, including all charges; he still has a right to hold that part to indemnify himself for his engagements on account of the portion not received. Stevens v. Robbins, 12 Mass. 179. (p) Butler v. Woolcott, 2 N. R. 64. 1See this subject considered at length in Angell on Carriers, § 357 et seq. (q) Rushforth v. Hadfield, 6 East, 519; 8. C., 7 id. 224; Wright v. Snell, 5 B. & Ald. 350. *See this subject fully considered in Angell on Carriers, § 357 et seq. >See 3 Pars. on Cont. 252; ante, p. 365, note. (r) Wright v. Snell, supra. (s) Wiseman v. Vanderput, 2 Vern, 208. 494 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIfr The point was definitely raised in Oppenheim v. Russell (¢), which which was decided in the year 1802. In that case the Court of Common Pleas decided that a usage for carriers to retain goods for a general balance of account between them and the consignees cannot affect the right of the consignors to stop the goods in transitu. Mr. Justice Heath based his opinion upon the follow- ing grounds: First, the right of stopping én transitu is a common law right; secondly, it is a right arising out of the ancient power and dominion of the consignor over his property, and reserved to him upon his delivery of the goods to the carrier; and, thirdly, there is privity of contract between the consignor and the carrier. His lordship was clear that this power, reserved out of the domin- ion the consignor had over his property, is paramount to any sort of agreement as between the carrier and consignee. The court agreed unanimously in deciding that a carrier has no absolute right in the property intrusted to him, and that while the goods are en transitu his lien cannot, as against the consignor, extend [370*] *any further than to entitle him to be paid for his carriage of the particular goods. Similarly questions may arise between the consignee and the carrier; but it has been decided that a carrier who, by the usage of a particular trade, is to be paid for the carriage of goods by the consignor, has no right to retain them against the consignee for a general balance due to him for the carriage of other goods of the same sort sent by the consignor (w)." Sixthly, as to the master of a ship: The master of a ship has a maritime lien both for his wages and disbursements, and his claim is to be preferred to the claim of a mortgagee (2). Formerly the master had no lien upon the ship for his wages (y).? (t) 3 Bos. & P. 42. (u) Butler v. Woolcott, 2 N. P. 64. 1See Richardson v. Goss, 3 B. & P. 119; 3 Pars. on Cont. 241. (z) The Mary Ann, L.R.,1 A. & C. 8; 24 Vict. c. 10, s. 10. (y) Smith v. Plummer, 1B. & Ad. 575. ®See Hussie v. Christie, 9 East, 426; Wilkins v. Carmichael, 1 Doug. 101; The Johannes Christoph, 33 Eng. L. & Eg. 600. Nor had he any lien on the freight for his disbursements or charges. See Smith v. Plummer, 1 B. & Ald. 575; Gibson v. Ingo, 6 Hare, 112; Bristow v. Whit- more, 4 DeG. & J. 325; Atkinson v. Cotesworth, 3 B. & C. 647. In the U. S. he is said to have a lien, for his charges and disbursements on the freight. Lane v. Penniman, 4 Mass. 91; Lewis v. Hancock, 11 id. 72; Rich- ardson vy. Whiting, 18 Pick. 530; The ONAP. V.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL 495 By the 16th section of the 7 & 8 Vict. c. 112, he first acquired the same rights of lien for the recovery of his wages as a seaman, but only in the case of a bankruptcy of the owner; but this restric- tion was taken off by the 191st section of the Merchant Shipping Act, 1854, which enacts, that “every master of a ship shall, so far as the case permits, have the same rights, liens and remedies for the recovery of his wages, which by this act, or by any law or cus- tom, any seaman, not being a master, has for the recovery of his wages.” The seaman, however, could not recover wages in the Admiralty Court, if there was a special contract respecting the same; and as the master’s wages are almost invariably determined by special contract, his position was not greatly improved by the Merchant Shipping Act. This difficulty was put an end to by the 10th section of the Admiralty Court Act, 1862 (24 Vict. ¢. 1), which enacts, that “The High Court of Admiralty shall have jurisdic- tion over any claims by a seaman of any ship, for wages earned by him on board the ship, whether the same be due under a special contract or otherwise, and also over any lien by the master of any ship for wages earned by him on board the ship.” The claim of a seaman for his wages overrides that of a mortgagee; hence the claim of the master in respect of his wages is also preferred to that of a mortgagee (2). The master’s maritime lien on the freight for his wages and dis- bursements, in priority to the claims of the mortgagees, is *not affected by the fact of his being also part-owner of the [371*] vessel (@). A maritime lien does not include or require possession. The word is used in maritime law, not in the strict legal sense in which we understand it in courts of common law, in which case there can be no lien where there is no possession actual or constructive, but to express, as if by analogy, the nature of claims which neither presuppose nor originate in possession. This, it has been said, was well understood in the civil law, by which there might be a pledge with possession, and a hypothec without possession, and Ship Packet, 3 Mason, 255; but noneon Mason, 91; Hopkinsv. Forsyth, 14 Penn, the ship. The Ship Grand Turk, 1 Paine, St. 34. ; C. 0.73; Revensv. Lewis, 2 id. 202; The (2) Per Dr. Lushington, The Mary Tarch, 2 Curtis, C. ©. 427; Ex parte Ann, ubi sup. Clark, Sprague, 69; Willard v. Dorr,3 (a) The Feronia, L. R., 2A. & E. 65. 496 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK MI. by which in either case the right travelled with the thing into whosesoever possession it came. Having its origin in this rule of law, a maritime lien is defined by Lord Tenterden to mean a claim or privilege upon a thing to be carried into effect by legal pro- cess. That process is explained by Mr. Justice Story (0) to be a proceeding im rem. “A maritime lien,” in the language of the judicial committee of the Privy Council in Harmer v. Bell (c), “is the foundation of the proceeding 7m rem, a process to make perfect a right inchoate from the moment the lien attaches; and whilst it must be admitted that where such a lien exists, a pro- ceeding in rem may be had, it will be found to be equally true that in all cases where a proceeding in rem is the proper course, there a maritime lien exists, which gives a privilege or claim upon the thing to be carried into effect by legal process. This claim or privilege travels with the thing, into whosesoever possession it may come. It is inchoate from the moment the claim or privilege at- taches, and, when carried into effect by legal process, by proceed- ing in rem, relates back to the period when it first attached.” Maritime liens are to be distinguished from claims the payment of which the court has power to enforce from the ship and freight. The former spring into existence the moment the circumstances give birth to them, such as damage, salvage and wages. But it does not follow that because a claim may, by act of parliament, be enforcible against the respondent, that it is therefore created a maritime lien (d). A question of sume novelty was raised in Hingston v. Wendt (c), which was decided in 1876, viz., whether a ship captain [372*] and his “agent, who made an extraordinary expenditure for the purpose of saving a cargo, and which did save the cargo, had a right to detain the whole of the cargo, if it belonged to one owner, till the whole was paid or secured; or, if the cargo belonged to several owners, to detain each part of the goods so saved till the contribution in respect of that part was paid or secured. The court answered this question in the affirmative, al- though the charges were incurred without express authority from the owner. Seventhly, as to solicitors. Kinds of lien: (b) 1 Sumner, 78. (d) The Mary Ann, L. R., 1 A. & E.11, (c) 7 Moo. P. C. 284. (e) 1Q. B. Div. 367. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. | 497 A solicitor has two kinds of lien: (1) A retaining lien, which is a right to retain possession of another’s property until a debt to the solicitor has been satisfied. (2) A charging lien, which is a right to charge property in the possession of another. Liens are also divided into particular and general. A particular lien exists when the claim arises in respect of the very property retained. A general lien exists where the debt results from a general bal- ance of account. The retaining lien is both particular and general; whilst the charging lien is only particular (/). A retaining lien is defeasible; a charging lien is absolute (9). To what the right attaches: The retaining lien of a solicitor attaches to all deeds, papers, money, and chattels in his possession, belonging to his client, and which have come to his hands in the course of, and with refer- ence to, his professional employment, unless there has been sove agreement to the contrary, or unless the right is inconsistent with the solicitor’s employment (A).1. Thus the right has been held to attach to account books, ledgers, journals and cash book (2); letters patent (2); papers relating to a manor (7m); ar- ticles delivered to the solicitor for the purpose of being exhibited to witnesses on the trial of an action (n); bills of exchange (0); an award (); money received by way of compromise (gq). * «Tf the money,” said Lord Mansfield, in Welsh v. [873*] (f) Stokes on Liens, p. 1; Lush, Dubois’ Appeal, 38 id. 231; Nichols v. Practice, vol. i, 323; Chitty, Pract. vol. Root, S. Ct. of Ill, Jan. 25, 1879, i, 183. 11 Chicago Leg. News, 170. (g) Ibid. This subject will be found more fully (h) Chitty, Pract. vol. i, 133; Lush, considered in Weeks on Attys. § 372 et vol. i, 323. seq. 1See Howard v. Osceola, 22 Wis. (i) Jabet, Ex parte, 6 Jur., N. 8. 387. 453; Dennett v. Cutts, 11 N. H. 163; (2) Ex parte Solomon, 1 Glyn & J. 25. White v. Harlow, 5 Gray, 463; Stewart (mm) Reg. v. Williams, 2 H. & W. 277. v. Flowers, 44 Miss. 513; In re Paschal, (n) Friswell v. King, 15 Sim. 191. 10 Wall. 483. (0) Gibson v. May, 4 D.M. & G. 512. See, however, contra, Walton v. (pp) Jones v. Turnbull, 5 Dow. 591. Dickerson, 7 Penn. St. 376. See, also, (q) Davies v. Lawndes, 3 C. & B. 823. 82 498 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [COOK 1. Lole (r), “come to his hands, he may retain to the amount of his bill. He may stop it 2m transitu if he can lay hold of it.” . The papers, etce., must be received by the solicitor in his pro- fessional character. Hence there was no lien recognized in the following cases: where the deeds came to him as mortgagee (s); where the work was done in character of town clerk (¢); when a deed was delivered to the solicitor for the purpose of being shown to another by way of satisfaction (w); where A. gave deeds to B. for the purpose of sat- isfying himself of their sufficiency to secure an annuity, and B. gave them to C. for the purpose of investigating the title, and the treaty for the annuity went off, not from any objection to the title —the court refused to allow C. to retain them until the cost of investigating the title was defrayed (#); where a solicitor in a cause in chancery had without the authority of that court received rents (7). The lien must not be inconsistent with the solicitor’s employ- ment. Hence the lien does not attach to an original will given to him to be proved (z); or to money placed in the hands of the solic- itor for a specific purpose (@). As to a charging lien, it is provided that: In every case in which an attorney or solicitor shall be employed to prosecute or defend any suit, matter, or proceeding in any court of justice, it shall be lawful for the court or judge before whom any such proceeding has been heard or shall be depending, to declare such attorney or solicitor entitled to a charge upon the property recovered or pre- served, and he shall thereupon have a claim upon and a right to payment out of the property of whatsoever nature, tenure, or kind it may be, for the taxed costs, charges and expenses of, or in refer- ence to, such suit, matter, or proceeding (0). (r) Doug. 238. (b) 23 & 24 Vict. c. 127, s. 28. (s) Pelly v. Wathen, 18 L.J.,Ch. 281. In some of the United States this (f) Rex v. Sankey, 5 A. & E, 423. subject is regulated by statute. See (u) Balch v. Symes, 1 T. &. R. 87. Baker v. Cook, 11 Mass. 236; Simmons (x) Hollis v. Claridge, 4 Taunt. 807; v. Almy, 103 id. 80. see Ridgway v. Lee, 25 L. J., Ch. 584. In the United States Supreme Court, (y) Wickens v. Townshend, 1 R. & and in some of the state courts, the lien My. 361. for fees, costs and disbursements is rec- (z) Georges v. Georges, 18 Ves. 294. ognized. Wylie v. Coxe, 15 How. 415; (a) Re Callen, 27 Beay. 51, _. Newbert v. Cunningham, 50 Me. 231; ‘CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 499 | The court or judge may also make such order for taxation and for payment of such costs as shall appear just and proper, but no order shall be made where the right to recover payment is barred by the Statute of Limitations. *An order declaring a solicitor entitled to acharge under [874*] this section must be made in the branch of the court to which the suit was attached (e). All conveyances and acts done to defeat this right are, unless made to a bond fide purchaser for value without notice, abso- lutely void and of no effect as against the right of the solicitor (¢). The charge for costs extends to the property of the client only, and not to that of other persons. | An estate was settled on A. for life, with remainder to his chil- dren as he should appoint, and in default of appointment to the use of his children as tenants in common in tail, with cross re- mainder and in tail between them. In a suit to which B. was a defendant, an appointment by A. was set aside, and the property was left to devolve according to the limitations of settlement, and B. thereby became entitled to an estate tail in certain undivided shares of the property. JB. died a bachelor and without having executed a disentailing deed. B.’s solicitor was not allowed to charge B.’s shares of the settled property with costs, under the above section (7). Charging liens have been allowed in the following cases: Stratton v. Hussey, 62 id. 286; Cooley v. Patterson, 52 id. 472; Sexton v. Pike, 18 Ark. 193; Andrews v. Morse, 12 Conn. 444; Benjamin v. Benjamin, 17 id. 110; Walker v. Sargeant, 14 Vt. 247; Hutchinson v. Howard, 15 id. 544; Hutchinson v. Pettes, 18 id. 616; Mar- tin v. Hawks, 15 Johns. 405; Power v. Kent, 1 Cow. 172; Rooney v. Second Avenue R. R. Co., 18 N. Y. 368; Bowl- ing Green Bank v. Todd, 52 id. 489; Carter v. Davis, 8 Fla. 183; Waters v. Grace, 23 Ark. 118. In some states the lien is limited to statutory costs and disbursements. See Wright v. Cobleigh, 21 N. H. 339; Young v. Dearborn, 27 id. 324; Currier y. Boston & M.R. BR. Co., 387 id. 223; Wells v. Hatch, 43 id. 246; Cozzens v. Whitney, 3 R. I. 79; McDonald v. Na- pier, 14 Ga. 89; Elwood v. Wilson, 21 Jowa, 523; Mansfield v. Dorland, 2 Cal. 507; Dodd v. Brott, 1 Minn. 270. In others the lien is denied, although the attorney has a right to deduct his compensation from money in his hands. Dubois’ Appeal, 88 Penn. St. 231; La Framboise v. Grow, 56 Ill. 197; Forsythe v. Beveridge, 52 id. 268; Hill v. Brink- ley, 10 Ind. 102; Frissell v. Haile, 18 Mo. 18; Humphrey v. Browning, 46 Ill. 476; Nichols v. Root, 8. Ct. Ill, Jan. 25, 1879, 11 Chicago Legal News, 170. (e) Heinrich v. Sutton, L. R., 6 Ch. 865. (f) Berrie v. Howitt, L. R., 9 Eq. 1 500 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III™ 1. A., the defendant, having recovered a sum of money in an action brought by him against D., C., his attorney in that action, had taken out a summons for an order charging his costs in an action upon the sum recovered. B. after- wards, having recovered judgment in his action against A., obtained an ew parte garnishee order attaching the sum recovered by A. against D. in execution. C.’s claim was held to be good as against B. (9). 2. In a suit by a cestut que trust against a lien of landed estate a receiver was ordered to be appointed. During the pro- gress of the cause the plaintiff, without the knowledge of her solicitor, agreed with the defendant to compromise the suit. Upon hearing of this, the plaintiff’s solicitor applied for the terms of the compromise; they were refused him. The court held, upon his petition, that he was en- titled to a first charge for the amount of his taxed *eosts, as between solicitor and client, upon the [875*] property of the plaintiff (A). 3. The costs of a married woman, incurred by her in the defence to a suit by her husband to set aside a first nuptial settle- ~' ment whereby funds were assigned to trustees to secure an annuity to her separate use without power of anticipa- tion, were charged on the annuity (¢). 4. A foreign vessel was arrested in an admiralty suit. A solic- itor was instructed to defend; the suit was dismissed with costs. Suits were again instituted against the vessel and freight for necessaries, some of which were supplied sub- sequently to the former suit. The vessel was sold, and the proceeds paid into court. The solicitors who defended the former suit were paid out of the proceeds in priority both to the claims in respect of necessaries supplied after the institution of the first suit, as well as to the master’s claim for wages (/). 5. S. and D. were entitled to a portion of certain real estates, subject to mortgages thereon. 8. was entitled toa charge (9) Birchall v. Pugin, L. R., 10 C. P. (i) Re Keane, L. R., 12 Eq. 115. 397. (k) The Heinrich, L. R.,3 A. & E. (hk) Twynam v. Porter, L. R., 11 Eq. 505; see The Leader, L. R., 2 A. & E. 181. 814; The Phillippine, L. R., 1 Ib. 809. cHAr. V.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. bol on the other portion of the same estate. S. filed a bill for foreclosure and redemption, to which D. was a defendant. A decree was made in favour of D. Before the general certificate in the suit was made, D. became bankrupt, and his solicitor was held entitled to a charge on his estate and interest (C). 6. Where the proceedings were under the Declaration of Titles Act on behalf of the infant (m). 7. In a partition suit (m). 8. In a suit to obtain a declaration of lien (n). 9. By an order in an administration suit, the costs were ordered to be taxed, and the plaintifi’s costs to be paid to his solicitor B., out of a specified fund in court. Before the costs had been taxed the plaintiff obtained an order to change his solicitor, and B. no longer acted for any pay inthe suit. The Court of Appeal held that B. *was entitled to a charging order, under [876*] 23 & 24 Vict. c.127, upon the interest of his client in the funds in court, notwithstanding the prior order for payment out of a certain specified fund; but that such order ought not to extend to directing a sale, but should be limited to the parties’ liberty to apply. The fact that the plaintiff had in the meantime assigned his interest wit the knowledge of B. was held to be immaterial (7). B. was allowed to retain the papers in the suit till his costs were paid. In another case a solicitor had been originally employed by H. to take pro- cedings in respect of certain shares in a company of which he was a director. In consequence of those proceedings the solicitor obtained certain cheques from the liquidator of the company in exchange for shares. H. had deposited the certificates with the solicitor as a security for costs, none of which had been paid, and subsequently transferred his shares, with notice of the solicitor’s lien, to the plaint- iffs. The retainer was continued by the plaintiffs, who (2) Scholefield v. Lockwood, L. R., 7 —_() Ib.; see Baile v. Baile, L. R., 13 Eq. 83. Eq. 497; Jones v. Frost. L. R., 7 Ch. (m) Pritchard v. Roberts, L. R., 17 773; De Bay v. Griffin, L. R., 10 Ch. Eq. 222. 291. (m) Pilcher v. Arden, 7 Ch. Div. 318. 502 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. now claimed the cheques free from any lien for charges due from H. The court held that the solicitor was en- titled to a lien upon them for his costs of all proceedings against the company in respect of the shares (7). They were not allowed: 1. Ina suit by a residuary legatee against the sole surviving trustee of a testator’s estate. An administration decree was made, and an order for new trustee. The plaintiff stopped further proceedings, but his solicitor in the suit was not allowed to charge the plaintiff’s interest in the estate under sect. 28, as there had been no property re- covered or preserved (0). 2. So when an interlocutory injunction was granted against building higher, the suit was afterwards compromised on the terms that the building should remain at its then height (7). [877*] *Suor. 5.— Stoppage in transitu. An agent has the right of stoppage in transitu: When he has made himself liable for the price of goods con- signed by him to his principal, by obtaining them in his own name and on his own credit (q).! The right, however, does not exist if at the time of the consign- ment the agent is indebted to his principal on the general balance of account to a greater amount than the value of the goods, and if such consignment has been made in order to cover this balance (7). Nor does the right exist if the agent is only a surety for the price of the goods (s). The right of stoppage im ¢ransitu may be exercised either by obtaining actual possession of the goods, or by giving notice of the claim to the person in whose custody they are during the transit (¢).? (n) The General Share Trust Co. v. Chapman, 1 C. P. Div. 771. (o) Pinkerton v. Easton, L. R., 16 Eq. 490. (») Foxon v. Gascoigne, L. R., 9 Ch. 654. (q) Hawkes v. Dunn, 1 Crom. & Jer. 519. 1 Feise vy. Wray, 3 East, 93. (r) Wiseman yv. Vandeputt, 2 Vern. 203; Vertue v. Jewell, 4 Camp. 31. (s) Siffken v. Wray, 6 East, 371. (t) Northey v. Field, 2 Esp. 613; Litt v. Cowley, 7 Taunt. 169. 2 See Newhall v. Vargas, 13 Me. 93; Mottram v. Heyer, 5 Den. 629; Bell v. Moss, 5 Whart. 189. CHAP. v.] RIGHTS OF AGENT AGAINST HIS PRINCIPAL. 503 The right to stop in transitu may be defeated by the goods arriv- ing in the actual or constructive possession of the consignee (w).! The right will be defeated in the following cases: 1. Where the goods had been delivered at the consignee’s own warehouse (v): 2. Where they had been delivered on board his ship (2), though they are carried at the risk of the consignee (y): 3. Where they had been taken possession of by the assignees of the consignee (z): 4. Where they had been delivered at a warehouse which the consignee was in the habit of using for the purpose of receiving consignments, unless notice is given that delivery is not to be made to the consignee until pay- ment (a): 5. Where they have been delivered at a place where the con- signee means them to remain until a fresh destination is communicated to them by his orders (6): *6. Where the consignee has determined the transit by doing any act which is equivalent to taking [3878*] possession on his own account, e. g. by request- ing the carrier, after notice of their arrival, to allow them to remain in a warehouse until further orders, the consignee taking samples (¢): 7. Where the carrier, before the arrival of the goods, agrees to hold the goods as the consignee’s agent (d): 8. Where the goods remain in the vendor’s charge, the vendor receiving warehouse rent for them, unless it is . agreed that they are to remain at rent(e): (u) Jackson v. Nichol, 7 Scott, 577. 882. 1See Hollingsworth v. Napier, 3 Cai. (z) Ellis v. Hunt, 3 T. R., 464; Scott 182; Sawyer v. Joslin, 20 Vt. 172; Mar- v. Pettit,3 B. & P. 469. shall v. Fall, 9 La. Ann. 92; Mottram (a) Loeschman vy. Williams, 4 Camp. y. Heyer, supra; Donath v. Brownhead, 181. 7 Penn. St. 301; Hays v. Mouille, 14 (b) Wentworth vy. Outhwaite, 10 M. id. 48; Stubbs v. Lund, 7 Mass. 453. & W. 436. (v) James v. Griffin, 2 M. & W. 622. — (c) Foster v. Frampton, 6 B. & C. 107. (a) Schotmans v. Lancashire and (@) Whitehead v. Anderson, 9M. & Yorkshire R. Co., L. R., 2 Ch. 332. W. 518, 535. (y) Van Casteel v. Booker, 2 Ex. 691, _(e) Miles v. Gorton, 2 Cr. & M. 504, 708; Wilmhurst v. Bowker, 7 M. & G. per Bayley, J. 504 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIT 9. Where the bill of lading has been assigned bond fide (f): 10. Where the consignee, under a bill of lading, takes pos- session of part of the goods consigned, with the inten- tion of exercising dominion over the whole (9). Where the vendee takes possession of a part of the goods with the view of separating the part delivered from the rest, and not meaning thereby to take possession of the whole, then the transit is determined only as to that part and no more (g). The right will not be defeated: 1. By a claim of the carrier against the consignee (A): 2. By a pledge of the bill of lading (2): 3. By a mere sale of the goods by a consignee (Z). (f) Rodger v. Comptoir D’Escompte 42. See ante, 369. de Paris, L. R., 2 P. C. 393; Cumming (i) Re Westzinthers, 5 B. & Ad. 817. v. Brown, 9 East, 506, 514. (k) Miles v. Gorton, 2 Cr. & M. 504; (g) Tanner v. Scovell, 14M. & W. 28. Dixon v. Yates, 5 B. & Ad. 339. (h) Oppenheim vy. Russell, 3 B. & P. CHAP. VI.] RIGHTS OF AGENTS AGAINTS THIRD PARTIES, 505 *CHAPTER VI. [379*] RIGHTS OF AGENT AGAINST THIRD PARTIES. Sect. 1.—On Contracts. Where the agent has contracted personally..........sseeceeeseees veceeee OUD Where the agent is the real principal........... id ceeUCeahe Hose eeeeGe 3880 Where the agent has a special property........0...ceseeceseeeceeseeenens 885 Where money is paid under illegal contract or by mistake..... .....+esee- 386 SECT. 2.—In Tort. ..cessseeee senate scien as 389 Secr. 1.— Upon Contracts. Ay agent is entitled to bring an action against third persons upon contracts to which they are parties — (1.) Where the agent has contracted personally; ? (2.) In certain cases where the agent is the real principal; (3.) Where the agent has a special interest in the subject-matter of the contract; (4.) In some cases where money is paid on contract which turns out to be illegal, or where it is paid by mistake. Firstly. Where the agent has contracted personally. It is a well-established rule of law that when a contract not un- der seal is made with an agent in his own name, for an undis- closed principal, either the agent or the principal may sue upon it,? the defendant, in the latter case, being entitled to be placed 1 See ante, p. 304. 2See ante, p. 304; Taintor v. Pren- dergast, 3 Hill, 72; Groover v. War- field, 50 Ga. 644; Huntington v. Knox, 7 Cush. 371; Merrick’s Estate, 2 Ashm. 485; 8. C.,8 W. & S. 502; Chandler v. Coe, 54 N. H. 561; Brewster v. Saul, 8 La. 296; Culver v. Bigelow, 43 Vt. 249; Saladin v. Mitchell, 45 Ill. 79. See, also, Woodstock Bank v. Downer, 27 Vt. 482; Evrit v. Bancroft, 22 Ohio St. 172; post, pp. 396, 401. A factor who receives goods, and in his own name ships them to another market to be sold by a sub-agent, can- not collect the proceeds against the will of the owner. After the sale the sub- agent is the debtor, and not the trustee, of the principal. Jackson Ins. Co. v. Partee, 9 Heisk. 296. A disclosed principal is not liable to be sued, nor entitled to sue upon a written contract made by his agent for him in the agent's name. Chandler vy. 506 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIR in the same position, at the time of the disclosure of the real prin- cipal, as if the agent had been the real contracting party.! This rule is most frequently acted upon in sales by factors, agents or partners, in which cases either the nominal or real contractor may sue; but it may be equally applied to other cases. When, how- ever, money is lent by another in his own name, the plaintiff, who alleges that he was in reality the lender, must prove that fact dis- tinctly and clearly. He must show that the loan, though nomi- nally that of another, was really intended to be his own (a). Hence, where one of the managing owners of a vessel was permitted by the other owners to have the possession of the warrants to pay to the owners or bearer a sum of money for freight, and the [380*] managing owner deposited the warrants in *the hands of his bankers, who received the money due on them, and gave him credit for it in account, the court held that, on proof.of the above facts, the other owners could not recover the money from the bankers, because it was not shown that the loan was upon this account (@)*. This case is to be distinguished from cases where the contract is, in point of law, the contract of the principal, the question in Sims vy. Bond being whether the plaintiffs were from the beginning the contracting parties. Cooke v. Wilson (b), deeided in the year 1856, was an action upon a charter-party, in which it was said: “It is this day mu- tually agreed between J. and R. W., owners of the ship ‘Jessica,’ of the first part, and 8. J. ©. (the plaintiff), on behalf of the G. and M. Railway Company, of the other part.” The agreement was signed “J. and R. W.,8.J.C.” In an action by the plaintiff for a breach of the agreement, the defendant demurred to the claim, on the ground that the declaration did not show any cause of action in the plaintiff, who was merely an agent. The demurrer was overruled. “I have always understood the law to be,” said Mr. Justice Crowder, “that if a man signs a written contract, he Coe, supra. See Culver v. Bigelow, su- & Ad. 389. pra. (a) Per Curiam, Sims y. Bond, 5 B. 1 Merrick’s Estate, 2 Ashm. 485; 8.C., & Ad. 389. 8 W. & S. 402; Huntington v. Knox,7 *See Lime Rock Bank y. Plimpton, Cush. 371; Taintor v. Prendergast, 38 17 Pick. 159. Hill, 72. See, also, Kelly v. Munson, (b) Cooke v. Wilson, 1 C. B., N.S. 7 Mass. 319. See post, p. 396. 153. ‘ (a) Per Curiam, Sims vy. Bond, 5B. GHAP. VI.] RIGHTS OF AGENTS AGAINST THIRD PARTIES, 507 is to be considered as the contracting party, unless it clearly ap- pears that he executes it as agent only.” Here, of course, the plaintiff signed the contract in his name simply, and was conse- quently clearly liable upon it. Similarly, as there is a presumption that the agent of a foreign principal or foreign house has no authority to pledge the credit of the latter, therefore the agent is primd facie entitled to sue upon contracts made for such principal (c).? Secondly, where the agent is the real principal. The mere fact that the agent has contracted as agent will not disentitle him to sue. This point was elaborately discussed in 1846 by the Court of Exchequer in Raynor v. Grote (d). This was an action by an agent for non-acceptance of goods. The plaintiff made a written contract for the sale of goods, in which contract he described himself as the agent of a named principal. The buyers accepted and paid for a portion of the goods, and then had notice that the plaintiff was himself the real principal in the transaction; they therenpon refused acceptance of the *rest of the goods. At the trial Mr. Justice Cresswell di- [881*] rected the jury, that if they were satisfied from the evidence that the defendants had received the first portion of the goods with full knowledge of the fact that the plaintiff was the real seller, and that all parties then treated the contracts as one made with the plaintiff as the principal in the transaction, he was entitled, subject to other questions which arose in the cause, to recover in this action. The jury found for the plaintiff. Upon motion for a new trial, it was argued on behalf of the defendants, that the true question was whether evidence could be given to show that the contract, though made in the name of a principal, was made in fact by the agent; if so, a new contract is made differing in time and consideration from that declared upon. The case of a con- tract with a builder of repute was cited, and it was asked whether another could come in and say he was the principal. Baron Alderson, in delivering the judgment of the court, said: “Tf, indeed, the con. tract had been wholly unperformed, and one which the plaintiff, merely proving himself to be the real principal, was seeking to 1 See ante, p. 304. Q. B. 572. (c) Houghton v. Matthews,3B.&P. —* See ante, p. 193, 485, 490; Hutton v. Bullock, L.R.,9 (d) 15M. & W. 359, 508 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Im) enforce, the question might admit of some doubt. In many such cases —such as, for instance, the case of contracts in which the skill or solvency of the person who is named by the principal may reasonably be considered as a material ingredient in the contract — it is clear that the agent cannot then show himself to be the real principal, and sue in his own name; and perhaps it may be fairly urged that this, in all executory contracts, if wholly unperformed, or if partly performed without the knowledge of him who is the real principal, may be the general rule.” The motion, however, was dismissed upon the ground that this contract had been in part performed, and that part performance was accepted by the defend- ants with full knowledge that the plaintiff was not the agent, but the real principal. Hence the court came to the conclusion that the plaintiff was fully entitled to say that the defendants could not refuse to complete that contract, but must receive the remain- der of the goods and pay the stipulated price fcr them. To the same effect it has been said that if an agent acts for and on behalf of the principal but in his own name, then, inasmuch as he is the person with whom the contract is made, it is no an- swer to an action in his name.to say that he is merely an agent, unless the defendant can show that the agent is prohibited from carrying on the action by the person on whose behalf the [882*] *contract was made. Where, however, the agent has con- tracted on behalf of his principal and in his principal’s name, he will not be allowed to sue in his own name in respect of goods which have not come into his possession, although he has made advances to his principal in respect of such goods(e). The distinction taken in an old case is, that if goods by bill of lading are consigned to A., A. is the owner, and must bring the action against the master of the ship if they are lost, but if the bill be to deliver to A. for the use of B., B. ought to bring the action (/). An opinion prevailed until within a recent period, that a broker could sue his principal in his own name on contracts made by him as broker, although he had no interest in the subject-matter of the contract. In Fairlie v. Fenton (g), decided in 1870, a broker sued the defendants for non-acceptance of cotton. In the bought-note the words were, “I have this day sold you, on account of T., ete. (e) Sargent v. Morris, 3B.& Ald.277. (g) L. R., 5 Ex. 169. (f ) Evans v. Marlett, Ld. Raym. 271. CAP. VI.] RIGHTS OF AGENTS AGAINST THIRD PARTIES. 509 Signed, S. F., broker.” The court, whilst recognizing the fact that there are cases where an agent may sue in his own name— as when, for instance, he either has an interest in the subject-matter of the contract, or when the contract is so framed as to make him a party to it— made absolute a rule to nonsuit the plaintiff. If aman sells goods, whilst acting as broker, the moment the sale is complete he is functus officio (h). In Sharman v. Brandt (1), decided in the Exchequer Chamber in 1871, the plaintiff, a broker, was authorized by the defendants to buy a quantity of hemp for them. He sent them a contract note, “bought for B. and H. (the defendants) of our principals,” and signed W. S. and Co. (the plaintiff ’s business name), brokers. At the trial it appeared that the plaintiff had no principal as seller, a fact which was not proved to have been known to the defend- ants. A nonsuit was directed at the trial, on the ground that there was no sufficient memorandum to satisfy the Statute of Frauds (4). This ruling was upheld by the Court of Queen’s Bench, where judgment was affirmed on appeal. The judges for the most part based their decision upon the fact that there was no contract within the Statute of Frauds. Chief Baron Kelly expressed an opinion that a contract between a broker, *though in [383*] his own person, but expressed to be as broker for an un- named principal, and a purchaser, is not a contract made between the broker as unnamed principal and the buyer. Baron Martin doubted whether there was any contract at all, inasmuch as a man employed to purchase cannot make himself a principal in the contract. There is in the case of insurance brokers an apparent exception to the rule that a broker cannot sue in his own name. Policies not under seal in this country are generally effected by brokers in their own name for the benefit of a named principal, or of whom it may concern. The action on the policies so effected may be brought either in the name of the principal for whose benefit it was made (2), or of the broker who was immediately concerned in effecting it (m).! When the policy is by deed a distinction has (hk) Per Lord Ellenborough, Black- (m) Provincial Insurance Company burn v. Scholes, 2 Camp. 341. of Canada v. Leduc, L. R., 6 P. C. 224; (i) L. R., 6 Q. B. 720. see Arnould, Mar. Ins., p. 1086. (k) Wright v. Dannal, 2 Camp. 2038. 'See Finney v. Bedford Commercial (1) Browning v. Provincial Insurance Ins. Co., 8 Met. 348, Company, L. R., 5 P. C. 263. 510 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. been drawn between a deed under seal inter partes and a deed- poll, z. ¢, a deed which is made by one party only. The rule of the law of England is, that the force and effect of a deed under seal cannot exist unless the deed is executed by the party himself, or by another for him in his presence and with his direction, or, in his absence, by an agent authorized to do so by another deed, and in every such case the deed must be made and executed in the name of the principal;! where, however, the deed is a deed- poll, although but one person is named as assured therein, yet all who are interested in the insurance may be joined with him as plaintiffs in the action (7). The right of an agent to sue as principal upon contracts made by him as agent, depends in certain cases upon the fact whether the contract is executory or executed. But the limitation to the agent’s right to sue exists only in contracts when a principal is named, and [is] not [applicable] to those cases where he is not named in the contract (0). When the defendant has received the benefit of the contract, there is nothing in the limitation under consideration to prevent the agent suing in his own name; but in executory contracts, where the skill or solvency of the person who is named as the principal, may reasonably be considered as a ma- terial ingredient in the contract, the agent cannot show that he is the real principal (y). Itis said that this rule is applica- [884*] ble in all *cases of executory contracts, if they are wholly unperformed, or if they are partly performed without its being known who is the real principal (). In Schmalz v. Avery (r), decided in 1851, which was an action in assumpsit on a charter-party stated to be made by the plaintiff as agent for the freighter, it concluded: “This charter-party being concluded on behalf of another party,” etc. No principal was named. At the trial it appeared that the plaintiff was the real principal. Justice Wightman ruled that the plaintiff was con- cluded by the terms of the instrument from saying he was not agent, and that the evidence altered the written contract. A rule 1See ante, p. 171 et seq. (p) Ib., quoting Raynor v. Grote, 15 (n) Sunderland Marine Insurance M. & W. 359. Company v. Kearney, 16 Q. B. 925, (q) Ibid. (0) Per Curiam, Schmalz v. Avery, (r) 20 L. J., Q. B. 228; 15 Jur. 291. 15 Jur. 293. ‘CHAP. VI.] RIGIITS OF AGENTS AGAINST THIRD PARTIES. 511 to enter the verdict for the plaintiff was made absolute by the full court. — “The question,” said Mr. Justice Patteson, “is reduced to this — whether we are to assume that the defendant did so rely on the character of the plaintiff as agent only, and would not have contracted with him as principal if he had known him so to be; and are to lay it down as a broad rule, that a person contract- ing as agent for an unknown and unnamed principal, is excluded from saying, ‘Iam myself that principal.’ Doubtless, his saying so does in some measure contradict the written contract. It may be that the plaintiff entered into the charter-party for some other party, who had not absolutely authorized him to do so, and after- wards declined taking it; or it may be that he intended originally to be the principal. In either case the charter-party would be, strictly speaking, contradicted; yet the defendant does not appear to be prejudiced, for as he was regardless who the real freighter was, it would seem that he trusted for his freight to his lien on the cargo.” A person who has contracted as agent for another whom he names, cannot at once throw off that character, and put himself forward as principal, without communication or notice to the other party (s).!. The soundness of this ratio decidendi was ques- tioned by the Court of Exchequer in a subsequent case (¢), when the plaintiff, being the real principal, contracted as agent for J., sued the defendant for not accepting and paying for the goods. The defendant had accepted and paid for a part of the goods sold, and then had notice, before he refused the remainder, that *the plaintiff was the real principal; and the court held [385*] that the action lay (w). (s) Bickerton v. Burrell, 5M. & 8. 383. 1A party entering into a contract un- der the assumed character of agent, either concealing or falsely representing the name of his principal, when in fact he is the real principal, cannot maintain an action on such contract as principal, without first giving the other party no- tice of his real character. Foster v. Smith, 2 Cold. 474. ‘Where the defendants, who had been in the habit of dealing with B., sent a written order for goods directed to B.; and the plaintiff, who on the same day had bought B.’s business, executed the order without giving the defendants any notice that the goods were not supplied by B.: Held, that plaintiff could not maintain an action for the price of the goods against the defendants. Boulton v. Jones, 2H. & N. 564. (t) Raynor v. Grote, 15 M. & W. 359, (wu) See Schmalz v. Avery. 512 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK MI When the agent’s right is due to his character as agent, he has no personal right tosue.' In Pigott v. Thompson (v), the defend- ant had agreed in writing to pay the rent of certain tolls which he had hired to the treasurer of the commissioners, and the Court of Common Pleas held that no action to recover such rent could be maintained in the name of the treasurer. “It is not necessary to decide,” said Lord Alvanley, “ whether, if A. let land to B. in consideration of which the latter promises to pay the rent to C., C. may maintain an action on that promise. I have little doubt, however, that the action might be maintained, and that the con- sideration would be sufficient. In the present case the agreement is, that in consideration that the commissioners have let the tolls to the defendant, he will pay to their treasurer. Now, it is said that this amounts to a promise to pay to the person who was the treasurer at that time; but Iam clear that such was not the mean- ing of the instrument, and that if the defendant had been removed from his office it would have been a payment which would not have availed the defendant if he had persisted to account with the present plaintiff. The manifest intention of the agreement was, that the defendant should pay the money to any person whom the commissioners should choose to make their treasurer for the time being.” Thirdly. 1A mere agent or attormey, not hay- ing any beneficial interest in a contract, cannot maintain an action upon it in his own name either at law or in equity. Gunn vy. Cantine, 10 Johns. 387; Oakey v. Bond, 3 Edw. Ch. 482; Jones v. Hart, 1 Hen. & Munf., 470; Kent v. Born- stein, 12 Allen, 342; Whitehead v. Potter, 4 Ired. Law, 257; Taintor v. Prendergast, 3 Hill, 72. See, also, Eastern R. R. Co. v. Benedict, 5 Gray, 561. But one holding a check, bill or note payable to bearer, or indorsed in blank, as mere agent, may sue them in his own name; and it does not lie with the opposite party to object to the plaintiff’s want of interest. Mauran v. Lamb, 7 Cow. 174; Hodge v. Comly, 2 Miles, 236. When the agent has a special interest: ? Where a contract is made with a public officer in his official capacity, ac- tion thereon should be brought in the name of his principal and not in the name of the officer. Garland v. Rey- nolds, 20 Me. 45, where the note in suit was made payable to “ E.H., treasurer of the committee of the surplus rev- enue;” Irish v. Webster, 5 Me. 171, where the note, not negotiable, was exe- cuted to “J. J. Statis, agent, or his suc- cessor in office,’ for timber belonging to the state; Dugan v. U. 8., 3 Wheat. 172; Bainbridge v. Downie, 6 Mass. 253; White v. Bennett, 1 Mo. 102. (v) 8 Bos. & Pul. 147. ? Whitehead v. Potter, 4 Ired. Law, 857. Asfactors: Murray v. Toland, 3 Johns. Ch. 569; Toland v. Murray, 18 Johns, 24; Ladd v. Arkell, 5Jones & Sp. CHAP. VI.] RIGHTS OF AGENTS AGAINST THIRD PARTIES. 5138 In Atkyns v. Amber (x), decided before Chief Justice Eyre in the year 1796, the declaration stated that in consideration that the plaintiffs would sell to the defendant a cargo of timber, the defendant undertook to pay them with a bill for the value: aver- ment, the delivery of the timber; breach, the not giving the bill as agreed. At the trial, it appeared that H. employed the plaintiffs as brokers, and that the latter had advanced money to H. on the timber in question. The sale note was made in the name of H. His lordship, however, ruled that inasmuch as the plaintiffs had “a special property in the timber,” there was no variance, and a verdict for the plaintiffs was found. The claim of an agent who sells goods upon which he has a lien cannot be defeated by a plea that the principal is indebted to the buyer. The law has been thus stated by Lord Mansfield: * We think that a factor who receives cloths, and is au- [386*] thorized to sell them in his own name, but makes the buyer debtor to himself, though he is not answerable for the debts, yet he has a right to receive the monies; his receipt is a discharge for the buyer, and he has a right to bring an action against him to compel the payment; and it would be no defence for the buyer in that action to say, that as between him and the principal he (the buyer) ought to have that money because the principal is in- debted to him in more than that sum, for the principal himself can never say that but when the factor has nothing due to him” (y). Fourthly.. When money is paid by mistake or under illegal contract: Lord Mansfield stated as a rule of law in an early case, that “Where a man pays money by his agent, which ought not to have name to recover the price of goods sold 85; Graham vy. Duckwall, 8 Bush, 12; or auctioneers who sell the goods of third persons. Bogart v. O'Regan, 1 E. D. Smith, 590; Hulse v. Young, 16 Johns. 1; Minturn v. Main, 7N. Y. 220; Beller v. Block, 19 Ark. 566. See, also, DeForrest v. Fulton Ins. Co., 1 Hall, 84. A mere ordinary merchandise broker, not acting under del credere commission, cannot maintain an action in his own 33 by him for the owner. White v. Chouteau, 10 Barb. 202. But if the broker has advanced upon the goods sold, or has guaranteed the sale, he may sue in his own name. White v. Chouteau, supra. (a) 2 Esp. 493. (y) Drinkwater v. Goodwin, Cowp. 251. K 514 [BOOK Im. RIGHTS, ETC., ARISING OUT OF THE CONTRACT. been paid, either the agent or principal may bring an action to re- cover it back. The agent may, from the authority of the princi- pal, and the principal may as proving it to have been paid by his agent” (2).! The same rule applies when the money is paid by the agent on a contract which turns out to be illegal owing to facts of which the agent wasignorant. Thus, where an insurance had been made on goods from a port in Russia to London, by an agent residing here for a Russian subject, which insurance was in fact made after the commencement of hostilities by Russia against this country, but before the knowledge of it here, and after the ship had sailed and been seized and confiscated, the court held that the policy was void in its inception, but that the agent of the assured was entitled to a return of the premium paid in ignorance of the fact of hostilities (z). At the trial Lord Ellenborough ruled that the plaintiffs having effected the insurance without any conscious- ness of its illegality at the time, were entitled to recover back the premium, as money had and received by the defendant, to their use and without consideration. On a motion to enter a nonsuit, it was argued that the insurance was either legal or illegal; if it was legal, and the risk attached for an instant, the plaintiffs could not recover the premium; if it was illegal, the plaintiffs would be equally unable to recover. A rule was refused on the [387*] grounds that the plaintiffs had no *knowledge of the com- mencement of hostilities, and that the risk never at- tached. Where the agent sues in his own name the defendant may avail himself of all defenses which would be good at law and in equity: (z) Stevenson v. Mortimer, Cowp. 805. 1See post, p. 404. One who is simply employed to sell goods and pay over to his employer the money received from the sales, has no authority to exchange such money with a third person; and, if he does so, and receives in exchange a counterfeit bill, he may maintain an action in his own name to recover back the money paid out by him for it; and it is not neces- sary, before bringing such action, to offer to retum the counterfeit bill. Kent v. Bornstein, 12 Allen, 342. See, also, Hungerford v. Scott, 37 Wis. 341, where an action by a steam- boat agent to recover from a purchaser the difference between the price received by him and the schedule price of tickets sold, which he had paid to the company, the tickets being sold by the agent by mistake for less than the schedule price, was held not to lie. (a) Oom vy. Bruce, 12 East, 225. CHAP. VI.] RIGHTS OF AGENTS AGAINST THIRD PARTIES. 515 (a.) As against the agent who is the plaintiff on the record,! or (b.) As against the principal for whose use the action is brought, provided, of course, a principal exists.’ The authorities at common law upon the first point were very fully examined in a considered judgment of the Court of Com- mon Pleas, in 1838. A broker, in whose name a policy of insur- ance was effected, brought covenant and the defendants pleaded payment to the plaintiffs, the proof being that, after the loss hap- pened, the assurers paid the amount to the broker by allowing him credit for premiums due from him to them. It was held that, although there was no payment as between the assured and as- ‘surers, the payment was good as between the plaintiffs on the record and the defendants (0). The earlier authorities are consistent with this decision, and warrant the position that a plaintiff, though he sues as a trustee of another, must, apart from equitable considerations, be treated in all respects as the party in the cause; if there is a defence against him, there is a defence against the cestue que trust who uses his name; and the plaintiff cannot be permitted to say for the benefit of another that his own act is void, which he cannot say for the benefit of himself (c). In Bauerman vy. Leadenius (d), in which the question was whether the admission by the plaintiff, who was a trustee for an- other, could be received in evidence, Lord Kenyon said: “I take it to be an incontrovertible rule, that an admission made by the plaintiff on the record is admissible evidence.” So a release by the plaintiff on the record suing for the benefit of another was decided, in a case before Lord Mansfield (e), to be a good answer at law, and Mr. Justice Lawrence expressed the same opinion in the case last mentioned. The courts of law have been in the habit of exercising an equitable jurisdiction on motion, and setting such releases aside, or preventing the “defendant [388*] from pleading them (f)2 This practice shows that, but for the equitable interference of the courts, the real plaintiff would 18ee Lime Rock Bank v. Plimpton, (d) 7 T. RB. 668. 17 Pick. 159. (e) Cited in Bauerman v. Radenius, 28ee 1 Greenl. on Evid. § 180. supra. (b) Gibson v. Winter, 5 B. & Ad. 96. (f) Legh v. Legh, 1 Bos. & Pul. 447. (c) Ibid. 3See 1 Greenl. on Evid. § 173. 516 RIGUTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III? be barred. By the operation of the Judicature Acts, a plea which is no answer in equity will no longer avail a defendant. See 36 & 37 Vict. c. 66, s. 25, subs. 11. With respect to the second point, Mr. Justice Bayley pointed out in &. v. Hardwick (g), that Bauerman v. Radenius only de- cided that the declarations of the nominal party on the record were evidence against him; but not that the declarations of the real party would not also have been evidence. Accordingly, in an action by the master of a ship for freight, Lord Ellenborough ruled that, although the action was in the name of the master, it was brought for the benefit of the owner, and that therefore anything said by the latter was admissible evidence for the defendant (A). In Grice v. Kenrick (2), which was decided in 1870, the plaintiff was an auctioneer employed by one Weir to sell certain goods by auction. The action was brought to recover the price of the arti- cles bought by the defendant at the auction, and afterwards received by him. The defence set up was, that before the sale the defend- ant, who was a creditor of Weir, had agreed with him that he should bid at the auction, and receive the goods for which he should be the highest bidder in payment of the debt due him. It was contended on behalf of the plaintiff that, as he had no notice of this agreement at the time of the sale, and gave up the goods to the defendant on the faith of his paying for them, he, the plaintiff, was entitled to recover. The plaintiff had paid over to Weir a greater sum than the amount of the purchases made by the de- fendant after notice of the agreement between Weir and the de- fendant. Mr. Justice Hannen, who delivered the judgment of the court, said: “It was contended that the fact that the plaintiff gave up the goods to the defendant on the faith of his paying for them created a liability on the part of the latter to make such payment. If there had been any deceit practiced by the defendant on the plaintiff, or if there had been any facts accompanying the receipt of the goods from which a promise on the defendant’s part to pay the auctioneer could be inferred, the plaintiff would be en- [389*] titled to recover; but the defendant, in *obtaining the goods from the plaintiff without payment, did no more (g) 11 East, 578. (%) Smith v. Lyon, 3 Camp. 465. (7) L. R., 5 Q. B. 344 CIIAP. VI.] RIGHTS OF AGENTS AGAINST THIRD PARTIES. 517 than he was entitled to do as between himself and Weir, and he was justified in assuming that the plaintiff, in giving up the goods without payment, was doing so in fulfilment of the agree- ment of his principal.” In the present case the conditions which were wanting in Robinson v. Rutter (k) were supplied. By the terms of the agreement between defendant and Weir, the defend- ant was entitled to have the goods without payment; and it appeared that, as between the plaintiff and Weir, the plaintiff's charges in respect of the goods delivered to the defendant had been satisfied before action. Sror. 2. — Rights of agent against third parties in tort. Any special or temporary ownership of goods, with immediate possession, is sufficient to maintain an action for conversion (2). An agent having such special property, with immediate posses- sion, may maintain an action against the absolute owner for wrongful conversion, but can only recover damages in respect of his limited interest (m).? If an agent is not in possession at the time 'of the conversion, and has to rely upon his right only, he may be called upon to prove a good title, and the defendant will be allowed to rebut his title by showing a jus tertid (x). Where the defendant has disturbed the actual possession of the plaintiff, (k) 241. J., Q. B. 250. (1) Legg v. Evans, 6 M. & W. 36. 1See this subject fully considered in Cooley on Torts, pp. 442-447. See, also, Ladd v. Arkell, 5 Jones & Sp. 35, factors; Fitzhugh v. Wiman, 9 N. Y. 559, forwarding merchants; Beyer v. Bush, 50 Ala. 19. One having the goods of another in his possession to sell on commission, can maintain an action for any damage done to them while so in his possession. Robinson v. Webb, 11 Bush, 464. Property of the principal held by an agent for sale is not liable to be seized on execution or attachment for the agent's debt. Loomis v. Barker, 69 il. 360. Where an agent, pursuant to in- structions of his principal, delivers to a common carrier moneys of the princi- pal, consigned to and to be transported to him, the consignor, from the time of the delivery, ceases to have any title or interest therein, and cannot maintain an action against the carrier therefor. Thompson v. Fargo, 63 N. Y. 479. (m) Roberts v. Wyatt, 2 Taunt. 268, *So, a factor having a lien upon goods for the amount of his advances, can, in an action against a creditor of his prin- cipal, who has taken the goods under attachment, recover only the value of his special property in the goods. Heard v. Brewer, 4 Daly, 136. (n) Leake v. Loveday, 4 M. & G. 972; Gadsden v. Barrow, 9 Ex. 514, 518 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. he will not be allowed to set up a jus tertiz, unless he can justify his act under the authority of the third party (0). First, as to the cases where the agent has been in possession of the goods or chattels in respect of which he sues: In Burton v. Hughes (p) the owner of furniture lent it to the plaintiff under the terms of a written agreement. The plaintiff placed it in a house occupied by the wife of a bankrupt. The assignees of the bankrupt seized the furniture, and the Court of Common Pleas held that the plaintiff might recover it in trover without producing the agreement. “The case of Sutton vy. Buck (q), which has been referred to,” said Chief Justice Best, “confirms what I had esteemed to be the law upon the subject, namely, that a simple bailee has a sufficient interest to [890*] sue in *trover.”! In that case, a person whose title was not completed by registry of a regular conveyance sued in trover to recover a ship of which he had been possessed. “ Sup- pose a man,” observed Chief Justice Mansfield, “ gives mea ship, without a regular compliance with the Register Act, and I fit it out at 5002. expense, what a doctrine it is that another man may take it from me, and I have no remedy.” “There is enough property in the plaintiff,” remarked Mr. Justice Lawrence, “to enable him to maintain trover against a wrongdoer; and although it has been urged that the contract is void with respect to the rights of third persons, as well as between the parties, yet so far as regards the possession, it is good as against all except the vendor himself.” The rule laid down by Mr. Justice Chambre, in the case cited by Chief Justice Best, is that an agister, etc., a carrier, a factor may bring trover. A general bailment will support the action, though the bailment is made only for the benefit of the true owner.! In Rooth v. Wilson (r), which was an action on the case against (0) Jeffries v. The South Western cient forthe purposes of this action, and Railway Company, 5 E. & B. 802; 25 as against a mere wrongdoer, may L. J., Q. B. 107. recover the whole value of the property, (p) 2 Bing. 188. being accountable over to the general (q) 2 Taunt. 302. owner. Cooley on Torts, 447; Beyer v. 1A factor, or a bailee, or any other Bush, 50 Ala. 19; Edwards on Bail- person with a right of his own, however ments, $$ 37, 69, 103 et seq., 329. special or trivial, has a property suffi- (r) 1B. & Ald. 59. CHAP. VI.] RIGHTS OF AGENTS AGAINST THIRD PARTIES. 519 the defendant for the not repairing the fences of a close adjoining that of the plaintiff, whereby a horse of the plaintiff fell into the defendant’s close and was killed, it was objected that the plaintiff had not such a property in the horse as to entitle him to maintain the action, he being merely a gratuitous bailee. A verdict hav- ing been found for the plaintiff, the court discharged a rule for a new trial. “TI think,” said Mr. Justice Abbott, “that the same possession which would enable the plaintiff to maintain trespass would enable him to maintain this action.” Mr. Justice Holroyd based the liability of the defendant on the ground that the plaintiff was entitled to the benefit of his field, not only for the use of his own cattle, but also for putting in the cattle of others. Secondly, as to cases where the agent has not been in pos- session: In Fowler v. Down (s), which was decided by the Court of Common Pleas in 1797, Chief Justice Eyre pointed out that it is not true that, in cases of special property, the claimant must have had possession in order to maintain trover, citing the case of a factor to whom goods have been consigned and who has never received them.’ *In Bryans v. Nia (t),a corn merchant, T., who had been [391*] in the habit of consigning cargoes of corn to the plaintiffs, as his factors, for sale at Liverpool, obtaining from them accept- ances on the faith of such consignments, obtained from the mas- ters of canal boats 604 and 54 receipts signed by them for full car- goes of oats deliverable to the agent of T. in Dublin, in care for the plaintiffs. T. inclosed the receipts to the plaintiffs, and drew a bill on them against the value of the cargo, which the plaintiffs accepted, on 7th February, and paid when due. On 6th February, W., an agent of the defendant, who was T.’s factor for sale in Lon- don, pressed T. for security for previous advances, and T. gave W. an order on the Dublin agent to deliver to W. the cargoes of the boats on the arrivals. Only boat 604 was loaded when the receipt was given by the masters, and the acceptances were obtained from the plaintiffs. The loading of 54 was completed on the 9th, and T. then sent to W. a receipt signed by the master similar to that sent to the plaintiffs, making the cargo deliverable to W., who took possession of both cargoes. ‘The court held that the property in (s) 1B. & P. 44. 'See Cooley on Torts, 445, 446. (t)4 M. & W. 775. 520 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL. the cargo of boat 604 vested in the plaintiffs on their acceptance of the bill, and that they were entitled to maintain trover for it; but that they could not maintain trover for the cargo of boat 54, since none of it was on board, or otherwise specifically appropri- ated to the plaintiffs when the receipt for that boat was given by the master.! “The transaction,” said Baron Parke, who delivered the judg- ment of the court, “is in effect the same as if T. had deposited the goods with a stakeholder,’ who had assented to hold them for the plaintiffs, in order to indemnify them. As evidence of such a transaction, it is wholly immaterial whether the instruments are bills of lading or not; and it might equally be proved through the medium of carriers’ or wharfingers’ receipts, or any other description of document, or by correspondence alone. If the in- tention of the parties to pass the property, whether absolute or special, in certain ascertained chattels, is established, and they are placed in the hands of a depository — no matter whether such de- pository be a common carrier or shipmaster employed by the con- signor or a third person — and the chattels are so placed on account of the person who is to have that property, and the deposi- [892*1 tory assents, it is enough; and it matters not by what *docu- ments this is effected, nor is it material whether the per- son whois to have that property be a factor or not; for such an agreement may be made with a factor as well as any other indi- vidual.” In Anderson v. Clark (u), a bill of lading, making the goods deliverable to a factor, was, upon proof from correspondence of the intention to vest the property in the factor as security for antecedent advances, held to give him a special property the in- stant the goods were delivered on board, so as to enable him to sue the master of the ship for their non-delivery. When, however, the relation between consignor and consignee is simply that of principal and factor, the latter has no such interest in consign- ments that have not come into possession as to entitle him to main- tain trover against the carrier who claims a lien (w). 1 See generally on this subject, Benj. Thompson v. Fargo, ante, p. 389, note. on Sales, § 867; Hatch v. Bayley, 12 * See as to stakeholders, ante, pp. 318, Cush. 27; Prince v. Boston & L, R. R. 319. Corporation, 101 Mass. 547; First Nat. (u) 2 Bing. 20. Bank y. Dearborn, 115 id, 222, 223. See (v) Kinloch v. Craig, 8 T. R. 783, CHAP. VI.] -RIGHTS OF AGENTS AGAINST THIRD PARTIES. 521 Lord Ellenborough observed, in Patten v. Thompson (a), that “if it be taken that the cargo was consigned to the Liverpool house as a security for advances made by them, this may afford a ground for their claim to detain the same siti such time as they are indemnified against these advances on the responsibility they had contracted in respect of the cargo. But the case as it now stands seems to me to go further, and that the defendant, in order to succeed in his claim, must make out this position, that when- ever a principal consigns goods to his factor for sale, and is at the same time in a course of drawing on the factor upon account, the circumstance of there being mutual credits between them, does of itself give to the factor a right, not merely to detain such consign- ments as shall come to his hands, but to anticipate the possession, and to keep it against the unpaid seller. If there had been any specific pledge of this cargo in the course of the transaction — if bills had been accepted by the Liverpool house on the credit of this particular consignment, or if it had been so stipulated — this would have been a different case.” In Evans v. Nichol (y), which was decided in 1841, trover was brought for a quantity of alkali and potash, and the defendants pleaded that the plaintiffs were not possessed, as of their own property, of the goods mentioned. At the trial, it appeared that a manufacturer at Newcastle consigned the potash and alkali to E. and Co., their factors in London, specifically to meet *a bill drawn upon them, transmitting to them a receipt [393*] signed by the mate of the vessel. The receipt acknowl- edged the goods to have been received for E. and Co. At the time of the shipment the consignor was indebted to the shipowners for freights due on former shipments. He became bankrupt, where- upon the shipowners refused to sign the bills of lading, claiming a general lien. The vessel seadhied London, and the shipowners sent to their agents there (the defendants) an order for the goods in question. The defendants received the goods, and refused to deliver them to E. and Oo., the plaintiffs. An unsuccessful attempt was made to prove a custom to a general lien, and Chief Justice Tindal ruled upon the other question, that the circumstance of the alkali having, at the time of the shipment, been specifically appropriated by the consignor to the bill, vested such a property (z) 5M. & 8. 350. (y) 4 Scott, N. R. 43. 522 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK II. therein in the plaintiffs as to enable them to maintain trover. A rule nist to enter a nonsuit was discharged. Maule, J., said: “Upon the delivery of the goods to the defend- ants to be delivered to the plaintiffs, and the defendants’ accept- ance of ihem upon those terms, the property vested in the plaint- iffs, who had an interest in them, viz., the interest of persons with whom the goods were pledged. And this view of the case is strongly supported by the decision of the Court of Exchequer in Bryans v. Nix(z). It is clearly competent to a man to sell goods to another, and to vest in him the property, though the goods are not present. It is admitted that the plaintiffs’ right to recover would have been indisputable had the relation between Clapham (the consignor) and the plaintiffs been that of vendor and vendees, instead of pawnor and pawnees. But the goods having been shipped by Clapham to the order of the plaintiffs upon their ac- ceptance of the 5002. bill, and the defendants having received them for the purpose of being delivered to the plaintiffs, and Clapham not having revoked the consignment, it appears to me that the plaintiffs acquired such an interest in the property and right to the possession as to entitle them to maintain trover against the defendants.” The case of Hazilé v. Smith (a) bears a resemblance to Z’vans v. Wichol. A., of Liverpool, wishing to draw upon the banking- house of B. in London, agreed, among other securities given, to , consign goods to a mercantile house consisting of the same [394*] *partners as the banking-house, though under the firm of B.andC. Accordingly he remitted the invoice of a cargo and the bill of lading indorsed in blank to B. and C., but the cargo was prevented from leaving Liverpool by an embargo. A. then became bankrupt, being considerably indebted to B., and the cargo was delivered to his assignees by the captain. It was held that B.and C. might maintain [trover] for the cargo against the captain. In Kinloch v. Craig (6), Bruce v. Waite (c) and Nichols v. Clent (d), there was no documentary or other evidence to prove that the intention of the consignors was to vest the property in the consignee from the moment of delivery to the carrier. (z) 3M. & W. 15. (c) 3M. & W. 15. (a) 1B. & P. 563. (d) 8 Price, 547. (b) 3 T. Rep. 783. CHAP, VII.] RIGUTS OF PRINCIPAL AGAINST THIRD PARTIES. 523 *CHAPTER VIL [395*] THE RIGHTS OF THE PRINCIPAL AGAINST THIRD PARTIES. PAGE. Szor. 1.— The Right to sue upon the Contracts of the Agent. The rights and duties of principals as regards third parties are re- ciprocal ...-...+ sanieamadis wee's 826 The rights of the Sadoal are sub- ject to two qualifications.....-.- 396 The principal's right to sue is not affected by the fact that the agent is also entitled to sue....----+++ Opinion of Mr. Justice Willes in Semenzav. Brinsley, with respect to defences within George v. Claggett......- aie sion sigs so s's - 397 The right of the principal 4a sue is paramount to that of the agent unless the agent has a lien ae to the claim of the principal.... 400 Summary of the law by Mr. J aatioe Holroyd ..2seeesee seers - 401 Effect of the srilies of the Stock ‘Ex change....+-.ee adteia' sv efecce vee 402 Cornfoot v. Fowke discussed ....-- 403 Summary of propositions......++- 404 Szor. 2. — The Right of the Prin- cipal to recover Money wrong- fully paid or applied. ‘ The rule stated by Lord Mansfield. 404 The action may be brought either " py the agent or by the principal. Sucr. 3. — The Right of the Prin- cipal to follow Property wrong- fully conveyed or its Proceeds. Opinions of Lord Holt, Lord Cow- per, Willes, C. J., and Lee, C.J. 406 405 Sect. 3.— continued. PAGE. Taylor v. Plumer examined.....-. 406 The Factors’ Acts.... .. .. se eianeisie 410 Unauthorized sale or pledge at com- mon law.......06. eieteteiisie- BG8's 411 Cases examined .....seeeseeeeees 411 Rules of common law unaffected by Factors’ Acts.......seeeecceees Provisions of 4 Geo. 4, c. 83 Sale by agent acting in a character different from that in which he received goods Provisions of 6 Geo. 4, c. 94...06- Decisions upon, examined ...... The act does not extend to docu- ments made by the agent, or where the agent was not in- trusted as agent for sale, or to documents not intrusted by the true OWNEL. ... eee eeeeecees o. 415 Meaning of word ‘‘ disposition ”.. 416 What deposits or pledges are with- in the section Opinion of Mr. Justice Blackburn upon the above acts......+-++0- Provisions of 5 and 6 Vict. c. 39... The recital examined Lord St. Leonards’ opinion of the effect of this statute......--.--- Hitherto these acts had only ap- plied to mercantile transactions. 422 Who are agents intrusted with 418 414 415 416 416 419 eae eeenee goods or documents......++++.. 422 Examination of cases which throw light on the Factors’ Act, 1877.. 424 Summary and effect of the provis- jons of 40 and 41 Vict. c. 39.... 428 524 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL. Sxcr. 8.—continued. PAGE. Summary of the rules of the com- mon law, and the provisions of the Factors’ Acts......... eoeee 402 Sect. 4.—The Right to rescind Contracts affected by Fraud. Opinions of Lords Justices James and Mellish examined.......... Secr. 4.— continued. PAGE. Courts of equity will administer re- dress where one principal had acted surreptitiously with the agent of another principal...... The defence of laches..... eeeseee 436 435 | The claim to damages......+-... 487 Tue rights of a principal against third parties may be distributed under the following heads: (a.) The right to sue upon the contracts, and to take advantage of the acts of his agent. [896*] *(b.) The right to recover money wrongfully paid or ap- plied by the agent. (c.) The right to recover gouds wrongfully conveyed or pledged. (d.) The right to rescind contracts affected by fraud of the agent and the other contracting parties. Sror. 1.— Zhe right to sue on contracts of agent. Those acts or contracts of an agent which render the principal liable to third parties impose upon the third parties themselves a reciprocal obligation to the principal; and as the principal is lia- ble to the burden of such acts or contracts, whether the agent had authority originally, or his acts have been duly ratified, so he is entitled to the rights and benefits arising from such contracts, and may enforce those rights by action.’ 1See ante, p. 379, post, 401, and notes; Conklin v. Leeds, 58 Ill. 178; Barber v. Garvey, 83 id. 184; Machias Hotel Co. v. Coyle, 35 Me. 405. Otherwise, if the contract is under seal. Briggs v. Partridge, 64 N. Y. 357. See, ante, pp. 171, 172, and notes. J£ an agent procures the note of his principal to be discounted, and deposits the proceeds in bank to his own credit, the principal may, it is held, maintain an action therefor against the bank in his own name, notwithstanding the bank, after notice, has paid the money on the check of the agent. Frazier v. Erie Bank, 8 W. & S. 18. Where a merchant's clerk, who had been sent on a tour of collection for his principal, paid his fare as passenger in a railroad car, and committed his trunk, which contained money belonging to his principal, not exceeding a reasona- ble amount for traveling expenses, to the agent of the proprietors of the rail- road, and the trunk was lost: Held, that an action would not lie in the name of the principal upon the contract ex- isting between his agent and the de- fendant. Weed v. Saratoga, etc. R. R. Co., 19 Wend. 534. The husband of plaintiff, as her agent, but in his own name, entered into a contract under seal with the de- fendant for the sale by the latter of cer- CIIAP. VII.] RIGITS OF PRINCIPAL AGAINST THIRD PARTIES. 523 The rights here mentioned are subject to two qualifications. The first, which is of universal application, whether the principal is known or undisclosed at the time the contract is entered into, is, that the right of the principal is affected and modified by the declarations, misrepresentations, concealments, and frand gener- ally of the agent acting within the scope of his authority... The second, which is applicable to cases where the agent has been al- lowed to contract as principal with the third party without notice, is, that the principal, if he takes advantage of the agent’s contract, must do so subject to all the equities and rights of which the other contracting party might avail himself in the transaction as against the agent, assuming the latter to have been a principal. It may be here mentioned that the right of the principal to sue is not affected by the fact that the agent also is entitled to sue, or that the principal was undisclosed when the contract was made, or that the agent acts under a del eredere commission, or that the other contracting party dealt with the agent without notice of the existence of a principal. Lord Mansfield stated (a), as early as the year 1788, that the rule had long been settled that where a factor, dealing for a prin- tain real estate. Plaintiff was present v. Handy, 23 Wend. 260; Bennett v. during the negotiations. She received Judson, 21 N.Y. 238; Crans v. Hunter, the deed from defendant, paid the con- sideration and took possession of the land: Held, that an action could be maintained by the plaintiff for fraud in the sale on the part of the defendant. Beardsley v. Duntley, 69 N. Y. 577, which was a bill for a specific perform- ance of an alleged oral agreement for the sale of land by defendant to plaint- iff, the fraud consisting in the omission from the deed of a part of the premises orally bargained for. See, however, Chandler v. Coe, 54 N. H. 561; Briggs v. Partridge, supra. 1Morton v. Scull, 23 Ark. 289; De- meritt v. Meserne, 39 N. H. 521; Mad- ison & Ind. R. R. Co. v. Norwich Saving Society, 24 Ind. 457; Mutual Benefit Ins. Co. v. Cannon, 48 id. 264; Barber v. Britton, 26 Vt. 112; North River Bank v. Aymar, 3 Hill, 262; Sandford 28 id. 389; Elwell v. Chamberlin, 31 id. 611, 619; N. Y. & N. H.R. R. Co. v. Schuyler, 34 id. 30; Crump v. U. 8. Mining Co., 7 Gratt. 352. 2See ante, p. 379, and note; Traub vy. Milliken, 57 Me. 63; Koch v. Willi, 63 Ill. 144; Miller v. Lea, 35 Ind. 396; Lime Rock Bank v. Plimpton, 17 Pick. 159; Culver v. Bigelow, 43 Vt. 249; Peel v. Shepherd, 58 Ga. 365. If the purchaser of property does not know that he is dealing with an agent of the owner and has not good reason to know it, he is justified in treating the agent as the owner, and payment of the purchase price to him will be a defense to an action by the owner for the amount. Eclipse Wind Mill Co. v. Thoraon, 46 Towa, 181. (a) Rabone v. Willams, 7T. R. 360 n. 523 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL cipal, but concealing that principal, delivered goods in his own name, the other contracting party has a right to consider him to all intents and purposes as the principal; and though [897*] *the real principal may bring an action upon that contract against the purchaser of the goods, the latter may set off any claim he may have against the factor in answer to the demand of the principal. This principle, after having been frequently acted upon at Nisi Prius, was at length, in the year 1797, con- firmed by the full Court of King’s Bench. George v. Claggett (b) was a case which decided that, if a factor sells goods as his own, and the buyer knows nothing of any principal, the buyer may set off any demand he may have on the factor against the demand for the goods made by the principal.’ The difficulty felt in applying the statute of set-off, and saying that the terms of the statute were satisfied, so as to say that the debt of the factor should for the purpose of the action be considered as the debt of the princi- pal, was got over by a subsequent case (¢), where it was held that the existence of the set-off without any knowledge of the agency entitled the debtor to set up as against the principal the defence of set-off as a guast extinguishment, notwithstanding the words of the statute of set-off. Mr. Justice Willes, in Semenza v. Brinsley (d), has pointed out that, in order to make a valid defence within the above rule, the defendant must show: (1.) That the contract was made by a person whom the plaintiff had intrusted with possession of the goods. (b) 7 T. R. 359. 1On sales made by a factor, the prin- cipal may recover the price due by the vendee, subject to the equities which the vendee has acquired by dealing with the agent as principal, or which the agent may have acquired from the course of dealing between him and the vendee. Merrick’s Estate, 5 W. & 8. 9; 8. C., 2 Ashm. 485. See note, p. 396; ante, p. 120. Where a factor, L., entrusts goods of his principal, W., to an agent, A., for sale, such agent knowing that L. was the factor of W., A. cannot in an ac- tion against him by L. to recover the proceeds of the goods which had been sold by him, set off an individual in- debtedness due from L. tohim. Ladd y. Arkell, 40 N. Y. Superior Ct. 150. If an agent, appointed to collect a debt, is indebted to the debtor, the lat- ter cannot offset against the debt due from him to the principal, claims against the agent. Wilson v. Codman, 3 Cranch, 204. (c) Carr v. Hincheliff, 4 B. & C. 547. (d) 18C.B., N.S. 477; 34 L. T., C. P. 161. CHAP. VIL.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 527 (2.) That tke person sold them as his own goods in his own name, as principal, with the authority of the plaintiff. (3.) That the defendant dealt with him as and believed him to be the principal in the transaction, and that before the defendant was undeceived in that respect the set-off accrued. Henee, if the buyer is dealing with a known agent, the prin- ciple laid down in George v. Claggett does not apply, although the buyer does not know at the time who is the particular prin- cipal (¢).! The principles stated by Mr. Justice Willes in Semenza v. Brinsley were accepted by the Court of Common Pleas in 1873 (/). In Borries v. The Imperial Ottoman Bank, which was decided *in 1873, there was acount for goods sold and [898*] delivered. To this the defendants pleaded that the goods were sold and delivered to them by Scheitlin and Co., then being the agents of the plaintiffs, and that Scheitl{n and Co. sold the goods in their own name, and as their own goods, with the con- sent of the plaintiffs; that at the time of the sale the defendants believed Scheitlin and Co. to be the owners of the goods, and did not know that the plaintiffs were the owners of or interested therein, or that Scheitlin and Co. were their agents; and that before the defendants knew that the plaintiffs were the owners of the goods, or that Scheitlin and Co. were agents in the sale thereof, Scheitlin and Co. became indebted to the defendants, who alaimed a set-off. The plaintiffs replied that before the sale the defend- ants had the means of knowing that Scheitlin and Co. were merely apparent owners of the goods, and that the same were intrusted to Scheitlin and Co. merely as agents, and that Scheitlin and Co. were agents, and as such sold the goods to the defendants. The (e) Ibid. 1See Graham v. Duckwall, 8 Bush, 12; Saladin v. Mitchell, 45 Il. 79. If the character of a seller is equivo- cal, if he is known to be in the habit of selling sometimes as agent and some- times as principal, a purchaser who is aware of this and makes no inquiries as to the capacity in which the seller acts, will be denied the benefit of his set-off, if it should turn out that he has bought of an undisclosed principal. Miller vy. Lea, 35 Md. 396. (s) Borries v. Imperial Ottoman Bank, L. R., 9 C. P. 38; 43 L. J., C. P. 3. 528 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IT, court held that the plea was good, and the replication no answer to it. Coleridge, C. J., said: “The essence of the defence is, the real state of the defendants’ mind when they bought the goods of Scheitlin and Co. They assert that it was this, that they believed the goods to be the goods of Scheitlin and Co., and did not know or believe that the plaintiffs were the owners of or interested in them. That brings the case distinctly within the rule in George v. Claggett; and that is the form of plea which has been com- monly in use to raise a defence of this kind. I observe that in two cases — Purchell v. Salter (g) and Semenza v. Brinsley (h) —where the plea contained an averment that the defendant had no means of knowledge, no notice is taken of that allegation in the judgment. If it be necessary to aver that the defendants had not notice that the plaintiffs were the owners of the goods, I think that is substantially averred in this plea by the statement that Scheitlin and Co., with the consent of the plaintiffs, sold the goods as their own, and that the defendants believed them to be the owners of them, and did not know that the plaintiffs were the real owners.” The above decisions of the Court of Common Pleas were re- viewed by the Court of Appeal in 1876, when the latter court decided that a person purchasing goods from a factor, who [899*] sells *them in his own name, can set off a debt due to him from the factor personally, in the same way as if the factor was the plaintiff, unless the purchaser has notice that the factor is not the principal; and that this right is not affected by the fact that the factor, in selling in his own name without disclosing the agency, is acting in contravention of the express directions of his principal (¢). Brett, J. A., explained that the statement by Willes, J., in Semenza v. Brinsley, was to the effect that it must be shown that the agent acted with the authority of his principal. This statement was due to the cireumstance that he was dealing with the demurrer. Such authority is shown when the facts prove that the agent is intrusted as a factor. ‘“ Now,” said his lordship, “the rule of law is, that the extent of an agent’s authority, as be- (g) 1Q. B. 197. (i) Ex parte Dixon, Re Henley, L. R., (h) 180. B., N.S. 467. 4 Ch. Div. 133; 46 L. J., Bank. 20, CHAP. viI.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 529 tween himself and third parties, is to be measured by the extent of his usual employment. That being so, the very fact of intrust- ing your goods to aman as a factor, with right to sell them, is prima facie authority from you to sell them in his own name.! Therefore, it not being shown here that any limitation of that authority was made known to the person who was dealing with the agent, there is sufficient evidence, as between the principal and such third party, that the goods were to be sold by the agent in his own name as principal, with the authority of the person who so intrusted him with the goods. That point, therefore, is made out. It is true that Mr. Justice Willes, in Semenza v. Brinsley, states it to be necessary that the agent should have the authority of the principal for selling in his own name; but he was only dealing with a demurrer to a plea; and, at the end of the judgment, he says it was a great pity that the parties did not go on to try the facts; and, if the facts had been tried, I have no doubt that as soon as he found that the agent was intrusted with the goods as a factor, he would have held that that proved author- ity given to him by the principal to sell in his own name, so far as anybody was concerned to whom some limitation of his author- ity was not disclosed. It, therefore, is made out that the agent sold in his own name with the authority of the principal. An- other point taken in the argument was, that the person dealing should be shown to have believed that the agent was the principal in the transaction. Evidence to the effect that he dealt under such belief was given by the person dealing with the agent; but it was further argued *that the former must be taken [400*] to have known the contrary, because the acceptances on former transactions showed on their face that the agent was deal- ing as an agent.” The court, however, decided the latter point against the principal upon the facts. “The arguments of the ap- pellant (the principal),” said James, L. J., “are founded on a private communication between the principal and his agent, and on the form of certain bills of exchange. As regards third par- ties, the powers of an agent are measured by the apparent scope of his authority, and cannot be limited by any private communi- cation with him. Then as to the forms of the bills of exchange, when I come to look at them, I think the argument amounts to 1See ante, p. 123. 34 530 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK I. nothing whatever, because, although there is something printed upon them as to agency, that is so written over with ink as to prevent anybody from noticing it.” An attempt was made, on behalf of the principal, to limit the definition of the term factor to persons intrusted with goods from abroad. The attempt, it need scarcely be remarked, was unsuccessful. The right of the principal to sue is paramount to that of the agent, and in cases where either may bring an action, the former, by giving notice to the other contracting party, puts an end to the agent’s right of action, except in cases where the agent has a lien upon the subject-matter of the action equal to the claim of the principal.! Thus, where a factor sold goods, and the principal took steps to recover the debt himself, Lord Ellenborongh ruled that after the intervention of the principal the right of the factor to sue was gone, and that the debt was due to the principal in the same manner as if the sale had been made personally by him in the first instance (7). An instance of the exception to the rule is furnished by Hudson v. Granger (k), which was decided in 1821. There the owner of goods, being indebted to a factor in an amount exceeding their value, consigned them to him for sale. The fac- tor, who was also similarly indebted to the defendant, sold the goods to him. The factor afterwards becaine bankrupt, and on a settlement of accounts between the defendant and the assignees, the defendant allowed credit to them for the price of the goods, and proved for the residue of his claim against the estate. The plaintiffs, the original owners of the goods, brought an £401*] action against the vendee *for the price; but the court held that, as the factor had alien on the whole price of the goods, the settlement of accounts between the vendee and the assignees afforded a good answer to the action. Mr. Justice Holroyd summarized the law thus: “In Drink- water v. Goodwin (L) it was expressly decided that a factor who becomes surety for a principal has a lien on the price of the goods sold by him for his principal in the amount of the sum for which he becomes surety;? and Mr. Justice Chambre, in Houghton v. Mat- 1§8ee Taintor v. Prendergast, 3 Hill, (2) Cowp. 251. 72; post, p. 404. *See Daniel v. Swift, 54 Ga. 118; (j) Sadler v. Leigh, 4 Camp. 195. ante, p. 368, note. (k) 5B. & Ald. 27. CUAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 531 thews (m), considers that settled law. Clark (the factor), having a lien on the proceeds, had a right to receive the price from the buyer, and, when he had so received it, to retain it against Hal- lowell (the consignor). The bankruptcy of Clark could not ope- rate to destroy his right of lien, though it would operate as a revocation of his authority to receive any money on behalf of his principal. His assignees, after the bankruptcy, had the same rights as the bankrupt had before. Assignment made to Clark before his bankruptcy, even against the will of Hallowell, would have operated as a valid payment as against Hallowell, and a pay- ment to his assignees afterwards must have the same effect.” By the law of England an undisclosed principal may sue and be sued upon mercantile contracts made by his agent in his own name, subject to any defenses or equities which, without notice, may exist against the agent (z).' If the owner of goods allows the broker through whom he sells them to sell them as a princi- pal, the buyer of goods so sold is discharged by payment to the broker in any way which would have been sufficient had he been the real owner (0).2 “A broker,” remarked Lord Ellenborongh, “after having made the contract of sale, cannot vary the terms of it; but in this case the person employed to sell, himself acted as a principal, and the plaintiff, knowing this, authorized his mode of dealing, and all its consequences” (p). To a similar effect it has been said that a broker, with an undisclosed princi- pal, may vary the terms of payment after the sale is completed. The principal may interfere at any time before payment, but not to rescind what has been before done. But if a man sells goods, acting as a broker, the moment the sale is com*pleted [402*] he is functus officio. The terms of the contract cannot then be altered except by the authority of the principal (qg).* (m) 3B. & P. 489. state of the title. (n) Per Curiam, Browning v. Provin- (0) Coates v. Lewes, 1 Camp. 444. cial Insurance Company of Canada, L. * Traub vy. Milliken, 57 Me. 63; Peel R., 5 P. C. 279. vy. Shepherd, 58 Ga. 365; Saladin v. 18ee ante, pp. 379, 896, and notes; Mitchell, 45 Ill. 79. Woodruff v. McGehee, 30 Ga. 158; See ante, p. 896, and note. Foster v. Smith, 2 Cold. 474; Hunting- (p) Ibid. ton v. Knox, 7 Cush. 371; Bryant v, (q) Per Lord Ellenborough, Black- Wells, 56 N. H. 152, a lease not under burn v. Scholes, 2 Camp. 341. seal, executed byagentin hisownname = *See Saladin v. Mitchell, 45 Ill. 79; without disclosing his agency or the ante, p. 122, note. 532 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. It is a well-established rule of law that where a contract not under seal is made with an agent in his own name for an undis- closed principal, either the agent or principal may sue upon it. If the principal sues, then the defendant is entitled to be placed in the same position at the time of the disclosure of the real principal as if the agent had been the contracting party.’ This rule is most frequently acted upon in sales by factors, agents or partners, in which cases either the nominal or real contractor may sue; but it may be equally applied to other cases (7), but not to the case of a broker who had neither the documents of title to the goods nor the possession of the goods (s). Hence where a broker sells goods without disclosing the name of his principal, and in so doing exceeds his authority, the buyer cannot set off a debt due from the broker to him against the demand for the goods made by the principal (¢).? The real ground upon which this and similar decisions rests is, that where a principal permits an agent to sell as apparent principal, and afterwards intervenes, the buyer is entitled to be placed in the same situation at the time of the disclosure of the real principal as if the agent had been the real contracting party, and is entitled to the same defence, whether it be by common law or statute, payment or set off, as he was entitled to at that time against the agent, the apparent principal (2). The rule that a principal may sue upon a contract entered into on his behalf by an agent, although his name was concealed at the time of the contract, is not affected by the rules of the Stock Exchange, the effect of which is to make all stockbrokers princi- pals as between themselves, but not to take away the right of a principal to sue in respect of his own right in his own name (v), or to free an undisclosed principal from liability (2). The mere fact that persons have notice that a party contract- ing with them in his own name is a factor, is not enough to deprive them of the rights they have derived from his actually 1 See ante, pp. 879, 396, 401. 12; Miller v. Lea, ante, p. 397, note. (r) Per Curiam, Sims v. Bond, 5 B. = (u) Per Curiam, Osberg v. Bowden, & Ad. 389. 8 Ex. 852. (s) Baring y. Corrie, 2 B. & Ald. (v) Langton v. Waite, L. R., 6 Eq. 137. 165. (t) Ibid. (x) Mortimer v. McCallan, 6 M. & 2See Graham vy. Duckwall, 8 Bush, W. 58. CHAP. VIL] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 533 selling goods as a principal. A man who is in the habit of *selling the goods of others may likewise sell goods as [403*] his own; and where he sells goods as a principal with the sanction of the real owner, the purchaser who is thus led to give him credit will not be deprived of his set-off by the intervention of any third person.’ This rule, however, does not apply where the purchaser has express notice, before the completion of the con- tract, that the seller acted only as factor (y), But a person who contracts as agent cannot afterwards sue as principal, without giv- ing notice to the other contracting party that he is the real prin- cipal (2)! : The rule that an undisclosed principal may take advantage of the contract entered into by his agent applies to policies of marine insurance, even when no assignment clause is inserted (a). ‘ ‘When a written contract has been entered into by an agent in his own name, the undisclosed principal is entitled to sue upon it, although it sets out that the agent agrees to pay a sum of money by cheque upon his own bankers (0).8 The proposition that the right of a principal to sue upon con- tracts entered into by his agent may be modified by the declara- tions, misrepresentations, concealment and fraud generally of the agent,’ is sometimes said to be qualified in its turn by the decision 18ee ante, p. 397, note. (y) Moore v. Clementson, 2 Camp. 22. (z) Bickerton v. Burrell, 5 M. & 8. 383. 28ee ante, p. 384, and note. (a) Browning v. Provincial Insurance Company of Canada, L. R., 5 P. C. 263. (b) Phelps v. Prothero, 16 C. B. 370. 3 See ante, p. 896, and note. 4See ante, p. 396, and note; post, p. 465. If an agent effects a sale of land of his principal by false representations or other fraud, without authority or knowl- edge of the principal, the latter is charge- able with such fraud in the same man- ner as if he had known or authorized it. Law v. Grant, 37 Wis. 548; Bennett v. Judson, 21 N. Y. 238; Elwell v. Cham- berlin, 31 id. 611, 619. The rule is the same in the case of a purchase. Graves v. Spier, 58 Barb. 349, If the vendor knows when he effects the sale, that the purchaser has been in- duced to buy by the false and fraudulent representations of a third person, he is responsible for the fraud, though such person was not his agent. Law v. Grant, supra. An innocent principal cannot take an advantage resulting from the fraud of an agent, without rendering himself civilly liable to the injured party. Na- tional Life Ins. Co. v. Minch, 5 Thomp. & C. 545; Elwell v. Chamberlin, 31 N, Y. 611, 619; Bowers v. Johnson, 18 Miss. 169; Lawrence v. Hand, 23 id. 103; Mundorff vy. Wickersham, 63 Penn. St. 87; Haskit v. Elliott, 58 Ind. 493. See ante, Ratification, p. 65. Accordingly, where a husband as 534 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. of the Court of Exchequer in Cornfoot v. Fowke (c), which has been thought to limit the proposition to cases other than those where the principal is free from moral frand.' That decision, how- ever, when carefully examined, it will be found, may be supported by the principle that oral evidence cannot be given to vary the terms of a written contract. The contract in that case was in writing; the representation upon which the defendant relied as an answer to the action was not embodied in the contract. Baron Rolfe admitted that if the plaintiff, knowing of the nuisance, ex- pressly authorized the agent to state that it did not exist, or to make any statement of similar import; or if he purposely em- ployed an agent ignorant of the truth, in order that such agent might innocently make a false statement, believing it to be true, and might so deceive the party with whom he was dealing, in either of these cases he would be guilty of a fraud, and the truth of the plea would then be established. This admission proceeds upon the principle, that a principal was not liable for the [404*] agent’s fraud, unless the fraud was brought *home to him. Baron Alderson laid stress upon what is conceived to be the true ratio decidendi, namely, that above stated — a view which Baron Parke also adopted. If the decision itself is thought to support the general proposition that a person who has been in- duced to enter into a contract by the fraud of the agent cannot set up such fraud as an answer to an action by the principal, pro- vided the latter is innocent, it can no longer be considered as an authority (d). The following propositions may be inferred from the authorities with respect to the right of a principal to sue upon the contracts of an agent: agentof his wife, by fraud procured an insurance upon her life, it was held, that money paid upon the policy by the in- surance company to the personal repre- sentative of the wife after her death, could be recovered back, notwithstand- ing the wife was innocent of the fraud. Nat. Life Ins. Co. v. Minch, supra. (c) 6 M. & W. 358, 1The case of Cornfoot v. Fowke was denied by Redfield, J., in Fitzsimmons v. Joslin, 21 Vt. 140. See, also, Fuller y. Wilson, 3 Q. B. 58; 8. C., id. 68, 1009; National Exchange Co. v. Drew, 2 Macq. 103, 144; 8. C., 32 Eng. L. & Eq. 1; Collins v. Evans, 5 Q. B. 820; Benj. on Sales, §§ 455, 462; Story on Agency, § 139, note; 2 Kent Com. (12 ed.) 621, notes c. and 1; post, p. 467. See, also, Mr. Bigelow’s comments on the case in his Leading Cases on Torts, p. 21; 3 Am. Law Rev. 430; Coddington v. Goddard, 16 Gray, 436, 442. (d) See Wilson v. Fuller, 3 Q. B. 68, and per Willes, J., in Barwick v. Eng- lish Joint Stock Bank, L. R., 2 Ex. 282. CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 535 (a.) Tle may take advantage of all such contracts, whether his name has been disclosed or not, except 1. When the agent has contracted personally by deed (e).' 2. When in a contract of sale the agent has a lien upon the - subject-matter of the contract or its proceeds, exceeding or equal to the value, in this case the right of the agent is paramount to that of the principal (7). 3. When an exclusive credit is given to and by the agent (9). (b.) This right of the principal, when it exists, is subject to the qualification, 1. Defences founded upon the fraud of the agent are equally valid against the principal (/).? 2. Where the agent has been allowed to contract as principal without notice, the principal takes the contract subject to all the equities and rights of which the other con- tracting party might avail himself in the transaction as against the principal (2). Srcr. 2.— The right of the principal to recover money wrong- Sully paid or applied. Lord Mansfield laid down the general rule, as early as the year 1778, to the effect that “where a man pays money by his agent which ought not to have been paid, either the agent or *his principal may bring an action to recover it back. The [405*] agent may, from the authority of the principal; and the principal may, as proving it to have been paid by his agent (2).° Hence, if exorbitant fees are taken by acustom-house officer from the master of a vessel, the owners may bring an action to recover the excess (0). (e) Appleton v. Binks, 5 East, 149; — () See Parley, 3d ed. 235. Tanner v. Christian, 4 E. & B.591; See ante, p. 403, and note. Pickering’s Claim, L. R., 6 Ch. 525; = (¢) Ibid. Schack v. Anthony, 1 M. & S. 573. “See ante, p. 396, and note. 1See ante, pp. 171, 172, and notes; = (%) Sadler v. Evans, 4 Burr. 1984; Spencer v. Field, 10 Wend. 88; Potts v. Stevenson vy. Mortimer, Cowp. 805. Rider, 3 Ohio, 70; Demarest v. New §° See ante, p. 386, and note; Far- Barbadoes, 40 N. J. Law, 604. mers’ & M. Bank y. King, 57 Penn. (f) Hudson v. Granger, 5B. & Ald. 27. St. 202; Sheffer v. Montgomery, 65 2 See ante, p. 400. id. 829. (g) Addison v. Gandasequi, 2 Smith’s (7) Ibid. Lead. Cases, 853, and notes. 536 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. In Ancherv. The Bank of England (m), decided in 1781, a specially indorsed bill of exchange having been rendered nego- tiable by a forged indorsement was discounted by the defendant. An agent of the drawer having taken up the bill, the court held that the drawer might recover back the money so paid by his agent (7). An underwriter who has acknowledged the receipt of premiums from an agent will not be allowed, in an action brought by the principal to recover back such money, to say that the agent never paid him. Accordingly, where the defendant had underwritten a policy of insurance effected bya broker on account of the plaintiff upon goods by ship or ships, he was not allowed, in an action brought to recover back the premium on the ground that the goods had never been shipped, to impeach the policy signed by himself, on which he acknowledged the receipt of the premium (0). In actions against an underwriter for a loss, an acknowledg- ment in the policy of the payment of the premiums is conclusive as between the assured and the underwriter; and the latter can- not, as a rule, set off the premiums, although they have never been paid (p). It has been suggested, however, that if it had ap- peared on the face of the case that the underwriter had paid the Josses and returns of premium to the assured through the medium of premiums retained in the hands of the broker, there would be an answer to the action (q). Szcr. 8.— The right of the princinal to follow property wrongfully conveyed or its proceeds. It is a well-established principle, that wherever the property of a party has been wrongfully misapplied, or a trust fund [406*] has *been wrongfully converted into another species of property, if its identity can be traced, it will be held, in its new form, liable to the rights of the orignal owner or cestwi que trust (7). (m) 2 Doug. 637. (q) Ibid. (n) See to the same effect Sigourney (r) Story, Eq. Jur. § 1258 et seq. v. Lloyd, 8 B. & C. 622. 1See Farmers’ & M. Bank v. King, (0) Dalzell v. Mair, 1 Camp. 582. 57 Penn. St. 202; Greene v. Haskell, 5 (p) De Gaminde v. Pigou, 4 Taunt. R. I. 447; Chesterfield Manfg. Co. v. 246, Dehon, 5 Pick. 7; Le Breton v. Peirce, 2 CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST TOIRD PARTIES. 537 ' Lord Holt ruled in 1708 (s), that trust property in the posses- sion of a factor empowered to dispose of it for his principal did not pass to his assignees upon his becoming a bankrupt. Soon afterwards Lord Cowper came to the same decision (¢). The doc- trine was extended in Whitecombe v. Jacob (u), which was de- cided in 1711. In that case a factor intrusted with the disposal of merchandise for his principal sold it, and received the money; and instead of paying the money to his principal vested the pro- duce in other goods, and died indebted in debts of a higher na- ture, such as specialty debts. The Court of Chancery held that those goods should be taken as the merchant’s estate, and not the factor’s.! The authority of this case at law was acknowledged by Willes, C. J., in Scott v. Surman (a). In Ryall v. Roll (y), the two latter cases are quoted, and Lee, C. J., accepts the principle that “things arising from the sale of other things follow the na- ture of the goods themselves.” Again, Lord Mansfield decided (2) in 1763, that if an executor becomes bankrupt, the commis- sioners could not seize the specific effects of his testator, not even in money, which could be specifically distinguished and ascer- tained to belong to the testator, and not to the bankrupt. So in the case of specific remittances. The representatives could under the old bankrupt law be in no better position than the person whom they represent would have been (a). With respect to Allen, 8; U.S. v. State Bank, 6 Otto, 30. Where an agent occupying a fidu- ciary relation to his principal, purchases the property of the principal in his charge, at a greatly inadequate price, by concealment of facts and informa- tion relating thereto, which he was bound to disclose, the sale will be set aside, and where a party purchases from the agent a portion of the prop- erty so purchased from the principal, with full knowledge of the transactions between the agent and his principal, the sale cannot be sustained. Norris v. Taylor, 68 Ill. 17. Where an agent exchanges the prop- erty of his principal without authority, the fact of his liability to his principal will afford no ground for defeating an action of trover brought by the princi- pal against the party receiving the same from the agent, or release his lia- ability to the owner after his refusal to deliver the same on demand. Bertholf v. Quinlan, 68 IIl. 297. (s) InL’Apostre yv. Plaistrier (cited 1 P. Wms. 318). (t) Copeman v. Gallant, 1 P. Wms. 3820. (u) Salk. 160. 1 Tate v. Laforest, 25 La. Ann. 187, (x) Willes, 400. (y) 1 Atk. 172. (z) Howard v. Jemmett, 3 Burr. 1369. (a) Ex parte Chion, 3 P. Wms. 187 n., and Hassall v. Smithers, 12 Ves. 119. 538 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL. money which has been converted into land, the same principles apply, the only difficulty being that of proof (0). The judgment of Lord Ellenboroughin Taylor v. Plumer (¢), 1815, contains an able exposition of this branch of law. This was an action in trover brought by the assignees of one Walsh, a stock- broker, to recover certain valuable securities from the defendant. The facts stated were that the defendant intrusted the broker with money for the purchase of exchequer bills. [407*] *This money the broker had misapplied by buying Amer- ican stock and bullion. He afterwards absconded, but having been taken before he had left England, he gave up to the defendant the securities for the stock and the bullion. The broker became bankrupt on the day on which he misapplied plaintiff’s money. The court held in a considered judgment that the plaint- iff was entitled to retain the proceeds of the securities as against the plaintiffs. Lord Ellenborough, who delivered the judgment of the court, said: “Upon a view of the authorities and consideration of the arguments, it should seem that if the property in its original state and form was conveyed with a trust in favour of the plaintiff, no change of that state and form can divest it of such trust, or give the factor or those who represent him in right any other more valid claim in respect to it than they respectively had before such change. An abuse of trust can confer no right on the party abusing it, nor on those who claim in privity with him.” His lordship went on to say that the defendant’s counsel was obliged to contend that if A. is trusted by B. with money to purchase a horse for him and he purchases a carriage with that money, B. is entitled to the carriage, and continued: “If he be not so entitled, the case on the part of the defendant appears to be hardly sustain- able in argument. It makes no difference in reason or law into what other form different from the original the change may have been made, whether it be into that of promissory notes for the security of the money which was produced by the sale of the goods of the plaintiff, as in Scott v. Surman (d), or into other merchandise, as in Whitecomb v. Jacob (e); for the product of or (») Per Lord Hardwicke in Lane v. (c) 3M. &S. 562. Dighton, Amb. 409; see Lench vy. Lench, (d) Willes, 400. 10 Ves. 517. (e) Salk. 160. CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 539 substitute for the original thing still follows the nature of the thing itself, as long as it can be ascertained to be such, and the right only ceases when the means of ascertainment fail, which is the case when the subject is turned into money, and mixed and confounded in a general mass of the same description. The dif- ficulty which arises in such a case is a difficulty of fact and not of law, and the dictum that money has no ear-mark must be un- derstood in the same way, 2. ¢., as predicated only of an undivided and undistinguishable mass of current money.’ But money in a bag, or otherwise kept apart from other money, guineas, or other coin marked (if the fact were so), for the purpose of being distinguished, are so far *ear-marked as to fall within the [408*] rule on this subject, which applies to every other descrip- tion of personal property whilst it remains (as the property in question did) in the hands of the factor or his general representa- tives.” This case was the subject of much discussion in the Court of Appeal in 1876, in Hx parte Cooke, Re Strachan (f). There a trustee employed a broker to sell trust stock and invest the pro- ceeds in railway shares on behalf of the trust estate. The broker had full notice that the stock in question was trust stock. He sold for cash and bought the railway shares to the same amount for the settling day. The price of the trust stock was received in a cheque, which the broker paid in to his account at his bank- ers. Before the arrival of the settling day he stopped payment and went into liquidation, and the trustee claimed so much of the broker’s balance at his bankers as arose from the proceeds of the trust stock. The claim was disallowed by the registrar on the ground that the relation between broker and customer was similar to that between banker and customer. This decision was reversed on appeal by Lord Justice James, Sir Richard Baggallay, and Sir Geo. Bramwell. Taylor v. Plumer (g) was relied on for the appellant. All the learned judges agreed that this case was an 1J£ an agent mingles his principal's to him. Farmers’ and M. Bank v. money with his own, so that it cannot King, 57 Penn. St. 202. See School be followed, the principal can not re- District v. First Nat. Bank, 102 Mass. cover it specifically. But the agent 174. does not convert himself into a mere (/) L. R., 4 Ch. Div. 123, debtor; the principal may claim from = (y) Supra. the admixture the sum which belonged 540 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. authority to be acted upon in the case before the court, but Sir Richard Baggallay would express no opinion how the latter case would have stood if the money had not been trust money, or if the broker had received it without any notice of the fact. The other two learned judges, however, were clear that, apart from the question of trust, the position of a broker was that of an agent into whose hands money is put to be applied in a peculiar way. “The money arising from the sale,” said Lord Justice James, “is trust money, and by no bargain between A. (the plaintiff) and the broker, nor by any rule of the Stock Exchange, can it be made anything but trust money liable to be followed as such. Even had there been no such trust, it appears to me that the case must have been decided in favour of the appellant, for I cannot find any distinction between this case and Taylor v. Plumer.” The fact that the payment was made by cheque did not prevent the property being followed. It is clear that the judgment of the Court of Appeal in Fa parte Cooke does not rest upon the same ratio decidendi as [409*] that in *Zaylorv. Plumer, and the question may be raised at a future time whether the statement of the law by Lord Ellenborough should be accepted in its entirety. With the strong dicta of Lord Justice James and Sir Geo. Bramwell in its sup- port, it will probably be accepted. In Ex parte Cooke there was a double trust. The person who employed the broker was him- self a trustee of the property in question. But irrespective of this consideration, the duties devolving upon the broker were, from the very nature of his employment, analogous to those of a trustee with respect to that property. It is submitted that the first con- sideration is immaterial. Referring to the case of Taylor vy. Plumer (h), it was pointed out by Sir. Geo. Bramwell that the bonds were not the property of Plumer by reason of his having ordered them to be purchased, and they could only be held to be- long to him because they were bought with his money; hence the conclusion that if the broker had been caught with the money upon him, the defendant could have claimed it. He could have claimed it “because the money was paid to the broker, not as a trustee in the strict sense of the word, so that no action at law could be maintained against him, and he would only be liable to (A) Supra, CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 541 have a bill filed against him, but was handed to him in a fiduciary character, so as not to create the mere relation of debtor and cred- itor between him and his principal.” This was not necessary to be stated for the decision of Lx parte Cooke. It goes, however, fully to an affirmance of Taylor v. Plumer. His lordship having dwelt upon a difficulty in tracing money, viz., that difficulty which arises from the circumstance that pay- ments now are not usually made in gold, but by cheques which go into a banking account, so that the sum is mixed up with the other monies of the customer; went on to say, “If this payment were made by a bag of gold which the broker put into his strong box, and then misapplied part of the money, leaving the rest in the bag, there would be no doubt that what was so left could be claimed as the money of the client. The use of cheques may make difficulties in tracing money, but that, so far as it can be traced, it may be claimed as the property of the client, appears to me to be covered both by the reason of the thing and by the authority of Taylor vy. Plumer.” | Similarly, it is well established that if a client intrusts money *to a solicitor for the purpose of investment of a [410*] particular kind, and he invests it in an unauthorized secur- ity, he is bound to repay it just as if it still remained in his hands uninvested; and if he replaces it he is entitled to the benefit of his supposed rotten security. The fact that the solicitor pays only a composition makes no difference. If he becomes bankrupt and pays so much in the pound, and the security afterwards proved sufficient, his trustee will have the same equity to have the divi- dend returned (2). In Sawyer v. Goodwin a solicitor invested money of a client on an improper security (a fourth mortgage). The security was supposed to be worthless, and the solicitor ab- sconded. ‘The client thereupon received a composition of five shillings in the pound from the estate of a deceased partner of the solicitor. The mortgaged estate subsequently proved sufficient’to pay the fourth mortgage, and the Court of Appeal, reversing the decision of Hall, V.-C., held that the amount received under the composition must be repaid to the partner’s estate, and did not enure to the benefit of subsequent incumbrancers on the mortgaged property. (2) Per Mellish, L. J., Sawyer v. Goodwin, 45 L. J., Ch. 289; L. R., 10h. Div. 351. 542 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. The defence of most frequent occurrence in actions to recover property which has been disposed of without authority is that founded upon the Factors’ Acts.! The Jaw with respect to the power of a person in possession of goods or documents of title to goods belonging to another, to bind the owner by a sale or pledge of such goods without or contrary to instructions, has five weli-defined stages. These stages are marked by the innovations made by the legislature from time to time upon the common law rules. (a.) The common law rules were in full force until the year 1823. (b.) On the 18th July, 1823, the first Factors’ Act was passed (4 Geo. 4, ¢. 83). (c.) On the 5th July, 1825, another act was passed (6 Geo. 4, ce. 94) to amend the law. (d.) On the 30th June, 1842, a further act (5 and 6 Vict. ¢. 39) was passed for the better protection of persons who deal with agents intrusted with the possession of goods or documents of title to goods. (e.) The Act of 1877. [411*] essary to the lawyer. *A knowledge of the changes here indicated is still nec- At common law, it has been said by a learned judge, ‘a person in possession of goods could not confer on another, either by sale or by pledge, any better title to the goods than he himself had.’ 1 Acts founded upon the English stat- utes upon this subject have been enacted in the several states below mentioned, and perhaps in others, viz.: New York, Wisconsin, Pennsylvania, Massachu- setts. See 2 Kent Com. 628, note b; Smith’s Merc. Law (Am. ed.), 126, note; Bonito v. Mosquera, 2 Bosw. 401; Stoll- enwerck v. Thacher, 115 Mass. 224; Michigan State Bank v. Gardner, 15 Gray, 3862; Nickerson v. Darrow, 5 Allen, 419, and the cases cited in the following notes. It was held in Walther v. Wetmore, 1 E. D. Smith, 7, that the N. Y. stat- ute in relation to factors and agents (Laws of 1830, p. 203) was framed for the regulation of the conduct of factors within that jurisdiction, and for the protection of those having dealings with them there, and had no application to the determination of questions arising upon a pledge in London, by a factor there, although the delivery of the goods pursuant to the contract made in Lon- don was consummated by the agents of the parties in New York. Butit seems, that under such circumstances, if the similar British statute, from which the N. Y. statute was in part modeled, were before the court, its provisions would control the determination of the cause. Otherwise the case must be governed by general common law principles. * Fawcett v. Osborn, 82 Ill. 411; Mc- Mahon y. Sloan, 12 Penn. St. 229; CITAP. vit. ] RIGITS OF PRINCIPAL AGAINST THIRD PARTIES. 543 To this general rule there ‘was an exception of sales in market overt,! and an apparent exception where the person in possession had a title defeasible on account of fraud. But the general rule was that to make either a sale or a pledge valid against the owner of the goods sold or pledged, it must be shown that the seller or pledgor had authority from the owner to sell or pledge, as the case may be. If the owner of the goods had so acted as to clothe the seller or pledgor with apparent authority to sell or pledge, he was at common law precluded, as against those who acted bona side on the faith of that apparent authority, from denying that he had given such an authority, and the result as to them was the same as if he had really given it. But there was no such preclusion as against those who had notice that the real authority was limited. The ‘possession of bills of lading or other documents of title to goods did not at common law confer on the holder of them any greater power than the possession of the goods themselves. The transfer of a bill of lading for goods im transitw had the same effect in defeating the unpaid vendor’s right to stop in transitu that an actual delivery of the goods themselves under the same circumstances would have Had.? But the transfer of the docu- ment of title by means of which actual possession of the goods could be obtained, had no greater effect at common law than the transfer of the actual possession (4). Prime v. Cobb, 63 Me. 200; Marshall v. Beeber, 53 Ind. 83; Stanley v. Gaylord, 1 Cush. 586; Gilmore v. Newton, 9 Al- Jen, 171; Barker v. Dinsmore, 72 Penn. St. 427; Quinn v. Davis, 78 id. 15; Galvin v. Bacon, 11 Me. 28. The owner of a chattel cannot, apart from legal process, be divested of his title to it except through some unlaw- ful or improvident act of his own; the transfer of possession to another with- out more is not such an act. Quinn y. Davis, supra; Nickerson v. Darrow, 5 Allen, 419. The transfer must be ac- companied by something indicating in the custodian a right of property or power of alienation; there must be proof of language or conduct at least equivocal, Quinn v. Davis, supra. 1This exception does not exist in the United States. Wheelwright v. De- peyster, 1 Johns. 471; Newkirk v. Dal- ton, 17 Ill. 413; Easton v. Worthing- ton, 58. & R. 130; Fawcett v. Osborn, 82 Ill. 411; Bryant v. Whitcher, 52 N. H. 158, 2 See Fawcett v. Osborn, supra; Chi- cago Dock Co. v. Foster, 48 IL. 507; Ohio & M. R. R. Co. v. Kerr, 49 id. 458; Bell v. Farrar, 41 id. 400; Mich. Cent. R. R. Co. v. Phillips, 60 id. 190. 5See this subject considered at length in 2 Dan. on Neg. Inst., § 1727 et seq. (k) Per Mr. Justice Blackburn, Cole v. North Western Bank, L. R., 10 0. P. 354, Sit RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. At common law it was held that a pledge by a factor did not even transfer the lien which the pledgor himself had (2). It is, then, a general principle of the common law, that where the true owner has clothed anyone with apparent authority to act as his agent, he is bound to those who deal with the apparent agent, on the assumption that he really is an agent with that au- thority, to the same extent as if the apparent authority is real. In Pickering v. Busk (m), which was decided in 1812, the plaintiff, the true owner, had bought goods throngh S., [412*] who was *a broker and agent for sale. At the plaintiff's desire, the goods were transferred in the name of S., who afterwards sold them. In an action to recover the goods, Lord Ellenborough ruled that the transfer by the plaintiff's direction authorized §. to deal with them as owner with respect to third persons, and that the plaintiff, who had enabled S. to assume the appearance of ownership to the world, must abide the consequence of his own act. A verdict for the defendant was upheld by the full court.? A careful reading of the opinions of the several judges (1) M'Combie v. Davies, 7 East, 5. 1See ante, pp. 123, 362, note. (m) 15 East, 38. 2See 1 Chitty on Contracts (11 Am. ed.), 584; Benj. on Sales, § 19; Nixon vy. Brown, 57 N. H. 34 (ante, p. 139, note); Western Union R. R. Co. v. Wagner, 65 Ill. 197; Mich. Cent. R. R. Co. v. Phillips, 60 id. 190; Voss v. Robertson, 46 Ala. 486; Western Transp’n Co. v. Marshall, 4 Abb. App. Dec. 575; Barker v. Dinsmore, 72 Penn. St. 427; Quinn v. Davis, 78 id. 15 (ante, p. 411, note); Bearce v. Bow- ker, 115 Mass. 182; Henry v. Philadel- phia Warehouse Co. 81 Penn. St. 76; post, p. 427. See, also, Mechanics’ & T. Bank v. Farmers’ & M. Bank, 60 N. Y. 40. But when the person dealing with the apparent owner of property has actual notice of the rights of the true owner, he can claim no other or greater interest therein than the apparent owner can lawfully convey. Porter v. Parks, 49 N. Y. 564. See post, p. 413, note. Where a chattel had been lent to one who used it as his own and sold it, the lender does nob lose his right of prop- erty; nor do his declarations that the borrower owned the chattel, bind him further than as evidence on the ques- tion of ownership, unless the purchaser was thereby induced to buy. McMahon v. Sloan, 12 Penn. St. 229. When a commission merchant sells and delivers property, intrusted to him for sale, before notice of the revocation of his authority, he is not liable in trover for such sale; and the bona jide pur- chaser under such sale and delivery ac- quires thereby a good title as against a prior purchaser from the consignor with- out delivery. Jones v. Hodgkins, 61 Me. 480. See, however, Torre v. Thiele, 25 La. Ann. 418. Where the owner of property has per- mitted his agent in possession to repre~ CUAP, VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 545 shows that the judgment of the court was based upon the fact that it was a reasonable inference, from the circumstance that 8. had implied authority to sell. Lord Ellenborough’s remarks go further. His lordship, however, qualified them by saying, “Ifa person is authorized to assume the apparent right of disposing of property in the ordinary course of trade, it must be presumed that the apparent authority is the real authority.” When the case of Wilkinson v. King (n) was cited on behalf of the plaintiff, he remarked, “that was the case of a wharfinger, whose proper busi- ness it was not to sell, and to whom the goods were sent for the mere purposes of custody.” In Wilkinson v. King, one Eltit, a wharfinger, was accustomed to sell lead from his wharf. It does not clearly appear whether these sales were of his own lead or not, but he had never sold lead for the plaintiff. The defendant bought of Ellit lead which had been sent to him by the plaintiff, as wharfinger, and Lord Ellen- borough raled, that “ Ellit had no colour of authority to sell the lead, and no one could derive title from such tortious conversion.” It was not the intention of the legislature, in passing the Factors’ Acts, to give to all sales and pledges in the ordinary course of business the effect which the common law gives to sales in market overt. The intention was to make it law that when a third person has intrusted goods, or the documents of title to goods, to an agent who, in the course of such agency, sells or pledges the goods, he should be deemed by that act to have misled anyone who deals bona fede with the agent, and makes a purchase from, or an advance to, him without notice that he was not authorized to sell or procure the advance. It was not, however, intended to make the owner of goods lose his property if he trusted the possession to a person who in some other capacity *made sales, in case that [413*] person sold them (0).!| For instance, if A. deposits his sent himself as the owner, whereby he has obtained credit and incurred a debt for an improvement upon the property, the owner is estopped to deny his liabil- ity therefor. White v. Morgan, 42 Towa, 118. Where the owner of stock intrusts the certificates, with blank powers of attor- ney, to an agent for safe keeping, who fraudulently ae them to a third oO party, who in turn, without knowledge of the fraud, has them transferred to himself, the owner cannot recover for the loss. Pennsylvania R. R. Co.’s Ap- peal, 86 Penn. St. 80. (n) 2 Camp. 335, (0) See Cole v. Northwestern Bank, L. R., 10 C. P. 372. 1The statute, says Mr. Benjamin in his work on sales_(§ 19), is limited in 546 [Boor mI. RIGHTS, ETC., ARISING OUT OF THE CONTRACT. goods for safe keeping with B., who, in addition to being a bailee, is also a factor; or if A. pledges his goods to B., there is no in- trusting to B. within the statute (7). The provisions of the Factors’ Acts are in part confirmatory of the common law, and in part alterations of that law. The rules of common law relating to unauthorized sales or pledges, which have not been affected by those acts, are those relating to 1. Sales in market overt. 2. Sales or pledges by one, not the owner, under circumstances from which the acquiescence of the owner might reasonably be inferred. The first change in the common law was made in 1823 (4 Geo. 4, c. 83), when it was enacted that where goods were shipped in the names of persons “intrusted for the purposes of sale” with goods, the consignees might advance money on the security of the goods as if the consignors were the true owners, unless they had notice to the contrary. It was also provided that the persons in whose names such goods are so shipped, shall be taken to have been intrusted with them, unless the contrary “appears to be shown in evidence by any person disputing the fact” (sect. 1). It was also made lawful for any person to take goods or bills of lad- ing in deposit from a consignee, but the rights transferred were not to exceed those possessed by the consignee (sect. 2). This act did not alter the law as to pledging, except in the case of pledges by consignees. The provisions of this act were incorporated in, and extended by, an act passed about two years afterwards (6 Geo. 4,0. 94). The strictness with which the rules of common law relating to unauthorized sales and pledges by agents were construed, gave rise to a number of enactments which were intended to protect persons its scope to mercantile transactions, to dealings in goods and merchandise, and. does not embrace sales of furniture or goods in possession of a bailee for hire. A purchaser in good faith from such vendors would be liable in trover to the true owner. See Loeschman v. Machin, 2 Stark. 311; Cooper v. Willomatt, 1 C. B. 672. See, also, cases cited in note, p. 411. Where the person pledging the prop- erty holds it not on consignment but as agent as security for drafts discounted by another, he has no authority to pledge the same. Ullmann v. Barnard, 7 Gray, 554, (p) See per Coltman, J., in Baines v. Swainson, 32 L. J., Q. B. 281. CIIAP. vit. ] RIGHTS OF PRINCIPAL AGAINST TIIRD PARTIES. 547 who dealt bona jfide' with agents intrusted with goods or docu- ments of title to goods.” In Dyer v. Pearson (q), decided in 1824, which was an action 1Where a merchant, in order to se- cure himself from loss, took merchan- dise from a factor with a knowledge that the factor was about to fail, the principal who consigned that merchan- dise to the factor may avoid the sale and reclaim his goods, or hold the mer- chant accountable for them. Warner v. Martin, 11 How. 209. ? These acts were intended for the se- curity of those who deal with a factor or agent in the bona fide belief that he is the true owner. Stevens v. Wilson, 6 Hill, 512; 8. C., 3 Den. 472; Warner v. Martin, 11 How. 209; Covell v. Hill, 6N. Y. 374, 880; Bonito v. Mosquera, 2 Bosw. 401; Howland v. Woodruff, 60 N. Y. 73. Where the party claiming the protec- tion of the acts has notice that the fac- tor is not the owner or is acting in vio- lation of his instructions, or it appears on the face of the document that he is not the owner, he is not protected by the acts. Bonito v. Mosquera, 2 Bosw. 401; Wilson v. Nason, 4 id. 155; Covell v. Hill, 6 N. Y. 374; Mackey v. Dillen- ger, 73 Penn. St. 85; Price v. Wis. M. & F. Ins. Co., 48 Wis. 267; Florence Sewing Machine Co. v. Warford, 1 Sweeny, 433; and the cases above cited in this note. But the factor’s act of N. Y. (ch. 179 of 1830) protects one who makes ad- vances upon the faith of the document- ary evidence of title furnished by a warehouse-keeper’s receipt of imported goods procured by a factor by his being intrusted with an invoice of the goods, although the invoice showed that the goods belonged to the shipper. Cart- wright v. Wilmerding, 94.N. Y. 521, Neither by the common law nor under any statute of Wisconsin, can a person entrusted with merchandise simply as agent for the sale thereof, dispose of it by barter to one who knows the goods bartered for to be for the agent’s own use, or pledge it for his own indebted- ness for goods sold to him as for his own use. Victor Sewing Machine Co. v. Heller, 44 Wis. 265. (Price v. Wis. M. & F. Ins. Co., 48 id. distinguished.) It must appear that the advance was made on the faith of the bill of lading. First Nat. Bank v. Shaw, 61 N. Y. 283. Under sec. 3 of the act of 1830, of N. Y., which provides that “ every fac- tor or other agent entrusted with the possession of any bill of lading, etc., or who shall be entrusted with the pos- session of merchandise, for the purpose of sale, or as a security for any advance to be made or obtained thereon, shall be deemed the true owner thereof, so far as to give validity to any contract made by such agent with any other per- son, for sale or disposition of the whole or any part of such merchandise, for any money advanced, or negotiable in- strument, or other obligation in writing, given by such other person upon the faith thereof,’’ a contract of sale by a factor or agent, entrusted with goods for the purpose of sale, is valid, and will protect a purchaser against the principal, although no money is ad- vanced, or negotiable instrument or other obligation given at the time of the contract; it is enough if an obliga- tion be subsequently entered into on the faith of the contract, at any time while it remains unrescinded: Held, therefore, that the subsequent indorsements of promissory notes, and in anticipation of which the property was transferred, gave effect to the contract. Jennings v. Mer- rill, 20 Wend. 9. (q) 3B. & C. 88. 548 RIGITS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL. to recover a quantity of wool, A., who had sold the wool to the defendant, had been intrusted by the plaintiffs with the bill of lading, for the purpose of warehousing the goods. He did so in his own name. There was no distinct evidence that A. {414*] was in *the habit of buying and selling wool for others, nor had he any authority from the plaintiffs to sell. At the trial, Abbott, C. J., left it to the jury to say whether the de- fendant had bought the wool under circumstances which would have induced a cautious man to believe that S. had authority to sell. The jury found for the defendant. A new trial was granted, and Abbott, C. J., who delivered the judgment of the court, said: “T ought either to have told the jury that even if there was an unsuspicious purchase by the defendant, yet as A. had no author- ity to sell they should find their verdict for the plaintiffs, or should have left it to the jury to say whether the plaintiffs had by their own conduct enabled A. to hold himself forth to the world as hav- ing, not the possession only, but the property; for if the real owner of goods suffer another to have possession of his property, and of- those documents which are the indicia of property, then, perhaps, a sale by such a person would bind the true owner. That would be the most favourable way of putting the case for the defendant, and that question, if it arises, ought to have been submitted to the jury.” This case is useful as throwing light upon the intention of the legislature in passing 6 Geo. 4, ¢. 94(7). The first section of 6 Geo. 4, c. 94, provides that: Any person intrusted for the purpose of consignment or of sale with any goods,! and who ships the goods in his own name,’ and any person in whose name any goods shall be shipped by another person, shall (r) See per Blackburn, J., in Cole v. 2 See Covell v. Hill, 6 N. Y. 874. Northwestern Bank, L. R., 10 C. P. 365. 1Under the New York factor’s act, the possession of goods by a factor, “not having the documentary evidence of title,’’ that can alone enable him to create a pledge valid as against the owner, is an actual, as distinguished from a constructive possession. Bonito vy. Mosquera, 2 Bosw. 401; Howland v. Woodruff, 60 N. Y. 73. See, also, Cartwright v. Wilmerding, 24 N. Y. 21. The shipment must be in the name of another with the owner's consent, in order to protect the purchaser. Covell v. Hill, supra; Mechanics’ and T. Bank v. F. & M. Bank, 60 N. Y. 40; First Nat. Bank v. Shaw, 61 id. 283. The New York factor's act of 1850 applies only in favor of consignees named in the bill of lading. Mechanics’ & T. Bank v. F. & M. Bank, 60 N. Y. 40; 8. C., 2 Thomp. & C. 395; First Nat, Bank v. Shaw, 61 N. Y. 288, CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 549 be deemed to be the true owner, so as to entitle the consignee to a lien thereon in respect of any money or negotiable security ad- vanced or given by him to or for the use of the person in whose name the goods are shipped, or in respect of any money or negotia- ble security received by the latter to the use of the consignee, provided (1) the consignee has no notice at or before the time of any such advance or receipt, that the person in whose name the goods are shipped is not the true owner; and (2) the person in whose name the goods are shipped shall be taken to be intrusted therewith for the purpose of consignment or of sale, unless the contrary appear. Monk v. Whittenbury (s), decided in 1831, was one of the ear- liest decisions after the passing of 6 Geo. 4, ¢. 94. There C., who was both a flour factor and a wharfinger, received, in his character of wharfinger, a quantity of flour from the plaintiff. He sold a part of it to *the defendant, and the plaintiff [415*] brought an action to recover the value. Lord Tenterden, before whom the cause was tried, was of opinion that if the sale in question was made by an agent in the ordinary course of busi- ness to a person who was not aware at the time that such agent was unauthorized to sell, the purchaser was protected by 6 Geo. 4, c. 94, s. 4, and he left it to the jury to say whether or not the sale was in the ordinary course of business. The jury found that it was not. Upon a motion for a new trial, his lordship touched upon the difficulty of defining who was an agent intrusted with goods within the meaning of the act, but he was clear that a wharfinger was not such an agent any more than a carter, a ware- houseman, or a packer. 1 In Close v. Holmes (t), which was tried before Baron Alderson in 1837, a factor, who was the consignee of goods for sale, and indorsee of the bills of lading, had landed and warehoused the goods, and taken the wharfinger’s certificate and dock warrants in his own name, and then pledged the certificates and warrants to a bank for an advance of money on his own account. The learned judge left it to the jury to say whether the banking com- pany, at the time they made the advances, were aware that the goods did not belong to the pledgor, and whether the latter him- self had any transferable lien under the 5th section of Geo. 4, « (s) 2B. & Ad. 484, () 2 Moo. & R. 22, 550 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III) 94. The jury found for the plaintiff on both points. Another point had been raised during the trial, viz., that the documents having been created by the factor himself, for the purpose of rais- ing money, were not within the statute. His lordship was clearly of opinion that the statute only gave validity to pledges by a factor of documents intrusted to him by the real owner, and that it did not extend to the pledge of documents created, as in the present instance, by the factor himself. In Janberry v. Britten (u), 1838, it was held that a pledge by a person holding goods for another was not within 6 Geo. 4, ¢. 94, where it did not appear on the pleadings that the goods were intrusted to him as agent for sale.t So it was held in a subse- quent case (z), that a possession of documents by a person in his own right is not within the statute. Nor is it sufficient for the holder of a document of title to goods to show that he is an in- nocent indorsee. Such documents must also have been [416*] *intrusted to the pledgor by the true owner, and must have been intrusted to him as agent (7). Sect. 2 provides that any person intrusted with and in posses- sion of any bill of lading, India warrant, dock warrant, ware- housekeeper’s certificate, whartinger’s certificate, warrant, or order for delivery of goods, is the true owner of the goods described in such document so as to make valid contracts for the sale or dispo- sition of such goods, or for the deposit or pledge thereof, or any part thereof, as a security for any money or negotiable instru- ment advanced or given by him upon the faith of such document, provided the person who advances the money or gives the secu- rity has no notice that the person so intrusted is not the future [true] owner. By the use of the word disposition, the legislature did not intend to give effect to any transaction which was neither a sale nor a pledge (z). A deposit or pledge to come within the section must have been made for money, or the negotiator must have advanced or given upon the faith of the documents pledged (a). (u) 5 Scott, 655. v. Booker, 18 L. J., Ex. 14. 1See Covell v. Hill, 6 N. Y. 874. (z) Taylor v. Trueman, 1 Mood. & (x) Jenkyns v. Usborne, 7 Man. & G. M. 453; Taylor v. Kymer, 3 B. & Ad, 679 (1844). 320. (y) See per Baron Parke, Van Casteel (a) Tbid. CHAP, VIl.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 551 The notice may be express or implied. It is sufficient notice if the circumstances would justify a reasonable man in inferring that the agent is not the true owner (0). The 2nd section of 6 Geo. 4, c. 94, made an important altera- tion in the law, as by it the possession of bills of lading or other documents of title gave a power of selling or pledging the goods to those dealing bona jide with the possessor, beyond any which either by common law or by any provision of that statute the possession of the goods themselves gave. This solved one of the doubts expressed in Dyer v. Pearson (c), by enacting that the possession of the documents of title might enable the person so possessed to deal with others as if he were the owner of the goods. It was confined, however, to the possession by “ persons intrusted with” these documents of title, on which words a con- struction was put in the two cases of Phillips v. Huth (d), and Hatfield v. Phillips (e). The 5 & 6 Vict. c. 39, in consequence of these decisions, altered the law as to what should constitute intrusting. *The 2nd section of 6 Geo. 4, c. 94, also contained a pro- [417*] viso that the purchaser or pledger had not notice by the documents! or otherwise, that the seller or pledger was not “the actual and bona fide” owner of the goods sold or pledged —a pro- viso which, after the decision of Pletcher v. Heath (k), rendered it unsafe to make advances on goods or documents to persons known to have possession thereof as agents only. This also has been altered by 5 & 6 Vict. c. 39. In the 4th section of 6 Geo. 4, c. 94, the language used by the legislature is completely changed. It does not in this section give any power to pledge at all; nor does it use the language of the 2nd section, and authorize “any person intrusted with the possession of the goods,” to sell them to anyone not having notice that this person is not the true owner; but it enacts that it shall be lawful to contract with “any agent” (@) Evans v. Trueman, 1 Mood. & the factor is not sufficient, where the R. 10. documentary evidence of title intrusted. (c) Supra. to him shows on its face that he is not (d) 6M. & W. 572. the owner. Wilson v. Nason, 4 Bosw. (c) 9M. & W. 647; 12 Cl. & F. 848. 155; Covell v. Hill, 6 N. Y. 874; ante, Per Blackburn, J., Cole v. North West- p. 413, note. ern Bank, supra. (k) 7B. & C. 517, The mere possession of the goods by 552 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK In intrusted with any goods, or to whom they may be consigned, for the purchase of such goods, and to pay for the same to “such agent;” and such sale and payment is to be good, notwithstanding the purchaser has notice that the party selling or receiving pay- ment is only an agent; provided such contract or payment is made in the usual course of business, a proviso which by itself alone shows that the legislature meant by the word “ agent” only such agents as in the usual course of business sell goods for their principals and receive payments, such as factors, brokers, and did not mean to include bailees, warehousemen, carriers, and others who may in one sense no doubt be called agents, but who do not sell or receive payment for goods intrusted to them by those sup- plying them. It therefore solves the second doubt in Dyer v. Pearson (t) by declaring that if the evidence should be such as to show that the person in possession of the goods was intrusted as “an agent,” a sale by him should bind the true owner (m). But no person is to acquire a security upon goods in the hands of an agent for an antecedent debt beyond the amount of the agent’s interest in the goods (n). The 4th section makes it lawful for any person to contract with any agent “intrusted with any goods,” and to receive such goods and pay for the same to such agent, and “such contract [418*] *and payment shall be binding upon and against the owner” notwithstanding such person shall have notice that the person making the contract is only an agent, “ provided such contract and payment be made in the usual and ordinary course of business, and that such person or persons . . . shall not when such contract is entered into or payment made, have notice that such agent or agents is or are not authorized to sell the said goods, ware or merchandise, or to receive the said pur- chase-money.” In construing this section, the two branches must be looked at. We first see whether the agent’ was of the species to which the act refers, and, secondly, whether the contract is made in the ordi- nary course of business by the party selling. As to what is meant by the term “agent,” it was said by Mr. Justice Coltman, in (1) Supra. (n) Sect. 3; and see Fletcher v. Heath, (m) Per Blackburn, J., in Cole v. 7B. &C. 517; Blandy v. Allan, 3C. & North Western Bank, supra. P, 447, CUAP. VIl.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 553 Baines v. Swainson (b): “I think the real meaning is this, that the person is to be intrusted gua agent, and that the great diffi- culty is to see what is the real meaning of the word ‘agent.’ . . . There must be the relation of principal and agent; perhaps it does not apply to every case of principal and agent, and I cannot think that it applies whenever goods are given to a person ostensibly acting as factor. . . . We must look to see whether he is an agent intrusted with any goods, and the specific kind of agency intended. . . . I think the right view was taken by the Vice- Chancellor (c), when he says it must be a mercantile transaction.” The section is not confined to the case of a factor who has author- ity to sell (d). Where a person makes an advance, or gives security, with no- tice, his lien does not extend beyond the agent’s interest (sect. 5). This section does not apply unless it appears that the principal was indebted upon the whole account between himself and the agent (e). ’ But the true owner is entitled to follow his goods while in the hands of his agent or of the assignee in bankruptcy, or to recover them from a third person upon repayment of advances (sect. 6). In order that a purchase may be protected under 6 Geo. 4, c. 94, s. 4, it is not necessary that money should actually pass. *The section applies equally where the goods are [419*] transferred by the factor in consideration of an antecedent debt (f). The plaintiffs employed B. to sell blankets, and after- wards sent him a quantity on consignment and not on sale. B., being indebted to the defendant in a sum exceeding their value, sold them to him without disclosing the fact of his agency. The defendant had no notice of the agency. In an action brought to recover the value the Common Pleas Division held, on the au- thority of Carr v. Hinchliff (g), Fx parte Dixon (h), and similar cases, that the defendant was entitled to set off hisdebt. Grove, J., cited Lord Mansfield’s statement of the law in Rabone v. Will- dams, which was cited by Lord Kenyon in George v. Claggett (2), to the effect, that “where a factor dealing for a principal, but (b) 32 L. J., Q. B. 281. (f) Thackrah v. Fergusson, 25 W. R. (c) Wood v. Rowcliffe. 307. (a) Ibid. (9) 4B. & C. 547. (e) Robertson v. Kensington, 5 M. & (h) L. R., 4 Ch. Div. 188. R. 381. (i) TT. BR. 359, 554 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL concealing that principal, delivers goods in his own name, the person dealing with him has aright to consider him to all intents and purposes as the principal; and though the real principal may appear and bring an action upon that contract against the pur- chaser of the goods, yet that purchaser may set off any claim he may have against the factor in answer to the demand of the prin- cipal. This principle runs through a great number of de- cisions (4). The 5 & 6 Vict. c. 39, commences with a preamble, and though the enacting part may either go further than or fall short of effect- ing what is recited in that preamble as being the object of the legislature, that preamble is of great importance. It first re- cites that, under 6 Geo. 4, c. 94, “In the present state of the law, advances cannot safely be made upon goods or documents of title to persons known to have bought of agents only.” This points to Fletcher v. Heath (1), and shows an intention to alter the law as there decided. It then recites that “advances on the security of goods and merchandise have become an usual and ordinary course of business, and it is expedient and necessary that reasonable and safe facilities should be afforded thereto, and that the same pro-' tection and validity should be extended to bona jide advances upon goods and merchandise as by the said recited act is given to sales; and that owners intrusting agents with the possession of goods and merchandise, or of documents of title thereto, [420*] should in all cases where such owners *by the said recited act or otherwise would be bound by a contract or agree- ment of sale, be inlike manner bound by any contract or agree- ment of pledge or lien for any advance dona fide made on the security thereof.” This recital shows a plain intention to enact that what had ever since the case of Paterson v. Tash (t) been the law, should no longer be so; and that an agent having power to sell should bealso enabled to pledge. But there is no indication of any intention to give a power to pledge where there is not a power to sell; nor to extend the power to sell beyond that which by the common law and 6 Geo. 4, c. 94, s. 4, was given; nor to alter the construction put upon that enactment by Monk v. Whittenbury (u). (k) See Sect. I of this chapter. (uw) 2B. & Ad. 484. Per Mr. J ustice () TB. & C. 517. Blackburn in Cole v. North Western (t) 2 Str. 1178. Bank, L. R., 10 C. P. 369, 370. CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 555 4 There is a further recital that the act does not extend to pro- tect exchanges bona fide made. This refers to Zaylor v. Kymer («), and perhaps Bonzi v. Stewart (y), though that latter case, after a very protracted litigation, was not decided till a few weeks before 5 & 6 Vict. c. 39 received the royal assent, and this recital shows an intention to alter the law as there decided. There is an express recital pointing to the decision in Phdllips v. Huth (2), and the ease of Hatfield v. Phillips (z), which had then been decided in the Exchequer Chamber and was still pend- ing in the House of Lords; but from the enactment in the 4th section, it is plain that these causes were in contemplation, and that it was intended to alter the law as laid down in those cases (a). ' Lord St. Leonards discussed the effect of 5 & 6 Vict. c. 39, at some length in Vavalshaw v. Brownrigg (b). The conclusion to which his lordship came was, that whereas there was at first a question how far a broker could sell, if he had no authority to sell, and, secondly, how far he had authority to pledge, if he had no authority to pledge, so as to bind his principal, the 5 & 6 Vict. c.39 provided that the mode of raising money by pledge by a factor is to be taken as a recognized course of dealing, and that be- ing so, the legislature intended to give protection to all persons dealing dona fide with such agent. With respect to the meaning *of the expression “dealing bona fide,” it has [421*] been said by Vice-Chancellor Page Wood (c), “ dealing dona fide did not imply that they [the persons who dealt with the agent] were to consider the question of his being an agent or not; they might know him to be an agent or a factor, and if they knew him to be such, they would assume that he had authority to pledge, and that pledge they would have, unless there was some mala fides in the transaction.” It is provided, by the 1st section, that any agent intrusted — (1.) With the possession of goods; or, (2.) With the possession of the documents of title of goods, is to be deemed the true owner of the goods or documents, so as to (aw) 3B. & Ad. 320. 870. (y) 4M. & G. 295. (6) 2D., M. & G. 441, (z) Supra. (c) Portalis v. Tetley, L. R., 5 Eq. (a) Per Blackburn, J., in Cole v. 146. North Western Bank, L. R., 10 C. P. 556 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III give validity to any contract or agreement by way of pledge, lien or security, dona fide made by any person with him, as well as for any original loan, advance or payment, made upon the security of such goods or documents, and also for any further or continu- ing advance in respect thereof. Such agreement is binding upon the owner and all others, notwithstanding that the person claim- ing such pledge or lien has had notice that the person with whom the agreement is made is only an agent. The 2nd section provides, that contracts made in consideration of an advance include any contract or agreement for pledge, lien or security, made dona fide in consideration of the transfer to the agent of any other goods, documents of title, or negotiable secu- rity, upon which the person so delivering up the same had at the time a valid and available lien in respect of a previous advance by virtue of some contract or agreement made with such agent; provided the lien acquired under the last mentioned agreement shall not exceed the value of the goods given up. This section alters the law as laid down in Taylor v. Kymer (d). The 8rd section provides, that this act is to be construed to give validity to such contracts and agreements only, and to protect only such loans, advances and exchanges, as shall be made bona jide and without notice that the agent making such contracts or agree- ments has not authority, or is acting mala fide. It shall not be construed to protect any lien or pledge in respect of any antecedent debt owing from any agent to any person with or to whom such lien or pledge shall be given; nor to authorize any agent in devi- ating from any express orders of the owner. [422*] *The 4th section enumerates the documents which are to be considered documents of title. These are — (1.) Bills of lading. (2.) India warrants. (3.) Dock warrants. (4.) Warehouse-keepers’ certificates,' warrants or orders for the delivery of goods. (5.) Any other document used in the ordinary course of busi- (d) 3B. & Ad. 320. 401; Price v. Wis. M. & F. Ins. Co., 48 1“ Warehouse-keeper’s receipt’? de- Wis. 267. See Cartwright v. Wilmerd- fined in Bonito v. Mosquera, 2 Bosw. ing, 24 .N. Y. 521. CIIAP. VII.] RIGITS OF PRINCIPAL AGAINST THIRD PARTIES. 557 ness as proof of the possession or control of goods, or authorizing, or purporting to authorize, either by indorsement or delivery, the possession [possessor] of such document to transfer or receive goods thereby represented. In a case decided in 1846 (e), Vice-Chancellor Wigram made some important observations upon the application of the Factors’ Acts (6 Geo. 4, ¢. 94, and 5 & 6 Vict. c. 39). One Wright had been employed by the plaintiff to take possession of certain goods as his agent. Wright did so, and whilst in possession assigned them to the defendant as a security fora loan. It was contended that the transaction, so far as concerned the defendant, was pro- tected. “It may be true,” said his honour, “that the words of the statute (5 & 6 Vict. c. 39), in their general signification, are wide enough to comprehend the present case. But the act has never been understood to apply to other than mercantile transactions. The first act (6 Geo. 4,¢. 94) is for the ‘ protection of the property of merchants and others,’ and the property referred to is ‘ goods, wares and merchandise’ intrusted to the agent ‘for the purpose of consignment or sale,’ or ‘shipped.’ And, upon a judicial con- struction of the act, it has been held that the generality of the expressions must be restricted. Every servant of the owner of goods employed in the care or carriage of such goods is, in one sense, an ‘agent intrusted with goods,’ but still he is not an agent within the meaning of the statute (/).1 The title of the second act (5 & 6 Vict. c. 39) is more general; but it appeared to me to relate to ‘agents,’ and to ‘ goods and merchandise,’ in a sense which is not applicable to the agency or the property in this case.” So it has been said by Mr. Justice Willes (g), that the result of the (e) Wood v. Roweliffe, 6 Ha. 191. (f) Monk v. Whittenbury, 2B. & Ad. 484. 1A general clerk of a merchant, who transacts the out-door business of the latter, negotiates purchases and charter parties in the name of and ratified by his principal, and prepares and presents bills of lading for signature on shipping property of the principal, has no author- ity as such clerk, or as commercial agent, to pledge such bills of lading, or to re- ceive advances on the faith thereof. Such clerk is in no sense a factor nor is he intrusted with the possession of the bills of lading, within the factor’s act of 1830. That statute was intended to protect advances and dealings made on the faith of the ownership of the prop- erty, and not on the faith of the posses- sion of the paper title or the evidences of title. Zachrisson v. Ahman, 2 Sandf, 63. (9) Heyman v. Flewkes, 18 C. B., N. 8. 519; 82 L. J., C. P. 182. 558 RIGHTS, ETC., ARISING OUT OF TUE CONTRACT. [BOOK IIL. : cases may be stated to be that the term “agent” does not include a mere servant or care-taker, or one who has possession of [423*] goods for *carriage, safe custody or otherwise, as an inde- pendent contracting party; but only persons whose employ- ment corresponds to that of some known kind of commercial agent like that class [factors] from which the act has taken its name. Neither a clerk (4) nor a vendee (2) is an agent within the act. If the true owner did in fact intrust the agent as an agent, it is immaterial, so far as third parties dealing with such agent are concerned, that he was induced to do so by the agent’s fraud. In Sheppard v. The Union Bank of London (k), decided in 1862, it was so held on demurrer by the Court of Exchequer. Baron Channell pointed out that, if the circumstance of fraud in the agent made the slightest difference, the statute would in effect be repealed, since its object was to protect a person who made an advance knowing nothing of the dealings between the principal and agent. A similar question was determined by the Queen’s Bench in the following year (2). A factor and commission agent induced the plaintiffs to forward a quantity of cloth to him upon the repre- sentation that certain merchants wished to buy cloth of that kind. He fraudulently sold the cloth to others, and applied to his own use the money he received in payment. The plaintiffs knew that he was a commission agent, but had no previous business with him. “TI construe the statute to say this,” observed Mr. Justice Blackburn, “ that an agent whose business it is to sell goods and receive payment for them, shall, by virtue of the act, be entitled to sell, and, by virtue of the 5 and 6 Vict. ¢. 39, which extends the power, he shall be clothed with apparent authority to pledge the goods, provided he does it in the ordinary course of business, and the owner shall be exactly in the position of a man at common law who had clothed him with such authority, and any restrictions which he may have made shall go for nothing, unless they are brought home to the notice of the other person.” Upon the question of “intrusting,” reference may be made to (h) Lamb vy. Attenborough, 31L. J., _ (#) 81 L. J., Ex. 154. Q. B. 41. (2) Baines vy. Swainson, 32 L. J., Q. (i) Jenkyns v. Usborne, 7 M. & Gr. B, 281. 678; M’Ewan v. Smith, 2 H. L. C. 309. CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 559 Cole v. North-Western Bank (m) and Johnson v. The Credit Lyonnais (7). “Intrusting” under the Factors’ Acts, previous to the [424*] Act of *1877, must be “to a factor or agent as such.” The defence on those acts in these cases turns on 6 Geo. 4, ¢. 94, s. 2, for 5 and 6 Vict. c. 39, s. 1, so far as these cases are con- cerned, only repeals the proviso in sect. 2 of 6 Geo. 4, c. 94, as to the pledgee not having notice (0). Before touching upon the alteration made in the law by the Factors’ Act, 1877, there remains to be noticed three cases of some importance, inasmuch as they throw light upon the intention of the legislature in passing thatact. In Cole v. The North-Western Bank (p), A., who was a wool broker and warehouse keeper, was in the habit of receiving from the plaintiff, in his capacity of warehouse keeper, bills of lading for wools. The wool sent by the plaintiffs to A. consisted of goats’ wool and sheep’s wool. A. never sold goats’ wool, and the sheep’s wool he sold only under specific instructions. The plaintiffs had sent a quantity of goats’ and sheep’s wool to be taken charge of in the above manner, but gave him no obstructions to sell or pledge either. A. nevertheless pledged both with the defendants for a loan. An action was thereupon brought to try the right of the defendants to this wool. It was argued on behalf of the defendants that A. was an agent, that he was an agent intrusted with the possession of goods, and that he was also intrusted with the documents of title to the goods. Lord Coleridge, in the court below, conceded that all this was in a sense true, but that it was not sufficient to determine the point at issue, inasmuch as the question was whether A. was so intrusted within the meaning of the act of parliament (g). It was also con- tended that Wonk v. Whittendury (r) could no longer be consid- ered good law, because that and similar cases were overruled by 5 and 6 Vict. «. 39. In 6 Geo. 4,¢. 94, upon which Jfonk v. Whittenbury was decided, the words are “any person intrusted (m) L. R., 9 C. P. 470; 10 ib. 354. (0) See per Bramwell, L. J., in John- (n) L. R., 2.C. P. Div. 224. son v. Credit Lyonnais Company, L. R., 1 See Bonito v. Mosquera, 2 Bosw. 401; 38 C. P. Div. 82. Stollenwerck v. Thacher, 115 Mass. 224; (p) L. R., 9C. P. 470. Zachrisson v. Ahman, ante, p. 422, (q) 5 and 6 Vict. c. 39, s. 1, note. (r) 2B, & Ad. 484, 560 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL. for the purpose of consignment or of sale with any goods,” ete.; whereas in 5 and 6 Vict. c. 39, the words are “any agent intrusted with the possession of goods, or of the documents of title to goods.” There are, however, numerous decisions to the effect that the words in the later act must be taken with some limitation (s). [425*] *The Court of Queen’s Bench had already held (¢) that the question under 5 & 6 Vict. c. 39 was much the same as under 4 Geo. 4, c. 83, and 6 Geo. 4, ¢.94. The Common Pleas adopted the same view in the present case. Upon appeal the decision of the court below was affirmed. “The argument,” said Baron Bramwell, “is that he is an agent, and that he is intrusted with the possession of the goods. But unless we adopt a verbal construction that leads to absurdities, some limitation must be put on those words —some such limita- tion as ‘agent intrusted as such, and ordinarily having, as such agent, a power of sale or pledge.’ Otherwise, the words would include the case of an agent for the sale of one thing, say a metal broker intrusted with a thing unconnected with his agency — say wool; and also the case of an agent for some purpose which neither in fact give him power to sell or pledge, nor according to the usage of business appeared to give such power.” The conclu- _sion of sect. 1 protects certain transactions, notwithstanding no- tice of agency, but his lordship pointed out that “notice that the person is only an agent” must mean notice that the person is only an agent such as the pledgor might well suppose had power to pledge. A delivery order intrusted to a factor and addressed to vendors for the delivery of specific quantities of goods which have been previously purchased, is within the Factors’ Acts (w). So if a factor has sold his principal’s goods, and the principal sends him the delivery order for the purpose of completing the sale by the delivery of the goods, this is an intrusting of the factor with the delivery order for the sale of the goods (#). The facts in Vickers v. Hertz («), which was decided in 1871, bear some resemblance to those in Baines v Swainson (y). C. a (s) See Baines v. Swainson, 4 B. & S. (uw) Vickers v. Hertz, L. R., 2 Sc. Ap. 270; 52 L. J., Q. B. 281; Wood v. 11% Rowecliffe, 6 Ha. 183. (x) Ibid. (t) Baines v. Swainson, supra. (y) 82 L. J., Q. B. 281. ‘ CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 561 Glasgow merchant, had represented to the plaintiff that he had made for the plaintiff a sale to a principal of a quantity of iron. This was quite untrue. The plaintiff was induced by the false- hood to send a delivery order to C., but he did not intrust him with the delivery order for the purpose of making a sale. He thought the sale was already made, and intrusted the agent with the document of title to make delivery of the goods as his agent. The House of Lords held that a pledge by C. to the *defendant was good under the Factors’ Acts. This de- [426*] cision is an authority in support of the proposition that the Factors’ Acts are not confined to the case of a factor who is intrusted for the purpose of effecting a sale not yet made. Johnson v. The Credit Lyonnais (2), decided in 1877, throws additional light upon the question what limitation should be placed upon the words “agent intrusted.” From the facts of the case it appeared that the plaintiff bought of A., a commission merchant and agent, as well as a dealer in tobacco, a quantity of tobacco which was then lying in bond in the name of A. The plaintiff paid for the tobacco, and it was agreed that it should be forwarded to him by A. free of any charge for commission, or to the plaintiff's vendees. The plaintiff undertook to remit the amount of the duty and dock charges. The tobacco remained in A.’s name, and he retained the dock warrants; but the sale to the plaintiff was duly entered in his books. Owing to the heavy duty payable on tobacco it is usual to leave the goods in the warehouse in the name of the seller. A. represented to the defendants that the tobacco in question belonged to him, and pledged it as a secu- rity fora loan. In an action to recover the property, the defend- ants claimed to retain it, on the ground that the plaintiff had “given A. ostensible authority to deal with it as his own, or that he had intrusted him with the tobacco or the documents of title within the Factors’ Acts.” Upon motion for judgment, Mr. Justice Denman had power to draw inferences of fact. Upon the first defence, his lordship observed that, independently of the Factors’ Acts, the mere possession of the dock warrants is no- where made conclusive as to the application of the rule acted upon in Pickering v. Busk (a). It is for the jury to say whether the plaintiff has so conducted himself as to have lost the right to (2) 5 R., 2. P. Div. 224. (a) 15 East, 38. 562 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. follow his own goods into the hands of the purchaser or pledgee. Under the facts stated in the present case, his lordship did not think that the plaintiff had so conducted himself. The second contention, his lordship thought, was disposed of by the case of Cole v. North Western Bank, inasmuch as the only purpose for which A. could be said to be intrusted with the goods was to clear them and forward them upon receipt of instructions. Upon appeal the judgment of Denman, J., was af- [427*] firmed (4). *Referring to the observations of Lord Ellenborough and Bayley, J., in Pickering v. Busk (c), Cockburn, C.J., remarked that their language might appear to be applicable to the present case, but that there was a material differ- ence between the twocases. In Pickering v. Busk, the purchaser had himself expressly directed that the goods should be entered in the broker’s name, whereas in the present case the plaintiff had simply remained passive. Having referred to the cases of Boyson v. Coles (d), Dyer v. Pearson (e), and Higgins v. Burton (f), his lordship went on to say: “Sitting here in a court of appeal, I feel myself at liberty to say that these authorities fail to satisfy me that at common law the leaving by a vendee goods bought or the documents of title in the hands of the vendor till it suited the convenience of the former to take possession of them, would, on a fraudulent sale or pledge by the party so possessed, divest the owner of his property, or estop him from asserting his right to it. If this had been so here, there would have been, as it seems to me, no necessity for giving effect by statute to the unauthorized sale of goods by a factor.” His lordship also thought that the doctrine established in Pickard v. Sears (g), and Jreeman v. Cooke (h), and the subsequent cases which have proceeded upon the same principle, carried the case no further. “ In all the cases decided on this principle,” his lordship went on to say, “in order that a party shall be estopped from denying his assent to an act prejudicial to his rights, and which he might have resisted, but has suffered to be done, it is essential that knowledge of the thing done shall be brought home to him. It would be to carry this (b) L. R., 3 C. P. Div. 32. (f) 26 L. J., Ex. 342. (c) 15 East, 38. (g) 6A. & E. 469. (a)6M. &S. 14. (A) 2 Ex, 654; 18 L. J., Ex. 114, (e) 8B. & C. 38, CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 563 doctrine much too far to apply it where advantage has been taken of a man’s remissness in looking after his own interests to invade or encroach his rights, in the absence of knowledge on his part of the thing done from which his assent to it could reasonably be implied.” With respect to the second point taken, viz., the de- fence founded on the allegation of negligence, his lordship, whilst admitting that the plaintiff had been guilty of negligence, or had been wanting in common prudence in omitting to have the goods transferred to his own name, did not think the circumstance material, inasmuch as the plaintiff owed no duty to the defend- ants. *The Factors’ Act, 1877 (40 & 41 Vict. c. 39), came into [428*] operation on the 10th of August, 1877. This act consists of six short sections. The first defines the Factors’ Acts. The second amends the Jaw with respect to secret revocations of authority, and provides that where any agent or person has been intrusted with and continues in the possession of any goods, or documents of title to goods, within the meaning of the principal acts as amended by this act, any revocation of his intrustment or agency shall not prejudice or affect the title or rights of any other person who, without notice of such revocation, purchases such goods, or makes advances upon the faith or security of such goods or documents. The third section relates to the case of vendors who are per- mitted to retain documents of title to goods. It provides that where any goods have been sold, and the vendor or any person on his behalf continues or is in possession of the documents of title thereto, any sale, pledge, or other disposition of the goods or docu- ments made by such vendor, or any person or agent intrusted by the vendor with the goods or documents within the meaning of the principal acts as amended by this act, so continuing or be- ing in possession, shall be as valid and effectual as if such vendor or person were an agent or person intrusted by the vendee with the goods or documents within the meaning of the Factors’ Acts, pro- vided the person to whom the sale, pledge, or other disposition is made has not notice that the goods have been previously sold. The fourth section relates to cases where vendees are permitted to have possession of documents of title to goods. This section 564 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. provides that where any goods have been sold or contracted to be sold, and the vendee, or any person on his behalf, obtains the pos- session of the documents of title thereto from the vendor or his agents, any sale, pledge, or disposition of any such goods or docu- ments by such vendee so in possession, or by any other person or agent intrusted by the vendee with the documents, shall be as valid as if such vendee or other person were an agent or person intrusted by the vendor with the documents within the meaning of the Factors’ Acts, in the absence of notice of any right of the vendor in respect of the goods. The fifth section relates to transfers of documents of title, and provides that where any document of title to goods has been [429*] *lawfully indorsed or otherwise transferred to any person as a vendee or owner of the goods, and such person trans- fers such document by indorsement, or by delivery, where the doc- ument is transferable by delivery, or makes the goods deliverable to the bearer, to a person who takes the same bona fide and for valuable consideration, the last-mentioned transfer shall have the same effect for defeating any vendor’s lien or right of stoppage in transitu as the transfer of a Dill of lading has for defeating the right of stoppage in transitu. The sixth section provides that the act shall not be retrospective. The preamble of the act to amend the Factors’ Acts, 1877 (40 & 41 Vict. c. 39), briefly states the object of that act to be the removal of certain doubts which have arisen with respect to the true meaning of certain provisions of the Factors’ Acts, and to amend those acts, for the better security of persons buying or making advances on goods or documents of title to goods, in the usual and ordinary course of mercantile business. The second section accordingly provides that where any agent or person has been intrusted with and continues in possession of any goods or documents of title to goods, a revocation of his in- trustment or agency shali not affect the title or rights of any other person who, without notice of such revocation, purchases such goods, or makes advances upon the faith or security of such goods or documents. This section overrules the well-known case of Fuentes v. Mon- tis (2), in which the Court of Common Pleas and Court of Ex- (i) L. R., 2 C. P. 268; 4 ibid. 93, CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 565 chequer Chamber were of opinion that the words “intrusted with and in possession of ” should be construed as referring to the time when the factor made the pledge, and held that a factor whose authority to sell has been revoked could not make a valid pledge of goods which had been intrusted to him for sale, but which he had wrongfully retained after his authority had been revoked, and the goods demanded from him by his principal. It is clear from the remarks of the judges who heard the case that they re- gretted the necessity of so deciding, and Mr. Justice Montague Smith remarked that he should have been glad to have given a construction of the Factors’ Acts wide enough to include this case, as he thought it fell within the very mischief *against which the legislature meant to provide. In its [430*] result the decision, as pointed out by Mr. Benjamin (2), had the effect of shaking the confidence felt by merchants in deal- ing with factors in relation to goods consigned to them. | The Factors’ Acts which had been passed previously to the act of 1877 were intended to protect vendees or pawnees in their deal- ings with persons whose employment was of a commercial char- acter; but they were not meant to protect transactions with per- sons whose employment was other than mercantile, as for instance, with persons employed as warehousemen, carriers, or the like. | This protection has been extended by the 40 & 41 Vict. c. 39, to cases other than. those in which the employment was of a com- mercial character. It isa general principle of the common law that the second vendor of goods does not stand in a better position than does his immediate vendor (j). The Factors’ Act, 1877, has extended the exceptions to this rule. | Sect. 3 protects sales or pledges to third parties by vendors of goods or their agents being in possession of the documents of title, by providing, that “where any goods have been sold, and the vendor, or any person on his behalf, continues or is in posses- sion of the documents of title thereto, any sale, pledge or other disposition of the goods or documents made by such vendor, or any person or agent intrusted by the vendor with the goods or (i) Sales of Personal Property (2dAm. (J) Small v. Moate, 9 Bing. 574. ed.), p. 20, sec. 20. 566 RIGHTS, ETC., ARISING OUT OF TUE CONTRACT. [BOOK III. documents within the meaning of the principal acts as amended by this act, so continuing or being in possession, shall be as valid and effectual as if such vendor or person were an agent or person intrusted by the vendee with the goods or documents within the meaning of the principal acts as amended by this act, provided the person to whom the sale, pledge or other disposition is made has not notice that the goods have been previously sold.” Previous to the passing of the Factors’ Act, 1877, a vendee was held not to be agent within the meaning of the Factors’ Act (4). The 4th section of the Act of 1877 now provides that where any goods have been sold or contracted to be sold, and the vendee, or any person on his behalf, obtains the possession of the [4381*] *documents of title thereto from the vendor or his agents, any sale, pledge or disposition of such goods or documents by such vendee so in possession, or by any other person or agent intrusted by the vendee with the documents within the meaning of the principal acts as amended by this act, shall be as valid and effectual as if such vendee or other person were an agent or per- son intrusted by the vendor with the documents within the mean- ing of the principal acts as amended by this act, provided the person to whom the sale, pledge or other disposition is made has not notice of any lien or other right of the vendor in respect of the goods.” By sect. 1, the expression “ principal acts” means the following acts: 4 Geo. 4 (1823), c. 83; 6 Geo. 4 (1825), «. 94; 5 & 6 Vict. (1842), ¢. 39. The above acts, together with the 40 & 41 Vict. c. 39, are to be cited as the “ Factors’ Acts, 1823 to 1877.” The case of a vendee who was in possession of a chattel had already been provided for (7). Where a vendee has a defeasible title which the vendor may affirm or disaffirm, he must elect to disaffirm before the goods are transferred to an innocent pur- chaser (m7). Sect. 5. extends the principle of Lickbarrow v. Mason (n) to all documents of title to goods by enacting that where any document (k) Jenkyns v. Usborne, 7 M.& Gr. (m) White v. Garden, 10 C. B. 919. 678; M’Hwan v. Smith, 2 H. of L. Cas. (n) [2 Term, 63; S. C., 1 H. BI. 357; 309. 6 East, 21;] 1 Sm. L. C. 757, 7th edit. (1) Kingsford v. Merry, 11 Ex. 577, ) CHAP. VII] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 567 of title to goods has been lawfully indorsed or otherwise trans- ferred to any person as a vendee or owner of the goods, and such person transfers such document by indorsement (or by delivery where the document is by custom, or by its express terms trans- ferable by delivery, or makes the goods deliverable to the bearer), to a person who takes the same bona fide, and for valuable con- sideration, the last-mentioned transfer shall have the same effect for defeating any vendor’s lien or right of stoppage 7 transitu as the transfer of a bill of lading has for defeating the right of stop- page in transitu. The courts have frequently held that the giving of a delivery order did not operate as a constructive delivery of the goods to which it relates, and that it neither was equivalent to a bill of lading, nor deprived the owner of the goods, who gave the order, of his lien even against the claim of third persons who had bona *fide purchased the goods from the original vendor. [432*] To this effect were the ruling of Mr. Justice Burrough in Akerman v. Humphrey (0), and the decisions of the Court of Common Pleas (7). Where an agent, who subsequently becomes bankrupt, has given as security for an antecedent debt goods which belong to his principal, but which were held by the agent on such terms that they were in his order and disposition at the time of the bankruptcy, the pledgee cannot assert a lien against the trustee in bankruptey (q). A customer purchased of a horsedealer a pair of horses with a warranty. The purchase-money was paid, but the horses not being as warranted were returned, and the horsedealer promised to supply another pair. Subsequently he sent the customer another pair, which, upon her refusing to buy them, he requested her to use until a suitable pair was found. The horsedealer after- wards became bankrupt, when it was found that the horses be- longed to another person, who had intrusted them to the dealer on such general terms that the county court judge had held that they were in the bankrupt’s order and disposition at the time of the bankruptcy, with the consent of the true owner. The cus- (0) 1 Car. & P. 53. 809. (p) Jenkyns v. Usborne, 7M. &Gr. = (gq) In re Sillence, Ex parte Roy, 47 678; M’Ewan v. Smith, 2 H. of L. Cas. L. J., Bank. 36. 568 RIGHTS, ETC., ARISING OUT OF THE conTRACT. [BOOK Im. tomer claimed a lien upon the horses against the trustee in bank- ruptey, on the ground that the trustee could only take them subject to the same equities as those to which the bankrupt held them before his bankruptcy, which included the lien. On the other hand, it was urged that the bankrupt being simply a factor could not pledge for an antecedent debt. The chief judge held that the bankrupt could not create such a lien, pointing out that the bankrupt could only deal with the horses under the order of his principal (7). In the following paragraphs an attempt is made to reduce to as brief limits as possible those rules of cominon law, and those provisions of the Factors’ Acts, 1823 to 1877, which prescribe the conditions which must be fulfilled upon the making of unauthor- ized sales, pledges or exchanges, so as to protect the third parties contracting. , First, as to the person who sells, pledges or exchanges. There must be proof that the transaction was entered [483*] into *under circumstances from which it might reasonably be inferred that the owner had given him authority to enter into the transaction (s), or there must be proof that he was in- trusted with the possession of the goods, or uf the documents of title to the goods (¢), or that upona sale of goods subsequently sold and pledged, or otherwise disposed of by him, he was the vendor, or a person who acted on behalf of the vendor, and that he con- tinued or was in possession of the documents of title to such goods (w), or that upon a contract for the sale of goods subsequently sold, pledged or otherwise disposed of by him, he was the vendee or a person acting on behalf of the vendee, and had obtained pos- session of the documents of title to the goods from the vendee or his agent (v). 1 Where an agent is possessed of a document of title, it is imma- terial whether he derived it immediately from the owner of the goods, or obtained it by reason of his possession of the goods, or of any document of title to the goods (a). An agent is to be deemed to be in possession of goods or docu- (r) Ibid. (t) 5 and 6 Vict. c. 39, s. 1. (s) Pickering v. Busk, 15 East, 38; (u) 40 and 41 Vict. c. 39, 8. 3. Cole v. North Western Bank, L. R., 10 (v) Ib., 8. 4. C. P. 572. [See ante, p. 411.] (x) 5 and 6 Vict. c. 89, 8. 4, CHAP. VIL] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 569 ments of title, whether they are in his actual custody, or held by another person subject to his control, or for him, or on his be- half (y). A contract or agreement is within 5 and 6 Vict. ¢. 39, whether made with the agent or with another person on his behalf (2). An agent in possession of goods or documents of title is to be deemed to be intrusted therewith by the owner, unless the con- trary is shown in evidence (a). Secondly, as to the person who buys the goods, or makes an ad- vance or exchange. Unless he acted bona fide on the faith of the apparent authority of the person in possession, he cannot claim the goods or docu- ments as against the owner; but notice simply of the fact of agency does not affect his claim (6). The 5 and 6 Vict. ¢. 39 is to be construed to give validity only to transactions made bona fide, and without notice that the agent is acting mala fide against the owner of the goods (¢). Thirdly, as to the sale, pledge or exchange which is pro- tected. *The purchase, pledge, or exchange must be dona fide, [484*] and without notice that the agent is acting mala fide against the owner of the goods (a). The contracts made in consideration of an advance which are protected are contracts or agreements by way of pledge, lien or security bona fide made for any original loan, advance or payment made upon the security of the goods or documents, as well as for any further or continuing advance, but not for any antecedent debt due from the agent (e). Contracts in consideration of an advance include any contract or agreement for pledge, lien or security made bona fide in con- sideration of the transfer to the agent of any other goods, docu- ments of title or negotiable security upon which the person so delivering up the same had at the time a valid and available lien in respect of a previous advance by virtue of some contract or agreement made with such agent, provided the lien acquired under (y) Ibid. (c) Ib., 8.3. (z) Ibid. (d) 5 and 6 Vict. ¢. 39, s. 3. (a) Ibid. (e) Ib., 8. 2. (b) 5 and 6 Vict. c. 39, s. 1.: 570 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. the last mentioned contract or agreement shall not exceed the value of the goods given up (/). 5 A revocation of an instrument or agency does not affect the title of a person who enters into a contract with the agent or person intrusted without notice of such revocation (g).! The lawful transfer of any document of title to goods bya vendee has the same effect for defeating any vendor’s lien or right of stoppage in transitu as the transfer of a bill of lading has for defeating the right of stoppage im transitu (A). Sror. 4.— The light to rescind contracts affected by fraud? Any surreptitious dealing between one principal and the agent of another principal is a fraud upon the latter of which courts of equity will take cognizance. The consequence of such fraud is that the party defrauded will be entitled to such full redress as can be given. In one case Lord Justice James expressed an opinion that the defrauded principal would be entitled at: his option, if he came in time, to have the contract rescinded; or, if he elects not (f) Thid. (g) 40 and 41 Vict. c. 39, s. 1. 1 Where it appears that a person was formerly the general agent of another in a certain line of business, his acts as such within the scope of the authority formerly possessed by him, will still bind his former principal after the au- thority has been determined, until par- ties who have been and continue dealing with him as such agent, are informed of the determination of his authority. Diversy v. Kellogg, 44 Ill. 114; Murphy v. Ottenheimer, 84 id. 39; Marsh v. Gil- bert, 4 Thomp. & C. 259; McNeilly v. Continental Life Ins. Co., 66 N. Y. 23; Claflin v. Lenheim, id. 301; Barkley v. Rensselaer & 8. R. R. Co., 71 id. 205; Packer v. Hinckley Locomotive Works, 122 Mass. 484; Hatch v. Coddington, 95 U. 8. 48. See, also, Cupples v. ‘Whelan, 61 Mo. 583; Summerville v. Han. & St. Joe R. R. Co., 62 id. 391; The Howe Machine Co. vy. Linder, 59 Ind. 307. Thus, where a commission merchant sells and delivers property, intrusted to him for sale, before notice of the revo- cation of his authority, he is not liable in trover for such sale, and the bona fide purchaser under such sale and delivery acquires thereby a good title as against a prior purchaser from the consignor without delivery. Jones v. Hodgkins, 61 Me. 480. Defendant adopted a corporate name in which to carry on business, and au- thorized an agent to draw bills on his factor, and subsequently transferred the business to a company organized under that name: Held, that he was liable to the factor for money paid on bills drawn in the same name by the agent after the transfer, and paid in good faith and without notice of the transfer. Rice v. Isham, 4 Abb. App. Dec. 37. (A) Ib., 8. 5. ? As to revocation of the agent's au- thority by his fraudulent acts, see ante, p. 86, note. CHAP. VII.] RIGHTS OF PRINCIPAL AGAINST THIRD Parties. 571 to have it rescinded, to have such other adequate relief as the court may think right to give him (2). *Lord Justice [435*] Mellish, in the absence of authority, was not quite certain that he would go the full length of saying that, because a person has been a party to a frandulent act after the contract had been made, the mere fact of his having been guilty of such fraudulent conduct, supposing that a full remedy for the fraud could be other- wise obtained, would entitle the otler party to say, “Because you acted fraudulently, therefore I will have nothing more to do with you.” There is no doubt of the principle of law, that if by any act of one of the parties the performance of a contract is rendered impossible, then the other side may, at his option, rescind the con- tract (£).!. If the contract cannot be performed in the manner stipulated, though it may be performed in some other manner not very different, that is sufficient to justify a rescission (J). The above question was elaborately argued in 1874 before Vice- Chancellor Malins, and afterwards, on appeal, in Panama and South Pacific Telegraph Company v. India Rubber, Gutta Percha and Telegraph Works Company (m). The defendants agreed with the plaintiffs to lay a cable, which was to be paid for by a sum of 40,0002. payable when the cable was begun, and by twelve instalments of 15,0002. each payable on certificates by the plaint- iffs’ engineer, who was named in the contract. The engineer, being subsequently engaged to lay other cables for the defendants, agreed with them to lay this cable also for a sum of money to be paid to him by instalments payable by the defendants when they received them from the plaintiffs. Upon an order to begin mak- ing the cables, the plaintiffs gave cheques for 40,0002. to the de- fendants, and for 600/. to the engineer. The sub-contract between the defendants and the engineer was not disclosed to the plaintiffs. Subsequently, after its existence was discovered, the present bill was filed for the purpose of having the original contract delivered up to be cancelled, and of obtaining a decree for the repayment of the above sums. The decree of the vice-chancellor granting the prayer was affirmed by the Court of Appeal. Lord Justice (¢) Panama, ete. Company v. India 1See 2 Pars. on Cont. 678. Rubber, etc. Company, L. R., 10 Ch. (2) Planché v. Colburn, 8 Bing. 14. 515. (m) L. R., 10 Ch. 515. (&) Per Lord Justice Mellish, ib. 572 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Ill, James proceeded upon the ground that any surreptitious dealing between one principal to a contract and the agent of the other principal entitles the latter principal to have the contract re- scinded. Lord Justice Mellish went rather upon the [436*] ground that the sub-contract, by *depriving the plaintiffs of the services of their engineer, made such a material and essential difference in the performance of the contract as entitled the plaintiffs to say that the contract should be rescinded. It is clearly fraudulent for the owners of property to arm a per- son whom they knew to be about to endeavour to find others to take up a purchase, whether as a company or otherwise, with a document purporting to be an offer made by themselves as owners to sell at a fictitious price, at which price he is to propose to other people to take up and to accept that offer as if it were the real one. If that is not the real price which the owners of the prop- erty expect to get, and if they are parties to an arrangement that the intermediate agent, who is to induce others to accept the offer, is himself to put a considerable part of the nominal price into his own pocket, without any communication of the facts, the docu- ment is false and dishonest, representing a false transaction in order to deceive; and if a person purchasing in ignorance of the circumstances applies, the contract will be rescinded, and the price ordered to be paid (7). The defence of laches was set up in the above case, and it may not be amiss to quote the observations of the court upon that doc- trine. The doctrine of laches in a court of equity, it was said, is not an arbitrary ora technical doctrine. Where it would be prac- tically unjust to give a remedy, either because the party has, by his conduct, done that which might fairly be regarded as equiva- lent to a waiver of it, or where by his conduct and neglect he has, though not perhaps waiving that remedy, yet put the other party in a situation in which it is not reasonable to place him if the remedy were afterwards to be asserted —in either of these cases lapse of time and delay are most material. But in every case, if an argument against relief, which would otherwise be just, is founded upon mere delay, that delay of course not amounting to a bar by any statute of limitations, the validity of that reference must be tried upon principles substantially equitable. Two cir- (n) Lindsay Petroleum Company v. Hurd, L. R., 5 P. C. 221. CHAP. VII.] RIGUTS OF PRINCIPAL AGAINST THIRD PARTIES. 573 cumstances always important in such cases are, the length of the delay, and the nature of the acts done during the interval which might affect either party, and cause a balance of justice or injus- tice in taking the one course or the other, so far as relates to the remedy. The right to obtain damages was discussed in a case which *was decided in the Court of Appeal in the year [437*] 1877 (0). The action was brought to recover damages sustained as alleged by reason of the defendants’ having made a false representation to the plaintiffs with respect to a cargo of rye bought by the latter of the former. The pleadings were drawn under the old practice. The following facts were proved at the trial: The defendants, who were corn merchants in London, re- ceived a telegram from their agents in Gibraltar, stating “‘Golden Plover’ arrived this afternoon. Cargo good condition. Await your orders.” They thereupon advertised the cargo for sale, and on the plaintiffs’ agent negotiating with them showed him the telegram. They did not know whether the cargo had been exam- ined by their agents at Gibraltar, but they knew it was not usual to examine cargoes at a British port of call unless an order was sent to the agent from the owners. No such order had been sent. The plaintiffs’ agent, on inquiring whether the defendants were sure the cargo was in good condition, was shown the telegram. The purchase was then made for the plaintiffs. The memoran- dum stated that the cargo was “of fair average quality of the season’s shipment when shipped.” On arrival, it turned out to be quite rotten, and was sold by the plaintiffs at a loss. Mr. Justice Field ruled that there was no case for the jury, as there was no evidence that the representation was false to the knowl- edge of the person making it,’ but postponed judgment to enable the plaintiffs to move for a new trial. A rule was accordingly granted by the Common Pleas Division. This decision was re- versed by the Court of Appeal, consisting of Lords Justices Bramwell, Brett and Cotton. The plaintiffs’ counsel relied upon the grounds — first, that in equity, on showing a contract made through a misrepresentation, although innocent, the plaintiffs might rescind it, and each party be put in the same nosition that (0) Schroeder v. Mendl, 37 L. T. Rep., 1See ante, p. 831; Big. Lead. Cases N.S. 452. on Torts, 20, and cases cited. 5i4 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIT. they were before the contract was entered into. “This conten- tion,” said Lord Justice Bramwell, “was not open to them, be- cause it did not arise on the declaration or at the trial.” Secondly, that because the defendants’ agent made a false representation to the defendants they adopted it, and are liable for his representa- tion. This point, also, was not open on the pleadings. There was another contention that, by giving the telegram to [438*] the plaintiffs’ agent, the defendants “represented that the cargo had been inspected. This inference was held to be unreasonable. With respect to the claim to equitable relief, Lord Justice Cot- ton remarked: “It is clear from the pleadings that itis an action for damages, and not for setting aside a contract, or obtaining relief on that footing. It is not an attempt to repudiate a con- tract made but not acted on, for here the corn is sold.” And with respect to the contention that if the case was not sufficiently proved to maintain an action for damages, on the ground of the sctenter being absent, equity will, nevertheless, grant relief when an innocent misstatement has been made which causes loss or in- jury; and that it is with respect to the setting aside of a contract induced by misrepresentation when in a court of law no action can be maintained for deceit, went on tosay: “But would the same kind of misrepresentation support an action for damages in equity? Suits for damages are of rare occurrence in equity, although it has a jurisdiction in cases of fraud, and will give re- lief where a court of common law has not that power (py)! A (p) Evans v. Bicknell, 6 Ves. 174; Pasley v. Freeman, 3 T. R. 51; Slim v. Croucher, 1 D., F. & J. 518. 1See this subject considered by Mr. Justice Story (2 Eq. Jur. §§ 794-8), who states that ‘‘ compensation or dam- ages, it would seem, ought ordinarily to be decreed in equity only as inci- dental to other relief sought by the bill, and granted by the court, or where there is no adequate remedy at law; or where some peculiar equity intervenes.’” Where, however, specific performance is impossible for the reason that the title is defective, or the vendor has incapaci- tated himself from performing the con- tract, compensation may, as it seems, be decreed. See Greenaway v. Adams, 12 Ves. 401; Denton v. Stewart, 1 Cox, 258; Woodcock v. Bennett, 1 Cow. 711; Andrews v. Brown, 3 Cush. 130; Milk- man v. Ordway, 106 Mass. 232; Carroll v. Wilson, 22 Ark. 32; Sugg v. Stowe, 5 Jones Eq. 126; Harrison v. Deramus, 33 Ala. 463; Tenney v. State Bank, 20 Wis. 152; O’Meara v. N. A. Ins. Co., 2 Nev. 112. See, however, contra, Saws- bury v. Jones, 5 Myl. & Cr. 3; ‘odd v. Gee, 17 Ves. 273; Gwillim v. Stone, 14 Ves. 128; Clinan v. Cooke, 1Sch. & CIIAP. vil. ] RIGHTS OF PRINCIPAL AGAINST THIRD PARTIES. 575 court of common law can only give relief where sczenter is proved, but it is otherwise with equity. But equity cannot give relief for damages arising from deceit, unless the same action were good at common law.” The case of The Reese River Silver Mine Company v. Smith (gq) was distinguished on the ground that the application there was to set aside a contract. Lefr. 25; Blose v. Sutton, 3 Meriv. 248; Newham v. May, 13 Price, 749; Kemp- shall v. Stone, 5 Johns. Ch. 195, Judge Story in his commentaries en- deavors to reconcile the cases by the distinction that courts of equity ought not to entertain bills for compensation or damages, except as incidental to other relief, where the contract is of such a nature that an adequate remedy at law lies for such compensation or damages. But where no such remedy lies at law, there seems to exist a pecu- liar ground for equitable relief, in order to prevent irreparable mischief, or to avoid a fraudulent advantage being taken of the injured party. See 2 Story’s Eq. Jur. § 798, and cases cited. (q) L. R., 4 E. & I. App. 64. 576 [439%] RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [poox In. *CHAPTER VIII LIABILITY OF PRINCIPAL TO THIRD PERSONS. PAGE. Sect. 1.— On Contracts of Agent. Where the agent executes his au- PONT ic whewarde cciaals/etcaeus AAt General rule as to principal’s lia- bibty. .cianseweswaseeeasnemee 441 Classification of decisions relating to liability of undisclosed prin- CIAL S aisie\sieie sieicieiiaic ai wiaverarsisiarere 442 The question is, to whom was credit PIVEN? ovens seine cietcse-od a's sins aie 442 Qualification of the liability ...... 442 Dicta and cases ..... wsssecesees 442 Heald v. Kenworthy considered... Existence of such qualification de- termined by Court of Queen’s Benthisss sas cvies ciweviawcawas 444 Rules where the principal is a for- eigner resident abroad..... 444 Prima facie the agent does not pledge his liability......... 445 History of the law........... 445 Statements of the law by Lord Tenterden, Jervis, C. J., Willes, J., Parke, B., and the Queen’s Bench........ 445 The doctrine of election .......... 448 The jury to decide whether there has been an election....... 448 The principal and the agent may be severally liable... .. 449 What sufficient proof of elec- HON coves ee scisene eoneaes 449 Action proceeded with to judgment and execution 449 Filing affidavit of proof on bankruptcy of debtor not conclusive......... 450 Insertion of agent's name in contract, the princi- pal’s being known, not Conclusive ....seeeceee Summary of rules........... Srcr. 1.— continued. PAGE, Where the agent exceeds his au- thority ... 2... cseeee anatase +. 452 Where the principal ratifies an un- authorized contract......-.... » 454 Where the agent contracts in his OWN NAME... .ceees ee ceee sees 462 Where the third party and tis agent are identical .........06 weeeee 462 Srcr. 2.—For Agent’s Misrepre- sentation and Fraud. Statement of the rule of law...... 465 Examples of liability .... ... 466 Misrepresentation or fraud of factor 466 Misrepresentation or fraud of ap- PIENUCE s.6 5 bv isc wieonhwekadee Misrepresentation or fraud of house agent...... Pee ear ee rire A67 Cornfoot v. Fowke discussed.. 467 That case may be supported on the ground that parol evidence can- not be given to vary or contradict a written document............ 469 Misrepresentation by law agent of COMpANy 0. .... seeeeeneceeee 470 Liability of corporations.......... 470 Corporations carrying on con- cerns for profit liable for fraud of agent............ 470 Fraud of manager of bank... 471 Statement of the law in Bar- wick v. English Joint Stock Bank saitestveeiesiee cece Western Bank of Scotland v. Addie discussed........... Can incorporated companies be liable for frauds of directors commiited before incorpora- tion? ....... cites euwews 476 The fraud or misrepresentation must be committed in the course of the employment.. 477 CHAP. VIII.] Sect. 3.— For Agent's Acts or Negligence. PAGE. Acts within scope of employment.. 479 Examples.......c...eceeeese 479 Damage caused by kindling a fire. 481 Damage caused by deviation by carman Damage caused by wilful act ..... An agent has no implied authority to do what the principal could not do Example of the application of the rile seis wise oc e¥ 085 ¥teae An authority to act as general su- perintendent of station yard.... 485 Authority of booking-clerk to give into custody ......e..seeeaeees Distinction between acts done upon a wrong assumption of authority and acts done in pursuance of a i ee a iy Cece meee mace c amar ccceee LIABILITY OF PRINCIPAL TO THIRD PERSONS. 517 SEct. 3. — continued. PAGE. Wanton and illegal acts ........+- 4389 Authority to commit a trespass ... 490 Authority of one of several who act i 490 Effect of plea of contributory negli- BENCE. ese eeeee Sect. 4. — Inevitable Necessity. Vis major, act of God..... aia ethieis . 494 Judicial exposition of the meaning of the expression...... In actions for negligence, negli- gence must be proved.......... The principal or employer not lia- ble for injuries due to vis major. 495 Various illustrations......... ooo. 496 Onus of proof..... isla sicrmisiels wesc Snot. 5.— Effect of intrusting Performance of Work to a Con- public duty.........seeeeeeees 497 The case of Burns y. Poulson tractor. examined .......... ose aay 488 | Result of the cases ..cecesses w+» 499 *Sror. 1.— On contracts of agent. [440*] A princrpat is liable to third parties for whatever the agent does or says; whatever contracts, representations or admissions he makes; whatever negligence he is guilty of, and whatever fraud or wrong he commits, provided the agent acts within the scope of his apparent authority, and provided a liability would attach to the principal if he was in the place of the agent (@).’ But the agent alone is liable in the following cases: Where he covenants personally in instruments under seal; * Where he contracts personally in negotiable instruments; * Where exclusive credit is given to the agent, the principal being known; (a) See Holmes v. Mather, L. R., 10 Bank, 9 Heisk. 479; Planters’ Ins. Co. Ex. 261. v. Sorrells, 57 Tenn. 852; Noble v. Cun- 1To the same point, see N. Y. Life ningham, 74 Ill. 51; Bass v.C. & N. Ins. Co. v. McGowan, 18 Kan. 300; Mor- ton v. Scull, 23 Ark. 289; Gasway v. Atlanta & W. P. R. R. Co, 58 Ga. 216; Mass. Life Ins. Co. v. Eshelman, 80 Ohio St. 647; Tage v. Tenn. Nat. 37 W. R’y Co., 42 Wis. 654. See, also, ante, p. 105. 2See ante, pp. 171, 172, and notes. 3 See ante, p. 176 et seq., and notes. , 578 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Il. Where an agent commits a wilful wrong. The liability of a principal to third persons upon contracts into which the latter have entered with the agent depends upon a num- ber of considerations. Amongst those considerations are such as relate to the agent’s authority and the conduct of the principal, secret limitations of authority, and the knowledge of the third persons, the ambiguity of the agent’s instructions, the existence of a custom or usage, and the like. In considering the various ques- tions which may thus arise, an advantage in respect of clearness may be gained by treating them according as they relate to cases: 1. Where the agent executes his authority strictly; 2. Where the agent exceeds his authority; 3. Where the principal ratifies an unauthorized contract; [441*] *4. Where the agent contracts in his own name; 5. Where the third party and the agent are identical. First, then, as to the liability of the principal, where the agent has executed his authority strictly. The rule is, that an agent who contracts as such, being authorized so to contract by a known principal,' will incur no personal responsibility, unless the other circumstances of the case lead to the conclusion that he has either expressly or impliedly incurred or intended to incur such personal responsibility (6). The liability of the principal, in cases where the agent is duly authorized, will depend —first, upon the form of the contract; secondly, upon the answer to the question, To whom was credit given? The effect of the form in which the contract has been executed was considered in Book II, Part II, Chaps. 2 and 8; and it will be sufficient to state briefly here the rules which are examined at length in those chapters. Thus — As to Deeds.— An agent may so execute a deed that it will bind the principal and not himself, or that it will bind himself and not the principal, or that it will be void. A deed will bind the principal if executed in his name and on his behalf, and this fact appears on the face of the instrument.’? ‘And when a contract shows on its Swaine v. Maryott, 28 N. J. Eq. 589. face that it was executed by an agent, (b) Story on Agency, § 261, and cases in order to bind the person named as cited; Paley by Lloyd, 368, 369 [2 principal, the authority of the agent to Kent’s Com. *629, 630]. act fur the principal must be shown. See ante, pp. 171, 172, and notes. CHAP. VIU.] LIABILITY OF PRINCIPAL TO THIRD PERSONS. 579 As to Bills of Exchange. — If a bill is addressed to a principal, and accepted by his agent on behalf of that principal, the latter will be liable as acceptor; nor is it necessary that the agent should state on the face of the instrument any words to the effect that he accepts on behalf of the drawee.’ As to Promissory Notes.— Where an agent promises and signs in the character of agent, the principal will be liable. The same rule applies where the words importing agency are confined to the signature.” The answer to the question, To whom was credit given? is of importance chiefly where the agent is acting for an undisclosed principal; and the inquiry whether a principal is disclosed or un- disclosed is of importance only in questions of contract. The ex- tent of the liability of an undisclosed principal to third parties has been defined by a series of decisions, extending from the case of Railton v. Hodgson (c) to that of Armstrong v. Stokes (a). These decisions may be distributed under two heads; thus: (1.) The agent may give no information to the third party of *the existence of a principal; or may simply in- [442*] form the other contracting party of the fact of his agency without disclosing the principal’s name; ° or the third party, know- ing that he is dealing with an agent, and aware of the principal’s name, may elect to deal with the agent alone; * or (2.) The principal may be a foreigner resident abroad. In all these cases the question is, To whom was credit given?® This is a question of fact for the jury, subject to the ruling of the presiding judge.’ An agent may make a contract by which he may become personally liable, while he still makes it on behalf of his principal, so that the other party has a choice to go against either the one or the other. But the righ to sue and the liability to be sued upon a contract are reciprocal, and these reciprocal rights and liabilities, as regards both principal and agent, con- tinue until the other contracting party has elected to give exclu- sive credit to one or the other. 1See ante, p. 177, and notes. 5 See ante, p. 193, and note. 2 See ante, p. 186, and notes. 6 See ante, p. 193, note; post, p. 445; (c) 4 Taunt. 576 n. 2, Smith’s Lead. Cases, *377. (d) L. B., 7 Q. B. 598. ™Maryland Coal Co. v. Edwards, 4 ®See ante, p. 308, note. Hun, 482. "48ee ante, p. 308, note. 580 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IL. As to the cases under the first head, it is stated by Lord Ten- terden, C. J., in Thompson v. Davenport (e): “I take it to be a general rule that if a person sells goods (supposing at the time of the contract he is dealing with a principal), but afterwards dis- covers that the person with whom he has been dealing is not the principal in the transaction, but agent for a third person, though he may, in the meantime, have debited the agent with it, he may afterwards recover the amount from the real principal;* subject, however, to this qualification, that the state of the ‘agcounts be- tween the principal and the agent is not altered to the prejudice of the principal.” The qualification here mentioned remained a mere dictum until the decision of the Queen’s Bench in Arm- strong v. Stokes (f). Before touching upon the latter case, it will be convenient to refer briefly to the various dicta indicating an opinion on the part of the judges that such a qualification of the general rule would be recognized. In Railton v. Hodgson and Peele v. Hodgson (g), which came before Mansfield, C. J., in 1804, that learned judge remarked: “Tf Hodgson had really paid S. L. and Co., it would have de- pended upon circumstances whether he would be liable to pay for the goods over again; if it would have been unfair to have made him liable, he would not have been so.” The facts of these cases will be referred to when the subject of election by [443*] *the vendor is examined. Mr. Justice Bayley, in Zhom- son. Davenport (h), states the qualification in the follow- ing terms: “The principal shall not be prejudiced by being made personally liable if the justice of the case is that he should not be personally liable. If the principal has paid the agent, or if the state of the accounts between the agent here and the principal would make it unjust that the seller would call on the principal, the fact of payment, or such a state of accounts, would be an answer to the action brought by the seller where he had looked to the responsibility of the agent.” On the other hand, the expressions of Baron Parke, in Heald v. Kenworthy (2), seem to lead to the conclusion that that learned (ec) 9 B. & C. 78 [S. C., 2 Smith’s Gandasequi, 4 Taunt. 576 [S. C., 2 Lead. Cases, *358.] Smith's Lead. Cases, *353]. 1See ante, p. 308, note. (A) Supra. (f) Ubi supra. (i) 10 Ex. 789, 745; 24 L. J., Ex. (g) Reported in a note to Addison vy. 76, 77. CHAP. VIII.] LIABILITY OF PRINCIPAL TO THIRD PERSONS. 581 judge thought no such qualification existed. The decision itself cannot be accepted as an authority with reference to the existence or non-existence of the above qualification, inasmuch as the plea neither stated that the plaintiff was ignorant of the existence of the defendant till after the latter had paid the agent, nor affirms that the defendant believed such to be the case. This was the opinion of the Queen’s Bench in a subsequent case (j). Lord Ellenborough decided two cases in 1807, which have been referred to upon this question. In the one (A), it was held, that where goods are bought by a broker who does not disclose his principal until he, the broker, has become bankrupt, the principal cannot set off the price of the goods against a debt due to him from the broker. In the other (2), the plaintiff sold by public auction to brokers a quantity of coffee, to be paid for on delivery. The brokers acted for the defendant, whose name was not dis- closed until the brokers became insolvent. The defendant having paid his brokers, refused to pay the plaintiff. Lord Ellenborough directed the jury that “a person selling goods is not confined to the credit of a broker who buys them, but may resort to the prin- cipal on whose account they are bought; and he is no more affected by the state of accounts between the two than I should be were I to deliver goods to a man’s servant pursuant to his order, by the consideration of whether the servant was indebted to the master, or the master to the servant. If he lets the day of payment go by, he may lead the principal into a *sup- [444*] position that he relies solely on the broker; and if, in that case, the price of the goods has been paid to the broker on account of this deception, the principal shall be discharged. But here payment was demanded of the defendant on the several days it became due.” Light is thrown upon both these decisions by a consideration of the fact that, in 1807, a London broker was bound by his bond to disclose his principal if required to do so, and to abstain from dealing on his own account (7). The question whether such a qualification existed was fully discussed in 1872, in the case of Armstrong v. Stokes (n), and (j) Armstrong v. Stokes, L.R.,7Q. __(m) See the form of the bond in Holt, B. 598. N. P. 481. (k) Waring v. Favenck, 1 Camp. 85. (n) L. R., 7 Q. B. 598, (1) Kymer v. Suwercropp, ib. 109. 582 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. the Court of Queen’s Bench, consisting of Blackburn, Mellor and Lush, JJ., decided that a vendor who has given credit to an agent, believing him to be the principal, cannot recover against the un- disclosed principal, if the principal has in good faith paid the agent at a time when the vendor still gave credit to the agent, and knew of no one else as principal.' In this case, R. and Co., commission merchants, who sometimes dealt as agents and some- times as principals, bought a quantity of shirtings of the plaintiff, who had never been informed that they dealt as agents, but in the event of any dealing had always settled with them. The con- tract to sell was made on the 15th June; payment was to be made on the 25th August. On the 24th August, R. aud Co. asked for further time to pay. While the plaintiff was considering this proposition, R. and Co. stopped payment on the 30th August, on which day the plaintiff discovered that R. and Co. had been acting for the defendants. It was given in evidence that the defendants had paid R. and Co. for the shirtings on the 11th August, in the ordinary course of their business, and no imputa- tion of mala fides was cast on the transaction. The court held, that assuming that there was authority to establish privity of contract between the defendants and those from whom R. and Co.’ had obtained the goods, the defendants were not liable for the grounds above stated. The court was apparently inclined to question the soundness in principle, but not the correctness in point of law, of the rule which allows a vendor to have recourse at all against one to whom he never gave credit. Where the principal is a foreigner resident abroad, there is no practical difference in the legal principles applicable. At [445*] “one time it was contended that not only is the agent the person who is primarily liable, but that he is in general the only person liable. The true rule seems to be that, although the agent does not prima facie pledge the principal’s credit, evi- dence may be given to rebut this presumption (o0).? Lord Tenterden stated the rule thus, in Thomson v. Daven- port (p): “Where a British merchant is buying for a foreigner, 1 See 2 Smith's Lead. Cases, *368, 375; (0) See Elbinger Actien-Gesellschaft Smith on Contracts (6th ed.), 403, 405 v. Claye, L. R., 8 Q. B. 313. et seq. See, also, Johnson v. Cleaves, ?See ante, p. 193, and note. 15 N. H. 332. (p) 9B. & C. 78. ‘CHAP. VIII.] LIABILITY OF PRINCIPAL TO TUIRD PERSONS. 583 according to the universal understanding of merchants and of all persons in trade, the credit is then considered to be given to the British buyer, and not to the foreigner.” In Mahony v. Kekulé (q), which was decided in 1854, the ques- tion is treated as one of evidence. A written contract expressed to be made between V. and T. (the foreign principals) and the plaintiff was signed at the end by the defendant as agent for V. and T. evidence of negligence. Thus in an old case, decided in the year 1796 (w), the action was for trespass, assault, and battery. To this the defendant pleaded that he rode upon ahorse in the king’s highway, and that his horse, being affrighted, ran away with him, so that he could not stop the horse; that there were several per- sons standing in the way, among whom the plaintiff stood; that he called to them to take care, but that, notwithstanding, the plaintiff did not go out of the way, but continued there; so that the defendant’s horse ran over the plaintiff, against the will of the defendant. The plaintiff demurred. It was argued for the de- fendant that if the defendant showed that the anaideut was inev-| itable, and that the negligence of the defendant did not cause it, he was entitled to judgment. The court, however, held that, in- asmuch as the justification might be given in evidence, judgment should be entered for the plaintiff. He should have pleaded the general issue, for if the horse ran away against his will, he would have been found not guilty. So in an earlier case, the action be- ing similar (x), the defendant pleaded that he, amongst others, was a trained soldier in London, as was the plaintiff, and [497*] that they were skirmishing *with their muskets charged with powder for their exercise against another captain and his band; and as they were so skirmishing, the defendant, casu- aliter and per infortuniam and contra voluntatem suam, in dis- charging his piece, did wound the plaintiff. Upon demurrer, judgment was given for the plaintiff; for though it was agreed that if men tilted or tourneyed in the presence of the king, or if two masters of defence playing their prizes killed one another, this was no felony, yet in trespass, which tends only to give damages according to hurt or loss, it is not so; and, therefore, no man should be excused of a trespass unless it is entirely without his fault, as, for example, if a man by force take A.’s hand and strike B., or if in the present case the defendant had said that the plaint- iff ran before his piece, or if he had set forth the case with the circumstances, so that it appeared to the court that it had been \ (uw) Gibbons v. Pepper, 4 Mod. 405. (x) Weaver v. Ward, Hob. 184. CIAP. VIII.] LIABILITY OF PRINCIPAL TO THIRD PERSONS. 643 inevitable, and that the defendant had committed no negligence to give occasion to the hurt. In Wakeman v. Robinson (y), decided in 1823, the jury were directed that if the injury was occasioned by an immediate act of the defendant, it was immaterial whether that act was wilful or accidental. The Court of Common Pleas, however, disregard- ing the dictum of Grose, J., held, “that if the injury was occa- sioned entirely without default on the part of the defendant, or blame imputable to him, the action would not lie,” and refused a new trial, because the evidence showed that the accident was caused by defendant’s default. The report of the case of Under- wood v. Hewson (2) is altogether too meagre to be of any use as an authority. In Holmes v. Mather (a), decided in the year 1875, which was an action for negligently driving a carriage, whereby the plaintiffs were injured, the jury stopped the case, and expressed an opinion that there was no negligence in anyone. The verdict was entered for the defendant. There was proof of damage, but it was caused under the following circumstances: The defendant’s horses were being driven by his groom in the public highway, where they were startled by a dog barking, and became unmanageable. The groom requested the defendant not to interfere; the latter accordingly left the management to the groom, who could to some ex- tent guide the horses. In trying *to guide them round a [498*] corner, the carriage was dashed against some palisades, and one of the plaintiffs was struck down by the horses. The plaint- iffs obtained a rule nist to enter the verdict for them on a count for trespass. The rule was discharged by the court, consisting of Barons Bramwell and Cleasby. The former, assuming that the defendant was as much liable as if he had been driving, thought the action was not maintainable, because the driver was absolutely free from all blame, and had endeavoured to do what was best under the circumstances. “If the plaintiff,’ said his lordship, “under such circumstances can bring an action, I really cannot see why she could not bring an action because a splash of mud, in the ordinary course of driving, was thrown upon her dress or got into her eye, and so injured it. It seems manifest that under such (y) 1 Bing. 218. (z) 1 Str. 596. (a) L. R., 10 Ex, 261. 644 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK III. circumstances she could not maintain an action. For the eonven- ience of mankind in carrying on the affairs of life, people, as they go along the road, must expect, or put up with, such mischief as reasonable care on the part of others cannot avoid.” Baron Cleasby apparently based his judgment upon the ground that the act of the servant was not, under the circumstances, the act of the mas- ter, and he relied upon an observation of Baron Parke (0), to the effect that “in all cases where a master gives the direction and control over a carriage, or animal or chattel, to another rational agent, the master is only responsible in an action on the case for want of skill or care of the agent — no more.” In an action for negligence, then, negligence must be proved.t In Pearson v. Cox (c), decided in 1877, the defendants were build- ers and contractors, who, after the outside of a house was finished, had removed the outer hoarding, and had employed a subcon- tractor to do the internal plastering. One of the men employed by the subcontractor shook a plank, which caused a tool to fall out of a window of the house, and the tool in falling injured the plaintiff, who was passing along the highway. The jury found that the hoarding had been properly removed, but that the injury was caused by the negligence of the defendants in not providing some other protection for the public. The court held that the defendants were entitled to judgment, as there was no negli- gence. [499*] | *When an injury is occasioned to anycne by the negli- gence of another, if the person injured seeks to charge with its consequences any other person than him who actually caused the damage, it lies on the person injured to show that the circumstances were such as to make some other person responsible. In general it is sufficient for this purpose to show that the person whose neglect caused the injury was, at the time when it was occasioned, acting not on his own account, but in the course of his employment as a servant in the business of a master, and that the damage resulted from the servant so employed not having conducted his master’s business with due care. In such a case, the maxim “ Respondeat superior” prevails, and the master is responsible. Thus, if a servant, driving his master’s carriage (b) Sharrod v. The Londonand North —1 See Cooley on Torts, 629, 661. Western Railway Company, 4 Ex. 586. (ce) 2 C. P. Div. 869. ONAP. VIII.] LIABILITY OF PRINCIPAL TO THIRD PERSONS. 645 along the highway, carelessly runs over a bystander, or if a game- keeper, employed to kill game, carelessly fires at a hare so as to shoot a person passing on the ground, or if a workman, employed by a builder in building a house, negligently throws a stone or brick from a scaffold, and so hurt a passer-by, in all these cases the person injured has a right to treat the wrongful or care- less act as the act of the master. “ Qui facit per alium, facit per se” (a). Secr. 5.— The effect of intrusting performance of work to a contractor, The general rule, it has been said, is weli established, that if the person on whose behalf a particular work is done intrusts the execution of the work to a person whose calling is to perform work of that kind, and who is master of the workmen employed, having control over them, he is not liable for injuries done to third persons from the negligent execution of the work (e).4 (d) Per Lord Cranworth, Bartonshill Coal Company v. Reid, 3 Macq. 282. (e) Cuthbertson v. Parsons, 12 C. B. 304; Milligan v. Wedge, 12 Ad. & E. 737. 1See Holt v. Whatley, 51 Ala. 569; Barry v. City of St. Louis, 17 Mo. 121; Forsythe v. Hooper, 11 Allen, 419; Hil- liard v. Richardson, 3 Gray, 349; Lin- ton v. Smith, 8 id. 147; De Forrest v. Wright, 2 Mich. 368; Kelly v. Mayor, etc. of New York, 11 N. Y. 432; Clark v. Vt. & Can. R. R. Co., 28 Vt. 103; Cin- cinnati vy. Stone, 5 Ohio St. 38; Pfau v. Williamson, 63 Ill. 16 (a contract by the owner of a lot with a builder for the erection of a house thereon); Schwartz v. Gilmore, 45 id. 456 (same as Pfau v. Williamson); ‘Burke v. Norwich, etc. R. R. Co., 34 Conn. 474; Blake v. Fer- ris, 5 N. Y. 48; Ardesco Oil Co. v. Gil- son, 63 Penn. St. 146; McGuire v. Grant, 25 N. J. Law, 356; Scammon v. Chicago, 25 Ill. 424; Hale v. Johnson, 80 id. 185; McCafferty v. Spuyten Duyvil, ete. R. R. Co., 61 N. Y. 178; King v. N. Y. etc. R. R. Co., 66 id. 181; Cooley on Torts, 547. See, however, Lowell v. Bos- ton, etc. R. R. Co., 23 Pick. 24; Stone v. Cheshire R. R. Co., 19 N. H. 427; Darmstaetter v. Moynahan, 27 Mich. 188. As to who is a contractor, see Cooley on Torts, 549. In order to hold the employer liable for the trespass of the contractor, the contract must have been to do the act complained of. McClanathan v. N. Y. etc. R. R. Co., 1 Thomp. & C. 501. The rule, however, that exempts the employer in respect to the acts of con- tractors, applies only to direct or conse- quential injuries, and has no application to a case where the trespass complained of consists in the taking by the contractor of the property of another and appropri- ating it to the use of his employer. McClanathan v. N. Y. etc. R. R. Co., supra. A brig, which was towed at the stern of a steamboat employed in the business of towing vessels in the river Mississippi below New Orleans, was, through the negligence of the master and crew of 646 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [Book rm. This rule is, however, subject to the following exceptions: (1) Where the work which is intrusted to the independent control of another involves the performance of a duty which is incumbent upon the person by whom the work was so intrusted (f):! (2) Where a person is in possession of fixed property, [500*] *which is so managed or dealt with that injury results to another, the former will not escape liability by reason of the fact that he has employed an independeat and com- petent contractor (g).” As an illustration of the general rule it may be observed, that in Burgess v. Gray (h), which was decided in 1848, Tindal, C. J., ruled that if the jury thought the defendant had completely parted the steamboat, over whom those in charge of the brig had no control, brought into collision with a schooner lying at anchor: Held, that the owner of the brig was not responsible for the damage sustained by the schooner. Sproul v. Hemmingway, 14 Pick. 1. As the business of towing is ordinarily conducted on the lakes, the relation be- tween the tug and tow is that of con- tractor and contractee. Lach is liable to third parties for its own negligence, but neither is liable for the negligence of the other. The Frank Moffat, U.S. Dist. Ct., EH. D. Mich., 11 Chicago Leg. News, 114, and cases there cited. See, also, Arctic F. Ins. Co. v. Austin, 69 N. Y. 470. Where a person employs a mechanic to make a drain for him, on his own land, and extending thence to a publio drain, the mechanic procuring the neces- sary materials, hiring laborers, and charging a compensation for his services and disbursements, the mechanic is deemed to be in the service of his em- ployer so far as to render the employer responsible to a third person who sus- tains damage by reason of want of skill, or want of due diligence or care, on the part of the mechanic. Stone v. Codman, 15 Pick. 297. The contractor is himself liable to third persons for his own negligence, or tor that of servants or other persons em- ployed by him in the execution of the work. Holt v. Whatley, 51 Ala. 569; Blake v. Ferris, 5 N. Y. 48. A special receiver or assignee of the property of a railroad corporation, ap- pointed in bankruptcy proceedings, in- voluntary on its part, is not an agent or servant of the corporation, and it is not liable for damages occasioned by his negligence. Metz vy. Buffalo, etc. R. R. Co., 58 N. Y. 61. ; (f) Pickard v. Smith, and cases infra. 1 See Silvers v. Nerdlinger, 30 Ind, 53; Detroit v. Corey, 9 Mich. 165, and cases there cited; Darmstaetter v. Moynahan, 27 id. 188; also, cases cited in note, p. 500. (g) See cases infra. * See Silvers v. Nerdlinger, 30 Ind. 53; Chicago v. Robbins, 2 Black, 418; Clark v. Fry, 8 Ohio St. 358. Thus, a principal cannot by any con- tract relieve himself of duties resting upon him as owner of real estate, not to do or suffer to be done upon it that which will constitute a nuisance. Cooley on Torts, 547; Clark v. Fry, 8 Ohio St. 358; Chicago v. Robbins, 2 Black, 418, (h) 1C. B.578, CHAP, VII] LIABILITY OF PRINCIPAL TO THIRD PERSONS. 647 with all control over the work to a contractor, the former could not be held responsible for damage caused by the contractor’s negligence; but otherwise, if he had himself exercised any con- trol! A., the contractor, was employed to make a drain into a common sewer by B., who owned and occupied premises adjoin- ing the highway. In performance of this work, the workmen employed by A. placed gravel on the highway, in consequence of which C., in driving along the road, was injured. A. had the sole management of the work, and employed D. to cart away the rubbish, and had charged B. in his bill for the sum paid for cart- ing away the rubbish. The only evidence of B.’s personal inter- ference was that he had applied to the commissioners for leave to perform the work, and that before the accident the dangerous position of the heap was pointed out to him, and he promised to remove it. The jury found for the plaintiff, and the court held that there was evidence to support their finding. Chiet Justice Tindal was clear, however, that if this had been the simple case of a contract between A. and B., and there had been no personal interference on the part of B., the damage should be made good by the contractor, and not by his employer. The above case, it will be seen, is no authority for any propo- sition at variance with the above exceptions. The ob¢ter dicta of Tindal, C. J., were unnecessary to the decision; and if they did contain what was at one time the law, they have long ceased to do so (2). In Pickard v. Smith (k) the defendant employed a coal mer- chant to put coals into his cellar, and was held liable for injury suffered by the plaintiff from his falling through the cellar- hole, which was left open by the negligence of the coal mer- chant’s servants. The rule stated by the court was that if an 1 But where the employer retains the control and direction over the mode and manner of doing the work, and an injury results from the negligence or miscon- duct of the contractor as his servant or agent, the employer is placed under a liability equal and similar to that which exists in the ordinary case of principal and agent. Cincinnati v. Stone, 5 Ohio St. 88; Chicago v. Joney, 60 Ill. 233; Schwartz v. Gilmore, 45 id. 456; Chi- cago v. Dermody, 61 id. 431; Sewall v. St. Paul, 20 Minn. 511. See, also, Cooley on Torts, 548, and cases cited in note. (i) See Bush v. Steinman, 1 B. & P 404; Martin v. Temperley, 4 Q. B. 298, and cases infra. (k) 10C. B., N.S. 470. 2 See Clapp v. Kemp, 122 Mass. 481, which is a case very similar in its facts to Pickard v. Smith, supra. 618 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK IIL [501*] *independent contractor is employed to doa lawful act, and in the course of the work he or his servants commit some casual act of wrong or negligence, the employer is not answerable. The rule is, however, not applicable to cases in which the act which occasioned the injury is one which the contractor was employed to do;! nor, by a parity of reasoning, to cases in which the contractor is intrusted with the performance of a duty incumbent upon his employer, and neglects its fulfillment, whereby an injury is occa- sioned. In a subsequent case the coal merchant was held respon- sible under similar circumstances (/). | Grayv. Pullen (m), a decision of the Exchequer Chamber, is a still stronger authority, in support of the proposition that where a work is being executed from which danger may arise to others, and it thereby becomes incumbent on the party doing or ordering it to be done to take measures to prevent damage resulting to others, he cannot divest himself of liability by transferring the duty to a contractor. An Act of Parliament authorized the cut- ting of a trench across a highway for the purpose of making a drain. Attached to the exercise of the right was the condition of filling up the trench after the drain had been completed. The defendant employed an independent contractor to do the whole work; owing to the negligence of the latter in filling up the trench, the plaintiff’s wife had sustained personal injury. The Court of Queen’s Bench held that the contractor alone was liable; but this judgment was reversed in the Exchequer Chamber.” In Jarry v. Ashton (n), decided in 1876, the defendant became the occupier of premises from which a lamp was suspended over the highway. This lamp was worn out before he became occu- pier. A man in the defendant’s employ had raised a ladder against the bracket from which the lamp hung, and on mounting it, to save himself from falling, caught hold of the bracket, which gave way. Thelamp in falling struck he plaintiff. A few months months before the defendant employed an experienced gas-fitter to examine the lamp and put it in thorough repair. The jury 1 See Cooley on Torts, 548, and cases = *See Silvers v. Nerdlinger, 30 Ind. cited; Lawrence v. Shipman, 89 Conn. 58; Detroit v. Corey, 9 Mich. 165, and 586. cases there cited; Darmstaetter v. Moyn- (2) Whiteley v. Pepper, 1 Q. B. Div. ahan, 27 id. 188. 271. (m) 1 Q. B. Div. 314, (m) 5B.& 8. 970; 34L. J., Q. B, 265. CHAP, VII] LIABILITY OF PRINCIPAL TO TUIRD PERSONS. 649 found there was no negligence on the part of the defendant or of the servant who mounted the ladder, but that there was on the part of the gas-fitter. The court held that the defendant was “liable. Mr. Justice Blackburn put this liability upon [502*] the ground that, as he knew of the defective state of the lamp, he was bound to put it in good repair, and that he could not escape from liability by intrusting the fulfillment of the duty to others. Justices Lush and Quain thought that if a person main- tains such a lamp for his own purposes, it is his duty to maintain it so as not to be dangerous to passengers. There is another class of cases which fall within the rule laid down by the Queen’s Bench in Bower v. Peate (0) in the year 1876. The rule is that, when work is committed to a contractor from which, if properly done, no injurious consequences can arise, the party authorizing the work is exempt from liability for injury re- sulting from negligence which he had no reason to anticipate; whereas if the work to be executed is such that mischievous con- sequences will arise unless preventive measures are adopted, the person authorizing the work is liable for injury caused by any neg- lect in not preventing such consequences, and it is quite immate- rial through whose default the omission to take the necessary measures for their prevention arose. In that case the defendant employed a contractor to pull down and rebuild his house, the latter undertaking the risk of supporting the house of the plaintiff, an adjoining occupier, and to make good any damage. Owing to a want of proper support the plaintiff ’s house was injured, and the court held that the action was properly brought against the de- fendant. It was contended, on behalf of the defendant, that he could not be responsible unless a nuisance was created (p), but without effect. From certain of the observations in the judgment it might be inferred that if the contractor had contracted specific- ally to give support to the plaintiff’s house, such work being in- cluded in the specification, the result of the case would have been different. The introduction, however, of such a stipulation, it is (0) 1Q. B. Div. 321. way Company, 30 L. J., Ex. 81; Ellis 1 See Cooley on Torts, 547, 548. vy. Sheffield Gas Company, 23 L. J., Q. (p) See Hole v. Sittingbourne Rail- B. 42. 650 RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK Ill. submitted, could not have the effect of limiting the rights of the plaintiff (¢). A person who employs a contractor, to whom he gives sole man- agement of the work undertaken, may be liable in respect of his occupation or possession of the premises upon which the work is to be performed, for injuries caused by the negligence of the con- tractor or his workmen. In Beaulieu v. Finglam (r), which [503*] *was an action in case for so negligently keeping a fire that the plaintiff’s house and goods were burnt, Chief Justice Markham observed: “TI shall answer to my neighbor for him who enters my house with my leave or with my knowledge, or who is a guest with me, or for my servant, if he or any of them does ayibing: as with a candle or other thing, by which doing the house of my neighbor is burnt.” So, shar the owner of a house had employed a surveyor to do some work upon it, and there were several sub-contracts, and one of the workmen of the person last employed put some lime on the road, in consequence of which the plaintiff’s carriage was overturned, it was held that the owner of the house was liable (s). Again, where an occupier employed a bricklayer to make a sewer, the former was held liable for inju- ries caused by the sewer being left open (¢). In another case (w), the defendants, occupiers of a bonded warehouse, engaged a mas- ter porter to lower and convey a barrel of flour from their ware- house. The master porter engaged a master carter, and both of them attended with their men. During the process of lowering it from the warehouse, the barrel fell, owing to the defectiveness of a rope furnished by the master porter, and injured the plaintiff, and the defendants were held to be liable. The rule of law appears to be, that where a man is in possession of fixed property, he must take care that his property is so used and managed that other persons are not injured; and that whether his property is managed or dealt with by his own immediate ser- vants, or by contractors or their servants (x).! Such injuries, it (q) See Burgess v. Gray, 1C. B. (x) Per Mr. Justice Littledale, in 578. Laugher v. Pointer, 5 B. & C. 564; see, (r) P. 2 H. 4, fo. 18, pl. 6. too, per Lord Tenterden, ib., and per (s) Bush v. Steinman, 1 B. & P. 404. Baron Parke, in Quarman v. Burnett, (t) 6 Esp. 6. 6M. & W. 499. (uw) Randleson v. Murray, 8 Ad. & E. 1See ante, p. 500, note. 209. CHAP. VII] LIABILITY OF PRINCIPAL TO THIRD PERSONS. 651 has been said, are in the nature of nuisances; but the same prin- ciple which applies to the personal occupation of land or houses by a man or his family, does not apply to movable chattels, which, in the ordinary conduct of the affairs of life, are intrusted to the management of others, who are not the servants of the owners (y). (y) Per Curiam, Quarman v. Burnett, supra. [504*] RIGHTS, ETC., ARISING OUT OF THE CONTRACT. [BOOK mI, *CHAPTER IX. LIABILITY OF EMPLOYER FOR INJURY CAUSED BY NEGLIGENCE OF FELLOW-WORKMAN. PAGE. Earliest case, Priestly v. Fowler... 504 Lord Abinger’s statement of the Va Winn yas onteake