i Hii i Pi ee me i, iis L Cl ih ing ee aa Lanes Cornell Law School Library Cornell University Library KF 1344,P62 Lol lected cases on ag iA SELECTED CASES ON AGENCY ARRANGED FOR ‘The Use of Students of Business Law —BY— «m Warp W. PIERSON of the Philadelphia Bar Professor of Law —AND— CLARENCE N. CALLENDER of the P hiladelphia Bar Instructor in Law WHARTON SCHOOL UNIVERSITY OF PENNSYLVANIA SECOND EDITION Philadelphia Moore, Rettew and Budenz 612 Chestnut Street 1920 WIHd130V1IHd YBONSTIVO ‘N BONSYVIO 0Z6l LROINAdOO £251h9 PREFACE Second Edition Since the publication of the first edition of this book, death has claimed my lifelong friend and associate, Major Ward W. Pierson. He was killed in action November 9th, 1918, in the Argonne Forest, while serving with the Amer- ican Expeditionary Forces as a Major of the 315th Infan- try. In this edition an attempt has been made to further sim- plify the cases by eliminating as far as possible matters of technical practice. A few cases have been replaced by later decisions and several new cases have been added. A glossary of technical terms, which could not conveniently be eliminated, has been added. CLARENCE N. CALLENDER. March, 1920. PREFACE First Edition pared by us on Contracts, is designed for the spe- cial use of students taking a course in Business law in Universities and Colleges. Much of the world’s business is Suaied on through the medium of Agents. The courts over and over again have been called upon to pass upon the various phases of the law governing the relation of Principal and Agent. We offer herewith a series of fifty-six typical court decisions establishing the main principles which govern this phase of business. While these cases are complete, they are stripped of all of the features of pleading and practice which en- shroud many cases and which make impractical the use of the original court reports. In many cases the facts are abridged. This has been done without calling attention to the matter. Portions of opinions on points irrelevant to the subject herein pre- sented are omitted. These omissions are indicated. Wher- ever in the course of the opinion of the court a group of authorities is cited these citations are abridged. This volume is dedicated to all those who may find ~“4t useful. T HIS CASE BOOK on Agency, like the one pre- Warp W. PIERson, CLARENCE N. CALLENDER. April, 1916. Table of Contents PAGE TABLE: OF ‘GASES: sik: debate waves au paceheds cs vs ceed << Viii-x Chapter I ‘ THE RELATION 1, DEFINITION. a. Classes of agents defined .......... cscs eee sees 3 b. Distinction between agent and trustee ............. 8 c. Distinction between agent and independent con- tPactof .ise..swes iiiNis ee BBs DAMETR Cte a va SewUNS 10 d. Distinction between agent and servant ............ 14 (1.) Liability of master for acts of servants.. 20 (2.) Agent may be master ..........ceeeeeeeee 24 Chapter IT THE PARTIES 1. WHO0 MAY BE AGENT 2... cece cece cence crete eee enees 28, 32 2. WHO MAY BE PRINCIPAL ......ecceeceeeeseeeeereeneees 33, 39 Chapter ITI CREATION OF THE RELATION 1, BY CONTRACT ..ecece sec ee cece cree cence er eeeteeeeeenanees 42 | BY ESTOPPEL oo. cece cece ence een c rent ee eeseeencnes seeeee 46 3. BY RATIFICATION (EXPRESS OR IMPLIED) ....... cise BaD AES 49 a. Necessity for knowledge of facts ......+.ssseeeees 54 Vv Chapter IV CONSEQUENCES OF THE RELATION PAGE 1. Durtes AND LiaBILities oF AGENT TO PRINCIPAL. a. Duty to be loyal ...-seeeeeevesrrenr err rere reer 57 b. Duty to use good faith aniegaws’s preR eemeee tes FES 59 c. Duty to acquire no adverse interest ..-..+eseerrees A d. ae Duty to obey instructions ..+e-sereereeeeret ete Ses biaewrnsignn® 70 (1.) Reimbursement of principal e. Duty to account for profits ..seceeeeeereressernets 72 f. Duty to use proper care «+--+ sha REE Raw eee 80 g. Duty not to commingle funds ...+-+e+seerreeere’ 82 2. Duties AND LIABILITIES OF PRINCIPAL TO AGENT. a. Compensation. Agents liens .-.-++--eerreerrt tt 83, 84 b. Reimbursement of agent --++.serrrrerrseese 86, 90 3, LiapiLity oF AGENT TO Tuirp Party. a, Warranty of authority ..---seserererercesserreee’ 92 b, Exclusive credit to agent .---serererrerreer tre 96 c. Undisclosed principal ...-+--eeseeerreeeerersetene 98 (1.) Time disclosures must be made .....- 101, 106 4. Lrapitiry oF PRINCIPAL TO Tuirp Party. i. Tay Beteol, pncseewreenncntaeae ese er eneeeereneeN*® 107 b. Representations of authority by agent ..---++++++ 111 c. Representations by agent after authority shown ... 114 d. Warranty by agent ..+.-+sseeererersnertter tenes 115 e. Possession as evidence of agents’ authority ....--- 118 f. Effect of secret instructions ...e-eeee ere e rset 120 g. Unauthorized contract—disclosed principal ......- 125 h. Effect of notice to agent by third party ...---++- 127 i. Election to sue principal or agent—undisclosed prin- Eipal. panera areiarertinwerssearenrl ss e+ raeRTtAee 131 j. When neither principal nor agent bound .......-- 134 hk. Tort of agent ....-sceeeeeeeceeeeeeestrtrees 138, 140 5, Lrapitiry or THirp Party TO AGENT. a, Agent having interest in goodS ...+--eeeee sree cette 143 b. Undisclosed principal ....-.sseeeesrerrestttrttt 146 6. Lrasmity or THIRD Party TO PRINCIPAL. 150 a. Disclosed principal—payment to agent .....eeeee eee 153, 155, 160: b. Undisclosed principal .....---- agen Pees c. Right of third person to select the party with whom he: deals scnssganctonrsseerneneerem abe s sei sete 163 d. Right of principal to sue ...-.-+eeeeeeerreeet rst £ . vi ie ON Chapter V TERMINATION OF THE RELATION PAGE REVOCATION OF AUTHORITY IN GENERAL ........0..e00e00e 166 Faiture oF AGENT TO OBEY INSTRUCTIONS .............. 174 Wuen Principat LIABLE FOR DAMAGES ...........+00005 175 RIGHT OF PRINCIPAL TO REVOKE AUTHORITY .........2.-005 176 DEATH (OF. PRINCIPAL. asience.c cicea eadaad a eee ey OY AAR Ewes 178 Table of Cases Reported PAGE Bank of Delaware County v. Bromball, 38 Pa. 135.......... 80 Barry v. Page et al., 10 Gray 398.......... se eee cece eee eee 163 Birkett v. Postal Telegraph Cable Co., 107 App. Div. (N. Y.) TTS Rescate os otera tiie enamine BAe a Sy SS culated 20n4.8 wah Naeem 138 Burke v. Priest & Burke, 50 Mo. App. 310.................06% 176 Butler v. Dorman, 68 Mo. 298......... 0: cece ence eee eee e eee 150 Camp v. Barber, 88 Atl. (Vt.) 812... 0... cece eee cee n een ees 146 Casement v. Brown, 148 U. S. 615....... cc ce cece eee eee 10 Columbia Mill Co. v. National Bank of Commerce, 52 Minn. DOK. bascsaiss oss ae bs Cala ea eee AAT AR ee ca ee INR 46 Cummins v. Beaumont, 68 Ala. 204........ 0... cece eee eee ee 118 Darrow et al. v. Horne Produce Co., 57 Fed. 463............. 155 ‘Dutton v. Willner, 52 N. Y. Appeals 312........ 0... cee eee eae 72 Ehrmanntraut v. Robinson et al., 52 Minn. 333.............. 54 ‘Farmers’ Loan and Trust Co. v. Wilson, 139 N. Y. 284...... 178 ‘Ford v Williams, 21 “HOW, (287 sessccsesss4 nancvases lesan’ 153 Fort Worth & Denver City R. R. Co. v. Johnson & Trice, 2 Tex: (Ct Of App, 181s 2.40% sewsmcgmekces saa s vinkwewwtwnded 125 ‘Box vw, Simons, 251 Ul: SlOs sswsioaasearrei acd aiaxgemmee eras 62 Gibson v. Snow Hardware Co., 94 Ala. 346...............00, 3 Gilman Linseed Oil Co. v. Norton & Worthington e¢ al., 89 TOW AS40 necetnucne ac: & 36h sa bsbtinet Ah eg coe Gace one ne 107 Grauman & Shuttleworth v. Reese, 13 Ky. Law 683.......... 83 Heyn v. O’Hagen, 60 Mich. 150......... cece cece eee eee eee 49 Hyde et al. v. Paige, 9 Barb (N. Y.) 150...............0005. 96 Jenkins Bros. Shoe Co. v. Renfrow & Co., 151 N. C. 323...... 127 ‘Kelly Asphalt Block Co. v. Barber Asphalt Paving Co., 211 Ne Y.68. sxcsultton pian nne ad 4 saunemakact deans anemenivan 98 ‘Kingan & Co., Ltd., v. Silvers ef al., 13 Ind. App. Ct. 80....... 14 ‘Lindquist v. Dickson, 98 Minn. 369...........0. cece eeeeeeee 131 Little Rock Furniture Co. ef al v. Kavanaugh e¢ al., 111 Ark, G75) ter, act for himself.” It is only by a rigid adherence to this simple rule-that all temptation can be removed from one acting in a fiduciary capacity to abuse his trust, or seek his own advantage in the position which it affords him. One consequence of a violation of the rule is that the agent must, at the option of his principal, account to him for any profit he may have made by the transaction. It matters not how fair the conduct of the agent may have 76 been in the particular case, nor that the principal would have been no better off if the agent had strictly executed his power, nor that the principal was not_in-fact. injured _by. the intervention of the agent for his.own benefit. If ., the agent deals_ with the- ‘subject-matter of his agency, or, . “by departing from the instructions of his principal, obtains _a better result than could have been obtained d by following them, the principal can claim the advantage thus obtained, even though the agent may have contributed his own funds. _or responsibility in producing the result. The rule which places it beyond the power of the agent to profit by such transactions is founded upon considerations of policy, and is intended not merely to afford a remedy for discovered frauds, but to reach those which may be concealed; and also to prevent them, by removing from agents and trustees all inducement to attempt dealing for their own benefit in matters which they have undertaken for others, or to which their agency or trust relates. Keech v. Sandford, 3 Eq. Cases Abr. 741; * * * All profits and every advan- tage beyond lawful compensation made by an agent in the business, or by dealing or speculating with the effects of his principal, though in violation of his duty of agent, and though the loss, if one had occurred, would have fallen on the agent, are for the benefit of the principal. Dunlap’s Paley on Agency, 51; * * * The defendant in this case admits in his answer “that O. H. Dutton requested the defendant, as his agent, to sur- render the policy of insurance for cancellation, and in- trusted him with the same for that purpose,” and the same fact is found by the court. It was by being thus intrusted with the policy, as agent of O. H. Dutton that the defendant was brought into rela- tions with the company and enabled to make the arrange- ment which he finally did. The policy belonged to O. H. Dutton, and all profits resulting from it, though acquired by 77 __his agent by departing from the instruction given him, also .~belonged-to the principal. — In substance, the defendant, instead of cancelling the policy, renewed it without the knowledge of his principal and had it made payable to himself and G. D. Dutton, de- riving from such renewal much greater advantages than he could have derived from an original application on his - own-behalf for a policy on the life of O..H. Dutton, and . ultimately receiving the proceeds of the renewal. It is contended that before obtaining the renewal or reissue, the defendant had executed the power conferred upon him by O. H. Dutton by surrendering the original policy. That when that had been done all interest of O. H. Dutton in the matter had terminated, and the defendant was at liberty to make whatever contract he pleased with the insurance company for his own benefit. This argument is too trans- parent to conceal the real nature of the transaction. It is true that the defendant did at one time physically surrender the policy, and at that time he no doubt intended to carry out the instructions of his principal. The premium notes were thereupon sent by the company to Mr. Phelps for the purpose of being surrendered, and the defendant must have known that one of the purposes of his principal in sur- rendering his policy was to extinguish those notes, and that to consummate the matter they should be delivered up. But while the notes were still in the hands of Phelps uncan- celled, and the matter thus capable of reconsideration, the defendant, at the instigation of George D. Dutton, con- sented to undo so much as he had previously done in pur- suance of his agency, and to accept a reissue of the policy ae the benefit of himself and G. D. Dutton, giving them in _-thereon,. and- leaving his poles. outstanding in the “hands of _ the company as -security for the unpaid premiums. It is plain that the new policy thus obtained was a mere substi- 78 tute for or continuation of the surrendered one, and nota new and independent contract. If, on the surrender of the original policy the company had paid a sum of money to the defendant by reason thereof, no one would question that he must account for it to his principal, though the principal had authorized him to surrender it for nothing. Instead of a sum of money the company gave the defend- ant a contract, part of the consideration of which proceeded from his principal, and out of which the defendant has realized a considerable amount. On what principal can the agent retain this benefit with any greater show of right than he could a direct payment? The consideration for it was in part the policy with which he had been intrusted by his principal, and in part the notes of his principal, which, as he well knew, ought to have been extinguished. The fact that in addition to these the agent contributed some of his own funds, gives him no right except that of reimburse- ment of what he has contributed. It is said that O. H. Dutton sustained no prejudice by the renewal of the policy and the redelivery of his notes to the company, for the reason that the acceptance by the company of the surrender of the original policy would have been a good defence to the notes. Whether or not this defence would have been available it is not necessary to inquire. The notes being left outstanding as apparently valid securities, and the consequent exposure to an action, and to the necessity of defending it, would be some preju- dice. The defendant took up the notes after the lapse of a year or more, availing himself of them in the meantime to obtain credit for the unpaid premiums accrued on the policy, and it hardly lies in his mouth to say that they were not valid obligations. But, as before remarked, it was not necessary that the principal should have been prejudiced. If the agent made a profit out of the transaction he is bound to account for it, though made without the knowl- 79 _edge or authority of the principal, and without-risk or - _ expense to him. ; If, when it was proposed to the defendant to renew _ the policy for the benefit of himself and G. D. Dutton, the ~ defendant had asked the consent of O. H. Dutton so to do, and to use his notes for the purpose, and such consent had - been voluntarily given, then, in the absence of any misrep- resentation, concealment or fraud, the defendant might. have been discharged from his obligations as agent, and might have acquired a beneficial interest in the policy. See Ex parte Lacey, 6 Ves. 625. But no such consent having been asked, and the transaction having been kept secret from O. H. Dutton during the residue of his life time, the defendant’s relations as agent in the matter did not termin- ate, and the plaintiff has the right to adopt his acts, and call him to an account for the profits he has derived from the transaction. _The defendant is entitled to credit for all payments nec- _essarily-made-to_preserve the policy. residue he must be deemed to have received in _trust for the legal representativs of O. H. Dutton, de-" _ ceased, | eae. ~~ The judgment appealed from should be reversed and a new trial ordered, with costs to abide the event. al ie Sa aceon Editor’s Note—The fact that the agent is adversely interested in the contract which he was authorized to make on behalf of his principal does not render the contract void, but merely voidable at the option S the principal, and a third person cannot raise such an objection. 2 Corpus Juris 696. t 80 Duties and liabilities of agent to principal—Duty to use proper care THE BANK OF DELAWARE COUNTY zv. BROOMHALL, 38 Pa. 135 (1861). Appeal from judgment for plaintiff (Broomhall). This was an action on the case, brought August 9, 1858, by John Broomhall against the Bank of Delaware County, to recover damages for an alleged negligence in protesting before maturity a note which had been left with the bank for collection. The case was this: Broomhall, being the endorser and holder of a promissory note drawn by Henry E. Peirce to the order of John L. Pennell, for $225, at sixty days, deposited it, on or about the Ist of January, 1858, in the bank for collection. At the time of its execution the date, which was De- cember 11th, 1857, had been altered with consent of the parties to December 15th, 1857, in which condition it went into the bank, but it did not appear that the officers were informed of this. The date as altered was imperfect and obscure, and was, after a careful examination, read by the bank officers, “December 5th, 1857,” marked as maturing February 6th, 1858, on which day it was, in due form of law, protested for non-payment, of which the parties had notice. The court below, after stating the facts briefly, charged in substance that “it was in evidence that the note had been altered from December 11th to December 15th at the time of its execution, with the knowledge and consent. .of _ Mr. Pennell ;” that “there was negligence in the bank, in not ascertaining from the plaintiff the true date of the maturity of the note before handing it.over to the notary for protest ;” that “the bank was a general agent in the collection of notes, and, whether with or without reward, 81 was bound to use due-diligence in such cases,” defining that to _be “reasonable and _proper-eare, skill, and judgment, such as other persons of experience and skill exercising the same profession would have exercised under similar-cir- cumstances.” There was a verdict and judgment in favor of the plaintiff for-$280,05,. whereupon the defendant took this appeal, assigning as error among other things the charge of the court with respect to the negligence of the bank in “not ascertaining from the plaintiff the true date of the maturity.” LowriE, C. J.: Certainly, when the bank accepted this note for collection, it became its duty to use reasonable care and skill in attending to it: yet herein it is chargeable -with a remarkable blunder in treating the date 15th Decem- _ber as if it. were 5th. There can be no doubt that the 15th is there, for anybody can see it who looks, and the court could commit no error in saying that much. But the first figure was not so strongly marked as the other, and there- _ fore the bank’s officers interpreted it out rather than over- looked it, and thus made a mistake and had the note pre- _sented for payment ten days too soon, and not at the. proper time, and thus discharged_ the endorser, This was _clear carelessness ; for, if there was any doubt. about the. date, the bank ought to have refused the collection of it, or to have got. the holder to state what was the true date, _or-to have presented it on both days. To guess a meaning contrary to the expression, is not careful. Judgment affirmed. 82 Duties and liabilities of agent to principal—Duty not to co-mingle funds THE MASSACHUSETTS LIFE INS. CO. v. CARPENTER, 2 Sweeny, N. Y. 734 (1870). This case was tried before a referee. The action was brought to recover of defendant car- penter an alleged balance of account due from him as the agent of plaintiffs in New York. The only defense claimed and urged rested upon the fact that one William W. Cain, a clerk of the defendant (employed, as defendant claimed, in the business of plain- tiffs), had embezzled the amount sought to be recovered, and consequently defendant was not liable. The plain- tiffs had acted in the premises, and in their dealings with defendant, upon this theory, and were estopped from deny- ing the same. The referee found in favor of the plaintiffs. The defendant appealed from the judgment entered upon the report of the referee. SPENCER, J.: I have examined critically the findings _of fact and law made by the referee in this case, and con- clude they are fully supported by the evidence, and that the judgment in this action should be affirmed. This fact clearly appears from the evidence, and does not seem to be contested, “That the defendant mixed the money and funds _of the plaintiffs with moneys and funds of his own and of third parties, at the office and the bank, and that the money embezzled by the clerk was taken from these moneys and funds, which were so mixed and comingled that it is im- possible to determine to whom the money embezzled actual- ly belonged at the time.” This action on the part of defend- ant made him liable to account to the plaintiffs for their moneys received by him, even admitting that a loss had _occurred. — - a 83 By the act of defendant the identity of plaintiffs’ ~moneys was,lost, and the loss should fall upon the defend- ant, as Story justly remarks, “as a sort of penalty” for the agent’s negligence in not keeping his principal’s money sep- -arate from his own—and_that of others. When he chose _to mingle these funds of the plaintiff with his own, etc., he. . made the. a own, and incurred the lia-_ foieed( tants saat he: scratained willie, bye. the. aa The judgment should be affirmed, with costs. _ Duties and liabilities of principal to agent—Agent’s lien GRAUMAN & SHUTTLEWORTH v. REESE,* 13 Ky. Law Rep. 683 (1892). Appeal from Davies, Circuit Court. Barsour, J.: Ordinarily a general creditor has no lien -upon_property which may be in his possession, but in cases of agency ; there generally exists a particular right of lien in. the agent for all his commissions, advances and services in _and about the property or thing entrusted to his agency, ” wherever they were proper or necessary, or incident thereto. A traveling salesman is entitled to a lien for his com- missions upon the samples entrusted to him by his employer, and in an action against him by the employer to recover the —him as a counter ter claim. *Abstract of opinion. 84 Duties and liabilities of principal to agent—Agent’s lien for advances WHITE v. SHEFFIELD & TUSCUMBIA STREET RWY. CO. 90 Ala. 253 1890). The Sheffield & Tuscumbia Street Railway Company brought suit against the East Tennessee, Virginia and Georgia Railroad Company for the recovery of “one dummy engine of the value of $2000, with the value of hire thereof during the detention.” It appears that the Sheffield & Tuscumbia Street Rail- way Company had purchased and paid for the engine and had had it shipped and consigned to one McMillan, its then president, at Tuscumbia. It had arrived and was in the de- pot of the East Tennessee, etc., R. R. at the point of deliv- ery, but the freight charges $340 were unpaid. It then ap- pears that on May 10, 1887, McMillan, ex-president and consignee, and Tompkins, president of the Sheffield & Tus- cumbia Street Ry. Co., gave White an order to take pos- -session of the engine; that pursuant thereto White paid the East Tennessee, etc., R. R. the freight due on the engine _and took some steps in its removal, but it remained on one _ of the tracks of the East Tennessee, etc., R. R. On May -11, 1887, the Sheffield, etc., Ry. brought suit against. the East Tennessee, etc., R. R. to recover the engine as above stated; the sheriff thecepon took possession of the engine under an order of seizure issued in said suit. A few days later White interposed a claim for advances made by_him ~in paying freight and he now claims a lien on said engine for the amount of his advances as agent. This suit is to determine the right of possession of the engine, whether the right is in the Street Railway Company as owners or whether White has a lien on said engine for advances made as agent. The issue between the Sheffield, etc., Ry. and the 85 East Tennessee, etc., R. R. is not here considered. In this suit the Sheffield & Tuscumbia Railway Company is the for plaintiff. Defendant-appeals. StonE, C. J.: * * It will be observed that White tes- tified that he paid the freight charges as one of the condi- tions on which he could obey the orders of McMillan and Tompkins—in other words, the orders of the street railway company—and thereby obtain possession of the engine. This presents the sole ground shown by him on which he can base any right to claim the engine. He does not state with whose money he made the payment. If he made it with funds furnished him for the purpose by the Street Rail- way Company he has shown no claim whatever to the engine. So, if it had been shown that, in what he did, he was acting in the capacity of superintendent, the presump- tion would be that he paid with corporate funds, and this would give him no rightful claim to hold the engine. But, as we have shown, the testimony does not authorize us to infer and announce as facts either of the foregoing cate- gories. The testimony showing at most that he was only a private agent, acting at the instance and request of the street railway company, the inference is not absolutely re- pelled that he paid the freight charges with his own money. Acting as he did under the request of the street railway company, and not shown to have been other than a private agent, if he paid his own money as a necessary means of obeying the request and obtaining possession of the engine, and, in obedience thereto, he did obtain such possession, this gave him a lien on the engine for his reimbursement and would overcome the Street Railways Company’s right to recover the possession from him until he was repaid the money he had thus paid out. Guesnard v. L. & N.R. R. Co., 76 Ala. 453; Story on Agency, par. 373. In the present case it was a question for the jury, under proper instructions, whether White obtained possession of 86 of the engine at the request of the plaintiff and whether he paid the freight with his own money. If he did, he could retain the possession against the street railway company until the money was refunded or tendered to him. On the evidence it cannot be affirmed, as matter of law, that White did not pay the freight bill out of his private funds, and it follows that the circuit court erred in giving the general charge in favor of the plaintiff railway company. Dollins v. Pollock, 89 Ala. 351. Reversed and remanded for a new trial. Duties and liabilities of principal to agent—Reimburse- ment of agent MAITLAND EFT AL. v. MARTIN, 86 Pa. 120 (1878). Appeal from judgment for plaintiff (Martin). Mr. Justice Mercur: This action was brought by the plaintiff Martin for money had and received for her use. The money sought to be recovered came into the hands of the defendants under the following circumstances: In Aug- ust, 1873, being brokers in the city of Philadelphia, they purchased for the plaintiff five South Carolina bonds, of the nominal value of $1,000 each. She left the bonds in their possession, They were sealed up in an envelope, her name endorsed thereon, and deposited in the safe of the defendants in the “Fidelity.” They thus remained until May, 1875, when she instructed the defendants to sell them at thirty-three per cent. There being no market in Philadel- phia for them, on the 12th of May they directed their cor- respondents, Cecil, Stout & Thayer, brokers in New York, to sell them. By dispatch, on the 14th of May, they ad- vised the defendants they had sold at the price named. Im- 87 mediately thereafter the defendants notified the plaintiff of the sale. On the same day the defendants forwarded the bonds to their correspondents by express and requested a draft to be remitted for net proceeds. On receipt of the bonds, Cecil, Stout & Thayer remitted the proceeds to de- fendants on the 15th of May. On the 17th of May, and while the proceeds remained in the hands of the defendants, they were notified by Cecil, Stout & Thayer that three of the bonds were not fundable, and not a good delivery at the price for which they had sold them; and, therefore, they had purchased others at the same price to supply the place of those not fundable, and held the defendants for the sum thus advanced. On the same day the defendants advised the plaintiff of the substance of this notice and further re- quested her to consider the sale of $3,000 of the bonds re- ported by them sold as cancelled. They also directed Cecil, Stout & Thayer to return the three bonds not accepted and draw on them for the sum paid. Thereupon Cecil, Stout & Thayer returned the bonds and the defendants paid them the sum which they had advanced. The defendants offered to return the three bonds to the plaintiff and account for the proceeds of the two others; but she denies their right to hold her responsible for the money thus paid by them, and seeks to recover the whole sum agreed to be paid for the five bonds. It appears, by the evidence, that about the Ist of June, 1874, the treasurer of the State of South Carolina issued a notice that certain bonds of that State had been declared null and void by the legislature and would not be recog- nized. Thereupon, June 2, 1874, the New York Stock Ex- change made an order that the bonds embraced in said notice should not pass as a good delivery on a sale of regular “South Carolina bonds” after that date. Three of these bonds appear to have been repudiated by the legislature, and at the time of the sale, in May, 1875, were not fundable and as a consequence were almost worthless. Cecil, Stout 88 & Thayer professed to sell “fundable bonds” only. They supposed all of the five to be of that class. The purchaser had a right to suppose he was buying such. Discovering that three of them were not of that kind, he refused to accept them. Cecil, Stout & Thayer thereupon replaced them with such bonds as filled the contract. If these facts be proved, they undoubtedly had a valid claim against the persons in whose behalf they agreed to make the sale. At the time the defendants directed them to make the sale, they did not disclose the name of their principal; yet this in no manner changed the legal rights and liabilities between her and them. The specific bonds were her property. The defendants were her agents to effect a sale. It was to be made for her benefit. The defendants were bound to due care, prudence and diligence in the execution of the powers committed to them. These they appear to have exercised. They kept their principal informed of their action. The plaintiff is not shown to have sustained any damage by rea- son of any information being withheld from her. These bonds had depreciated while owned by her. If the defend- ants, while acting as her agents in effecting the sale, without any fault on their part, became liable, she, and not they, must bear the loss. The object to be effected was a sale of the bonds. The defendants, as well as Cecil, Stout and Thayer, were act- ing as agents to reach that end. An agreement to sell fund- able bonds and a payment by the purchaser to one agent, and his transmission to another agent, did not necessarily com- plete the transaction. It required a delivery, or a readiness to deliver the bonds, of the kind sold, according to the contract. Anything less than that left the transaction incomplete, unless further fulfilment was waived. In fully perfecting a sale the defendants were strictly in the line of their duty. We discover nothing affecting their good faith. If, then, without fault on their part in 89 the honest management of the business of the plaintiff, they incurred damages, those damages must be borne by her and not by them. Stocking v. Sage, 1 Comm. 519. * ok x If the defendants in good faith carried out the con- tract made with the purchaser, they did not thereby adopt the loss as their own and relieve the plaintiff from her legal obligation to reimburse them, Although they took back the bonds, without the express consent and authority of the plaintiff, yet they did not thereby necessarily accept them as their own. If the facts are found to be as stated, the purchaser was justified in refusing to accept the bonds, If so justified, it was clearly within the general scope and au- thority of the defendants, as her agents, to fulfil the con- tract, and their acts, in contemplation of law, became her acts. Although, by failing to disclose their principal, the defendants may have become personally liable to Cecil, Stout & Thayer, yet that does not bar the right of the de- fendants to require the plaintiff to make their loss good. It therefore follows that many portions of the charge were too unfavorable to the defendants and the assignments are substantially sustained. Judgment reversed and a new trial awarded. Editor's Note—Except where the contract of agency contains stipulations contrary to or inconsistent with any right of the agent to indemnity or reimbursement for liabilities or expenditures in- curred in the furtherance of the agency, an agent ordinarily is entitled to indemnity against the consequences of all proper acts done by him in the execution of his agency or in pursuance of the authority conferred upon him, and to reimbursement from his principal for all advances and expenditures properly made in carry- ing into effect the purposes of the agency. The fact that the agent in the transaction of the business of his principal fails to disclose the name of his principal does not affect the latter’s obligation to reimburse the agent for expenditures or for loss or damage sus- tained. 2 Corpus Juris 793. 90 Duties and liabilities of principal to agent—Undisclosed principal—Reimbursement NIXON v. COWNEY & WOLVERTON, 49 Iowa Repts. 166. The plaintiff averred ‘in his petition, in substance, that the defendants are partners ; that as their agent he purchased for them one hundred and twenty-three hogs at three dollars and fifty cents per hundred pounds; that they authorized him to pay for them with his own money, and that he did so; that they refused to receive the hogs and pay for them, and that by such refusal he was damaged in the sum of five hundred dollars. There was a trial by jury, and verdict for the plaintiff in the sum of three hundred and sixty-one dollars and seventy-seven cents. There was also a special verdict by which the jury found, among other things, in substance, that the plaintiff did not buy the hogs in the defendants’ name; that he invested his own money in them by permission of the defendants, and that the jury did not know whether plaintiff knew that defendants were agents of a firm at St. Joseph or not. The defendants filed a motion for a judgment in their favor on the special findings, notwithstanding the general verdict. They also filed a motion for a new trial, to be iuled on in case the motion for judgment on the special findings should be overruled. The court sustained the first motion, and rendered judgment for defendants. The plaintiff appeals. Apams, J.: It is insisted by the defendants that the special findings are inconsistent with the general verdict in three respects: First, in that the plaintiff did not purchase the hogs in the name of the defendants; and, second, that he paid for them with his own money; and, third, that it does not appear affirmatively that plaintiff did not know that the defendants were agents for a firm in St. Joseph. 91 The evidence tended to show that the plaintiff, when he purchased the hogs, did not disclose his agency, if there was any; that the defendants refused to receive and pay for the hogs; and that the plaintiff then paid for them with his own money, and that the defendants were not -uying hogs on their own account, but for the firm of Pinger & Co., in St. Joseph. The defendants contend that if the plaintiff did not purchase in the name of the defendants, he cannot now be heard to say that he purchased for them. The argument is that by not disclosing his agency he bought in his own name, and thereby exposed the property to the risk of being at- tached for his own debts; that in so doing he violated his contract of agency, if there was any, which implied that he was to purchase in the name of his principals, and that he thereby released his principals from the fulfillment of the contract upon their part. The fallacy of the argument consists in assuming that the plaintiff was obligated to purchase in the name of his principals in the absence of instructions to that effect. Pos- sibly the plaintiff could purchase to better advantage in his own name. If ‘he was not instructed to the contrary it must be deemed to have been left to his discretion. The rights of a principal to property purchased for him by his agent are precisely the same whether the agency is disclosed or concealed. As to the payment by plaintiff of his own money it is sufficient to say that he became liable to pay it because he did not disclose his principals. He simply discharged that liability. He now claims to recover for the damage sus- tained by him by the nonfulfilment of the contract by the defendants. It will be observed that he is not seeking to recover for advances as such. If it were so it might be important to inquire whether the advances were officiously made Story on Agency, par. 336, and whether the find- ing of the jury that defendants permitted the plaintiff to 92 make the advances would preclude the idea that they weré made by him officiously. But no such question arises in the case. Finally, it is said that the evidence should have been such that the jury could determine that the plaintiff did not know that the defendants were agents for Pinger & Co. The plaintiff, however, might have known that they were agents tor Pinger & Co., yet if they employed the plaintiff to pur- chase not for Pinger & Co., but for themselves, they would be liable. We think that the court below erred in rendering judgment for the defendants upon the special findings as against the general verdict for the plaintiff. Reversed and judgment entered for the plaintiff on the general verdict. Liability of agent to third party—Warranty of authority OLIVER v. MORAWETZ, 97 Wis. 332 (1897). Appeal from judgment for plaintiff. This was an action brought to recover $1,000 in com- missions for services in procuring a proper person to pur- chase certain property described in the complaint. The evidence showed that the plaintiff Oliver performed fully all the conditions precedent on his part, and the defendant . failed to pay the plaintiff his agreed commission. The znswer was a general denial. The plaintiff testified con- cerning a conversation with the defendant as follows: “Mr. Morawetz, who owns this property?” He said “It belongs to the estate of Joseph Bremer, Jacob Morawetz and my- self.” Plaintiff said: “Are you the authorized agent?” 93 “Yes,” he said, “I am. I have got the property for the heirs; I built the building.” He also promised to pay Oliver a commission of 2 per cent. for a sale of $50,000_- _Oliver_obtained a 2_purchaser,. but it afterwards appeared that Morawetz “was not authorized to sell the property.” Oliver then brought suit against Morawetz for his commis- sions. Verdict for plaintiff, Defendant appeals. Pinney, J.: The findings of the jury are plainly sup- ported by the evidence, and the court properly refused to set aside the verdict on the motion of the defendant as being against the weight If the defendant acted and contracted avowedly as the agent of his co-owners of the property to be sold, who were known as. principals, his acts and contracts withinthe- scope ¢ of his authority ‘would be con considered the acts and contracts of the princi- gals, and would involve no liability on the part of the de- _fendant, Mlorawetz, as their agent; for. the presumption is that an agent always intends to bind his principal, and not himself, although he may pledge his own private credit, and obligate himself~to- ~the performance of a contract which otherwise _would~devolve_ on his principal. Under the facts in this case, the defendant was, we think, prop- erly held liable, and the recovery, beyond any fair ques- tion, is right, and should be affirmed. It was found, in answer to the first question submitted to the jury for a general verdict, that the defendant repre- sented to Oliver, the plaintiff, that he (Morawetz) was _authorized to -sell—the-real estate in -question_upon_. the _terms erms stated i in the receipt in evidence. After the plaintiff had performed his undertaking and procured a purchaser, the defendant, as well as his co-owners, refused to sign the paper or carry out and conclude the sale. He testified at the trial, in most explicit terms, that he was not authorized _to sell the property. He had induced the plaintiff to to act in the premises, and procure a purchaser upon the specified terms. He was therefore bound to make the agreement 94 _good, or be responsible for the consequences. Mechem, Agency, secs. 541, 542. He must be regarded as insuring the plaintiff against the consequences arising from the want _of such authority,namely,-the loss-of-his commission thus “earned, by reason of the defendant’s want of authority to ‘tind his co-owners. Kroeger v. Pitcairn, ‘101 Pa. St. 311. In that case the general rule was stated to be that “when- ever any party undertakes to do any act as the agent at of another, if he does not possess: any- ena, from _the gated to him, fe will be ‘personally | liable to the person with whom he is dealing for and on account of his prin- cipal.” Story, Agency, sec. 264. In Baltzen v. Nicolay, 53 N. Y. 467, it was said that “the reason why the agent is liable in damages to the person with whom he contracts, when he exceeds his authority, is that the party dealing _with him is deprived of any remedy upon the contract egainst the principal. The contract, ‘though in form the contract of the principal, is not his in fact; and it is but just that the loss occasioned by there being no valid con- tract with him should be borne by the agent who con- tracted for him without authority.” In Kroeger v. Pitcairn, supra, it was laid down that: “The cases in which agents have been held liable person- ally have sometimes been classified as follows, namely: (1) Where the agent makes a false representation of his au- thority with intent to deceive; (2) where, with knowledge of his want of authority, but without intending any fraud, he assumes to act as though he were fully authorized; (3) . where he undertakes to act, bona fide believing he has au- -thority, but_in fact has none, as in the case of an agent act- ing under a forged power of attorney. As to cases fairly brought within either of the first two classes, there cannot be any doubt as to the personal liability of the self-consti- tuted agent; and his liability may be enforced either by an action on the case for deceit or by electing to treat him as OF principal. While the liability of agents in cases belonging to the third class has sometimes been doubted, the weight of authority appears to be that they are also liable. This whole doctrine proceeds upon a plain principle of justice ; for every person so acting for another, by a natural, if not -a.necessary, implication, holds himself. out as having com- petent authority to do the act; and he thereby draws the other party. into a reciprocal engagement. If he has no the other party; and if that Wwrotg ‘produces injury to the latter, owing to his confidence in the truth. of an express -or_implied assertion of authority by the agent, it is per- fectly just that he who makes such assertion should be. personally responsible for the consequences, rather than that the injury should be borne by the other party who has ~been misled by it.” “Much question has been raised as to the form of action in which the agent who acts without authority is held to be liable-—whether assumpsit can be maintained or only a special action on the case. -Where an agent who knows that he has no > authority makes ex- ‘press assertions that he possesses it, or so acts as to amount to an assertion of authority, and by so doing de- .ceives and injures the other party, who has relied thereon, it cannot be doubted that an action on the case for the deceit_is an appropriate. remedy. At the same time, an action of assumpsit upon the express or implied warranty of authority might also be maintained, instead of the action the case. Where, however, the agent, acting in good faith and supposing himself authorized, has made express or implied assertions of authority, an action of assumpsit seems~the more appropriate remedy.” Mechem, Agency, sec. 549. Later and better considered opinion seems to be that the liability, when the contract is made in the name of his principal, rests upon implied warranty of authority oo is by an action for its pe Collen v. Wright, —®& Bl. 647. “Later cases,” says 96 Scupper, J., in Patterson v. Lippincott, 47 N. Y. Law 457, “hold that he may be sued either for a.breach_of warranty— or for deceit, according to the facts in each case.” The defendant asserted his authority to make the sale, and induced the plaintiff to undertake to and procure a purchaser, as he did. The defendant is now in court, both as a party and as a witness, denying that he had any . such authority, and is therefore chargeable with having deceived and injured the plaintiff, who-relied_on his asser- tions. An action on the case for such a deceit would be a proper remedy, and assumpsit_might, as. we have_seen, be. maintained upon the express-warranty_or assurance of his _authority. For these reasons the defendant was liable, and the recovery-against-him_is clearly_right. Judgment affirmed. Wen 4 we age a an Te Liability of agent to third party—Exclusive credit to agent HYDE ET AL. v. PAIGE 9 Barb. (N. Y.) 150 (1850). Appeal from judgment for defendants (Hyde et al). Hanp, J.: I think the only point in the case is whether Paige, the plaintiff, can call upon the defendants, Hyde et al., after taking Moulton’s note for the price of the goods sold. Moulton testified that he bought the hay of the plaintiff Paige for the defendants, Hyde et al., in 1839 or 1840, and gave _ Editors Note—In the case of a public agent, where his authority, or that of his principal, to contract, is derived from a public statute, the partv contracted with is presumed 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. 97 his own note for the amount, which he had never paid, and _ that he was insolvent. The plaintiff Paige wanted Moulton’s note, who declined at first to give it, saying the hay was for Hyde, for whom he was purchasing it. But the plain- tiff insisted upon Moulton’s own note, which Moulton finally _gave. The note was payable on demand, and there was no proof that it_ had been given up. Moulton was the only _witness sworn, and it is impossible not to see that the plaintiff relied entirely upon Moulton to pay for the fis ee Where a vendor sells goods to an agent, and with full _knowledge of the agency, takes the note of the agent for the purchase money and relies upon his credit, he cannot _resort to the principal. Beebe v. Robert, 12 Wend. 417. It clearly appears that this was done in this case. Six or seven years have elapsed, and the agent has failed in busi- ness, and now the vendor attempts to collect the debt of the principal. This he cannot do., It is said this was a question of fact for the justice, and that his finding is conclusive. But there is no conflict —of_evidence. The only witness in the cause was called by the plaintiff, and he is clear, distinct and ‘unequivocal in_his relation of this portion of the transaction. - There being no dispute about what the witness testified, nor any ambiguity or doubt as to the meaning of his lan- guage, the facts are undisputed, and-the effect of his testi- mony becomes matter of law. The judgment of the county court must be affirmed. 98 Liability of agent to third party—Undisclosed principal KELLY ASPHALT BLOCK COMPANY v. THE BARBER ASPHALT PAVING CO., 211 N. Y. 68 (1914). Appeal from a judgment in favor of the plaintiff entered upon the verdict. , Carpozo, J.: The plaintiff sues to recover damages for breach of an implied warranty. The contract was made between the defendant and one Booth. The plaintiff says that Booth was in truth its agent, and it sues as undisclosed principal. ._The question is whether it has the right to do_so... _The general rule is not disputed. A contract not under. seal, made in the name of an agent as ostensible principal, _ may be be. sued on by the real principal at the latter’s election. Henderson, Hull & Co. v McNally, 48 App. Div., 134; affirmed on opinion below, 168 N. Y. 646. The defendant says that we should establish an exception to that rule, where the identity of the principal has been concealed be- cause of the belief that, if it were disclosed the contract would not | ‘be > made. We are asked to say that the reality of the -defendant’s consent is thereby _ destroyed and the. contract _vitiated for mistake. The plaintiff and the defendant were competitors in business. The plaintiff’s president suspected that the de- fendant might refuse to name him a price. The suspicion was not based upon any previous refusal, for there had been none; it had no other origin than their relation as competitors. Because of this doubt the plaintiff availed itself of the pemvices ‘of Booth, WhO, though interested to “also tees in a like puisinese, for another corsoracion Booth asked the defendant for a price and received a quo- tation, and the asphalt blocks required for plaintiff’s pave- ment were ordered in his name. The order was accepted 9 Ly. the defendant, the blocks were delivered, and _ payment was made by Booth with money furnished by the plaintiff. The paving blocks were unmerchantable and the defendant, retaining | the price, contests its liability for damages on the ground that if it had known that the plaintiff was the prin ” cipal, it would have refused to make the sale. _ We are satisfied that upon the facts before us the defense cannot prevail. A contract involves a meeting of the minds of the contracting parties. If “one of the sup- posed parties is wanting,” there is-an absence of “one of the formal constituents of a legal transaction.” Rodliff v. Dallinger, 141 Mass. 1, 6. In-such a situation there is no. contract. A number of cases are reported where A has ordered merchandise of B, and C has surreptitiously filled- the order. The question has been much discussed whether C, having thrust himself without consent into the position _of a creditor, is entitled to recover the value of his wares. Boston Ice Co. v. Potter, 123 Mass. 28. That question is not before us, and we express no opinion concerning it. We state it merely to accentuate the distinction between the “cases which involve it and the case at hand. Neither of the supposed parties was wanting in this case. The appar- ent meeting of the minds between determinate contracting parties was not ‘unreal or illusory. The defendant was contracting with the precise person with whom it intended to -contract——It was contracting with Booth. It gained whatever benefit it may have contemplated from his char- le ~acter and substance. Humble v. Hunter, 2 Ad. & El. (N. S.) 311. An 3 agent ent who contracts in his own name for an undisclosed principal does not cease to be a party. because.- of_his-agency. Higging v. Senior, 8M. & W. 834, 844. Indeed, such an agent, having made himself personally liable, may_enforce the contract though the principal has renounced it. Short v. Spackman, 2 B. & Ad. 962. As be- tween himself and the other party, he is liable as principal to the same extent as if he had not been acting for an- 100 other. Tt is impossible in such circumstances to hold that the contract collapses for want of parties to sustain it. The contractual tie cannot exist where there are not persons to be bound, but here persons were bound, and those the very persons intended. If Booth had given the order in his own right and for. his own benefit, but with the expectation of _later assigning it to the plaintiff, that undisclosed expecta- tion. would not have. nullified the contract. His undisclosed intention to act for a principal who was unknown to the defendant, was equally ineffective to destroy. the contract in_ite-inception. If, therefore, the contract did not fail for want of parties to sustain it, the unsuspected existence of an undis- closed principal can supply no ground for the avoidance of a_contract unless fraud is proved. We must distinguish between mistake such as we have been discussing, which renders the contract void ab initio, because the contractual _ tie has never been completely formed, and fraud, “which — renders it voidable at the election of the defrauded. party. Rodliff v. Dallinger, 141 Mass. 1,6. In the language of Hoimgs, J., in the case cited; ‘ ‘Fraud only becomes im- portant, as such, when a sale or contract is complete in its formal elements, and therefore valid unless repudiated, but the right is claimed to rescind it.” If one who in reality an agent denies his agency when questioned, and falsely asserts that his principal has no interest in the transaction, _ the contract, it may be, becomes voidable, not because there is a want of parties, but because it has been fraudulently _ procured. That was substantially the situation in Win- chester v. Howard (97 Mass. 303). When such a case arises, we shall have to consider whether a misrepresenta- tion of that kind is always so material as to justify recis- sion after the contract has been executed. Leake on ‘Con- tracts, 6th ed., pp. 19, 340. But no such situation is dis- closed in the case at hand. Booth made no misrepresenta- tion to the defendant. He was not asked anything, nor 101 did he say anything, about the plaintiff’s interest in the transaction. Indeed, neither -he nor the Plaintiff’s officers knew. whether the defendant would refuse to deal with the plaintiff directly. They suspected hostility, but none had been expressed. The validity of the contract turns thus, according to the defendant, not on any overt act of either the plaintiff or its agent, but on the presence or absence of a mental state. We are asked to hold that a contract complete in form, becomes a nullity in fact because of a secret belief in the mind of the undisclosed |_principal | that pletion of the . bargain. e cannot go so far Stoddard v. Ham, 129 Mass. 383. a smoot Judgment affirmed. Ce Liability of agent to third party—Undisclosed principal —Time disclosure must be made WHITMAN ET AL. v. JOHNSON, 31 N. Y. Supp. 1009 (1895). Action by Edmund S. Whitman and another against Edwin L. Johnson. Verdict and judgment for defendant. Plaintiff asked for a new trial and it being refused appeals. Booxstaver, J.: From the case it appears that this action was brought to recover damages for the breach of an executory contract for the sale of 1,000 barrels of oil. Editor's Note-—-Suppose A makes a contract with B. He is presumably responsible on it. When sued let his defense be, in substance, that he was acting as agent for C, his principal. To maintain such a defense, he must prove that he disclosed the name of his principal. It is not sufficient that he was acting as agent, or that the other party to the contract supposed he was acting as agent, if he did not know who the principal was. Horan v. Hughes, 129 Fed. 248. 102 The contract, irrespective of certain printed notices upos the billhead on which it was written, is as follows: “New York, Nov. 16th, 1892. “Messrs. WHITMAN Bros., “Produce Exchange, City. “Gentlemen: We herewith confirm sale to you of 1,000 bbls. prime crude cotton oil, from Sulphur Springs and Wolfe City, Texas, at 26% cents per gallon, delivered New York City, in tank cars, to be furnished the mills by you as needed. “Yours very truly, “FAITH COTTON-OIL AGENCY OF N. Y., “Epwin L. JoHNSON, Prop’r.” The appellants are the Messrs. Whitman Bros., to whom the above is addressed, and the respondent is Edwin L. Johnson, the signer of the letter. The oil was never delivered, and the Messrs. Whitman Bros. brought this action against the defendant as principal in the trans- action, The respondent’s defense was that he acted merely as the agent of two oil companies in Texas, and was there- fore not liable. Nevertheless, as appears by the contract above, he signed it personally, and did not. disclose. to the_ appellants, as the latter claim, the name of the seller until the time came to send the tank cars; and an examination of the notice of sale sent the oil companies shows that he did not disclose to them the name of his purchaser. On the trial the respondent sought to relieve himself from the responsibility of the contract sued on by claiming, not that he disclosed his principal to appellants, but that he had _ ~ made certain. statements from which ‘the ‘appellants should shave inferred that he was not acting as principal in the _matter, but as agent for certain companies, the name. of which he did not disclose; also that he had before that time dealt with the appellants _as agent, and that. they_well 1 knew he was in his transactions acting as agent, and not as. principal. These facts were, however, denied by the appel- lants, and respondent relied chiefly upon the notice or ad- vertisement contained on the letterhead used in writing the 103 confirmatory letter before set forth. These words were above that contract, and in much finer print, and are as follows: “The Faith Cotton-Oil Agency represent the Independent Oil Mills and Refineries, and does an exclusively commis- __sion and brokerage business in cotton-seed products. Prod- ucts sold by sample to arrive on consignment, with liberal advances, or for future shipment to any market, with _contracts made direct between principals, if desired.’ And also upon another form used by him, containing the ex- pressions, “Cotton-seed products on commission” and “Manufacturers’ agents of the Independent Mills.” The evidence is contradictory as to when and how this confirma- tory letter was received by appellants; respondent claiming that the contract was made verbally, and confirmed by the letter, which was sent by mail later in the day. The wit- ness Whitman testified that he thought it was by a per- sonal delivery, although he would not be certain. It is clear from the case, however, that the letter was merely confirmatory of a sale made earlier in the day. The whole controversy turned upon a question of whether or not the contract was made between the parties with the full knowledge of both that the respondent was acting in the matter as an agent merely, or whether he was acting as principal, or as agent for an undisclosed princi- al or principals. The law governing such transactions is too well settled to need extensive argument or review. Miller v. Railroad Co., 90 N. Y. 430. * * * From the cases cited, the rule of law applicable to this case is clearly deducible, and, according to such rule, the respond- ent must show to the satisfaction of the jury: First, that— _when he made the contract he had authority from the per- sons for whom he made it to make it in the form he did; ‘and, sécond, that che not only disclosed the fact of his egency to the appellants at the time of making the contract, ind gave them an-opportunity.to_discover who the princi- als were, but isclose es of such "principals 104 toothe appellants, in such a way that the contract would bindsithe principals, and not himself. And while it is very apparent: to! the professional mind that these rules of law werecrclearly in the mind of the learned justice who tried the sthse;-and were presupposed by him, yet in-such charge- “ae ‘these rules; ee is, that at the time of making the con- _tact, or before doing so, he disclosed the. fact.of his agency ..tasthe appellants. Hence, at the close of the charge, appel- lants’ counsel asked the court to charge the jury “that the Méssrs. Whitman Bros. are not bound by any notice on this written contract from Edwin L. Johnson, printed in vety small type on the upper left-hand corner. of this -paper, unless the defendant first brought home. to the Messrs. een to.-which. the court ® seoliads oy charge as counsel fatiinctee namely, that the Messrs. Whitman are not bound by that, _notice up there about the Faith. Agency. doing an ¢ exclusive. commission and brokerage business—not at all, unless the Messrs. Whitman saw that, and whether they saw it and of the fact ne the: contuast Jmniediately. ora shane tine after its execution, that very. paper was handed. to. the Messrs. Whitman, and has been in their custody from that day to this, so far as there is any evidence in the. case; and furthermore,—correct me if I am wrong,—Mr. Whitman,_. going on the stand, did not say he had not seen that.” ” In view of the charge thus made, appellants’ _counsel re-. _ quested _ the court to. further charge “ ‘that they must disre- gard that notice as bearing o on the written part of this con- tract in evidence, without it was brought, home to the plaintiffs at the time of the making of this contract,” which the court refused to charge, and proceeded to state that there was abundant evidence, if the jury believed it, for them to find that Mr. Whitman knew of the notices on the face of the paper. But inasmuch as the court nowhere 105 specifically charged the jury that the notice of agency must have been given to the appellants before or at the time of making the contract, so that when it was made the appel- lants had full knowledge that they were dealing with an agent, and not a principal, the request,in our opinion, was proper, and should have been charged, From what the courts said, the jury may have thought that, although they believed Mr. Whitman’s testimony as to what took place before the contract was made, and not Mr. Johnson’s, yet in as much as the notice, when attention was called to it, was clear th that he | he was doing a general business as as agent, and ‘Whitman after he ‘received the - paper, , they v were bound to ae as they ¢ did. But from the case it is ora that this Dee the contract was made, and, in et on. the face of it it purports to be a confirmation of the verbal contract theretofore.made. A comparison of the confirmatory note __sent the appellants and th the notice sent to the oil _companies shows that in the former he did fot reveal his principals to the purchaser, nor in the latter did he reveal the purchaser to the companies; and also shows a considerable diversity as to the price to be paid and the terms of sale. * * * Judgment refusing plaintiffs a new trial is reversed and a new trial is ordered. Editor’s Note—“It is sufficient to relieve the agent from liability, if the disclosure of the fact of the agency and the identity of the principal is made before or at the time the contract is entered into or before liability is incurred on either side. But a disclosure, made after the transaction has been practically brought to a close and liabilities incurred comes too late to relieve the agent from liability.” 2 Corpus Juris 819. 106 Liability of agent to third party—Undisclosed principal —Time disclosure must be made PAINE v. BERG, 23 Pa. Sup. 577 (1903). Action of asswmpsit for salary and expenses as sales- man. Defendant, in answer to plaintiff’s claim, filed the fol- lowing affidavit of defense: I am not indebted to the plaintiff in any sum of money what- ever. It is true that the plaintiff was engaged by me as a salesman on or about December 8, 1902. He was so engaged by me as an officer of the Chemical Specialty Company, a corporation organized under the laws of the State of New York. The plaintiff’s claim, if he has any claim, is against the said corporation and not against the defendant in this suit. The court entered judgment for plaintiff for want of a sufficient affidavit of defense. Defendant appealed. Per curiam: The plaintiff_alleges that_he was.employed ~by the defendant as a salesman. The affidavit of defense admits the contract of employment, but alleges that the plaintiff was engaged by the defendant “as an officer of the. _Chemical Specialty Company.” This is an “equivocal ex- pression which, in the connection in which it appears, may -be accepted as verity so far as it relates to the undisclosed . intention of. the defendant, without necessarily implying the on his part that the defendant was so acting. The case of Seyfert v. Lowe, 36 Legal Intelligencer, 345, relied on by the appellant’s counsel, was admitted by the Supreme Court to be close to the border line, but it is plainly distinguish- able from the case at bar in that there was enough on the face of the paper sued on in that case, coupled with other facts alluded to in the opinion, to clearly warrant the infer- ence drawn by the court that the plaintiff “must have known that the indorsement of the note by the president was the 107 indorsement of the company.” No such inference can be drawn with any degree of certainty from the averments of the affidavit in the present case. It is plainly defective in not alleging that the defendant made known his agency at _the-time-that-the contract was made, or that the plaintiff _-had-knowledge o of the fact from some other source. See 1 P. & L. Digest of Decisions, 283. Judgment affirmed. Liability of principal to third party—In general GILMAN LINSEED OIL COMPANY v. NORTON & WORTHINGTON ET AL,, 7 89 Iowa 434 (1893). Appeal from judgment for plaintiff. Rosinson, Cc. J.: In the year 1889 the plaintiff was, E. M. Lanier & Co. were “setae ‘business at George, i in this State. In March of that year the plaintiff entered into an agreement in writing. with Lamar & Co., by. which..the— former agreed to furnish to the latter one thousand bushels of flaxseed for the purpose of having it loaned to farmers for use as seed, for the purpose of procuring the product. of the seeding. Lamar & Co. were to loan the seed to farmers for the purpose stated only, for and in the name of the plaintiff, on terms specified in the agreement, taking notes to secure payments for the seed, and making contracts for the product thereof at the rate of twenty-five cents less than the Chicago prices for each bushel delivered to the agent of the plaintiff at George. Lamar & Co. were to keep an account of their transactions on books of account which were to be furnished by and remain the property of the 108 plaintiff, and to make reports to it when demanded. They were to ship to the plaintiff all the products of the loaned seed which they should receive, under the contracts with t the farmers, and were not to loan, sell, or buy any flaxseed dur- ing the continuance of the agreement for any one excepting the plaintiff, without its written. consent. They were to re- ceive as their only compensation for services rendered in performing the agreement on their part the sum of five cents per bushel for the flaxseed bought for and shipped to .the plaintiff. The agreement also contained a paragraph in words as follows: “It is further mutually agreed that_all. seed purchased under the agreement is, from the time of such purchase, the sole and absolute property. of the party of — the first part (the plaintiff), and that the party of the second. part (E. M, Lamar & Co.) has no right, or interest in, or devant. and that so long as it remains in ‘their “actual possession they hold it only as the agent of the party of the. _first part.” There was also a provision for the payment of a commission for purchasing seed not under contract, but-—~~ it is not involved in this case. In the latter part Of the year 1889 Lamar & Co. pur- chased flaxseed under that agreement with money furnished by the plaintiff. In November, 1889, they shipped to the defendants in Chicago two carloads of flaxseed, and drew on them for nearly the amount of its value. The flaxseed was received by the defendants and sold, and the drafts were paid. The seed so received and sold was purchased by Lamar & Co. under their agreement with the plaintiff, with its money, and they had no lien upon it for any pur- pose. The defendants claim that they received and sold the seed only as brokers and commission merchants, acting for the shippers and receiving a commission for their serv- ices, and that they did not purchase it on their own account. It appears that in December, 1888, they arranged with Lamar & Co. to furnish them two thousand dollars for use 109) in; theig,. grain and jseed_ business, andthe nextuiyrarycthe amonatwas increased toithree thousand dollars.s Shipments were snade by, Laman & Cao toi the idefendantsotae the amount of thisteen thousand,dollars,: and -draftsn to:sthe amnouns los| sixteen! thousand, dollars swere sdrawh;-any thena andi paid, Jeaving: aobalanceiidue fromitamas &Geato the defendantsyofthree;thousand dollars, Whenothecshipments in question were made, theidrafts drawacagainst them were changed,to; Lamar & Go.wand the proceeds efsthe shipments werel credited to shen *ilFveF mi tolsob s aud? jootts si Jorlltois ,comsended sthas} the: plaintiff Muos oT “Mpsburgh ‘had ab "téah authoritypsfrom the! sdeféidant; none’ is ‘pretended and he was outed aE seen. tle individual” and va) finan) Weabilit: ark; wéty, different cele Hepheyl ray be different’ t6 ‘the cveditdil as lwetboas to the firm} oilé may be ‘solvent! and the:othen moty: 2noi}qor The counsel cites many cases to sustain the decision 113 of the trial judge, but they are all cases of dormant partners who confessedly need not be sued if the plaintiff did not _know of the existence. of ‘the dormant: partner. Such are the cases in 19 Wend. 25, etc. So if a party purchase for himself, without disclosing that he had a partner, and the vendor was ignorant thereof, the action may be brought . against the party alone who made the contract. So an agent can bind ‘himself by not disclosing his agency, but he cannot bind. the p party for whom he is not an agent, no matter how he assumes. He cannot create an agency by representations. This action would undoubtedly lie if it could be estab- lished that the agent of a firm to buy hops was therefore and thereby the agent of an individual member of that firm, authorized to buy for him and to make him indi- vidually liable therefor. But that position the plaintiff's counsel has not attempted to establish. He cites no au- thority to that effect and takes no such position. He simply argues upon the assumption that Vosburgh was the agent of this defendant, and as such authorized to bind him as far as he could bind himself. The court must have acted upon that principle in its charge, that if the plaintiff did not know that Vosburgh was acting for the firm, but was in- formed that he acted for the defendant, that then the de- fendant was liable severally. This cannot be mairitained. No amount of representations can create an agency. Any person may bind himself as he pleases. But to be bound by the act of another, that other must have real or appar- ent authority to do the act. In this case the assumed agent had neither. This defendant set up in his answer that his son was a necessary party, but the plaintiff refused to amend. The judgment should be reversed, new trial granted. Judgment reversed. 114 Liability of principal to third party—Disclosed principal —Representations by agent after authority shown WEBSTER v. CLARK, 30 N. H. 245 (1855). Action of assumpsit for goods sold and delivered amount- ing to $260.22. Verdict for plaintiff. Defendant appealed. EastTMAN, J.: We cannot entertain any doubt of the competency of the evidence to show Neal to be the agent of the defendant. He occupied a store on which was the sign of “John T. Neal, Agent.’”’ On this cards and bills he was designated in the same way. To the witness, who in- quired of him for whom he was agent, he made a reply which induced the witness to call upon Clark, and inquire of him if Neal was his agent, and upon the inquiry being _ thus made, Clark - frankly answered that he was. He, moreover, agreed that goods. might be sent ‘to Neal, as he —had_d desired. It also appeared that Clark was frequently in and out of the store, engaged in conversation with Neal. This plain admission of the defendant, coupled with. the agency, and. thus. settle. the first, exception _ taken. at the. trial. It-is unnecessary to examine it further, as it appears. to be yielded in the argument. Neal’s agency being thus established, it follows that whatever he might do within the legitimate scope of that agency would bind the defendant, as much so if done by himself. Story on Agency, par. 126. Before any goods were sent, the defendant informed the plaintiff’s clerk that Neal was his agent, and that the plain- _tiffs might. send_goods to Neal. Neal, as the defendant’s agent, accordingly ordered several bills of goods, and after- wards, between the ordering of each bill, stated that he had received the goods, although he did not specify the quan- tity. These acts and admissions of Neal were those of 115 Clark, and were competent to show that he had ordered _goods of -the_plaintiffs, and had also. received goods. — ‘The evidence was sufficient to charge the defendant. * * * Judgment upon the-verdict. _u-—~ Liability of principal to third party—Disclosed principal —Warranty of agent PICKERT v. MARSTON ET AL., 68 Wis. 465 (1887). Appeal from judgment for defendant. The complaint in this action was, in effect, upon an account for goods, wares, and merchandise sold and deliv- ered by the plaintiff, of Boston, to the defendants at_La _Crosse, at their request, September 23, 1884, on a credit of — sixty days, at the agreed price of $78.25, and which were rea-_ __sonably worth that t sum; that no part of it had been paid, _ _but was due, wilh genes from November 23, _1884,-for_. which judgment with 1 costs was demanded.’ The answer was to the effect that about September 1, 1884, the defendants contracted with the plaintiff to send them a quantity of cod- fish, which he guaranteed should stand shipment and arrive in La Crosse in good, sound, merchantable condition; that when the fish shipped arrived in La Crosse they were spoiled and wholly worthless; that the defendants, supposing them_ _good, paid thereon $20 frei freight, and that their” storage ar and care thereof was worth $10, and hence countérclaimed $30. The plaintiff, replying, denied the counterclaim. From the judgment in favor of the plaintiff and against the defend- Editor’s Note—The declarations, statements and admissions of an agent made while acting in the course of his employment and within the scope of his authority are binding on the principal.” 31 Cyc. 1587. 116 ants in the justice’s court, the latter appealed to the circuit court; and, upon the retrial therein, the jury found for the defendants and assessed against the plaintiff the freight paid ~to the amount.of-$10.._ From_the judgment entered thereon -.. the plaintiff appeals... Cassopay, J.: The evidence is undisputed that the fish were in good condition when shipped to the defendants from Boston, and worthless when they reached the defendants at La Crosse. The defendants made the contract of purchase at La Crosse with the plaintiff’s traveling salesman, who re- sided at Chicago. There was evidence tending to prove that the fish shipped were not the fish ordered; and also that by the terms of the contract the fish ordered were guaranteed by the traveling salesman to reach the defendants in La Crosse in good merchantable condition. The evidence on the part of the plaintiff was to the effect that the traveling salesman had no authority to make such guaranty, nor any assurance as to the condition in which the fish should be on reaching La Crosse; and that he so informed the defend- ants about a month prior to the taking of the order in ques- tion. The issue made does not arise between the principal and agent, but between the principal and the defendants who made the contract of purchase with the agent. The agency and the right to contract for the sale are admitted. But the authority to make the guaranty or warranty is denied. Be- yond question, an agent may bind his principal if he does not exceed the power with which he is ostensibly invested, not- withstanding he has secret instructions from his principal to ~—the_contrary. Putnam v.-French; 53- Vt.-402...-Assuming.... that the traveling salesman had no actual authority to make- such guaranty or warranty of the fish, then it became im- _ _portant to determine whether his authority to sell or con- tract for the sale clothed him with an implied authority_ to ~~ make such guaranty or warranty. “The general rule is, as to all contracts, including sales,” said a late learned author, “that the agent is authorized to do whatever is usual to carry 117 out the object of his agency, and it is a question for the jury to determine what is usual. If, in the sale of the goods confided to. him, itis usual in the market to give a warranty, ‘the agent may give that warranty in order to effect. a sale.” Z Benj. Sales (4th Am. ed.); par. 945, p. 824. The text is supported by the citation of numerous authorities. See Upton v. Suffolk Co. Mills, 11 Cush. 586. = Thus, in Dingle v. Hare, 97 Eng. C. L. 145, Erte, C. J., observed: “The strong presumption is that when a principal authorized an agent to sell goods for him he authorizes him to give all such warranties as are usually given in the 2 par- _ticular trade or business ;” and ByzEs,_J., added: “An. agent _ to sell has a general authority to do all that is usual 2 and nec- ~essary.in the course of. such employment.” ” So in Smith v. Tracy, 36 N. Y. 82, Porter, J., _ speaking for the court, said: “The rule ° applicable to to such a case is stated with ‘ith discrimina-_ eee Peeters press power to warrant cannot give a a warranty which’ ‘shall bind the principal, unless the sale is one which is usually at- _ -tended with warranty.’ ” ‘Here the plaintiff offered to prove, by different wit- nesses having the requisite knowledge, the general custom of the trade as known and universally followed by dealers in fish, as to their being warranted or guaranteed against spoiling or turning red in transit; but it was excluded and, as we think, erroneously, under the rules of law above stated. It would seem, however, that to be binding upon the defend- ants, such custom should be known to them or exist in their __Section of the country. Thus, in Graves v. Legg, 2 Hurl. & N. 210, it was said by Cocxrurn, C. J.: “The only ques- tion is whether, when a merchant residing in London con- tracts with a Liverpool merchant in Liverpool, he is bound by the usage of trade at Liverpool. We think that as he em- ployed an agent at Liverpool to make a contract there, it must be taken to have been made with all the incidents of 118 a contract entered into at Liverpool, and one is that notice to the buyer’s agent is notice to the principal.” By the Court.—The judgment of the circuit court is re- versed, and the cause is remanded for a new trial. Liability of principal to third party—Disclosed principal —Possession as evidence of agent’s authority CUMMINS v. BEAUMONT, 68 Ala. 204 (1880). Appeal from judgment for defendant. SOMMERVILLE, J.: This is an action of detinue, brought ior the recovery of a piano, which was hired by the plaintiff, Cummins, to one Mrs. Phillips, and by her sold to the de- tendant, Beaumont. The contract was in writing, and from its terms was a mere bailment and not a conditional sale. The intention of the parties, as expressed in this letting for hire, is evidently to repudiate expressly the idea of a sale. Mrs. Phillips was, at the same time, constituted by Cum- mins as his agent to sell pianos and organs; and the author- ity was also in writing. She was to receive commissions on all sales of them, and “to make all orders for the same to said Cummins ;” and it was further provided that “the instru- ments (were) to be sent direct from the factory.” The de- fendant, Beaumont, purchased the piano in question from Mrs. Phillips, paying her three hundred dollars cash for it, and without any notice of the limited agency, or want of authority to sell; and she failed to pay over the money to the plaintiff. She had made no other sales to any one, ex- cept the one organ; and this sale was known to Beaumont when he purchased. We think the principle must control here that one who deals with an agent is bound always, at his peril, to ascer- 119 tain the extent of his authority. Powell’s Adm’r v. Henry, 27 Ala. 612. The defendant, when he made the purchase in question, was required to know the status of the personal property sued for in this action, and the written limitations upon the agent’s authority to deal with it. Its sale by Mrs. Phillips was an unauthorized conversion, and conferred no title on the purchaser. The contract of letting for hire ex- pressly took it out of the operation of the other agreement authorizing sales of pianos and organs on certain stipulated conditions. The exercise of proper diligence, by inquiry, might have led to this knowledge. Furthermore, it was clearly contemplated, by the contract of agency, that the agent was “to make all orders” to the principal for such instruments as might be sold, and that they were to be shipped “direct from the factory” by the principal. A knowl- edge of the agency was in law, a knowledge of the contents of this writing; for “the vital principle of the law of agency lies in the legal identity of the agent and the principal, cre- ated by their mutual consent;” and a principal is not bound by the acts of his agent who transcends the scope of his authority. 1 Greenl. Ev. sec. 59. And such powers of attor- ney are ordinarily subjected to a strict construction, so as to preclude all authority not expressly given or necessarily to be inferred. Dearing v. Lightfoot, 16 Ala. 28. The Circuit Court erred in charge given; and the judg- ment is reversed and the cause remanded. 120 Liability of principal to third party—Disclosed principal —Effect of secret instructions WHEELER v. McGUIRE, SCROGGINS & CO. 86 Ala. 398 (1888). Appeal from judgment for plaintiffs (McGuire, Scrog- gins & Co.). Crorton, J.: Plaintiffs McGuire, Scroggins & Co. seek to recover the price of certain goods which they alleged were sold and delivered to defendant Wheeler through T. A. Tat- ham as his agent. The agency was not disputed; but defend- ant Wheeler contends that Tatham was in his employ merely as a clerk, and was not authorized to purchase goods on a credit and bind them. The plaintiffs contend that Tatham was a general agent, having authority to transact all the defend- ant’s mercantile business, or was held out by defendant, or permitted to hold himself out as such, so as to justify the belief that he was clothed with the powers of a general agent. The question mainly controverted by the parties relates to the character of the agency and the extent of his authority. The general rule is that one who deals with an agent is bound to ascertain the nature and extent of his authority; but, in the application of the rule, a distinction is observed between general and special agencies. The power to do everything necessary to its accomplishment may be included in a particular agency so that private instructions as to the particular mode of execution, which are not intended to be communicated, and are not communicated to the party with whom the agent may deal, will not be regarded as limitations on his power. But, with this qualification, a special author- ity must be strictly pursued. A general agent may exceed his express authority, and the principal nevertheless be bound. The scope and character of the business which he is empowered to transact is, as to third persons, the extent and measure of his authority. By his appointment the prin- cipal is regarded as saying to the public that he has the 121 authority to transact the business in the usual and customary modes. Secret limitations on his power, or private instruc- tions as to the mode of transacting the business, will not affect the rights of third persons who have no notice of such limitations or instructions. When a general agent transacts the business intrusted to him, within the usual and ordinary scope of such business, he acts within the extent of his authority; and the principal is bound, provided the party dealing with the agent acts in good faith and is not guilty of negligence which proximately contributes to the loss. Louisville Coffin Co. v. Stokes, 78 Ala. 372. Third persons, dealing with a person as a general agent, are not acquitted of all duty to inquire and ascertain the character and extent of his agency ; but if, on inquiry, it is ascertained to be general, actually or apparently, they are not bound to inquire whether there are secret limitations or private instructions, unless they have knowledge of facts which should put them on such inquiry. As to these issues the burden is on the plaintiffs to establish by proof that Tatham was the general agent of defendant, or that the latter, by acts, conduct, or negligence, justified the belief that he had authority to purchase goods on credit for the store. If these issues be found in favor of plaintiffs no subsequent misconduct of the agent, misappro- priating the goods or otherwise will affect their rights. * * * The most general powers that may be conferred on an agent are necessarily limited to the business or purpose for which the agency is created. The terms of the employment of Tatham—“in charge of his retail store at Wheeler’s Sta- tion to conduct his mercantile business”—in connection with the limitations on his authority to purchase limit his powers as a general agent to the transaction of the local mercantile business of defendant. In the matter of buying goods, his power was expressly restricted to the use of money specially deposited for that purpose and to cash receipts. In appoint- ing Tatham his agent, defendant withheld power to buy and pledge his credit under any circumstances. By the terms of 122 his commission, Tatham may be regarded a general agent to conduct the local business of the store, with special pow- ers to purchase. To construe it otherwise would be to estab- lish the rule that a merchant who furnishes his clerk with funds to purchase goods and make immediate payment, clothes him with power to buy on his principal’s credit, and that persons dealing with him are relieved of the obligation to ascertain the nature and extent of his warrant of author- ity. This would press too far the application of the doc- trine of general agency. Jaques v. Todd, 3 Wend. 83. * OK Ok When an express authority is given, the extent thereof must be ascertained from its terms; and another or different authority cannot be implied, unless facts are shown from which such other authority may be presumed or arises by implication of law. Therefore, proof of facts or circum- stances from which the authority is presumed or arises by implication of law-——an appearance of authority, caused not by the agent himself, but by the defendant—is essential to his liability for Tatham’s acts, not within the scope of his commission. In such a case it is incumbent upon the plain- tiffs to prove that defendant, by ratification, assent, or acquiescence in previous acts, held out Tatham as clothed in the character in which he assumed to act, which fairly led the plaintiffs to believe that more extensive powers had in fact been given, than were conferred by the terms of the ap- pointment. On this question all the circumstances of the transaction, the previous conduct of the defendant, and the usages of the business, may be properly considered. It should, however, be remarked that in order to bind the de- fendant by ratification, assent, or acquiescence in prior acts of his agent in excess of the authority actually given, knowledge of the material facts must be brought home to the defendant. And if, in the absence of express authority to bind defendant in the manner in which he is sought to be charged, his liability is rested on previous recognition of simi- 123 lar acts of Tatham as his agent, it is requisite to show that plaintiffs sold the goods to Tatham on the faith of such pre- vious recognition. St. John v. Redmond, 9 Port. 428. In this aspect of the case, any evidence is relevant which shows prior similar acts of Tatham and tends to prove or disap- prove defendant’s knowledge and plaintiff’s reliance on his recognition of them. The charge under consideration is objectionable in an- other respect. The authority, as hypothetically stated, therein, was conferred in November, 1881, when the defend- ant was on the eve of leaving home to be absent for months. There is evidence tending to show that on his return, in June, 1882, the authority to purchase was revoked. The transactions with the plaintiffs were in January, February, and March, 1883, and were the first transactions which Tatham had with plaintiffs as agent of defendant. An authority conferred is always revocable, unless coupled with an interest or founded on a valuable consideration; and may be revoked expressly, or by acts clearly inconsistent with its continuance. When third parties have dealt with an agent clothed with general powers, the agency continues as to them, after revocation, until they have notice thereof. Also, the principal may be liable for the acts of the agent after revocation to third persons who never dealt with him previously, if they, in common with the public at large, are justified in believing that such agency existed, and have no notice of its revocation. €laflin v. Lenheim, 66 N. Y. 301. On the case as presented by the record these questions should have been submitted to the jury. They were with- drawn from their consideration by the instruction to find a verdict for the plaintiffs, independent of the evidence in regard to the revocation of the authority of Tatham and notice to plaintiffs. The court also charged the jury that if the defendant placed Tatham in charge of his retail store, with instruc- tions to buy for cash only, it was the duty of the defendant 124 to keep himself posted as to the manner in which his agent conducted his business, and to see that his instructions were cbeyed; and if he knew the agent was buying on credit, or could have known it by the exercise of ordinary diligence, he is estopped to deny the authority of Tatham to purchase on credit. The rule is stated by Mr. Wharton as follows: “When a principal conducts his affairs so negligently as to lead third persons to reasonably suppose that his agent has full powers; then, if the agent exceeds his authority, the principal must bear the loss. It is true that the principal is not chargeable with culpa levissima. He is not chargeable, in other words, with the consequence of those slight negli- gences into which good business men are liable to fall. But, if he is negligent to an extent beyond what is usual with good business men in his department, and if, in consequence of his negligence, third parties repose trust on the supposed agent, then the loss, if loss accrue, must fall on the princi- pal.” Whart. on Agency, 123. Though mere negligence, mere want of ordinary diligence, may furnish the agent an opportunity of undue assumption of authority, it does not, of itself, work an estoppel. A principal is not required to distrust his agent, nor to keep a vigilant watch over the manner in which he exercises his authority and to see that his instructions are obeyed. He may act on the presump- tion that third parties dealing with his agent will not be negligent in ascertaining the extent of his authority as well as the existence of his agency. And negligence, to consti- tute a ground of liability, must have caused the plaintiffs to repose trust on the authority of Tatham, and the negli- gence of plaintiffs must not have proximately contributed to the loss. The charge exacts of the principal a degree of diligence not required by the law. Many cases hold that notice to an agent is notice to his principal, though acquired before the relation is cre- ated, if present in his mind at the time of the particular transaction and he can communicate it or act upon it with- 125 out violating a legal moral duty. It was, however, early settled in this State that knowledge of an agent to operate as constructive notice to the principal must have been ac- quired after the relation of principal and agent was formed. This rule having been an open question, it would not be prudent to disturb it now. Mundine v. Pitts., 14 Ala. 84. x Ok Ok Reversed and remanded. wor Liability of principal to third party—Disclosed principal —Unauthorized contract FORT WORTH & DENVER CITY R. R. CO. ». JOHNSON & TRICE, 2 Tex. Ct. of App. 181 (1884). Appeal from judgment for plaintiffs (Johnson & Trice). WuitE, P. J.: In this case Trice & Johnson sued the railroad company to recover the value of beef furnished to one Barker, claiming that Barker was the agent of the com- pany and authorized to bind it for the beef purchased by him. Barker was roadmaster for the company, and he also kept a boarding or eating house in some box cars belonging to the company, which cars were furnished him by the com- pany free of charge. He fed and lodged hands who were in the employ of the company. The beef furnished by Trice & Johnson was for the boarding house kept by Barker. Barker, when he purchased the beef, told Trice that he had authority to bind the company for the beef. There was no evidence, except the declarations of Barker, that he had any authority to bind the company for the beef. There was not sufficient proof that Barker was the agent of the company authorized to bind it by the purchase of the beef. Agency cannot be proved by the declarations of the 126 supposed agent. Such declarations are not admissible to establish agency. If acts of an agent are relied upon to prove agency, the acts offered in evidence must be within the apparent scope of the agency proposed to be proved. “When an agency arises by implication and presump- tion from the facts and circumstances of the case, the nature and extent of the authority conferred upon the agent will be ascertained and limited in the same manner and be gov- erned by the same considerations which control in the con- struction of an express authority which is conferred in gen- eral terms. If the agency arises by implication from several previous acts done by the agent with the tacit consent or acquiescence of the principal, such agency will be limited to acts of a like nature.” 1 Wait’s Act. & Def. 230, “If the agency arises from authority to do a single or particular act, it is limited to the appropriate means of accomplishing that very act and the required end; and it extends no fur- ther. In brief, an implied agency is never construed to ex- tend beyond the obvious purposes for which it is appar- ently created.” Jd. 231. “The mere existence of the rela- tion of agency establishes no agency further than is neces- sary for the discharge of the duties ordinarily belonging to it.” I Greenl. Ev. (13th ed.), sec. 64a. That a party is agent-for another does not render such other liable for every contract the agent may make. To be binding upon the principal the contract must come within the apparent scope of the agent’s authority. With regard to special agents, the rule is that if the agent exceeds the special and limited authority conferred on him, his principal is not bound by his acts, but they become mere nullities so far as he is concerned, unless, indeed, he has held him out 2s possessing a more enlarged authority. Story on Agency (9th ed.), sec. 126. The agency conferred upon a road- master is special, and does not confer authority to bind the company for provisions to supply a boarding house. If a party dealing with an agent has notice of the 127 authority under which such agent acts, or of such facts as will put him upon inquiry as to the extent of such authority, then the principal will not be bound by the acts of the agent not contained in the authority conferred. If a party has notice that an agent is acting under a special contract made with his principal, or if he has notice of such facts as will put him upon inquiry as to such contract and its terms, he will, at his peril, contract with said agent, and if the agent exceeds the authority given him, the principal will not be hound. W. & W. Con. Rep., sec. 291. Reversed and remanded. Liability of principal to third party—Disclosed principal —Effect of notice to agent by third party JENKINS BROS. SHOE CO. v. RENFROW & CO., 151 N. C. 323 (1909) Appeal from judgment for plaintiff corporation. The plaintiff corporation sued the defendants, as part- ners, to recover an amount due it for goods sold and deliv- ered. The defendant T. J. Renfrow alone answered and contested the plaintiff’s right to recover against him. The plaintiff, in its complaint, alleged “that on 27 May, 1907, it sold and delivered to the defendants a lot of shoes, of the value,” etc. The contesting defendant denied his liability, on the ground that the partnership between him and his co- defendant had been dissolved on 28 March, 1907, and notice of dissolution had been published in a newspaper published in Wilkesboro, N. C., where the partnership did business, the plaintiff doing business in Winston-Salem, and_ that notice of such dissolution had been given to W. N. Horn, the traveling salesman of plaintiff, its agent who had taken the order sued upon and all other orders from defendant 128 for plaintiff. It was admitted by the defendant that the partnership existed up to 28 March, 1907, and was formed in 1904; that his co-partner, G. V. Renfrow, his son, had the entire management of the business and did all its buying and selling ; that he lived in Mecklenburg County ; that when the partnership was dissolved he took from his co-partner his note, secured by a mortgage on certain described lands in Mecklenburg County. The plaintiff offered evidence of the continued advertisement in the paper stated by G. V. Renfrow & Co. for some months after the alleged dissolu- tion, and denied it had any notice of the dissolution at the date mentioned in the complaint. It further appeared in evidence that the salesman of the plaintiff, Horn, took the order from G. V. Renfrow on 4 April, 1907, but it was subject to acceptance by the plaintiff. The plaintiff’s sales- man admitted he received notice of the dissolution before 15 May; that it was within his duty to notify plaintiff when ke received notice of dissolution of partnership who were dealing with it, and he sometimes received money from customers when they offered it. It was in evidence that the agent, Horn, was notified on 4th April of the dissolution, but this was denied by him. His Honor charged the jury that unless the notice of dissolution was given to the agent, Horn, on or before 4th April, no subsequent notice would avail the defendant. The defendant excepted. The jury answered the issue of indebtedness in favor of the plaintiff. From the judgment rendered upon the verdict the defendant T. J. Renfrow appealed to this court. Mawnnine, J.: If Horn was such an agent of the plain- tiff that notice to him would be imputed to the plaintiff, then we think his Honor was in error in restricting the time at which the notice of the dissolution should have been given, in order to be binding upon his principal, the plaintiff, to the date “on or before 4th April.” While the order for the goods sued for was taken by Horn on 4th April, it was made ty Horn subject to the acceptance of the plaintiff. The ac- 129 ceptance of the order was signified by the shipment of the goods on 27th May, and in no other way. The complaint alleged both sale and delivery on that day, and in our con- sideration of this appeal we must consider the plaintiff con- cluded by this allegation of his pleading. This allegation was distinctly presented to his Honor by the defendant, and instructions asked and refused. The agent admitted he had notice of the withdrawal of the defendant T. J. Renfrow trom the partnership before 15th May, and that he was then the agent of the plaintiff, with the same scope and extent of authority as theretofore. In Mechem on Agency, sec. 721, the learned author deduces the following rule from:the authorities: “The law imputes to the principal and charges him with all notice or knowledge relating to the subject-matter of the agency which the agent acquires or obtains while acting as such agent and within the scope of his authority or which he may previously have acquired, and which he then had in mind, or which he had acquired so recently as to reason- ably warrant the assumption that he still retained it. Pro- vided, however, that such notice or knowledge will not be imputed (1) where it is such as it is the agent’s duty not to disclose, and (2) where the agent’s relation to the subject- matter or his previous conduct render it certain that he will not disclose it, and (3) where the person claiming the benefit of the notice, or those whom he represents, colluded with the agent to cheat or defraud the principal.” There is no evidence in this case bringing it within any of the excep- tions named in the proviso of the above rule. This court, in Straus v. Sparrow, 148 N. Y. 309, quotes with approval this principle, as stated in Cox v. Pearce, 112 N. Y. 637: “1. The failure of an agent to communicate to his principal informa- tion acquired by him in the course and within the scope of his agency is a breach of duty to his principal; but as notice to the principal it has the same effect as to third per- 130 sons as though his duty had been faithfully performed.” Mfg. Co. v. Rutherford, 64 S. E. Rep. 444. If therefore Horn was such an agent that notice to him was notice to his principal, the plaintiff, then, under the above authorities, it must follow that the plaintiff had notice of the withdrawal of the defendant T. J. Renfrow from the firm, and its dissolution before 15th May—be- tween 6th and 15th May, as fixed by Horn. No credit had then been extended for the goods ordered on 4th April. In Bisban v. Boyd, 4 Paige’s Chan. Rep. 16, it is held: “If he (a former customer) was informed of the dissolution of the partnership immediately after the sale and while the goods remained in his own hands, undelivered, a court of equity would never permit him to recover for those goods against the former partners of the vendee.” Notice of the dissolution is a recision of the order. Goodspeed v. Plow Co., 45 Mich. 522. The correctness of these doctrines can- not be controverted. It cannot be consistent with any just conception of fair dealing to subject a retired partner to the payment of debts contracted after notice of dissolution of the partnership has been given to the creditor extending the credit. Such a creditor cannot assume the status of part- nership to be unchanged when he has actual notice of a change imputed to him from the knowledge of his agent. Was Horn such an agent that notice to him was notice to his principal? The evidence offered at the trial tends to show that Horn was a traveling salesman of the plaintiff, and defendants made all their purchases, extending over several months, from plaintiff through Horn; that he was the sole representative of plaintiff in the section in which defendants did business, and visited their place on business nearly every thirty days; that he reported to plaintiff refer- ences given by new customers; that he reported dissolutions of partnerships with whom plaintiff was dealing, and some- times received payments for bills due, when offered him by merchants, but that he was not instructed to collect bills; 131 that he in a general way inquired about the condition of the eerie of those with whom he was dealing for plaintiff. * Horn was a competent agent to receive notice, and that notice to him was notice to the plaintiff, his principal. Horn was, by his course of dealing and the scope and extent of his power, the medium of negotiations between plaintiff and defendant partnership. * * * New trial awarded. Liability of principal to third party—Undisclosed principal—Election to sue principal or agent LINDQUIST w. DICKSON, 98 Minn. 369 (1906). Appeal by defendant from an order denying a motion for a new trial, after a trial and verdict in favor of plaintiff. Affirmed. Start, C. J.: Action to recover from the defendant, Mrs. Dickson, as an undisclosed principal, for labor and material performed and furnished by the plaintiff in decorating and repairing her house, pursuant to an alleged contract made for her by her husband, Joseph M. Dickson. The complaint alleged, in effect, that at the time the contract was entered into with the husband he was in fact acting as agent for his wife, the defendant, but he failed to disclose to the plaintiff the fact of such agency, or the fact that she was the real party in interest and owned the house, the decorating and improvement of which was the subject matter of the contract; that the plaintiff performed the contract on his part; that he was not paid therefor; and that he commenced an action against the husband to recover the balance due him on the contract, and on August 29, 132 1904, he recovered judgment against him for the sum of $273.68, no part of which has been paid; and, further, that thereafter (in the month of October, 1904) the plaintiff learned for the first time that the defendant was the real party in interest, and that the contract was made for her by her husband as her agent. This action was commenced in the month of June, 1905. The defendant by her answer denied that she ever made the contract alleged in the com- plaint, and alleged as a defense the recovery of a judgment by the plaintiff against her husband, Joseph M. Dickson. The trial resulted in a verdict in favor of the plaintiff for the amount stated, and the defendant appealed from an order denying her motion for a new trial. 1. The first group of alleged errors to be considered is to the effect that there was no evidence to support the verdict, because there was no evidence that the husband cf the defendant was her agent and acted as such in making the contract in question, and further that there was no evi- dence that the plaintiff relied upon such supposed agency in making the contract; but, on the contrary, that he dealt with the husband as principal. It is not controverted that the plaintiff, at the time the contract was made, understood that the house he was to decorate and improve belonged to the husband, and that he was dealing with him as principal, and further that he recovered judgment against the alleged agent upon the same claim which is the basis of this action, in ignorance of such alleged agency. It is the contention of the defendant that such judgment is a bar to this action. The general rule is that where a simple contract, by parol or writing, is made by an authorized agent without disclosing his principal, and the other contracting party sub- sequently discovers the real party, he may abandon his right to look to the agent personally and resort to the principal. Land Co. v. Levy, 76 Minn. 364. But whether the creditor can proceed against the undiscovered principal, after he had 133 obtained a judgment on his claim against the agent, is a question as to which the adjudged cases are conflicting. In the case of Kingsley v. Davis, 104 Mass. 178, the creditor, after being fully informed that the party with whom he made the contract was acting for an undiscovered principal, brought an action against the agent and recovered judgment for his claim. Afterwards he brought an action against the principal to recover for the same claim, and the court held that the action against the principal could not be maintained for the reason that: “The general principle is undisputed that when a person contracts with another who is in fact an agent of an undisclosed principal, he may, upon the discovery of the principal, resort to him or to the agent with whom he dealt at his election. But if, after having come to a knowledge of all the facts, he elects to hold the agent, he cannot afterwards resort to the principal.” In Beymer v. Bonsall, 79 Pa. St. 298, it was held that nothing short of satisfaction of the judgment against the agent would discharge the principal. The case of Kingsley v. Davis sug- gests the true basis for solving the question. It is a ques- tion of election. Election implies full knowledge of the facts necessary to enable a party to make an intelligent and deliberate choice. Pederson v. Christofferson, 97 Minn. 491. We therefore hold upon principle, and what seems to be the weight of judicial opinion, that: If a person contracts with another, who is in fact an agent of an undisclosed principal, and, after learning all the facts, brings an action on the contract and recovers judgment against the agent, such judgment will be a bar to an action against the prin- cipal. But an unsatisfied judgment against the agent is not a bar to an action against the undiscovered principal when discovered, if the plaintiff was ignorant of the facts as to the agency when he prosecuted his action against the agent. Steele v. Potthast, 109 Iowa 413. Judgment for plaintiff is affirmed. 134 Liability of principal to third party—Where neither principal nor agent bound LITTLE ROCK FURNITURE COMPANY E&T AL. v. KAVANAUGH ET AL, 111 Ark. 575 (1914). Action by the Little Rock Furniture Manufacturing Company and others against W. M. Kavanaugh and others. Judgment for defendants, and plaintiffs’ appeal. Affirmed. Appellants were plaintiffs below, and alleged in their complaint substantially the following facts: The plaintiffs are corporations, organized under the laws of the state of Arkansas, and are engaged in the manufacture and sale of furniture. At & mass meeting of the citizens of Little Rock, held in the summer of 1910, to arrange plans for entertain- ing the Confederate Reunion in May, 1911, the defendants were selected as an executive committee, with W. M. Kava- naugh as chairman, to control the arrangements to be made for said reunion. That said mass meeting was a mere vol- untary association, not incorporated, and had no legal exist- ence, and could make no contracts. That such defendants, as such executive committee, assumed and exercised full control of the affairs of said Confederate Reunion, made all contracts, controlled the collection of the subscriptions and the expenditures of funds, and the making of pay- ments of the obligations incurred in connection with the said reunion. That said defendants, as such executive commit- tee, acted through sub-commniittees appointed to attend to dif- ferent departments of the work of caring for the reunion, one of which committees was the eating and lodging com- mittee. That, in caring for the visitors, cots and mattresses were necessary, and were used for the reunion. That on February 23, 1911, plaintiffs entered into a contract with the defendant for the furnishing of certain cots and mattresses. SMiTH, J.: Appellants say the evidence is practically un- disputed, and that a verdict should have been directed in 135 their favor. That this is true, because appellees were mem- bers of a voluntary association and acted within the scope of their authority in making the contract sued on, and that they are therefore within the rule of law that “each mem- ber of an association is liable for the debts thereof, incurred during his period of membership, and which have been nec- essarily contracted for the purpose of carrying out the ob- jects for which the association was formed.” The law is so stated to bein 4 Cyc, p.311. * * * Where one assumes to act as agent for another, he impliedly represents that his principal has existence, and that he has authority to act for him, and, if either of these things be false, the agent becomes personally liable. But ‘when the agent makes full disclosure of, the facts consti- tuting his authority, as when he shows to the other party the power of attorney, or letter of instructions under which he acts, the question of his authority becomes a mere question of construction or of law, and no warranty of the suffi- ciency of the authority can be implied.” Tiffany on Agency, par.92, * * * Appellants contracted for the sale of their supplies with full knowledge of all the facts in regard to the connection of appellees with the reunion. These gentlemen were se- lected to serve upon the executive committee because of their executive capacity and public spirit, and all persons who dealt with them knew the only source of their revenue ; appellants had this knowledge, for they were contributors to this public subscription ; and all other creditors must also have had this knowledge, for none of them have brought suit for the balances due them. Facts such as we have stated were evidently in mind of the author when section 287 of Story on Agency was written. That section reads as follows: “But although it is thus true that persons, contracting as agents, are ordi- narily held personally responsible where there is no other responsible principal to whom resort can be had, yet the doc- 136 trine is not without some qualifications and exceptions, as, indeed, the words ‘ordinarily held’ would lead one naturally to infer. For independent of the cases already suggested, where the contract is or may be treated as a nullity, on ac- count of its inherent infirmity or defective mode of execu- tion, other cases may exist in which it is well known to both of the contracting parties that there exists no authority in the agent to bind other persons for whom he is acting, or that there is no other responsible principal ; and yet the other contracting party may be content to deal with the agent, not upon his personal credit or personal responsibility, but in the perfect faith and confidence that such contracting party will be repaid and indemnified by the persons who feel the same interest in the subject matter of the contract, even though there may be no legal obligation in the case. Thus, for ex- ample, if private persons should subscribe a sum towards some charitable object, and should request an agent to em- ploy tradesmen and others to supply materials to carry it into effect, and it should be distinctly made known by the agent that the tradesmen and others were not to look to him, or to the subscribers personally, for payment, but that they must solely depend upon the success of the charitable sub- scription and the state of the funds, and the supplies should be furnished with this clear understanding, there could be no doubt that neither the subscribers (at least, beyond their subscriptions) nor the agent would be personally respons- ible. Such occurrences often take place in cases of volun- tary charitable societies, and especially in cases of such charities, conducted by females, some of whom are married and some unmarried, where the tradesmen, who furnish sup- plies, are understood to trust entirely to the state of the funds, and to rely for reimbursement solely upon the funds which may, from time to time, be obtained from charitable and beneficent persons. For it has been well remarked that few persons would be willing to become members of com- mittees of Bible societies and other voluntary religious and 137 eleemosynary institutions, if they were held to be person- ally bound * * * for articles furnished in furtherance of such meritorious objects. * * * Similar transactions may take place in relation to agents, acting for the public at large or for particular public bodies, in cases avowedly be- yond the scope of their authority, and yet for the benefit of the public at large or for particular public bodies, where the other contracting party may rely solely upon the public liberality and sense of justice to award him a suitable com- pensation without in any manner giving credit to the agents or looking to them for compensation.” And the same learned author, after discussing fully the liabilities of agents to third persons, said: “The truth, how- ever, is that the same general principle prevails in all these cases notwithstanding their apparent diversity of form and decision. They are all answered by the same general in- quiry: To whom is the credit knowingly given, according to the understanding of both parties? This inquiry is some- times a matter of fact, as where the contract is verbal or unwritten, and sometimes a matter of law, as where it de- pends upon the true construction of the terms of a par- ticular written instrument. The law in all these cases pro- nounces the same decision that he to whom credit is know- ingly or exclusively given is the proper person who incurs ‘ability, whether he be the principal or the agent.” Sec. 288, Story on Agency. Under this test we think appellees are not liable. There is nothing in the proof, as we understand it, which would have given appellants any reasonable right to expect appel- lees to assume any personal liability to them, or to any one else. Ignoring the fact that the Confederate Veteran Re- union Association was not incorporated and took charge of all the funds, the appellees were acting in a capacity known to all persons who dealt with them, and were chargeable with no higher duty to any creditor than to see that the funds were honestly accounted for and equitably disbursed. 138 This they have done, and the judgment of the court below in their favor will be affirmed. Liability of principal to third party—Tort of agent BIRKETT v. POSTAL TELEGRAPH CABLE COMPANY, 107 App. Div. (N. Y.) 115 (1905). Appeal from judgment for plaintiff. The defendant company had in its employ at Penn Yan, N. Y., an agent and manager named Harrington. The business carried on at the defendant’s office was quite ex- tensive for a country village and the part contributed by the plaintiff was large. Harrington was in full control of this business for the defendant. The plaintiff was systematically overcharged by Harrington, who, however, made proper re- ports and remittances to the defendant, appropriating the overcharges for his own use. When he had appropriated $2,480.24, Harrington absconded. The plaintiff now sues the company for the overcharges. Judgment for plaintiff upon the report of a referee. Defendant appeals. SPRING, J.: The rule of law governing this case is ele- mentary. A principal is liable to a third person for the mis- conduct of his agent committed in the line of his employ- ment, even though the offense was in excess of his authority, “and the principal did not authorize, justify or know of it.” Nowack v. Met. St. Ry. Co., 166 N. Y. 433, 440. Conced- ing this rule of law, the appellant contends that Harrington was not acting in the line of his employment in making false entries in the accounts rendered to the plaintiff. Harring- ton had general superintendence of the defendant’s office in Penn Yan. He had the exclusive handling of its funds at that village. He was charged with the rendition of the 139 accounts to the plaintiff and with collecting for the tele- grams and cablegrams sent by the plaintiff and upon which there were charges for transmission. He was acting within the scope of his agency in receiving the money for the benefit of the defendant. If the plaintiff had paid the exact amount due and Harrington had misappropriated it the plaintiff could not have been compelled to respond over again on account of the misconduct of Harrington. Of course, Harrington was not authorized to collect money of the plaintiff for telegrams never transmitted, but it was his duty to collect the sums actually due for their transmission. If he collected more than was due he did that because of his agency. The agent in his dealings with the plaintiff turned out to be dishonest while acting in that capacity. His delinquency does not exonerate the defendants to the plaintiff who relied upon the manifest authority of Harrington. The principal cannot so easily evade liability for the misdeeds of its agent. The general line of employment is fixed by the agency, and whatever an agent does to an innocent third person within that general line, although ultra vires, he represents his principal. If a conductor uses undue vio- lence in removing a passenger from a train the railroad com- pany is liable. The company does not authorize the con- ductor to handle the passenger harshly, but it does empower him in certain cases to eject the passenger, and it must be held civilly responsible for whatever the conductor does in carrying out the authority intrusted to him even though he oversteps his instructions. The rule here applicable is founded on the old maxim that the principal is responsible for his agent, not the innocent third person. The plaintiff was furnished with the tariff books of the defendant, and by examination of each statement with the tariff rates could have ascertained that he was being cheated. It is urged that he was negligent in failing to make these examinations and should not, therefore, be permitted to re- cover. The plaintiff was not obliged to act on the assump- 140 tion that Harrington was defrauding him. The defendant had placed its agent in the responsible position of manager of its business. It vouched for his integrity to its patrons. They had a right to assume he was honest and were not called upon to enter into any inspection of the items of his accounts for the purpose of discovering either fraud or mis- take. Judgment affirmed. Liability of principal to third party—Tort of agent STICKNEY ET AL. v. MUNROE, 44 Me. 195 (1857). This was an action in tort for damages for diverting water from plaintiff’s mill, Judgment for defendant. Plain- tiffs appeal. Suit was instituted to recover damages alleged to have been caused to the plaintiffs’ mill by the defendant, in alter- ing and enlarging the water gates under a certain other mill, and in opening gates leading therefrom, without lawful authority. The plaintiffs introduced into evidence a deed from the defendant to them in 1851, showing the plaintiffs to be the owner of a certain mill on the Schoodic River in the town of Calais, Maine. This deed specified the estate, the water power and the privileges intended to be conveyed. The defendant, Munroe, who lived in Boston, owned considerable land in the neighborhood in question. He em- ployed one Levi L. Lowell to look after said lands. The defendant introduced in evidence a power of attorney to Lowell, authorizing him to give leases of any real estate owned by defendant in the county of Washington. The evi- dence shows that Lowell was held out to the world as the 141 defendant’s general agent in charge of the property, in the management, etc. In 1852 Lowell leased a sawmill to one Ferdinand Tinker. During the term of the lease, Tinker made certain changes in the channel of the stream, thereby, as alleged, causing the injury to the plaintiffs’ mill, which was the subject of this suit. It is alleged by the plaintiffs that Tinker did blasting and made excavation and changes in the stream so as to divert water from the plaintiffs’ mill with the knowledge and consent, or subsequent ratification or approval, of the defendant Munroe, and that he was therefore liable for the injury resulting. TENNEY, C.J. * * * The acts of a general agent, or one whom a man puts in his place to transact all his business of a particular kind or in a particular place, will bind his principal so long as he keeps within the scope of his authority, though he may act contrary to his private instructions ; and the rule is necessary to prevent fraud and encourage confidence in dealing. 2 Kent’s Com., 5th edition, 620. “The principal is held liable to third persons in a civil suit for frauds, deceits, concealments, misrepresentations, torts, negligences, and other malfeasances and omissions of duty in his agent, in the course of his employment, although the principal did not authorize, justify, or participate in, or indeed know of such misconduct; or even if he forbade them or disapproved of them.” “In every such case the principal holds out his agent as competent and fit to be trusted; and thereby, in effect, he warrants his fidelity and good conduct in all matters of his agency.” Story’s Agency, sec. 452. And as an illustration of the principle, a carrier will be liable for the negligence of his agent, by which the goods committed to his custody are damaged or lost. /d., sec. 453. But although the principal is thus liable for torts and negligences of his agent, yet we are to understand the doc- 142 trine, with its just limitations, that the tort or negligence occurs in the course of the agency. For the principal is not liable for the torts and negligences of his agent in any mat- ter beyond the agency, unless he has expressly authorized them to be done, or he has subsequently adopted them for his own use and benefit. Jb., sec. 466, also sec. 455. The principal is not responsible for the injuries done by the person employed by him as an agent, which he has not ordered and which were not in the course of the duty de- volved upon such person. In all such cases the proper remedy is against the immediate wrongdoer for his own mis- conduct. The evidence shows that in the management of the mill property at Calais, in the building of one of the mills upon the dam, upon which the Washington and the Madison mills are situated, and in the repairs made upon the defendant’s mills from time to time, and the supervision of their opera- tions, and the receipt of rents therefor, in connection with the fact that the defendant had his residence in Boston, and was not personally at Calais for many years in succession, Lowell was at least held out to the world as the defendant’s general agent in the charge of the property aforesaid. But it is manifest that the scope of this agency was limited to the business of keeping the mills in a proper condition, leasing the same, and receiving the rents therefor. It does not ap- pear that previous to the excavations complained of in this action he had undertaken to make such an alteration in the bed of the river as to cause a diversion of the water of the same from the wheels of other mills, to the injury of the cwners thereof, or that he had done any unlawful act under his agency, commanded before or ratified after it was done, by the defendant. It is true that: Lowell is shown by the evidence to have authorized the defendant’s lessee, Tinker, to have made alterations in the channel of the river, provided no injury should be done thereby to any one, and when informed by 143 the plaintiffs of the excavations made by Tinker, and when he saw them, he made no objections to the further prosecu- tion of the work. But at that time the lease to Tinker had four years and one-half to run, and the lessee was en- © titled, on request, to have the same extended, and the de- fendant cannot be affected by these facts. From a full view of all the evidence in the case, there is nothing showing that these excavations were made for the use and benefit of the defendant, and that they were done by Lowell, or authorized by him, in the execution of his agency, as he was held out by the defendant; and under the special findings of the jury, and the law applicable to the facts, the defendant cannot be held liable for this por- tion of the injury alleged by the plaintiffs. Judgment for defendant affirmed. Liability of third party to agent—Agent for disclosed principal having interest in goods STEAMBOAT CO. v. ATKINS & CO. 22 Pa. 522 (1854). Appeal from judgment for plaintiffs (Atkins & Co.). Knox, J.: The plaintiffs below, Atkins & Co., delivered to the plaintiff in error (defendant below), the Baltimore Steamboat Company, certain goods, which they promised to deliver in good order to Cumberland Railroad Company at Baltimore, to forward to Messrs. McKaig & Agnew, Cum- berland, who were agents of Atkins & Co. The goods were damaged whilst in the custody of the steamboat company, by their negligence, as established by the verdict of the jury. This action of assumpsit is brought by Atkins & Co., for the use of the legal owners of the goods, to recover the dam- 144 ages sustained; and whether their action can be sustained, , , as brought, is the only point properly raised by the record before us. To determine this question, we must first in- quire into the manner in which Atkins & Co. became pos- sessed of the goods, and the extent of their interest in them. The equitable plaintiffs in the action, J. Beal and P. McArthur & Co., are merchants of Cincinnati, and pur- chased the goods in question in the city of New York. The vendors of the goods delivered them to the New Jersey Transportation Company, to be forwarded by that company to Philadelphia; and from thence to Cincinnati, the place of their destination, by O’Connor’s Five Day Line, which is represented in Philadelphia by Atkins & Co., the plaintiffs below. When the goods arrived in Philadelphia, Atkins & Co, received them from the New Jersey Transportation Com- pany, paying to that company their charges, and placed them in the hands of the defendants, without repayment, upon their agreement to deliver the goods in good order to the Baltimore Railroad Company, for the purpose of forward- ing to Cincinnati, there to be redelivered to the agents of Atkins & Co. By receiving the goods in Philadelphia, and paying the freight from New York, Atkins & Co. certainly obtained an interest in them, subject, of course, to the general prop- erty of the owner, but good as against any other person, and even superior to the general owner upon the question of possession until repayment. If the defendants had complied with their contract, and delivered the goods to the Baltimore Railroad Company, they would again have been restored to the actual custody of the plaintiffs, through their agents at Cumberland, and by them forwarded to Pittsburgh, where, according to the evidence, upon delivery on board of a steamboat, charges of every description would have been paid to the plaintiffs ; but from Philadelphia to Pittsburgh, they must be considered 145 in the light of the principal carriers, using the defendants’ company and the Baltimore and Ohio Railroad Company as the means of transporting the goods from Philadelphia to Cumberland. At the time of the injury, the interest of the plaintiffs, Atkins & Co., in the property was, first, to the extent of the advances made by them to the New Jersey Transportation Company ; second, the right to receive the goods at Cumber- land, and transport the same to Cincinnati, or at least, to Pittsburgh, and to retain the possession until all charges were paid. This interest gave to Atkins & Co. a special or qualified property in the subject matter of their agree- ment with the Baltimore Steamboat Company ; and, accord- _ing to all the authorities, both in England and i: in this coun- try, the action of assumpsit may be maintained i in the 1 name \ of one having such special property. . \ ‘In general, a mere servant or agent with whom a con- 7 tract is. expressed .to..be made, on behalf of another, and who has no direct, beneficial interest in the transaction, can- not. support. an action thereon. But when an agent has any |) beneficial _ interest _ in ‘the’ 1e performance of the contract, as for commission, or a “special. property in the subject-mat- ‘ter of the agreement, he may support an action in his own ( name upon the contract, as in the case of a factor, or broker, Lo or a warehouseman, or carrier, _or a policy broker whose... —“name-is-on the-policy,-or the captain of-a-ship, for-freight, Grove v. Dubois, 1 T. R. 112. Judgment affirmed. 146 Liability of third party to agent—Undisclosed principal CAMP v. BARBER, 88 Atl. (Vt.) 812 (1913). Appeal from judgment for defendant. TayLor, J.: The action is general assumpsit. In his original specification the plaintiff specified “supplies con- _sisting of wire, brackets, insulators, etc., for 4 ‘half-mile sections of telephone line at $8 per section, $32,” and inter- _est thereon. He seeks to recover under a contract with the defendant concerning a proposed telephone line past the residence of the defendant. The case was referred, and ‘was heard below on report of the referee. The referee finds that at a time shortly previous to October 13, 1903, the plaintiff had a talk with the defend- ant relating to the construction of a new telephone line in connection with the Orange County Telephone Company, - which proposed line was to extend from some place in or neat Plainfield, Vt., past the residence of the defendant, to the city of Barre; that the line was to be built by individuals, each person who was to have a telephone on, or a share in, the same to erect poles and pay for wire and other supplies tor the construction of one-half mile of said line; that the proposed line was to have 16 sections of one- -half mile each; that the defendant told the plaintiff, if the plaintiff would stake out the line, and order the supplies, consisting of wire, insulators, brackets, etc., he would get the subscribers for the 16 shares, or take them himself; that thereupon the plaintiff staked out the entire line, for which labor he was to receive 75 cents per share; that the defendant obtained sub- scribers for 12 shares, including his own; that the defendant again told the plaintiff “to go ahead and order the supplies _ sight away, and he, the defendant, would see to getting signers for the other 4 shares, or take them himself” ; - that the plaintiff then ordered the supplies for the entire line. 147 irom the Orange County Telephone Company, which were shipped to the railroad station at East Montpelier in the name of C. L. Speare, then president of said company; that on October 28, 1903, the plaintiff paid the telephone company for such supplies, $116, being $8 per share, less 75 cents per share for the labor of staking out the line; that soon after plaintiff was paid for 12 of the shares at $8 per share, 2 being paid for by the defendant personally, 6 through the defendant for the respective purchasers, and the remaining 4 either through the defendant or by the pur- chasers directly; that the 4 sections for which subscribers | were not obtained have not been constructed; that plaintiff has not been paid for the labor of staking out these sec-_ ~tions, nor for the materials ordered and. paid for by him for their construction, The referee further finds that the defendant’s agree- ment was oral; that at the time of making the agreement and through the whole transaction the plaintiff was acting .as agent for the Orange County Telephone Company ; that of the supplies remaining after the 12 shares were taken _ sufficient for about three-fourths mile of line was taken ” from the railroad station and left at the residence of the defendant, but what became of this, or of the other material, __the evidence did not. disclose. The referee submitted to the court the question whether upon this state of facts the defendant was liable, and, if liable, found for the plaintiff to recover $32, with interest from October 28, 1903. The court below rendered judg- _ ment on the report for the defendant, to which the plaintiff excepted. * * * “Can the plainitff recover on the facts in his own name? The defendant contends that he cannot, because the plaintiff was acting for the Orange County Telephone Company in making the contract. The referee finds “the plaintiff, at the time of the making of the agreement and through the whole transaction, was acting as agent of the Orange County Tele- 148 phone Company.” But this fact alone is not determinative. To escape liability to the plaintiff, the defendant attempts to show that-the right of action, if any exists, is in the_ plaintiff's-principal. While the general rule is that, where an agent makes a contract with a third person, naming his __ principal, the contract is made. with the principal, and not with the agent, and no cause of action subsists in favor of the agent against the other party thereto, it has been held in some jurisdictions that, even where the principal is dis- closed, a contract may be made by an agent with a third person in such terms that he, the agent, is personally liable for its fulfilment, and may therefore enforce the same in his own name. _31 Cyc. 1564, and cases cited. Moreover, the authorities are practically uniform that, where the nomi- nal promisee in a contract not under seal is an agent, and he has a beneficial interest in the performance of the con-. ce or a-special property in the subject matter. of..the agreement, the legal interest is in him, and he may support an.action upon the contract in his own name. 31 Cyc. 1564, 1621, and cases cited. In Binney & Broadhead v. Plumley, 5 Vt. 500, which was a suit on a note payable to the plaintiffs, as trustees of the Newmarket & Kingston Wesleyan Academy, this court, holding that plaintiffs could recover in their own names, said: “If the plaintiffs had been mere servants or agents of the corporation, and had made a contract in their (its) behalf, then the action should be in the corporate name. But it seems that plaintiffs did not act as mere ser- vants or agents who have no legal interest in their contracts, but acted as trustees, and took a legal interest.” In Rutland & Burlington Railroad Co. v. Cole, 24 Vt. 33, which was an action on a note given by the defendant to one Henshaw, treasurer of the plaintiff, for stock of the corporation, it was said: “It is clearly settled that the person beneficially interested may sue upon a simple contract.” Though not 149 full authority, these cases recognize the principle involved in the case at bar. On the facts reported the defendant has failed to go far enough to make his defense available. Agency is a fact the burden of proving which rests upon the party affirming its existence. The rule is applicable not only to one who would charge another as principal with the act of an alleged agent or to one who would relieve himself from personal ability on the ground of agency, but is equally applicable to one who would relieve himself from liability on a contract because made by the other as agent. Nicholson v. Pease, 61 Vt. 534; 31 Cyc. 1643-1650, and cases cited. It follows that, when one beneficially interested in a contract, though made. by him as agent, the contract con- | taining apt words to bind the agent personally, seeks to enforce such contract in his own name, the other party to the contract, to « defeat such action, must not only prove the - tact of agency but must go “further and show necessary facts-to.make the defense available, ; as, for example, that ~e the principal w was disclosed, and that the agreement was in -fact between himself and the principal. Defendant’s failure Te. show more than the mere fact of agency leaves the agree- ment, as its terms import, a contract with an agent whose principal was undisclosed, and so subject to the rule govern- ing such contracts. é It is a well-settled rule of law that, where an agent acts for an undisclosed principal, the agent becomes personally bound on the contract, and is individually liable thereon to the other party. Asa corollary to this rule, an action may be brought in the name of either the agent or the principal for the breach of such a contract by the other party, or at least the agent may sue in his own name when he is bene- ficially interested in the contract. Holden v. Rutland Rail- road Co., 73 Vt. 317. * * * This rule works no injus- tice to the other party to the contract, since he may avail 150 himself of all defenses that are good either against the ~. agent or the principal. __ — a ‘The contract by the defendant in terms imports to be an agreement with the plaintiff personally, though in fact, acting for the Orange County Telephone Company. So far as appears, the plaintiff’s principal was undisclosed; the plaintiff ordered and personally paid for the materials and \ performed the labor required by the contract, and so was sd bearehicially interested in it. In these circumstances he is en- titled to support an action upon the contract in his own name, and should have had judgment below for the sum found by the referee. Judgment reversed, and judgment for the plaintiff for $32, with interest from October 28, 1903. Liability of third person to principal—Disclosed principal —Payment to agent BUTLER ET AL. v. DORMAN, 68 Mo. 298 (1878). Appeal from judgment for defendant. Henry, J.: This was an action for the recovery of the balance of an account alleged to be due from Dorman to the plaintiffs. On the 12th day of September, 1874, the plaintiffs employed Wm. S. Ridgely as a traveling agent to sell goods for them by sample in the State of Missouri. On the 6th day of October thereafter, less than a month after his employment, he sold to defendant, on four months’ time, two bills of goods, one for $346.43, and the other for. $27.25. Editor's Note—When a contract not under seal is made with an agent in his own name for an undisclosed principal, whether he describes himself to be an agent or not, either the agent or principal may sue upon it. (Ludwig v. Gillespie, 105 N. Y. App. 653 (1887).). v 151 The agent was not intrusted with possession of the goods sold, and was expressly forbidden, by the terms of his em- ployment, to receive payment for goods sold. On the 12th day of October, 1874, six days after he sold the goods to the defendant, Ridgely drew a draft on the defendant for $60, and wrote requesting him as an espe- cial favor to him to pay the draft, promising to return the money when he again reached Clinton, or to credit the amount on the bills of goods; that he expected to return to _Clinton, where defendant resided, in about ten days. De- fendant paid plaintiffs all the bill except $60, insisting that he was entitled to a credit for that amount paid to Ridgely. * ok The jury was waived and the cause was tried by the court. Judgment for defendant. Exceptions were taken by Plaintiffs to the charge of the court. | The distinction between factors and brokers has long \s, | been settled. A factor is one to whom goods are consigned ‘for sale. He has the possession and a special property, and \ on a sale may receive payment. principal will also be competent against the agent; but if. a_ written con- tract be made exclusively with the agent, who expressly 157 states himself to be principal, the real principal would not .. be entitled to maintain an action thereupon by. showing that. the professed principal was merely his agent. * * * It is thus apparent _that neither the text of Story nor the cases -cited support the defendants’ contention, but on the contrary each is an authority.against him. * * * Parol testimony will not be permitted to control or con- tradict a contract in writing; but, in the absence of any re- _cital appearing therein, it in no just sense contradicts the written contract to show by oral testimony, aliunde the writ- “i that the names signed to the contract are those of sage aa that undisclosed principals are the real parties ~ in interest. Counsel has cited cases touching the rule applic- able to sealed instruments. It is unnecessary to examine those cases, becatise the writing here declared on is a sim- ple contract, not under seal. A further review of the adjudged cases is unnecessary, as the true doctrine is found accurately stated in the ele- mentary books. Story, Ag. (4th Ed.) 1600, states the doc- trine in these words: “Indeed, the doctrine maintained in the more recent authorities is of a far more comprehensive extent. It is that, if the agent possesses due authority to make a written con- tract not under seal, and he makes it in his own name, . whether he describes himself to be agent or not, and whether .the principal be known or unknown, he, the agent, will be —liable_tobe. sued, and be entitled to sue thereon, and his . _ principal also will be liable to be sued and be entitled to sue thereon, in all cases, unless from the attendant circumstances. it is clearly manifested that an exclusive credit ii is given to the agent, and it is intended _by_both parties ¢ that no res no resort shall in any. event be had by or against the principal upomit__ The doctrine thus asserted has this title to commendation and support: that it not only furnishes a sound rule for the exposition of contracts, but that it proceeds upon a principle of reciprocity, and gives to the other contracting party the 158 \ same rights and remedies against the agent and principal “which they possess against him.” Nor does this doctrine contradict or vary the written instrument. The same writer observes: “Tt 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 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.” Whart. Ag. sec. 298, states the doctrine thus: “On non-negotiable instruments, where the agent is prima facie the contracting party, unless it should appear that the agent is the person exclusively privileged or bound, the prin- _ cipal can sue or be sued, and in the latter case the contract- _ ing party can sue either principal or agent.” _ Mechem, Ag. secs. 695-700, discusses the subject of the liability of undisclosed principals, and of principals known, but not mentioned in contracts executed on their account, but signed by the agent alone, and he shows that in such cases, unless the principal in the meantime has in good faith paid the agent supposing he was the principal, the other party may pass over the agent, and sue the principal inthe first instance. In-sec. 701 he says: “This rule applies to all simple contracts, whether written or unwritten, entered into by an agent in his own name and wihin the scope of his authority, although the name of the principal does not appear in the instrument, and was not disclosed, and although the party dealing with the agent sup- posed that the latter was acting for himself. And this rule obtains as well in respect to contracts which are required to _ be in writing as those to whose validity writing is not essen- tial. It does not violate the principle which forbids the con- tradiction of a written agreement by parol evidence, nor that which forbids the discharging of a party by parol from the obligation of-his written contract. The writing is not con- 159 tradicted, nor is the agent discharged; the result is merely) that an additional party is made liable.” These authorities demonstrate that the first contention of the defendant is untenable. ? Demurrer overruled. _ Editor's Note.—'‘There are two classes of sales through an agent to an undisclosed principal which it is necessary to distin- guish. 1. Where the seller supposes himself to be dealing with a principal, but discovers afterwards that he has ‘been selling to an agent, and that there is an undisclosed principal behind, the law allows the seller to have recourse on such discovery to the undisclosed principal; provided, always, that the principal has not meanwhile paid the agent, or that the state of accounts between the principal and agent does not render it unjust, . e., inequitable that the seller should any longer look to the principal for payment. This statement of the proviso which relieves the undisclosed principal in certain cases from all necessity to pay the seller was thought by Parke, B., and the other judges in Heald v. Kenworthy, 10 Exch. 745, to be too large without further explanation, and they expressed the view that the only case in which the seller under such circum- stances was precluded from having recourse to the undisclosed prin- cipal when discovered, was when the seller, by some conduct of his own, had misled the principal into paying or settling with his agent in the interim. The principal, such is the reasoning of the Court of Exchequer, has originally authorized his agent to create a debt, and the principal cannot be discharged from the debt unless the seller has estopped himself, by his conduct, from enforcing it against him. The Court of Queen’s Bench, in Armstrong wv. Stokes, do not adopt this narrower version of Lord Tenterden’s and Mr. Justice Bayley’s proviso. They revert to the wider language used by Lord Tenterden and Bayley, J., in Thomson v. Davenport, and it must now be taken to be the law that a seller who has given credit to an agent, believing him to be a principal, can not have re- course against the undisclosed principal if the principal has bona fide paid the agent at a time when the seller still gave credit to the agent, and knew of no one else except him as principal.” Mechem, Agency, sec. 697. 160 Liability of third party to principal—Undisclosed principal WOODRUFF v. McGEHEE, 30 Ga. 158 (1860). Action for damages for breach of warranty of a horse made to one Lee, plaintiff’s agent, by John W. McGehee, de- fendant. Nonsuit. Plaintiff appeals. ' STEPHENS, J.: The only reason assigned for the re- jection of this warranty is that it is made to the agent, the principal not being known in the transaction. But the authorities are express that the principal may claim all his rights, though not at first. known,.just as .ifhe_had_been. _ known, with the single limitation that the other party shall not lose any right which he would have against the agent if the agent were principal as he had first been supposed to - be. See Story on Agency, par. 418. The reason of the doctrine is, that itis but just that every man should have what really, though secretly, belongs to him, so far as he can obtain it. without injuring another by appearing in his true character of owner. We think the action is maintain- ablé in the name of the before unknown principal, and that ' the evidence ought to have been admitted. _' Judgment reversed. Editor's Note—The general rule is that an undisclosed prin- cipal cannot be held liable upon a contract under seal executed by an agent in his own name. It is the firmly established common law doctrine that action can be brought upon a sealed contract only ‘ against those whose names appear thereon. A qualification of this rule exists, however, where the seal affixed to the contract by the agent was not necessary to the validity of the instrument at common law, and in this case the seal may be disregarded as surplusage and action be brought against the principal as upon a simple contract. 31 Cyc. 1576. 161 Liability of third party to principal—Undisclosed princi- pal—Right of third person to select the party with whom he deals WINCHESTER ET AL. v. HOWARD, 97 Mass. 303 (1867). This case was appealed by defendant on exceptions to a verdict directed for the plaintiffs by the trial court. Suit on contract for the purchase price of a pair of oxen alleged to have been purchased by the defendant of the plaintiffs. The defense set up was a denial of such a “purse At the trial in the Superior Court, the plaintiffs introduced evidence tending to prove that anecueD Lorenzo - Smith, their agent, they sold endant; _Whereupon-the..defendant_offered-to -prove that Smith told “the defendant that he had a pair of oxen for sale, and an- -ether_ pair belonging 1 to a Mr. Blanchard, d, which pair he was _ -_ authorized to sell. ~ As to the. first, pair, Smith represented that the plaintiffs had no mortgage on them and that. there Mere no claim on them excepting that which’ Smith himself Shad. Defendant then drove them ‘home, ‘but discovered the same evening that they-were not the-property of Smith and that .the. plaintiffs. claimed.them. Defendant undertook to - return the cattle on.this.account. Smith. declined to receive them and offered a bill of sale, either in the name of the _ plaintiffs or his own name, both of which, offers. defendant declined. - Defendant further offered to show that for some _ years he had had no dealings with. the plaintiffs, that he re- “Tied on Smith’s statement that he was the owner of the cattle, and that he would not have entered into the contract at all had he known the plaintiffs. were the owners. The judge ‘ruled that even if proved this would constitute no defense to the action and directed a verdict for the plaintiffs. CHAPMAN, J.: The court are of opinion that it should have been left to the jury in this case to determine whether 162 the minds of the parties really met upon any contract; and _ if so, what the contract was. It is true that an agent may sell the property of his principal without disclosing the fact that he acts as an agent, or that the property is not his own; and the principal may maintain an action in his own name to recover the price. If the purchaser says nothing on the subject, he is liable to the - unknown principal. Huntington v. Knox, 7 Cush. 371. But on the other hand, every man has a right to elect what _parties he will deal with. As was remarked by Lord Den- man in Humble v. Hunter, 12 Q. B. 311, “You have a right to the benefit you contemplate from the character, credit _and substance of the person with whom -you contract.” There may be good reasons why one should be unwilling to buy a pair of oxen that had been owned or used or were claimed by a particular person, or why he should be un- ls to have any dealings with that person; and as.a. _ man’s right to refuse to enter into a contract is absolute, he is not obliged to submit the rabdity, of his reasons to a court or.jury In this case it appears chia Smith, the plaintiff’s agent, told the defendant that he had a pair of oxen for sale (re- ferring to the oxen in question), and that another pair be- longing to one Blanchard were in his possession, .which pair he was authorized to sell. A jury might properly find that this amounted to a representataion that the oxen in question were his own. The defendant then made inquiries; in answer to which Smith affirmed that the oxen had never been hurt; that the plaintiffs had no mortgage upon them, _and that there was no claim upon them except the claim which.Smith had, -—A j jury might properly find that this was, in substance, a representation that the title to the oxen, was _exclusively in Smith; and that,.as the.defendant was un- ‘willing to deal with the plaintiffs, he made proper inquiries on the subject, and was led by Smith to believe he was not dealing--with-the plaintiffs. ~The defendant took the cattle 163 home with an agreement that he might return them “if he did-not-find-things.as.Smith had told him.” In the course of the evening he was informed that the cattle belonged to the plaintiffs, and being unwilling to buy oxen of them, he returned them to Smith, the next morning before any bill of sale had been made. The jury would be authorized to find that he returned them within the terms of the condition upon which he took them, because he did not find things as Smith had told him. It is thus apparent that upon the ~whole_evidence. they. would_be justified in finding a verdict \ for the defendant, _ Exception sustained. Liability of third party to principal—Undisclosed principal—Right of principal to use BARY v. PAGE ET AL, 10 Gray 398. Action of contract by a citizen of New York to re- cover the price of goods, sold by his factors in Boston to the defendants. At the trial it appeared that the goods were consigned by the plaintiff to the factors, and sold by_them, without mentioning their principal or indicating in_ any \ way that they were not their own, and that they subsequently . ; ! presented-bills for the goods i in their _own name. aie a Defendants asked the trial court to rule that the action’ -should_have been brought by the factors, and could not be maintained in the name of thisplaintiff: The court ruled © .the_action was rightly brought, a verdict was returned for the plaintiff and the defendants’ al alleged ¢ exceptions. a BIcELow, J.: * * * 2. As the contract of an agent is in law the contract of the principal, the latter may come forward and sue thereon, although at the time the contract was made the agent acted as and_appeared.to be the princi-— % 164 pal. There is a qualification of the rule, by which it is held that when a contract has been made for an undisclosed principal, who permits his agent to act as apparent principal in the transaction, the right of the former to intervene and bring suit in his own name is not allowed in any way to affect or impair the right of the other contracting party, P but he will in such case be let into all the equities, set-offs and other defenses to which he would have been entitled, if the action had been brought in the name of the agent. But in the case at bar it does not appear that the defendant has any defence to the action, which he could have made if it had been brought by the agent. The objection is purely technical, and goes only to defeat the right of action by the principal, irrespectively of any meritorious answer to the suit... It has been sometimes said that when a sale is made _by a factor for a foreign principal, the latter cannot sue for the price. This supposed exception has been put on the ground that in such case the presumption at law is, that exclusive credit was given to the agent, and therefore the principal cannot be treated in any manner whatever as a -party to the contract. But the later and better opinion is, that there is no such absolute presumption, and that a princi- pal, whether foreign or domestic, may sue to recover the . price of goods sold by his factor, unless it is made affirma- tively 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. Story on Agency, par. 420. No fact appears in the exceptions to show any exclusive credit by which to take the present case out of the ordinary rule by which the principal can maintain an action in his ‘own name. ~s Exception overruled. Editor's Note—In Arkansas Valley Smelting Co. v. Belden Co., 127 U. S. 379, Gray, J., the case is thus put: “But every one has a right to select and determine with whom he will contract, and 165 cannot have another person thrust upon him without his consent. In the familiar phrase of Lord Denman, ‘You have the right to the benefit you anticipate from the character, credit and substance of the party with whom you contract.’ Humble v. Hunter, 12 Q. B. 310, 317. The rule upon this subject, as applicable to the case at bar, is well expressed in a recent English treatise: ‘Rights arising out of contract cannot be transferred if they are coupled with lia- bilities, or if they involve a relation of personal confidence such that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he actually confided.’” The exception is applied to a purely executory contract in Pancoast v. Dinsmore, 105 Me. 471. “Here the defendant, instead of seeking to bind an undisclosed principal to a third party who contracted with the agent, seeks to bind a third party to an undis- closed principal, in the case of an unperformed contract. It is good sense, as well as sound law, that, in case of a purely executory contract, a party dealing with another as principal, though in fact he is agent, is not compellable, at all events, to accept performance from the undisclosed principal, when discovered, though he may do so. He may well say: ‘This is not the contract I made.’” The above exception has no application in cases where it does not appear that the third person relied on the learning, skill and knowledge or reliability of the agent of the undisclosed principal, and where no personal service is involved. Wiehle v. Safford, 27 Misc. Rep. 562. Nor to cases where the principal contracted as agent and now sets up that he was the real principal, and the agent a mere man of straw. Bickerton v. Burrell, 5 Manel & S. 383. Chapter V TERMINATION OF THE RELATION Termination of agency—Revocation of authority—In general STIER v. IMPERIAL LIFE INS. Co., 58 Fed. 843 (1893). Action by Geo. Stier to recover damages for breach of contract. This is an action founded on contract of agency. The defendant, an insurance company, in 1889 employed the plaintiff, by written contract, as agent. to solicit policies, _ stipulating _ for certain commission on premiums ‘collected, and for certain commission on renewal premiums. Among “the classes of policies was what is known as “Natural Premium Policies” and “Level Premium Policies.” The principal business done by the company was in the natural ‘premium line. After the plaintiff had acted as such agent for a year or more after the execution of the contract, the company concluded, from experience, that it was more ad- vantageous to its interests to turn its attention more ‘espe- cially to the prosecution of the level premium plan, and .so advised the -plaintiff, and withdrew its efforts to advance further the natural premium plan. As the latter was more profitable to the agent, he declined to accept the change; and after much correspondence and negotiations the plaintiff withdrew, and took employment in a rival insurance com- pany, and brought this suit, as for a breach of contract, and predicated his damages on what he claims is the cus- tomary mode of f admeasuring damages on such breach. By _ consent Of the parties the cause was referred to L. E. Wyne, Esq., to take the evidence and make a finding of the facts 16 0¢C~C~— 167 and damages. To his report, findings for the plaintiff and assessing his damages at $3,198, both parties have filed exceptions. Putts, J.: The action throughout is predicated upon a contract, and proceeds for breaches thereof. The con- tract is set out in substance, and it is then averred that the plaintiff kept and performed the same on his part, and that —the--defendant. broke and failed to keep.the same. The _ petition alleges that the contract was to continue in force until the same was terminated by the neglect or refusal on the part of plaintiff to account for moneys belonging to de- fendant by the. terms and conditions of the contract, or until there was dishonesty or non-compliance with the rules and instructions: of-said contract on the part of. the plain- tiff, It is also averred that, if he should fail to furnish to the defendant company an average of $20,000 per month, taken and paid for in three consecutive months, the com- pany might cancel said contract without notice; that de- fendant bound itself to issue policies known as the ‘“‘Natural-—— Premium.Renewal.. Term-Policies,” the “Natural Premium ~—~Annuity Bonds,” ‘Five-Year. “Renéwable-Term. Policies,” “Ten-Year_Renewable Term Policies,” and “Monthly Life ~and Savings-Policies,”” also, “Partici icipating and Non-Partici-, _ pating—Level Premium Policies,’ cies,” and | “Survivor’s ‘Endow- __mentPolicies,”—and to allow plaintiff on each of _ said ‘policies.a_certain compensation set out in the contract. It is also averred that defendant bound itself to pay plaintiff a renewal commission on adjusted natural premium policies and natural-premium_yearly renewable term policies, and life and savings policies, for the. first year $1. 80, the second $1 .60, and $1.40 the fourth and subsequent years. — oe breaches of the contract “assigned are ‘are that in 1891 the defendant refused and ceased to issue any natural re- newable term policies, etc., and refused to permit plaintiff to solicit.or take any applications for the policies mentioned RSS rea, _in the contract,-and.made an entire change in the kind of — 168 policies issued, and substituted new and different policies therefor, which substituted policies were not so advanta- geous to plaintiff_as those provided for; and.afterwards made._no effort-to. collect-the renewal premiums on policies issued under.applications taken by defendant, but used every _ means to discourage, and did discourage, parties holding such policies from paying renewal premiums,. thereby de- _ priving plaintiffs of his commissions, etc. It is to be observed that it is nowhere averred that defendant discharged ‘the - plaintiff from his agency, nor is it averred that the plaintiff secured an average of $20,000 insurance per month for - three consecutive months, as provided by the contract. The answer, after tendering the general | isstié, avers that the plaintiff discontinued acting under said contract _ long prior to the institution of. the suit, without notice to defendant, and engaged in soliciting insurance for another insurance company, a rival in business to the defendant; , and it avers that in the months of May, June and July, November and December, 1890, the plaintiff did not pro- ure and furnish to defendant an average of $20,000 of insurance per month taken and paid for, by reason of which the right accrued to defendant to cancel said contract of “agency without notice. to plaintiff ; that it was under no obligation to plaintiff to make any effort to collect renewal eran on its policies; and avers that plaintiff volun- tarily abandoned the further performance of said contract on his part, and that by mutual consent said contract was annulled and surrendered. No reply was filed, and no denials made to the new matter thus set forth in the answer, and under the Code of Practice these matters stand admitted by the pleadings. If the plaintiff discontinued acting under said contract and engaged in soliciting insurance for another rival insurance company of the defendant, and “he voluntarily abandoned the further performance of said contract on his part, and by mutual consent said contract was annulled and sur- 169 rendered,” it is not perceived that there is any foundation for _Ahe-finding of the referee that defendant could not-terminate... ___the contract.at-its-pleasure. .Nor am I satisfied, as a matter of law, that defendant did not have the power to terminate the agency. In the absence of an agreement of employment for a definite period of time, thé agency is one at will, determinable at the pleasure —of—the-principal, unless. the agency is coupled with an interest in_ the. subject-matter. This is fundamental. Mechem on Agency, sec. 204, says: “The authority of the agent to represent the principal de- pends upon the will and license of the latter. It is the act of the principal which creates the authority; * * * and unless the agent has acquired, with the authority, an in- terest in the subject-matter, it is in the principal’s interest alone that the authority is to be exercised. * * * It is the general rule of law, therefore, that as between the agent and his principal the authority of the agent may be re- voked by the principal at his will at any time, with or _Without_giving-reason therefor, except in those. cases. where_. the authority is coupled with a sufficient interest in the agent ; sand ‘that is true, even though the. authority -be in aids terms declared to be exclusive or irrevocable. But, though the principal has the power thus to revoke the au- thority, he may subject himself to a claim for damages if he exercises it contrary to his express or implied agree- ment in the matter.” * * * Clearly, therefore, the plaintiff had no such interest in the subject-matter of the contract as would take away the customary option of the principal to terminate the agency. But it is claimed by the plaintiff, on account of _ article 18 of the contract in question, that the implication _ was that the power of dismissal i is denied, except for the causes therein specified. - This article is as follows: -- “This contract may be terminated upon the neglect or refusal of the said George H. Stier to account for all moneys belonging to 170 the company according to rule 7, or for dishonesty, or for noncom- pliance with any of the foregoing rules and instructions.” * * * ' I am unable to perceive that the provision that the contract might be terminated upon certain specified grounds enforces the conclusion that it was intended thereby to pro- long the existence of the agency indefinitely, or so long as “the agent did none of the specified delicts.. A not dissimilar question arose in Sewing Machine Co. v. Ewing 141 U. S. 627, where it was held that an agency contract containing the provision that a “violation of the spirit of this agree- ment shall be sufficient cause for its abrogation” does not imply that it could only be abrogated for sufficient cause. It seems to me that the proper meaning of article 18 is that, for any of the designated derelicts, the right arose absolutely to the principal to terminate the contract without any liability, leaving the right untouched to exercise the power to discontinue subject to a liability under a quantum meruit action, | The general rule of law is that such con- tracts are revocable at pleastire “unless the power to revoke is restrained by express stipulation.” Mechem Ag., pars. 209, 210. This rule is aptly put in Coffin v. Landis, 46 Pa. St. 421, 432. The court said: “The true question is, what was the contract? To what did the parties bind each other? We are not at liberty to make contracts for them, or to add any stipulation which they have not seen fit to incorporate. We cannot give a mere expectation the sanction or binding force of a cove- nant. * * * There is nothing said in regard to the time during which the agreement should continue, and noth- ing in its language to define the duration of the service of - plaintiff or his employment by the defendant. This the con- \. tracting parties appear to have left out of consideration, or t least failed to make it. a subject of covenant obligation. \may ‘be that neither was willing to bind himself ‘for any definite period. * * * It is evident, then, that were we so to construe the agreement as to hold it obligatory upon 171 the one party to employ, and upon the other to serve, dur- ing any period, we should be in danger of i imposing liabil- . ities which _both-parties absolutely avoided assuming. And, \if-it. be-admitted that neither of the parties contemplated a severance of the relation affirmed by the contract at the will of ‘the: ‘other pi Party, it does not follow that we are at liberty to treat the agreemeint as continuing a covenant against him. That would be to make an expectation of results equiv- alent to a binding acknowledgment that they should fol- low.” * * * There must be, in the absence of a clear provision to the contrary, the element of mutuality in such a contract. If, as against the principal, the agent had the right to insist ‘on a continuation of the agency so long as he did none of -the prescribed acts in article 18, the correlative right of the _Principal must obtain to hold the agent to perpetual service, _or so long as he was faithful; and thus it would result that, | ‘nolens volens, the employment could be made perpetual. It _is quite evident from the second paragraph of the opinion in the Newcomb case, supra, that the learned judge had in mind the recognized distinction between the reserved power _to discharge and the right and wrong of a discharge, where "the remedy is not in an action ex contractu for the dis- charge, but a quantum meruit action predicated upon its injurious—exercise. In the latter instance the suit is not founded on the breach of the contract, as such, but.is an . ‘action of assumpsit for a quantum meruit, in which the contract may be put in evidence and will control the maxi- mum of recovery. Mansur v. Botts, 80 Mo. 654, 655, and citations. Keeping this distinction in view, the vice is apparent in the finding of the referee that the defendant broke its contract with the plaintiff in not permitting him to continue the prosecution of his work in taking insurance on the natural premium plan, or in discouraging the prose- cution of that system by its determination to specially prosecute the level premium policies. Is there any pro- 172 vision or stipulation in the contract which bound the de- _ fendant to adhere exclusively to the natural premium plan, which in contemplation of law would constitute a_ breach” of contract, if defendant should at any time thereafter. de- termine upon a more special prosecution of the level pre-__ mium plan? I am wholly unable to find any such provision in terms. — The power of attorney to the plaintiff simply appoints the plaintiff agent for the defendant company in a desig- nated territory, under instructions, conditions, and rules governing agents; and it distinctly appears on the face of the petition, as it does on the back of the contract in ques- tion, that the commissions which the plaintiff was to receive applied not only to natural premium policies, but also to non-participating level premium policies, participating level premium policies,.and_to survivors’ endowment t policies. The fact that one class of policies was or was not more profit- able to the agent than another, or that it may have been. in the contemplation of either that the business of defendant. was to be mainly confined to the natural premium policies, cannot, it seems to me, affect the question as to whether or not by the contract the defendant obligated itself to so confine its business. If it did not so covenant in the writ- ten agreement, no damage can be predicated on a breach of contract in this respect. Carried to its logical conclusion, the contention of plaintiff would have entitled him to claim damages had the defendant, at any time after executing the contract, concluded that the prosecution of the level pre- mium plan was more advantageous, and, without abandoning the natural premium plan, given more especial attention to its own preference. And it is just as inferable, by impli- cation, that had the plaintiff, after entering upon his agency, discovered that the level premium plan was more beneficial to him than the natural premium, he could as well claim that the contract forbade the defendant to do anything which waule. lessen his profits under the level plan, as_to make ee 173 his present claim, in so far as anything appearing on the __fact of the contract itself. When we turn from the contract to the evidence in the case, the cause of the plaintiff finds less support. As already stated, it stands admitted by the pleadings that the plaintiff, without being discharged by the defendant, himself broke the contract by voluntarily entering the service of an antag- onistic insurance company ; and it appears from the evidence . that he actually entered into a written contract of agency with the Provident Savings ils Insurance Society, by which he stipulated for commissions “upon policies of the above .. forms secured by said Stier upon the lives of persons whom he has heretofore insured in the Imperial Life Insurance ‘Company of. Detroit,” which contract bears date July 28, 1891. On August 20, 1891, the president of the | defendant company wrote to the plaintiff as follows: “We are informed that you are now doing business for the Provident Savings Life, which, of course, terminates your contract with this company, and we desire you to forward all supplies to us to this office at once,” which indicates that the plaintiff had taken service there without terminating his agency with this defendant, and without its knowledge or consent. While it is to be conceded that prior to plaintiff’s thus taking service in the employ of another company this defendant had signi- _ fied to, him its desire and purpose to conduct its business upon the level premium plan, yet it is not true that the defendant company, as is alleged in the petition, refused to _ permit the plaintiff to proceed further in the prosecution of his agency upon the natural premium plan. The evidence shows that as late as June 30, 1891, after an effort had been made to agree upon another contract between the parties, the president of the defendant wrote to the plaintiff as fol- lows: “Tf this contract (the new one) is not satisfactory to you, we stand ready to carry out the old one; and, if you feel that you prefer the old plans to the new ones, send us in your old line rate 174 books, and we will forward you supply of the old ones, so there will be no grounds of dissatisfaction of any kind on that point. However, I am satished it would be by far the best for all parties concerned for you to take up the new plan.” The utmost that the referee could find against the de- fendant on this branch of the case is that, owing to the desire and purpose of the defendant to turn its business in the direction of the level premium plan, the plaintiff did not receive the support and co-operation of the defendant re- quired under the natural premium plan. But as it cannot be maintained, in my opinion, that the contract restrained the defendant from directing its own business in a channel which it conceived to be most profitable to it, and such channel being one provided for in the contract itself, it would seem to follow that no action for damages is predi- cable upon the contract for a breach in so endeavoring to direct and control its business. It is true, the petition alleges that the defendant broke its contract with the plaintiff in failing to furnish him with the requisite supplies and blanks, etc., yet, as no damages have been found or réported as aris- ing therefrom, this may be treated as damnum absque in- juria, * * * a Defendant’s exception sustained. ~ Termination of agency—Failure of agent to obey instructions MACFARREN v. GALLINGER, 210 Pa. 74 (1904). Bill in equity for an account. Appeal from decree for defendant. From the record it appeared that plaintiffs were em- ployed by the defendant to sell lots, and that the agency was 175 terminated for the cause stated in the opinion of the Su- preme Court. Per curiam: The contract was one of agency only, and therefore revocable at any time for good cause. A very material stipulation of the contract was that plaintiffs should “deposit daily all money, received” to the order of defend- ents, _and. this not being done, defendants - terminated the agreement and took charge of the business‘ themselves. The findings of the court below on this point is that “while the terminating of the contract may have resulted in loss to .plaintifis, they alone are responsible for this loss. The agreement does not provide for a commission upon all lots sold by plaintiffs—it provides for the payment to them by defendant of twenty-five per cent. of moneys collected and paid over daily, which twenty-five per cent, is to be in full of, all ‘demands for compensation. This agreement, at least “to the extent that it requires daily payments, was almost continuously violated by plaintiffs from the time the first. payments were made_ to them under its terms until its termination. An account having been stated, it appeared that plain- tiffs were indebted to defendants in a greater amount than the commissions retained by the latter. The bill therefore