r2/^
THE LIBRARY
OF
THE UNIVERSITY
OF CALIFORNIA
LOS ANGELES
SCHOOL OF LAW
THE LAW OF AGENCY
THE LAW OF AGENCY "^^'
INCLUDIiNG
THE LAW OF PRINCIPAL AND AGENT
AND
THE LAW OF MASTER AND SERVANT
BY
ERNEST W. HUFFCUT
n\
PROFESSOK OF LAW IN THE CORNELL UNIVERSITY
COLLEGE OF LAW
SECOND EDITION
REVISED AND ENLARGED
BOSTON
LITTLE, BROWN, AND COMPANY
1901
Copyright, 1895, 1901,
By Ernest W. Huffcot.
\9or\
University Press :
John Wilson and Son, Cambridge, U.S.A.
PREFACE TO THE SECOND EDITION.
The primary purpose of this volume is to set forth the man-
ner in whicli obligations are incurred or rights acquired
through the acts of agents and servants, and to do this as a
natural sequence to a study of the manner in which like ob-
ligations are incurred or like rights acquired by one's own
acts. Book I. deals with the law of Principal and Agent ; that
is, the law of agency in its application to the creation of pri-
mary obligations, mainly those of contract. Book II. deals with
tlie law of Master and Servant ; that is, the law of agency in
its application to the creation of secondary or substituted ob-
ligations, mainly those in tort. Book I. may therefore properly
supplement a study of the law of contract, and Book II. a study
of the law of tort. Book I. is largely rewritten, and Book II.
appears for the first time in this edition : the whole constitutes
practically a new work.
An attempt has been made in the Introduction to state
clearly the distinction between an agent and a servant, and
the legal consequences that flow from such a distinction.
This is more fully developed in the sections dealing with the
liability of a principal or a master for acts of the agent or ser-
vant in excess of the authority. It is believed that this dis-
tinction is not merely a theoretically valid one, but that it is a
necessary means to the correct solution of the problem of the
constituent's liability, especially in the case of an agent's
frauds, and that the failure to observe it has led to needless
confusion.
While no attempt has been made to cite all decided cases in
agency in all of the fifty or more jurisdictions from which
authorities may be gathered, there has been a painstaking
734018
vm PREFACE TO THE SECOND EDITION.
cl'fort to cite an adequate number of authoritative and well-
reasoned cases, and upon all controverted questions to make
tlie citations as full as the scope of the work would permit.
In its enlarged form this work covers the whole held of
agency, and, it is hoped, may i»rove useful not only to the
student but also to the practitioner.
E. W. 11.
CoKNELL University College of Law,
August, 1901.
TABLE OF CONTENTS.
i3ooJi I.
PRINCIPAL AND AGENT.
INTRODUCTION.
CHAPTER I.
PRELIMINARY TOPICS.
Section Page
1. Representation iu the law of obligatiou 3
2- Meaning and scope of agency 5
3. Distinction between agency and otlier legal relations ..'... 6
4. Distinction between the law of principal and agent, and tlie law
of master and servant 10
5. Basis of constituent's liability for the acts of his representative . 13
6. Definition of agent and servant 17
7. Classification of agents and servants 19
8. Divisions of the subject of agency 21
PART I.
FORMATION OF THE RELATION OF PRINCIPAL AND AGENT.
CHAPTER IL
FORMATION OF THE RELATION BY AGREEMENT.
10. Elements of agreement 24
1. Agency by Contract.
11. Elements of contract 25
12. Forms of ao-reemeut 25
X TABLE OF CONTENTS.
SecUon Page
13. Consideration 26
14. Parties — Competency 27
15. — Infant principal 27
16. — Insane principal 28
17. — Married women as principals 30
18. — Cor|)()rations as principals 31
19. — Partnerships as principals 32
20. — Unincorporated clubs as principals 32
21. — Aliens as principals 33
22. — Joint principals 33
23. — Competency of agents 34
24. — Joint agents 35
25. — Sub-agents 36
26. Form of contract 36
27- Legality of object 39
2. Gratuitous Agents.
28. As between agent and third party 40
29. As between principal and agent 40
CHAPTER III.
FORMATION OF THE RELATION BY RATIFICATION.
30. Meauiug of ratification 42
1. Elements of Ratification.
31. Analysis 43
32. Act in behalf of existing principal 43
33. Assent of principal 46
34. Assent may be express or implied 47
35. Assent by silence 49
36- Assent must be in toto and unconditional 50
37. Assent must be free from mistake or fraud 50
38. Assent : has third party a right to recede before assent of prin-
cipal 52
39. Competency of principal 53
40. Fonn of ratification 55
41. Legality or validity of act : general rule 56
42. Same : exceptions to rule 57
43. Same : converse of rule 5S
44. Same ; ratification of forgery 58
TABLE OF CONTENTS. Xl
2. Legal Effects of Ratification.
Section Pago
45. Ratification is irrevocable 59
46. Effect as betwceu j)riucij)al and third party 59
47. Eifect as betwceu principal aud strangers 60
48. Efluct as between principal and agent 60
49. Effect as between agent aud third party 61
CHAPTER IV.
FORMATION OF THE RELATION BY ESTOPPEL.
50. Agencies not resting on assent 62
51. Meaning of estoppel 62
52. Application to law of agency 64
52 tf. Application to agent's torts 68
53. Limits of the doctrine 70
CHAPTER V.
FORMATION OF THE RELATION BY NECESSITY.
54. General doctrine of contracts from necessity 72
55. Agency of wife 72
56. Agency of infant child in purchase of necessaries 74
57. Agency of shipmaster 74
58. Agency of unpaid vendor 75
59. Other illustrations 75
CHAPTER VI.
TERMINATION OF THE RELATION.
60. Ways in which relation may be terminated 77
1. By Bilateral Act.
61. By terms of original agreement 77
62. By subsequent agreement 78
2. By Unilateral Act.
63-68. Revocation 78
69. Renunciation 82
XU TABLE OF CONTENTS.
3. By Operation of Law.
Section Page
70. By change affecting subject-matter 82
71. By cliauge ill condition of parties 84;
4. Irrevocable Agencies.
72. Doctiiue of irrevocable agencies 87
PART II.
LEGAL EFFECT OF THE RELATION AS BETWEEN PRINCIPAL
AND AGENT.
CHAPTER VII.
OBLIGATIONS OF PRINCirAL TO AGENT.
75-83. Compensation of agent 92
84. Reimbursement of agent 103
85. Indemnity to agent 104
86. Non-assignability of obligations 105
CHAPTER VIII.
OBLIGATIONS OF AGENT TO rUINCIPAL.
1. Agents by Contract.
88. Obedience 106
89. Prudence lOS
90. Good fiiiili . -. 110
91. Accounting • 112
92-95. Acting in person : appointment of sub-agents 115
96. Del credere agents 120
2. Oratuitous Agents.
97. Obligations of gratuitous agents 122
98. Gratuitous bank directors 124
TABLE OF CONTENTS. xiii
PART III.
LEGAL EFFECT OF THE RELATION AS BETWEEN THE
PllINCIPAL AND THIRD PARTIES.
CHAPTER IX.
CONTRACT OF AGENT IN BEHALF OF A DISCLOSED PRINCIPAL.
1. In Agencies Generally.
Section Page
100. General doctrine 127
lOL Contracts actually authorized 128
102. Contracts apparently authorized : estoppel 128
103. Ostensible authority : meaning 129
101. Same : general and special agents 132
105. Same : public agents 134
106. Same : elements of authority 135
107. Same : illustrations 140
108. Contracts unauthorized .• I4.7
109. Contracts voidable 148
2. In Particular Agencies.
111. Factors I49
112. Brokers 151
113. Auctioneers 153
114. Attorneys at law " 154
115. Bank cashiers 155
116. Shipmasters 156
CHAPTER X.
CONTRACT OF AGENT IN BEHALF OF UNDISCLOSED PRINCIPAL.
1. The Doctrine of Privity of Contract.
118. General statement of the doctrine 158
119. Application to agency generally 160
120. Application to contract for undisclosed principal 160
121. Suits against undisclosed principal 162
122. Suits by undisclosed principal 164
123. Parol evidence rule 164
xiv TABLE OF CONTENTS.
2. Liability of an Undisclosed Princijyal.
Section ^^eo
1-24. Geucral rule !•''>
125-128. Exceptious 1(J7
3. Ricjlds of an Undisclosed Pniicipal.
129. General rule 172
130-135. Exceptions 173
CHAPTER XL
ADMISSIONS AND DECLARATIONS OF AGENT.
136. Object in proving admissions • 178
137. When always inadmissible 17S
138. Wiien admissible : general rule ISO
139. When admissible : res gestae 180
110. Limitation of rule : adverse interest 185
CHAPIER XII.
NOTICE TO AGENT.
141. General statement of rule 186
142. Notice acquired during transaction 1S7
143. Notice outside of transaction, but Tvithin general scope of agency 187
144. Notice before agency begins 188
145. General qualifications 189
146. Application of rule to corporations 190
147- Notice to sub-agent 191
CHAPTER XIII.
LIABILITY OF PRINCIPAL FOR TORTS OF AGENT.
1. Liability for Torts Generally.
148. Distinction between servant's torts and agent's torts 193
149. Basis of master's and of principal's liability for tort 194
150. Nature of third person's remedies 19G
2. Liability for Frauds and Misrepresentations of Agent.
151. Eraud and misrepresentation generally 197
152. Fraud in relation to agency : deceit 1^7
153. Fraud for benefit of principal 200
154. Fraud for bencGt of agent 202
TABLE OF CONTENTS. XV
Section Page
155. Fraud — Issue of fictitious stock certificates 204
156. — Issue of fictitious bills of lading 206
157. —Other illustrations 207
3. Liability for Influencing Conduct of Other Persons.
158. Representations about plaintiff 208
159. Inducing breach or terminatiou of contract 209
160. Defamation 209
161. False arrest and malicious prosecution 210
CHAPTER XIV.
LIABILITY OP THIRD PERSON TO PRINCIPAL.
1. Contract Obligations.
163. Contracts by agent 212
164. Contracts in name of principal 212
165. Contracts in name of agent 213
2. Quasi- Contract Obligations.
166. Money paid by mistake 214
167. Money paid under duress or fraud 215
3. Tort Obligations.
168. Property diverted by agent : general rule 216
169. Exceptions : negotiable instruments 217
170. Exceptions : indicia of ownership 217
171. Exceptions : factors acts 219
172. Forms of action for property or its value 222
173. Wrongs of fraud and malice 223
174. Fraud in making contract 223
175. Collusive fraud 223
176. Interference with agency 224
4. Trust Obligations.
177. Constructive trusts 225
178. Following trust funds 225
179. Legal remedies for diversion of trust funds 227
XVI TABLE OF CONTENTS.
PART IV.
LEGAL EFFECT OF THE RELATION AS BETWEEN THE
AGENT AND THIRD PARTIES.
CHAPTER XV.
CONTRACT RELATIONS BETWEEN AGENT AND THIRD PARTY.
1. W7ie}-e Principal alone is Bound,
Section Page
182. Authorized contract 229
2. Wliere Agent alone is Bound.
183. Unautliorized contract 230
184. Incompetent principal 233
185. Fictitious principal 233
186. Exclusive credit to agent 235
187. Foreign principal 236
188. Contract under seal 237
189-195. Negotiable instruments : construction of signatures . . . 238
3. Where both Principal and Agent are Bound.
196. Undisclosed principal 249
197. Simple contract signed by agent 250
198. Effect of custom 252
199. Interest in subject-matter 253
4. Wliere neither Principal nor Agent is Bound.
200. Revocation of authority by death 253
201. Disclosure of facts affecting authority 254
202. Insufficiency of form 254
5. Special Case of Public Agents.
203. Public agents 254
6. Liability of Agent in Quasi-Contract.
204. Money paid agent by mistake or fraud 255
205. Money received to use of third party 257
TABLE OF CONTENTS. xvii
7. Liability of Third Person to Agent.
Section Page
207- Where agent alone may sue 2.)S
20S-20'J. Where either principal or agent may sue .... . . 2(;0
210. Liability iu quasi-contract 2G2
CHAPTER XVI.
TORTS BETWEEN AGENT AND THIRD PARTY.
211. Agent liable for misfeasance 263
212. Whether liable for non-feasance 2o;3
213. Special instances of misfeasance 264-
214. Whether principal and agent liable jointly 266
215. Liability of third person to agent for torts 267
23oo!t II.
MASTER AND SERVANT.
INTRODUCTION.
216. Scope of the subject of master and servant 271
PART I.
WHO IS A SERVANT?
CHAPTER XVII.
INDEPENDENT CONTRACTORS.
218. General rule 274
219. Exceptions — Selecting competent contractor 275
220. — Contracting for nuisance 275
221. — Contracting for unsafe result 276
222. — Statutory liability to construct safely 276
223. — Contract liability to construct safely 277
224. — Extra-hazardous work 277
Xviii TABLE OF CONTENTS.
Section P»8!«
2-2:). Exceptions — Safety of premises 278
221). — Interference by employer 278
227. Resumption of control by owner 279
CHAPTER XVllI.
TRANSFER OF SERVICE.
228. General rule .280
220. Hiring horses ami driver 280
230. Hiring macliine and operator 283
231. Servant sent to work on another's premises 284
232. Physician employed for benefit of servants or passengers . . . 28i
233. Sleeping-car porters also servants of railroad company .... 285
CHAPTER XIX.
COMPULSORY EMPLOYMENT OR SERVICE.
234. Meaning 286
235. Liability for servant compulsorily employed 286
236. Status of one compelled to serve 288
237. Parent and child 289
238. Husband and wife 289
CHAPTER XX.
SUB-SERVANTS AND VOLUNTEERS.
239. Sub-servants 291
210. Volunteers 292
PART IT.
LIABILITY OF MASTER FOR TORTS AND CRIMES OF
SERVANT.
CHAPTER XXI.
LIABILITY OF MASTER TO THIRD PERSONS FOR TORTS OF SERVANT.
242. Conditions of liability 295
243. Wrongdoer must be defendant's servant 295
244. Servant must be about his master's business 297
245. Servant must be acting within the course of bis employment . . 298
TABLE OF CONTENTS. XIX
Section Page
246. Same : acts commanded by master 299
247. Same : acts ratified liy master 300
248. Same : acts which master reasouably led servant to believe were
authorized 301
249. Same: acts impliedly authorized 302
250. Same : acts for master's benefit 304
251. Same : acts for servant's benefit 305
252. Wilful or malicious torts : (1) in furtherance of the employment . 305
253. Same: (2) injuries to passengers 310
254. Same : (3) misuse of dangerous instrumentalities 311
255. Liability of master for exemplary damages 313
250. Imputed notice 314
CHAPTER XXII.
LIABILITY OF PUBLIC AGENCIES OR PUBLIC CHARITIES FOR TORTS
OF SERVANTS.
257- General doctrine 315
258. Liabihty of the state and its agencies 315
259. Liability of municipal corporations 316
260. Lial)ility of public officer 317
261. Liability of public charity 318
262. Liability of private person served by public officer 321
CHAPTER XXIII.
LIABILITY OF MASTER FOR PENALTIES AND CRIMES.
263. Introductory 322
264. Liability to private penalties 322
265. Criminal liability generally 323
266. Absolute liability 324
267- Authorized crimes 327
268. Negligent failure to control 328
PART III.
LIABILITY OF MASTER FOR INJURIES TO SERVANT.
CHAPTER XXIV.
LIABILITY OF MASTER TO ONE SERVANT FOR TORTS OF ANOTHER
SERVANT.
270. Classification of servants 330
271. The fellow-servant rule 331
XX TABLE OF CONTENTS.
Section Page
272. Evolution of the rule o32
273. Fellow-servants enij)loyed iu the same common service .... 335
274. First exception : the vice-principal doctrine 338
275. Same: the superior officer test 339
276. Same: the non-assignable duty test 340
277. Same : summary of vice-principal doctrine 344
278. Second exception : incompetent fellow-servants 3^4
279. Third exception : Statutory provisions 345
CHAPTER XXV.
LIABILITY OF MASTER TO SERVANTS FOR HIS OWN TORTS.
280. Introductory 350
281. Negligent operative act 350
282. Negligent performance of uoa-assigaable duties 351
283. Servant's assumption of risks 352
284. Servant's contributory negligence 356
285. Wilful torts 357
PART IV.
LIABILITY OF SERVANT FOR TORTS.
CHAPTER XXVL
servant's LIABILITY FOR TORTS.
1. Liability to Master.
287. Gratuitous service 360
288. Paid service 3G0
2. Liability to Fellow- Servants.
289. Liable to co-servant for misfeasance 361
3. Liability to Third Persons.
290. Liable for misfeasance, but not for non-feasance 362
291. Meaning of non-feasance 302
292. Misfeasance 365
293. Liability for torts of fellow-servants 365
294. Public servants : acts of state 366
TABLE OF CONTENTS. XXI
PART V.
LIABILITY OF THIRD PERSON TOR TORTS TO MASTER OR
SERVANT.
CHAPTER XXVn.
LIABILITY OF Tllllil) PERSON FOR TORTS.
Section Page
296. Personal injuries to servant 368
297- Seduction of servant 369
298. Enticing away a servant 370
299. Procuring discharge or nou-employment of servant 372
300. Summary as to interference with contract relations 373
APPENDIX.
New York Factors Act 375
English Factors Act 377
Massachusetts Employers' Liability Act 381
INDEX 385
CASES CITED
A.
Page
Abbey v. Chase 254
Abbott V. Abbott 290
V. llapgood 44
Abel V. Delaware & H. C. Co. 341,
352
V. Sutton l-'i8
Abrabains r. Bullock 281
V. Dcakiu 210, 308, 309
V. Kidney 369
Abrath v. Northwestern Ry. 211
Ackert i'. Barker 103
Adams v. Flanagan 146
V. Freeman 300
V. Ins. Co. 139
V. Irviug Nat. Bank 201
i;. Power 56
V. Robinson 107
Adams Mining Co. v. Senter 101
Adumson c. Jarvis 104
Addison v. G.indasequi 169, 235
JFAua. N. B. v. Ins. Co. 146
Aggs V. Nicholson 244
Agnes Otto, The 287
Ahern v. Baker 77
V. Goodspeed 140, 141
Alabama, etc., R. v. Hawk 184
Albany, etc., Co. v. Luudberg 261
Alhro V. Jaquith 361
Alcorn's Exec. v. Cook 38
Aldrich v. Bostcm & Worcester R. 298
Aldridge v. Stuyvesaut 372
Alexander v. Jones 50
V. Southey 265
V. University 101
Alia I". Nadean 97
Allan I'. State Steamsliin Co. 285
Allen r. Bryson 26, 95
V. Colliery Engineer's Co. 96, 97
Page
Allen V. Flood 209, 267, 372, 373
V. Ilartfield 264
V. London, etc., Ry. 303, 309
V. McKibbin 100
V. Merchants' Bank 109, 119
V. Miller 244
V. News Pub. Co. 209
V. Railway Co. 310
V. St. Louis Bank 219
V. South Boston R. 190, 206
V. Suydam 109
Allkinsi^.'jupe 103,104
Althorf V. Wolfe 291, 292
Alton V. Midland Ry. 3G8
Americau Wire and Nail Co. v.
Bayless 206
Ames V. Union Ry. Co. 224, o>;8
Ancona v. Marks 48, 213
Anderson v. Boyer 283
V. Ogden, etc. Co. 340
V. Sanderson 182
V. State 327
Andres v. Wells 309
Andrews v. JEtna Life Ins. Co. 52
v. Green 307
Angel V. Felton 20O
Angle V. Chicago, etc. Ry. 209, 224, 372
Anon. V. Harrison 81
Anonymous (12 Mod. 514 (1701)) 67
Ap])eal of Kister!)Ock 206
A]>pleton V. Biuks 2"{7
Arey v. Hall 133
Arff *'. Star Fire Ins. Co. IIS, 192
Argersinger v. Macnaughton 141, 150,
249
Arkansas Smelting Co. v. Belden
Mining Co. 117,159
Armita;;e r. Widoe 28, 53, 55, 58
Armour i-. Mich. Cent. 11. 195, 207
XXIV
CASES CITED.
Page
Armstrong v. Oregon, etc. E. 334, 3.30,
340
V. State Iiis. Co. 144
V. Stokes 168
r. Toler 39
Arnold V. Hart 63
V. Poole 39
('. Swenson 248
Arthur v. Barton 157
Ash v. Guie 32, 234
Asliley V. Dixon 372
Ashtou V. Spiers 309
Ashwortb c. Stanwix 3.50
Atchison, etc. 11. v. JMcKee 336
V. Zciler 284
Atkinson v. Cotesworth 261
Atkyns v. Amber 262
Athiuta R. Co. v. Kimberly 274, 279
Atlantic, etc. R. v. Dunn 314
Atlas 8.S. Co. V. Colombian Land
Co. 23.5
Atlec i\ Bartholomew 53
Attorney-General v. Riddle 328
V. Siddon 328
Attwood V. Munnings 136
Audenried v. Bctteley 86
Angust, The 157
Aulrman v. Lee 146
Austin r. Guardians of Bethnal
Green 39
Austrian v. Springer 140
Auty V. riutchinson 255
Ayer v. Tilden 216
Ayrault v. Pacific Bank 120
B.
BaVicock ;•. Beman 247
Bailey v. Rome, etc. R. 341
V. Troy, etc. Co. 9
Bain v. Brown 110
Baines v. Ewiiig 132, 133. 136, 144,
147
Bnird i;. Shipnian 264, 364, 365
Baker v. Diusmore 216
V. Morris 289
V. New York N. B. 226
BaMorstoii r. Hubber Co. 121
Baldwin v. Bank 177, 248
Baldwin Bros v. Potter 112, 113
Page
Ball !'. Bruce 371
Ballou V. Talbot 231, 241
Baltimore, etc. R. v. Pierce 308
Baltzcu V. Nicolay 23 1 , 232, 233
Bank c. American Dock & Trust
Co. I'JO, 204, 206, 207
V. Bossieux 124
j;. Butler 120
V. Cook 241, 242
r. Cushman 191
V. Monteath 243
V. Owstou 210
V. Patterson 39
V. R. 70
V. Town 36
V. Vanderhorst 216
Bauk of Batavia v. New York, etc.
R. 68, 195, 203, 207
48
248
248
61
207
248
143
109
107
297
300
172, 237
182
94, 150, 152
265
184
Bank of Beloit v. Bcale
Bank of Genesee v. Patchiu
Bank of New York v. Bank of
Ohio
Bank of Owensborough v. West-
ern Bank
Bank of Palo Alto v. Pacific Postal
Tel. Cable Co.
Bank of the State ?>. Wheeler
Banner Tobacco Co. v. Jenison
Bannon v. Warfield
Barber v. Taylor
Bard v. Yohn
P>arden v. Felch
Bariiara v. Bell
Baring v. Clark
V. Corrie
Barker v. Furlong
V. St. Louis, etc. R
Barlow v. Congregational Society 239,
244
Barnard v. Coffin 117, 120
Barnes v. Ontario Bk. 138, 156
V. Trenton Gas Light Co. 1 90
Barnctt v. South London Tram.
Co. 180
Barnstable, The 288
Baron i'. Husband 257
Barrett v. Deere 145
Barron ?•. Detroit 317
Barrows v. Cushway 82
Barry r. Page 236, 237
Bartholemew v. Jackson 26, 94
CASES CITED.
XXV
Page
Bartlctt V. Tucker
234
Banley v. Kiclitiiiyer
369
Barton v. Moss
111
Bartonshill Coal Co. v. Rcid
332
Barwick v. English Joint Stock
Co. 195, 199, 200
203
305
Bates V. American Mortgage
Co.
192
V. Pilling
263
V. West borough
317
Batty V. Carswell
127
146
Baulec v. N. Y., etc. R.
345
Bawden v. London, etc. Co.
187
Baxter v. Sherman
174
Bayley v. Wilkius
142
Beach v. Ficke
257
Beal V. Soutli Devon Ry.
108
122
Bean v. Pioneer Mining Co.
171
242
Beardslee v. Ricliardson
122
Beattie v. Lord Ebury
254
Beaufort v. Neeld
137
Beckham v. Drake
237
Beecher v. Venn
142
Belfield v. National Supply Co.
174
Bell V. Josselyn 362,
363
305
V. McConnell
101
102
Bell's Gap R. R. v. Christy
44
Benjamin v. Dockham
73
Bennett v. Allcott
369
V. Bates
266
V. Davis
28
V. Juilson
201
V. Lathrop
235
Benson v. Liggett
48
Bentley v. Doggett 127,
132,
137
Benton v. Pratt
372
V. Trustees
320
Benzing v. Steinway
352
Berea Stone Co. v. Kraft 3.39,
.343,
344
Berg V. Parsons 275,
278,
279
Bergh v. Warner
73
Bergman v. Hendrickson
308
311
Berkeley v. Mardy
37,
258
Berkey c. Judd
238
Bernshouse r. Aljbott
173
Berry v. Barnes
142
Betteley v. Reed
112
Bexwell v. Christie
107
Beymer v. Bonsall
169
Bibb V. Allen
104
Bickerton v. Rurrell
259
260
Bickford c. :Mcuier 66,
138
143
Bid die v. Bond
Bicrce v. Red Bluff Hotel Co.
Bigelow V. Livingston
Page
112
187
136
Biggs V. Evans 8, 65, 218, 219
Bi<4ley v. Williams 183
Billings V. Mason 50
Bird V. Boulter 35
V. Brown 58, 60
Bittle i>. Camden & Atl. R. 312
Bixby V. Dunlap 370
I'. Moor 103
Black V. Christchurch Finance Co. 277
Blackburn v. Haslam 187
V. Scholes 78
V. Vigors 187
Blackstone v. Butterraore 79, 89
Blackwell v. Ketcham 132, 146
Blades v. Free 84, 253
Blaisdell r. Aheru 103
Blake i-. Ferris 274, 277, 278
V. Lanyon • 370
Blakely v. Bennecke 234
Blanchard v. Kaull 244
Bliven v. Hudson River Rd. Co. 1 12
Bliss V. Sneath 258
Blood V. French 1 53
Blore V. Sutton 1 1 5
Blumenthal v. Shaw 209, 358, 373
Board v. Howell 36
Bock V. Gorrisen 94
Bodge V. Hughes 323
Bodine v. Killeen 31
Bollman v. Loomis 39
Bolton Partners v. Lambert 52
Bonaparte i'. Wiseman 277
Bond V. Evans 325, 326
Bonito V. Mosquera 221
Bonncy v. Morrell 155
Bonynge v. Field 230
Boorman v. Brown 139, 152
Booth V. Mister 292
Borchcrling I'. Katz 170, 237
Borden v. Boardman 159
Borries v. Imperial Ottoman Bank 173,
174
Boston ?•. Simmons 223
Boston Ice Co. v. Potter 45, 158, 159,
175, 260
Boston, etc. R. v. Whitcher 250
Boswell V. Barnhart 289
V. Cunningham 110
XXVI
CASES CITED.
Page
Boulton I'. Jones 45, 158, 260
Buurlier v. Macauley 224, 371, 373
Boweu V. Hall 3"2
V. Joues 92
Bower L\ Teato 277
liowlcr (-'. O'Connell 299
Bowliug Greeu Saviugs Bank v.
Todd 94
Boyce v. Bank 1^0
Bovson V. Thorn 372, 373
Biacey v. Carter 98
Bnukelt v. Luhke 274
Bradford i;. Hanover Ins. Co. 202
Bradish v. Belknap 67
Bradlee r. Boston Glass Manu-
factory 1 " 1 ,
Bradstreet v. Baker 171,
V. Everson
Brady v. Todil 139,
Brainerd c. Dunning
Branch v. International , etc. By.
Brannock v. Elmore
Bray v. Gunn 61,
V. Kettell
Brazil Coal Co. v. Gaffney
Brevig v. Chicago, etc. 11. 304,
Brice v. Bauer
Briggs r. Partridge 170, 237, 239,
i;. Spaulding
Brigham v. Palmer
V. Peters
Bristow ('. Whitmore
Briti.sh Mutual Banking Co. v.
Charnwooil Forest By.
British Waggon Co. v. Lea
Britton v. Turner
Broadbend v. Barlow
Brock V. Jones
Brockway v. Allen
V. Mullin
Brodeur v. Valley Falls Co.
Brohl V. Lingeman
Bronson's Ex'r v. Chappell
Brook V. Hook
r. N. Y. etc. R.
Brookhaven v. Smith
Brooks V. Has.sall
V. Jameson
V. New Durham
Brookshire v. Brookshire
68,
203,
13/
244
238
120
141
46
313
275
108
236
355
307
314
251
124
50
178
50
195,
204
159
100
225
59
240
, 143
336
289
66
59
207
64
139
145
155
79
Brothers i-. Bank
Bronghton r. Silloway
Brower v. Wooten
Brown i\ Andrew
V. Boston Ice Co.
t-'. Bradlee
V. Howard
V. Lally
V. Lent
V. Maxwell
I'. Re i man
V. Smith
Browning v. Hinkle
Bruce r. Reed
Bryan v. Adler
Bryant v. Bank
' V. Flight
V. Moore
Bryne
Page
189
145, 153
57
35
308
230, 252, 255
357
145
365
332
169
141
202
309
323
135, 138
93
133
Massasoit Packing Co. 132,
133, 134
Bryson v. Lucas 238
Buckalew v. Tennessee Coal, etc.
Co.
Buckley ;-'. Ilumason
Buckwalter r. Craig
Buffalo Lubricating Oil Co. v
Standard Oil Co.
BuUer v. Harrison
Bunker v. Miles
Burdick v. Garrick
Biirkinshaw v. Nicolls
Burlingamec. Brewster
Burlington Ins. Co. u. Gibbons
Burniesler v. Norris
Bnriiham v. Kidwell
Burns v. Pethcal
V. Poulsom
Burnside v. Grand Trunk Ry.
Bnron v. Denman
Bnrrill v. Nahant Bank
Burt (.'. Palmer
Burton v. Goodspeed
r. G. H. & S. R.
V. Great N. Ry.
V. Perry
Busch V. Wilcox
Bush V. Cole
V. Steinman
Bussey ?'. Donaldson
Butchers', etc. Bank v. Ilubbell
Butler V. C, B. & Q. Ry. Co.
289, 335
103
141
211
2.56
110, 115
114
63
242
144
138
29
362
298, 299
182
263, 366
38
182
164
281, 283
99
189
201
1.5.3, 232
278,291
287
217
178
CASES CITED.
XXVll
Page
Butler t'. Dorman 138, 140, 145
V. Knight 78
V. Manhattan Ry. Co. 181, 184
V. Maples 20, 129, 131, 133, 142
V. Murray 75
V. Trice 34
V. TliDinpson 35
Buttcrfiekl v. Ashley 370
Butts V. Phelps 107
Byington v. Simpson 165, 166, 170, 237
Byrd v. Hughes 39
Byrne v. Eastmans Co. 352
j;. Kansas City, etc. R. 283
Cabot V. Shaw
Cahen v. Piatt
Cahokiu v. Rautenberg
Cairns r. Page
Calais Steamboat Co. v. Van
Calder v. Dobell
Canulen, etc. Co. i\ Abbott
Cameron v. New York Cent
R.
V. Oberlin
Campbell v. Cooper
V. Hillman
V. Portland Sugar Co.
V. Providence
V. Reeves
V. Smith
Cannell v. Smith
Capen r. Pac, etc. Ins. Co
Capp I'. Topham
Capper ;;. R. Co.
Cardot v. Barney
Carew v. Rutherford
Carey v. Kochereau
Carney v. Barrett
Carnochau v. Gould
Carpenter v. Far iis worth
V. German Am. Ins. Co.
Carr v. Clarke
V. Jackson
V. Ry. Co.
Carriger v. Whittington
Carrol r. Bird
Carroll v. State
V. Staten Is. R.
Pelt
165,
136,
., etc.
345,
263,
266,
115,
240,
118,
234,
256
101
255
221
217
170
146
352
277
371
264
364
297
117
39
102
82
105
343
318
370
364
74
151
245
192
369
236
140
253
358
326
351
Page
Carter v. Beckwith 29
V. Howe Machine Co. 210
V. Slocoml) 87, 89
Cartwright v. Wilmerding 221, 222
Ca.sco Bank v. Keene 59
Casco N. B. i;. Clark 239, 240, 245, 246
Case Mfg. Co. v. Soxmau 240, 242
Casement v. Brown 9
Cass V. Rudele 237
Castle V. Duryee 317
V. Noyes 104
Caswell V. Cross 155
Catlin V. Bell 115, 117
Caughey v. Smith 370, 371
Cave V. Cave
190
Central of Georgia R. v. Price
75
Central R. v. Keegan
342
V. Peacock
310
Central Trans. Co. v. Pullnian Car
Co.
72
Chadwick v. Knox
94
Challi.<s V. Wylie
361
Chambers v. Baldwin 372
373
V. Seay 79, 89
Chandler v. Coe 165, 170
236
Chanoine v. Fowler
57
Chapin v. Holyoke, etc. Ass'n
321
Chapman v. Erie Co. 343
352
V. N. Y. Cent., etc. R.
298
Charles v. Eshleman
32
Chase v. Debolt
250
Chastain v. Bowman
34
Chattachoochee Brick Co. v. Bras-
well
355
Cheever v. Pittsburgh, etc. R.
147
Chezum v. Kreighbaum
8
Chicago & Alton R. v. May 339,
.343,
344
V. Pillsbury
311
V. Sullivan
345
Chicago Brick Co. v. Sobkowiak
356
Chicago, B. & Q. R. v. Honey
225
Chicago, etc. R. v. Brackman
304
V. Dickson
312
r. Epperson
r. Kerr
V. Moranda
V. Ross
r. Swan
V. West
China, The
312
351
334, 336, 337
18, 342
3.17
307
288
XXVIU
CASES CITED.
Page
Chipley v. Atkinson 267, 372, 374
Cliipiiian r. Forest 245
Church V. Chicago, etc. "Ry. 292, 336
Ciriacii v. Merchauts' Woolen Co. 334
Citizens' Street K. v. Willoeby 314
City N. B. V. Dun 199, 200, 202
City of Anderson v. East 316
City of Boston v. Simmons 34
City of Fiudlay v. Pertz 49, 56, 148, 224
City of Kansas v. Hannibal, etc. R. 238
Citv of Richmond r. Long's Adm'r
316, 320
Claflin V. Cont. Jersey Works 143
i;. Farmers', etc. Bk. 1 56
V. Lenhcim 80, 81
Clark V. Clark (63 N. J. L. 1) 370
V. Clark (46 Conn. 586) 74
V. Cumming 152
V. Lovering 264
r. Randall 103, 154
V. Shee 217
Clarke v. Courtney 258
i;. Tipping 112,113
Clay V. People 328
Cleg-horn v. N. Y. Cent. & H. R. R. 313
Clerk V. Laurie 89
Cleveland, etc. R. v. Jenkins 358
Cleveland, etc. Railroad Co. v. Wal-
rath 285
Clews V. Jamieson 53
Clifford V. Burton 182
Clougii V. Clough 38
Clowdis V. Fresno, etc. Co. 314
Clutterbuck v. Coffin 253
Coal & Mining v. Clay 344
Coates V. Lewis 1 73
Cobb V. Columbia, etc. R. 313
V. Knapp 169, 250
V. Superior Court 35
Cockcroft )'. Muller 154
Cocke V. Dickens 176, 258
Cockran v. L-lam 115, 117
Coddington r. Goddard 35
Coe V. Smith 100
V. Wise 320
Copgin V. Central R. Co. 283
Coggs V. Bernard 122
Cohen V. Dry Dock, etc. R. 308
V. Kittell 107
Cole !'. O'Brien 231
Coles V. Trecothick 117
Page
Collen V. Gardner 127, 131
V. Wright 230, 231
Collins V. Buck 94
V. Buckeye State Ins. Co. 240
V. Cooper 142
V. Tillou 112
Collman v. Mills 325
Columbia Bridge Co. v. Geisse 179
Colyar v. Taylor 123
Combe's Case 115
Combs V. Scott 47, 51
Comegys v. American Lumber Co. 179
Comfort V. Graham 103, 234
Commercial Bank v. Armstrong 217
V. French 177
V. Norton 116
Commercial, etc. Co. v. State 144
Comm. V. Briant 327
V. Canal Commissioners 35
V. Kelley 325
r. Morgan 324, 328
V. Nichols 325, 327
V. Stevens 327
V. Wachendorf 325, 327
Concord i'. Bank 156
Cone I'. Delaware, etc. R. 351
Coukey v. Bond 110
Conrad v. Ithaca 316, 317
Consolidated Coal Co. v. Haenni 353
V. Seniger 287
Consolidated Co. v. Curtis 265
Consolidated Nat. Bk. r. Pacific,
etc. Co. 138
Constant v. University of Rochester 189
Continental Ins. Co. v. Ruckman 143,
144
Conway v. 111. Cent. R. 351
Conwell y. Voorhees 317
Cook V. R. Co. 353
V. Tullis 60
Cooke V. Eshelby 174
V State Bank 156
I". Wilson 261
Cooley u. Perrine 141
Coombs V. New Bedford Cordage
Co. 3.53, 355
Coon V. Syracuse, etc. R. 332, 333, 337
Cooper V. Milwaukee, etc. R. 333
Cope V. Rowlands 103
Copeland v. Mercantile Ins. Co. 79
Coppen I'. Moore 326
CASES CITED.
XXIX
Page
Coppiiis V. New York Cent., etc. R. 341,
34.5
Cordes v. Miller 83
Corn foot V. Fowke 198, 199
Connval v. Wilson 49
Corser v. Paul .59
Costigan v. Mohawk 98
Cot hay v. Feuiiell 161, 164
Couglitn- ('. Globe Woolen Co. 278
Countess of Salop v. Crompton 361
Coursolle v. Weyerhauser 28, .55
Cousins V. Hannibal, etc. R. 297, 313
Couturier v. Hastie 121
Covell I'. Hart 230
V. Hill 221
Coventry v. Barton 105
Covington, etc. Bridge Co. v.
Steinbrock 277
Cox V. Bruce 206
V. Prentice 256
Cragie v. Hadley 188
Cragin v. Lovell 239, 241
Craig V. Charleston 317
Craighead v. Peterson 135, 136
Crain v. First N. B. 138, 139, 156
Craker v. Chicago, etc. R. 310, 313
Crane v. Gruenewald 131, 145
Crawford v. Scovell . 29
Cream City Glass Co. v. Fried-
lander 251
Cregan v. Marston 341
Cribben i-. Deal 32, 38
Crispin v. Babbitt 334, 338, 342, 343,
344, 350
Cromwell v. Benjamin 74
Cropper v. Cook 103
Crosby v. Hill 145, 152
Cross V. Haskins 145
Crosskey v. Mills 114
Crowfoot V. Guruey 87, 90, 257
Crown V. Orr 353, 355
Crump V. lugersoU 34
Cullen V. Thomson 263
Culver V. Streator 317
Cummings v. Chicago, etc. R. 285
V. Sargent 143
Cummins i\ Heald 120
Cunningham v. Keardon 74
Curran v. Galen 372
Curtiu V. Somerset 365
Curtis V. Iviley 278
Curtis V. Williamson
Cashing v. Rice
Cutter V Gillette
V. Powell
D.
Page
169
223
97, 98
92,96,99
Dadswell v. Jacobs 112, 113
Dale I'. Donaldson 231
Dalheim v. Lemon 289
Daltou V. Irviu 98
Daly V. Bank 120
Dan by v. Coutts 77
Daniel y. R. 311
V. Swearenger 224
D'Arcy v. Lyle 104
Darrow I'. Home Produce Co. 164, 165,
172, 173, 176
Danghcrty v. Herzog 365
Daves v. Southern Pac. Co. 361
Davidson v. Donaldson 168
V. Goodall 370
Davis V. Caldwell 74
V. England 241
V. Forbes 355, 356
V. Hamlin 1 10
V. Kobe 150
V. Lane 30, 84
V. Maxwell 101
V. Waterman 192
Dawes v. Jackson 171
Day V. Holmes 139
Daylight Burner Co. v. Odlin 130, 139,
141, 150
Dayton v. Warne 238
Deakin v. Underwood 35
Dean v. Broek 364
V. Peel 369
Dearborn v. Bowman 26
De Bussche r. Alt 36, 111, 115, 118,
119, 120
Deford v. State 275
DeGraff v. New York Cent., etc. R. 356
Delafield v. Hlinois 136
V. Smith 95
Delaney v. Rochereau 263, 264, 364
Delano v. Case 124
Delaware, Lackawanna, etc. R.
Co. V. W. R. Har.ly 284
Demarest v. Barbadoes 215
XXX
CASES CITED.
Page
Deining v. Terminal Ry. Co. 277
Dempscy v. Chambers 42, 50, 52, 57,
60, 194, 298, 300, 301
Denney v. Manhattan 11. 362
Denni3 v. Clark 74, 369
Denuison v. Sevmuiir 287
Denver, etc. R. i'. Harris 313
Derby i'. Johnson 97
Derry v. Peek 190
Despatch Line r. Bellamy Mfg.
Co. 5.^), 143
Devall V. Burbridge 108, 111
Devendorf v. West Virginia, etc.
Co. 241, 243
Devinney v. Reynolds 238
Devoss I'. Gray 33
Dewey i". Union School Dist. 83
DeWitt i;. Walton 241
Dexter i--. Hall 29
V. Norton 83
Dick V. Cooper 182
Dickenson i'. Naul 261
Dickinson v. Bank 87, 89
V. Calahan's Adm'rs 159
Dickson i;. Waldrou 321
Die Elbiuger Actiengesellschaft v.
Clave 1 70, 236
Dicfeiiback v. Stark 100, 101
Dieringer r. Meyer 81
Dingle i'. Hare 139, 141, 1.'30
Distilled Spirits, The 186, 189
Diversy v. Kellogg 141
Dixon 'f. Bell 368
V. Chicago, etc. R. 334, 336
r. Ewart 86
Dodd V. Farlow 141, 1.52
Dodge y. Granger 317
V. Hopkins 53
Doe V. Gold win 57
r. Walters 57
Dolan V. Thomp-son 121
Donahoe v. McDonald 217, 267
Donaldson r. (Commissioners 319
Donelley v. Popham 58
Donivan v. Manhattan Ry. 301
Donnelly v. San Francisco Bridge
Co. 343
Donovan v. Laing 280, 283
V. McAlpin 318
Dorclic^ter Bk. v. New England
Bk. 120
Page
Doublcday v. Kres3 145
Dougherty v. West Superior Iron
Co. 356
Dow V. Johnson 366
Downes v. Harper 318
Downey v. Burke 100
V. Low 276
Downmau v. Williams 230
Drain v. Doggett 146
Dresser i;. Norwood 189
Drew r. Nunn 29, 30, 84, 233
Drinkwater v. Goodwin 150, 262
Drummond v. Crane
Drury v. Foster
Ducarrey v. Gill
Dugau V. Anderson
Dun V. City N. B.
Duncan v. Baker
V. Findlater
V. Hill
V. Jaudon
i;. Niles
Dung V. Parker
Dunlop V. Muuroe
Dunn I'. Hall
V. Macdonald
Durant i'. Roberts
Durden v. Barnett
Durkin v. Kingston Coal Co.
Durnford v. Patterson
Durrell r. Evans
Duseiibury v. Ellis
Dustan v. Mc Andrew
Dutton V. Marsh
V. Willner
Duvall V. Wellman
Dwindle r. N. Y. C. & H. R. R. 285, 310
159
39
171
97
120, 202
100
318
103, 105
190
231
231
317
209
255
45
368
287
122
137
231
75
239
113, 115
39, 103
Dyer v. Miuiday
Dvett I'. Hvnian
E.
Eager v. Grimwood
Eaglesfield v. Londonderry
Earle v. Earle
Eason v. S. & E. T. Ry.
East St. Louis Connecting Ry. i*.
Reames
Eastern R. Co. i'. Benedict
Eaton V. New York Cent., etc. R.
308
299
369
264
31
293
313
164
342
CASES CITED.
XXXI
Page
Eberts r. Selover 50
Eddy V. Livingston 122
Edgecombe y. Biickhout 85
Edmunds I'. Busliell 138, 142, 143, 147
Edwards v. Dillon 32
Egglcston V. Boardman 116, 117, 176
V. Wagner 38
Eichbaum r. Irons 235
Eiglimy v. Union Pac. Ky. 319
Eiscmau v. Schneider 37
Eldridge v. Atlas Steamship Co. 355
V. Walker 110, 115
Electric Ky. v. Lawsou 340
Elkhart County Lodge r. Crary 39
Elledge v. Ry. Co. 183
Elliott V. Chicago, etc. Ry. 356
V. Swartwout 256
V. Tur(]uand 86
Ellis V. Goulton 256
V. New York, etc. R. 351
V. Sheffield Gas Consumers Co. 275
Elwell I'. Shaw 171
Empire Mill Co. r. Lovell 182
Engel V. Eureka Club 275
Engelhart v. Farraut 292, 299
Entwisle v. Dent 136
Eoff V. Irvine 11 1
Episcopal Church u. Wiley 113
Ermentrout v. Girard, etc. lus. Co. 144
Espy y. Bank 156
Estes V. Worth! ngtoa 362
Evans v. Davidson 299, 305
V. Smallcombe 54
V. Wain 174
V. Walton 371
Evansville R. v. Guyton 345
Evarts v. St. Paul, etc. Ry. 293
Evrit V. Bancroft 262
Ewald V. R. Co. 344
Ewan V. Lippincott 284, 335
Exchange Bank v. Rice 159
Exchange N. B. v. Third N. B. 119
Ex parte Birmingham Banking Co. 117
Bright 8
Cooke 226
Edwards 256
Hartop 230
Mather 104
Snowball 86
Sutton 1 1 6
White 8, 227
F.
Page
Factors, etc. Co. v. Maine Dry
Dock, etc. Co. 191
P'airbanks v. Snow 28
Fairchild v. King 1 17
V. McMahon 60, 201
Fairfield Savings Bank v. Chase 189,
191
Fairlie fc". Fen ton 213, 262
V. Hastings 180, 181, 182
Fairmount Ry. v. Stutler 368
Falk V. Moebs 245, 248
Farebrother v. Simmons 35
Farmers', etc. Co. v. Wilson 84, 88, 253
Farmers' & M. Bank v. Butchers'
& I). Bank 70
Farmers', etc. Bank v. King 226
Farmington Sav. Bank r. Buzzell 146
Farr v. .John 153
Farrel Foundry Co. v. Dart 191
Farrington v. South Boston R. 206
Farry v. Great Northern Ry. 309
Farwell v. Boston, etc. R. 193, 332
Faviell v. Eastern Counties R. 155
Fay V. Winchester 136
Fellows V. Hartford, etc. Co. 80, 81
Felt V. School Dis. 109
Felton V. Harbeson 343
Feltus V. Swan 364
Fenn t». Harrison 127, 132
Feoffees of Heriot's Hospital v.
Ross 318
Ferguson v. Carrington 48
Ferrand I'. Bischoffslieim 175
Fetrow v. Wiseman 27
Fifth Ave. Bank v. Forty-Second
St., etc. Co. 195, 206
Firbank's Ex'rs v. Humphreys 231, 232
Fire Ins. Patrol v. Boyd 318, 321
First N. B. v. Cody 63, 64
V. Fourth N. B. 109
V. Hall 248, 259
V. Shaw 220,2:21
V. Spr.igue 120
V. Wall is 246
Fisher v. Drewett 96
V. Krutz 1 1 1
Fiske V. Fnders 297
P'itch V. Lewiston Steam Mills Co. 38
Fitzgerald v. Connecticut Paper
Co. 356
xxxu
CASES CITED.
Page
Fitzhugh 1-. Wiman 267
Fitzmaurice v. Bavley 51
Fitzsiinmons v. Josliu 199
I'. Railway Co. 307
Flamiagan v. California N. Bauk 156
Fleckuer v. Bauk of U. S. 00
Fleet V. Miirton 250
Fleming v. Hartford F. Ins. Co. 144
Fleniyug v. Hector 32, 33, 234, 235
Fler^h r. Lindsay 31
Fletcher v. Baltimore and Poto-
mac n. 301
V. G. W. El. Co. 20-
1-. llarcot 104
Flike V. Boston and A. R. 341, 352
Flinn & Co. v. Hoyle 2.'36
Flint V. Norwich
Floyd Acceptances, The
Flyun V. Messenger
311
137
73
209
180
248
54
152
341
164, 165
319
V. Pew
Folger V. Chase
Forhes v. Hagman
Forcheimer v. Stewart
Ford V. Fitchburg R.
V. Williams
Foreman v. Mayor
Fores v. Wilsou 370
Forney v. Shipp 250
Forsyth v. Day 238
V. Hastings 101
Fortune i-. Traiuor 309
Forward v. Cout. Ins. Co. 143
Foster v. Bates 46
V. Smith 260
V. Wadsworth-IIowland Co. 274
Fothergill v. Phillips 50
Fowler r. Callan 103
Fowles V. Bowen 357
Fowlkes V. Baker 74
Fo.x V. Chicago, etc. Ry. Co. 76
V. Peninsular Lead Works 341,352
V. Stevens 369
Fradley v. Hyland 163, 169
Fraker v. St. Paul, etc. R. 333
Frank r. Jenkins 48
Frankland v. Johnson 240, 244
Franklin v. R. Co. 351
Franklin Bank Note Co. v. Mackey 130
Frazier i;. Erie Bank 227
Freeman v. Cooke 131
Page
Freeman r. Glens Falls Paper Mill
Co. 355
u. Robinson 74
V. Roslier 51
Freeman's Bauk r. National Tube
Works 217
French v. CresswcU 307
Frenkel v. Hudson 190
Friedlander v. Ry. 68,69, 195, 202, 203,
204, 206
Frink v. Roe 88, 136, 141
Frith V. Cartland 225
Frixioue v. Tagliaferro 95
Frothingham v. Everton 107
Fruc i: Loriug 227
Fry V. Lockwood 256
Fuller V. Hooper 258
y. Jewett 341,344
V. Wilson 199
Fulton Mills v. Wilson 348
Furmau i'. Van Sise 369
G.
Gabriel.sou v. Waydell
Gadd V. Houghton
Gaetano & Maria, The
Gagnon v. Uana
Gaither v. Myrick
Gardiner v. Davis
Gardner v. Allen
V. Gardner
V. Ogden
Garland i'. Dover
Garner v. Maiigam
Garratt v. Cullum
Garrey i'. Stadler
Garth v. Howard
Gaussen v. Morton
Geisingcr v. Beyl
Gelatt V. Ridge
George v. Clagett
V. Gobey
Georgia R. v. Newsome
Gcrli ('. Poidebard Silk
German Fire Ins. Co. i'.
Gibbs V. Baltimore, etc.
Gibson v. Soper
V. Winter
Gihon V. Stanton
Mfg. Co.
Grunett
Co.
157
230, 252
157
280
75
261
173
38
113
248
201
162
93
180
87,89
111
61, 95
173
323
312
101
142
103
29
258, 262
121
Gilbert v. Holmes
V. How 33,
V. Scliwenck
Gill V. Bickncll
V. Middlcton
Gillespie v. Lincoln
Gillett V. reppercurne
V. Whiting
Gilley v, Gilley
Gilson V. Collins
Glaspie v. Keator
Glavin v. Rhode Island Hospital
Glencoe Land, etc. Co. v. Commis-
sion Co.
Goddard v. Grand Trunk R.
Godman v. Meixsel
Godshaw v. Struck
Godwin v. Francis
Gooch V. Association
Goodenow v. Tyler
Goodspeed v. East Haddam Bank
90,
147,
Goodwin v. Bowden
V. Roberts
Gordon v. Brewster
V. Bulkeley
V. Potter
Gorman v. Gross
V. Smith
Goss V. Stevens
Gould V. Norfolk Lead Co.
Governors, etc. r. Meredith
Grady v. American Cent. Ins. Co.
Grafton N. B. v. Wing 242,
Graham v. St. Charles St. Ry. 209,
Grammar v. Nixon
Grand Trunk Ry. v. Latham
Grant v Beard 42, 60,
V. Norway
t'. Ry.
Grapel v. Hodges
Graves v. Horton
Gray v. Agnew 219,
V. Durland
V. Ilaig
Great N. Ry. v. Kasischke
Great W. Ry. v. Willis
Green v. Elgie
V. Gilbert
V. Kopke
V. Maitland
112,
181
Page
79
1,35
368
35
122
317
110
49
74
361
224
319
372
314
103
75
233
319
150
211,
310
257
216
97
37
74
276
9
55
179
317
116
248
374
198
301
230
206
54
84
127
222
369
113
3.54
182
266
99
236
112
CITED.
XXXlll
Page
Green v. Mules
9
2, 96
V. New River Co.
361
Greenberg v. Whitcomb Lum
ber
Co.
361
Greenfield Bank v. Crafts
59
Greenfield Sav. Bk v. Simons
110
Greenlief v. Moody
150
Greenwood, etc. Co. v. Georgia
Hume Ins. Co.
110
Greer v. Louisville, etc. R.
340
Gribben i'. Maxwell
29
Grice v. Kenrick
262
Griffiths V. Earl of Dudley
346
349
V. Wolfram
361
Griggs V. Swift
80, 86
Grimes v. Young
308
Grinnell v. Wells
369
Grinton v. Strong
7
Grist r. Backhouse
176
258
Griswold i'. Gebbie
201
V. Haven
195
Grojan v. Wade
176
Groover v. Warfield
262
Grund v. Van Vleck
44
Guelich v. National State Bank
120
Guerreiro v. Peile
141
150
Gulf, etc. Ry. v. Kirkbride
301
Gulick V. Grover
130
,131
Gundlach v. Fischer
77
Gunn V. Roberts
157
Gurley v. Armstead
266
Gutlirie v. Armstrong
35
Guy Mannering, The
287
Gwilliam v. Twist 76,
291,
292
H.
Haas I'. Balcli
356
V. Damon
113
Iladley v. Ileywood
371
Ilagedorn v. Oliverson
43,46
Ilager i". Rice
247
Haines v. Pohlmann
145
V. Schultz
313
Hall V. Crandall
231
V. Finch
25, 26
V. Hollander
368
V. Lauderdale
232, 254
r. Storrs
109
Halley, The
287
XXXIV
CASES CITED.
Page
Ilalliday v. Nat. Tel. Co. 274
V. Stuart IJ'T
Ilaluptzok V. Great Northern Ry.
Co. 36,40, 118, 291
Hamilton v. Love 98
Hamlin v. A bell 263, 264
V. Sears -14
Hammond i'. Ilannin 56
Hancock v. Hodg.son 237
Hancock Bank v. Joy 243
Hand V. Clearfield Coal Co. 98
V. Cole 19
Hanford v. McNair 37, 5.^)
Hankius v. New York, etc. R. 341, 343
Hannon v. Siegel-Cooper Co. 196, 296
Hardy v. Shedden Co. 280, 282
r Waters 28
Harlan v. Ely 109, 141
Harley v. Buffalo, etc. Co. 351
Harper v. Little 84
V. Tiffin N. B. 169, 172
Harralson y. Stein 118
Harrigan v. Welch 261
Harrimau v. Stowe 184, 364, 365
Churchward
Harrington
V. Gies
Harris v. Johnston
V. Simmermau
V. Truman
Harrison v. Collins
I'. Grady
Harsant r. Blaine
Hart V. Aid ridge
V. Ten Eyck
Hartai< v. Ribbons
Hartfield v. Roper
Hartford Ins. Co. v. Farrish
Hartley's Appeal
Hartwig v. Bay State, etc. Co,
Harvey v. Merrill
v.'n. Co.
Haskell v. Starl)ird
Haskins v. Royster
Hastings v. Dollarhide
Hasty V. Sears
Hatch V. Ferguson
V. Squires
V. Taylor
Hathaway v. Johnson
Haven r\ Brown
Haver v. Central R.
235
55
138
264
236, 252
59
111,224
108
95
98
135
145
226
9
73
113
370
113
105
5
144
79
288
105
343
68, 201
224, 370
28
280, 284
191
178
131,133,134
200
81
310
Page
Hawk V. Garman 289
Ihiwke c. Cole 32,45
lluwkius I'. McGroarty 56
V. Kockford Ins. Co. 144
Ilawley v. Keeler 35
f. Northern Central R. 354
Ilawtavne v. Bourne 143
Hayes "f. Willio 105
Hays I'. McConnell 93
Hazard v. Spears 108
V. Tread well 15
Hazeltiue v. Miller 131
Head V. Porter 366
Heald v. Ken worthy 167
Healoy v. Lotlirop 321
Hearns v. Waterbury Hospital 319,320
Heath v. Go.slin
V. Nutter
V. Paul
Iledden v. Griffin
Heffron v. Pollard
Hefner v. Vandolah
Ilegenmyer v. Marks
Heineman v. Heard
Ilempfling i-. Burr 264
Henderson v. Ford 85
V. McNally 174
V. Mayhew 162
Henry v. Heeb 59
Hen.son v. Hampton 100
lleutz V. Miller 218
Herd V. Bank of Buffalo 45
Hermes v. Cliicago, etc. Ry. 184
Hern ('. Nichols 15,198
Herring I'. Hoppock 299
V. Skaggs 140, 141
Hertzog i;. Ilertzog 26, 93
Hess V. Rau 87, 89, 90
Hewett V. Swift 266, 300
Ilewlet V. George 289
Hexamer v. Webb 274
Hevu !-. O'llagen 49
Ileys r. Tiudall 108
Hihbard v. Peek 139
Hihhlcwhite V. McMorine 37, 38
Hicks y. Burhans 26,94
Ilierny. Mill 187
Iliggins V. Moore 138, 140, 145, 152
r. Senior 165, 251, 252
V. Watcrvliet Turnpike Co. 306
V. W. U. Tel. Co. 279, 284
CASES CITED.
XXXV
nilbery v. Ilatton 52, 57
Hill V. Boston 316
i;. Caverly 365
V. Morey 293
V. North 187
V. Wand 66
Hilts V. Chicago, etc. R. 345
Hinckley ;;. Arey 110
V. Southgate 36
Hines v. Charlotte 316
HirshfieUl v. Waldron 145
Hissong V. Richmond, etc. Ry. 349
Hitchcock V. Buclhinan 245
Hobhouse v. Hamilton 250
Hoboken Printing, etc. Co. l'.
Kahn 210
Hobson V. Hassett 241
Hochester v. De la Tour 97
Hodgson V. Dexter 171, 238, 255
Hoffman v. Carow 265
V. U. Co. 303, 304, 306
Hogan V. Shorb 174
V. Smith 352
Hogg V. Snaith 136
Holbrook v. Chamberlin 55, 56
Holden v. New York and Erie
Bank 188
Holding V. Elliott 230
Hole V. Sittingbourne R. Co. 276
Holland v. Russell 256
Hoiliday v. St. Leonard's 320
Hollins V. Fowler 265
Hollis V. Wells 370
Hollman i;. Pullin 234, 260
Holman v. Frost 215
Holmes v. Lucas Co. 215
Holt V. Ely 262
Home Machine Co. v. Ballweg 145
Homer Ramsdell Transportation
Co. V. La Compagnie Generale
Transatlantique 288
Honncr v. 111., etc. R. 3.33
Hood V. Keeve 180
Hoover v. Wise 191
Hopkins v. Mehaffy 254
V. MoUinieux 34
V. Oxley Stave Co. 374
Hoppe V. Savior 233
Horiord v. Wilson 96
Horgan v. Pacific Mills 369
Horn V. Cole 63
Horn V. Western Land Ass'n
Hornby v. Lacy
Horr V. Barker
Horton v. McCarty
Hough V. Texas, etc. R.
Houghton V. First Nat. Bk.
V. Matthews
Houldsworth v. Glasgow Bank
98
121, 172
222
35
356
248
1.50
199,
203
Housatonic Bk. v. Martin 191
Houseman v. Girard, etc. Ass'n 189
Hoverson v. Noker 289
Hovey v. Hobson 29
Howard v. Baillie 135
V. Chapman 151
V. Crowther 370
V. Daly 96, 97, 98
i;. Duncan 59
I". Patent Ivory Co. 44
V. Sheward 139
V. Worcester 317
Howard's Case 1 1 7
Howe V. Keeler 38
V. Newmarch 306
Howe Machine Co. v. Clark 178
Howell V. Batt 257
V. Caryl 155
V. Gordon 87
V. Graff 134
Howland v. Woodruff 221
Hubbard v. Tenbrook 142, 143, 164,
166
Hubbell V. Denison 156
Hudson V. Granger 174
V. Randolph 190
Huff V. Ford 10, 281
Hughes V. Graeme 233
V. Wamsutta Mills 85, 86, 99
Ilughson V. Richmond, etc. R. R. 335
II 111 but V. Marshall 31
Humble v. Hunter 159, 165, 175, 176,
259
Hun V. Gary 124, 125
Hundley r. Louisville, etc. R. 358
Hnuu V. Michigan, etc. R. 343
Hunt V. Douglass 117
V. Great N. Ry. 357
r. Rousmanier 79, 84, 88, 89
V. Wotton 369
Hunter v. Giddings 259
Huntington v. Knox 164, 165, 172
XXXVl
CASES CITED.
Page
135,
137
94
210
371
146
317
250
100
250
332
236
186
321
Huntley v. Mathias 67, 127, 130,
Hurlbert v. Bringli.im
Hiissey v. Norfolk, etc. R.
llutcheson v. Peck
IIutcliin<;s I'. Munger
Hutcliiiis I'. Brackett
Hutchinson v. Tatham
i: Wetmore
V. Wheeler
V. York
Hutton u. Bulloch 170,
Hyatt i;. Clark 47, 48, 51,
Hyde v. Cooper
I.
Illinois Cent. R. v. King 303
V. Latham 300, 307
Hliuois Steel Co. v. Mann 356
Ilsley I'. Merriam 174
Imperial Loan Co. v. Stone 29
Indianapolis Chair Mfg. Co. v.
Swift 179
Indianapolis, etc. Ry. v. Tyng 199
V. Morris 75
V. Watson 356
lunerarity i-. Merchants' Nat. Bk. 190,
191
In re Broomhead 94
Consort Deep Level Gold
Mines 65
Cunningham 138, 147
D'Angibau 34
Day 1 54
Hannan's, etc. Co. 89
London, etc. Bk. 99
North Australian Territory
Co. 115
Northumberland Avenue
Hotel Co. 44
Portuguese, etc. Mines 52
Succession of Lanaux 84
Insurance Co. v. Davis 87
International, etc. Ry. v. Ander-
son 304
Ireland r. Livingston 130, 136
Ironwood Stove Co. v. Harrison 54
Irvine v. Grady 187
V. Union Bank 58
Page
Irvine v. Watson 168
Irwin V. Reeves Pulley Co. 120
i;. Williar 39, 103
Isaacs i;. Third Ave. Railroad Co. 306,
310
Isberg V. Bowdea 258
Isham V. Burgett 236
V. Post 122
J.
Jackson v. Ilopperton
V. Mutual Benefit Life Ins. Co.
358
145,
146
V. Nat. Bk. 138, 139, 146, 147, 216
James ;;. Allen County 97
V. Bixby 252
V. O'Driscoll 26
V. Rickiiell 155
V. Russell 65
Janes v. Citizens' Bank 240
Jansen v. McCahill
38
Jefferson v. Asch
159
Jeffrey v. Bigelow
182
200
Jeffries v. Ins. Co.
35
Jenkins v. Bacon
123
V. Hutchinson
231
Jennings v. Lvons
99
Jetley ('. 11 ill'
130
Jett I'. Hempstead
113
114
JiLson V. Gilbert
37
Joel V. Morison
297
V. Woman's Hospital
319
Johanson v. Pioneer Fuel Co.
308
Jolmson V. Armstrong
250
r. Barber
362
365
V. Buck
153
V. Dodge
37
V. Hurley 67, 12C
, 130,
140
V. Johnson's Adm'r
84
V. Lindsay
335
I'. Martin
361
V. Nat. Bank
343
r. Richmond, etc. Ry.
348
V. Sumner
73
Johnston v. Milwaukee, etc.
Co.
127,
129
Jones V. Adler
96
I'. Atkinson
50, 59
V. Avery
19
CASES CITED.
XIXVll
Page
Jones V. Blocker 370
v. Corporation of Liverpool 281
V. Hope 45
V. Jackson 247
V. Littledale 230, 251
V. Pliipps 142
V. St. Louis S. W. Ry. 335
V. Scullard 281, 282
Jordan i'. Norton 127
V. Wright 74
Joseph V. Kuox 261
Josephs V, Pebrer 103
Joslin V. Grand Uapids Ice Co. 281
Jossehn v. McAllister 61
Judkius I'. Walker 101
K.
Kaare (;. 1 roy bteel Co.
Kalteubach v. Lewis
357
174
Kariiak, Tlie
157
Kaulback v. Churchill
170
236
Kausal v. Minnesota, etc. Ins.
Co.
144
Kayton v. Barnett
162
166
Kean c. Davis
240
244
Kearley v. Tonga
325
Keating v. Hyde
39
V. R.
307
Keator v. St. John
224
Keay v. Fenwick
33,95
Keefe i;. Sholl
200
Keeuan v. Southworth
317
Keene v. Sage
257
Kehler v. Schwenk
355
Keidan v. Winegar
240
Keighley v. Durant 45
46
160,
213
Kelley v. Davis
74
V. Newburyport Horse R.
4'
\ 51
Kelly V. Metropolitan Ry.
364
V. Thuey
176,
235
Kelner v. Baxter
44,
234
Kendall v. Hamilton
169
Kennedy v. Green
186
V. McKay
200
V. Ryall
365
Kent I'. Bornstein
262
V. Quicksilver Milling
Co
50
Kenton Ins. Co. v. McClellan
30
Keokuk Falls Imp. Co. v.
Kings-
land, etc. Co.
240
Kerfoot v. Ilyman
Kershaw v. Kelsey
Kotcham v. Newman
Kiersted v. \i. R. Co.
Kiewert i'. Hiudskopf
Kilgour V. Finlyson
Kimball v. Billings
Kindig v. March
King V. Batterson
V. Longnor
V. New York Central,
V. Sparks
Kiugsley v. Davis
V. Siebrecht
Kinsey v. Leggett
Kirkpatrick v. Stainer
Kirk's Appeal
Kirkstall Brewery Co. v.
Ry.
Kline v. Bank
Knapp V. Alvord
V. Simon
KnatciibuU v. Hallett
Knight V. Clark
Knisley v. Pratt
Knowles v. BuUene
Knox V. Flack
Komorowski v. Krumdick
Kosminsky v. Goldberg
Kozel I'. Dearlove
Krantz v. R.
Kreiter v. Nichols
Kroeger v. Pitcairn
Krumm v. Beach
Krutz V. Fisher
Page
110, 113
33, 86
275, 300
237
112
138
265
90
176
38
etc. R. 9
146
169
165
221
170, 236
155
Furness
182
240
88, 89
169
225
238, 255
353, 355
309
28
142
290
56
310
323
230, 231
201
111
Lacy V. Getman 84, 159
La Farge v. Kneeland 256
Lafferty f. Jelly 113
Laflin, etc. Co. v. Sinsheimer 246
Laing v. Butler 169
Lakeman v. Pollard 83
Lake Shore, etc. R. v. Prentice 313
Lake Shore, etc. Ry. Co. v. Spang-
ler 348
Lamm v. Port Deposit, etc. Ass'n
180,202
xxxvm
CASES CITED.
Page
Page
Lamothe v. St. Louis, etc
Co.
80, 82
Lewis V. Ramsdale
135
Liiinpley v. Scott
122
V. Read
51
Laucaster v. Kuickerbocker
Ice
V. Samuel
103
Co.
237
V. Tilton
234
Lane v. Black
60
Lewson v. Kirk
361
V. Cotton
263
317
362
Libby v. Schennan
355
V. Pere Marquette Boom Co.
213
Lickbarrow v. Mason
8
Langan v. Great W. Hy.
76
Liddell v. Cliidester
96
Langhoru v. Allnut
179
Liebscher v. Kraus
240
242
Laiiing v. N. Y, Cent., etc
. R.
252
,256
Lilly V. Smales
232
, 254
Larkin v. Ilapgood
256
Limpus V. Loudon General Omni-
La Rue v. Goezinger
117,
159
bus Co.
306
Laubheim v. DeK. N. S.
::o.
284
Linuehan v. Rollins
9, 274
, 278
Laugher v. Poiuter
281
Linneinan v. Moross
159
Laussatt v. Lijjpincott
118
Lipe V. Eiseulerd
369
Laverty v. Snethen
107
117
Lister v. Stubbs
227
Law I'. Stokes
141
145
Little (;. Fosset
267
Lawrence v. Fox
159
V. Gallus
111
V. Gullifer
98
V. Hackett
280
V. McArter
28
Little Miami Railroad Co. v.
Fitz-
V. Shipmau 9, 274
, 275
,276
,279
patrick
344
Lawton v. Waite
361
Little Miami R. i;. Stepheus
334,
338,
Lawyer v. Fritcher
369,
370
371
339
Leadbitter t;. Farrow
239
V. Wetmore
311
Leatherberry i-. Odell
98
Little Rock, etc. Ry.
V. Eubanks
348
Lebanon Savings Bank v.
Hollen-
Lockwood V. Levick
96
beck
189
London, etc. Ass'n v.
Kelk
54
Lee V. Fontaine
50
London Stock Hank
'. Simmons
216
V. Lord
301
Long V. Colburn
241
V. Mathews
263
V. Hart well
37
V. Munroe
135
V. Millar
230
V. Percival
242
V. Thayer
84
253
V. Walker
108
V. Tribune Printing Co.
209
Lehow V. Simonton
160
Loomis t'. New York
etc. R.
183
Leigiiton v. Sargent
108
V. Simpson
115
117
Lennard v. Robinson
252
Lorentz v. Robinson
350
Leopold I'. Salkey
86
Louis V. Smellie
111
Lerned v. Johns
165
Louisville, etc. R. v.
Collins
340
Le Roy v. Beard
135,
138,
141
Louisville, etc. R. Co
V. Orr
348
Leu V. Mayer
179
Love ('. Miller
96
Leuthold v. Fairchild
2«5
Lovell V. Howell
332
Levi r. Booth
66,
140,
219
Lowenstein v. Lombard
142
Levitt V. Ilaniblet
140,
166
Luby V. Hudson Riv.
R.
183
Levy V. Barnard
94
Lucas V. Bank
32
V. Spencer
102
V. De la Cour
259
Lewis V. Atlas, etc. Ins. Co.
81
Lucey v. Ingram
287
V. Brehme
121
Luckie r. Johnson
145
V. Duane
155
Lucy V. Ry.
311
V. Ins. Co.
99
Ludgater v. Love
198
199
V. Long Island R.
280
Ludwig V. Gillespie
261
V. Nicholson
231
Lufkin V. Mayall
101
CASES CITED.
XXXIX
Lumley v. Gye
Page
209, 224, 370, 371,
372
Lupton V. White 113
Lyell V. Kennedy 46, 48
L}ueh V. Fallon 102
V. Met., etc. R. 210
Lyon V. Kent 34
V. Mitchell 102
i;. Tollock 136
M.
Maauss v. Henderson 235
McArthur v. Times Printing Co. 44
MacBeath v. Ellis 78
Macbeath u. Haldiniaud 25.5
McCauley f. Brown 8,218
McCaulIey v. Jenuey 254
McClay v. Hedge 100
Maclean v. Dunn 56
McClellan v. Reynolds 255
McCliutock V. South I'enn. Oil Co. 53
McCoUin V. Gilpin 252
McConnell v. East Point Land Co. 177
McCord V, Western Union Tel.
Co. 207, 208
McCormick v. Joseph 189
McCracken v. San Francisco 42, 53, 56,
60
McCrarv v. Ruddick 26, 93
McCready i'. Thorn 74, 138, 157
McCuUoiigh V. Moss 143
McCurdy i-. Rogers 231
MeCutcheon v. People 326
McDaniels v. Flower Brook Mfg.
Co. 170,238
McDonald v. Maltz 102
V. Massachusetts General
Hospital 319
McDowell r. Laer 160
V. Simpson 56
McElrath v. United States 215
McGilvray v. West End Ry. 310
McGraft v. Rugee 94
MacGregor v. Gardner 79
Machine Co. i-. Insurance Co. 143
Mclllhcnny f. Wilmington 317
Mtlnerney r. D. & II. Canal Co. 283
Mc In tyre i-. Park 56
Mclutyre v. Trumbull 318
Page
Mackall i'. Rachford 373
Mackay v. Comnierciul Bank 199
McKensey v. Edwards 244
McKeuzie v. British Linen Co. 59
V. Nevius 94
McKindly v. Dunham 145
McLaren v. Hall 54
McLeod V. Evans 225
McManus v. Crickett 16, 306
M'Namee v. Hunt 278
McNaughton i-. Moore 84
McNeil V. Boston Chamber of
Commerce 36
!;. Tenth N.B. 217
McNeilly v. Continental Life Ins. Co. 80
McNevins v. Lowe 122
McNutt V. Livingston 318
M'Peck V. Central Vt. R. 354
McPherson r. Cox 155
McTaggart v. Eastman's Co. 337
Mad River, etc. R. v. Barber 333
Madden v. Jacobs 83
Maddox v. Brown 297
Maddux v. Bevan 155
Madison R. v. Bacon 333
Mahoney i'. Dore 353, 354, 355
Maier v. Randolph 300, 302
Maiseubacker y. Society Concordia 313
Maitland v. Martin 103, 104
Makepeace i;. Rogers 114
Malcolm v. Scott 257
Mali V. Lord 309
Mallach v. Ridley 309
Mallory v. Mariner 146
Mallough V. Barber 109
Malouey v. Bartley 266
Mandeville t'. Welch 114
Manhattan Life Ins. Co. r. Forty-
second Street, etc. R. 185, 206
Mann v. Delaware & H. C. Co. 345
Manning v. Uogan 352
I'. Wells 74
Manson v. Baillie 93
Mapler. R. Co. 169
Mare v. Charles 246
Marfield v. Goodhue 107
Margarite Mitchell, The 79
Maria, The 287
Markey v. County of Queens 315
Markham v. Jaudon 152
Marquette, etc. R. v. Taft 75
xl
CASES CITED.
Page
Marscball v. Aiken 63
Maisli V. Hand ^
V. llerinau 352
V. J elf 153
Martiu i'. Almond 238
v. Famsworlli 156
V. Great FaUs Mfg. Co. 127
r. Louisville, etc. li. 361
V. Moultou 110
V. Payue 369
V. Pope 94
I'. Schoenberger 100
V. Teinperley 287
V. Webb 65
Martiui v. Coles 150, 222
Marviu v. Brooks 7, 1 14
V. Ellwood 1 12
Mason v. Joseph 116
V. Richmond, etc. R. 340, 356
V. Waite 217
Massey v. Banner 113
r."Tavlor 98
Mather r.'Rillston 341, 352
Matlu'son v. Kilburn 45
Matter of GoodcU 1 54
Matthews v. Dubuque Mattress
Co.
V. Menedger
Matthiessen, etc. Co.
Mahon's Adm'r
Mattison v. L. S. & M. S.
May V. Bliss
Maver i'. Dean
240, 242
94
V. Mc-
30, 84
Ry. 358
298, 300, 302
198
V. Hutchinson Building Co. 364,
365
Mayor v. Eschbach 135
Mayor, etc. of Salford v. Lever 34, 115,
148, 223, 224
Means v. Swormstedt 242
Mechanics' Bank v. Bank of Co-
lumbia 156, 245, 248
51
232
276
243
146
143
69,
155, 156
Merchants' N. B. v. Goodman 120
Merrick v. Wagner 146
Meehan v. Forrester
Meek v. Wendt
Meier v. Morgan
Mclledge I'. B().ston Iron Co.
Melvin v. Lamar Ins. Co.
Mentz V. Lancaster F. Ins. Co.
Merchants' Bank v. State Bank
169,
46, 240,
232,
Merrill v. Kenyou
i;. Wilsun
V. Witherby
Merritt v. Merritt
Mersey Docks v. Gil)bs
Metcalf V. McLaughlin
V. Williams
Meyer i;. Ilanchett
V. 111. Cent. R.
V. Ry.
V. Stone
Michael v. Jones
V. Stanley
Michaelson v. Denison
Michoud V. Girod
Mildred v. Maspous
Milford V. Water Co.
Mill V. Hawker
Miller i;. Goddard
V. Lea
r. Minnesota & Northwestern
V. New York, etc. li.
f. Phoenix Ins. Co.
V. R. R. Co,
V. Roach
I'. State Bank of Duluth
Mills V. Mills
Millville, etc. Ins. Co. i;. Mechan-
ics', etc. Ass'n
Minett v. Forrester
Minnesota, etc. Co. v. Montague
Minturu v. Main
Misa V. Currie
Missouri Pac. R. v. Williams
Mitchell V. Crassweller
V. Harmon}'
Mitcluim V. Dunlap
Mobile, etc. R. r. Clauton
V. Godfrey
V. Jay
Moffatt V. Batemaa
Mobr V. Miesen
Moir V. Hopkins
Molcy V. Brine
Monsseaux v. Urquhart
Montagu v. Forwood
Montaignac v. Sliitta
Monticello i\ Kendall
Montreal Assurance Co. v. M'Gil
livray
362
343,
104,
298,300,
Page
170
235
84
320
266
241
110
339
311
145
254
356
357
110
174
58
263
100
174
283
9
143
224
242
261
39
143
86
136
262
94
340
297
306
178
361
344
50
122
105
302
28
33
173
206
255
128
CASES CITED.
xli
Montross v. Eddy
Moon V. Kicliinond, etc. R.
Moore v. Appletou
V. Fitchburg 11.
V. Fox
V. McKiiiney
V. Penn
V. Robinson
V. Shields
V. Stone
V. Railroad
Moores r. Citizens' Nat. Bk.
Moors V. Kidder
Morau v. Dawes
Page
102
338
104
266
37
318
177
267
256
77
340
204, 206
221
369
V. l)un})liy
Morgan r. East
V. Railroad
V. Smith
V. Vale of Neath R.
372, 373, 374
153
63
9
332
Morier v. St. Paul, etc. R. 298, 305
Morris v. Ckasby 121
I'. Preston 216
V. Salberg 155
Morse v. Conn. Riv. R. 182
V. State 327
Mortimore v. Wright 74
Morton v. Met. Ins. Co. 211
Moses V. Bierliug 96
V. Stevens 101
Moss V. Livingston 246
Motley V. Head 84
Mott V. Consumers' Ice Co. 306
Moulton I'. Bowker 139, 154
Mudgett V. Day 146
Mullens v. Miller 137
Muller V. Podir 94
Mulligan I'. N. Y. & R. B. Ry. 210,
299, 308, 309
Mullins V. Collins 325, 326
Mulvehall i-. Millward 369
Mulvehill v. Bates 297
Mundorff r. Wickersham 50
Muiin V. Commission Co. 131, 132
Murphy v. New York, etc. R. 337
Murray v. Dwiglit 281, 335
V. South Carolina Railroad
Company 332
V. Usher 362, 364
Muscott V. Stubbs 26
Mussey v. Becchor 136
V. Eagle Bank 156
Page
Mussey v. Scott 170, 237
Mutual B. L. Ins. Co. v. Robi-
sou 144
Mutual Life Ins. Co. v. Hunt 29
Myerlioff v. Daniels 201
N.
Nagle V. McFeeters 94
Naltner v. Dolan 113
Narramore v. Cleveland, etc. Ry. 355,
357
Nash V. Mitchell 30
Nat. Bank v. Ins. Co. 225, 226, 227
National Bank of Commerce v.
Chicago, etc. R. 207
National Cordage Co. v. Sims 8, 122
National Exchange Co. v. Drew 199
Nat. Life Ins. Co. i;. Minch 60, 190
National Protective Ass'n v. Cum-
ming 372
Nave V. First Nat. Bk. 177, 248
Neal V. Patten 179
Neilsou V. James 109
Nelson v. Aldrich 141, 153
V. Cowing 182
V. Powell 162
Nelson Business College Co. v.
Lloyd 308
Neufeld v. Beidler 254
Newall V. Tomlinson 256
Newberry r. Wall 35
Newboldy. Wright 219, 222
Newconib v. Boston Protective De-
partment 321
Newell V. Borden 33
i>. Smith 116
New England R. Co. v. Conroy 338, 342
Newman v. Sylvester 254
New Market Savings Bank v. Gillet 244
New Orleans, etc. R. v. Norwood 283
N. Y., etc. Ins. Co. v. Ins. Co. 110
New York, etc. R. t'. Lambright 342
V. Schaffer 358
New York Iron Mine v. Citizens'
B.ank 146
V. First N. B. 138, 143, 147
New York, L. E. & W. R. i-. Stein-
brenner 280
N. Y. Life Ins. Co. v. Statham 87
xlii
CASES CITED.
Page
New York & N. II. R. r. Schnyler
195^ 205, 206
New York Security & Trust Co. v.
IJpmuu 220
New Zealand, etc. Co. v. Watson 119
247
177', 248
39
317
112
67, 129
Boys'
60, 298, 301
334, 340
217, 218
137, 146
343
266
326
371
110
Nichulls r. Diaiuoud
Nichols V. Frothiiigham
V. Mudgett
Nicholson c. Mouiicey
Nickolson v. Knowles
Nickson v. Brohan
Nims V. Mouut Ilerniou
School
Nix V. Texas, etc. R.
Nixon V. Brown
V. Palmer
I'. Selby, etc. Co.
Nobel's Exp, Co. v. Jones
Noecker v. People-
Noice V. Brown
Nolte !.•. Ilulhert
Nord Dcutscher, etc. Co. v. Inge-
bregsten 341
Norfolk V. Worthy 172
Norrington v. Wright 101
Noriis V. Kohler 296
North River Bank t;. Aymar 136
Northern Pac. R. v. Babcock 3.')6
V. Ilainbly 336
V. Herbert 342
V. Mares 354
Northwestern Distilling Co. v.
Brant 171
Norton v. Herron 252
Norwalk Gaslight Co. v. Norwalk 275,
277
Noyes V. Laudon 1 1 1
i;. Loring 231, 232
o.
Oakes v. Cattaraugus Water Co. 44, 234
V. Ma.se
337
O'Brien v. Cunard Steamship Co.
285
Oceanic, etc. Nav. Co. v. Com-
pania, etc. Es])anola
361
O'Conner v. Insurance Co.
179
O'Connor v. C'lopton
256
Odiorne c. Maxcy
147
Oelricks v. Ford
236
Ogden V. Ilall
Page
252
Ogles by V. Yeglesias
251
Ohio, etc. Ry. i;. Stein
184
Okell V. Charles
247
Olcott V. Tioga R. R. Co.
245
O'Leary v. Manjuctte
317
Oliver V. Court
no
Olyphant i'. McNair
142
O'Maley v. South Boston Gasli
ght
Co.
353
354
355
O'Neil I'. Behanna
373
Oom V. Bruce
262
Opie V. Serrill
123
Orton V. Scofield
no
Osborn i'. Gillett
368
Osborne v. Knox
336
V. Morgan
264
361
Oskanip v. Gadsden
182
Owen V. Cronk
256
257
V. Gooch
230
Owings V. Hull
52
Owsley V. Montgomery, etc
. R.
2n
I'. Pliilips
59
Oxford V. Crow
55
Pack i;. White
Packet Co. v. Clough
Padniore v. Piltz
Padwick v. Stanley
Page V. Wells
Paice V. Walker
Paige I'. Stone
Pain u. Sample
Painton v. Northern Cent. R.
Palk V. Force
Palmer v. Delaware & II. C. Co.
V. Hatch
V. Haverhill
Palmeri v. Manhattan Ry. 210, 299,308
Panama, etc. Co. v. India Rubber
Co.
Papc r. Westacott
Parcell v. McComber
Park V. N. Y. Cent., etc. R
Parker v. Brancker
V. Hill
V. McKeuna
V. Smith
244
183
157
95, 114
108,109,361
252
235
235
351
103
351
141
93
224
107
100
352
150
38
n5
66
107
CASES CITED.
xliii
Page
Parker v. Winlow 252
Parks V. Ross 255
Parsons v. Wiuchell 266
Parton v. Crofts 152
Partridge v. White 48
Patersou v. Gaudasequi 169, 235
Patrick v. Bowman 234
Patten v. Kea 297
Patterson v. Lippiucott 28, 53, 233
V. Tash 219, 222
Pattisou V. Jones 357
Paul V. Hummel 289
Paxton Cattle Co. v. First Na-
tional Bank 44
Payne I'. Lecoufield 141, 153
V. Potter 141
Peabody v. Hoard 131
Peak u. Ellicott 225
Pearson v. Graham 86
Peck V. Harriott 135
Peebles v. Patapsco Guano Co. 200
Peel V. Shepherd 173
Peeples v. Ry. 310
Peine u. Webster 55
Pelham v. Hildcr 139
Penfold V. Warner 135, 136
Peninsular R. c. Gary 75
Pennsylvania Co. v. McCaffrey 352
V. Roy 285
Pennsylvania R. v. Zink 356
Pentz V. Stanton 169, 172, 241, 249
People V. Clay 210
V. Denison 54
V. Globe Ins. Co. 86
V. Roby 325
V. Township Bk. 110
Perkins r. Boothby 143, 147
V. Evans 223
V. Smith 362
Perminter v. Kelly 33, 265
Perry r. Lansing 338
Peters v. Farnsworth 141
Peterson v. W. U. Tel. Co. 209
Petor V. Hague 182
Petril, The 337
Phelin v. Kenderdiue 369
Phelps I'. James 182
V. Sullivan 39
V. Wait 267, 362, 365
Philadelpiiia, etc. R. v. Cowell 42, 49
V. Howard 171
Page
Philadelphia, etc. R. v. Larkin 314
y. Quigley 210,310
Philadelphia and Reading R. v.
lyoThy 123, 305, 307
Phillips y. Barnctt 290
V. Mercantile Nat. Bk. 203, 207
V. Muir 136, 150
Pliilpot V. Bingham 28
Phcenix Ins. Co. v. Munger 143
Pickard v. Sears 63, 64
I'ickering v. Busk 8, 15, 66, 130, 217,
218 222
Pickert v. Marston 139, 141, 152
Pickett V. Pearsons 61
Pierce v. Johnson 249
Pike V. Balch 75
V. Douglass 48
V. Ongley 250, 252
Pinkham v. Crocker 139, 150
Pitney v. Glen's Falls Ins. Co. 143
Pittman v. Sofley 190
Pitts V. Mower 172
Pittsburg, etc. R. v. Gazzam 45
V. Pillow 311
V. Shields 311
V. Sullivan 284
Plant V. Thompson 151
V. Woods 372
Poillon V. Secor 62
Pole V. Leask 16, 129, 132, 136, 137
Polhill V. AV alter 232
Pollacek v. SchoU 174
Pollard V. Gibbs 38, 55
V. Vinton 202, 206
Pollock I'. Cohen 58
V. Stables 139
Poulton V. London, etc. Ry. 210
Pow V. Davis 232, 233
Powell V. Construction Co. 283
I'. Oleson 165
Power c. First N. B. 119
Powers i\ Briggs 244
I'. Ma.«s. Homoeopathic Hos-
pital 319
V. New York R. 353, 354
Powles I'. Page 191
Prather v. United States 326
Prentice Co. v. Page 221
Preston v. Hill 155
V. Prather 123
Prestwich v. Poley 155
xliv
CASES CITED.
Page
Price V. Taylor 239, 242
Prickett i;. Badper 96
Priestley v. Feruie 169
V. Fowler 332
Prins Hendrik, The 287
Pritchard v. Hitchcock 301
Probst V. Delainater 351
Proctor V. Bennis 131
Prosser v. Coots 318
Protection Life Ins. Co. v. Foote 31
Providence v. Miller 25.7
Purdy V. Rome, etc. Railroad
Company 349
Putnam v. French 141, 145
D. R. Co. 311
Q.
Quarman v. Burnett 281
Queen i'. Parr 99
V. Stephens 328
Quiiilan v. Providence, etc. Co. 144
Quinn v. Complete Electric Const.
Co. 10
V. Power 297. 305
V. R. 284
R.
Rabone v. Williams 1 "3
Ragan v. Chenault 56
Ragon V. Toledo R. 353
Ragsdale v. Laud Co. 9
Railroad i'. Spence 340
Raisin I'. Clark 110
Raleigh v. Atkinson 87, 88
Ralli V. Troop 288
Ramazotti v. Howring 173
Randall v. Kehlor 150
RandcU v. Trimen 232, 233
Rathbun i-. Snow 65, 147
Ray V. Powers 32
Rayuer v. Grote 259, 200
Re Devala Provident, etc. Co. 179
National Coffee Palace Co. 232
Pickering's Claim 170
Read v. Anderson 87, 90, 104
V. East Providence Fire Dist. 279
V. Legard 74
Page
Reagan v. Casey
281
Rechtscherd i;. Accommodat
ion
Bank
107
361
Reddie v. Scoolt
370
Redgrave v. Hard
196
Reece v. Kyle
103
Reed v. Home Savings
Bank
210
309
Recdie v. London & N.
W. Ry
278
Rees I'. Pellow
80
Reese v. Medlock
136
Reeve v. First N. B.
171,
240
242
Reg. V. Cooper
210
I'. HoUirook
328
V. Huntley
361
Rendell v. Harriman
239
,242
Renshaw v. Creditors
89
Renwick v. Bancroft
116
Reuben v. Swigart
276
Rex i;. Almon
328
V. Dixon
326
V. Gutch
210
328
i;. Medley
328
V. Walter
210
328
Reynolds v. Peapes
236
Hhoades v. Blackiston
261
Kiioda V. Anuis
201
Rhodes v. For wood
99
Rice V. Gove
179
V. Manley
209
372
V. Peninsular Club
147
r. Wood
102
V. Yocum
265
Rice, etc. Co. v. Bank
174
Richardson v. Carbon
Hill Coal
Co.
285
319
V. Eagle Machine Works
97
V. Kimball
61
Richmond, etc. R. v. Norment
356
i: Williams
334
Ricks 17. Yates
99
Riddle v. Backus
37
liiehl V. Evansville Foundry Ass'n
226
Right V. Cuthell
58
Rimell v. Sampayo
130
Ripley v. Chipnian
100
Rippe V. Stogdill
114
Risbourg v. Bruckner
61
Ritchie v. Waller
297
305
Roach V. Turk
265
Robb V. Green
111
Roberts v. Johnson
266
CASES CITED.
xlv
Roberts )•. N. W. Nat. Ins. Co.
V. Ogilby 24,
V. K. Co'.
V. Hock bottom
Robertson v. Cloud
V. Levy
V. Sichel
Robins V. Bridge
Robinson r. Bird
V. Davison
V. Kanawha Valley Bank 243
V. Mullett ' 111,
V. Rohr
V. K utter
V. Webb
Robson V. Drummond 117,
Roca ('. Byrne
Rochester Lantern Co. v. Stiles
Rockford, etc. R. i'. Sage
Rodick V. Coburn
Roehm v. Ilorst
Roesner v. Herman
Roger V. BlaokwcU
Roland v. Coleman
Roosevelt v. Doherty
Rossiter v. Rossiter
V. Trafalgar Life Assurance
Co.
Rounds V. Delaware, etc. II. 300,
Rourke v. White Moss Colliery
Co. 280,
Rower. Rand 80,84,201,
Royal Ins. Co. v. Beatty
Royce v. Allen
Rudasill v. Falls
Rudd V. Matthews
Rudgeair i-. Reading Traction Co.
Ruffner v. Hewitt
Ruggles V. American Central Ins.
Co.
Rumsey v. Briggs
Rnpp V. Sampson
Rnss V. Wabash W. Ry.
Russell V Hankcy
r. Hudson Riv. R. Co.
V. Lawton
r. Slade
Rust r. Katon
Rutland, etc. R. v. Lincoln
Page
179
, 112
344
37
80
146
317
230
26.5
8.5
,247
, 139
317
2G2
267
, 159
225
117,
159
44
141
97
348
29
88
174
132
116
30G,
307
283
262
49
249
50
59
308
103
143
243
no
340
109
334
318
37
127
48
Ryan v. Cumberland R.
V. Tudor
Page
332, .•J34
146, 192
Sadler v. Henlock 274
V. Leigh 172, 260, 261
Sage V. Shepard & Morse Lumber
Co. 221
St. Andrew's Bay Land Co. i».
Mitchell 31
St. Johnsbury, etc. R. Co. v. Hunt
224, 368
St. Louis, etc. R. v. Larned 207
V. Weaver 182
V. Youley 278
St. Margaret's Burial Board v.
Thompson 116
Salacia, The 252
Saladin v. Mitchell 152
Salomons i-. Pender 102
Salter v. Howard 371
Saltus 17. Everett 216
Samo V. Ins. Co. 152
Samuelian r. American Tool Co. 284
Sanborn v. Ncal 255
Sanders v. Partridge 237
Sands v. Child 263
Sanger v. Warren 171
Sargeant v. Clark 155
Sar<,'ent v. Mathewson 370
Satterfield v. Malone 189
Saunderson v. Griffith 45
Savage i-. Gibbs 255
V. Waltliew 361
Saveland v. Green 49, 104
Savings Eund Soc. v. Savings
Bank 130
Saxton V. Hawksworth 353
Sayre »'. Nichols 116
Scaiilan v. Keith 242
Schendel v. Stevenson 166
Scliip I'. Pabst Brewing Co. 275
Schlater v. Winpenny 80
Schm.^ltz v. Avery ' 163, 176, 259, 200
School District v. JEtna Ins. Co. 54
Schultz r. Griffin 138, 141
Scidmore r Smith 370
Scott V. Central Park, etc. R.
308, 311
xlvi
CASES CITED.
Page
Page
Scott r. Maier
2
5, 93
Simpson v. Lamb
99
i\ Surinan
162
226
V. Walby
119
Scribner v. Collar
102
Sims V. Miller
1.50
V. Flagg Mfg. Co.
37
Singer Mfg. Co. v. Rab
n
P, 19
274
Scrimshire v. AUlcrton
164
Sioux Citv, etc. R. v.
First Nat.
Scully r. Sully's K.x'r
93
Bk.
207
Scagar v. Slingerlaiid
370
Skiff V. Stoddard
139
152
Seaman v. Kocliler
338
Skipper v. Clifton Mfg
C
3.
313
Scarle v. Parke
300
Slater v. Jewett
343
352
Sebeck v. Plattdeutsche Volkfest
Slater Woolen Co. i". Lamb
31
Verein
275
Slawson i\ Loring
245
246
Secord v. Ry.
284
Sleatli V. Wilson
297
Secretary of State for India v.
Ka-
Sloan t;. Central Iowa Ry.
Co.
76
machee Boye Saliaba
366
Small V. Attwood
131
Seeberger v. McCormick
231
232
Smalley v. Morris
182
201
Seiple V. Irwin
130
138
Smart v. Sanders
87,88
150
Semenza v. Brinsley
174
Smith V. Backus
356
Seton V. Slade
78
V. Bailey
196
296
Sevier v. Birmingham, etc.
R.
75
V. Baker
354
355
Seymour i'. Cummins
317
V. Benick
278
V. Greenwood
306
V. Binder
256
Shack V. Anthony
176
258
V. Clews
140
218
Shafer v. Phtt'nix Ins. Co.
189
V. Cologan
59
Sliarman v. Brandt
259
V. Hodson
50
Siiarp V. Jones
213
V. Kelly
256
Shaver v. Penn. Co.
349
V. Kerr
38
Shearer v. Evans
267
r. Kidd
146
Shcehan v. R. Co.
343
V. Lane
80
Sheffer i'. Montgomery
227
V. Leveaux
95
Shcthold V. Watson
171
V. Lyons
262
Sheldon v. Cox
186
V. McGuire
140
V. Darling
246
V. New York, etc.
R.
(19
N.
Shelton v. Johnson
93
Y. 127)
337
V. Springett
74
V. N. Y. Cent. & H.
R
R.
(78
Shcpard v. Slierin
256
Hun, 524)
312
Sherman v. Rochester, etc.
R.
334
V. Oxford Iron Co.
341,
343
Sherrod v. Langdou
62
V. Price
109
Sliorwood V. Stone
121
V. Rice
141
Shiells V. Blackburne
122
r. Sleap
256
Shisler v. Vandike
59
V. Sorby
148,
224
Shoe Co. V. Saxey
372
V. Steele
288,
335
Short V. Millard
77
102
V. Tracy
141
152
Shuey v. United States
80
V. Utley
366
Sibbald i;. Bethlehem Iron Co
151
V. Water Comm.
191
Simmonds i;. Moses
231
232
V. Webster
200
Simmons «. London Joint
Stock
Smout V. Ilbery
232
,234
2.53
Bank
147
Sucll V. Pells
112
Simon v. Brown
65
Snow V. Ilix
254
V. Motivos
249
Rnowdon v. Davis
256
Simonds r. Heard
255
Soltau V. Gerdau
221
Simpson v. Garlaud
244
Somerville v. Hawkins
357
CASES CITED.
xlvii
Pa(!fe
Songhegan Nat. Bk. v. Boardman 247
South Heiirt, etc. Co. i;. Dakota,
etc Ins. Co. 143
Soiulicote L'. Stanley 361
Suutliernc v. Howe 15, 67
Southwell I). Bowtlitch 230, 250
Spacknian c. Evans 54
Spalding v. Kosa 85
Sparks v. Dispatch Trausfei
•Co.
171,
241
Spittle V. Lavender
61
, 230
Spofford V. Ilohhs
55
Spooner r. Browning
129
, 130
Spragne r. Gillett
142
Spraiglits r. Hawley
265
Spurr V. Cass
172
Stables V. Eley
296
Stiigg V. Elliott
137
Staiushy c Frazer's Co.
44
Standard Oil Co. v. Gilbert
81
Stanford v. McGill
97
Stanley v. Schwalby
366
Stanton v. Embrey
103
Staples V. Schmid
210
308
Stark V. Parker
100
State V. Fredericks
200
V. McCance
325
327
V. j\Iason
328
V. Moore
318
Steam])oat Co. v. Joliffe
72
Stearns v. Doe
138
Stebbins v. "Walker
173
175
Steele Smith Grocery Co. v.
Pott-
hast
169
Stephens, The John G.
288
Stephenson r. Southern Pac.
Co.
313
Stevens i'. Fitch
215
V. Lndiura
64, 65
V. Midland R.
267
V. Wilson
221
Stevenson v. Mortimer
215,
262
Stewart v. Brooklyn, etc. R.
310
V. Kennett
57
V. Stone
83
V. Woodward
143
Stier I'. Ins. Co.
89
Stiles r. Western R.
182
Stillwcll V. Stajiles
52
Stimson v. Whitney
63
Stinchfield v. Little
171,
238
Stoddart v. Key
82
307
Stone V. Cartwright
V. Hills
Storer v. Eaton
Storey v. Ashtoa
Stout V. Ennis
Stowell V. Eldred
Stranahan v. Coit
Strasser i-. Conklin
Strauss v. City of Louisville
V. Francis
V. Meertief
Street Ky. v. Bolton
Strong V. High
Stuart v. Simpson
Stubbing V, Heintz
Sturdivant v. Hull
Suart r. Haigh
Suit V. Woodhall
Sullivan v. Miss., etc. R.
V. Shailer
Sumner v. Conant
i\ Conhaim
r. Reicheniker
Sutherland v. Ingalls
V. Troy, etc. R.
V. Wyer
Sutton V. Spectacle Makers Com-
pany
Svenson v. Atlantic Mail Steam-
ship Co.
Swan V. Nesmith
Swazey v. Union IVIfg. Co.
Sweeney v. Berlin, etc. Co.
Sweeting v. Pearce
Swentzel v. Penn. Bank
Swift V. Jewsbury
Swim V. Wilson
Swinarton v. Le Boutillier
Swire v. Francis
Sydnor v. Hurd
Sykes v. Howarth
Page
365
297
108, 111
297
39
237
311
48
278
127, 139
96, 98
293
109
370
127
239, 242
231
187
333
176
31
97
81, 98
321
345
98
39
296, 338
121
76
353, 356
139
124
263, 264
265
301
199
252
309
Taft V. Brewster
Tags ^'- Bowman
Taititor r. Prendergast
Talbot V. Bowen
V. National Bank
Talcott V, Chew
170, 238
114
164, 172, 173
34
215
150
xlviii
CASES CITED.
Page
Talcott V. Wabash R. 1 72
Tulmai^e v. Hierliause 140
Tauiiatt I'. Hocky Mt. Nat. Bk. i>41
Tapliii 17. Florence 88
Tarrant v. Welib 3.32
Tarry v. Ashtun 278
Tasker v. Slieplierd 84
Tatam i-. Reeve 104
Tate V. Ilyslop 187
Taussig V. Hart 34, 110
Taylor i: Brewer 93
V. Conner 55
r. Green 198
I'. Nostrand 232
r. Plumer 226
V. RoljinsoD 58, 60
V. Starkey 141
Teedf. Beere 114
Temperton i'. Russell 224, 372
Tetnple i-. Pomroy 143, 146, 147
Tenant 1-. Elliott 113
Terre Haute, etc. R. v. McMurray 75
V. StockwcU 75
Terrill v. Rankin 366
Terry v. Birmingham N. Bk. 102
Tewk.sbury v. Spruance 34, 110
Texas & P. Ry. v. Scoville 313
Thacker v. Hardy 87, 104
Thayer v. Meeker 179
Thomas v. Atkinson 169
V. City N. B. 48
V. Joslin 38
Thompson v. Barnum 216
V. Havelock 110
V. Kelly 153, 262
V. Lowell, etc. Ry. 277
Thomson v. Davenport 166, 167, 235
Thome i-. Deas 27, 40, 122, 360, 363
Thorold V. Smith 145
Thorpe v. N. Y. C. & II. R. R. 285
Tier I'. Lampson 80, 82
Tifft r. Tifft 289
Tillicr I'. Whitehead 32
Timberlake v. Thayer 100
Timjipon v. Allen 65
To.id V. Emly 33, 235
Toledo, etc. Ry. i\ Harmon 312
I'. Mylott 75
Tome I'. Parkersburg Branch R. 200
Tool Co. V. Norris 102
Topham v. Braddick 114
Pago
Towle V. Dresser 28
I'. Leavitt 133, 141
Townsend v. Corning 53
Townsley v. Bankers' Life Ins. Co. Ill
Trainer v. Morisou 145
V. Trumbull 72
Traveller' Ins. Co. v. Edwards 65
Traver f. Garlingtou 241,243
Trentor v. Potiien 190
Trickett v. Tomilson 127
Triggs V. Jones 61, 95
Tri.st V. Child 39, 102
Trueblood v. Traeblood 28, 54, 55
Trueman v. Loder 81
Trust Co. i;. Floyd 231, 232
Tubbs i;. Dwelling Ilou.se Ins. Co. 144
Tucker v. St. Louis, etc. Ry. 75
V. Taylor 94
Tucker Mfg. Co. v. Fairbanks 240, 242,
246
Turner v. Goldsmith 83
Turnpike Co. v. Green 309
Turpin v. Bilton 109
Tuttle I". Swett 36
Tweddle v. Atkinson 159
u.
Udell V. Atherton 195, 199, 200
Ulilman v. N. Y. Life Ins. Co. 7
United States v. Bartlett 215
V. Buchanan 139
V. Dempsey 215
V. Grossmayer 33, 86
V. Jarvis 98
V. Parmele 164
I". Pinovcr 256
United States Bank i'. Burson 145
V. Davis 191
V. Lyman 177, 258
United States Tel. Co. v. Gilder-
sleeve 261
Union Bank i>. Campbell 191
Union, etc. Bk. v. Gille.«|)ie 226
Union Canal Co. ;•. Loyd 191
Union Gold Min. Co. r. Rocky
Mt. N. B. 191
Union Mut. Ins. Co. v. Wilkinson 144
Union N. B. v. German Ins. Co. 187
Union Pacific Ry. v. Artist 319, 320
CASES CITED.
xlix
Union Pacific Ry. v. Doyle 334, 338, 339
V. Erickson 336
Updike V. Ten Broeck 37
Upton V. Arclier 39
i;. Suffolk County Mills 137, 141
V.
Van Men v. Am. Nat. Bk. 225
Van Antwerp v. Liuton 364
Van Arman v. Byington 25, 93
Vance v. Erie H. 211
Van Deusen v. Sweet 29
Van Tassell v. Manhattan Eye
and Ear Hospital 319
Vauuxem v. Bostwick 100
Varnum v. Evans 238
Vater i'. Lewis 248
Vawter v. Baker 237
Vegelahn v. Guntner 373, 374
Veuuiug f. Bray 79
Verona Central Cheese Co. v.
Murtaugh 326
Very v. Levy 130
Vescelius v. Martin 143
Vicksburg, etc. Railroad Co. v.
O'Brien 184
Viele !'. Germania Ins. Co. 143
Vinton v. Baldwin 94, 96
Violett V. Powell 176
Vi.scher v. Yates 217
Vrooman >\ Turner 159
Vusler V. Cox 73
W.
"Wabash R. v. Kelley 285, 321
V. McDaniels 341, 351, 352
Waddell v. Mordecai 250
Waddill r. Sebree 251
Wadsworth v. Sharpsteen 29
Wagner v. Jayne Chemical Co. 356
Wagoner v. Watts 38
Wait V. Borne 141
Walker r. Baird 366
V. Bank 247, 252
V. Crouin 209, 224, 372, 374
V. Guarantee Ass'n 361
V. Herring 153
Page
Walker v. Osgood 110
V. Rostron 257
V. Swartwout 255
Wall V. Delaware, etc. R. 345
Wallace v. Bank 146
t;. Central Vermont R. 355
V. Finberg 266, 310
t'. Floyd 25, 92
Wallis Tobacco Co. r. Jackson 137, 143
Walls V. Bailey 139
Walsh V. Fisher 99
V. Whitcomb 87
Walter v. James 52
Walton V. N. Y., etc. Co. 298
Wambole v. Foots 85
Waples V. Hastings 28
Warax v. Cincinnati, etc. R. 361, 365
Ward V. Evans 145
V. St. Vincent's Hospital 319
V. Smith
V. Williams
Warder v. White
Ware v. Morgan
Warlow V. Harrison
Warner v. M'Kay
V. Martin
V. Southern Pac. R.
Warr v. Jones
Warren v. Hewitt
V. Holbrook
Warwick v. Slade
Wash V. Trustees
Washburn v Nashville, etc. R. R
Co.
Washington Gas Light Co. v.
Lansden
Wasliington, etc. R. v. McDade
Water Company v. Ware
Watkius I'. De Armond
Watson V. King
V. Swan
t;. Union Iron Co.
Watt r. Brookover
Watteau v. i'enwick
33, 87, 109, 145
49
176
2.54
253
174
141, 150, 219
313
232, 233
103
7, 114
79
318
31
Watts V. Kavanagh
Weare r. Gove
I'. Williams
Webb V. Smith
Weber v. Brooklyn, etc. R. 308, 311
V. Weber 263, 264, 362
210
351
277
74
89
45
113
155
142,143,164,166,
167
80
231
136
182
CASES CITED.
Page
Weed V. Adams 150
V. Panama R. 305
Weeks v. Holmes 93
Weisbrod v. Chicago, etc. R. 30. 31
Weiss V. Wliitteniore 267
Welch V. Maine Cent. R. 293
Wells & F. Co. i;. Gortorski 355
West Jersey & Seashore R. r.
Welsh 299. 303, 304
West St. Louis Sav. Bk. v. Shaw-
nee Couuty Bk. 156
Western Bank v. Addie 200
Western, etc. Ry. v. Bishop 348
Western Mortg. & Invest. Co. v.
Ganzer 190
Western Pub. House v. Dist. Tp.
of Rock 45
Western Trans. Co. v. Barber 112,
221
Westfield Bank v. Cornen 191
Weston f. Davis 93
Wetherbee i;. Partridge 277
Whcatly v. Miscal 101
Wheeler t;. McGuire 131, 137, 142
V. Nevins 38
V. Wason Mfg. Co. 352
Wheeler, etc. Co. v. Augbey 48
V. Boyce 314
i;. Givan 141, 150
Whelan v. Reilly 146
Whi]pple r. Whitman 146, 155
White r. Equitable, etc. Union 39
i;. Fuller 152
V. Madison 231
i;. Miller 181,182
V. Nellis 369
V. Owen 223
r. Procter 118,153
V. Sawyer 200, 267
V. Skinner 231
Whitehead v. Greetham 40, 122, 360
V. Reddick 238
V. Tavlor 57
V. Tuckett 15, 127, 132
Wliileman v. Hawkins 109
Whiteside v. United States 135
Whitfield V. Lord Le Despencer 263,
362
r. Paris 317
Whitfnrd I'. Laidler 238, 254
Whiting V. Mas.s., etc. Ins. Co. 43
Page
Whitney v. Dutch 28
r. Marline 108,109
r. Merchants' Union Exp. Co. 107
V. AVvman 44, 230, 234
Whittaker v. I). & H. C. Co. 341, 352
Whittenbrock v. Bellmer 48
Wichita Bank v. Atchison, etc. R. 207
Wick China Co. v. Brown 372
Wickham v. Wickham 121
Widrig V. Taggart 34, 101
Wiggin V. St.' Louis 278
Wild V. Bank 156
Wilkinson ». Coverdale 360
V. Ileavenrich 37, 53
Wilks 1-. Back 170, 237
Willcox V. Arnold 235
Willcox, etc. Co. v. Ewing 8
William v. Koehler 299
\Vm. Lindeke Land Co. v. Levy 165
Williams v. Evans 153
V. Innes 180
V. Johnston 146
V. McKay 124, 125
V. Merle 263
V. Milliugton 262
V, North China Insurance Co. 43
V. Planters' Ins. Co. 211
V. Pullman Palace Car Co. 285,
301
V. Robbins 241
V. School District 36
V. Second N. B. 240
V. Stevens 115
V. Walker 145
V. Williams 113
V. Woods 116
Williamson i-. Barbour 114
V. Barton 230, 235
V. Cambridge R. 183
V. Loui.^ville Industrial School 320
Wilson )'. Bcardsley 133
V. Board of Education 101
r. Brett 122,360
V. Dame 95
V. Edmonds 26
V. Ford 73
V. Hart 162
V. Poultcr 50
V. Tumman 42, 45, 46
V. West Hartlepool, etc. Ry. 54
V. Wilson 107
CASES
CITED.
n
Page
Page
Wiltse I'. State Bridge Co.
298
Wright V. Central R. Co.
108
Wiltshire v. Sims
141
1 -r2
V. Cronipton
365
Wincliestcr r. Howard
17.5
V. Dannah
35
Wing v. Click
2.5.5
V. Davidson
7
Wiiismorc r. Greetibank
.371
r. Eaton
. 61
Wirehach r. First Nat. Bk
29
V. New York Cent. R.
334, 336
Wiscousiu V. Toriims
5
4,60
V. Wilcox
16, 306
Wisconsin Central 11. v.
United
Wyllie V. Palmer
284
States
215
Wise V. Ry. Co.
310
Wishard v. McNeill
142
X.
Wolf V. Howes
99
V. Studebaker
98
Xenos V. Wickham
152
Wolfe V. Pugh
200
, 201
Wolff V. Koppel
121
Wood V. Baxter
253
Y.
V. Farnell
318
V. Goodridge
238
Yale V. Eames
147
V. McCain
60
Yates V. Brown
287
V. Moriarty
160
Y. B. (.34 & 35 Edw. I.)
162
Woodman v. Met. R. Co.
9
Y. B. (7 H. IV. 34 pi. 1)
42
Woodward v. Suydam
61
Yerrington v. Green
100
V. Washburn
368
York V. Chicago, etc. R.
284
Woolfe V. Home
253
Young V. Cole
139, 141
Worden v. Humcston, etc.
R. Co.
183
V. Schuler
251
Workman r. Wright
59
V. Stevens
29
Worrall v. Munn
38
Worthington v. Cowles
235
I'. Waring
358
z.
Wrijiht V. Boynton
117
V. Cabot
174
Zerrahn v. Ditsou
92
BOOK I.
PRINCIPAL AND AGENT.
THE LAW OF AGENCY,
INTRODUCTION.
CHAPTER I.
PRELIMINARY TOPICS.
§ 1. Representation in the law of obligation.
Legal obligations are either primary antecedent obligations
or secondary substituted obligations. The obligation to fulfil
a contractor the obligation not to assault another, is primary.
The obligation to pay damages for not fulfilling a contract, or
for assaulting another, is secondary or substituted, and arises
only as a consequence of the breach of the primary one.
The primary obligations are imposed either by one's volun-
tary undertaking or by the law, irrespective of one's volition,
upon grounds of public policy or utility.' Usually the volun-
tary undertaking originates in an offer or a representation
made to another person and acted upon by him. Thus a con-
tract or a gratuitous undertaking or a representation may,
when acted upon by another person, impose an obligation
which could not have existed but for the obligor's voluntary
act. On the other hand, the obligation not to assault or
defame another, or not to convert another's goods, is imposed
upon every man in society without any act or consent of his.
The secondary substituted obligations arise from an act or
omission resulting in a breach of a primary obligation. If
^ Voluntary primary obligations have been termed "recusable obliga-
tions," while involuntary primary obligations have been termed " irre-
cusable obligations." AVigmore, 8 Harv. Law Rev. 200; Harrimau on
Cont. p. 6.
4 AGENCY.
the j)riiiiary obligation was voluntary, it may have been a
contract, a representation, or an undertaking either not
amounting to contract or extending beyond it. In the first
case we call the failure to fulfil the obligatiijn a breach of
contract ; in the second, misrepresentation, fraud, or deceit; ^
in the third, negligence. If the primary obligation was an
involuntary one, we call the breach of it a tort, and we have
various special names for these torts, as assault, defamation,
conversion, negligence, etc.
Most of the things which a man may do in person he may
do through a representative; accordingly, he may create a
voluntary primary obligation through a representative, or he
may through a representative commit a broach of a primary
obligation, and thus imj)ose upon himself a secondary substi-
tuted obligation. Representation, therefore, is of great
importance in the law of obligation. It creates a subsidiary
range of obligations differing from the main range only in the
fact that the one obliged acts mediately through a represen-
tative, instead of immediately in person.
The problem reduced to its simplest terms is to discover
when and under what circumstances a man is obligated by the
act of his representative, either (1) in creating or attempting
to create voluntary primary obligations, or (2) in committing
a breach of primary antecedent obligations and thus giving
rise to secondary sul)stituted obligations. It is obvious that a
representative might naturally be authorized to create pri-
mary obligations, but would not ordinarily be authorized to
commit breaches of them. Agencies would therefore be
expected to be created for the first purpose, but not for the
second. But even if an agency be created for the first pur-
pose, the agent may go beyond his actual authority and make
1 Deceit and like wrontj^.s are anomalous. The obligor imposes upon
himself the oMigation by his own representation, acted upon by the other
party, and conunits a breach of it at once in consequence of its falsity.
This results in the secondary obligation to pay damages, or to make
restitution, or it works an estoppel, according to circumstances. Owing
to some peculiarities of classification and procedure, deceit h;is come to
be regarded as a pure tort, but in several essential particulaVs it is more
nearly allied to contract. See post, p. 12.
INTRODUCTION. 5
promises or representations not authorized. Is his principal
bound thereby ? So also a servant appointed for a purpose
entirely foreign to the creation of obligations, may commit a
breach of one while about his master's business. Is the mas-
ter bound ? These and similar problems are those that are
treated under the title of agency.
§ 2. Meaning and scope of agency.
Agency is a term signifying the legal relations established
when one man is authorized to represent and act for another
and does so represent and act for another. The one repre-
sented may be comprehensively termed the constituent, and
the one representing him may be termed the representative.
More specifically the constituent is called either a principal
or a master, while the representative is called either an agent
or a servant. Agency therefore divides itself into two main
heads, — the law of principal and agent, and the law of master
and servant.
The authority is usually conferred upon the representative
by the will of the constituent, but in a few instances it is con-
ferred by the law in consequence of an existing relation or
status of the two. Historically, the relation probably origi-
nated in status, and may have rested upon a fiction of
identity,! but with the growth of individualism and the
progress from status to contract, the relation has come to be
mainly a consensual one. Yet the agency of a wife in the
purchase of necessaries is a distinct remnant of the older
doctrine,^ and there has been an anomalous revival of it in
our day in the identification of a child with its parent or
guardian in cases of contributory negligence.^
The act which the representative is authorized to do may
be either, — (1) to represent the will of the constituent to third
persons with a view to establishing new legal relations be-
tween such persons and the constituent by creating voluntary
1 O. W. Holmes, Jr., 4 Ilarv. Law Rev. 345; 5 Ihid. 1. But see 2
Pollock and Maitland's Hist, of Eng. Law, 225-227, 530, and 7 Harv.
Law Rev. 107.
2 Post, § 55.
« Hartfield v. Roper, 21 Wend. (N. Y.) 614.
6 AGENCY.
primary obligations with their correlative rights, or (2) to
perform for the constituent operative or mechanical duties
not intended to create any new legal relations between him
and third persons. When the representative is employed for
the first purpose, he is called an agent, and his constituent is
called a principal. When he is employed for the second
purpose, he is called a servant, and his constituent is called a
master.
The legal consequences of creating an agency may l^e three-
fold : (1) to establish new legal relations between the constitu-
ent and representative ; (2) to establish new legal relations
between the constituent (principal) and third persons, that is,
to impose voluntary ])rimary obligations u{)on the principal in
favor of third persons, or give him correlative right against
third persons, or to disturb existing legal relations between
the constituent (master) and third persons, that is, to cause
a breach of existing primary obligations ; (3) to create new
legal relations between the representative (agent) and third
persons, or to disturb existing legal relations between the rep-
resentative (servant) and third persons.
Agency, then, is the title under which we treat of the doc-
trines of representation in the law of obligation. Under the
head of principal and agent, we treat of the creation of
voluntary primary obligations and their correlative rights.
Under the head of master and servant, wc treat of the breach
of such obligations and the substitution of secondary obliga-
tions and their correlative rights and remedies. Under both
heads, we seek to discover the source and extent of the repre-
sentative's authority, the rights and obligations of the consti-
tuent and representative, of the constituent and third persons,
and of the representative and third persons.
§ 3. Distinction betvreen agency and other legal relations.
Before jjroceeding to a discussion of the essential i)roblems
of aginicy, it is necessary to distinguish this legal concept fi-oni
other concepts more or less nearly related to it. One person
may act in the interest of another without being technically
his agent or servant. In order, therefore, to delimit our subject,
INTRODUCTION. 7
we must first set aside and distinguish these analogous legal
relations.
(1) Agency or Trust. "The germ of agency is hardly to
be distinguished from the germ of another institution which
in our English law has an eventful future before it, the ' use,
trust, or confidence.' " ^ The two are now, of course, quite
distinct, and the distinction is found fundamentally in this,
that in agency the legal title and use of the property concerned
are in the principal and not the agent, while in trusts the legal
title is in the trustee and the use in the cestui. Accordingly,
agency is a topic of the common law, and trusts a topic of equity
jurisdiction. Yet for some purposes an agent is spoken of as
a quasi trustee, and is required to account in equity .^
(2) Agency or Partnership. It is sometimes difficult to
determine whether a contract creates the ordinary relation
of principal and agent or the special relation of partnership.
Even where parties unite in a joint enterprise and agree to
share the profits, a partnership does not necessarily result ;
the participation in profits is an element in the problem, but is
not decisive. It is a question of construction upon the whole
agreement, the intention of the parties being the controlling
consideration.'^ A partner is also an agent, but his agency is
of a special and peculiar character.*
(3) Agency or Sale. Whether the relation between the
parties is that of principal and agent, or vendor and vendee,
must depend upon the construction of the contract. A. agrees
to dispose of goods placed in his hands by B., and at periodical
intervals return an account to B. of the sales made, and turn
over to B. the value of the goods sold, at a fixed price, keeping
himself the difference between this price and the price at which
he has sold them. This might be a del credere agency,^ or a
sale as between A. and B. The construction to be placed on
1 2 Pollock and Maitland, Hist, of Eng. Law before Edw. I., p. 226.
2 Marvin v. Brooks, 9-1 N. Y. 71 ; Warren v. Holbrook, 95 Mich. 185;
cf. Uhlnian v. N. Y. Life Ins. Co., 109 N. Y. 421.
3 Grinton v. Strong, 148 111. 587 ; Wright v. Davidson, 13 Minn. 449.
* Burdick on Partnership, p. 159, 195.
6 Post, § 90.
8 AGENCY.
tlie contract will vary in accordance with the terms and the
evident intention of the parties.^ The refinements are too
nice to be discussed liere, but will be disclosed by an examina-
tion of the cases.
(4) Agency or Bailment. P. may deliver his property to
A. for either of two purposes, namely, to sell lor P. or to keep
for P. In the first case A. is an agent ; in the second a bailee.
Tiie nature of the understanding between P. and A. must de-
termine whether the transaction results in the creation of an
agency or a bailment. Thus in Biggn v. Evans^ an opal table
was entrusted to a dealer on condition that it was not to be
sold without first securing the authorization of the owner. The
dealer sold it without such authorization, and it was held that
the table was never entrusted to the dealer to sell, but only to
keep, and that the purchaser acquired no title. Such a case
may involve a question of ostensible agency or a question of
ostensible ownership. Thus if an owner invests a bailee with
the indicia of ownership, a purchaser from the bailee may ac-
quire a good title as against the owner, not because the owner
is estopped to deny the agency (for there is no holding out as
agent), but because he is estopped to deny the bailee's owner-
ship.3 It may well be questioned whether Biggs v. Evans
ought not to have been decided in favor of the purchaser, on
tlie ground that one who permits his goods to be exposed by a
dealer in such goods is estopped to deny the dealer's owner-
ship. The doctrine of ostensible ownership is especially ajipli-
cable to cases where the true owner invests another with docu-
ments of title.* It is to extend this doctrine of ostensible
ownership that the " Factors Acts " have been passed.^
(5) Agencij or Lease. In like manner it becomes a matter
1 Ex parte White, L. R. Ch. App. 307; Ex parte Bright, L. R. 10
Ch. D. 506; National Cordage Co. v. Sims, 44 Neb. 148; Willcox, &c.
Co. V. Ewiug, 141 U. S. 627; Chezum v. Kreighbaum, 4 Wash. 680;
Singer Mfg. Co. v. Rahn, 132 U. S. 518.
2 18f»4, 1 Q. B. 88.
3 McCauley v. Brown, 2 Daly (N. Y. C. P.), 426.
« Lickbarrow v. Mason, 2 T. R. 63; Pickering v. Busk, 15 East, 38;
post, § 170.
6 Post, § 171.
INTRODUCTION. 9
of construction whether a party to a contract is an agent or a
lessee. Although the party may be acting under a formal
power of attorney authorizing him to represent the other party
in the management of certain property, yet this, taken in con-
nection with the intent and conduct of tlie parties, may be
construed as a lease of the property so as to make the lessee
liable for rent as the assignee of the terni.^ If the construc-
tion of the relation is that of lessor and lessee, and not that of
principal and agent, the lessor is not liable for the wilful or
negligent acts of the lessee in the conduct of the property.''^
Thus if one lets his farm and stock on shares, he is not liable
for the negligence of the lessee in keeping a vicious animal.^
(6) Serva7it or Independent Contractor. A person may be
engaged to perform an operative act for another without be-
coming a servant. The test usually applied is whether the
employer retains any control, or right of control, over the
means or methods by which the work is to be accomplished.
If he does, the employee is a servant ; * if he does not, the other
party to the contract is not strictly an employee at all, and is
in no sense a servant, but is an independent contractor, re-
sponsible to his contractee for results only.^ This is more
fully considered hereafter.^ The question whether one is liable
for the unsafe condition of his premises, or of a public street
over which he has been given control, involves other consider-
ations having to do with the high degree of responsibility placed
upon occupiers of premises.'^
1 Eagsdale v. Land Co., 71 Miss. 284, 303-307.
2 Miller v. New York, &c. R., 125 N. Y. 118.
3 IVIarsh v. Hand, 120 N. Y. 315.
* Linnehan v. Rollins, 137 Mass. 123 ; Lawrence v. Shipman, 39 Conn.
586. The owner may approve or disapprove the results of the work daily
without retaining control over methods. Casement v. Brown, 148 U. S.
615.
6 Bailey v. Troy, &c. Co., 57 Yt. 252; Harrison v. Collins, 86 Pa. St.
153; King v. New York Central, &c. R., 66 N. Y. 181 ; Morgan v. Smith,
159 Mass. .570; 35 N. E. 101.
« Post, § 218.
7 Gorham v. Gross, 125 Mass. 232; Woodman v. Met. R. Co., 149
Mass. 335.
10 AGENCY.
(7) Transfer of Service. A master may transfer tempora-
rily tlic service of his servant to another, so as to make the
servant the rei)resentative of the transferee. Thus A. rents
a machine to B. with a man to operate it. If, in the opera-
tion of the macliine, the man is under the control of B., he
becomes B.'s servant as to the operation, though not perhaps
as to the inspection aud repair, of the machine.^ But other-
wise, if the man remains under the control of A., who stands
somewhat in the relation of an independent contractor.*^ The
master cannot transfer the control over a servant without the
lattcr's consent.^ Transfer of service is more fully considered
hereafter.*
§ 4. Distinction between the law of principal and agent, and
the law^ of master and servant.
Agency ^ divides itself into two main heads, — the law of
principal and agent,^ and the law of master and servant.
The fundamental distinctions between the two are to be
sought, — (1) in the nature of the act authorized, and (2) in
the nature of the obligation resulting from the performance
of the act, and (3) in the nature of the legal test fixing the
constituent's liability for an act in excess of authority.
(1) The primary distinction l)etwecn representation through
an agent, and representation through a servant, lies in the
nature of the act which the rei>rosentative is authorized to
perform. An agent represents his principal in an act intended,
1 Donovan v. Laing, (1893) 1 Q. B. 629.
2 Quinn v. Complete Electric Const. Co., 46 Fed. Rep. 506; Huff v.
Ford, 126 Mass. 24.
8 Post, § 86.
* Post, § 228.
^ It is to be regretted that the word " agency " should be used to cover
the whole field of representation, and that the word " agent " should at the
same time be used as the name of the representative in one branch of it.
H there were another word for agency (e. g. representation), or aimtlicr
word for agent (e. g. deputy), many tedious circumlocutions niiglit be
avoided. It might be better still if the whole field were called the " Law
of Representation," while the branch known as the " Law of Principal
and Agent" were called the "Law of Agency," and that known as the
" Law of Master aud Servant," were called the " Law of Service."
INTRODUCTION. 11
or calculated, to result in the creation of a voluntary primary
obligation or undertaking. A servant represents his master I
in the performance of an operative or mechanical act of ser- •
vice not resulting in the creation of a voluntary primary obli-
gation, but which may result, intentionally or inadvertently, in
the breach of an existing one. An agent makes offers, repre-
sentations, or promises for his principal, addressed to third
persons, upon the strength of which such third persons change
their legal relation or position. A servant performs operative /
acts not intended to induce third persons to change their legal !
relations. An agent has to take account of the mind and will of ;
two persons, namely, of his principal whose mind he represents, '
and of the third person whose mind he seeks to influence. A ,
servant has to take account of the mind and will of one per- i
son, namely, of his master whose existing obligations and
duties he is to perform. An agent may cause damage by
inducing a third person to act. A servant may cause damage
by acting upon a third person or his property or rights. In
representation through an agent there are always three per-
sons involved, the principal, the agent, and the third person.
In representation through a servant, there are only two per-
sons primarily involved, the master and the servant, and the
third person is introduced only when the servant commits, in
the course of his master's business, a breach of the obligations
owing by the master to a third person. In the first case, there
are three persons and the third is induced to act. In the sec-
ond case, there are three persons and the third is acted upon.
(2) The secondary distinction between representation
through an agent, and representation through a servant, hangs
in sequence upon the primary one. The agent, by influencing
the will of the third person, induces him to enter into new
legal relations with the principal. The servant, by acting
upon the already existing legal relations of the principal and |
the third person, may commit a breach of his principal's obli-
gations. The agent lays upon his principal a primary obliga-
tion to make good a promise or a representation. A servant
may lay upon his master a secondary obligation to repair the
breach of an antecedent or primary one. The law governing
12 AGENCY.
principal and agent has therefore to do with the creation of
new obligations. The law governing master and servant has
to do with the breach of existing obligations. The main, but
notthejexclusive, subject-matter of the first is contract. The
main, but not the exclusive, subject-matter of the second is
tort. The first includes, besides contract, such gratuitous
undertakings as may be enforceable, such estoppel obligations
as may be enforceable, and such tort obligations as result from
a false rci)resentation acted upon by the one to whom it is
made, namely, deceit and torts analogous to deceit. The
second includes, besides torts, the breach of existing contract
obligations or voluntary undertakings, though it will usually
be found in such cases that the undertaking, while it may
originate in contract, is really larger than contract, and that
its breach is remediable in an action ex delicto.^
An agent therefore is a representative who creates bifac-
toral obligations to which his principal is a party. These
are usually contracts ; but other concepts of the law fall
within the classification, namely, gratuitous undertakings,
estoppel, and deceit. In a gratuitous undertaking the obliga-
tion is voluntary, and it is fixed by the act of the one who
suffers a detriment relying upon it. In estoppel the obliga-
tion is voluntarily undertaken by making a representation
and is fixed by the act of the one who suffers a detriment
relying upon it ; thereafter the maker of the representation
is estopped to deny its truth. In deceit, the matter is not so
clear because of the habit of regarding deceit as strictly a
tort arising from the breach of an absolute involuntary obli-
gation. But deceit differs from all other torts in this, that it
consists in influencing the conduct of another person to his
damage. Its first appearance seems to have been in an action
for a false warranty, and it was not until 1778 that an action
in assumpsit on a warranty first appears in the reported cascs.^
^ For example, where a carrier undertakes by contract to transport a
passenger, and liis servant entrusted with tlie performance of the duty is
negligent, the passenger has an action eitlier for breach of contract, or
in tort for negligence. Bigelow on Torts, 7th ed., §§ 54-56.
^ Ames, Hist, of Assumpsit, 2 Harv. Law Rev. 8.
INTKODUCTICN. 13
Moreover the first actions for breach of parol promises were
actions on the case for deceit,^ and assumpsit to-day retains in
the doctrine of consideration the earmarks of its origin,
" because only he who had incurred detriment ujjon the failh
of the defendant's promise, could maintain the action on the
case for deceit in the time of Ilcnry VII." 2 Deceit, there-
fore, while sounding in tort, resembles contract and estoppel
in this, that it arises from a voluntary representation by one
party acted upon by another to his detriment. Strictly speak-
ing, the obligation is created voluntarily by the one making
the representation, but its extent is determined by the detri-
ment suffered by the one acting upon it. It is therefore
proper, or at least it serves a useful purpose, to include
deceit among the voluntary bifactoral obligations.
(4) The third distinction between representation through
an agent, and representation through a servant, lies in the
nature of the test fixing the constituent's liability for acts of
his representative in excess of the actual authority. In the
case of the principal, this test is to be sought in the doctrine
of estoppel. In the case of the master, this test is to be
sought in the doctrine that one who employs an instrumen-
tality for an operative act must remain liable, within reason-
able limits, for its defects. The nature of these tests will be
explained more fully in the succeeding section. What it is
important to note here is the fact that the distinction between
the two branches of agency involves more than a mere matter
of classification, and goes direct to the central problem of
agency, namely, when and upon what doctrine is a consti-
tuent liable for the acts of his representative in excess of the
authority conferred.
§ 5. Basis of the constituent's liability for the acts of his repre-
sentative.
The main problem of agency is to discover when, and under
what circumstances, a man is liable for the acts of his repre-
sentative. This problem would be a comparatively easy one
1 Ames, Hist, of Assumpsit, 2 Harv. Law Rev. 15.
8 Ibid. p. 16.
1-i AGENCY.
were it true that a man is obligated by the act of his
representative only when he has in fact authorized the repre-
sentative to do or not to do that which results in obligation,
or when he has ratified as his own an act of his representative
not originally authorized. Agency is a compendious term
signifying the instrumentality through which a i-esult is ac-
complished ; in its normal sense it means the instrumenlality
through which the will of an individual is accomplished. If
therefore a man chooses to em])loy a particular agency to
carry out his i)re-determined purpose, he is of course respon-
sible for the result determined upon and reached, as fully as
if he had acted immediately instead of mediately. In such a
case, we should be concerned only with the result, and not
with the means through which it was accomplished. But the
doctrine is much more sweeping in its application. In the
employment of a human agency, the constituent must take
account, not only of his own will, but also of the will of the
representative. This second will may prove either incom-
petent, or careless, or perverse, and from this incompetence,
carelessness, or perversity may flow consequences never in-
tended by the constituent, but for which the law holds him
accountable. Thus it follows that a man may be obligated
by the act of a representative which he has not only not
authorized, but which he has in terms forbidden. The problem
therefore resolves itself into this, when and why is a man held
liable for acts of his representative, neither commanded nor
ratified, acts in excess of any actual authority conferred ?
It has been contended that we must seek the basis of
liability in such cases in the fiction of identity.^ It has, on
the other hand, been contended that this fiction plays a small
part historically in the development of the law of representa-
tive liability, and that the basis of the liability is the voluntary
act of the employer in setting the representative in motion,
or that one must answer, within reasonable limits, for an
instrumentality operating for his benefit.^ Still others would
contend that the whole matter is determined mainly by the
1 O. W. Holmes, Jr., 4 Haw. Law Rev. 345, and 5 Ibid. 1.
2 J. H. AVigmore, 7 Harv. Law Rev. 383.
INTRODUCTION". 15
practical consideration that the employer is usually better
able to pay than the representative.'
Much confusion has been occasioned by the failure to dis-
tinguish between liability for acts creating primary obligations
and giving rise to primary rights, and liability for acts violat-
ing primary obligations and giving rise to secondary obliga-
tions and secondary or remedial rights. In the first case the
employer has authorized a representative to make promises
or representations and to induce third parties to act upon
them. The sole legal question then is, had the third person,
in acting upon the representative's statements, reasonable
grounds for believing that the representative was authorized
to make them ? In other words, had the agent apparent
authority to do what he did do ? If so, then the employer is
estopped to deny that that which he made to appear to be
true is not true, since a third person has acted upon the repre-
sentation of the principal as to the agent's authority .^ This
is a solid ground of liability which dispenses with all fictions
and all slippery considerations of the limits within which one
man ought to be held liable for the perversity of his instru-
mentalities. The earliest authorities which suggest this
ground of liability are in cases of deceit where, as in contract,
the essence of the employer's liability consists in the fact that
he has held out his agent as having authority to make repre-
sentations, and the third party has, relying on this apparent
authority and the agent's representations, changed his legal
position.^ And in contract cases this ground is distinctly
taken.*
1 2 Pollock and Maitland, Hist, of Eng. Law, 530-532. See also 7
Harv. Law Rev. 107.
2 Post, §§ 51, 52, 102, 108.
8 Southerne v. Howe, 2 Rolle's Rep. 5, 26 (1618), in the argument of
counsel; Hern v. Nichols, 1 Salk. 289 (1708).
* Hazard v. Treadwell, 1 Stra. 506 (1768) ; Pickering v. Busk, 15 East,
38 (1812) ; Whitehead v. Tuckett, 15 East, 400 (1812). In Pickering y.
Busk, it is said, " This case . . . proceeds on the principle, that the plain-
tiff having given Swallow an [implied] authority to sell, he is not at lib-
erty afterwards, when there has been a sale, to deny the authority." The
16 AGENCY.
But in the second class, whore the act of the representative
consists in the breach of liis employer's antecedent obligations
and an infringement of the third party's antecedent rights,
the basis of liability is by no means so clear. Here the third
party is not misled by any representations of the employer
as to the employee's authority. Here the consideration that
where one employs an instrumentality for a merely operative
purpose he ought to be liable, within reasonable limits, for its
defects, must be invoked.^ But what are the limits ? (1) A
negligent performance of the operative act while the sei'vant
is within the course of the employment, is an incident which
ought fairly to attach to the operation as a whole, and render
the master liable. Upon this modern cases express no doubt.
(2) A wilful damage inflicted upon a third party by the
servant in the performance of the operative act (as an inten-
tional assault or trespass) has given more trouble.^ But the
modern form which the test of liability has taken is that if
the wilful act was done by the servant in furtherance of, and
within the course of the employment or business entrusted to
him, the master is liable.^ It will be noted that there are
two tests here (a) " in the course of the employment" and
(h) " in the furtherance of the employment," or, as it is some-
times stated, " for the master's benefit." While both of these
tests are usually applied, there are some cases w^hich escape
the second, and the master is held liable where the act was
not " in the furtherance of the employment." ^
The basis of liability for a representative's acts may there-
fore be said to be :
principle is clearly put by Lord Cranworth in Pole ?'. Leask, 33 L. J. Ch.
155 (1863).
1 Undoubtedly the earliest cases proceeded on the ground of an ex-
press command (save where as in cases of fire there is a duty to insure
safety), but the law speedily escapes this narrow doctrine, and gradually
moulds itself into the modern doctrine through the intermediate fiction of
an "implied command." See Wigmore, 7 Harv. Law Rev. 383.
2 McManus v. Crickett, 1 East, 107 (1800) ; Wright v. Wilcox, 19
Wend. 343 (1838).
8 Post, § 252.
* Post, § 254.
INTKODUCTION, 17
(1) Command or ratification where the act is within the
actual authority ; ^
(2) Estoppel to deny authority, where the act is in excess
of actual authority, and consists in the making of a promise
or representation upon which a third party acts ; ^
(3) The course of the employment, where the act is in
excess of authority and consists in negligent harm to a third
person in the performance of an operative act ; ^
(4) The course of the employment and the furtherance of
the employment or husiness, where the act is in excess of
actual authority, and consists in a wilful harm to a third
person.^
§ 6. Definition of agent and servant.
An agent is a representative vested with authority, real or
ostensible, to create voluntary primary obligations for his
principal, by making contracts with third persons, or by mak-
ing promises or representations to third persons calculated to
induce them to change their legal relations.
" Vested with authority " includes authority acquired
through the will of the principal or by operation of law, and
authority acquired either prior to or subsequent to the per-
formance of the representative act.
A servant is a representative vested with authority to per-
form operative acts for his master not creating new primary
obligations, or bringing third persons into contractual relations
with the master, or otherwise causing them to change their
legal position. A master comes under obligations to third
persons by the act of his servant only when the servant
commits a breach of the master's primary obligations and
thus creates secondary substituted obligations.
" Vested with authority " means here the same as in the
preceding definition. But the authority in such case must
be real, not ostensible merely, since no doctrine of estoppel
^ Applicable to the law of principal and agent, and the law of master
and servant.
^ Applicable only to the law of principal and agent.
^ Applicable only to the law of master and servant.
2
18 AGENCY.
is applicable except where a third person is induced to change
his position. If he is induced to change it in consequence of
the ostensible authority, then the representative is an agent.
To put the whole matter shortly, an agent is one really or
ostensibly authorized to create voluntary antecedent or pri-
mary obligations for his principal in I'avor of third persons,
or to acquire such obligations for his principal as against
third persons ; while a servant is one authorized to perform
operative acts not creating primary obligations, but which
may result in the breach of antecedent primary obligations,
voluntary or involuntary.
Since it is the nature of the act to be performed that con-
stitutes the essential difference between the two classes of
representatives, it follows that the same rejjresentative may
be both an agent and a servant, and herein lies the source
of much of the confusion that prevails in the discussion of the
law of representation. It is often said that the distinction
lies in the fact that an agent is vested with discretion, while
a servant is not.^ But this is obviously incorrect. A railway
conductor is not an agent merely because he is vested with a
wide discretion as to the management of his train ; he may or
may not be a vice-master, but he is a servant so long as his
authority is to do an act not resulting in contractual obliga-
tion ; if vested with authority to engage employees or make
contracts of carriage then for that purpose he is an agent and
not a servant, since his act results in the creation of a con-
tractual obligation. So a representative authorized to sell a
horse to a specified person at a specified price for cash is not
a servant merely because he has no discretion as to the terms
of the sale ; his act results in a contractual obligation, and
he is therefore an agent ; if, however, he is vested with autlior-
ity to drive the horse to a designated place, he is a servant in
the performance of that duty, and if he drive the horse negli-
gently to the injury of A., the master becomes liable in tort
for the damage.^
^ 28 Am. L. Rev. 9, 22, citing Chicago, &c. R. Co. v. Ross, 112 U. S.
377, 390.
' "The great and fmitlainental {listiiiction between a servant and an
INTRODUCTION. 19
§ 7. Classification of agents and servants.
Agents are often classified as universal agents, general
agents, and special agents.
A universal agent is said to be one authorized to transact
for his princijial any and all business which can be done
through a representative. Such agencies are rather theoreti-
cal than practical, and a universal agent is, at most, a "gen-
eral agent" in the superlative degree. We may, therefore,
disregard this class of agents.
A general agent is said to be (a) one authorized to act for
his principal in all matters (universal agent), or in all matters
connected with a particular trade or business, or in all mat-
ters of a particular nature, or (b) one whose business or pro-
fession it is to transact for any or all persons a particular kind
of business, as a factor, broker, auctioneer, lawyer, etc.^
A special agent is said to be one authorized to act for his
principal in only a single, specific transaction, such act or
transaction not being in the ordinary course of a trade or pro-
fession which he is followino-.^
Many refinements as to the liability of a principal have
been built upon the distinction between general agents and
special agents. The distinction, however, is a vague one and
often leads to more confusion than it cures. To begin with,
writers do not agree as to the distinction itself, much less as
to its legal effects. One writer makes the distinction to con-
sist in the extent of the representation ; that is, if the agent
represents the principal in a single transaction, he is a special
agent is, that the former is principally employed to do an act for the em-
ployer, not resulting in a contract between the master and a third person,
while the main office of an agent is to make such contract. Servants
may make contracts incidentally, while agents may in the same way
render acts of service. The principal distinction between them, however,
is as above stated." — Dwight, Persons and Pers. Prop. p. 323. See
Singer Mfg. Co. v. Rahn, 132 U. S. 518; Hand r. Cole, 88 Tenn. 400;
Jones V. Avery, 50 Mich. 326.
1 Sometimes (a) is given as the correct definition, sometimes (b), and
sometimes both (a) and (b).
2 Sometimes the definition is given with, and sometimes without, the
last qualifying phrase.
20 AGENCY.
agent, while if he represents him in all business dealings of a
particular kind, he is a general agent.^ Another writer finds
the distinction in the source of the discretionary power. If
the agent's powers arc fixed by the terms of his appointment,
he is a special agent, while if his powers are fixed by custom
and usage, he is a general agent."'' Clearly it would be of the
first importance to know which of these views is correct if
anything depended upon the distinction, for they are irrecon-
cilable. If a principal entrusted a cargo of wheat to a factor
to sell, the agent would be a special agent under the first view,
but a general agent under the second. If a principal's liabil-
•ity depends upon the solution of the question whether the
agent is special or general, the conclusions reached would be
exactly opposed to each other. As we shall see later, the
question of the principal's liability can be determined without
involving it in the solution of this preliminary question,^ The
terms special agent and general agent may therefore be dis-
regarded except as terms of convenience to indicate broadly
the scope of the agency. The liability of a principal for the
acts of his agent depends upon the ostensible authority which
he has conferred: in determining this it is often necessary to
inquire whether the agent has really or apparently been en-
trusted with the conduct of a business generally, whether he
is an agent whose powers are fixed by the customs of a trade
or profession, or whether, not following a customary trade or
profession, he has been engaged to carry out a single or par-
ticular transaction.* As a convenient method of indicating
briefly the distinction between agents transacting a general
business for the principal, or following a customary trade or
profession, and agents transacting a particular item of busi-
ness for the principal, and not following a customary trade or
profession, the terms general agent and special agent may,
perhaps, serve some useful purpose ; but this can only be if all
who use the terms affix to them the same significance.
^ Mechem on Agency, § 6; Story on Agency, § 17: Butler v. Maples,
9 Wall. (U. S.) 766.
2 Holland, Jurisp. (9tli ed.) p. 200; Dwiglit, 1 Col. Law T. 81.
» 7^6/, § 104. * Post, § 106.
INTRODUCTION. 21
Agents are also divided into del credere agents, or those
who guarantee their principals against the default of those
with whom contracts are made, and agents not del credere, or
those who do not guarantee credits.^
Special names are also applied to certain classes of agents,
as, attorneys-at-law, auctioneers, brokers, factors or commis-
sion merchants, shipmasters, cashiers, etc.^
Servants are also divided into various classes, as, general
managers, superior officers, vice-principals, fellow-servants,
etc.^
§ 8. Division of the subject of agency.
The law of agency is divided into the law of principal and
agent and the law of master and servant, as already explained.
Under each of these two heads agency may be treated from
three quite distinct points of view. First, it may be treated
as a contract between principal and agent or master and ser-
vant, and inquiry may be directed to the ascertainment of the
terms and legal effects of this contract. Second, it may be
treated as a means to the formation of new relations between
the principal and third parties, or as a means for the carrying
out of operative acts for the master that may result in harm
to third parties, and inquiry may be directed to the legal
effects of the employment of such instrumentalities. Third,
it may be treated as a means of bringing the agent or servant
into contact with third parties, and inquiry may be directed
to relations which the agent may personally establish in act-
ing for the principal, or in excess of authority, and harm which
the servant may occasion or suffer in acting for the master or
in excess of authority.
The first view of the subject presents no special difficulties,
since the contract obligations are created by two parties in
person, and the usual doctrines of contracts for personal ser-
vice are applicable. This part deals, therefore, with the for-
mation, termination, and legal effects of contracts of agency
or service.
The second view is the one which makes necessary a special
1 Post, § 06. 2 pos^ § 110 e< seq. » Post, § 270.
22 AGENCY.
treatment of tlie law of agency, — first, because an agency may
be created otherwise than by contract between the constituent
and the representative, and second, because a constituent,
whose will is thus represented, may be made liable to third
persons in cases where the representative proves careless, in-
competent, or perverse, and even where he acts in direct oppo-
sition to the express commands of the constituent.
The third view is, in a sense, subordinate to the second, for
in cases where the representative acts as for himself and not
for his constituent, or where he acts in excess of authority, or
wrongfully, he may incur legal obligations to third persons as
well as to his constituent, and may, in some cases, acquire
legal rights against third persons. The subject of agency is
therefore divided, logically, into two great parts :
(I.) The law of principal and agent ;
(IT.) The law of master and servant.
Each of these parts is divided into four parts :
(1) The formation of the relation, either as regards obliga-
tions subsisting between constituent and representative, or as
regards the authority of the representative to act for the con-
stituent. Incidental to this is the subject of the termination
of the relation.
(2) The mutual rights and obligations of the constituent
and representative as to each other.
(3) The mutual rights and obligations of the constituent
and third persons growing out of the exercise of authority by
the representative.
(4) The mutual rights and obligations of the representative
and third persons arising from the acts of the representative.
PART I.
FORMATION AND TERMINATION OF THE RELATION OF
PRINCIPAL AND AGENT.
§ 9. Introductory.
The inquiry whether the relation of principal and agent
has been formed or exists may arise either in a controversy
between the principal and agent, or between the principal
and some third person with whom the agent has dealt, or
between the agent and such third person. To avoid useless
repetition, this part of the work will therefore discuss the
formation of the relation as concerns any one or all of these
possible cases. For the one or the other of these purposes
the relation may be formed in any one of four ways: (1) by
agreement; (2) by ratification ; (3) by estoppel; (4) by neces-
sity. In addition to a consideration of the methods of form-
ing the relation, this part will also discuss the methods by
which the relation may be terminated.
The problem of whether the relation has been established
as between the principal and third persons involves the doc-
trines of ostensible, as distinguished from actual, agency, doc-
trines more fully treated under the head of estoppel.
It should also be noted that much, but not all, of what
follows is applicable to the formation of the relation of master
and servant. Accordingly some cases cited have to do with
master and servant so far as concerns the formation of the
relation of employer and employee.
2-4 FORMATION OF AGENCY
CHAPTER 11.
FORMATION OF THE RELATION BY AGREEMENT.
§ 10. Elements of agreement.
Agrecinent is a broader term than contract. It implies,
however, an offer and acceptance, or a meeting of the minds,
or manifestation of the meeting of the minds, of the parties.^
Accordingly an agency by agreement is one where the princi-
pal and agent mutually consent to the formation of the rela-
tion. Such an agreement may amount to a contract, or it
may fall short of contract. If it amount to a contract, it is
binding as between principal and agent, and when acted upon
may bind the principal to third persons or third persons to
the principal. If it falls short of contract, it will not bind
the principal and agent as a contractual obligation, but is
good as an appointment of an agent, and if acted upon by
the agent under such appointment may bind the principal to
third persons or third persons to the princii)al, and may
render the agent liable to the principal for misfeasance.
The assent of the principal may be express or implied, and,
as to third persons, it may rest upon a holding out giving rise
to an estoppel to deny the assent.^ It may be subsequent to
the act of the agent and amount to ratification.*^
The assent of the agent may be express or implied. It is
implied whenever he undertakes to act for another; and his
conduct, in so acting for or on behalf of another, may give rise
to an estoppel to deny the agency.*
Under the head of agency by agreement, we have then to
consider, (1) agency by contract, and (2) agency by agree-
ment falling short of contract.
1 Huffcut's Anson on Cont. p. 2. 2 p^^f^ §§ 50^ io3.
• Post, § 30 et seq. * Fvoberts i-. Ogilby, 9 Price, 269.
BY AGREEMENT. 25
1. Agency hy Contract.
§ 11. Elements of contract.
A contract of agency (that is, a contract binding as between
the principal and agent) must possess all the essential ele-
ments of any enforceable contract, namely, true agreement,
consideration, competent parties, legality of object, and in
some cases a particular form.^ Most of these elements call
for no special discussion, as they differ in the contract of
agency in no essential particular from the like elements in
any contract known to the law. Some special points of diffi-
culty may be briefly noted.
§ 12. Agreement, forms of.
The agreement between the principal and agent may take
any one of three forms : the offer of a promise for an act ;
the offer of an act for a promise ; the offer of a promise for a
promise.^
The first case is where the principal promises remuneration
if the agent will render a service. The promise may be ex-
press, or it may be an implied promise to pay what the ser-
vices are reasonably worth. An express agreement controls ; ^
in its absence an implied agreement may be inferred. Strictly
the promise would be offered for the act only when there was
a request that the act be done.^ And even in sucli a case the
circumstances may negative any implication that the services
were to be paid for.^ Such is the result where the services are
rendered by one member of a family at the request of another.^
The second case is where the agent offers a service which
the principal accepts. The acceptance may be by express
words, stating the terms, in which case the express promise
would control ; or it may be by conduct, in which case there
is an implied promise to pay what the services are reasonably
^ Huffcut's Anson on Cont. p. 12 et seq.
2 Huffcut's Anson on Cont. pp. 402-403.
8 Wallace v. Floyd, 29 Pa. St. 184.
* Van Arman r. Byington, 38 lU. 443.
6 Scott V. Maier, 56 Mich. 554.
6 Hall V. Finch, 29 Wis. 278.
26 FORMATION OF AGENCY
wurtli.^ The test is as to whether a reasonable man would
understand that the agent expected to be paid for his services.
It is because reasonable men understand that services rendered
by one member of a family for another are generally gratuitous
that an offer of an act by the one, accepted by the other, raises
no promise to pay.^ Of course if the offer of the act is not
communicated to the principal until after it is performed, and
he has therefore had no opportunity either to accept or reject
it, he would not be bound without a ratification.^
The third case is that of a promise for a promise, namely, an
express contract by which the agent promises to perform the
service, and the principal to pay for it. In this, and the other
cases, it is necessary as between employer and employee that
the agreement be real, that is, free from mistake, misrepre-
sentation, fraud, or duress. As between the employer and
third person, the authority, if exercised, binds the employer.
§ 13. Consideration.
Consideration consists in a benefit to the promisor or a
detriment to the promisee. It is as necessary to tlve contract
of agency as to contracts generally. The only case calling
for special mention is where the services have been rendered
gratuitously, and there is a subsequent promise to pay for
them. Generally speaking there would be no consideration
for the subsequent promise, since, there being no prior legal
obligation, the case would be one of past consideration, which
will not support a promise.* Cases which seem to hold to the
contrary arc those in which there was cither a previous re-
quest, express or implied, or where the services were rendered
under such circumstances as not to be deemed gratuitous,
and the subsequent promise merely fixes expressly the value
of the services.^
1 Muscott I'. Stubbs, 24 Kans. .520 ; McCrary v. Ruddick, '33 Towa, 521.
2 Hertzog v. Hertzog, 29 Pa. St. 4G5; Hall v. Fincli, 29 Wis. 278.
« Bartholeinew v. Jackson, 20 Johns. (N. Y.) 28; James v. O'Diiscoll,
2 Bay (S. C), 101.
* Allen V. Bryson, 67 Iowa, 591.
6 Dearborn v. Bowman, 3 Mete. (IMass.) 155; Hicl.s v. Burhans, 10
Johns. (N. Y.) 243; Wilson v. Edmonds, 24 N. H. 517.
BY AGREEMENT. 27
But while gratuitous services may raise no promise to com-
pensate, a promise to perform a gratuitous service, followed
by an actual performance, in whole or in part, may be en-
forceable to the extent of rendering the agent liable for negli-
gence. But whether this is on the ground of contract or tort,
is not clear.i Moreover, as to third persons, the question
whether there is any consideration as between employer and
employee is immaterial.
§ 14. Parties, — competency of, generally.
Generally speaking, parties competent to make any con-
tract are competent to make a contract of agency.^ As be-
tween the principal and agent this rule is well enough, but as
between the principal and third persons it calls for further
examination and modification. On the one hand, we have to
inquire whether an incompetent person, as a lunatic or an
infant, can make a contract through a competent agent ; on
the other, whether a competent person can make a contract
through an incompetent agent. This discussion is applicable
to cases of gratuitous agency and of ratification, as well as to
cases of agency by contract.
§ 15. Parties. — Infant principals.
It is sometimes said that all contracts of an infant are
voidable except two, — the contract for necessaries, which is
binding, and the contract for the appointment of an agent,
which is void.^ It is the last proposition which calls for
special notice.
If an infant, by contract or otherwise, appoints an agent,
and this agent makes a contract with X. in behalf of the
infant principal, is the contract so made void or voidable ?
If the appointment of the agent is a void act, then obviously
no legal results can flow from it, and the contract with X.
must likewise be void. If void, it could not be ratified by any
subsequent act of the principal.^ There are many cases
1 Thorne i'. Deas, 4 Johns. (N. Y.) 84. See post, § 29.
2 See generally Huffcut's Anson on Cont. Pt. II. Ch. iii.
8 Fetrow v. Wiseman, 40 Ind. 148, 155.
* Post, § 41.
28 FORMATION OF AGENCY
wliich make the sweeping statement of the law that the
ai>pointuK'nt of an agent by an infant is a void act, and that
the acts done by the agent in behalf of the principal are likewise
void.^ But these authorities are in most cases based upon the
app«jintment of an attorney by formal warrant of attorney,
and the rule to be deduced from them is that the formal
power or warrant of attorney by an infant, not conveying a
present interest, is void.- The American cases show a decided
tendency to confine the rule to this class of cases, and to hold
that the appointment of agents by an infant generally, is a
voidable and not a void act.^ Yet there is authority for the
broader rule that the appointment of any agent by an infant
is void.* It is admitted that the exception, if it be one, is not
founded on any intelligible principle, and the tendency to con-
fine it within the narrow limits of formal powers of attorney
is likely to prevail.^ " The courts have, from time to time,
made so many exceptions to the exception itself that there
seems to be very little left of it, unless it be in cases of powers
of attorney required to be under seal, and warrants of attorney
to appear and confess judgment in court." ^
§ 16. Parties. — Insane principals.
The generally accepted rule in England as to the effect
of insanity upon contracts is that " a defendant who seeks
to avoid a contract on the ground of his insanity, must plead
and prove, not merely his incapacity, but also the plaintiff's
knowledge of that fact, and unless he proves these two things
1 Philpot V. Bingham, 5.5 Ala. 435; Knox v. Flack, 22 Pa. St. 3.37;
Bennett v. Davis, 6 Cow. (X. Y.) 393.
2 Lawrence v. McArter, 10 Ohio, 37 ; Waples r. Hastings, 3 Harr. (Del )
403.
8 Patterson v. Lippincott, 47 N. J. L. 457; Towle v. Dresser, 73 Me.
2.j2; Hardy v. Waters, 38 Me. 450; Hastings v. Dollarhide, 24 Cal. 195;
Whitney v. Dutch, 14 Mass. 457.
* Trueblood v. Trueblood, 8 Ind. 195; Armitage v. Widoe, 30 :Mich.
124.
« Cases supra ; Moley v. Brine, 120 Mass. 324 ; Fairbanks v. Snow, 145
Mass. 153.
« Mitchell, J., io Coursolle v. Weyerhauser, 69 Minn. 328, 333.
BY AGREEMENT. 29
he cannot succeed." ^ In the United States the authorities
are in confusion, but the following principles are supported
by abundant and perliaps decisive authority : (1) Where the
sane person does not know of the other party's insanity, and
there has been no judicial determination of such insanity,
and the contract is so far executed that the parties cannot be
put in statu quo, the contract is binding on the lunatic,^
(2) Conversely, the contract is voidable if the sane party
knew of the other's insanity ;^ if the lunatic had in fact been
adjudged insane, whether the sane party knew such fact or
not ; * if the contract is bilateral, or if the sane party can be
put in statu quo.^ (3) The contract is void if the statute
provides that contracts by lunatics shall be void,^ or if it
provides that contracts by lunatics under guardianship shall
be void ; ' and in some jurisdictions the doctrine of void
contracts is pushed beyond statutory limits in case of deeds,
and all deeds of insane persons under guardianship are held
void ;^ there is also high authority to the effect that a power
of attorney by a lunatic is absolutely void.^
The application of these principles to the contract of agency
would support these propositions. As between the principal
and agent the contract would be voidable if, when it was
formed, the principal had been adjudged insane, or the agent
1 Lopes, L. J., in Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599 ; Drew
V. Nunn, L. R. 4 Q. B. D. 661.
•■^ Gribben v. Maxwell, 34 Kans. 8; Young v. Stevens, 48 N. H. 133;
Mutual Life Ins. Co. v. Hunt, 79 N. Y. 541.
8 Crawford v. Scovell, 94 Pa. St. 48.
4 Inquisitions to ascertain facts of public interest are analogous to
proceedings in rem, and so conclusive on all the world. Wadsworth v.
Sharpsteen, 8 N. Y. 388, 392; Carter v. Beckwith, 128 N. Y. 312.
5 Burnham v. Kidwell, 113 IlL 425. See Wirebach v. First Nat. Bk.,
97 Pa. St. 543.
^ This is sometimes the case as to deeds. Ind. Rev. St. (1881) § 2917;
Ga. Code, § 2735.
T Cal. Civ. Code, §§ 38-40; Dak. Civ. Code, §§ 2519-2521.
8 Van Deusen v. Sweet, 51 N. Y. 378; Gibson v. Soper, 6 Gray
(Mass.), 279; Rogers v. Blackwell, 49 Mich. 192; Hovey v. Hobson, 53
Me. 451.
9 Dexter v. Hall, 15 Wall. (U. S.) 9.
30 FORMATION OF AGENCY
knew he was in fact insane. It would be void if the statute
declared contracts of insane persons void, and, it would seem,
if it was created by power of attorney. It would be binding
if the insane person had not been so adjudged and the agent
made the contract in good faith, iguorant of the insanity ; at
least it would be binding so far as acted upon by the agent.
As between the principal and third parties the same result
would follow. Knowledge of the iusanity, or the absolute
notice arising from its judicial determination, would make
the contract voidable. But absence of both knowledge and
notice would make it binding, at least in all cases where the
contract has been acted upon. But what of the case where
the agent knows his principal is insane ? If the principal is
sane when the agent is appointed, but subsequently becomes
insane to the knowledge of the agent, but unknown to the
third party, the contract is binding.^ This is put on the
ground that the principal when sane represents the agent aa
having authority, and third persons may act on the represen-
tation until they have notice of its withdrawal. It is a case
where one of two innocent parties must suffer by the wrong-
ful act of the agent, and the loss should fall on the one whose
representation is the proximate cause of the injury.^
§ 17. Parties. — Married women as principals.
A married woman could make no binding contract at com-
mon law. All her contracts were absolutely void. Modern
statutes, however, have gone far to remove her common law
disabilities, and she may now contract in some jurisdictions
as freely as an unmarried woman. To the extent that she
may contract generally in her own person she may contract
through an agent,^ but, of course, to no greater extent.* If
she may contract through an agent, she is liable on doctrines
1 Drew V. Nunn, L. R. 4 Q. B. D. 6G1; Davis l: Lane, 10 N. II. 156;
Matthies.sen, &c. Co. v. McMahon's Adm'r, 38 N. J. L. 536.
2 .\.s to termination of agency by insanity, see post, § 71.
3 Weisbrod c Chicago, &c. R , 18 Wis. 35.
* Kenton Ins. Co. i: McClelhui, 43 Mich. 564; Nash u. Mitchell, 71
N. Y. 199.
BY AGREEMENT. 31
of estoppel for ostensible authority, the same as any other
person.^ Some early statutes giving married women the
power to convey their lands by deed, but not otherwise
enlarging their contractual capacity, were strictly construed
so as to require an execution of deeds in person and not
through an attorney ; under these statutes it was held that a
married woman could not appoint an attorney to do what she
might do in person.^ In general a married woman may now
appoint an agent and may appoint her husband as agent.^
Even where she could not have an agent, it seems she could
have a servant to care for her estate for whose operative acts
she would be liable.*
§ 18. Parties. — Corporations as principals.
A corporation has the powers expressly conferred by its
charter or impliedly necessary to carry into effect the provi-
sions of that instrument. The corporate charter usually
confers an express power to appoint agents, but even in the
absence of such provisions the power is implied, both as to
the official agents through whom a corporation must act, and
also as to the inferior agents who may be employed at the
discretion of the managers.^ But the appointment of an
agent in excess of these powers would be a void act, not
binding on the corporation so far as the agent is concerned,
though if the corporation had had the benefit of his services
he might recover in quantum meruit.^ Whether authority to
affix the corporate seal must be under seal is discussed
hereafter.'^
1 Bodine v. Killeen, 53 N. Y. 93.
2 Sumner v. Conant, 10 Vt. 9 ; Eaile v. Earle, 20 N. J. L. 347.
8 VVeisbrod v. Chicago, &c. R., 18 Wis. 35.
* Flesh V. Lindsay, 115 Mo. 1.
* Protection Life Ins. Co. v. Foote, 79 111. 361 ; Hurlbut v. Marshall,
62 Wis. 590; Washburn v. Nashville, &c. R. R. Co., 3 Head (Tenn.), 638;
St. Andrew's Bay Land Co. v. Mitchell, 4 Fla. 192.
* Slater Woollen Co. v. Lamb, 143 Mass. 420. Query as to the result
where the appointment of the agent was ultra vires, but the conti'act made
by him with a third person was intra vires.
^ Post, § 26.
32 FORMATION OF AGENCY
§ 19. Parties. — Partnerships as principals.
In a partnership each niember is usually a principal and
also an agent in the management of the partnership affairs.
As agent each partner has the authority necessary for carry-
ing on the partnership,^ and among other powers he has the
power to api)oint agents to carry out the ))urposes for which
the partnership exists.^ But if the ajipointment he to do an
act which the partner could not do himself without special
authorization from his co-i)artnei-s, the appointment will not
bind the firm.^ And if the a])pointment recjuires to be made
under seal it cannot be made except by the joint act of all
the partners; but adding a seal to an instrument where none
is necessary will not bring the appointment within this rule.*
Where all of the partners have executed a sealed instrument,
it seems that parol authority to one to fill in the name of the
grantee is good.^
§ 20. Parties. — Unincorporated clubs, etc., as principals.
Unincorporated clubs and other voluntary associations, as
churches, political organizations, and the like, are not com-
petent principals because they are not legal entities. But
their members are competent joint principals, and may be
held as such if they have acted jointly in the appointment of
an agent.^ Mere membership in the club does not make them
principals as to contracts made by the officers or committees
of the club;'^ it must be shown that they authorized the agent
of the club to act as their agent and pledge their credit. But
this is a question not of the competency of the principal, but
of the fact and extent of the agency.^
^ Leake on Contr. (3d cd.) p. 451 and cases cited.
2 Tillier v. Whitehead, 1 Dull. (Pa.) 2G9 ; Lucas v. Bank, 2 Stew.
(Ala.) 280.
^ Charles v. Eshleman, 5 Colo. 107.
* Lucas V. Bank, supra ; Edwards v. Dillon, 147 111. 14.
' Cribben v. Deal, 21 Ore. 211. See Parsons on Partnership, § 122;
post, § 26.
« Kay V. Powers, 134 Mass. 22.
' Flemyng v. Hector, 2 M. & W. 172 ; Hawke v. Cole, 62 L. T. Rep.
N. 8. 6r)8; Ash V. Guie, 97 Pa. St. 493.
8 Post, § 185.
BY AGREEMENT. 33
§ 21. Parties. — Aliens as principals.
Aliens are generally as competent to create an agency as
citizens or subjects. But an alien enemy cannot, during the
continuance of a state of war, make any contract with a
citizen of the United States which involves any communica-
tion across the lines of hostilities.^ Accordingly he cannot
appoint an agent in the United States during the continuance
of the war.2 But if he have an agent here at the outbreak of
the war, the agency is not terminated or suspended for those
purposes not involving a communication across the lines of
hostilities, either between the principal and the agent or the
agent and third persons.^
§ 22. Parties. — Joint principals.
Two or more persons may be jointly principals in a con-
tract of agency. This has already been illustrated in the
case of partnerships and unincorporated clubs.* In the case
of a partnership each partner represents his co-partners and
may bind them by the appointment of an agent. But joint-
owners of property do not stand in this relationship, and
each must assent for himself to the appointment of the agent
in order to be bound as a principal.^ If a joint power be
given, it does not authorize the agent to act for one of the
principals in matters affecting his individual interests.^ In
unincorporated associations, not being partnerships, one mem-
ber does not represent the others, nor do a majority represent
a minority, except by assent."
1 Kershaw v. Kelsey, 100 Mass. 561 ; United States v. Grossmayer,
9 Wall (U, S.)72.
2 United States v. Grossmayer, 9 Wall. 72.
8 Monsseaux v. Urquhart, 19 La. An. 482; Ward v. Smith, 7 Wall.
(U. S.) 447.
* Atite, §§19, 20.
5 Keay r. Fenwick, L. R. 1 C. P. Div- 745; Perminter v. Kelly, 18 Ala.
716.
6 Gilbert v. How, 45 Minn. 121.
'' Flemyng v. Hector, 2 M. & W. 172; Todd v. Enily, 7 M. & W. 427;
Devoss V. Gray, 22 Oh. St. 159; Newell v. Borden, 128 Mass. 31.
3
3-4 FORMATION OF AGENCY
§ 23. Parties. — Competency of agent.
Any person may, as to third persons, act as an agcnt,^
unless, perhaps, one who is too young or too imbecile to
perform at all the act in question.^ So infants,^ married
women,^ slaves,^ and probably lunatics and other incompet-
ents maybe the channel of communication between a principal
and one with whom he deals. Of course the contract of
agency between the principal and the incompetent is subject
to the usual rules governing contracts by persons under
disability,^ and the contract of warranty of authority'^ be-
tween the agent and the third party would be governed by like
considerations.
As between the agent and princijjal, the agent may be
disqualified by the fact that he has an interest in the subject-
matter of the agency adverse to that of the principal.^ As
between the principal and a third person the agent may be
disqualified by the fact that the agent is secretly acting for
both of the parties to the contract to the knowledge of the
third person ; this would amount to a combination between
the agent and the third party to defraud the princij)al.^ So
one cannot contract for himself in person and for another by
representation, that is to say, an agent cannot contract with
himself.
In cases where the Statute of Frauds requires a writing,
signed by a party or his agent, the agent contemplated by
the statute, who is to bind the party to be charged by signing
^ Coke on Littleton, 52 a.
^ Lyon r. Kont, 45 Ala. 656.
8 Talbot V. Bowen, 1 A. K. Marsh. (Ky.) 436 ; In re D'Angibau, L. R.
15 Ch. D. 228.
* Hopkins v. Mollinieux, 4 Wend. (X. Y.) 465; Butler v. Trice, 110
Mass. 97.
^ Lyon V. Kent, supra ; Chastain v. Bowman, 1 Hill's So. Car. Law.
270.
« Widrig V. Taggart, 51 Mich. 103.
T Post, § 90.
* Tewksbury v. Spruance, 75 111. 187; Crump i'. Ingersoll, 44 Minn.
84; Tau.ssig r. Hart, 58 N. Y. 425.
9 ^Layor, etc. of Salford v. Lever, L. R. 1891, 1 Q. B. 168; City of
Boston V. Simmons, 150 Mass. 461.
BY AGREEMENT. 35
the required memorandum, must be some third person and not
the other contracting party .^ An auctioneer selling for the
vendor may himself, or through his clerk, make the memoran-
dum which will bind both parties.^ So also a broker.^ But
an auctioneer's implied authority to sign for the buyer is
confined to the time of the sale and cannot be exercised at
any later date.*
The law may fix the qualifications of agents, as in the case
of attorneys-at-law, and in such cases only a duly licensed
person can act as agent.^
§ 24. Parties. — Joint agents.
The agents entrusted with the authority from the principal
may be either several or joint. The only question of
difficulty connected with a joint agency is as to the manner
in which it must be executed, and that may best be disposed
of at this point.
Where the agency is joint, that is, where two or more
persons are authorized jointly to act for the principal, the
execution of the agency must generally be joint.^ But
whether the agency is joint or several is a matter of con-
struction to be gathered from the terms of the authority and
considerations of custom or necessity." Two cases are clear
in which the agency though confided to two or more persons
is presumed to be several and not joint, so that one may act
for all : the first is the case of a partnership acting as agent,*
1 Wright V. Dannah, 2 Camp. 203 ; Farebrother v. Simmons, 5 B. &
Aid. 333.
2 Bird V. Boulter, 4 B. & Ad. 443; Gill v. Bickuell, 2 Cush. (Mass.)
355.
3 Butler V. Thomson, 92 U. S. 412 ; Newberry v. Wall, 84 N. Y. 576;
Coddington v. Goddard, 16 Gray (Mass.), 436.
4 Horton v. McCarty, 53 Me.' 394.
8 Cobb V. Superior Court, 43 Mich. 289.
6 Brown v. Andrew, 18 L. J. Q. B. 153; Commonwealth lk Canal Com-
missioners, 9 Watts (Pa.), 466.
' Guthrie v. Armstrong, 5 B. & Aid. 628; Hawley v. Keeler, 53 N. Y.
114.
8 Deakin v. Underwood, 37 Minn. 98; Jeffries v. Ins. Co., 110 U. S.
305.
36 FORMATION OF AGENCY
and the second is the case where the agency is a public one
or one created by hnv ; ^ or where the agency is that of direct-
ors of a corporation or a body of like powers.^ In the first of
these cases one of the joint agents may act for all, and in the
second a majority may decide for all, provided a quorum
meet and confer after due notice to all.^
§ 25. Parties. — Sub-agents.
Sub-agents may be appointed either, (1) by an agreement
between the agent and the sub-agent in which the agent as to
the sub-agent is principal, or (2) by an agreement between
the agent and the sub-agent in which the agent acts for the
princi})al. In the first case, a privity of contract or gratu-
itous relationship is created between the agent and the sub-
agent ; in the second case, a privity is created between the
j)riucipal and the sub-agent, provided, of course, the agent,
was expressly or impliedly authorized to make such an agree-
ment for the employment of the sub-agent in behalf of his
principal.'* This subject is more fully discussed hereafter,
more particularly with reference to the liability of the princi-
pal or agent for the conduct of the sub-agent.^
§ 26. Form of contract. — "Writing or seal.
An agent may be appointed by oral communication, by
writing, or by an instrument under seal. As a general rule
the contract of agency may be by parol. The cases where it
must be in writing or under seal may be summarized as
follows : —
(1) Where by the terms of the contract it is not to be
performed within a year, the contract is required by the
Fourth Section of the English Statute of Frauds to be
in writing.^ If the contract may be performed within a
1 Williams v. School District, 21 Pick. (Mass.) 75.
2 McNeil V. Boston Chamlier of Commerce, 154 Mass. 277.
8 r.ank V. Town, .52 Vt. 87 ; Williams v. Scliool Dist., 21 Pick. (:\rass.) 75.
* llaluptzok V. Great Northern Ry. Co., 55 Minn. 410; De Bus.sche v.
Alt, 8 Ch. Div. 286.
6 Post, §§ 92-95, 147, 160.
8 Hinckley v. Southgate, 11 Yt. 428; Tuttle v. Swett, 31 Me. 555;
Board V. Howell, (Ind.) 52 N. E. 769, 21 Ind. App. Ct. Rep. 495.
BY AGKEEMENT. 37
year,^ or if it expressly contemplates a continf^ency, as death,
which would terminate it within a year,^ it need not be in writ-
ing. Whether both parties must sign in order to have mutual
obligations and thus avoid the defence of want of mutuality has
been variously decided,^ but the weight of authority seems to
be that mutuality is not necessary in such cases.*
(2) In some States the Statute of Frauds provides that,
where a contract is required to be in writing and signed by
the party to be charged, or his agent thereunto duly author-
ized, such authority to the agent shall be in writing/^ Unless
such express provision is added in the statute, the agent may
be appointed orally although he must execute his authority in
writing.^ In these cases an auctioneer or broker may act for
both parties in signing the required memorandum, but one
party cannot act for the other.'^
(3) Where the contract between the principal and the third
party is required to be under seal, the authority of the agent
to execute the instrument must itself be under seal.^ A con-
tract for the sale of the lands need not be under seal, although
it must, under the Statute of Frauds, be in writing ; ^ but a
conveyance of the lands must be under seal, and the agent's
authority to execute the conveyance must also be under seal.
So also an authority to execute any specialty, as a bond, must be
evidenced by a sealed instrument.^^ To this rule there are some
1 Roberts v. Rockbottoin Co., 7 Mete. (Mass.) 46; Russell v. Slade,
12 Conn. 455; Moore v. Fox, 10 Johns. (N. Y.) 244; Scribner i'. Flagg
IMfg. Co., 175 Mass. 536.
2 Riddle V. Backus, 38 Iowa, 81 ; Updike v. Ten Broeck, 32 N. J. L.
105; Jilson v. Gilbert, 26 Wis. 637; Eiseman v. Schneider, 60 N. J. L.
291.
8 See Wilkinson v. Heavenrich, 58 Mich. 574.
4 Wood, St. of Frauds, § 405.
6 See Stimson's Amer. Statute Law, Vol. I. § 5201.
« Johnson v. Dodge, 17 111. 433; Long v. Hartwell, 34 N. J. L. 116.
' Ante, § 23.
8 Berkeley v. Hardy, 5 B. & C. 355, 8 D. & R. 102 ; Hanford v. Mc-
Nair, 9 Wend. (N. Y.) 54; Gordon v. Bulkeley, 14 Serg. & R. (Pa ) 331.
9 Long V. Hartwell, 34 N. J. L. 116.
^° Gordon v. Bulkeley, supra ; Hibblewhite v. ^McMorine, 6 Mees. & W.
200.
38 FORMATION OF AGENCY
apparent exceptions. First, if the specialty be executed by
the agent in the presence of the principal, the agent's author-
ity need not be under seal.^ and the grantee may sign the
grantor's name provided the latter afterward acknowledges
and delivers the deed.'-^ Second, if the seal is superfluous in
the sense that the instrument though actually sealed need not
be scaled in order to be valid, the seal may be disregarded and
a parol authority will be sufficient.^ Third, if a corporation
executes a specialty the agent's authority to execute it and
affix the corporate seal need not itself be under seal; it is
enough that the authority has been conferred by a vote of the
directors.* Fourth, the rule has also been greatly relaxed in
the case of partnerships, and many jurisdictions have held that
one partner may be authorized by parol to execute specialties
in the partnership name.^
(4) If a deed be executed by the grantor, but with blanks
left in it, may the grantor by parol authorize an agent to fill
the blanks and deliver the deed ? It is settled that a parol
authority is sufficient for the delivery of a deed.^ The older
authorities denied, however, that a parol authority was suffi-
cient for the filling of blanks in a deed." The modern
authorities in the United States are strongly in favor of the
view that where the agent acting under parol authority fills
the blanks before or at the time of delivery, the deed is effect-
ive as delivered.^ It is very generally held that this is so in
cases where the grantee is ignorant that such parol authority
1 Gardner v. Gardner, 5 Cush. (Mass.) 483; Eggleston v. Wagner, 46
Mich. 610; Jansen v. INIcCahill, 22 Cal. 563; King v. Longnor, 4 Barn
& Adol. 647.
2 Clou-h V. Clongh, 7-3 Me. 487.
3 Worrall v. Munn, .5 N. Y. 229; Alcorn's Exec. v. Cook, 101 Pa. St.
209; Wagoner ^^ Watts, 44 N.J. L. 126; Thomas r. Joslin, 30 Minn.
388. Contra, Wheeler v. Nevins, 34 Me. 54 ; Pollard c Gibbs, 55 Ga. 45
4 Bun-ill V. Nahant Bank, 2 Met. (Mass.) 163; Howe v. Keeler, 27
Conn. 538 ; Fitch v. Lewiston Steam Mill Co., 80 Me. 34.
6 Burdick on Partnership, pp. 188-193; Smith v. Kerr, 3 N. Y. 144.
• Parker i-. Hill, 8 Met. (Mass.) 447.
' Slieppard's Touchstone, 54; Ilibblewhite v. McMorine, 6 Mees. & W.
200.
8 Cribbeu v. Deal, 21 Ore. 211, and cases there cited.
BY AGREEMENT. 39
has been conferred and exercised, the decision in such cases
being put upon the ground of estoppel.^ This doctrine is not
applicable to a case where a married woman who can not ap-
point an agent to execute the deed, but must execute and
acknowledge it in person, executes and acknowledges a
deed with blanks, and seeks to authorize an agent to fill the
blank S.2
(5) In England, subject to various exceptions, it seems to
be the rule that all appointments of agents by corporations,
other than trading corporations, must be under the corpo-
rate seal.2 In the United States no such rule seems to be
recognized.*
§ 27. Legality of object.
A contract of agency must not contemplate an illegal
object. Accordingly a contract of agency for dealing in
futures where the object is to bet on the rise or fall of prices,^
or for lobbying,*^ or selling smuggled goods," or for procuring
a marriage contract,^ or for improperly influencing the action
of a third person, as by assuming to advise as a friend when
the adviser is secretly the agent of one who is to profit by the
advice,^ or for any other object opposed to law, or public
policy, or good morals, is unenforceable.^^ The whole matter
is a part of the general law of contract.^^
1 Phelps ('. Sullivan, 140 Mass. 36; Campbell v. Smith, 71 N. Y. 26.
Contra: Upton v. Archer, 41 Cal. 85.
2 Drm-y v. Foster, 2 Wall. (U. S.) 24.
8 Austin V. Guardians of Bethnal Green, L. R. 9 C. P. 91 ; Arnold
V. Poole, 4 M. & G. 860 ; Sutton v. Spectacle Makers Company, 10 L. T.
Rep. 411.
4 1 IVIorawetz on Corp. § 338; Bank v. Patterson, 7 Cranch, 299.
6 Irwin r. Williar, llO U. S. 499.
6 Trist V. Child, 21 Wall. (U. S.) 441 ; IMills v. Mills, 40 N. Y. 543.
7 Armstrong v. Toler, 11 Wheat. (U. S.) 258.
8 Duvall ('. Wellman, 124 N. Y. 15G.
9 Byrd v. Hughes, 84 Til. 174; Bollman v. Loomis, 41 Conn. 581.
w Stout V. Ennis, 28 Kans. 706 ; Nichols v. Mudgett, 32 Vt. 546 ; Keat-
ing V. Hyde, 23 Mo. App. 555 ; White v. Equitable, &c. Union, 76 Ala. 251 ;
Elkhart County Lodge v. Crary, 98 Ind. 238. See post, § 83.
^1 Huffcut's Anson on Cout. pp. 225-273.
40 rORMATION OF AGENCY
2. Gratuitous Agency.
§ 28. Gratuitous agency as between principal and third person.
The question of gratuitous agency resolves itself into two
parts : (1) as to the liability of a principal to third persons
where he acts through a gratuitous agent; (2) as to the lia-
bility of the agent to the principal or to third persons where
the agent serves without compensation.
The first phase of the question affords little difliculty. One
who acts through another is liable to third persons in the
same way as if he had acted without the intervention of an
agent, and so far as the tliird person is concerned it is wholly
immaterial whether the agent acts for the principal for com-
pensation or gratuitously.^ The sole inquiry is, had the
agent authority to act for the principal ? If so, the princijjal
is bound by the agent's act within the apparent scope of the
authority. But the doctrines as to the competency of the
principal apply to a gratuitous agency in the same way as to
an agency by contract.'-^
§ 29. Gratuitous agency as between principal and agent.
It is a fundamental dogma of the English law that a con-
sideration is necessary to support a promise. Accordingly a
gratuitous promise by an agent to perform an act for the prin-
cipal is unenforceable. If the agent enters upon the perform-
ance of the act, then he may be liable for the negligent manner
in which he performs it, either, as is sometimes said, because
the consideration then arises from the fact that the principal
suffers a detriment in parting with his control over the su])ject-
matter of the agency, or, as is more accurately said, because
one who voluntarily meddles with the property rights or quasi
pro])erty rights of another is bound to act as an ordinarily
])rudcnt man would act under like circumstances.^
The main difference therefore between an agency by con-
1 Haluptzok r. Great Northern Ry., 55 Minn. 446.
2 Ante, §§ 14-22.
» Thorne v. Deas, 4 Johns. (X. Y.) 84; Wliitolioad v. Greetham, 2 Bing.
i64; rollock on Gout. (Gth ed.) pp. 170-171 ; 2 Law Q. Rev. 33.
BY AGREEMENT. 41
tract and a gratuitous agency lies in the fact that the former
may be enforced while it remains unacted upon by either
party, while the latter can be enforced only when it has been
acted upon by the agent, and he has, by his act, involved the
interests and rights of the principal. But of this hereafter.^
1 Post, §§ 97, 98.
42 FOKMATION OF AGENCY
CHAPTER III.
FORMATIOiN OF THE RELATION BY RATIFICATION.
§ 30. Meaning of the term.
(1) Ratification generally. The assent of the principal to
the act of the agent may be given either before the act is per-
formed, or after it is performed. When given before it is
performed, the assent is in the nature of an appointment of the
agent for the performance of the act as explained in the pre-
ceding chapter. When given after the act is performed, it is
in tlic nature of a ratification of the act, and is intended to
clothe the act with the same qualities as if there had been a
prior appointment. Two cases of ratification are clearly dis-
tinguishable : first, where the agent had no prior authority for
any purpose and the ratification operates as an appointment
as agent and as authority to do the act ratified ; second, where
the agent had some prior authority, but exceeded it in the act
in question, and the ratification operates as an extension of
the authority so as to cover the act ratified.
(2) Statement of doctrine. Subject to the exceptions here-
after mentioned,^ where one person, whether no agent for any
purpose or an agent exceeding his. authority, does an act as
agent in the name of or on behalf of another in excess of au-
thority (if any) conferred upon him, the person in whose name
or on whose behalf the act was done may ratify the act and
thereby give to it the same legal effect as if the one doing it
had been in fact an agent, or, being an agent for some pur-
poses, had been in fact authorized to do the act in question.^
1 Post, §§ 42-44.
2 Y. B. 7 H. IV. Z\,pl. 1; Wilson v. Tumman, 6 iM. & G. 230; Phila-
delphia, &c. R. V. Cowell, 28 Pa. St. 329 ; McCracken v. San Francisco,
16 Cal. 501; Grant v. Beard, 50 N. H. 129; Dempsey v. Chambers, 154
Mass. 330, where the history of ratification is given, and it is sliown that
the doctrine applies to master and servant as well as to principal and
agent.
BY HATIFICATIOX. 43
When such unauthorized act comes to the knowledge of the
one in whose name or on whose behalf it was assumed to be
performed, he has an election either to repudiate the act or to
ratify and adopt it. If he elects to accept it, the acceptance
or adoption of it constitutes a ratification, and relates back to
the time the act was performed in such manner as to involve
the principal and third person on the one hand, and the prin-
cipal and agent on the other, in the same legal consequences
as would have ensued had the act been authorized in advance.
The principal's option to repudiate or ratify secures to him a
certain advantage in creating a contract relation which is
anomalous, but which the law permits him to enjoy .^ But in
order that he shall have this advantage, it is necessary that a
contract shall actually have been consummated prior to the
attempted ratification, ^
The subject of ratification falls into two main heads : (1)
Elements, or conditions, of ratification ; (2) Legal effects of
ratification.
1. Elements of Ratification.
§ 31. Analysis of elements.
The essential elements or conditions of ratification are as
follows : (1) An act performed by an " agent" in behalf of an
existing " principal ;" (2) The subsequent real assent of the
principal to the act so performed in his behalf ; (3) The com-
petency of the principal to give a binding assent ; (4) In some
cases an assent expressed in a particular form; (5) The
legality of the act ratified ; (6) Exceptions to the doctrine.
§ 32. (I.) Act performed in behalf of existing principal.
Two elements must concur before the basis for ratification
can be said to be laid : (1) The principal must be an existing
person capable of being ascertained, and (2) The contract
must have been made in the name of and in behalf of such
existing and ascertainable person.
1 Hagedorn v. Oliverson, 2 M. & S. 485; Williams v. North China
Insurance Co., L. R. 1 C. P. D. 757.
2 Whitiug V. Mass. &c. Ins. Co., 129 Mass. 240.
44 FORMATION OF AGENCY
(1) The principal must be an existing person. If an agent
professes to make a contract in behalf of a corporation to be
formed, but not yet in existence, the contract is incapable of
ratification after the corporation has a legal existence.^ The
corporation may make a new contract upon the same terms
as the original one, but this is a dififerent matter from ratifica-
tion. It is one thing to intend to ratify and to proceed upon
the assumption that there is a ratification, and another thing
to intend to make a contract and to proceed upon that assump-
tion,2 But if after the incorporation the company is found in
possession of property or benefits accepted under the terms of
the contract, this may be equivalent to proof of a new contract
on the terms of the original one or of a novation.^ This comes
very near the line of ratification, but is distinguishable from
it in theory.^ Some courts treat the case as one of ratifica-
tion,^ but tills is not justified under the general doctrine, un-
less, indeed, it be upon the theory that the court looks beyond
the corporate entity and fixes upon the stockholders as the
real principals.^
(2) The contract must be professedly made in behalf of such
existing principal. It seems to be the prevailing American rule
that in order that a person may ratify an act of another, the act
must have been done professedly in the name of, and on behalf
of, the one so ratifying, — in other words, that where the act is
done in the name of the actor, without naming or disclosing
any other person, there can be no ratification, even though the
actor was in fact acting in behalf of an undisclosed principal.^
1 Kelner v. Baxter, L. R. 2 C. P. 17i; Abbott i-. Hapgood, 150 Mass.
248.
2 In re Northumberland Avenue Hotel Co., L. R. 33 Ch. D. IG;
Stainsby v. Frazer's Co., 3 Daly (N. Y. C. P.), 98.
8 McArthur v. Tinaes Printing Co., 48 Minn. 319.
4 Howard v. Patent Ivory Co., L. R. 38 Ch. D. 156 ; Paxton Cattle
Co. V. First National Bank, 21 Neb. (521 ; Bell's Gap R. R. v. Christy, 79
Pa. St. 54 ; Rockford, &c. R. r. Sage, 65 III. 328.
6 Whitney v. Wyman, 101 U. S. 392 ; Oakes v. Cattaraugus Water Co.,
143 N. Y. 430.
* See Morawetz on Corp §§ 547-549.
"> Hamlin v. Sears, 82 N. Y. 327; Grund v. Van Vleck, 69 111. 478;
BY RATIFICATION. 45
This is now unquestionably tlie English rule. Where an
ao'cnt made a contract in his own name for the benefit of an
undisclosed principal, but without authority from that prin-
cipal, it was held by the House of Lords in the recent case of
KeigUe'y v. Burant^ that there could be no ratification. This
had previously been assumed to be the English law.^ But the
majority of the Court of Appeal held that the undisclosed
principal might ratify .^ The House of Lords unanimously
reversed this holding, and laid down the doctrine that if one
makes a contract in his own name, not purporting to act on
behalf of a priuci})al, but having a secret intention to act,
though without authority, for a principal, the contract so
made cannot be ratified by the undisclosed principal so as to
enable him to sue or render him liable to be sued upon it.
"The whole hypothesis of ratification is, that the ultimate
ratifier is already in appearance the contractor, and that by
ratifying he holds as done for him what already bore, pur-
ported or professed to be done for him. There is no room
for ratification (unless all the world may ratify) until the
credit of another than the agent has been pledged to the
third party."*
If A. makes a contract in the name and on 1)ehalf of B., C.
cannot, by an attempted ratification, take advantage of it, nor
can C. ratify it so as to become liable upon it.^ If A. makes
the contract in his own name, and really on his own behalf,
B. cannot in any way become a party to it.'' If A makes the
Herd v. Bank of Buffalo, 66 Mo. App. 643; Pittsburg, &c. R. v. Gazzara,
32 Pa. St. 340; Western Pub. House v. Dist. Tp. of Rock, 84 Io^va, 101.
1 1901, A. C. 240.
2 ]\Iatheson v. Kilburn, 1 Sm. L. C. (10th ed.) p. 349; Saunderson v.
Griffith, 5 B. & C. 909 ; Wilson v. Tumman, 6 M. & G. 236 ; Watson v.
Swan, 11 C. B. n. s. 756 ; dissenting opinion of A. L. Smith, L. J., in
Durant v. Roberts, 1900, 1 Q. B. 629, 633.
3 Durant v. Roberts, 1900, 1 Q. B. 629.
4 Lord Robertson in Keighley v. Durant, 1901, A. C. 240, 259.
^ Saunderson v. Griffith, 5 B. & C. 909 ; Jones v. Hope, 3 Times L.
Rep. 247 ; Hawke v. Cole, 62 Law Times, 658.
8 Boulton V. Jones, 2 H. & N. 564; Boston Ice Co. v. Potter, 123
Mass. 28.
46 FORMATION OF AGENCY
contract in his own name as principal, but really on behalf
of an undisclosed principal, the latter cannot ratify it.^
Under the rule that the principal must be disclosed as a con-
dition precedent to ratification, it has been held that it is enough
that some person who may be ascertained and identified is re-
ferred to. Thus insurance may be effected in behalf of all
persons, generally, who may be shown to be interested, and
any person actually interested may ratify.^ So also one may
act in behalf of an heir or administrator or owner, though not
specifically identified, and if such person is capable of being
ascertained, he may ratify.^
Whether a sheriff, in making a levy without special instruc-
tions, acts on behalf of an attaching creditor or as an oflicer
of the court serving in a public capacity, lies at the root of a
difference of judicial opinion as to whether an unauthorized
and wrongful levy may be ratified. The leading English case
holds there can be no ratification,* but some American cases
hold that there may be a ratification,^
§ 33. (II.) Assent of the principal.
Ratification, like prior authority by agreement, rests on
assent. The assent of the agent is already given by his
assuming to act. The assent of the third party is already
given by his entering into the contract.^ The assent of the
principal is therefore all that is required to make the contract
binding on him and on the third person. Much the same
considerations govern the doctrine of assent in ratification as
govern the assent in the acceptance of an offer.^ These may
^ Keighley v. Durant, supra.
2 Hagedorn r. Oliverson, 2 M. & S. 485.
8 Foster v. Bates, 12 U. & W. 226 ; Lyell v. Kennedy, 14 App. Cas.
437.
* Wilson V. Tumman, 6 M. & G. 236.
6 Brainerd v. Dunning, 30 N. Y. 211.
« As to whether he can withdraw his assent before ratification, see
post, § 38.
"> Yet it must not be supposed that ratification is a contract. It is an
election to regard a prior acceptance by an unauthorized agent as the
assent of the principal. Metcalf v. Williams, 144 Mass. 452.
BY RATIFICATION. 47
be summarized as follows : (1) The assent may be express or
implied. (2) Silence is not (ordinarily) assent. (3) Assent
must be in toto and unconditional. (4) Assent must be free
from mistake or ignorance as to facts, and from fraud. A
further consideration involves the question : (5) Has the third
party a right to recede before ratification by the principal ?
§ 34. — (1.) Assent may be express or implied.
Except in cases where a particular form is necessary, the
ratification may be either by express words or by conduct.
All that the law requires is such a manifestation of the intent
of the principal to adopt the act of the agent as would lead
the ordinarily prudent man to conclude that the principal has
assented. The main difference between the two methods is in
the nature of the proof offered to establish the ratification.
One other difference has to do with the question whether the
principal knew all the material facts when he manifested his
assent. If he has expressly adopted the act there may be a
presumption that he has either learned all the material facts
or has learned all he cares to know of them, and has deliber-
ately assumed the risk as to the others ; ^ while if he has
impliedly adopted the act, the conduct relied on to establish
the assent must have a greater or less probative force accord-
ing as the principal knows or does not know the facts to
which his conduct is sought to be related.^ While, therefore,
the knowledge of the principal of the material facts connected
with the transaction is a material element in ratification,^ the
difficulties of establishing such actual knowledge increase or
diminish according as the ratification is by conduct or by
words.*
(1) Express Ratification. Express ratification, like express
authority, may ordinarily be in any form, parol or written, and
if written, sealed or unsealed.^ Where, however, a prior
^ Kelley v. Newburyport Horse R., 141 Mass. 496.
2 Combs ('. Scott, 1-2 Allen (Mass.), 493.
8 Post, § 37.
♦ Hyatt V. Clark, 118 N. Y. 563.
6 Ante, § 2G.
48 FORMATION OF AGENCY
authority would require to be in any particular form, a subse-
quent ratification must be in like form. This general rule is
subject to some qualifications to be considered hereafter.^ It
seems that an express ratification must be addressed to the
other contracting party, or intended to be communicated to
him ; a mere declaration to a stranger is not sufficient.^
(2) Ratification hi/ Conduct. Any conduct by the principal
which would lead a reasonable man to conclude that the prin-
cipal is manifesting an intent to be bound by the agent's
contract will be deemed a ratification. This conduct may
assume an endless variety of forms. Only a few of these
can bo here mentioned by way of illustration. By accei)ting
benefits under the contract, a principal will be held to have
ratified it. "No rule of law is more firmly established than
the rule that if one, with full knowledge of the facts, accepts
the avails of an unauthorized treaty made in his behalf by
another, he thereby ratifies such treaty, and is bound by its
terms and stipulations as fully as he would be had he
negotiated it himself." ^ By bringing an action on the con-
tract, a principal will be held to have ratified it, whether the
action be against the third person or against the agent for
the proceeds of the contract.* Ratification may be after
action is brought by another in the name of the one ratify-
ing.^ Where A has received the rents of property for years
without authority, an action by the owner for an accounting
is a suflicient ratification to render A an agent as from the
beginning.^ By promising to pay the agent's commissions
1 Post, § 40.
2 Rutland, &c. R. v. Lincoln, 29 Vt. 206.
8 Strasser v. Conklin, 54 Wis. 102; Hyatt v. Clark, 118 N. Y. 563;
Pike V. Douglass, 28 Ark. 59; Thomas v. City N. B., 40 Neb. 501;
Wheeler, &c. Co. v. Aughey, 144 Pa. St. 308.
* Bank of Beloit v. Beale, 34 N. Y. 473 ; Partridge v. White, 59 ^le.
564; Frank v. Jenkins, 22 Oh. St. 597; Merrill v. Wilson, 66 Mich.
232; Benson v. Liggett, 78 Ind. 452; Ferguson v. Carrington, 9 B. &
C. 59.
6 Ancona v. Marks, 7 IL & N. 686. Contra, Witteubrock v. Bellmer,
57 Cal. 12.
« Lyell V. Kennedy, 14 App. Cas. 437.
BY RATIFICATION. 49
after full knowledge of the unauthorized contract, the princi-
pal ratifies the act.^ Even an express declaration of repudia-
tion of the contract may be overcome by subsequent conduct,
but the proof should be clear and decisive.^
§ 35. — (2) Ratification by silence.
It is a general rule in the law that silence does not give
consent,^ and this is modified only by the consideration that
in some special circumstances good faith may require a man
to speak or be thereafter estopped by his silence. In the
application of these principles to the doctrine of ratification it
is necessary to distinguish at the outset between an unauthor-
ized act by one who has no authority to act at all, and a like
act by one who has some authority to act but who has
exceeded his authority.
(1) Unauthorized Act hy Stranger. Mere silence by one
in whose behalf a stranger has assumed to act would not
probably be sufficient evidence of ratification, although, in
connection with other circumstances, it might be some evi-
dence.* Circumstances may also be present, which, coupled
with the silence of the supposed principal, would lead a
reasonable man to believe that an agency did in fact exist.
In such a case a duty seems to be laid upon the supposed
principal to speak in order not to mislead the third party to
his injury.^ The question is after all one as to the sufficiency
and not the kind of evidence, and it is clear that silence in
one set of circumstances would not have the same evidential
force as in another set of circumstances. " It is one thing to
say that the law will not imply a ratification from silence, and
a very different thing to say that silence is a circumstance
from which, with others, a jury may imply it."*^
1 Gillett V. Whiting, 141 N. Y. 71.
2 Coriiwal V. AVilson, 1 Ves., Sr., 509; City of Findlay v. Pertz, 66
Fed. Rep. 427.
3 Royal Ins. Co. v. Beatty, 119 Pa. St. 6.
* Ward V. Williams, 26 III. 447 ; Philadelphia, &c. R. v. Cowell, 28 Pa.
St. 329.
5 Heyn v. O'llagen, 60 Mich. 150; Saveland i;. Green, 40 Wis. 431.
* Phil. &c. R. V. Cowell, supra.
4
60 FOUMATION OF AGENCY
(2) Unauthorized Act hy Agent. Where an agent exceeds
his authority, and the principal, after knowledge of the trans-
action, remains silent, such silence may in itself be sufficient
evidence of ratilicalion.^ In some eases it may amount to
conclusive evidence of ratification.^ The evidential force of
the silence is much greater and more cogent where an agency
actually exists than where the act is that of a stranger,
because the circumstances of the case demand more impera-
tively that the principal should speak. The time wiihin
\vhich he nuist speak is to be determined by the facts of the
case. It must be a reasonable time after he learns of the
miauthorized act.'^
§ 36. - (3) Assent must be in toto and unconditional.
The principal must ratify the whole act or disaffirm the
whole. He cannot ratify as to a part and disaffirm as to the
rest.* A mail cannot take the benefits of a contract without
bearing its burdens.^ The principle is fundamental and axio-
matic. Accordingly the ratification of ])art of a transaction
operates as a ratification of the whole.*^ So also ratifying an
unauthorized act or transaction is a ratification of torts that
may have been committed in the doing of it.''
§ 37. — (4) Assent must be free from mistake or fraud.
In order that the ratification may be binding it is necessary
that it should be genuine, that is, it must be the free and
intelligent act of the principal. Several circumstances may
1 Fothergill v. Pliillips, L. R. G Ch. App. 770; Kent r. Quicksilver
Mining Co., 78 N. Y. 159; Mobile, &c. Ry. r. Jay, G.'j Ala. 113.
2 Lee V. Fontaine, 10 Ala. 755; Jones v. Atkinson, G8 Ala. 167; Alex-
ander V. Jones, 64 Iowa, 207.
8 Mobile, &c. Ry. v. Jay, sitpra.
* Smith V. Iloilson, 4 T. R. 211 ; Brigham r. Palmer, '\ Allen (Mass.),
450; Eberts c. Selover, 44 Midi. 519; Mundorff v. Wickersham, G:] Pa.
St. 87; Billings v. IMason, 80 Me. 49G.
6 Bri.stow V. Whitmore, 9 H. L. Cas. 391, 404; Rudasill v. Falls, 92
N. C. 222.
" Wilson c. Poulter, 2 Str. 859 ; Bristow v. Whitmore, 9 II. L. Cas.
391.
^ Dempsey c. Chambers, 154 Mass. 330.
BY RATIFICATION. 51
intervene to prevent the reality of the assent, the chief among
these being mistake and fraud.
(1) Mistake. The most obvious ground of mistake is that
the principal ratified the act believing certain facts to exist
when in reality the facts were otherwise. " The general rule
is perfectly well settled, that a ratification of the unauthorized
act of an agent, in order to be effectual and binding on the
principal, must have been made with a full knowledge of all
material facts, and that ignorance, mistake, or misapprehen-
sion of any of the essential circumstances relating to the
particular transaction alleged to have been ratified will absolve
the principal from all liability by reason of any supposed
adoption or assent to the previously unauthorized act of an
agent." ^ While the rule is clear that the principal must
know all the material facts before the ratification will become
binding, or, rather, that upon discovery of his mistake he
may avoid the ratification, the application of the rule calls
for some additional consideration. The first is that the
principal may choose to ratify knowing that he is ignorant
of all the circumstances. In such a case he assumes the
risk with knowledge of his ignorance, and is not misled or
deceived.2 The second consideration is that, where the agent
was authorized to act, but departed from his instructions,
there is a presumption that the principal knows all the facts.
This presumption grows out of the doctrine of agency, —
that the knowledge of the agent is the knowledge of the
principal, since it is the duty of the agent to disclose to his
principal all the facts connected with the agency. ^ This con-
sideration would not prevail where the act was that of a
stranger, nor is it admitted as correct in all cases of un-
authorized acts by agents.* The third consideration is that
it is not necessary that the principal should have knowledge
1 Combs V. Scott, 12 Allen (Mass.), 493; Lewis v. Read, 13 M. & W.
834; Freeman v. Rosher, 13 Q. B. 780.
2 Kelley v. Newburyport Horse R., 141 Mass. 496; Lewis i-. Read,
supra ; Fitzmaurice v. Bayley, 6 El. & B. 868.
« Meehaii v. Forrester, 52 N. Y. 277; Hyatt v. Clark, 118 N. Y. 563.
Post, § 141.
* Combs V. Scott, 12 Allen (Mass.), 493.
52 FORMATION OF AGENCY
of all collateral circumstances so long as lie has knowledge
of the main transaction.^
(2) Fraud. If the principal is induced to ratify the con-
tract by the fraud of the third party he can, of course, avoid
the ratification.^
^ 38. — (5) Has the third party a right to recede before ratification?
It is a disputed question whether the third party who
has entered into a contract with an unauthorized agent
has a right to recede from the contract at any time before
ratification.
In England it is held that he has not a right to recede on the
ground that the contract with the agent binds the third party,
though it does not bind the principal, and that a subsequent
ratification by the principal relates back to the time when the
contract was formed, and places the parties in tlie same posi-
tion as if the agent had had prior authority.^ " It comes to
this, that if an offer to purchase is made to a person who
professes to be the agent for a principal, but who has no
authority to accept it, the person making the offer will be in
a worse position as regards withdrawing it than if it had been
made to the principal ; and the acceptance of the unauthor-
ized agent in the mean time will bind the purchaser to his
principal, but will not in any way bind the principal to the
purchaser." * This view is further supported by some text-
writers, and in occasional dicta of American judges.^ While
this is the holding of the English courts on tliis point, they
hold that the third person and the unauthorized agent may
by mutual assent release the third person from any obligations
under the contract at any time before ratification.^
1 Ililbery v. Ilatton, 2 II. & C. 822; Denipsey y. Chambers, 154 Mass.
330.
2 Owings V. Hull, 9 Pet. (U. S.) 007.
» Bolton Partners v. Lambert, L. R. 41 Ch. D. 205.
< North, J., in In re Portuguese, &c. Mines, L. R. 45 Ch. D. 16, 21.
' Wharton on Agency, §§ 870-877; Story on Agency, §§ 245-248;
Andrews v. yEtna Life Ins. Co., 92 N. Y. 596, 604.
8 Walter v. James, L. R. 6 Ex. 124; Stillwell i-. Staples, 19 N. Y.
401.
BY KATIFICATION. 53
In the United States the doctrine generally prevails that the
third person may recede from the contract at any time before
ratification, on the ground that prior to ratification there is no
mutuality, and that if one party is free to be bound or not
bound, the other must also be frec.^ The decisions in Dodge
V.Hopkins and Clews y. Jamieson^ actually go beyond this
point, and hold the unauthorized contract a nullity, and a
subsequent ratification also a nullity unless assented to by
the third party. But this is obviously too refined for
the necessities of business. It is better to treat the con-
tract between the third person and the agent as in the nature
of an offer to the principal, which the latter may accept or re-
ject by an election operating upon the previous unauthorized
acceptance by the agent. It dili'ers from an ordinary offer in
"contract mainly in this, that it remains open until actually
withdrawn by notice to the principal or the agent, whereas an
ordinary offer lapses by the expiration of time. This avoids the
extremes of the English doctrine on the one hand, which treats
the unauthorized contract as in effect an irrevocable offer, and
of the doctrine of Dodje v. Hopkins on the other hand, which
treats it as in effect no offer at all. The case is an anomalous
one at best and requires anomalous treatment.^
§ 39. (III.) Principal must be competent.
The competency of the principal has already been discussed.*
The same considerations prevail in respect of the competency
of the principal to ratify an act as to authorize it. An infant
may ratify, if he could, by appointing an agent, authorize;^
but his ratification is not conclusive.^ If his appointment of
1 Dodge I'. Hopkins, 14 Wis. 630; Atlee v. Bartholomew, 69 Wis. 43;
Townsend v. Corning, 23 Wend. (N. Y.) 43.5; Clews v. Jarnieson, 89 Fed.
Rep. 63. See also Wilkinson v. Heavenrich, 58 Mich. 574 ; ]McClintock
V. South Penn. Oil Co., 146 Pa. St. 144, 161-162.
2 This, however, was the case of an undisclosed principal, and must be
considered in connection with the doctrines of § 32, a7i(e.
8 See 9 Harv. Law Rev. 60 ; 5 Am. St. Rep. 109.
* Anie, §§ 15-22.
^ Patterson v. Lippincott, 47 N. J. L. 457.
« McCiacken v. San Francisco, 16 Cal. 591, 623-624; Armitage v.
Widoe, 36 Mich. 124.
54 FORMATION OF AGENCY
an agent would be voiil, then he cannot ratify even after coming
of agc.^ If a married woman can appoint an agent, she may-
ratify the act of one who has represented her without au-
thority .^ Corporations may ratify cither by vote of the direc-
tors where they would have power to authorize,^ or by vote of
stockholders where the act could be authorized only by them.*
Acquiescence of stockholders may amount to ratification.^ One
partner may ratify for the firm.*' Voters may ratify or dis-
affirm tlie unauthorized act of the agents of a municipal or
quasi-public corporation." A state, througli the legislature,
may ratify the unauthorized acts of agents.^ Where an agent
has authority to do an act he may, in behalf of his princij)al,
ratify the like unauthorized act of another agent, but not, it
seems, of one who is not an agent for any purpose.^
The matter presents itself in several aspects : (1) The prin-
cipal may have been competent when the act was done and
competent when it was ratified ; (2) he may have been incom-
petent when it was done and incompetent when it was ratified ;
(3) he may have been competent when it was done and incom-
petent when it was ratified ; (4) he may have been incompetent
when it was done and competent when it was ratified. The
first three cases call for no special comment. In the first, the
ratification is clearly binding. In the second and third, it is as
clearly not conclusively binding.
The fourth case presents a difTiculty. If the incompetent
could have appointed an agent, subject only to his right to dis-
affirm the contract of agency, then clearly he could, on arriv-
ing at competency, aflUrm the agency and thereby ratify the
1 Trueblood i'. Trueblood, 8 Ind. 195.
2 McLaren v. Hall, 2G Iowa, 297.
« Wilson V. West Hartlepool, &c. Ry., 2 De G., J. & S. 475.
* Spackman v. Evans, L. K. 3 II. L. 171 ; Grant v. Rv., 40 Ch. Div.
135.
6 London, &c. Ass'n v. Kelk, 20 Ch. Div. 107; Evans v. Sniallcombe,
L. R. 3 H. L. 249.
« Forbes i'. Ilagnian, 75 Va. 168.
' School District v. iEtna Ins. Co., 62 Me. 330.
* Wisconsin i'. Torinus, 26 ^Minn. 1 ; People v. Denison, SO N. Y. 656.
* Ironwood Stove Co. r. Harrison, 75 Mich. 197.
BY RATIFICATION. 55
acts of the af^cnt.' So, it would seem, lie could ratify unau-
thorized acts of that agent as well as authorized acts. So, too,
he could ratify the acts of one who assumed to represent him
without any authority. But if the appointment of an agent by
the incompetent would be void (as in some States in case of
infancy), then clearly the act could not have been authorized
when it was performed. How then could it be ratified after it
was performed ? The conclusion is that the act so done by an
agent cannot be ratified.^ But this is dependent upon the
answer to the question whether the infant could have appointed
the agent.3
§ 40. (IV.) Form of ratification.
It has already been seen that, with the exception of a few
cases, the authority of an agent may be conferred without any
formality whatever. The same general rule applies to ratifica-
tion. Unless the case is one in which the authority, if con-
ferred in the first instance, must have been under seal or in
writing, the ratification may be by parol.^
(1) Ratification of agenfs contract under seal. Authority
to execute a contract which is required to be under seal, must
be conferred by an instrument under seal, and consequently
the unauthorized execution of such a contract can be rati-
fied only by an instrument of equal formality.^ But the con-
stantly growing tendency to do away with the formality of a
seal has led to an exception to the above rule, and it seems
now to be generally recognized that the execution of a sealed
instrument by a partner in the firm name may be ratified by
the other partner by parol.^ The Massachusetts court goes
^ Conrsolle r. Weyerhauser, G9 Minn. 328.
2 Trueblood v. Trueblood, 8 Ind. 19.5; Armitage v. Widoe, 36 Mich.
124.
8 See ante, § 15.
* Goss V. Stevens, 32 j\Iinn. 472 ; Taylor v. Conner, 41 Miss. 722.
6 Hanford v. INIcXair, 9 Wend. (N. Y.) 54 ; Heath v. Nutter, 50 Me.
378; Spofford r. Hobbs, 29 :Me. 148; Despatch Line v. Bellamy ]\Ifg. Co.,
12 X. H. 205; Pollard v. Gibbs, 55 Ga. 45; Oxford v. Crow, 1893, 3 Ch.
535.
* Peine v. Weber, 47 111. 41 ; Holbrook v. Chamberlin, 116 ]\Iass. 155.
56 FORMATION OF AGENCY
still further and liolds that a parol ratification is sufficient,
even in cases where the unautliurized execution of the sealed
instrument is in the name of an individual.^ Of course, if the
scaled instrument is one ui)on which no seal is necessary, the
seal may be regarded as mere surplusage and the instrument
ratified by parol.^
(2) llatijication of contract required hi/ Statute of Frauds to
be in writing. Unless the statute provides otherwise, a contract
required by the Statute of Frauds to be in writing may be rati-
fied by parol.^ It has been seen that in some States the Statute
of Frauds provides that where a contract is required to be in
writing and signed by the party to be charged, or his agent
thereunto duly authorized, such authority to the agent must
also be in writing.'' Under the rule stated above, it seems
clear that when such a contract is executed by the agent with-
out due authorization, his act can be ratified only by an instru-
ment in writing.^ It is held in one State, however, that a parol
ratification is sufficient.^ If the agent had written authority,
but departed from it by signing a contract not authorized by
the instrument of agency, a parol ratification of the contract
as signed is unavailing.^
§ 41. (V.) Legality or validity of act ratified.
It is a general rule that the principal may ratify any act
which he could have authorized,^ and whether lawful or unlaw-
1 Mclntyre v. Park, 11 Gray (Mass.), 102; Holbrook v. Chaniberlin,
116 Mass. 155.
2 Adams v. Power, 52 Miss. 828.
8 Maclean v. Dunn, 4 Bing. 722.
* Ante, § 26.
6 McDowell /'. Simpson, 3 Watts (Pa.), 129; Hawkins v. McGroariy,
110 Mo. 516. This view fin<ls some su])port in the case of Ragan v. Che-
nault, 78 Ky. 545, in which it is held that where a statute proviiles that
an agent cannot make a contract of suretyship without written authority,
a parol ratification is insufiicient.
8 Hammond v. Hannin, 21 Mich. 374.
* Kozel i\ Dearlove, 144 111. 23.
8 McCracken v. City of San Francisco, 16 Cal. 591 ; City of Findlay v.
Pertz, G6 Fed. Rep. 427.
BY KATIFICATION. 57
ful.^ As he may authorize an act resulting in tort as well as
an act resulting in contract, so he may ratify the one as well
as the othcr.2 --pi^g adoption of the benefits of an act made
with knowledge of the material facts, carries with it the bur-
dens of the act, whether those burdens arise from contract or
from tort.
§ 42. Exceptions to rule : giving notice.
An exception to the general rule is found in the case of no-
tice in behalf of an alleged principal where the notice is one
of an existing intent, and must be authoritatively given within
a specified time. Such notice cannot be given by a stranger,
or by an agent in excess of authority, and be subsequently
ratified after the specified time has expired, so as to avail the
principal.^ The reason is that the party notified has a right
to know, not merely the facts on which the notice is based, but
the existing intent of the principal with reference to such facts
so far as they concern the one notified. This he is not informed
of authoritatively, and it is immaterial that there is a subsequent
authority. Thus, if X is indorser on a bill which has been
dishonored, a notice of dishonor given him by A, who is a
stranger to the bill and to the holder, will not avail the holder,
and it seems is incapable of ratification by the holder.* In
this case the holder could have authorized A to notify X, but
cannot ratify the act where it was unauthorized, or at least
cannot ratify it after the time allowed for notice by the law
merchant has expired. So a notice to quit by two out of three
joint owners will not avail as against a tenant. " The rule of
law, that omnis ratihahitio retrofraJiitur, etc., seems only appli-
cable to cases where the conduct of the parties on whom it is
to operate, not being referable to any agreement, cannot in the
mean time depend on whether there be a subsequent ratifica-
1 Hilbery v. Ilatton, 2 II & C. 822; Whitehead v. Taylor, 10 A. &
E. 210.
2 Dempsey v. Chambers, 154 Mass. 330.
3 Doe V. Walters, 10 B. & C. 626 ; Doe v. Goldwin, 1 G. & D. 463.
* Stewart c. Kennett, 2 Camp. 177; Brower v. Wooten, 2 Taylor
(N. C), 70; Chanoine v. Fowler, 3 Wend. (X. Y.) 173.
58 FORM.VnOX OF AGENCY
tion." ^ Neither can there be a ratification if the rights of
strangers have intervened, even though the stranger knows of
the unauthorized contract.^ " The act of ratification must take
place at a time, and under circumstances, when the ratify-
ing i»arty might himself have lawfully done the act which he
ratifies." ^
§ 43. Exceptions to nile : void acts.
The converse of the rule is that an act which could not have
been authorized cannot be ratified. It may be that the act if
done by the principal or by an authorized agent would have
been void ; if so, a ratification would be void.* This generally
involves the question of competency of the party, or the form
of the act. Or it may be that the act if done by any one
would have been illegal ; if so, the ratification would be
illegal, certainly if the act continues to be illegal when rati-
fied.^ But there may be two special cases. First, the act
may be legal when done but illegal Avhcn ratified, or second,
the act may be illegal when done but legal when ratified. In
either case the ratification is probably inoperative. In the
first case, because when the contract became illegal the offer
must be regarded as revoked and a subsequent acceptance of
it would be too late. In the second case, because, as the rati-
fication relates back to the time of the unauthorized contract,
it would bring into existence a contract illegal when made.^
§44. Exceptions to rule: ratification of forgery.
A special instance in the law of ratification is presented in
the case of forgery. If A forges the name of B to an instru-
ment, can B ratify the forgery ? This is a vexed question on
which there is no agreement. It is contended, on the one
1 Ri^ht V. Cuthf>n, o East, 491.
2 Pollock V. Cohen, 32 Oh. St. 514; Taylor v. Robinson. 1 1 Cal. 306;
Donelly v. Pophatn, 1 Taunt. 1.
8 Bird r. l»ro\vn, 4 Kxch. 780.
* Arniitage v. Widoe, 3(5 Midi. 124; Milford v. Water Co., 124 Pa. St.
610; Irvine v. Union Bank, 2 App. Cas. 306.
6 Milford V. Water Co., 124 Pa. St. 610.
• Milford V. Water Co., supra.
BY RATIFICATION. 59
hand, that so far as the rights and liabilities of B are con-
cerned there is no more reason why lie may not ratify the
written contract than why he might not ratify the same con-
tract if it rested in parol.^ But it is contended, on the other
hand, that one who commits a forgery does not assume to act
as agent of the person whose name is forged ; that the only
conceivable motive for ratification is to conceal a crime; that
the doctrine of ratification does not apply, and the person at-
tempting to ratify is not bound.^ While this conflict exists
as to ratification, it is generally agreed that the doctrine of
estoppel is applicable in cases where the attempted ratification
leads innocent third persons to change their legal position, or
lose or impair their legal rights.^ There is also agreement on
the proposition that no ratification or estoppel on the part of
the principal can deprive the State of the right to prosecute the
wrong-doer for forgery. ^
2. Legal Effects of Ratification.
§ 45. Ratification is irrevocable.
Ratification bears many analogies to acceptance of an offer.
Among others is the rule that when once the principal has,
with knowledge of the facts, free from mistake or fraud,
adopted the act of the assumed agent as his own, he cannot
afterward withdraw his ratification.^
§ 46. Effect as between principal and third party.
Ratification relates back to the time of the contract or act
ratified, and the principal and third party are in the same
1 Greenfield Bank v. Crafts, 4 Allen (Mass.), 447; Hefner v. Vaudolah,
62 111. 483; IIo^Yard v. Duncan, 3 Lans. (N. Y.) 174.
2 Henry v. Heeb, 114 Ind. 275; Workman v. Wright, 33 Oh. St. 405;
Shisler v. Vandike, 92 Pa. St. 447 ; Owsley v. Philips, 78 Ky. 517 ; Brook
V. Hook, L. R. 6 Ex. 89 ; INl'Kenzie v. British Linen Co., L. R. 6 App.
Cas. 82.
8 M'Kenzie v. British Linen Co., supra; Casco Bank v. Keene, 53 Me.
103 ; Rudd v. Matthews, 79 Ky. 479; Corser v. Paul, 41 N. H. 24.
* M'Kenzie v. British Linen Co., supra.
* Brock V. Jones, 16 Tex. 461; Jones i-'. Atkinson, 68 Ala. 167; Smith
V. Cologan, 2 T. R. 188 ».
60 FORMATION OF AGENCY
position as if the act has been at that time authorized.^ The
principal becomes immediately liable upon the contract, and
liable as well as lor any fraud committed by the agent in its for-
mation,- or any tort connected with its performance." If it is
merely an act and not a contract which is adopted, the princi-
pal becomes liable for torts committed within the scope of the
act.^ On the other hand, tlic question as to whether the third
person is bound by a ratification without a new assent on his
part depends on the question whether the third person has a
right to recede from the contract before ratification. This has
already been discussed,^ with the result that it seems justifi-
able to say, at least in this country, that the third party is not
bound unless he has, by leaving the contract unrevoked, signi-
fied his willingness to be bound. But, of course, such assent
on the part of the third person would also relate back to the
time of the original contract and create obligations against
liim as of that datc.^
§ 47. Effect a3 between principal and strangers.
While as between the parties ratification relates back to the
time of the original transaction, it cannot by so doing cut off
the intervening rights of strangers to the transaction. Pur-
chasers of the subject-matter of the contract, attaching credi-
tors, and others who acquire intervening rights in the
subject-matter of the contract, are protected from the effects
of a subsequent ratification.'^
§ 48. Effect as between principal and agent.
Since ratification is equivalent to prior authority it follows
that the agent after ratification is, if he has fully informed his
1 Fleckner v. Bank of U. S., 8 Wheat. (U. S.) 338 ; Grant v. Beard, 50 N.
II. 120.
2 Nat. Life Ins. Co. v. Mincli, 53 X. Y. 144; Lane v. Black, 21 W. Ya.
617; Fairchild v. Mc:Mahon, 139 N. Y. 290.
' Xim3 I'. Mount Ilermon Boys' School, 160 Mass. 177.
* Dempsey v. Chambers, 154 Mass. 330.
6 Ante, § 38.
" AVisconsin v. Torinus, 26 Minn. 1.
•^ Ante, § 42; Wood v. McCain, 7 Ala. 800; Taylor v. Robinson, 14 Cal.
890; McCracken u. City of San Francisco, 16 Cal. 591; Cook v. Tullis, 18
Wall. (L\ S.) 332; Bird v. Brown, 4 Exch. 786.
BY KATIFICATION. 61
principal as to the facts, in the same position as if he had pos-
sessed prior authority to do the acts involved in the transac-
tion. ^ He is no longer responsible unless he would have been
responsible had he done the acts under express authority.*
But the agent must, to excuse himself, not only act in good
faith, but he must also be sure that he is not mistaken as to
the facts communicated. A false statement, whether wilful or
innocent, which induces the principal to ratify, will involve tlie
agent in liability to his principal for loss or damage which ac-
crues because the fact is otherwise than stated.^ Moreover,
the same conduct which might amount to ratification as be-
tween the principal and the third party will not always be so
construed in favor of the agent in order to relieve him from
liability for his own wrongful act.*
§ 49. Effect as between agent and third party.
An agent after ratification of his unautliorized act by his
principal is in the same relation to the third party as if the
acts had been previously authorized. The principal alone is
generally liable on a contract which he has ratified,^ though,
if the third party is free to accept or reject the ratification and
chooses to reject,^ the agent would be liable on his warranty
of authority.''' But since prior authority will not relieve an
agent from liability for a tort, obviously subsequent ratification
■will not ; ^ although the agent may claim indemnity against
the principal if sued for the tort in like case where he could
under prior authority.^
1 Spittle V. Lavender, 2 Brod. & Bing. 452 ; Risbonrg v. Bruckner,
3 C. B. N. s. 812; Gelatt v. Ridge, 117 Mo. 553.
2 Pickett V. Pearsons, 17 Vt. 470 ; "Woodward v. Suydam, 11 Ohio, 360;
Bray v. Gunn, 53 Ga. 144.
3 Bank of Owensboro v. Western Banli, 13 Bush (Ky.), 526.
* Triggs V. Jones, 46 Minn. 277.
^ Story on Agency, § 244.
^ As to which see ante, § 38,
7 See post, % 183.
8 Josselyn v. McAllister, 22 Mich. 300 ; Richardson v. Kimball, 28 INIe.
463 ; Wright v. Eaton, 7 Wis. 595.
» Post, § 85.
62 FORMATION OF AGENCY
CHAPTER TV.
FORMATION OF THE RELATION BY ESTOPPEL.
§ 50. Agencies not resting on actual assent.
The agencies by agreement and by ratification rest on as-
sent. The agent is either appointed by the j)i-incipal to carry
out tlie will of the latter, or the latter adopts the act of the
agent as an expression of his own will. The agencies we have
now to consider do not rest upon assent, but are created by
the law on grounds of public policy or convenience, irrespective
of the consent of the principal. In these agencies the prin-
pal has either given no authority whatever, or has not given
an authority extensive enough to warrant the act done by the
agent. Yet if there be ground to estop the principal from
denying the authority, or if there be an unforeseen necessity
urgent enough to enlarge the authority, the principal may be
held liable for the agent's act. And first of estoppel.
§ 51. Meaning of estoppel.
Estoppels may arise (1) from a record, (2) from a deed, (3)
from a contract, or (4) from a misrepresentation, which mis-
representation may be either by words or by conduct. Es-
toppels arising from contract or from misrepresentation are
usually termed estoppels in pais, a phrase frequently used but
conveying in itself no very definite notion. In the law of
agency we are mainly concerned with estoppels arising fi'om
misrepresentations.
Misrepresentation may be ])y words or by conduct, and may
be made by the person sought to be estopped acting alone or
by a third person who is aided therein by the act or omission
of the person sought to be estopped. For example, the defend-
ant represents that he is a member of a firm : he is estoi)pcd
to deny the truth of his representation.^ The defendant has
1 Sherrod v. Laugdon, 21 Iowa, 518 ; Poillou v. Secor, Gl N. Y. 456.
BY ESTOPPEL. 63
been a member of a firm but withdraws from it without giv-
ing notice of his withdrawal to those who had previously been
dealing with the firm : he is estopped to deny that he is a
member as against those who continue to deal in the belief
that he is still a member.^ Again, a third person without de-
fendant's knowledge or consent holds him out as a member of
a firm : defendant is not estopped to deny the partnership.^
Estoppel is the bar which the law raises to prevent a man
^from proving that a fact is contrary to what he represented it
•to be.^ It is based upon the idea that when one man induces
another, or aids to induce another, to believe in the truth of
that which appears to be true, he ought not afterward to be
permitted to deny that it is true, if the other has been misled
by the representation to his damage* " It proceeds upon the
ground that he who has been silent as to his alleged rights
when he ought in good faith to have spoken, shall not be
heard to speak when he ought to be silent." ^ The old notion
that " estoppels are odious," based upon the technical estoppels
by record or by deed, has no application to estoppels based
upon misrepresentation or upon conduct equivalent to misrep-
resentation.^
The misrepresentation may be made by express statement
or by conduct which the reasonable man would construe as
equivalent to an express statement. The estoppel may there-
fore arise from contract, or from words or conduct,'^ and the
words or conduct may consist in express representations or
in implied representations.^ The essence of estoppel in pais
is that a false impression has been created by one man upon
the mind of another as to the existence or non-existence of
• Stimson v. Whitney, 130 ^lass. 591 ; Arnold v. Hart, 176 111. 442.
2 First X. B. V. Cody, 93 Ga. 127; Marschall v. Aiken, 170 Mass. 3.
8 Ewart on Estoppel, pp. 3-4.
* Pickard v. Sears, 6 A. & E. 469 ; Ewart on Estoppel, pp. 5-7.
5 Morgan v. Railroad, 96 U. S. 720 ; Burkinshaw v. Nicolls, L. R.
App. Cas. 1004.
6 Ibid. ; Horn v. Cole, 51 N. H. 287.
'' Bigelow on Estoppel (5th ed.), 453.
8 Ibid., 556, 570.
64 FORSIATION OF AGENCY
some fact, upon the strength of which the latter is induced to
change his legal position.
Wliere the representation is made by cxpi'css statement, it
is not necessary, in ordei- to \\-ork an estoppel, that the one
making the statement should know it to be false, or should
even make it recklessly, consciously ignorant of its truth or
falsity.^ He may make it in good faith, believing it to be true,
and yet be estopped by it. It is enough that ho may reasonably
anticipate that the other i)arty will act upon it. Where, how-
ever, the estoppel is based upon the silence or non-action of
the one sought to be estopi)ed and the niisrei)rescntation of
some third party, the cstop))el will not be raised against the
former unless he knows that such misrepresentation is actually
being made.^ For example, a third party represents that
defendant is a partner with him: defendant is not estopped
to deny this unless he has stood silent, knowing the misrepre-
sentation to be made.^ Again, defendant is a by-stander while
an auctioneer sells goods to plaintiff which, in fact, belong to
defendant : the latter is estopped to set up his title, if he knew
the misrepresentation as to ownership was false, but not if he
was ignorant of his own title.*
§ 52. Application to the lavy of agency.
The application of this doctrine to the law of agency is of
the fii'st importance. It may be involved, not only in the
question as to the existence of the agency, but also in the
question as to its nature and extent. Heretofore we have
seen that a ])rinci})al may be bound by the act of an agent,
either because he authorized it or because he ratified it. We
have now to observe that he may be bound, when he neither
authorized nor ratified, upon the doctrine that he has, by his
representations or conduct, led third persons to believe that
the agent possessed the requisite authority, and is therefore
estopped to deny it.
1 Brookhaven v. Smith, 118 N. Y. 634; Stevens v. Ludlum, 40 ^linn.
160; Ewart on Estoppel, pp. 83-97.
2 Kwart on Estoppel, pp. 83-97.
8 First N. B. v. Cody, 93 Ga. 127.
* rickaid V. Sears, G A. & E. 460.
BY ESTOPPEL. 65
(1) JEstoppel may he relied upon to establish the agency.
When one knowingly and without dissent permits another to
act for him in a particular transaction, or in a general course
of transactions of which the particular transaction is one, he
will be estopped from denying the agency of such other
as against one who in good faith, and in the exercise of rea-
sonable prudence, has dealt with such apparent agent relying
on such apparent authority.^ To work this estoppel it is
necessary that the party misled should be so misled by the
representations or conduct of the alleged principal ; if he is
misled by the representations of the agent, the principal will
not be estopped.^ But it is not necessary that the representa-
tion should be made to the third party directly; " it is enough
if it is made to another, and intended or expected to be com-
municated as the representations of the party making them to
the party acting on them, for him to rely and act on." ^ It
is, of course, necessary that there should be some representa-
tion by words or conduct, in order to create the agency by
estoppel.'* Where an agent is appointed, but his authority to
do any act whatever, is contingent upon the happening of a
future event, the principal cannot be estopped to deny the
agency prior to the happening of the event, unless by conduct
on his part he leads third persons to believe that the contin-
gency has happened, or has been waived.^ So if one entrust
property to the custody of a dealer on- condition that it shall
not be sold without prior specific authorization, there is no
agency whatever, and, it seems, no misrepresentation upon
which to base an estoppel to deny the agency.^
1 Bigelow on Estoppel (5th ed.), 565; Martin v. Webb, 110 U. S. 7,
15; Travellers' Ins. Co. v. Edwards, 122 U. S. 457, 468; James v. Rus-
sell, 92 N. C. 194; Simon v. Brown, 38 Mich. 552. See /?os/, § 243.
- Rathbun r. Snow, 123 X. Y. 343.
3 Stevens i". Ludlum, 46 Minn. 161.
< Timpson v. Allen, 149 N. Y. 513.
5 In re Cotisort Deep Level Gold Mines, 1897, 1 Ch. 575; Rcithbun r.
Snow, 123 N.Y. 343.
8 Bijrgs V. Evans, 1894, 1 Q. B. 88. But it would seem that in such
a case there might be an estoppel to deny the dealer's ownership of the
article sold, where it is one in which he is accustomed to deal. See
5
66 FORMATION OF AGENCY
(2) Estoppel may he relied upon to establish the extent of the
agency. While this is to l)e distinguished from the estoppel
to deny the agency, the principle on which it is based is fun-
damentally the same. In the one case the defendant makes
two representations, both of which are false, namely, that A
is his aiicnt, and that A as his agent has certain authority.
If X relics, in good faith and in the exercise of ordinary
prudence, upon these representations, he may prevent the
defendant from denying either of them. In the other case
the defendant makes both representations ; but one of them,
namely, the fact of the agency, is true, while the other, namely,
the extent of the agency, is false. He is equally prevented
from denying either of them; but he is prevented from deny-
ing the one because it is true, while he is prevented from
denying the other because he has represented it to be true.^
This phase of estoppel finds its expression in the general rule
of law that one who deals with an agent within the apparent
scope of his authority is protected.'-^ " Where one, without
objection, suffers another to do acts which proceed upon the
ground of authority from him, or by his conduct adopts and
sanctions such acts after they are done, he will be bound,
although no previous authority exists, in all respects as if the
requisite power had been given in the most formal manner.
If he has justified the belief of a third party that the person
assuming to be his agent was authorized to do what was done,
it is no answer for him to say that no authority had been
given, or that it did not reach so far, and that the third party
had acted upon a mistaken conclusion. He is estopped to
take refuge in such a defence. If a loss is to be borne, the
author of the error must bear it." ^
The doctrines elsewhere set forth as to the extent of an
agent's authority to bind his principal* are based upon the
Pickering v. Busk, 15 East, 38; Ewart on Estoppel, pp. 2-16, 484; Levi
V. Booth, 58 Md. 305.
1 Bickford v. Menier, 107 N. Y. 490.
2 Post, § 102 et seq.
8 Bronson's Ex'r v. Chappell, 12 Wall. (U. S.) 681. See also HiU v.
Wand, 47 Kans. 340 ; Ewart on Estoppel, pp. 501-512.
♦ Post, §§ 102-106.
BY ESTOrPEL. 67
doctrine of estoppel so far as tliey include acts beyond tbe
authority conferred. Assuming an agent to have been ap-
pointed for some purpose and authorized to do some acts, the
liability of the principal for acts beyond the authority con-
ferred may rest upon various specific considerations, but
all or most of them may be reduced to the basis of estoppel.
Briefly stated, the elements to be considered in fixing the
principal's liability are: (1) the power actually conferred;
(2) the powers reasonably necessary in the execution of
those actually conferred ; ^ (3) the powers annexed by custom
or usage to the agency in question, considered either as to
the nature of the agency, or as to the place, time, or cir-
cumstances under which it is to be exercised ;2 (4) the
powers (in addition to those above named) which the prin-
cipal, by his words or conduct, reasonably leads third persons
to believe that his agent possesses. Now the last of these
elements rests indubitably upon estoppel and can find no
other doctrine in the law applicable to it.^ But the second
and third of the elements enumerated may be referred either
to a doctrine of " implied authority " or to a doctrine of
estoppel. It is sometimes said that it will always be implied
that a principal has conferred, together with the express
authority, the auxiliary authority reasonably necessary to its
execution, or the authority usually incident to the particular
agency.* It must be remembered, however, that the fact may
be otherwise, and that it is necessary to invoke the doctrine
of estoppel in order to prevent the principal from asserting
the fact. Having by creating the agency represented that
the agent has the authority incidental to it or affixed to it by
custom, lie will not afterward be heard to say that the agency
was by express stipulations confined within narrower limits.
1 " When one commands a thing to be done, he impliedly commands
all [convenient] means to be used for doing this." Argument of counsel
in Southerne v. Howe, 2 RoUe's Rep. 5, 26 (1618).
2 Anonymous, 12 Mod. 514 (1701) ; Nickson v. Brohan, 10 Mod. 109
(1712).
3 Johnson v. Hurley, 115 Mo. 513; Bradish v. Belknap, 41 Vt. 172.
Iluutley V. Mathias, 90 N. C. 101.
C8 • FOKMATION OF AGENCY
This is, of course, subject to the qualification tliat the third
party, in dealing with the agent, does not know of the express
liuiitation upon the incidental or customary powers. Ex-
amples of such estoppels arc discussed in subsequent sections.^
It will be observed that the doctrine of estoppel is applicable
only to cases where a representative is authorized to make
promises or representations upon which third persons are
invited to act, that is, it is applicable to a princii»al who
authorizes his agent to create primary obligations, but not to
a master who never authorizes his servant to create such
obligations.^
§ 52 a. Application to agent's torta.
In most cases of tort, the doctrine of estoppel is inapplicable.
The liability of the master for the servant's unauthorized
torts rests upon other and different considerations.^ But
there is one class of torts, so-called, which properly belong
inider the head of principal and agent, rather than that of
master and servant, and this because they arise out of
agency instead of service, and the principal's liability for
them rests upon grounds similar to those that fix the liability
of a princii)al for his agent's contracts.'*
If in conducting the agency the agent makes a representation
which is either naturally incidental to, or customary in, such
agencies, the principal will be estopped to deny that the agent
had authority to make it as against one who reasonably relies
upon it to his prejudice.^ In ordinary cases of tort, there is
no estoppel because the third party has not changed his
position in consequence of any act of the agent ; but in
deceit and torts analogous to deceit, the third party does
change his })<)sition relying upon the agent's rci»resentation,
1 Post, §§ 1O0-116.
2 Ante, §§ 4-5; pout, § 243.
« A nte, § 5 ; post, § 242 et seq.
* Ewart on Estoppel, pp. 496-501 ; post, § 148 f/ seq.
6 Bank of Hatavia v. New York, &c. R., 106 N. Y. 1 ■"': Haskell v.
Starbird, 152 Mass. 117; contra, Britisli IMutual Bankint: Co. r. Charn-
wood Forest Ry., L. R. 18 Q. B. D. 714; Friedlauder v. ily., 130 U. S.
416.
BY ESTOPPEL. 69
and the principal is estopped to deny the agent's anthority
to make such representation where he has clothed his agent
with the apparent authority to make it. If now the represen-
tation is false and known to the agent to be false, and the
third party relies upon it to his damage, the principal should
be liable just as he should be for an excess or abuse of
authority in making a contract under like circumstances.
The application of this doctrine would reconcile the con-
flict in regard to the liability of a principal for fraudulent
representations made by an agent for his own benefit, as in
the case of the issue of fictitious stock by a transfer agent or
of fictitious bills of lading by a shipping agent.^ It is ad-
mitted that a bank cashier has authority to certify checks,
and that therefore his certification binds the bank, although
it falsely states that the drawer has funds when he has not.^
It is admitted that a shipping clerk has authority to certify
to the delivery of goods, but it is denied that his false cer-
tificate that the shipper has delivered goods when he has not
will bind the carrier.^ It is obvious that the distinction can-
not rest on the nature of the instrument, for a principal is
not bound upon an unauthorized negotiable instrument made by
his agent, any more than upon a non-negotiable one. The
primary question in each case is as to the liability of the
principal for his agent's act. In each case the principal has
represented that the agent had authority to do the act, that
is, certify checks or issue bills of lading ; in each case the
agent has exceeded his actual authority by certifying a check
when the drawer had no deposit, or by issuing a bill of lading
when the shipper had delivered no goods ; in each case the
third party who takes the check or the bill of lading relies
upon the representation of the principal tliat the agent had
authority and upon the representation of the agent that the
funds or the goods Avere in the principal's custody. In one
case the principal is held estopped to deny his representation
1 Post, §§ 154-157; Ewart on Estoppel, pp. 508-511.
2 Merchants' Bank c. State Bank, 10 Wall. (U. S.) 601.
* Friedlauder v. Texas & Pac. Ry., 130 U. S. 416.
70 FORMxVTION OF AGENCY
of authority ; in the other not. The holding that the principal
is estopped in hoth instances seems more consistent and is
justified upon the well recognized grounds of cstopi)el.^
The true ground of distinction in all of these cases is that
the tort is committed by an agent while acting as agent and
not as servant, that is, while engaged in making contracts or
representations for his principal. The confusion has arisen
from an attempt to assimilate these so-called torts to ordin-
ary torts that consist simply in the breach of an antecedent
obligation. Here a voluntary primary obligation is created.
A representation is made with the intent that third persons
shall act upon it, and they do act upon it, thereby creating
the obligation to make good the representation. The sole
question is' had the third persons reasonable grounds to
believe that the agent was authorized to make the representa-
tion ? That question should be answered upon precisely the
same doctrines as if the question were whether the agent had
authority to make a contract. There is as much difference
between a tort by a servant in the course of his employment
and this so-called tort, as between a servant's tort and an
agent's contract. We are dealing with an agent and not
with a servant, and in agency the principal's liability is
determined by the doctrine of estoppel.^
§ 53. Limits of the doctrine.
The limits of the doctrine are to be sought in the general
law of estoppel by misrepresentation. The rules may be
briefly summarized as follows : ^ —
(1) The misrepresentation must be made by the ])rincipal,
or by some one having apparent authority from him to make
it, or by some one whose representation he has, by some
disregard of duty, made credible.
If made by the principal in person we have the ordinary
case of estoppel. If made by one having authority from him
1 Farmers' & M. Bank v. Butchers' & D. Bank, IG N. Y. 125; Bank
V. R., 100 N. Y. 195.
2 Post, §§ 148-157.
* Bigelow on Estoppel (5th ed.), p. 570; Ewart on Estoppel, p. 10,
BY ESTOPPEL. 71
to make it, we have, first, an estoppel to deny the agent's
authority, and, second, an estoppel to deny the agent's mis-
representation. If made by one (not an agent) whose rep-
resentation he has made credible, we have the case of a
misrepresentation by a third party, aided by some act or
omission by the defendant under circumstances where he
owed a duty to use due care to avoid harm or loss to others.^
(2) The representation must be as to a material fact, or of
such a character as may reasonably influence the conduct of
another person.
(3) The representation must be made with the intent that
the other party shall act upon it, or in a manner calculated
to lead him to act upon it.
(4) The other party must be ignorant of the truth, and his
ignorance must not be the result of his own negligence or
bad faith.
(5) The other party must actually be induced to act relying
on the representation.
Any further discussion of the elements of estoppel would
be foreign to the purpose of this work. The application of
the doctrines will appear in subsequent chapters.^
1 Ewart on Estoppel, pp. 18-27, 28-67.
2 Post, §§ 102-116; §§ 149-157.
FORMATION OF AGENCY
CHAPTER Y.
FORMATION OF TIIK KELATION BY NECESSITY.
§ 54. General doctrine of contracts from necessity.
Aside fruiu cuiitnicts which rest upon llic agreement of
the ]iai'tics there is a more or less clearly (.Icfined class of
legal relations in which obligations are enforced by contract-
ual remedies although in fact no contract by agreement
existed between the parties. These ai'c called "contracts
created by law," or "quasi-contracts."^ Such is the obliga-
tion of an infant to i)ay for necessaries, ^ of a man to return
money recei\'cd under mistake,'^ of a corporation to return
the benefits received under a contract nltra vires,'^ or of a man
to pay for benefits conferred uuder statutory authority.^ The
obligation where not a statutory one is created by the courts
on grounds of public policy to do justice between the ])ar(ies.
The principle of quasi-contractual obligation is aj)plied for
the ])urpose of creating an agency where otherwise there
would be none. Such agency generally arises from the nec-
essity of the particular situation.
§ 55. Agency of wife.
The authority of a wife to pledge her husband's credit
may rest upon any one of three grounds, namely, actual
authority, ostensible authority, or necessity.
If there be actual authority there is simply the usual
agency by agreement heretofore discussed.
Ostensible authority in the case of a wife may arise fi'om
the fact of cohabitation. Where a husband and wife live
* Keener on Qiiasi-Contructs, Chap. I.
2 Trainer v. Trumbull, 111 Mass. 527.
8 Keener, Cliap. If.
* Central Tran.s. Co. v. Pullman Car Co., 1-30 U. S. 24.
6 Steamship Co. v. JoUffe, 2 Wall. (U. S.) 450.
BY NECESSITT. 73
together, there is a presunii)tioii that she is authorized to
pledge his credit for the ordinary and usual household pur-
chases.i But for purchases going beyond such as the man-
ager of a household might reasonably make, there is no
presumption of authority from tlie fact of the conjugal
relation alone ; authority, if any, must be sought in acts and
conduct on the part of the husband calculated to induce third
persons to believe that the wife has the added authority,
such, for example, as having without objection previously
recognized and paid for such i)urchases.2 In other words,
ostensible authority rests upon the same consideratit)ns here
as in any other case, except that the fact that the wife man-
ages the household raises a presumption of authority to make
the usual and ordinary purchases for it. Where they live
apart no such presumption arises.-^
Authority by necessity is an authority created by the law
as a result of the marital relation by virtue of which the
wife has power to pledge the husbands' credit in order to
obtain the necessaries which he has neglected or refused to
furnish.^ This may exist even where the husband has for-
bidden the wife to pledge his credit, or has notified third
persons not to supply her upon his credit,^ or where, with his
consent or in consequence of his fault, she is living apart from
him.^ There may be two theories on which this result is
reached, — (1) that the obligation of the husband is to pay
for the necessaries without regard to the question of agency,'
or (2) that there is a compulsory agency created by law
under which the wife's act is the husband's act.^ The first
1 Harrison v. Grady, 13 L. T. Rep. 369; Flymi u. Messenger, 28 Minu.
208.
2 Bergh v. Warner, 47 Minn. 250.
3 Viisler V. Cox, 53 N. J. L. 516; Johnston v. Sumner, 3 Ilurl. &
Nor. 261.
* Bergh v. Warner, 47 Minn. 250. ^ Ibid.
6 Jolmston u. Sumner, 3 llurl. & Nor. 261; Wilson v. Ford, L. R.
3 Ex. 63.
"> Keener on Quasi-Contracts, pp. 22. 23.
8 Benjamin v. Dockham, 131 Mass. 418 ; Johnston v. Sumner, 3 Ilurl.
& Nor. 201.
74 FORMATION OF AGENCY
theory finds color in the fact that the luishand must jtay
even if the wife be insane or unconscious, or even if the
husband bo insane.^ In any case the creditor must show that
the husband neg-lccted or refused to provide suitable suj)port,
and that the articles furnished were necessaries. What are
necessaries is a question of fact for the jury, cxce])t where
the court can positively declare that the articles are not
necessaries.^
§ 56. Agency of infant child in purchase of necessaries.
Sonic of the American courts enforce the doctrine that a
father is liable for necessaries furnished his infant child
wiiere no actual authority is vested in the child to pledge the
father's credit. It is probably true that slighter evidence will
establish authority in such cases, than in cases where the
relation does not exist.^ But in some cases no evidence of
such authority exists at all, and hence the agency cannot rest
on assent. The English and some of the American courts
refuse to enforce any obligation under such circumstances,*
but some of our courts enforce it on the same theory as in the
case of the compulsory agency of the wife,^
§ 57. Agency of shipmaster.
A shipmaster has authority in cases of necessity to purchase
supplies for the vessel and pledge the credit of the owner.^
This is analogous to the purchase of necessaries by a wife or
1 Read v. Legard, 6 Ex. 636 ; Cunningham v. Reardon, 98 Mass. 538,
cited by Keener on Quasi-Contracts, p. 22.
2 Davis V. Caldwell, 12 Cash. (Mass.) 512.
8 Clark V. Clark, 40 Conn. 586; Fowlkes v. Baker, 29 Texas, 135.
And see Schouler on Domestic Relations, § 241; Jordan r. AVright, 45
Ark. 237; Freeman r. Robinson, 38 N. J. L. 383.
•" xMortimore v. Wright, 6 M. & W. 482; Shelton v. Springett, 11 C. B.
452; Kelley i'. Davis, 49 N. H. 187; Gordon v. Potter, 17 Vt. 318; Free-
man V. Robinson, 38 N. J. L. 383; Carney v. Barrett, 4 Ore. 171.
6 Gilley v. Gilley, 79 Me. 292; Cromwell v. Benjamin, 41 Barb.
(N.y.) 558; Manning r. Wells, 8 Misc. (N. Y.) 646; Watkins v. De-
Armond, 89 Ind. 553. And see dictum in Dennis v. Clark, 2 Cash.
(Mass.) 317, 352.
« McCready v. Thorn, 51 N.Y. 454.
BY NECESSITY. 75
child, in that the plaintiff in order to recover must show that
the supplies were in fact necessaries. Such authority may,
indeed, be thought to be conferred by the contract or assent
of the owner aided by custom, but it is closely analogous to
the compulsory agencies arising from necessity. So also the
[ shipmaster has authority to sell the cargo or even the vessel
\ itself in case of supreme necessity .^
§ 58. Agency of unpaid vendor.
An unpaid vendor who is still in possession of the goods,
may re-sell the same as agent of the vendee and charge the
vendee with the difference between the contract price and the
amount received on the re-sale. This agency arises " by
operation of law," and can be defeated by the vendee only by
taking and paying for the goods. ^
§ 59. Other illustrations.
The doctrine of agency by necessity has been extended in
some modern cases to relations unknown to the common law.
The most important instance is that of the employment of
medical attendance in railway accidents. Is a railway com-
pany liable for services rendered by a physician in the care of
injured servants or passengers, where the services are ren-
dered at the request of (say) a conductor ? It is held on the
one side that it is, on the ground that the emergency creates
an agency by necessity in favor of the highest railway official
on the scene of the accident or within reach by reasonable
means of communication.^ But this conclusion is denied in
other jurisdictions.^ The grade of the officer may determine
1 Pike V. Balch, 38 Me. 302; Gaither v. Myrick, 9 Md. 118; Butler v.
Murray, 30 N. Y. 88 ; post, § 116.
2 Dustan v. McAndrew, 44 N. Y. 72; Benjamin on Sales (6th ed.),
§§ 782-795, and American note.
3 Terre Haute, &c. R. v. McMurray, 98 Ind. 358 ; lb. v. Stock^Yell,
118 Ind. 98; Toledo, &c. R. v. Mylott, lud. App. 438; Indianapolis,
&c. R. V. Morris, 67 111. 295.
* Sevier v. Birmingham, &c. R., 92 Ala. 258; Peninsular R. v. Gary,
22 Fla. 356; Tucker v St. Louis, &c. Ry., 54 Mo. 177. See Marquette,
&c. R. V. Taft, 28 Mich. 289, where the court was evenly divided. And
see Godshaw v. Struck, (Ky.) 58 S. W. 781; Central of Georgia R. v.
Price, 106 Ga. 176.
76 FORMATION OF AGENCY.
the question, but if so, it must be on the ground of assent
and not of necessity.^
The recent English case of Gwilliam v. Twist ^ is an
interesting one upon the question of a servant's acquiring
authority by necessity. The driver of an omnibus belonging
to defendants became intoxicated while on duty and was
taken from his seat by a policeman. A man who happened
to be standing near, volunteered to drive the omnibus to the
defendants' yard, and the driver and conductor acquiesced,
the former warning him to drive carefully. The volunteer in
negligently turning a corner ran over and injured })laintiff,
who brought action for damages against the defendants,
owners of the omnibus. The trial court held, with consider-
able hesitation, that the defendants were liable for the injury,
placing its decision upon the ground of agency by necessity ;
but the Court of Appeal reversed the decision on the ground
that the necessity did not sufficiently appear, since the defend-
ants might have been communicated with, and left open the
question whether, if there had been an actual necessity, the
defendants would have been liable.^
^ Langan v. Great W. Ry., 30 L. T. x. s. 173; Swazey v. Union Mfg.
Co., 42 Conn. 556.
2 1895, 1 Q. B. 557; on appeal, 1895, 2 Q. B. 81.
8 See also Sloan v. Central Iowa Ry. Co, 62 Iowa, 728; Fox v. Chi-
cago, &o. Ry. Co., 86 Iowa, 308. See;;o^/, §§ 239-240.
TERMINATION OF AGENCY BY ACT OF THE PARTIES. 77
CHAPTER Yl.
TERMINATION OF THE RELATION.
§ 60. Ways in which relation may be terminated.
The relation of principal and agent may be terminated, by
various methods, and for convenience of treatment, these
methods may be classified as follows : (1) by bilateral act ;
(2) by unilateral act ; (3) by operation of law. But to the
general rules governing the termination of the agency by
these means there is an important exception, (4) where the
agency is coupled with an interest or where its revocation
would involve the agent in liability tov:ard third persons.
1. Bt/ Bilateral Act.
§ 61. By terms of original agreement.
The relation may be limited by the terms of the original
agreement, in any one of the following ways : (1) When the
contract by its terms is to endure only during a certain period
of time, the expiration of that period will dissolve the rela-
tion.i (2) When the parties manifestly contemplate that the
relation shall continue only until the happening of a certain
event, the happening of that event likewise operates as a dis-
solution.2 (3) When the purpose for which the agency was
created is accomplished, either through the instrumentality
of the agent or otherwise, the agent's authority is terminated.^
In every case, it is a question of the intention of the parties,
and such intention, unless expressed by the words of the con-
tract, may be implied from the circumstances of the case.
1 Gundlach r. Fischer, 59 III. 172.
2 Danby v. Coutts, L. R. 29 Ch. Div. 500.
8 Moore v. Stone, 40 Iowa, 259; Short v. Millard, 68 111. 292; Ahern
V. Baker, 34 ]\Iinn. 98.
78 Ti:i:.ML\ATION OF AGENCY
Tims the authority of an attorney engaged to conduct an
action terminates wlicn judgment is rendered.^ An auction-
eer's authority ceases when the sale is consummated.- And a
broker's ceases when the contract of sale is completed.^
4; 62. By subsequent agreement.
Ao-encv depends for its existence upon the contract l)y which
it was created, and consequently a subsequent agreement be-
tween the parties to cancel or rescind their original contract,
terminates the relation. The rescinding contract, of course,
must have the essential element of consideration, but the
abandonment by either party of his rights under the original
contract is sullicient.*
2. By Unilateral Act.
§ 63. Revocation and renunciation.
Having considered the ways in which the agency may be
terminated by the voluntary act of both principal and agent,
we have now to treat of its termination by the act of one party
alone. This may be effected, (1) by the principal's revoca-
tion of his agent's authority ; (2) by the agent's renunciation
of his authority. Questions as to remedies for breach of con-
tract by either principal or agent are considered hereafter.^
§ 64. Revocation — when possible.
It is clear upon principle, that since the authority is con-
ferred by the principal, and is to be exercised on his behalf
and for his benefit, the agent should not be permitted to con-
tinue in the exercise of such authority any longer than the
principal desires. The relation is, in a degree, personal and
confidential, and the principal for his own protection should
be able to withdraw his confidence at will. It is therefore the
general rule of law, subject to the exceptions hereafter enu-
1 MacBeath r. Ellis, 4 Bing. 57S ; Butler v. Knight, L. R. 2 Ex. 109.
2 Seton V. Slade, 7 Ves. 265.
* Blackburn v. Scholes, 2 Camp. 3il.
* Iluffcut's Anson on Cent. p. 333 et seq.
6 Post, §§ 79-81.
BY ACT OF TIIF, PAKTIES. 79
mernted,^ tliat the principal may revoke his agent's authority at
any time before the authority has been fully exercised, and
with or without good cause.^ And tliis is true even where the
principal has expressly or imi)liedly agreed not to revoke. In
such a case, however, the principal, although he has the potcer,
has not the 7ught to revoke, and the agent has an action against
the principal for any damages suffered by him as a result of
the rovocati(Hi.^
§ 65. Revocation — -what amounts to.
The revocation of the agent's authority may be by the ex-
press act of the principal, or it may be implied from the cir-
cumstances of the case. In the absence of statute, a sealed
or written revocation is unnecessary, even though the author-
ity was originally conferred by a formal instrument.* The
cii'cumstances from which a revocation will be implied are
various. If tlie principal, after conferring the authority, but
prior to its execution, disposes of the subject-matter of the
agency, or involuntarily loses control over it, a revocation
must necessarily be implied.^ For example, if a principal con-
fers authority upon an agent to sell his house, and before the
agent accomplishes his object, the house is destroyed by fire
cr sold by the principal himself, the agent is clearly deprived
of his power, and a revocation of authority is therefore pre-
sumed. And so also, if after conferring authority upon an
agent to perform a, specified act, necessarily exclusive, the
principal gives the same power to another, the authority of
the first agent is thereby revoked.^ But it is held that the
authority of an agent to do a specified act is not necessarily
1 Post, § 72.
2 Hartley's Appeal, 53 Pa. St. 212; Blackstone v. Buttermore, 53 Pa.
St. 266 ; Chambers v. Seay, 73 Ala. 372 ; Hunt v. Rousmanier, 8 Wheat.
(U. S.) 174 ; Venning v. Bray, 2 B. & S. 502 ; Warwick v. Slade, 3 Camp.
127.
8 Chambers v. Seay, supra : Blackstone v. Buttermore, supra ; Mao-
Gregor v. Gardner, 14 Iowa, 326.
* The Margaret Mitchell, Swabey, 382; Brookshire v. Brookshire,
8 Iredell (X. C.) Law, 74.
6 Gilltert v. Holmes, 64 111. 548.
^ Copeland v. Mercantile Ins. Co., 6 Pick. (Mass.) 198.
80 TERMINATION OF AGENCY
revoked by the subsequent cmj)loyment of another to attend
to all business of the principal.^ The dissolution of a corpo-
ration or partnership, or tlic severance of the interests of joint
principals, revokes the autliority of agents.^
^ G6. Revocation, notice of.
A revocation is effectual and binding-, only as against those
who have notice that it has been made. Consequently, in
order to protect himself, the principal must communicate the
revocation not only to the agcnt,^ but to all persons who, u[)on
the strength of his previous authority, are likely to deal with
him.^ In case the authority is only for the performance of a
special act, however, third persons cannot presume that the
agency will continue after the performance of that act, and
therefore no notice of revocation need be communicated to
them." Nor is it necessary to give notice to a sub-agent, de-
riving his authority from the agent alone.
The method by which the revocation should be communi-
cated varies with each particular case, but the notice must
always be sufficient to make the knowledge of the revocation
co-extensive with the knowledge of the authority. Thus, to
persons who have never dealt with the agent, a general notice
through the medium of the public press is sufficient, whether
it is seen or not. But to persons who have transacted busi-
ness with the agent, actual notice must be given, or at least
such knowledge of the revocation must be communicated to
them as would serve to place a prudent man uj)on inquiry.''^ A
1 Smith t'. Lane, 101 Tnd. 449.
2 Schlater c. Wiiipenny, 75 Pa. St. 321 ; Rowe v. Rand, 111 Tnd. 206;
Griggs V. Swift. 82 Ga. 392.
8 See Robertson v. Cloud, 47 Miss. 20S. It seems that a notice left at
the agent's usual place of business is enough to terminate the agency,
even before the agent has actual notice of it. Rees i'. Fellow, 97 Fed.
Rep. 1G7. Compare Shuey v. United States, 92 U. S, 73.
* Tier r. T.ampson, 3.5 Vt. 179 ; Fellows v. Hartford, &c. Co., 38 Conn.
197; Lamothe v. St. Louis, &c. Co., 17 Mo. 204; McXeilly v. Continental
Lifeln.s. Co , 66 N.Y. 23.
6 Watts V. Kavanagh, 35 Vt. 34.
6 ClaHin v. Lenheim, G6 N. Y. 301, 305.
BY ACT OF THE I'AUTIES. 81
failure to protect third persons l)y due notice may give rise to
an agency by estoppel.^
§ 67. Revocatioii, effect of, as to principal and agent.
It appears, therefore, that unless the agent's authority is
coupled with an interest, the principal has the j^owe?* to revoke
it at any time, and with or without good cause. It docs not
always follow, however, that he has the right to revoke with-
out incurring liability for breach of contract. Where there is
an agreement, express or implied, that the relation shall en-
dure for a definite time, the principal cannot revoke without
subjecting himself to liability for the damages resulting to the
agcnt.2 Of course, this rule docs not apply in case the agent
has broken an express or implied condition in the original
contract. For instance, every contract of agency contains the
implied condition that the agent will faithfully, honestly, and
diligently perform his duty, and if he fails so to do, the prin-
cipal may revoke his authority without liability.^ Unless
guilty of gross and wilful misconduct, the agent is entitled,
upon revocation, to reasonable remuneration for his past ser-
vices and expenditures, and, if nothing further remains to be
done, to full remuneration.*
§ 68. Revocation, effect of, as to third persons.
It has already been seen that the revocation of an agent's
authority is effectual as to all persons who have notice that it
lias been made, the character of the notice depending upon
circumstances. If sufficient notice has not been given, and
the third person has no knowledge of the revocation, he may
presume that the agency still exists, and his subsequent deal-
ings with the agent are binding and enforceable against the prin-
cipal.s In such case the jjrincipal is estopped to deny the agency.
^ A nte, § 50 et seq.
2 Lewis V. Atlas, &c. Ins. Co , 61 Mo. 534; Standard Oil Co. v. Gil-
bert, 84 Ga. 7U.
3 Dieringer v. Meyer, 42 Wis. 311 ; pnxt, § 87.
■* Sumner v. Reicheniker, 9 Kansas, 320; post, § 79.
5 Anon. V Harrison, 12 :Mod. 34(5; Truenian v. Loder, 11 A. & E.
589: Clafliu v. Lenheini, 66 N. Y, 301 ; Fellows v. Hartford, &c. Co., 38
6
82 TKK.MINATION OF AGENCY
§ 69. Renunciation.
The agent, like the principal, may terminate the relation at
will. And so also, his renunciation, if not express, may be
implied from the circumstances. Thus, if the agent abandons
his work, the principal is justified in regarding his authority
as renounced.^
The renunciation becomes operative, as between ])rincipal
and agent, when knowledge of it actually reaches the princi-
pal. And the principal, as in the case of his own revocation,
must notify third persons in order to protect himself from lia-
bility for the subsequent fraudulent dealings of the agent.^
If tlie agency is to endure for an indefinite period, or is an
agency at will, the agent has not only the power but the ri<jht
to renounce at any time.^ But in case there is an express or
implied agreement that the agency is to endure for a definite
period, a renunciation is a breach of contract and subjects the
agent to liability for the damages resulting to the principal.^
There is an exception to this rule, of course, when the prin-
cipal, by his own breach, justifies the renunciation. If an
agent renounces the employment he cannot generally recover
compensation for services rendered, but some jurisdictions
allow a recovery on quantum meruit}
3. By Operation of Law.
§ 70. Change affecting subject-matter.
Contracts may be discharged without the consent of the
parties, or irrespective of their consent. Such are the cases
where the law creates a discharge on grounds of public policy,
convenience, or necessity. Discharge by operation of law is
a topic of the general law of contract, and need not be spe-
cially treated here.^ So far as contracts of personal service
Cunn. 197; Tier v. Lampson, 35 Vt. 179; Lamothe i'. St. Louis, &c. Co.,
17 iMo. 204.
1 Stoddart v. Key, 62 How. Pr. (N. Y.) 137.
2 Capen v. Pac. &c. Ins. Co., 1 Dutcher (N. J. L.), 07.
8 Banow.s v. Cushway, 37 Mich. 181.
* Post §81.
6 Iluft'cut's Anson on Cont. pp. 390-399; Leake on Cont. (3d ed.)
590 el se(^.
BY OPERATION OF LAW. 83
arc concerned the subject involves, (1) a change in the law
itself, (2) a change affecting the subject-matter or circum-
stances of the contract, (3) a change affecting the parties to
the contract. These changes are generally in the nature of
what is termed a subsequent impossibility.
(1) A change in the law itself which renders the continu-
ance of the contract impossible, because illegal, would operate
to discharge the contract.^
(2) A change affecting the subject-matter or circumstances
of the contract may operate to discharge the contract if the con-
tract was made in contemplation of the continued existence of
the subject-matter or circumstances as it or they were at the
time of the formation of the contract. Thus if the agency be
created for the sale of a specific article and the article should
perish, without fault, the agency would be terminated.^ So if
the agency contemplated the continued existence of a particu-
lar state of things, and, without fault, this condition should
cease to exist, the agency would be terminated.^ But " the
parties must have contemplated the continuing of that state
of things as the foundation of what was to be done ; " other-
wise a change in conditions, however seriously it may inter-
rupt the agency, will not discharge the contract.* Whether
the danger arising from the prevalence of a contagious disease
at the place where the service is to be rendered will discharge
the contract, is a disputed question.^
(3) A change affecting the parties to the contract may be
caused by death, insanity, illness, marriage, constraint of law,
bankruptcy, and war. These are treated in the succeeding
section.
1 Cordes v. Miller, 39 Mich. 581.
2 Dexter v. Norton, 47 N. Y. G2.
8 Stewart v. Stone, 127 N. Y. 500.
* Turner i'. Goldsmith, 1891, 1 Q. B. 514, where the destruction of the
principal's manufactory was held not to discharge an agency for the sale
of the goods manufactured; so also Madden v. Jacobs, 52 La. Ann.
2107.
5 Lakeman v. Pollard, 43 Me. 463; Dewey v. Union School Dist., 43
Mich. 480.
84 te[;mixation of agency
§ 71. Change in condition of parties.
(1) Death. The death of either i>arty to the contract ter-
minates tlie agency. It is no longer binding on the survivor
nor on tlic estate of the deceased. ^ The death of the principal
revokes the anthority of the agent, and any contracts made
uith him afterwards are a millity, even though no notice of
the revocation of authority is given.^ The death of one of
two joint principals has the like effect.^ l>ut if the agent's
authority be coupled with an interest, the death of the i>rinci-
pal does not revoke the authority.* So also, the death of the
agent terminates his authority, and it cannot ))e exercised by
his administrator.^
(2) Inmnity. The after-occurring insanity of the principal
or agent, like his death, terminates the agency.^ And if his
insanity has been judicially declared, the decree of the court
will be regarded as notice, and the revocation will operate
upon all persons, whether or not they have actual knowledge
of the insanity. But if the princii)al has not been formally
adjudged insane, persons who, in ignorance of the insanity,
deal with the agent, are protected. This, upon the theory
that while both principal and tliird person are innocent and
free from blame, the principal, by conferring the original
authority, had made the wrong possible, and he must there-
fore bear the loss." In accordance with the general rule, if
1 Lacy )'. Getraan, HON. Y. 100.
2 Farmers', &c. Co. v. Wilson, 139 N. Y. 284; Long v. Thayer, l.oO
U.S. 520; In re Succession of Lanaux, 46 La. Ann. 10:56; Harper v.
Little, 2 Me. 14; Blades v. Free, 9 B. & C. 167. Post, § 200.
^ McNaughton v. Moore, 1 Haywood (N. C), 189; Rowe v. Kand,
111 Ind. 206 ; Tasker v. Shepherd, 6 H. & X. 575.
■* limit V. Rousmanier. 8 Wheat. (U. S.) 174, 203; Grapel v. Hodges,
112 X.Y. 41 0; jujsi, § 72.
^ Johnson r. Jolinson's Adni'r, Wright (Ohio), 594.
6 Davis V. Lane, 10 N. H. l.')(); Motley v. Head, 43 Vt. 633; MatHiie-
sen, &c. Co. v McMahon, 38 N. .J. L. 536 ; Drew v. Xuun, L. R. \ il. B. D.
661.
' Ante, § 16. But the burden is upon tlio third party to show that he
■was ignorant of the principal's insanity. !Merritt v. Merritt, 43 W. Y.
App. Div. 68.
BY OPERATION OF LAW. 85
tlie agent's authority is coupled with an interest, the princi-
pal's insanity does not terminate the agency.^
(3) Illness. The illness of the principal would have no
effect uj)on the agency. Ihit the illness of the agent which
incapacitated him from performing the duties of the agency
would warrant him in renouncing the contract.- And it is
immaterial that his illness is due to his own fault, since an
inquiry as to the cause of the illness is treated as an inquiry
into a remote cause.^ If, however, before renunciation or
notice of the termination of the agency, the agent should act
for the principal, his acts would, of course, be binding.
(4) Marriage. The marriage of a principal does not, as a
general rule, operate as a termination of the agency. It may,
liowever, revoke an authority the exercise of which would
impair rights growing out of the marriage. For instance it is
lield that a power of attorney to sell land, the home of a single
man, is revoked by his marriage* The principal's wife, by
the marriage, acquires an interest in the land which can only
be divested by her joining in the conveyance, or in the power
to convey. Under the common law, a woman was deprived
by marriage of all control over her property, and the authority
of her agent was consequently revoked.^ But under the
modern statutes giving to married women the right to hold
and control separate property, this rule, of course, does not
apply. The marriage of a woman who is under contract of
service does not of itself afford ground for a revocation of the
contract by the master.^ And, as we have seen, married
women may act as agents.'
(5) Constraint of Law. Where the law puts a constraint on
one of the parties which renders it impossible for him to con-
tinue the relation, the agency is revoked. Thus the arrest
1 PoM, § 72.
2 Spalding v. Rosa, 71 N. Y. 40 ; Robinson v. Davison, L. R. 6 Ex.
2G9.
8 Hughes V. Wamsiitta ^lills, 11 Allen (Mass.), 201 (semble).
* Henderson v. Ford, 4G Texas, 627.
6 Wambole v. Foote, 2 Dak. 1.
6 Edgecombe v. Buckhout, 146 N. Y. 332. ? Ante, § 23.
86 TERMINATIOX OF AGENCY
and imprisonment of an atront terminates tlie agency, and it is
immaterial that the arrest is due to the fault of the offender.^
So if a corporation be dissolved by judicial proceedings, the
agency is revoked.^ The dissolution of a partnership, whether
voluntary or involuntary, terminates an agency in which the
firm was either principal or agent.^
(G) BanJcruptcij. The mere insolvency of the principal has
no effect upon the agency, but if the principal becomes legally
bankrupt, and voluntarily or involuntarily surrenders the con-
trol of his property and affairs, the authority of the agent,
unless coupled with an interest, is regarded as terminated.*
It seems, however, that even after bankruptcy, the agent may
act for his principal in regard to all matters except those
touching the rights and property of which he is divested by
the bankruptcy.^ And it is also held that although the adju-
dication of the court relates back to the act of bankruptcy,
persons who, subsequent to the act of bankruptcy but prior
to the adjudication, deal with the agent in good faith, will
be protected.^ The bankruptcy of the agent revokes his
authority to deal with the principal's property rights, although
he might still perform a purely formal act.'
(7) War. Although there are several cases to the contrary,
it seems to be the law in America, that the existence of war
between the country or State of a principal, and that of his
agent, terminates the agency. This is in accord with the
general rule that all trading or commercial intercourse be-
tween two countries at war is prohibited.^ The exception is
^ Hughes V. "Wamsutta Mills, 11 Allen (Mass.), 201; Leopold v.
Salkev, 89 111. 412.
2 People V. Globe Ins. Co., 91 X. Y. 174.
8 Griggs V. Swift, 82 Ga. 392.
* Story on Agency, § 482; ]\Iinctt v. Forrester, 4 Taunt. 511; Pear.son
V. Graham. A. & E. 899; Parker v. Smith, IG East, 382; Ex parte
Snowluall, L. R. 7 Ch. App. 548.
6 Dixon V. Ewart, Buck, 9 1 ; 3 Mer. 322.
8 Ex parte Snowball, L. II. 7 Ch. App. 543; Elliott v. Turquand,
L. R. 7 App. Cases, 79.
■^ Audenried v. Betteley, 8 Allen (iMass.), 302. As to the agent's
right to compensation after bankruptcy, see post, § 80.
• * Kershaw v. Kelsey, 100 Mass. 5G1 ; United States v. Grossmayer,
8 Wall. (U. S.) 72. See ante, § 22.
hY IRUEVOCABLE AGENCIES. 87
recognized, however, that debts may be paid to the agent of
an alien enemy, wlien such agent resides in tlie same State
"with the debtor. But it must hr with the mutual assent of
princi{>al and agent, and it must not be done with the view of
transmitting the funds to the principal during the continuance
of the war.^
4. Irrevocable Agencies.
§ 72. Doctrine of irrevocable agencies.
To the general rule that an authority vested in an agent
may be revoked by the principal, and that it is revoked by
the death, lunacy, or bankruptcy of the principal, there are
some exceptions, and these exceptions constitute what are
known as irrevocable agencies. The reason for holding cer-
tain powers vested in an agent irrevocable, is that a revoca-
tion would cause to the agent a loss or damage other than,
and different from, a mere loss of employment or profit. Thus
if, for a valuable consideration, an authority is vested in an
agent for the purpose of fortifying a security held by him
against the principal, or of protecting or securing an interest
of his, the authority is irrevocable because its revocation
would subject the agent to damage by the loss of such secu-
rity, or the means of realizing upon it.^ So also if the agent
is employed to do an act which involves him in personal
liability to a third person, and he has incurred such liability,
the power cannot be revoked, because its revocation would
subject the agent to an action by the third person.^ In the
first case the agent is said to have " a power coupled with an
interest." In the second case he may be said to have " a
power coupled with an obligation." There are, then, two
exceptions to the general rule that an agency is revocable,
^ Insurance Co. v, Davis, 95 U. S. 425; N. Y. Life Ins. Co. v. Statham,
93 U. S. 24 ; Ward v. Smith, 7 Wall. (U. S.) 447 ; Howell v. Gordon, 40
Ga. 302. See ante, § 21.
2 Walsh i: Whitcorab, 2 Esp. 565; Gaussen i'. IVIoiton, 10 B. & C. 731 ;
Raleigh v. Atkinson, 6 M. & W. G70; Smart v. Sandars, 5 C. B. 895;
Dickinson v. Bank, 129 Mass. 279 ; Carter r. Slocomb, 122 X. C. 475.
8 Read r. Anderson, 13 Q. B. D. 779; Tbacker v. Hardy, 4 Q. B. D.
685 ; Crowfoot v. Gurney, 9 Bing. 372 ; Hess v. Ran, 95 N. Y. 359.
88 TERMINATION OF AGENCY
namely, (1) where the aixent has '' a power coupled with an
interest," and (2) when the agent has "a power coupled with
an obligation."
V (1) A "power coupled with an interest" is dil'licult to
define accurately. The word "interest" must not l)e taken
in a broad but in a narrow sense. It means an interest in
tlie thing itself which constitutes the subject-matter of the
agency as distinguished from an interest in tlie execution of
the power. " In other words, the power nnist be engrafted
on an estate in the thing." ^ There must be first an interest
or title in the thing constituting the subject-matter of the
agency and then, coupled with this, a power to dispose of or
otherwise control the thing for the purpose of protecting the
interest. Thus, if a factor makes advances to liis principal
in consideration of authority to sell goods consigned to him
and reimburse himself for the advances, the authority is irre-
vocable ; but if he is authorized to sell the goods and pay
himself from the proceeds a sum not advanced in considera-
tion of the power, the authority is revocable.^ If one have an
interest in lands or goods, coupled with a power of sale, the
power is irrevocable.^ But if one be authorized to sell lands
or goods in which he has no interest and apply the proceeds
to a debt due the agent from the principal, the power is revo-
cable because the agent, while having an interest in the
execution of the power, has none in the subject-matter of the
agency.*
The American rule seems to be that an interest in the sub-
ject-matter of tlie agency by way of security or indenmity,
coupled with a power to sell or otherwise dispose of the
property, renders the power irrevocable;^ but an interest by
^ Hunt V. Rousmaiiier, 8 Wheat. (U. S.) 174.
2 Raleigh v. Atkinson, 6 IM. & W. 670; Smart v. Sandars, 5 C. B. 895;
Taplin V. Florence, 10 C B. 744.
8 Roland v. Coleman, 76 Ga. 052; Knapp i'. Alvord, 10 Paige (X. Y.),
205.
* Hunt V. Rousinanier, 8 Wheat. (U. S.) 174; Friuk c. Koe, 70 Cal.
296; Farmers', &c. Co. r. Wilson, 139 N. Y. 284.
6 Knapp V. Alvord, 10 Paige (N. Y.), 205.
BY lEREVOCABLE AGENCIES. 89
way of compensation in the proceeds of such sale is not such
an interest as will render the power irrevocable.^
The English rale is somewhat broader and is to the effect
that where an agreement is entered into on a sufficient con-
sideration, whereby an authority is given for the purpose of
securing some benefit to the donee of the authority (as in the
proceeds by way of payment of a debt), such an authority is
irrevocable.^ This rule does not positively require that the
agent should have an " interest in the subject-matter," in
the sense in which that term is employed in most of the
American cases, but is satisfied if the agent has an interest in
the execution of the power, provided such interest rests upon
a sufficient consideration.
A leading American case took a distinction between revo-
cation by the voluntary act of the principal, and revocation by
death, and, while arguing that where the agent had acquired
upon consideration an interest in the execution of the power,
the principal could not have revoked such power during his
life, held that the power was revoked by the principal's
death.3 It is believed, however, that such a distinction is not
generally recognized, and that where a power is irrevocable
by the voluntary act of the principal, it is not revoked by his
bankruptcy,* insanity, or death.^
Y (2) ^ power coupled with an obligation means a power in
the execution of which an agent has come under some obliga-
tion to a third person. Where the revocation would involve
the agent in liability to a third person, the principal cannot
revoke, nor will the law revoke, the agency. Thus if an
agent is authorized to make a contract for the principal and
^ Blackstone v. Buttermore, 53 Pa. St. 2G6 ; Chambers v. Seay, 73
Ala. 372 ; Stier v. Ins. Co., 58 Fed. Rep. 843.
2 Gaussen i^. Morton, 10 B. & C 731 ; Clerk v. Laurie, 2 H. & N. 199 ;
In re Hannan's, &c. Co., 1896, 2 Ch. 643, affirming 74 L. T. Rep. n. s. 550.
3 Hunt V. Rousmanier, 8 "Wheat. (U. S.) 174. See also ^Vatson i-.
King, 4 Camp. 272.
* Dickinson v. Bank, 129 Mass. 279; Renshaw i'. Creditors, 40 La.
Ann. 37.
5 Knapp V. Alvord, 10 Paige (X. Y.), 205; Hess v. Rau, 95 N. Y.
359; Carter v. Slocomb, 122 N. C. 475.
90 TERMINATION OF AGENCY.
the agent has so far involved himself in the execution of the
power as that he would suffer loss or damage if the affair
were not carried through, the power to consummate it is irre-
vocable.^ So also if the agent is authorized to pay money on
behalf of the principal to a third person, and has come under
a personal liability to such third person for the sum in ques-
tion, the principal cannot revoke the authority .^ These cases
are sometimes treated as if they were those of a " power
coupled with an interest,'"'^ but they are distinguishable from
that class of cases which really have a more dcliuitely limited
scope.*
1 Iluffcut's Alison on Cont. pp. 431-432; Read v. Anderson, 10 Q. B.
D. 100 ; Hess v. Ran, 95 N. Y. 359.
- Crowfoot V. Gurney, 9 Ring. 372; Goodwin r. Bowden, 54 Me. 424.
See also Kindig v. March, 15 Ind. 248. Post, § 205.
8 Hess V. Ran, siipj-a.
* Huffcut's Anson on Cont. p. 432.
PART II.
LEGAL EFFECT OF THE RELATION AS BETWEEN
PRINCIPAL AND AGENT.
§ 73. Introduction.
It being assumed that the relation of principal and agent
has been formed, we pass to a consideration of the legal con-
sequences of the relation as concerns the principal and
agent. The relation when founded on contract imposes
mutual obligations. Even when gratuitous the agency if acted
upon calls for care and prudence on the part of the agent.
We proceed therefore to inquire : (1) What are the obliga-
tions of a principal toward his agent ; and (2) What are the
obligations of an agent toward his principal ?
92 riilNCII'AL AND AGENT.
CHAPTER YII.
OBLIGATIONS OF PRINCIPAL TO AGENT.
§ 74. Source and nature of obligations.
Tl)c obligations of each \ydvty are fixed cither by the terms
of the contract agreed to by them, or by the terms annexed
by law or custom, or by the terms reasonal>ly inferred from
the circumstances of the case. The relation being largely a
fiduciary one, the obligations are correspondingly high, as will
appear hereafter.
Turning then to the subject of the obligations of the prin-
cipal, we may classify them as follows : —
1. The duty to comjjensate the agent.
2. The duty to reimburse the agent.
3. The duty to indemnify the agent.
§ 75. Compensation.
An express agreement as to compensation will fix definitely
the right and amount of recovery for the agent's services.
The agreement may further fix the manner of payment or the
means of ascertaining when the compensation has been earned,
or it may fix a condition upon the haj)j)ening of which the
compensation sliall be deemed to be earned.^ In all such
cases the terms fixed by the parties will be conclusive of tlie
reciprocal rights and obligations.^
In the absence of an express agreement as to compensation,
there will arise an implied agreement to ])ay whatever the
services are reasonably worth, under all circumstances where
a reasonable man would infer that the services were not in-
1 Cutter V. rowell, 6 T. R. 3-20.
2 Wallace v. Floyd, 29 Pa. St. 184; Zerrahn v. Ditson, 117 Mass. 553;
Green v. Mules, 30 L. J. C. P. 343 ; Bower v. Jones, 8 Biiig. Go.
OBLIGATIONS OF rRINCIPAL. 93
tended to be gratuitous.^ In these cases the principal ques-
tion is, was any compensation intended ? The answer must
be sought in the circumstances of the transaction. If they
arc sucli as to lead to a reasonable inference that payment
is mutually intended, then payment may be enforced ; but if
they are such as to lead to a reasonable inference that the
services were intended to be gratuitous, then, however valu-
able they may prove to be, no payment for them can be
enforced against the one benefited. In the application of
this test some subsidiary considerations may be assumed to
be settled. Firat, if the services were rendered on request
there is a presumption that compensation was intended,^
except where the transaction is between near relatives.-^ In
the latter case there must be not only the express request
but also an express promise, for otherwise the reasonable
inference, arising from the relation of the parties, is that the
services are intended to be gratuitous.* So, also, the pre-
sumption arising from the request may be rebutted by the
existence of other attendant circumstances, as where the ser-
vices are competitive, or are rendered on the chance of future
employment, or compensation is at the will of the principal.^
Second, where there is no express request, the circumstances
of the transaction may raise an implied request, or an implied
acceptance of an offer, and therewith an implied promise to pay.^
These cases should be sharply distinguished from those where
the services are rendered at the request of an employee of the
principal, and the question is whether the employee is an agent
by necessity.' Third, where there is neither an express or im-
1 Bryant v. Flight,'5 M. & AV. 114; Manson r. Baillie, 2 ]\Iacq. H. L.
Cas. 80; JNIcCrary v. Ruddick, 33 Iowa, 521.
2 Weston V. Davis, 24 Me. 374; Weeks v. Holmes, 12 Cush. (^Nlass.)
215; Van Annan v. Byington, 38 111. 442.
3 Hertzog v. Hertzog, 20 Pa. St. 465; Hays v. McConnell, 42 Ind. 285;
Scully V. Scully's Extr., 28 Iowa, 548.
4 Ibid.
6 Palmer v. Haverhill, 98 Mass. 487; Scott r. Maier, 56 IMich. 554;
Taylor v. Brewer, 1 M. & S. 2!)0.
6 McCrary v. Ruddick, 33 Iowa, 521 ; Shelton v. Johnson, 40 Iowa, 84;
Garrey v. Stadler, 67 Wis. 512.
■^ See ante, § 59.
94 PRINCIPAL AND AGENT.
plied request, nor an cxjjrcss or implied promise, the services
are deemed gratuitous however valuable they may have been.*
§ 76. Compensation : remedies of agent.
In addition to the general remedies open to all creditors, an
agent may have a special remedy in the nature of a lien upon
the subject-matter of the agency. Liens are either general or
particular. A general lien exists where one has the right to
retain possession of goods or chattels as security for a general
balance, independent of the transaction in which possession
was obtained. A particular lien covers only goods or chat-
tels in respect of which debts or obligations were incurred.
Aside from special classes of agents, as factors, bankei's and
attorneys, the lien of an agent is a special or particular one
and extends only to the amount claimed for services or
expenditures performed or incurred in behalf of the very
property upon which the lien exists,^ unless by express agree-
ment or by a course of dealing a general lien is to be in-
ferred.3 This lien extends to property or funds which are
the produce or fruit of the agency and which remain in the
hands of the agent."* The lien, however, is a possessory one
and is lost by parting with the possession of the property or
funds.^ In general, the doctrine here follows the doctrine of
all common law liens.^
General liens, that is, liens for a general balance of account,
exist in favor of factors," bankers,^ and attorneys.^ Other
1 Chadwick v. Knox, 31 N. H. 220 ; Bartholomew v. Jackson, 20 Johns.
(N. Y.) 28. Cf. Hicks v. Burhans, 10 Johns. (N. Y.) 242.
2 McKenzie v. Nevius, 22 Me. 138; Muller r. Pondir, 55 N. Y. 325.
8 Bock r. Gorri.sen, 30 L. J. Ch. 39.
4 IVIuller V. Pondir, 55 N. Y. 325; Nagle v. McFeeters, 97 N. Y. 196;
Yinton r. Baldwin, 95 Ind. 433.
^ Tucker v. Taylor, 53 Ind. 93 ; Collins v. Buck, G3 Me. 459 ; Levy v.
Barnard, 2 Moore, 34.
« See Jones on Liens, §§ 1-20.
1 Story on Agency, § 376 ; Martin v. Pope, 6 Ala. 532 ; IMcGraft v.
Rugee, 60 Wis. 406 ; Matthews v. Menedger, 2 McLean (U. S. C. C), 145;
Baring i-. Corrie, 2 B. & A. 137.
8 Jones on Liens, § 241 ; Mi.sa v. Carrie, 1 App. Cas. 554.
9 Bowling Green Savings Bank v. Todd, 52 N. Y. 489 ; Ilurlbert v.
Brighaui, 56 Vt. 368; In re Broomhead, 5 D. & L. 52.
OBLIGATIONS OF PrvIXCIPAL. 95
general liens are sometimes created by statute. But the de-
tails of tliis subject are foreign to the purpose of this work.
Ordinarily an agent's remedy against his principal is in an
action at law. Where, however, the accounts between them
are too long and complicated to be conveniently submitted to
a jury, the agent may have an accounting in equity in the
nature of equitable assumpsit.^ This must not be confused
with the principal's right to an account against the agent
based upon the fiduciary relation.^
§ 77. Compensation for unauthorized act.
If the service was unauthorized but is subsequently ratified
and the benefits accepted by the principal, the agent may,
ordinarily, recover for the services in the same way and to
the same extent as if the service had been originally author-
ized.^ This doctrine must, however, be clearly defined. In
the first place the adoption of the act must be intended as a
ratification in toto, and not merely as an attempt on the part
of the principal to avoid further loss, and in the next place it
must be remembered that what might establish ratification as
between the principal and the third party will not, necessarily,
establish it as between the principal and the agent.^ It is
further necessary to distinguish clearly between ratification
and a subsequent promise to pay for a gratuitous service ; in
the latter case there is no consideration for the promise and
the agent cannot recover.^ With these cautions the doctrine
may be accepted in broad terms.^
§ 78. Compensation : conditions.
The compensation may be made to depend upon the per-
formance of certain conditions. If so, the performance of
1 Harrington v. Churchward, 29 L. J. Ch. 521 ; Smith v. Leveaux, 1 H.
& M. 123.
2 Post, § 91 ; Padwick i'. Stanley, 9 Hare, 627.
8 Gelatt V. Ridge, 117 Mo. 553; Wilson v. Dame, 58 N. H. 392; Dela-
field V. Smith, 101 Wis. 664; Frixione v. Tagliaferro, 10 M. P. C. C. 175;
Keay v. Fenwick, 1 C. P. D. 745.
* Triggs V. Jones, 46 Minn. 277.
6 Allen V. Bryson, 67 Iowa, 591.
« See ante, §§ 48, 49.
96 PRINCIPAL AND AGENT.
the condition is necessary to cstulilish the cUviin to compensa-
tion.^ If, however, the condition he perfoiined the agent is
entitled to his compensation, even though tlie princii)al refuse
to avail himself of the results of the service. This last propo-
sition is illustrated hy the cases where commissions are
promised the agent for the sale of the principal's proi)erty,
or for the securing of a loan. If the agent finds a purchaser
ready, willing and able to purchase on the terms fixed by the
principal, he is entitled to his commission although the prin-
cipal refuse to carry out the sale on those terms, or the sale
falls through from other causes.^ So, if the agent finds one
willing to loan to the principal on the terms fixed by the
latter, the agent has earned his commissi(m although the
principal refuse to accept the loan.^ In such cases the agent
has performed the condition precedent, and the right to
compensation is perfected.
§ 79. Compensation: revocation of agency by principal.
When the principal wrongfully revokes the agency in
breach of a contract, the agent may : (1) treat the contract
as still in existence and sue for the stipulated compensaticm
as it falls due ;* (2) treat the express contract as rescinded
and sue in quantum meruit for the value of services performed
as upon an implied contract ; ° (3) treat the contract as
broken and sue in damages for its breach.*^
The first remedy is no longer open in most jurisdictions
since it has generally been regarded as contrary to social
economy to permit the agent to remain idle and recover as
for constructive services.' Accordingly it has been held that
1 Green v. Mules, :]() L. J. C. P. 3i:i; Cutter v. rowell. T. R. 320;
Jones V. Adler, 31 Md. 440.
2 Ilorford v. Wilson, 1 Taunt. 12: Lockwood v. Levick, S C. B. n. s.
603; Mo.ses v. Bierlinjr, 31 N. Y. 462; Love v. Miller, .53 Tnd. 21)4.
'^ Fisher v. Drewett, 48 L. J. Ex. 32; Yinton ?;. Baldwin, 8S Tnd. 104.
< Allen V. Colliery Engineer's Co., 196 Pa. St. 512; Strauss v. iSIeer-
tief, 64 Ala. 290; contra, Howard v. Daly, 61 K Y. 362.
6 Prickett /;. Badger, 1 C. B. n. s. 290.
« Howard r. Daly, 61 N. Y. 362 ; Liddell v. Chidester, 84 Ala. 508.
" Howard v. Daly, 61 N. Y. 362 and cases there cited.
OBLIGATIONS OF PKIXCII'AL. 97
if, after revocation, the agent sues for and recovers one in-
stalment of salary, the judgment in that action is a bar to any
further action on the contract.^ But of course this would
not be so in jurisdictions that admit this form of remedy
under the doctrine of a continuing contract and constructive
service.^
The second form of remedy proceeds upon the theory that
the original express contract is rescinded, and that the prin-
cipal has agreed to pay what the services are reasonably
worth. In such a case the agent is not confined in his
recovery to the original contract price, but may recover the
full reasonable value of his services, as for benefits conferred.^
The third form of remedy is the usual and most effective
one. It proceeds upon the theory that the principal has
committed a breach of the contract to the damage of the
agent, and the latter is allowed to recover whatever damages
he can establish. The right of action accrues immediately
upon the revocation, even if this be before the time for per-
formance has arrived.^ If the action is begun before the
time for performance has arrived, the damages hvq prima facie
the entire stipulated compensation for the term of the hir-
ing ; ^ if the action is begun after the agent has entered upon
the employment, the damages are the salary already earned,
and jjrima facie iho. stipulated compensation for the unexpired
term.*^ To reduce the prima facie damages in either of the
above cases, the principal would have the burden of showing
the probability of the agent's finding similar employment
1 Alie V. Nadeau, 93 Me. 282.
2 Allen V. Colliery Engineer's Co., 196 Pa. St. 512.
3 Keener on Quasi-Contracts, p. 300; Derby v. Johnson, 21 Vt. 17.
4 Hochster v. De la Tour, 2 E. & B. 678; IToward v. Daly, 61 X. Y.
362; Diigan v. Anderson, 36 iMd. 567; Roehm v. Horst, 178 U. S. 1.
Contra, Stanford v. IVIcGill, 6 N. Dak. 536.
6 Ibid.
6 Cutter V. Gillette, 163 Mass. 95; Richardson v. Eagle Machine
"Works, 78 Ind. 422 ; James v. Allen County, 41 Ohio St. 226. The
theoi'y that the agent can recover dama^ies only down to the time of the
trial has some support (Gordon v. Brew>ter, 7 Wis. 353; Sumner v. Con-
haim, 54 N. Y. Supp. 146), but is contrary to the weight of authority.
98 PRINCIPAL AND AGENT.
(Jui'ing the unexpired term,^ and the proof must be weighty
enough to convince the jury of such reasonable probability.
If the action is not brought until after the expiration of the
prescribed term, the measure of damages is i^r una facie the
unearned stipulated compensation, but the principal may
show in mitigation of damages what the agent has earned
during that time, or what he might have earned had he
acted prudently. 2 The right of the principal to diminish the
damages by showing what the agent might earn proceeds on
the general doctrine of the hiw that upon a breach of con-
tract it is the duty of the injured party to act prudently and
diligently to prevent loss to himself. The application in the
case of agency involves the question as to the ditty of the
agent to seek other employment. He is bound to exercise
reasonable care to that end, but he is not bound to accept a
different employment,^ nor in a different locality,* nor with
an employer against whom reasonable objections would lie.°
If the revocation of the agency be not a breach of the
contract, as where the agency is at the will of the principal,^
or is revoked because of a breach by the agent himself,' no
damages can be recovered, but only compensation for services
actually rendered. If, however, the agent is guilty of such
gross misconduct or negligence that tlie service he has ren-
dered is of no value to his principal, he is not entitled to
compensation.^
1 Haniilton v. Love, 152 Ind. Oil; Howard r. Daly, 61 N. Y. 302;
Sutherland v. Wyer, 67 Me. 64; Cutter v. Gillette, 163 Mass. 95; Hand
V. Clearfield Coal Co., 143 Pa. St. 408.
2 Howard v. Daly, 61 N. Y. 362; Leatherberry v. Odell, 7 Fed. Rep.
641 ; Horn v. Western Land Ass'n, 22 ]\Iinn. 233.
3 Costigan r. Mohawk, &c. Rd. Co., 2 Denio (X. Y.), 009 ; Wolf v.
Studebaker, 05 Pa. St. 459.
* Costigan i'. Mohawk, &c. Rd. Co., 2 Denio (N. Y.), 009; Strauss v.
Meertief, 64 Ala. 299; Harrington v. Gies, 45 Mich. 374.
6 Strauss v. Meertief, 04 Ala. 299.
6 United States v. Jarvis, Daveis (U. S. C. C), 274.
^ Lawrence v. Gullifer, 38 Me. 532; Massey v. Taylor, 5 Cold. (Tcnn.)
417.
8 Dalton V. Lvin, 4 C. & P. 289; Bracey v. Carter, 12 Ad. & E. 373;
Sumuer v. Reicheuiker, 9 Kans. 320.
OBLIGATIONS OF PiaNCIPAL, 99
If there be no contract, or none for a definite time or a
definite service, the revocation by the principal gives the
agent no remedy.^ Whetlicr there has been an engagement
for a definite time or for definite services so that no irreme-
diable revocation can occur is a question of construction to be
settled by the terms of the contract or by custom and usage.^
§ 80. Compensation: revocation of agency by law.
The circumstances which will revoke an agency by opera-
tion of law have already been pointed out.=^ There may be
some incapacity on the part of the principal or some incapac-
ity on part of the agent. In either case the impossibility in
question discharges the contract as to both parties, but does
not discharge the liability of the principal for services already
rendered. In case of death, insanity, illness, imprisonment,
or other incapacity or coercion of the agent, he or his re-
presentative may recover in quasi-contract for benefits
already conferred,* unless he has expressly stipulated that
he shall not be entitled to compensation under such cir-
cumstances,^ or unless he knows at the time he makes the
contract that it will be impossible for him to perform it.*^ In
such case, however, the cost of completing an entire contract
may be considered in reduction of the claim for benefits
conferred." Even where the illness or imprisonment is caused
by the fault of the plaintiff he may still recover, as the illness
or imprisonment, and not the wrongful act of the agent, is
regarded as the proximate cause of the breach.^
1 Simpson c. Lamb, 17 C B. 603; Burton r. Great N". Ry., 9 Exch.
507; In re London, &c. Bk., L. R. 9 £q. 149 ; Rhodes v. Forwood, 1 App.
Cas. 256.
2 Queen v. Parr, 39 L. J. Ch. 73; Lewis v. Lis. Co., 61 :Mo. 534.
3 Ante, §§ 70-71.
4 Wolfe V. Howes, 20 N. Y. 197; ILighes v. Wamsutta Mills, 11 Allen
(Mass.), 201 ; Green i-. Gilbert, 21 Wis. 401 ; Walsh v. Fisher, 102 Wis.
172.
6 Cutter V. Powell, 6 T R. 320.
^ Jennings v. Lyons, 39 Wis. 553.
T Ricks V. Yates, 5 Ind. 115; Wolfe r. Howes, 20 X. Y. 197.
® Hughes V. Wamsutta Mills, supra.
100 I'UINCIPAL AND AGENT.
Bankruptcy of the ])rincipalj however, does not discharge
the estate from liability for damages, though it revokes the
authority of the agent.^ But in case of revocation in con-
sequence of the death of the principal, no damages may be
recovered but only compensation earned. -
§ 81. Compeusatiou: renunciation of agency by agent.
Where the agent renounces the agency in breach of the
contract, it is generally held that he can recover nothing for
the services already performed. It is due to his own fault
that the contract is not completed, and most of the courts
refuse to depart in his behalf from the severe rule of the law,
which forbids a man to profit from his own wrong.^ But a
few jurisdictions have been led from considerations of the
liardships of the case to permit a recovery in qaantum meruit
for the services actually performed, so far as tlie value of
such services exceeds the damage resulting from the breach.*
The two classes of cases are irreconcilable, and it is neces-
sary to know what is held in each jurisdiction where the
question may arise.
The above applies to the cases of indivisible contracts, or
to one partly performed division of a divisible contract.
But how of a divisible contract in which one or more parts
have been fully performed ? If the agreement is that the
agent shall work a year at a given price per month, or at a
given commission on actual sales, payable as the work or
sales progress, then the agent upon abandoning the contract
would be able to maintain an action for the full months he
1 Vanuxem v. Bostwick, 10 W. N. C. (Pa.) 74; s. c. 7 Atl. Rep. 598.
2 Yerrington v. Greene, 7 R. I. 589.
» Stark V. Parker, 2 Pick. (Mass.) 2G7 ; :\ril]er i'. Goddard, 34 Me.
102; Hutchinson v. Wetmoro. 2 Cal. 310; Ripley v. Chipman, 13 Yt. 268;
Heiison V. Hampton, 32 Mo. 408; Martin v. Schoenbercrer, 8 W. & S.
(Pa.) 307; Diefenback v. Stark, 56 Wis. 102; Timberlake v. Thayer, 71
Mi.ss. 279.
* Britten V. Turner, 6 X. H. 481; IMcClay v. Hedsrp. 18 Towa, 66;
Downey v. Bnrke, 23 ^NIo. 228 (bnt see Henson v. Hampton, unprn) ;
Duncan v. Baker, 21 Kans. 90: Parcell v. McComber, 11 Xeb. 209; Coe
V. Smith, 4 Ind. 79; Allen v. McKibbin, 5 Mich. 449.
OBLIGATIONS OF PRINCIPAL. 101
actually served, or the commissions actually earned, subject
to a counter-claim for damages for the non-performance of
the entire contract. This proceeds upon the theory that in
effect there are twelve contracts in one, and that the breach
of (say) the fifth is no bar to an action for the full pei'furm-
ance of the first, second, third, and fourth. But the fifth, and
the succeeding ones, are abandoned, and the defendant is
entitled to damages for their breach. The most serious
difficulty in these cases is to determine whether a contract is
in fact divisible or indivisible.^ This is really a question of
construction depending upon the ascertainment of the intent
of the parties. The general tendency seems to be to hold
contracts of service entire rather than severable, although
payment may be stipulated for by instalments.^
If an infant renounce his employment, he may nevertheless
recover tlie value of his services without abatement for dam-
ages for breach, since an infant may always rightfully avoid
such a contract.^ But remaining in the employment after
reaching majority ratifies the contract, and a subsequent
breach is within the general rule.*
§82. Compensation: agent acting for both parties.
Where an agent acts for both parties, his right to compen-
sation from either depends upon the knowledge or want of
knowledge by the principal that his agent was acting for the
other party. If therefore A acts as agent for both X and Y
in a transaction between the two, A may recover from both
if each knew that A was acting for the other also ; ^ but A
1 On this see Huffcnt's Anson on Cent. pp. 363-369 ; Norrington v.
AVright, 115 U. S. 188; Cahen v. Piatt, 69 N. Y. 348; Gerli v. Poidebard
Silk^Mfg. Co., 57 N. J. L. 432.
2 Diefenback v. Stark, 56 Wis. 462 ; Wilson v. Board of Education, 63
INIo. 137; Davis v. Maxwell, 12 Mete. (:\Iass.) 286; Widrig v. Taggart, 51
Mich. 103.
3 Judkins v. Walker, 17 Me. 38; Moses v. Stevens, 2 Pick. (^lass.)
332; Wheatly v. Miscal, 5 Ind. 142; Lufkin v. Mayall, 25 N. H. 82.
* Forsyth t?. Hastings, 27 Vt. 646.
5 Bell V. McConnell, 37 Oh. St. 396; Alexander v. University, 57 Ind.
466; Adams ISlining Co. v. Senter, 26 Mich. 73.
102 PKINCir-VL AND AGENT.
cannot recover from either if neither knew of the double
agency ;i and if the agent has been paid in ignorance of this
f^ct tiie monev niav be recovered back by the principal^ But
how if X knew A was also acting for Y, but Y did not know
A was acting for X ? Clearly A cannot recover from Y.
Can he recover from X ? The non-liability of the second
employer having knowledge of the first employment has been
maintained.^
If, however, the province of the agent is merely to bring
the parties together, and not to advise as to the terms of their
contract, he may recover from both parties if he act as the
ao-ent of both, since there is nothing inconsistent with a double
ao-ency in such a case.* And if, in accordance with the rules
of a stock exchange, a broker who has orders from one cus-
tomer to jmrchase, and from another to sell, a certain stock,
procures another member of the exchange to act for one of
the parties, the transaction will be upheld.^ So also if the
agent's duties to one princii)al have been fully discharged, he
may then act for the other party to the contract.*^ If two
agents agree that they will share the commissions received
on an exchange of their principals' property, the agreement is
illegal as it contemplates a fraud on the principals.^
§83. Compensation: illegal services.
Where tlie services of the agent have been rendered in an
unlawful undertaking to which he is i)rivy, he can recover no
compensation. This applies to lobbying contracts,^ contracts
for improperly influencing executive ollicers,'* marriage broker-
1 Salomons v. Pender, .3 H. & C. 639; Scribner r. Collar, 40 Mich. 375;
Rice V. Wood. 113 Mass. 133; Lynch v. Fallon, 11 11. I. 311 ; McDonald
V. Maltz, 94 Mich. 172.
2 Caniiell i.-. .Smith, 142 Pa. St. 2.5.
» See Bell r. McConnell, 37 Oh. St. 390 and cases cited.
* Montross v. Eddy, 94 Mich. 100.
6 Terry )■. Birmingham N. Bk., 99 Ala. 5G6.
« Short V. Millard, G8 111. 292.
' Levy I'. Spencer, IS Colo. 5-32.
8 Trist V. Ciiild, 21 Wall. (U. S.) 441.
9 Tool Co. r. Norris, 2 Wall. (U. S.) 45. Cf. Lyon v. Mitchell, 36 N.
Y. 235.
OBLIGATIONS OF PRINCIPAL. 103
age contracts,^ contracts of brokers for dealing in betting
"futures,"^ and thelike.^ Where a statute or ordinance pro-
vides that any person acting as real estate broker without a
license shall be subject to a penalty, a broker acting without
a license cannot recover his connnissions.^ Where the statute
forbids an attorney to be present at the taking of depositions
upon interrogatories unless hoth sides arc represented, he can-
not recover compensation for such services in violation of the
statute.^ At common law an agreement of an attorney to
carry on a suit and look to the proceeds of the suit alone for
his compensation is champertous and void.*^ But this rule has
been much modified in the modern law, and such agreements
are now generally upheld in the United States.'^
§ 84. Reimbursement.
An agent is entitled to be reimbursed for all sums which he
has paid out, or become individually and solely liable for, in
the due course of tlie agency and for the principal's benefit.**
The expenses or outlays must have been reasonably necessary
in due course, and not unreasonable in amount, or occasioned
by the default or negligence of the agent liimself.^ Thus an
attorney who, under implied authority, has indemnified an
officer for making a levy, may recover from the client the loss
suffered in consequence of such indemnity. ^^ If the contract
1 Duval V. Welhiian, 124 N. Y. 156.
2 Irwin V. Williar, 110 U. S. 499.
3 Gihbs V. Baltimore, &c. Co , 130 U. S. 396; Bixby v. Moor, 51 N. H.
402: Josephs v. Pebrer, 3 B. & C. 639; Allkins v. Jupe, 2 C. P. D. 375.
^ Cope V. Rowlands, 2 M. & W. 149 ; Palk v. Force, 12 Q. B. 666 ;
Buckley v. Humason, 50 Minn. 19.5.
^ Comfort V. Graham, 87 Iowa, 295.
6 Ackert r. Barker, 131 Mass. 436 ; BJaisdell v. Ahern, 144 Mass. 393.
■ Huffcut's Anson on Cont. pp. 246, 247 ; Reece v. Kyle, 49 Oh. St.
475; Stanton c. Embrey, 93 U. S. 548; Fowler v. Callan, 102 N. Y.
395.
8 Maitland v. Martin, 86 Pa. St. 120; Ruffner v. Hewitt, 7 W.
Va. 585 ; Warren v. Hewitt, 45 Ga. 501 ; Cropper v. Cook, L. R. 3 C. P.
194.
9 Lewis V. Samuel, 8 Q. B. 685; Duncan v. Hill, L. R. 8 Ex. 242;
Godman v. Meixsel, 65 Ind. 32.
1" Clark V. Randal], 9 Wis. 135.
104 PKINCITAL AND ACHNT.
was obviously, or to the knowledge of the agent for an illegal
purpose, he can have no reinibursement or inderauity for out-
lays or losses.^
§ 85. IndGmnity.
The agent is entitled to indemnity against the consequences
of all acts performed in the due execution of his authority
which arc not illegal or due to his own default.^ Even as to
the pcrlormancc of illegal acts he may claim indemnity if he
did not know they were illegal and if they were not in fact
contrary to good morals or general public jjolicy/'^ Thus an
auctioneer who innocently sells for his principal goods belong-
ing to a third person is entitled to indenniity in case he is
obliged to respond to the true owner for conversion.* So an
innkecj)er who detains a person under arrest at the solicita-
tion of an officer may recover indemnity if he is obliged to
])av damages to the involuntary guest for false imprisonment.^
These cases escape the general rule that there is no indemnity
or contribution between joint tort-feasors.
If the transaction is illegal, and known to the agent to be
so, or if though not known to the agent to be illegal, it is a
prohibited act, or against general public policy, the agent is
not entitled to indemnity. Thus the English courts held prior
to the Gaming Act of 1892,^' that an agent who has paid
money for his principal or incurred liabilities on wagers could
recover since wagers were unenforceable or void, and not
illegal." Since the Gaming Act which renders wagers illegal,
the holding has been otherwise.^ In this country wagering
1 Ex parte Mather, 3 Ves. 37:5; AUkins v. Jupo, 2 C. P. D. 375; Mohr
V. Miesen, 47 Minn. 228.
2 D'Arcy v. Lyle, 5 Binney (Pa.), 4tl; Saveland v. Green, 30 Wis.
612; Maitland v. Martin, 86 Pa. St. 120.
8 Bibb V. AUen, 149 U. S. 481, 498; Moore v. Appleton, 26 Ala. 633 ;
34 Ala. 147.
* Adamson v. Jarvis, 4 Bing. 66 ; Castle v. Noyes, 14 N. Y. 329.
^ Fletcher v. Ilarcot, Mutton, 55.
« 5.') Vict. c. 9.
" Thacker v. Hardy, L. R. 4 Q. B. D. 685 ; Read v. Anderson, L. R.
13 Q. B. D. 779.
8 Tatam v. Reeve, 1893, 1 Q. B. 44.
OBLIGATIONS OF riUNCIPAL. 105
contracts are generally illegal, and not merely void, and dis-
bursements and liabilities of the agent are, if he knows the
transaction is a wager, at his own risk since he become parti-
ceps criminis} If the transaction is one which the agent
ought to know is illegal, he cannot recover indemnity although
in fact he believed it to be legal.^
If the loss is due to the agent's own negligence or default
he cannot recover indemnity.^
§ 86. Non-assignability of obligations or rights.
The rule of law is strict that no one can assign his obliga-
tions.* Accordingly the principal cannot assign to a third
person the obligations which by his contract he undertakes
toward his agent. On the other hand the general rule is that
rights or benefits under a contract may be assigned.^ Yet an
exception occurs in the case of agency. A principal cannot
assign his rights to the services of the agent, since the agent
is not bound to assume a fiduciary relation toward the assignee
or consent to be governed by the latter.^ It follows that a
principal can assign neither his rights nor his obligations
under the contract of agency. He may with the consent of
the agent or servant transfer the services to another, so as to
make that other temporarily the principal or master.'
1 Harvey v. IMerrill, 150 Mass. 1 ; Molir v. Miesen, 47 Minn. 228.
2 Coventry v. Barton, 17 Johns. (N. Y.) 142.
3 Capp V. Tophara, 6 East, 392 ; Duncan v. Hill, L. R. 8 Ex. 242
See Hartas v. Ribbons, 22 Q. B. D. 254.
■1 Post, § 94.
5 Huffcut's Anson on Cont. Ft. III. Ch. ii.
6 lUd. ; Hayes r. Willio, 4 Daly (N. Y. C. P.), 259.
7 Post, § 228 et seq.
106 riUNCIPAL AND AGENT.
CHAPTER VIIL
OBLIGATIONS OF AGENT TO PRINCIPAL.
1. Ajenta by Contract.
§ 87. Statement of obligations. .
An agent may act for a reward, tliat is, for a valuable consid-
eration, or he may act gratuitously. If he acts fur reward, ho
is under contract and must perform the undertaking or pay
damages. If he enters into an undertaking gratuitously, he is
not bound to perform.^ We deal first with the obligations of
agents who undertake to act for a valuable consideration.
The obligations of the agent to the principal are in the main
, as follows : —
^>ut^a-«- 1. The duty to obey the instructions of the principal.
^yj^Ax<.<<- 2. The duty to exercise the skill, judgment, and care neces-
sary to the ])rudent discharge of the agency.
^io^>- 3. The duty to act with the highest good faith in the
management of the principal's interests.
<-J^K. :., 4. The duty to account fully for all the proceeds and profits
of the agency.
L^. -^ 5. The duty to act in person, except where autliorized by
v^ his principal or by custom to act through sub-agents.
§ 88. (I.) Obedience.
Agency is a means of expressing the will of the principal.
The agent contracts that he will serve as the means to that
end, and the measure of his obedience is his conformity to the
dominant will. So long as the agent correctly carries out
the will of his principal he is protected, but if he fails to be
directed by it, and loss ensues, he becomes liable for the
1 Post, § 97.
OBLIGATIONS OF AGENT. 107
deviation.^ It is no answer even that he used reasonable care
and diligence in the course he pursued ; he pursues it at his
own risk since it is contrary to his instructions, and it is not
for him to judge of the reasonableness of such instructions.^
Thus where the principal directed the agent to return a draft
at once if it was not paid, but the agent held the draft in
order to give the drawee an opportunity to communicate with
the drawer, and loss ensued, the agent was held liable for the
loss.3 So where an agent is directed by his principal to send
a claim for collection to A, but sends it to B, and loss ensues,
the agent is liable, and it is no defence that he acted prudently
in sending it to B, since he had no right of choice whatever
under his instructions.^ So where a landlord gave his agent
a license for the lessee to assign the lease, but directed the
agent not to deliver it until the lessee paid the arrears of rent,
and the agent on receipt of a check delivered the license, and
the check was dishonored, the agent was held liable for the
loss.^ So if the agent parts with the principal's goods con-
trary to instructions he becomes liable for conversion.^ Gen-
erally however he is liable simply for a breach of the contract.
If the instruction be to do an illegal act, the agent is not liable
for failure to obeyJ
If the agent has a lien upon the goods entrusted to him
for sale at a minimum price, he is entitled to sell at a fair
market price, although below that fixed by the principal, in
case the latter, after due notice, refuses to repay the agent's
advances.^
A deviation from instructions may be ratified by the prin-
1 Barber v. Taylor, 5 M. & W. 527; Adams v. Robinson, 65 Ala. 586;
Frothiiigham v. Everton, 12 N. H. 239; cases cited below.
2 Rechtscherd v. Accommodation Bank, 47 Mo. 181 ; Wilson v. Wilson,
26 Pa. St. 393.
8 Whitney v. ^Merchants' Union Exp. Co., 104 Mass. 152.
* Butts V. Phelps, 79 Mo. 302.
6 Rape V. Westacott, 1894, 1 Q. B. 272.
• Laverty v. Snethen, 68 N. Y. 522.
' Bexwell v. Christie, Cowp. 395; Cohen v. Kittell, 22 Q. B. D. 680.
8 Parker v. Brancker, 22 Pick. (Mass.) 40; Marfield v. Goodhue,
3 N. Y. 62.
108 PKLNCirAL AND AGENT.
cipal and iu some cases silence after full knowledge of the
facts may amount to ratiiication.^
§ 89. (II.) Prudence.
An agent acting for a valuable consideration is bound to
possess and to exercise a reasonable degree of skill, care, and
diligence. The measure of such skill, care, and diligence is
governed by the nature of the under_taking, by the c ustoin s
and usages of the profession or business, and by the circum-
stances of the case, but generally speaking, it may be said to
be such a degree as is ordinarily observed by prudent men
engpgcd iu similar undertakings, and under similar circum-
stances.2
One who assumes to act as a patent solicitor is bound to
possess and to exercise the knowledge and skill pertaining to
such a profession, and is liable to his principal for injury
caused by ignorance or negligence.^ An agent dealing in
rentals is bound to use reasonable care to ascertain the sol-
vency of tenants.* An agent vested with discretion as to j)ur-
chases is bound to exercise the discretion j)rudently and
reasonably in conformity with the general instructions.'' An
agent authorized to purchase timber lands must use due care
in transmitting descri])tions to his j)rinci{)al, but does not war-
rant the accuracy of sucli descriptions.'^ An agent nnist use
due care to notify his principal of facts affecting the security
of the latter's property entrusted to the agent, and a failure to
do so renders the agent liable to his principal.^ An agent
authorized to loan money is liable for negligently loaning
1 Bray v. (Jtinn, 5:5 (Ja. Ill; Hazard v. Spears, 4 Keyes (N. Y.), 460.
2 Beat r. South Devon Ry., 3 H. & C. 337; Leighton v. Sargent, 27
N. II. 4GU; AVright v. Central R. Co., IG Ga. 38; Ileinemann c. Heard,
50 N. y. 27, 35; Whitney v. Martine, 88 N. Y. 535.
8 Lee V. Walker, L. R. 7 C. P. 121.
* Heys V. Tindall, 1 B. & S. 206.
* Heinemann v. Heard, 50 N. Y. 27.
6 Page V. Wells, 37 Mich. 415.
7 Devall V. Burbridge, 4 W. cSc S. (Pa.) 305; Storer v. Eaton, 50 Me.
219.
OBLIGATIONS OF AGENT. 109
upon worthless or imprudent securities.^ An agent authorized
to effect insurance must use due care to select a solvent insurer
and secure a sufficient and adequate policy .^ Agents autho-
rized to collect debts or commercial paper must exercise dili-
gence and care, use all ordinary or customary means, and
employ the available remedies.^ If commercial paper is in an
agent's hands for collection, he must take care to make due
presentment, and demand and give due notice of dishonor.*
Ordinarily an agent for collection must take only money in
payment, and if he takes checks or other securities is liable for
any damages that accrue to the principal.^ But usage may
authorize the taking of checks.^
In general, the same rules apply to a breach of the contract
resulting from the agent's negligence, as to a breacii resulting
from the agent's disobedience of instructions. An agent is
presumed by law to warrant that he possesses and will exer-
cise such a degree of skill as is reasonably demanded by the
nature and circumstances of his undertaking ; and for a breach
of this implied warranty he will of course be liable in damages.
But he does not undertake an absolute liability.'^ If the prin-
cipal has knowledge or notice of the agent's deficiency in skill,
the presumption of a warranty is negatived.^
The measure of damages in an action by a principal
against his agent for negligence is such loss sustained
thereby as is the reasonable and probable consequence of
such negligence.^
1 Whitney t'. Martine, 88 N. Y. 535; Bannon v. Warfiekl, 42 Md. 22.
2 Tarpin I). Bilton. 5 Man. & G. 455; Mallough v. Barber, 4 Camp.
150; Strong v. High, 2 Rob. (La.) 103.
8 Allen V. Suydam, 20 Wend. (N.Y.) 321.
4 Allen V. Merchants' Bank, 22 Wend. (N. Y.) 215; First N. B. v.
Fourth N. B., 77 N. Y. 320.
5 Hall V. Storrs, 7 Wis. 253 ; Harlan v. Ely, 68 Cal. 522 ; Ward v.
Smith, 7 Wall. (U. S.) 447.
6 Russell V. Hankey, 6 T. R. 12.
T Page V. Wells, 37 Mich. 415.
8 Felt V. School Dis., 24 Vt. 297.
9 Smith V. Price, 2 F. & F. 748; Whiteman v. Hawkins, 4 C. P. D.
13 ; Neilson v. James, 9 Q. B. D. 546.
110 PRINCIPAL AND AGENT.
§ 90. (III.) Good faith.
Tlie relation existing between a principal and his agent is
a fiduciary one, and consequently the most absolute good faith
is essential. The principal relies upon the fidelity and integ-
rity of the agent, and it is the duty of the agent, in return, to
be loval to the trust imposed in him, and to execute it with
the single purpose of advancing his i)rincipars interests.^
Upon the general principle just stated the courts will not
permit an agent to take any position, or to acquire any rights
or interests that are antagonistic to those of the principal.
He should not attempt to act for both parties to the same
transaction without their consent,^ or in any way to use his
authority for his own benefit.^ Thus, an agent with instruc-
tions to lease or purchase property for his principal, cannot,
except with his principal's consent, lease or purchase it from
himself.* Nor will one authorized to sell or let property, be
permitted to become the purchaser or lessee.^ In either case
the principal may repudiate the transaction. And this is true,
even though the motive of the agent is perfectly honest, and
his action beneficial to the princii)al. The law sees only the
evil and dangerous tendency of such transactions, and upon
grounds of public policy refuses to enforce them in any case.^
1 Michoud V. Girod, 4 How. (U. S.) 503.
2 Kaisin v. Clark, 41 Md. 158; Walker v. Osgood, 98 Mass. 348;
X. Y., &c. Ins. Co. V. Ins. Co., 20 Barb. (N. Y.) 468; Hinckley r. Arey,
27 Me. 362; Meyer v. Hanchett, 39 Wis. 419. Cf. Rupp v. Sampson, 16
(Jray (Mass.), 398; Orton v. Scofield, 61 Wis. 382; Nolte v. Hulbert,
37 Oh. St. 445; Greenwood, &c. Co. v. Georgia Home Ins. Co., 72
Miss. 46.
8 Bunker v. Miles, 30 Me. 431.
4 Gillett V. Peppercorne, 3 Beav. 78 ; Conkey v. Bond, 36 N. Y. 427 ;
Taussig V. Hart. 58 X. Y. 425 ; Tewksbury r. Spruance, 75 111. 187 ; Bos-
well V. Cunningham, 32 Fla. 277; Davis v. Hamlin, 108 111. 39; Green-
field Sav. Bk. V. Simons, 133 :Mass. 415.
6 Oliver v. Court, 8 Price, 127 ; Thompson v. Havelock, 1 Camp. 527 ;
Kerfoot v. Hyman, 52 111. 512: Eldri.lge v. Walker, 60 111. 230; Martin
V. Moiilton, 8 N. H. 504; People v. Township Bd., 11 Mich. 222; Bain
V. Brown, 56 X. Y. 285.
« Michoud V. Girod, 4 How. (U. S.) 503; People v. Township Bd., 11
Mich. 222 ; Taussig v. Hart, 58 X. Y. 425.
OBLIGATIONS OF AGENT. Ill
Even a custom which converts an agent into a principal, or
puts him into a position antagonistic to the interests of his
principal, cannot be given effect unless known to the principal
and at least impliedly assented to by him.i
An agent cannot, through a failure to perform his duty,
acquire interests in conflict with those of his principal. For
example, an agent instructed to pay the taxes on his princi-
pal's property, and neglecting so to do, cannot acquire a valid
title to the land by purchase upon tax sale, bat will be re-
garded as a trustee for his principal.^ And an agent whose
duty it is to compromise a claim against his principal, may
not purchase the claim at a discount, and then enforce it in
full against his principal.^^ An attorney engaged to advise on
a title cannot purchase an outstanding adverse title and set it
up against his client ; he will hold the adverse title in trust
for the latter.'* An agent of a corporation commits a breach
of trust if he undertakes to secure voting proxies from share-
holders in order to oust an existing board of directors.^
Upon the same doctrine one who deals with an agent know-
ing that the latter is not in that transaction showing good faith
toward his principal, deals at his peril as a party to the agent's
bad faith or fraud.*^ Good faith requires the agent to give
notice to the principal of all facts coming to his knowledge
which may affect the principal's interests.'
An agent may be prevented by injunction from disclosing
trade secrets of his employer learned while in the employ-
ment.^
1 Robinson v. Mollett, L. R. 7 H. L. 802 ; De Bussche v. Alt, L. R.
8 Ch. Div. 286.
2 Barton v. Moss, 32 111. 50 ; Krutz v. Fisher, 8 Kans. 90 ; Fisher v.
Krutz, 9 Kans. 501 ; Geisinger v. Beyl, 80 Wis. 443.
3 Noyes v. Landon, 59 Vt. 569.
4 Eoff V. Irvine, 108 Mo. 378.
6 Townsley v. Bankers' Life Ins. Co., 56 App. Div. 232.
s Hegenniyer v. Marks, 37 Minn. 6.
' Devall V. Burbridge, 4 W. & S. (Pa.) 305; Storer v. Eaton, 50 Me.
219.
8 Robb t'. Green, 1895,2 Q. B. 315; Louis v. Smellie, 73 L. T. R. 226;
Little V. Gallus, 4 N. Y. App. Div. 569.
112 PRINCIPAL AND AGENT.
Akin to the rule of loyalty and good faith is one to the effect
that an agent may not deny his princii)ars title.^ When, by
virtue of his fiduciary relation to the principal, an agent comes
into the possession of the principal's money or property, and
is subsc(piently called upon by the principal to account for it,
he will not be allowed, as a general rule, to dispute the title of
the principal in such money or property. He may show in
defence, however, that he has been divested of the property by
one holding a paramount title,^ or that the principal's title has
either been terminated or transferred to the person under
whom he claims.^ Likewise, an agent cannot, in defence of
an action by his principal to recover money in his hands, set
up the illegality of the transaction under which he received it
or of the purpose to which it was to be devoted."* In like man-
ner an agent who receives money to the use of his i)rincipal is
bound to pay it over notwithstanding any claims of third
persons.^ But if it is paid to the agent wrongfully, or under
duress, or under a mistake of fact, he may repay it to the
person who so paid it to him.^^
§ 91. (IV.) Accounting.
It is the duty of an agent to keep his principal's money and
property separate from his own or third parties, to keep accu-
rate accounts of all dealings with the same, to preserve and
produce upon demand all documents relating to the same, to
render an account of his transactions, and to deliver or pay
over to the principal, upon demand, all property, documents,
or money, belonging to the principal, and all profits resulting
therefrom,' including all profits which have accrued to the
1 Green v. Maitland, 4 Beav. 524; Betteley v. Reed, 4 Q. B. 511; Col-
lins V. Tillou, 26 Conn. 308.
•^ Biddle r. Bond, 6 B. & S. 225; Bliven v. Hudson River Rd. Co., 36
N. Y. 403, 406 ; Western Trans. Co. v. Barber, 56 N. Y. 514, 552.
8 Marvin i'. Ellwood, 11 Pai-^^e's Ch. (N. Y.) 365.
* Baldwin Bros. v. Potter, 4G Vt. 402; Kiewert v. Rindskopf, 40 Wis.
81; Snell v. Pells, 113 111. 145.
6 Nickolson v. Knowles, 5 Madd. 47; Roberts v. Ogilby, 9 Price, 269.
6 Posf, § 204.
' Gray v. Haig, 20 Beav. 219; Clarke i-. Tipping, 9 Beav. 284; Dads-
OBLIGATIONS OF AGENT. 113
agent as a result of his transactions,^ wliether such transac-
tions were within or without the scope of the authority ,2 and
whether legal or illegal.^
(1) Keeping property and money separate. If an agent
commingles the goods or money of his principal with his own,
so that the separate interests cannot be easily or accurately
distinguished, everything not clearly proved to be his own,
will be deemed to belong to the principal.'* If an agent
deposits his principal's money in a bank in his own name or to
his own account, he is the loser in case the bank fails."
Funds deposited in the principal's name, or taken by a bank
or other person with notice of the principal's interest, are in
the nature of trust funds, and may be followed by the princi-
pal until they pass into the hands of a purchaser for value
without notice.®
(2) Keeping of accounts. If the nature of the undertaking
requires, it is the duty of an agent to keep reasonably full,
regular, and accurate accounts of liis business, including both
receipts and disbursements, and to preserve all vouchers and
other evidential papers which may be of value to his prin-
cipal.'^ If an agent fails to keep intelligible and accurate
accounts, everytliing will be presumed against him that is
consistent with the established facts of tiie case.^
(3) Rendering accounts. It is the duty of an agent to
render a full and accurate account to his principal of all trans-
well V. Jacobs, U Ch. Div. 278; Harsant v. Blaine, 56 L. J. Q. B. 511;
Jett V. Hempstead, 25 Ark. 462; Baldwin v. Potter, 46 Vt. 402.
1 Gardner v. Ogden, 22 N. Y. 327 ; Button v. Willner, 52 X. Y. 312 ;
LafEerty v. Jelly, 22 Tnd. 471.
2 Watson V. Union Iron Co., 15 Brad. (III.) .509.
3 Tenant v. Elliott, 1 B. & P. 3 ; Baldwin Bros. v. Potter, 46 Vt. 402.
* Gray v. Haig, 20 Beav. 219; Lupton v. White, 15 Ves. 432; Hart v.
Ten Eyck, 2 Johns. Ch. (N. Y.) 62.
5 Massey v. Banner, 1 Jac. & W. 241 ; Williams v. Williams, 55 Wis.
300; Naltner v. Dolan, 108 Ind. 500.
6 Post, § 178.
■^ Gray v. Haig, 20 Beav. 219 ; Clarke 0. Tipping, 9 Beav. 284 ; Dads-
well V. Jacobs, 34 Ch. Div. 278; Haas v. Damon, 9 Iowa, 589; Kerfoot
V. Hyman, 52 111. 512.
^ Gray v. Haig, supra.
8
114 ritlNCirAL AND AGENT.
actions cuiiiiccted with the agency, and, since the relation is
a fiduciary one, the principal has a right to compel the render-
ing of such an account in equity.* TJiis equitable remedy is
not based upon the complicated nature of the accounts (equit-
altlc assumpsit),^ but rests upon the fiduciary nature of the
relationship.^ Even in the case of accounts rendered and
accepted, the account may be reopened in equity on the
ground of fraud.^ An agent sued as a fiduciary is not, ordi-
narilv, permitted to jilcad tlie Statute of Limitations unless he
has in fact rendered an account, or demand has been made
iij)on him to do so.^
Although the right of set-off or counter-claim ordinarily
exists in favor of an agent, he will not be j)ermitted to enforce
it in cases where such enforcement would be in direct viola-
tion of the agent's duty as a fiduciary. For example, if a
principal directs his agent to collect a debt and to apply it
first to the payment of certain demands due to third persons,
and then to the payment of a mortgage held by the agent, but
the agent collects the debt and applies it all to the payment
of his own claim, the principal may recover the sum collected
by the agent, and ai)iilicable to tlie ])ayinent of the third per-
sons' claims, since the agent has acted in breach of his special
trust.^
(4) Dt'Uverij of propertjj and profits. The agent must deliver
to the ])rincipal, ujion demand, all the proj)erty of the i)riiici-
pal in his iiands, all proceeds of pro))erty disposed of, aud all
profits accruing from the agency." The agent cannot, without
the consent of his principal, make for himself any jiei'sonal
1 Makepeace v. Rogers, 4 De G. J. & S. 649 ; Marvin v. Brooks, 91 N. Y.
71 ; Warren v. Holbrook, 95 Mich. 185; Rippe v. Stogdill, 61 Wis. ;38.
2 Langdell, 3 Harv. Law Rev. 237; ante, § 76.
8 Padwick v. Stanley, 9 Hare, 627.
* Williamson v. Barbour, 9 Ch. Div. 520.
* Teed c Beere, 28 L. J. Ch. 7S2 ; Biirdick r. Garrirk, L. R. 5 Ch.
233 ; Jett v. Hempstead, 25 Ark. •162 ; Mundeville v. Welch, 5 Wheat.
(U. S.) 277.
6 Tagg V. Bowman, 108 Pa. St. 273.
^ Topham v. Braddick, 1 Taunt. 572 ; Crosskey v. Mills, 1 C. M. &
R. 298.
OBLIGATIONS OF AGENT. 115
profits in the conduct of the principal's business. He must,
accordingly, pay over to his principal all such profits made in
the course of the agency .^ This rule is applicable, even in
cases where the agent took the risk of loss,^ or the principal
suffered no injury.^ No secret profits, or profits made in
breach of the trust, are permitted to remain in the hands of
the agent. If the agent receives a bribe, he must pay it over
to his principal.*
§ 92. (V.) Delegation of authority: appointment of sub-agents.
In all matters involving judgment, skill, or discretion, it is
the duty of an agent to act in person unless he has the express
or implied authority of his principal to employ su])-agents.
No agent can without such permission from his principal
delegate his discretionary authority. Delegatus non jjotest
delegare is the maxim, and is founded upon the confidential
character of the relation.^
The doctrine involves, however, three quite distinct con-
siderations : first, the delegation to a deputy of the perform-
ance of mechanical or ministerial acts in execution of the plan
determined upon by the agent ; seco7id, the delegation to a sub-
agent of some discretionary power without seeking to create any
privity between such sub-agent and the principal ; third, the ap-
pointment of a second agent as the agent of the principal, and
therefore in privity with him. The first case lias to do with the
delegation of non-discretionary duties ; the second, with tlie
delegation of discretionary duties ; the third, with the perform-
ance of the duty or power to employ agents for the principal.
In the first two cases the agent is acting for himself in employ-
1 Parker v. McKenna, L. R. 10 Ch. 96; De Bussche v. Alt, 8 Ch. Div.
286; In re North Australian Territory Co., 1892, 1 Ch. D. 322; Eldridge
V. Walker, 60 111. 230; Button v. VVillner, 52 N. Y. 312; Bunker v. Miles,
30 Me. 431.
2 Williams ;;. Stevens, L. R. 1 P. C. 352.
3 Parker v. McKenna, supra.
* Mayor v. Lever, 1891, 1 Q. B. 168.
6 Combe's Case, 9 Co. R. 75; Blore v. Sutton, 3 Meriv. 267; Catlin v.
Bell, 4 Camp. 183; Cockran v. Irlam, 2 M. & S. 301 ; Campbell v. Reeves,
3 Head (Tenn.), 226 ; Loomis v. Simpson, 13 Iowa, 532.
116 PRINCIPAL AND AGENT.
ing his assistants ; in the third case lie is acting for his j)rincipal
in employing them. In neither of the first two cases can
tliere be any privity between the sub-agents and the ])rincipal,
and the sole question is, had the agent any authority to act
through such sub-agents, or should he have acted in person ?
In the third case the sole question is, was the agent vested
with authority to engage agents for liis principal, or was it
intended eitlier that he should act in person, or should employ
for himself such additional assistants as he might need ?
§ 93. Same : (1) delegation of non-discretiouary duties.
AVhere the particular act to be done is purely ministerial or
non-discretionary, involving no act of deliberation or judg-
ment, the agent may employ a deputy or assistant to perform
the act ; and where the general act to be done is one involving
discretion, and the agent, having exercised the discretion, has
still to perform in execution of his determined purpose a
particular act, ministerial or non-discretionary in character,
lie may employ a deputy or assistant to perform such minis-
terial act.i Thus, if an agent is invested with discretion to
make commercial paper, he may, after having exercised this
discretion, and determined upon the making of the paper,
delegate to a sub-agent the performance of the mechanical act
of writing and subscribing the papcr.^ The same is true of
other contracts, as insurance policies,^ or bills of lading.*
§ 94. Same : (2) delegation of discretionary duties.
Some contracts are assignable, and some are non-assignable.
None are assignable in which there is an element of conlidcnce
1 jNIason r. Joseph, 1 Smith, 406; Rossiter r. Trafalgar Life Assurance
Co., 27 Beav. .377; St. IMargaret'.s Burial Board v. Thomp.son, L. R.
6 C. P. 445; Williams v. Woods, 10 Md. 220; Reuwick r. Bancroft, 56
Iowa, .")27; Eggleston v. Boardman, ^7 Mich. 14.
2 Ex parte Sutton, 2 Cox, 84; Commercial Bank v. Norton, 1 Hill
(N. Y.), 501; Sayre v. Nichols, 7 Cal. .535.
3 Rossiter v. Trafalgar Assurance Co., 27 Beav. 377; Grady v. Ameri-
can Cent. Ins. Co., 60 Mo. 116.
* Newell c. Smith, 49 Yt. 255.
OBLIGATIONS OF AGENT. 117
or trust in the skill,credit, character, or discretion of another.^
Agency is peculiarly a relation of trust and confidence, and
hence the rule is strict that an agent cannot delegate to
another the exercise of the judgment and discretion which
he has undertaken personally to place at the service of his
principal.^ Accordingly an agent employed to buy or sell
property for his principal cannot delegate to another the
duty of buying or selling, because the principal contracts for
the judgment and discretion of the agent himself.^ Nor
an attorney engaged to conduct a litigation.'^ Nor any other
fiduciary.^
If an agent in breach of his duty to act in person commits
the duty to another, he renders himself liable to his principal
for all damages resulting therefrom. If, for example, he is
authorized to sell goods, and turns them over instead to a sub-
agent, he is guilty of conversion, and must account in full for
the value of the goods.^ And for any negligence or miscon-
duct of a sub-agent whose appointment is not authorized by
the principal, the agent remains liable.'''
Tiie rule, therefore, is that an agent cannot, without
authority, delegate to a substitute the exercise of the judg-
ment or discretion which he has contracted to place at the
service of the principal.
To this rule, there are no real exceptions. All seeming
exceptions range themselves under the head of an actual or
1 Ilnffcut's Anson on Cent. p. 287 et scq. ; Robson v. Drummond,
2 B. & A. 303; Arkansas Smelting Co. v. Belden Mining Co., 127 U. S.
379 ; La Rue v. Goezinger, 84 Cal. 281 ; Rochester Lantern Co. v. Stiles,
135 N. Y. 209.
2 Ante, § 92.
8 Coles V. Trecothick, 9 Ves. 234; Cockran v. Irlam, 2 I\I. & S. 301 ;
Wright V. Boynton, 37 N. H. 9; Hunt v. Douglass, 22 Vt. 128.
* Eggleston v. Boardman, 37 Mich. 14.
5 Howard's Case, L. R. 1 Ch. 561 ; Ex j)arte Birmingham Banking
Co., L. R. 3 Ch. 651.
6 Catlin V. Bell, 4 Camp. 183; Loomis v. Simpson, 13 Iowa, 532;
Campbell v. Reeves, 3 Head (Tenn.), 226; Laverty v. Snethen, 68 N. Y.
522.
7 Barnard v. Coffin, 141 Mass. 37; Fairchild v. King, 102 Cal. 320.
]1,S PRINCIPAL AND ACKXT.
iinplicd authority from the ))rincii):il to the agent to em])loy
Bub-agents,^ or under tlie head of a ratification or ac(|uicscence
in the cniploynient of such sub-agents.^ Such authority may
arise from actual agreement or fi-om usage.^ If there be any
exception it is to be sought in cases of necessity or emergency
not contemplated l)y the parties.*
§ 95. Same: (3) sub-agency by authority.
Authority to employ sub-agents must he sought in the
terms of the original appointment, or in the usages or cus-
toms of the particular agency, or in the obvious necessities of
the case.^ It is entirely clear that certain duties confided to
an agent cannot be performed by him personally, and that he
will and must employ sub-agents in order to accomplish the
purposes of the agency. In such cases there is an implied
authority from the principal to the agent to make use of
such additional instrumentalities as may be necessary and
prudent.
Assuming such authority from the principal to be expressed
or implied in the terms or nature of the agency, the second-
ary question is whether the agent's liability is merely to use
due care in the selection of the sub-agent, or whether he also
remains liable for the negligence or misconduct of such sub-
agent. The answer hinges ui)on the notion of privity of con-
tract or undertaking. Upon this, there may be two views :
first, that the principal's sole contract is with the agent, but
that it authorizes the agent to act through sub-agents, although
remaining liable for all consequences; second, that the prin-
ci])al authorizes the agent to make for the principal a contract
with a suitable sub-agent, and create thereby a i>rivity of
^ De Biissche v. Alt, S Cli. 1)1 v. 286.
2 AVhite V. Proctor, 4 Taunt. 209 ; Haluptzok v. Great Northern Ry.,
55 Minn. 446.
8 De Bu.'^sche v. Alt, 8 Ch. Div. 286; Laussatt v. Lippincott, 6 S. & R.
(Pa.) 386; Harralson v. Stein, 50 Ala. 347; Arff v. Star Fire Ins. Co.,
125 X. Y. 57; Carpenter v. Gernmn Am. Ins. Co., 135 N. Y. 298.
* A nle, § .50.
» De Bussche v. Alt, 8 Ch. Div. 286, 310.
OBLIGATIONS OF AGENT. 119
contract between the principal and such sub-agent. Under
the first view the agent alone is responsible to the principal,
and the sub-agent is responsible to the agent. ^ Under the
second view, the first agent discharges his obligation as soon
as he appoints a suitable second agent, and the latter is
responsible directly to the principal, or, in other words, the
first agent is merely an agent to make contracts of employ-
ment for his principal.^
The problem is well illustrated in cases where A deposits
in his home bank for collection commercial paper payable at
a distance. In such a case A knows that the home bank
must send it to a correspondent bank at the place where it is
payable. The problem is whether A, under these circum-
stances, simply authorizes the home bank to make use of a
sub-agent in the collection of the paper, or whether he author-
izes the home bank to employ an additional agent in his be-
half. If the first, then the home bank is liable for the
manner in which the sub-agent performs the duty, and the
sub-agent is liable to the home bank ; if the second, then
the correspondent bank is liable to the principal, and the
home bank is exonerated if it has used due care in the -selec-
tion of the additional agent. The courts differ widely in the
view taken of this situation. One class of cases holds that A
contracts for the skill and judgment of the home bank in the
collection of the paper, leaving the bank free to employ such
instrumentalities as it sees fit, but assuming himself no
responsibility for the conduct of the sub-agents.^ Another
class of cases holds that A under such circumstances con-
templates the appointment of a sub-agent, and impliedly
authorizes the home bank to make such an appointment in
his behalf ; that the obligation of the home bank is to use due
care in making such appointment ; and that there arise two
contracts, (1) the contract of the first bank with A to use due
1 New Zealand, &c. Co. v. Watson, L. R. 7 Q. B. D. 374.
2 De Bussche v. Alt, 8 Ch. Div. 286.
3 Exchange N. B. v. Third N. B., 112 U. S. 276; Simpson v. Waldby,
63 Mich. 439; Power v. First N. B., 6 JNIont. 251; Allen v. Merchants'
Bank, 22 Wend. (N. Y.) 215.
120 PRINCIPAL AND AGENT.
care in selecting a sub-agent, and ('2) the contract of the sec-
ond bank with A to use due care in the collection of the
paper. ^ On the first view there is no privity of contract
between A and the correspondent bank, while on the second
there is such privity. The same question arises in the case of
the appointment of a notary by the bank ;2 and in other like
cases.'^
It will be observed that the question in these cases is not
as to the power of the home bank to appoint a sub-agent, but
as to the power of the home bank to create a contract between
the principal and a third party. It is not the delegation of
power but the possession of power that is involved. And it
is believed that this is the question in every case whore it is
sought to establish a privity of contract between the principal
and a so-called sub-agent.^ Unhappily the courts are not
agreed upon the legal effect to be given to the same set of
circumstances, and therefore no definite rule can be laid down
as to when the exercise of the authority to act through sub-
agents does or does not create a privity between the principal
and such sub-agents.
§ 96. Del credere agenta.
A del credere agent is one who, in consideration of an addi-
tional compensation, undertakes to guarantee the payment to
the principal of the debts arising and becoming due through
» Guelich v. National State Bank, 5G Iowa, 434; Dorchester Bk. v.
New England Bk., 1 Cush. (Mass.) 177; Merchants' N. B. v. Goodman,
109 Pa. St. 422; Daly v. Bank, 56 Mo. 94; First N. B. v. Sprague, 34
Neb. 318; Irwin v. Reeves Pulley Co., 20 Ind. App. 101, 43 N. E. GOl.
2 Ayrault v. Pacific Bank, 47 N. Y. 570 ; Bank v. Butler, 41 Oh. St.
519.
8 Dun V. City N. B., .58 Fed. Rep. 174, where it was held that one who
seeks through a commercial agency information as to the standing of a
person residing in a distant city, contemplates the employment of a sub-
agent at the place where the third person lives and becomes the principal
of such sub-agent, to whom, and not to the commercial agency, he nmst
look for damages for negligence or fraud.
* De Bussche v. Alt, 8 Ch. Div. 286; Barnard v. Coffin, 141 Mass. 37;
Bradstreet v. Everson, 72 Pa. St. 124; Cummins v. Heald, 24 Kans. 600.
^ OBLIGATIONS OF AGENT. 121
his agency.^ His powers and duties are, in general, of the
same nature and extent as those of an ordinary agent or
factor. The authorities do not agree, however, whether tlie
legal effect of his special undertaking is to make him a mere
surety for the vendee, or primarily liable for the proceeds of
the sale.2 In England, it has been held that he is merely a
surety ; that is to say, that he guarantees the solvency of the
vendee, and in case of default, undertakes, himself, to pay;^
but later cases clearly modify this.* In the United States, on
the other hand, it is generally held, that the del credere agent
i^jjrimarily liable for the proceeds of the goods sold, as for
goocTs sold to Tmn.^ The question becomes of importance,
under the provisions of the Statute of Frauds. If the del
credere agent be regarded as a mere surety, his contract is to
answer for the debt of another, and must therefore be in writ-
ing. But if he is himself absolutely liable in the first instance,
his undertaking is an original one, and not within the provi-
sions of the statute.^ So, too, if he Agrees to make advances
to his principal, and after making them seeks to prove against
the principal's bankrupt estate, it is held that he must first
exhaust the property in his hands, and prove only for a
balanced
It is sometimes difficult to determine whether a transaction
amounts to a sale between A and B or the creation of a del
credere agency. It is stated broadly that " the law implies a
mere consignment of goods for sale upon a del credere com-
mission, and not a sale thereof, where the contract provides
that the consignee shall receive them, and return periodically
1 Morris v. Cleasby, 4 M. & S. 566; Hornby v. Lacy, 6 M. & S. 166.
2 Lewis i'. Brehme, 33 Md. 412.
8 Morris v. Cleasby, 4 M. & S. 566; Hornby v. Lacy, 6 M. & S. 166.
* Couturier v. Hastie, 8 Ex. 40 ; Wickham v. Wickham, 2 Kay &
Johns. 478.
6 Lewis I'. Brehme, 33 Md. 412; Sherwood v. Stone, 14 X. Y. 267;
Swan V. NesmiLh, 7 Pick. (Mass.) 220; Wolff v. Koppel, 5 Hill (N. Y.),
458.
® Sherwood v. Stone, supra ; Swan v. Nesmith, supra.
1 Gihon V. Stanton, 9 N, Y. 476; Balderston v. Rubber Co., 18 R. L
338. Compare Dolan v. Thompson, 126 Mass. 183.
122 riU-NXIPAL AND AGENT.
to the consignor the proceeds of the sales, at prices charged
by the hitter, the consignee guarantying payment thereof." '
2. Gratuitous Agents.
§ 97. Obligations of gratuitous agents.
Tlie agent may nndertake to perform a service for the prin-
cipal gratuitously. In such case the promise, being witliout
consideration, is unenforceable, and the agent is not liable for
refusing or neglecting to perform.^ But if the agent enter
upon the performance of the undertaking he is bound to exer-
cise that degree of care and skill for which he undertakes.
The real question in such cases is, what amount of care did
the gratuitous agent nndertake to bestow in the transaction
committed to him? To this various answers have been re-
turned. Some say that he undertakes to use only slight care
and is therefore liable only for gross negligence.^ Others say
that he undertakes for as much care as he would bestow upon
his own affairs.* Still others add, that he must exercise such
skill as he possesses ;5 or, in case he holds himself out as
skilful in a particular calling, then such as might be reason-
ably expected from one so holding himself out;*' or, in case
he undertakes an act highly dangerous to human life and
1 Xational Cordage Co. r. Sims, 44 Neb. 148; ante, § 2.
2 Thorne v. Deas, 4 Johns. (X. Y.) 81, where the subject is exhaus-
tively discussed.
^ Coggs I'. Bernard, 2 Ld. Rayni. 901), wliich. although a case of gra-
tuitous bailment, is the fountain source of the doctrine of gratuitous
undertakings generally. See also Beardslee v. Richardson, 11 AVend.
(X. Y.) 25; Laniploy v. Scott, 24 Miss. 528; Eddy v. Livingston, 35 Mo.
487.
* Shiells V. Blackburne, 1 H. Bl. 159; Moffalt v. Batcman, L. R.
3 P. C. 11.5.
6 AVilson V. Brett, 11 M. & W. 11.3.
8 Whitehead v. Greetliam, 2 Bing. 464; Beal v. South Devon Ry.,
3 H. & C. 337; Durnford v. Patterson, 7 Martin (La.), 460; Gill v. I\Iid-
dleton, 105 I\Iass. 477; McXevins v. Lowe, 40 111. 209: Lsham r. Post,
141 N. Y. 100, where it was held that a banker undertaking to loan
money gratuitously was bound "to exercise the skill and knowledge of a
banker engaged in loaning money for himself and for his customers."
OBLIGATIONS OF AGENT. 123
safety, then such care and skill as is proportioned to the risk,^
or, in case lie expressly undertakes to do a certain thing, and
intentionally does the contrary, he is liable irrespective of any
question of care or negligence.^
Probably the use of the fluid terms " slight care " and
"gross negligence" has led the courts to attempt to qualify
them by the addition of the more specific rules given above,
and therefore not one alone, but all of the above rules to-
gether, must be accepted as containing the established doc-
trines ujjon this subject. Reduced to equivalent terms they
seem to mean that a gratuitous agent must use as much care
as he undertook to use, and, in deciding how much he under-
took to use, the court or jury may consider: (1) how much he
is accustomed to use in his own like affairs ; (2) how much
skill he actually possesses; (3) how much skill he holds him-
self out as possessing; (4) how hazardous the affair is in
which he undertakes to act ; (5) whether he has committed
a breach of the terms of his undertaking.^ In short the gra-
tuitous agent must observe the rules of obedience and good
faith and must exercise such prudence, skill, and care as he
has, under the circumstances, expressly or impliedly under-
taken to use.* " Gross negligence in such cases is nothing
more than a failure to bestow the care which the property in
its situation demands ; the omission of the reasonable care
required is the negligence which creates the liability ; and
whether -this existed is a question of fact for the jury to deter-
mine, or by the court where a jury is waived."^
It is clear, then, that an agent's liability for negligence does
not depend upon the reward he is to receive, nor is the care
he is required to use proportioned to the reward. The absence
of a reward has merely an evidential force in establishing the
nature and extent of the care which he is bound to use, and
1 Philadelphia & Reading R. v. Derby, U How. (U. S.) -168.
' Jenkins v. Bacon, 111 Mass. 373; Opie i'. Serrill, 6 W. & S. (Pa.)
261.
3 Cases mpra; Beale, 5 Harv. Law Rev. 222.
"^ Colyar v. Taylor, 1 Cold. (Tenn.) 372.
5 Mr.' Justice Field in Preston v. Prather, 137 U. S. 604, 608-609.
124 TRINCirAL AND AGENT.
even for tliis purpose it is of slight significance when the snb-
sidiary rules given above come to be applied.
§ 98. Gratuitous bank directors.
The question of gratuitous agency arises frequent ly in the
case of directors of corporations who serve without compen-
sation, and the discussion has revolved particularly around
the question as to the liability of bank directors for losses oc-
casioned through their alleged negligence. What amount of
care is a bank director, serving without compensation, required
to exercise in the management of the affairs of the bank ?
Several answers have been given to this question. A very
connnon answer is that he is liable only for fraud or gross
negligence amounting to fraud. ^ Another answer is that he
is liable for the want of that care and prudence " that men
prompted by self-interest generally exercise in their own
affairs." 2 A third answer is that he is liable for negligence
(without an epithet) and that negligence consists in the want
of care according to the circumstances; that the circum-
stances do not warrant a director in being judged by the stan-
dard of the man who is conducting his own business, but by
the standard of the ordinarily prudent bank director as that
is fixed by experience and usage.^ The last answer seems the
most reasonable, and even in the cases in which "gross"
negligence is made the measure of liability, the reasoning re-
sults in the adoption of this standard.* The question sometimes
1 Swentzel v. Penn Bank, U7 Pa. St. 140; Bank v. Bossieux, 4 Hughes
(U. S. C. C), 387, 398, 3 Fed. R. 817.
2 Ilun V. Gary, 82 N. Y. 65.
3 Briggs )'. Spaulding, 141 U. S. 132 (.•^emhle) ; Delano i". Case, 121
111. 247 ; Williams v. McKay, 40 N. J. Eq. 189.
* See Swentzel v. Penn Bank, supra, where the court says that the
care to be exercised is "ordinary care." "Not, however, the ordinary
care which a man takes of his own business, but the ordinary care of a
bank director in the business of a bank. Negligence is the want of care
according to the circumstances, and the circumstances are everything in
considering this question. The ordinary care of a business man in his
own affairs means one thing ; the ordinary care of a gratuitous man-
datory is quite another matter. The one implies an oversiglit and knowl-
edge of every detail of his business ; the other suggests such care only as
OBLIGATIONS OF AGKNT. 125
turns on wlicther the duty of the directors is to the stock-
holders or to the depositors, it being urged that as to the for-
mer they are agents, while as to the latter they are trustees ; ^
but in eitlicr case the care required is the care customarily
given by such gratuitous agents, that is, the care that an or-
dinarily prudent business man would understand that he had
undei'takcn to exercise under similar circumstances.
a man can give in a short space of time to the business of other persons,
from whom he receives no compensation." Yet after this excellent state-
ment the court holds " the rule to be that directors, /who are gratuitous
mandatories, are only liable for fraud, or for such gross negligence as
amounts to fraud ! "
1 Hun V. Gary, 82 N. Y. 65; Williams v. McKay, 40 N. J. Eq. 189.
PART III.
LEGAL EFFECT OF THE RELATION AS HETWEEN THE
PRINCU^AL AND THIRD PARTIES.
§ 99. Introduction.
We have now considered, (1) the inauiier in which the
relation of principal and agent may be formed, and (2)
the legal effect of the formation of the relation as between
the principal and agent. We have now to consider, (3) the
legal effect of the execution of the agency as between the
principal and third persons with whom the agent may deal.
The main object of agency is to bring the principal into
contractual relations with third persons. In executing the
agency the agent may disclose his principal or he may not;
he may make admissions or declarations affecting the ])rin-
cipaFs interests; he may receive notice of facts affecting the
principal's interests ; or he may be guilty of fraud or other
torts affecting such interests. Accordingly we have now to
consider each of these possible cases, and to determine the
legal consequences of each. We have, in addition, to con-
sider the liabilities of the third person to the ])rincipal.
CONTRACT FOR DISCLOSED PRINCIPAL. 127
CHAPTER IX.
CONTRACT OF AGENT IN BEHALF OF A DISCLOSED PRINCIPAL.
1. In Agencies generally.
§ 100. General considerations.
The normal case of agency is that in which the agent acts
for a disclosed principal, in whose name, and in whose behalf
he enters into contracts with third persons. In so doing the
agent may (1) act within the scope of his actual authority,
or (2) act outside of the scope of his actual, but within the
scope of his apparent or ostensible authority, or (3) act
outside of the scope of his actual or his ostensible authority.
The legal effect of the contract will vary in accordance with
the variance in these three particulars.
Briefly stated, the doctrine is that the principal is liable
upon all contracts made by his agent within the scope of
the actual authority ; and upon all contracts made by his
agent within the scope of the ostensible or apparent author-
ity,i unless the third person has notice that the agent is
exceeding his authority.^ But the principal is not liable
upon contracts made by his agent beyond the scope of the
actual or the ostensible authority.^
1 Trickett v. Tomlinsoii, 13 C. B. n. s. 663; Whitehead r. Tiickett, 15
East, 400; Fenn v. Harrison, 4 T. R. 177; Huntley v. Mathias, 90 N. C.
101; Bentley v. Doggett, 51 Wis. 224; Johnston v. Milwaukee, &c. Co.,
46 Neb. 480.
2 Jordan v. Norton, 4 M. & W. 155; CoUen y. Gardner, 21 Beav. 540;
Strauss v. Francis, L. R. 1 Q. B. 379 ; Rust v. Eaton, 24 Fed. R. 830.
8 Stubbing v. Ileintz, 1 Peake, 66; Fenn v. Harrison, 3 T. R. 757;
Batty V. Carswell, 2 Johns. (N. Y ) 48; Martin v. Great Falls Mfg. Co.,
9 N. H. 51 ; Graves v. Horton, 38 Minn. 66.
128 PRINCirAL AND THIRD PARTY.
§ 101. Contracts actually authorized.
It is olniuus that if the ju'liu'lpal has actually authorized
the coutract speeilically or generally, that he will be bound
by it in the same manner as if he had made it in person. ^
The agent in such a case is merely an inslrumentalily which
correctly manifests the will of the jji-incipal. This is the
object of the agency and the object is attained. Every con-
sideration that leads to the enforcement of contracts made
in person calls e(pially for the enforcement of the contract
made under these circumstances. It is immaterial by what
means the agent derives his authority so long as it is suHi-
cient. It may spring from the consent of the princii)al or
from the necessities of the situation.''^
§102. Contracts apparently authorized: estoppel.
It may ha[)pen, however, that the princi])al has authoi'ized
his agent to make a contract or to make contracts, but has
placed certain restrictions or limitations upon the agent as
to the terms of the transaction. Tliese restrictions the agent
may disregard. In such a case the will of the j)rincipal is
not correctly manifested. Is he nevertheless bound by the
contract ?
The solution of this prol)lem de})ends upon a consideration
much more vital than the interests or rights of the principal.
It depends upon a consideration of the rights of the public
generally, and of those persons specially who may deal with
tlie agent. If agency is to be admitted as a means of trans-
acting business, it is essential that the business world
should be able to deal with agents, in a reasonable and
prudent manner, without assuming the risk that the agent
may turn out in the end to have exceeded his actual author-
ity. This consideration leads to the conclusion that where
a principal has vested his agent with apparent authority
to make a certain contract, and the agent, acting within
^ If th(3 principal could not lawfully have made the contract, of course
the agent cannot do so in his behalf. Montreal Assurance Co. v. M'Gil-
livray, 13 Moo. P. C. C. 87.
2 See Chapters II. and V., ante.
CONTRACT FOR DISCLOSED PRINCIPAL. 129
the scope of such apparent authority, does make a contract
with a person who reasonably believes the agent to possess
the authority which he seems to possess, the principal is
bound by such contract, even though the agent's authority
was in fact limited in such a way that the contract was
wholly unauthorized.! The sole inquiry in such a case is
whether there has been a holding out of the agent as one
having authority and whether the third person, acting with
average prudence and good faith, was justified in believing
that the agent possessed the necessary authority .^ If so, the
principal must bear the risk, because he has held out the
agent as possessing the authority which he seems to possess,
and is not in a position to maintain that third parties should
know that what appears to be true is not true. It will be
observed that this conclusion is based upon those doctrines
of estoppel considered in a previous chapter.^
§103. Ostensible authority. — Meaning.
Ostensible or apparent authority vested in an agent may,
when exercised, have the same effect in imposing con-
tractual obligations upon his principal as actual authority.
The doctrine has been clearly and satisfactorily stated in
these words :
" Where a principal has by his voluntary act placed an
agent in such a situation that a person of ordinary prudence,
conversant with business usages and the nature of the par-
ticular business, is justified in presuming that such agent
has authority to perform on behalf of his principal a par-
ticular act, such particular act having been performed, the
principal is estopped, as against such innocent tliird person,
from denying the agent's authority to perform it."*
In order to establish the apparent or ostensible authority
of the agent, therefore, it is necessary to sliow : (1) that the
1 Nickson v. Brohan, 10 Mod. 109 ; Bailer v. Maples, 9 Wall. (U. S.)
766; Johnson v. Hurley, 115 Mo. 513.
2 Spooner v. Browning, 1898, 1 Q. B. 528.
3 Ante, §§ 5, 51, 52.
* Irvine, C, in Johnston v. Milwaukee & Wyoming Investment Co.,
46 Neb. 480, 490. See also Pole v. Leask, 33 L. J. Ch. 162.
9
130 rUINCIPAL AND THIKD I'ARTY.
principal liulil out the agent under circumstances from which
a reasonably prudent man might infer such authority ; (2)
that, acting prudently, and in good faith, X believed the
agent to possess such authority.
(1) Holdinu out. One who holds out another as his agent
cannot deny the agency, or the authority that reasunably
attaches to it, as against one who prudently acts npon such
ostensible authority.^ What constitutes such a "holding
out" as will work an estoppel in favor of innocent j^arties
is a question of fact. It is sometimes said that where the
facts are undisputed the question of authority is one of law
for the court; 2 but, in accordance with the general principles
applicable to similar questions, it would seem that this ques-
tion is for the court when the facts are undisinited, and but
one inference can reasonably be drawn from the facts,^ but
that if the facts are in dispute, or if reasonable men might
differ as to the inferences to be drawn from the facts, the
doubt should be resolved by the jury.* If the authority be
contained in a writing upon which X relied, or ought to
have relied, its interpretation is for the court in accordance
with the general rules governing written instruments.^ An
ambiguous authority is construed to cover any act that may
fall within any fair interpretation of it.^
The apparent scope of an agent's authority is such authority
as a reasonably prudent man, in like circumstances with X
and with like means of knowledge and information, would
naturally infer the agent to possess. The cases are numerous
and decisive to the point, that the third person may prudently
conclude that the principal intends the agent to exercise those
1 Pickering v. Busk, 1.5 East, 38; Rimell r. Sampayo, 1 C. & P. 254;
Jetley v. Hill, 1 C. & E. 2:59; Daylight Burner Co. v. Odlin, 51 N. II. 50;
Johnson v. Hurley, 115 Mo. 513.
2 (Julick V. Grover, 33 N. J. L. 4G3.
8 Spooner v. Browning, 1808, 1 Q. B. 528; Franklin Bank Note Co.
V. Mackev, 158 N. Y. 140.
4 Seiple V. Irwin, 30 Pa. St. 513; Huntley v. I\Iatbias, 90 X. C. lOl.
<» Savings Fund See. v. Savings Bank, 36 Pa. St. 498.
8 Ireland v. Livingston, L. R. 5 II. L. 395; Very v. Levy, 13 How.
(U. S.) 345.
CONTRACT FOR DISCLOSED PRINCIPAL. 131
powers which ordinarily and properly belong to the character
in which the principal holds the agent out to the world.
" When a general agent transacts the business entrusted 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 con-
tributes to the loss." ^
(2) Relying upon representation. In order to work an
estoppel against the principal based upon a holding out of the
agent as possessed of authority, it is necessary that the third
person should have relied in good faith and prudently upon
the appearance of authority thus created.^ Thus if a principal
permits an agent who has loaned money for him to retain the
bond and mortgage, he vests the agent with apparent authority
to receive payment, and any payment made by the mortgagor
relying upon the appearance of authority thus created will
bind the principal ; but if the mortgagor makes a payment to
the agent after the latter has parted with possession of the
documents, with or without the knowledge of his principal,
such payment will not bind the principal, because the
mortgagor is not then relying upon an existing a])pearance of
authorityw^ In any case where the third person may not
prudently infer that the agent possesses the powers exercised,
he is negligent, and it is his own negligence, and not the
conduct of the principal, that is the proximate cause of his
loss.* If the third person knows the limitation upon the
agent's authority, he does not iu good faith rely upon any
apparent authority, and cannot hold the principal.^ But he
1 Wheeler v. McGuire, 86 Ala. 402; Butler v. Maples, 9 Wall. (U. S.)
766; Munn v. Commission Co., 15 Johns. (N. Y.) 44; Hatch v. Taylor,
10 N. H. 538.
2 Small V. Attwood, 1 Younge, 407 ; Freeman v. Cooke, 2 Ex. 654 ;
Proctor n. Bennis, 36 Ch. Div. 740.
"-■ '■'' . .'*^£-S^^^is£j^?"*^w^W> 120 N. Y. 274.
' 4 llazeftine v. Miller, 44 Me. 177; Gulick v. Grover, 33 N. J. L.
463.
6 CoUen V. Gardner, 21 Beav. 540; Peabody v. Hoard, 46 111. 242.
132 riUNClPAL AND THIRD PARTY.
is not bound to search for secret limitations upon an osten-
sible authority.^
J; 104. Same. — General and special agents.
It is oftrn said that tlie rules as above stated ai)])ly to a
general agency, but not to a special agency .^ "The dis-
tinction is well settled between a general and a special agent.
As to the former, the principal is responsible for the acts of
the affent, when acting within the general scope of his author-
ity, and the public cannot be supposed connusant of any
private instructions from the principal to the agent; but
■where the agency is a special and temporary one, there the
principal is not bound if the agent exceeds his employment." ^
"The acts of the former bind the principal, whether in
accordance to his instructions or not; those of the latter do
not, unless strictly within his authority." * "A special agent
cannot bind his principal in a matter beyond or outside of the
power conferred, and the party dealing with a special agent
is bound to know the extent of his authority." ^ And many
other cases use language to the same effect.
It is believed, however, that these statements as to the
distinction between general and special agents are misleading.
The difference between a general agent and a special agent
is not absolute but relative. It is a difference in degree and
not in kind. In either case the principal by authorizing the
agent to do a particular act or class of acts vests him ostensibly
with authority to do what is ordinarily incidental to the
execution of the power. In either case the burden of proof
is on the person dealing with the agent to show that the
agent had the authority, real or ostensible, which he assumed
to exercise.^ In bearing this burden the proponent may pro-
^ Byrne i-. Ma.s.sasoit Packing Co., 137 ]\Ia.ss. 313; Bentley v. Doggett,
51 AVi.s. 224. Compare Baines v. Ewing, 4 H. & C. 511.
2 For definitions, see ante, § 7; Whitehead v. Tuckett, 15 East, 408 ;
Fenn v. Harrison, 3 T. R. 762.
8 Mimn r. Commission Co., 15 -Tolms. (N. Y.) 44, 54.
* Rossiter r. Rossiter, 8 Wend. (X. Y.) 497.
6 r,lack\vell v. Ketcham, 53 Ind. 186.
' Pole V. Leask, 33 L. J. N. s. Ch. 155.
CONTRACT FOR DISCLOSED PRINCIPAL. 133
ceed more easily in the case of an agent whose incidental
powers are naturally or necessarily extensive, than in the case
of one whose incidental powers are naturally or necessarily
limited. But to assert that in the one case the third person
need not inquire whether what appears to be true is true,
while in the other he must so inquire, is to set an artificial
and inconvenient limit to the operation of the salutary doc-
trines of estoppel. The most that can justly be asserted is
that the third person should know that an agent, not acting
in the ordinary course of a trade, business, or profession, and
delegated to perform a siugle act, or even a number of dis-
connected particular acts, can possess but a very narrow limit
of incidental authority beyond the limits of the real or actual
authority. There is, therefore, little to rely upon except the
actual authority. But as to that little (and it varies in degree,
even as in agencies of wider scope) the third person may rely
upon it as safely as upon the larger incidental powers flowing
from a general agency. In neither case will any private
instructions to the agent, intended to limit the ostensible
authority, be effective as against one who deals with the agent
in ignorance of such instructions.^
" Whether, therefore, an agency is general or special is
wholly independent of the question whether the power to act
within the scope of the authority given is unrestricted, or
whether it is restrained by instructions or conditions imposed
by the principal relative to the mode of its exercise." ^
" Where private instructions are given to a special agent,
respecting the mode and manner of executing his agency,
intended to be kept secret, and not communicated to those
with whom he may deal, such instructions are not to be
regarded as limitations upon his authority ; and notwith-
standing he disregards them, his act, if otherwise within the
scope of his agency, will be valid, and bind his employer. . . .
1 Hatch V. Taylor, 10 N. H. 538; Bryant v. Moore, 26 Me. 84; Towle
V. Leavitt, 23 N. H. 360; Byrne v. Massasoit Packing Co., 137 Mass.
313 ; Wilson v. Beardsley, 20 Neb. 449. Cf. Baines v. Ewing, 4 H. & C.
511. . .
2 Butler V. Maples, 9 Wall. (U. S.) 766, 774. A j'^ ^^\ Q^^'^Jj-j, %,T
134 rRINCIPAL AND THIRD PARTY.
No man is at liberty to send another into the market, to buy
or sell for him, as his agent, with secret instructions as to
the manner in which he shall execute his agency, which are
not to be communicated to those with whom he is to deal ;
and then, when his agent has deviated from those instruc-
tions, to say that he was a special agent — that the instruc-
tions were limitations upon his autliority — and that those
with whom he dealt, in the matter of his agency, acted at
their peril, because they were bound to inquire, where inquiry
would have been fruitless, and to ascertain that, of which
they were not to have knowledge." ^ This doctrine })laces
special agencies upon the same footing as general agencies ;
each is to be measured by the appearance of authority upon
which reasonably {)rudcnt men may rely. " The rule is, that
if a special agent exercise the power exhibited to the public
the principal will be bound, even if the agent has received
private instructions which limit his special authority." ^
§ 105. Same. — Public agents.
" Different rules prevail in respect to the acts and declara-
tions of public agents from those whicli ordinarily govern in
the case of mere private agents. Principals, in the latter
category, are in many cases bound by the acts and declara-
tions of their agents, even where the act or declaration was
done or made without any authority, if it appear that the act
was done or declaration was made by the agent in the course
of his regular em{)loyment; but the government or ))ublic
authority is not bound in such a case, unless it manifestly
appears that the agent was acting within the scope of his
authority, or that he had been held out as having authority
to do the act, or was emjjloyed in his capacity as a public
agent to do the act or make the declaration for the govern-
ment. . . . Although a private agent, acting in violation of
specific instructions, yet within the scope of his general
authority, may bind his principal, the rule as to the effect of
1 Ilatcli r. Taylor, 10 N. II. 538, 548.
2 Howell V. Graff, 25 Nel). 130; Byrne v. INIassasoit Packing Co., 137
Mass. 313. See Ewart on Estoppel, vp. 474-483.
CONTRACT FOR DISCLOSED PRINCIPAL. 135
the like act of a public agent is otherwise, for the reason that
it is better that an individual should occasionally suffer fi-om
the mistakes of public officers or agents, than to adopt a rule
which, through improper combinations or collusion, might be
turned to tiie detriment and injury of the public." ^
§106. Same. — Elements of authority.
Several elements combine to make up what is termed the
apparent scope of the agent's authority, or that appearance of
authority upon which the public may rely. These ai*e (1) the
powers actually conferred ; (2) the powers necessarily or
reasonably incidental to those actually conferred ; (3) the
powers annexed by custom or usage to those actually con-
ferred ; (4) the powers which the principal has by his con-
duct led third persons reasonably to believe that his agent
possesses.^
(1) Powers actually conferred. — The principal is, of course,
bound by what he expressly authorizes. On the other hand,
he is bound by no more than he actually authorizes in cases
where the third party knows the exact terms of the authority.
This is especially true of authority conferred in a formal
power of attorney. Such powers of attorney are construed
as giving only the authority actually expressed ^ and such
medium lowers as are necessary for the effective execution
of those so expressed.* " It is as fundamental as it is ele-
mentary in the law of agency that a formal instrument con-
ferring authority will be construed strictly, and can be held
to include only those powers which are expressly given, and
those which are necessary and essential to carry into effect
those which are expressed." ° Thus it has been held that a
1 Whiteside v. United States, 93 U. S. 247, 256-257, citing Story on
Agency, § 307 «; Lee v. Munroe, 7 Cranch (U. S.), 366; Mayor v. Esch-
bach, 18 Md. 270, 282. As to liability of public agent for his own acts,
seejoos/, § 203.
2 Huntley v. Mathias, 90 X. C. 101.
3 Bryant v. Bank, 1893, App. Cas. 170; Lewis v. Ramsdale, 55 L. T. R.
179 ; Gilbert v. How, 45 Minn. 121; Craighead v. Peterson, 72 X. Y. 279.
4 Howard v. Baillie, 2 H. Bl. 618; Le Roy v. Beard, 8 How. (U. S.)
451 ; Peck v. Harriott, 6 S. & R. (Pa.) 146.
6 Harris v. Johnston, 54 Minn. 182; Penfold v. Warner, 96 Mich. 179.
136 PKiNarAL and tiiikd takty.
j.owcr of attorney to an agent to sell all lands owned by the
donor of the power in a certain county would not be construed
to cover lands purehast-d by the donor subsctpient to the
execution of the power.i But this has been criticised as too
strict a construction.- In general tiie formal instrument is
construed strictly as to its terms and is not to be extended to
the authorization of acts beyond those specified, and to those
onlv whi'U done in the i)rincipars business and for his benefit.^
Where the instrunu-nt is capable of two interpretations, and
the agent and third party deal in the light of one of them in
good faith, the princii)al is Ijound even though he intended it
to mean otherwise.^ F>ut where the [mwer hxes a limit to the
agent's transactions for his principal, and the agent represents
that he has not yet exceeded the limit, it seems the principal
is not responsible for the veracity and accuracy of the agent's
statements.^
Where the authority is contained in an instrument not
under seal, or is conferred orally, the authority is construed
more liberally, that is, while evidence of usage or attendant
circumstances may not be allowable to vary an authority
under scal,^ such evidence may be received to extend an
authority not under seal.'
Notice of the actual limits of an agent's powers j)revcnts
the one having such notice from claiming to rely upon osten-
sible authority. Thus by statute a signature by " procura-
^ Peiifold V. Warner, supra ; Weare v. Wilhains, S.l Iowa, '2oS.
2 ;j5 Am. St. Rep. 593, citing Fay v. Wiuchester, 4 Met. (Mass.) .513;
Bigelow i: Livingston, 28 Minn. 57.
3 Attwood i: Mannings, 7 B. & C. 278; Craighead r. Peterson, 72
N. Y. 279; Camden, &c. Co. v. Abbott, 41 X. J. L. 2."i7. But see North
River Bank v. Ayniar, 3 Hill (X. Y.), 2G2.
* Ireland v. Livingston, L. R. 5 II. L. 395 ; Minnesota, &c. Co. v.
Monta'iue, 65 Iowa, 67.
■^ Haines c. Ewing, 4 II. & C. 511 ; Mussey v. Beecher, 3 Cush. (Mass.)
511. See pout, §§ 151-157.
« Hogg r. Snaith, 1 Taunt. 317; Delafield v. Illinois, 26 Wend.
(N.Y.) 192. Such evidence may be used to interpret the instrument.
Reese v. Medlock, 27 Tex. 120; Frink v. Roe, 70 Cal. 29G.
" Pole r. Leask, 28 Beav. 562; Entwisle r. Dent, 1 Ex. 812; Piiillips
V. Moir, 69 111. 155; Lyon v. Pollock, 99 U. S. 668.
CONTRACT FOR DISCLOSED PRINCIPAL. 137
tioii " operates as notice that the agent has but a limited
authority to sign negotiable instruments, and the principal is
bound only in case the agent in so signing acted within the
actual limits of his authority.^
(2) Powers incidental to those conferred. — The implied
authority of the agent includes the power to use all means
reasonably necessary to the accomplishment of the object of
the agency. 2 What means are thus reasonably necessary,
seems to be a mixed question of law and fact. " Sometimes
the powers are determined by mere inference of law; in other
cases by matters of fact ; in others by inference of fact ; and
in others still, to determine them becomes a question of mixed
law and fact." ^ The nature and extent of such incidental
powers are varied and beyond the province of this work to
enumerate in detail. A few illustrations must suffice. An
agent employed to travel and sell goods has the implied power
to hire a horse for such purpose."^ And the principal is liable
for the horse hire even though he has furnished the agent
with money to pay for it, and has forbidden the agent to hire
it on credit.^ But the manager of a hotel has no implied
authority to hire horses for the use of guests and render the
principal liable for their safe-keeping and return.^ An agent
authorized to sell goods has implied power to warrant the
goods in such manner as is usual in such sales, but not the
power to give an unusual warranty.''' And the weight of
authority is now in favor of the proposition that an agent
1 Negotiable Instruments Law, § 21 (N. Y. § 40) ; English Bills of Ex-
change Act, § 2.5; Stagg v. Elliott, 12 C. B. x. s. 373; The Floyd Ac-
ceptances, 7 Wall. (U. S.) 666; Nixon r. Palmer, 8 N. Y. 398.
2 Pole V. Leask, 28 Beav. 562; Beaufort v. Neeld, 12 C. & F. 248;
Durrell v. Evans, 1 H. & C. 174 ; Mullens v. Miller, 22 Ch. Div. 194 ;
Wheeler v. McGuire, 86 Ala. 398; Bentley v. Doggett, 51 Wis. 224.
3 Huntley v. Mathias, 90 N. C. 101, 104.
* Huntley v. INIathias, supra.
^ Bentley v. Doggett, supra.
6 Brockway v. Mullin, 46 N. J. L. 448. See also Wallis Tobacco Co.
V. Jackson, 99 Ala. 460.
T Benj. on Sales (Bennett's ed. 1892), § 624, and notes pp. 629-630;
cases cited post, § 107; Upton v. Suffolk County Mills, 11 Cush. (Mass.)
586.
138 PKINCIPAL AND THIRD PAItTV.
autliorized to sell and convey real property may, nnlcss
specially restricted, sell and convey with general warranty .^
An agent authorized to sell goods has implied power to
receive payment for the goods provided he has ])Ossession
of them, and is authorized to deliver; but ii" he has not
possession there is no implied authority to receive payment.^
An agent has implied power to borrow money only where the
transaction of the business confided to him absolutely requires
the exercise of the power in order to carry it on ; it will not
be implied merely because its exercise would be convenient
or advantageous.^ Some agents have, however, a customary
power to borrow money, as cashiers of banks'* and masters of
ships,^ The power to make or indorse negotiable paper will
not ordinarily be inferred, or regarded as incidental to other
powers.^
(3) Powers annexed hy custom. Custom or usage may
aid materially in determining the authority of an agent.
An agent may be one who follows an established or recog-
nized trade, })rofession, or business, or he may be one not
following such a recognized or customary business. Where
a principal appoints an agent who is customarily governed
by established usages, it is presumed that he intends such
usages to govern the agent in the transaction in ques-
1 Le Roy v. Beard, S How. (U. S.) 451 ; Schultz v. Grillin, 121 N. Y.
291.
••2 Iliggins V. Moore, 34 N. Y. 417; Butler r. Dorman, 68 Mo. 298;
Seiple r. Irwin, 30 Pa. St. 513.
8 Bickford v. Meiiier, 107 N. Y. 490; Consolidated Nat. Bk. v. Pacific,
&c. Co., 95 Cal. 1; Heath c Paul, 81 Wis. 532; Bryant v. Bank, 1893,
App. Cas. 170.
* Crain v. First N. B., 114 111. 510; Barnes v. Ontario Bk., 19 X. Y.
152.
* The power of masters of ships to borrow money rests strictly on
imperative nece.ssity, which, it seems, must be shown to exist in order to
charge the principal. McCready v. Thorn, 51 N. Y. 454; Stearns v. Doe,
12 (iray (Mass.), 482. Cf. Arey v. Hall, 81 Me. 17. Post, § 116.
G Abel r. Sutton, 3 E.-^p. 108; Kilgour v. Finlyson, 1 H. Bl. 155;
Burmester v. Norris, 6 Ex.796; In re Cunningham, 36 Ch. Div. 532;
New York Iron Mine v. First N. B., 39 Mich. 644; Jackson v. Nat. Bk.,
92 Tenn. 154. Cf. Edmunds v. Bushell, L. 11. 1 Q. B. 97.
CONTRACT FOR DISCLOSED PRINCIPAL. 139
tion.^ It is upon this consideration that the courts reach the
conclusion that a bank cashier has power to borrow money ;2
or a factor or broker to sell on credit ; ^ or an attorney to con-
trol the procedure of an action at law.* Where the principal
appoints an agent who does not follow a customary calling,
such agent, in the carrying out of the objects of the agency,
has implied authority to deal according to the usages of the
particular business confided to him, or of the particular place
in which the business is to be done.^ This doctrine as to
custom is well illustrated in the case of stock-brokers who
buy and sell stock on margins, or otherwise, in behalf of
customers. The customer is bound by the customs of the
market in which he deals, and if the custom permits the
broker to repledge the stock for his own debt, the princi-
pal will be bouud by the custom.^ The doctrine finds a
further illustration in the much mooted question as to the
power of an agent to warrant goods sold for his principal.^
The usage must be reasonable, not contrary to positive law,
well-established, and publicly known ;S or if it be not gen-
eral it must be known to the principal.^ Even when a
usage fulfils all necessary conditions it will not prevail- as
against positive instructions given to the agent.^'' It is nec-
1 Young V. Cole, 3 Bmg. N. C. 724 ; Howard v. Sheward, L. R. 2 C. P.
148; Hibbard v. Peek, 75 Wis. 619; Adams v. Ins. Co., 95 Pa. St. 348.
2 Crain v. First N. B., 114 111. 516.
3 Boorman v. Brown, 3 Q. B. 511; Pinkham v. Crocker, 77 Me. 563;
Daylight Burner Co. v. Odlin, 51 N. H. 56.
" Strauss v. Francis, L. R. 1 Q. B. 379; Moulton v. Bowker, 115
Mass. 36.
5 Dingle v. Hare, 7 C. B. n. s. 145; Pelliam v. Hilder, 1 Y. & Coll.
C. C. 3; Pollock v. Stables, 12 Q. B. 765; Pickert v. Marston, 68 Wis.
465.
6 Skiff V. Stoddard, 63 Conn. 198.
T Post, § 107; Brady v. Todd, 9 C. B. N. s. 592; Howard v. Sheward,
L. R. 2 C. P. 148 ; Brooks v. Hassall, 49 L. T. R. 569.
8 Sweeting v. Pearce, 7 C. B. n. s. 449 ; United States v. Buchanan,
8 How. (U. S.) 83; Jackson v. Bank, 92 Tenn. 154; Hibbard v. Peek,
75 Wis. 619.
9 Walls V. Bailey," 49 N. Y. 464 ; Robinson v. Mollett, L. R. 7 H. L.
802.
" Day V. Holmes, 103 Mass. 306.
140 PRINCIPAL AND TIIIRU TAKTY.
cssai'y ill all cases to distiiij^uish between regulations or
customs intended to govern a particular body of dealers (as
stock-brokers) in their relations to each other, and regula-
tious or customs intended to bind outsiders. An outsider
is bound only so far as (he rules or customs are clearly
intruded to aj)|)ly to outsiders.^ In some cases the court
will take judicial notice of the existence of the custom,^ but
generally it is a matter of proof. If sought to be established
by proof, it must be shown to be so prevailing that parties
may be presumed to contract with reference to it.^
(4) Powers inferred from co)iduct of principal. The con-
duct of the j)rincij)al may be such as to lead to a reasonable
inference that the agent has certain powers, and if so the
principal will be estopped to deny the existence of such
powers. " If a man, whatever his real meaning may be, so
conducts himself that a reasonable man would take his eon-
duct to mean a certain representation of facts, and that it
was a true representation, and that the latter was intended
to act upon it in a particular way, and he, with such belief,
does act in that way to his damage, the first is estopped
from denying that the facts were as represented." * The
doctrine is the general doctrine of estoppel and calls for
no special consideration in this place.^
§ 107. Apparent scope of authority. — Illustrations.
(1) Agent authorized to sell. An agent authorized to sell
possesses impliedly or by custom the following authority :
(a) to receive payment if the agent has possession of the
goods but not otherwise ;'' (/>) to fix the terms of the sale
1 Levitt r. Hamblet, 1901, 1 K. B. 53.
2 Ahum V. Goodspeed, 72 N. Y. 108; T:ilniage v. Bierhause, 103 Ind.
270.
8 Herring v. Skaggs, 62 Ala. 180, s. c 73 Ala. 440.
* Carr v. Ky. Co., L. 11. 10 C P. 307, 317; Austrian c. Springer, 04
Mich. 343.
6 See ante, §§ 51, 52, 103; Smith v. Clews, 105 N. Y. 283; Levi v.
Booth, 58 IMd. 305; Johnson v. Hurley, 115 Mo. 513; Smith v. ]\IcGuire,
3 H. & N. 554.
• Higgius V. Moore, 34 N. Y. 417; Butler v. Dorman, 68 Mo. 298;
CONTRACT FOR DISCLOSED PRINCIPAL. 141
SO far as reasonably within the customs of such agencies
and sales ;^ («?) to warrant the quality of the goods sold if
such goods are customarily sold with such a warranty by
agents of like kind,^ but not if the article be not usually
sold with a warranty,^ or with a warranty like the one in
question,^ or if the agent be one not usually authorized to
warrant.^ He has no implied authority to sell at auction;^
to exchange the goods by way of barter with a third person ;7
to sell on credit^ unless clearly justified by custom, as in the
case of factors; to pledge or mortgage the goods ;^ or, after
a sale is once made, to rescind the contract or modify its
terms.i*' These rules apply, in the main, to agents author-
ized to sell realty as well as to those authorized to sell
personalty.^^
(2) Agent authorized to ijurchase. An authority to pur-
chase is construed somewhat more strictly than an authority
to sell. Except where " it is the custom of tiie trade to buy
Law V. Stokes, 32 X. J. L. 249. Payment must be in money, not in
checks or other negotiable instruments. Harlan v. Ely, 68 Cal. 522 ;
Brown v. Smith, 67 N. C. 245; Buckwalter v. Craig, 55 Mo. 71.
1 Putnam v. French, 53 Vt. 402; Daylight Burner Co. v. Odlin, 51
N. H. 56.
2 Dingle i>. Hare, 7 C. B. n. s. 145; Ahern v. Goodspeed, 72 N. Y.
108 ; Pickert v. Marston, 68 Wis. 465.
8 Smith V. Tracy, 36 N. Y. 79 ; Argersinger v. Macnaughton, 114
N. Y. 535; Herring v. Skaggs, 62 Ala. 180, s. c. 73 Ala. 446.
4 Wait V. Borne, 123 N. Y. 592; Upton v. Suffolk County Mills, 11
Cush. (Mass.) 586 ; Palmer v. Hatch, 46 Mo. 585 ; Brady v. Todd, 9 C. B.
N. s. 592.
8 Payne v. Leconlield, 51 L. J. Q. B. 642; Cooley v. Perrine, 41
N. J. L. 322, s. c. 42 X. J. L. 623; Dodd v. Farlow, 11 Allen (]\Iass.),
426.
6 Towle V. Leavitt, 23 N. H. 360.
7 Taylor ;•. Starkey, 59 N. H. 142; Guerreiro v. Peile, 3 B. & A. G16.
8 Wiltshire v. Sims, 1 Camp. 258; Payne v. Potter, 9 Iowa, 519.
9 Wheeler, &c. Co. v. Givan, 65 Mo. 89; Warner v. Martin, 11 How.
(U. S.) 209; Frink v. Roe, 70 Cal. 296; Rodick y. Coburn, 68 Me. 170.
For statutory provisions under Factors' Acts, see post, § 171.
10 Nelson v. Aldridge, 2 Stark. 435; Diversy v. Kellogg, 44 111. 114,-
Smith V. Rice, 1 Bailey (S. C), 648 ; cf. Young v. Cole, 3 Bing. N. C. 724.
11 Le Roy v. Beard, 8 How. (U. S.) 451; Schultz v. Griffin, 121 N. Y.
294; Peters v. Farnsworth, 15 Vt. 155.
142 PRINCIPAL AND TllIKD rAUTY.
Oil credit," "the law does not raise any presuni[ttion that
such agent may bind his principal l)y a purcliase on credit,
but the contrary." ^ This, of course, where the agent is
supplied with funds; if he be not supj)lied with funds, the
direction to buy will imply the authority to buy on credit.^
He can buy neither more, nor less, nor any diiferent kind
of goods, than his instructions specify,^ or than third persons
may reasonably infer that he has authority to contract foi-.'*
He may be presumed to have such powers as are reasonaljly
incidental to the transaction, as, to fix the terms, and, if
authorized to purchase on credit, to make the necessary
representations as to the solvency of the principal.^
(3) Agent authorized to manage a business. Where an
entire business is placed under the management of an agent,
the authority of the agent may be presumed to be com-
mensurate with the necessities of his situation.^ He is to
conduct the business as it is, buying and selling, hiring
workmen or agents, and otherwise acting as a prudent man
would in the conduct of a like enterprise. He has implied
authority to do whatever is ordinarily incidental to the con-
duct of such a bnsiness, whatever is necessary to the effec-
tive execution of his duties, or whatever is customary in
a particular traded For all contracts made within these
limits the principal is liable ; but not for contracts outside
of these limits. Thus the manager of a hotel may bind his
principal for the necessary supplies of the house,® but not
1 Komorowski ;;. Krumdick, 56 Wis. 23; AVheeler v. McGuire, 80 Ala.
398; Berry v. Barnes, 23 Ark. 411.
2 Si)rague v. Gillett, 9 Met. (Mass.) 91.
3 Olyphaiit r. .McNair, 41 Barb. (N.Y.) 446.
4 Butler V. Maples, 9 Wall. (U. S.) 7G6.
6 Bay ley c. Wilkins, 7 C. B. 886; Wishard v. McXeill, 85 Towa, 474;
Watteau v. Fenwick, 1893, 1 Q. B. 346; Hubbard v. Teiibrook, 121 Pa.
St. 291.
^ Quoted with approval in Lowenstein v. Lombard, 164 N. Y. 324, 329.
7 Edmunds v. Bushell, L. R. 1 Q. B. 97; Jones v. Phipps, L. R. 3 Q. B.
567; Collins v. Cooper, 65 Tex. 460; German Fire Ins. Co. v. Grunett,
112 111. G8.
* Beecher v. Venn, 35 Mich. 4GG.
CONTRACT FOR DISCLOSED PRINCIPAL. 143
for those tliat are not shown to be necessary.^ A manager
of a shop has authority to buy the goods necessary to keep
it in running order.^ But there is ordinarily no implied
authority to make negotiable paper ;^ nor to borrow money
except where the power is absolutely indispensable;* nor to
sell the entire business,^ nor to pledge or mortgage it,^ nor
to use his principal's goods for payment of his own debts."
(4) Insurance agents. An insurance agent, whether called
"general" or "local," — that is, whether his authority is
exercised over a wide or a, narrow territory, — is, within such
prescribed territory, the general representative of his com-
pany, and the law applicable to him is, broadly speaking,
the same as that applicable to a general agent.^ If author-
ized to solicit and accept risks, or issue and renew policies,
he is a general agent, and has ostensibly all the powers
incidental to such an agency or customary in it.^ Within
the scope of such ostensible authority, the agent may bind
his principal, although he acts contrary to special instruc-
tions.i^ Third persons are not affected in their dealings
1 Wallis Tobacco Co. v. Jackson, 99 Ala. 460 ; Brockway v. Mullin,
46 "N. J. L. 448; cf. Cummings v. Sargent, 9 Met. (Mass.) 172.
2 Wattean v. Fenwick, supra ; Hubbard v. Tenbrook, supra ; Banner
Tobacco Co. v. Jenison, 48 Mich. 459.
3 McCullough V. Moss, 5 Denio (N. Y.), .567; New York Iron Mine
V. First N. Bank, 39 Mich. 644; Temple v. Pomroy, 4 Gray (Mass.), 128;
cf. Edmunds v. Bushell, L. R. 1 Q. B. 97.
4 Hawtayne v. Bourne, 7 M. & W. 595; Bickford v. Menier, 107
N. Y. 490; Perkins v. Boothby, 71 Me. 91.
5 Vescelius v. Martin, 11 Colo. 391; Claflin v. Cont. Jersey Works,
85 Ga. 27.
6 Despatch Line v. Mfg. Co., 12 N. H. 205.
1 Stewart v. Woodward, 50 Vt. 78.
8 Millville, &c. Ins. Co. v. Mechanics', &c. Ass'n, 43 N. J. L. 652;
Mentz V. Lancaster F. Ins. Co., 79 Pa. St. 475.
9 Pitney v. Glen's Falls Ins. Co., 65 N. Y. 6; Continental Ins. Co. v.
Ruckman, 127 111. 364; Miller v. Phoenix Ins. Co., 27 Iowa, 203; South
Bend, &c. Co v. Dakota, &c. Ins. Co., 2 S. Dak. 17; Phoenix Ins. Co. v.
Munger, 49 Kans. 178.
1° Ruggles V. American Central Ins. Co., 114 N. Y. 415; Forward t).
Cont. Ins. Co., 142 N". Y. 382; Machine Co. v. Insurance Co., 50 Oh. St.
549 ; Viele v. Germania Ins. Co., 26 Iowa, 9.
144 PRINCIPAL AND THIRD PARTY.
witli an insurance agent within his ostensible authority by
secret or private instructions not brought to their atten-
tion.i ]jiit if the third party knows of the limitations set
by the princii)al upon the agent's authority, a contract be-
yond those limits would not be binding upon the principal.^
Wliethcr restrictions contained in a policy operate as notice
to the insured of the limitations upon the agent's authority,
there is a conflict of judicial decisions. As to acts by the
agent subsequent to the issuing of the policy, the restrictions
in the policy are clearly binding and effective notice.^ But
as to acts prior to or contemporaneous with the issuing of
the policy, it has been held that the restrictions in the policy
are not binding and effective unless actually known to the
insured, since the latter cannot be held to anticipate that
such restrictions will a])pcar in the policy when delivered.*
An agent to receive applications and premiums, and counter-
sign and deliver policies, has no implied authority to receive
notice of loss or to adjust losses.^ The questions connected
with insurance are, however, so numerous, and the authori-
ties so conflicting, that the student must be referred to
special works upon that subject .^
(5) Agent authorized to colled. An agent may be ex-
pressly authorized to collect money for his principal, and
such authority may be implied from circumstances. Such
authority is not necessarily implied from the mere fact that
1 Union :\Iut. Ins. Co. v. Wilkinson, 1;J W:ill. (U. S ) 222; Commer-
cial, &c. Ins. Co. v. State, 113 Ind. 331 ; Ilaitford ins. Co. v. Farrish, 73
111. 166.
2 Baines v. Ewing, L. R. 1 Ex. 320; 4 II. & C. 511 ; Armstrong w.
State Ins. Co., 61 Iowa, 212; Fleming v. Hartford F. Ins. Co., 42 Wis.
616.
8 Quinlan v. Providence, &c. Co., 133 N. Y. 356; Ilankins r. Rockford
Ins. Co., 70 Wis. 1 ; Burlington Ins. Co. v. Gibbons, 43 Kans. l-').
* Continental Ins. Co. v. Ruckman, 127 111. 364; Tubbs v. Dwelling
House Ins. Co., 84 INIich. 646 ; Kausal v. ]\Iinnesota, &c. Ins. Co , 31 Minn.
17; Mutual B. L. Ins. Co. v. Robison, 58 Fed. Rep. 723. See, for au-
thorities pro and con, Joyce on Ins. §§ 434-439.
6 Ermentrout v. Girard, &c. Ins. Co., 63 Minn. 305. But see Joyce
on Ins. § 575 et seq.
« May on Ins. §§ 118-155; 1 Joyce on Ins. §§ 386-603.
CONTKACT FOR DISCLOSED rUINCirAL. 145
the agent is authorized to present the bill or claim to the
third party/ but it may be implied from such fact and its
surroundiug circumstances.''^ Nor is such authority to be
implied from the mere fact that the agent negotiated the con-
tract out of which the claim arose ;'^ but where (he agent
sells and delivers property there is an implied authority to
collect payment.* Authority to collect may be implied from
the conduct of the principal in holding out his agent as
having such authority .° Where the agent is entrusted with
securities received by him upon the negotiation of a loan,
it is imphed that he is authorized to receive the payments
due upon such securities.^ But if the agent has not pos-
session of the securities, no authority to receive payment
upon them can be implied.'' Authority to receive interest
does not necessarily carry wdth it authority to receive the
principal sum.^
An agent authorized to receive payment is not impliedly
authorized to receive anything but money. ^ He cannot
bind his principal by accepting a promissory note,^*^ check,^^
1 Hirshfield v. Waldron, 54 Mich. 649.
2 Luckie v. Johnston, 89 Ga. 321. As to effect of a notice printed on
the bill that it is "payable at the office," or "not payable to agent," see
Luckie v. Johnston, supra ; Law v. Stokes, 32 N. J. L. 249 ; McKindly
V. Dunham, 55 Wis. 515; Putnam v. French, 53 Yt. 402; Trainer v. Mori-
son, 78 Me. 160.
» Butler V. Dorman, 68 Mo. 298; Higgins v. Moore, 34 N. Y. 417;
Crosby v. Hill, 39 Oh. St. 100; McKindly v. Dunham, 55 Wis. 515;
Brown v. Lally, 79 Minn. 38.
* Butler V. Dorman, supi-a; Meyer v. Stone, 46 Ark. 210; Cross v.
Haskins, 13 Vt. 536 ; Barrett v. Deere, M. & M. 200.
5 Law V. Stokes, 32 N. J. L. 249 ; Brooks v, Jameson, 55 Mo. 505 ;
Home Machine Co. v. Ballweg, 89 111. 318; Harris v. Simmerman, 81 111.
413.
6 Williams i\ Walker, 2 Sandf. Ch. (N. Y.) 225; Haines v. Pohlmann,
25 N. J. Eq. 179 ; Crane v. Gruenewald, 120 N. Y. 274.
^ Crane v. Gruenewald, supra ; U. S. Bank v. Burson, 90 Iowa, 191.
8 Doubleday v. Kress, 50 N. Y. 410.
9 Ward V. Evans, 2 Salk. 442; Thorold r. Smith, 11 Mod. 71, 87;
Ward V. Smith, 7 Wall. (U. S.) 447.
" Jackson v. Mutual Benefit Life Ins. Co., 79 Minn. 43.
^^ Broughton v. Silloway, 114 Mass. 71.
10
146 PRINCIPAL AND THIRD PARTY.
druit,' ur luercluindise.- lie cannot cunipromise a claim
and accept less than the I'tdl umonnt due," or snbstitute
himself as the debtor.'* Nor can he extend the time for
jiavment.^ Nor can he receive payment before it is duc.*^
Th(-' j)o\ver to collect may carry with it the power to cmjjloy
the means necessary to that end, including the (■mitloyment
of counsel and tiie bringing of actions at law."
(tj) A(jent authorized to execute or indorse bills, notes, and
chc<'k.s. The j)ower to make or indorse negotiable instruments
must ordinarily be sought in an express authority from the
principal.^ And such autliority is strictly construed and must
be exercised within its express limitations.'-* If the authority
is to make a negotiable instrument for a siiecilied amount, an
instrument for a larger amount is not binding upon the
princii)al.i'^ If the authority is to make a negotiable instru-
ment for a specified time, an instrument for a different time
is not binding.^i Authority to make notes for commercial
purposes carries with it no authority to make accommoda-
tion notes.^2
1 Drain i;. Doggelt, 41 Iowa, 082.
2 Mudgett V. Day, 12 Cal. 13!); Williams v. Jolinston, 92 N. C.
532.
8 Mallory v. Mariner, 15 Wis. 172; l\Ieh-in v. Lamar Ins. Co., 80 111.
44G; Whipple >: Whitman, 13 11. I. 512. But an dgent may receive and
credit a part payment. Whelan v. lleilly, (31 Mo. 565.
* Jackson v. Mut. Ben. L. Ins. Co., 79 Minn. 43; Aiiltman r. Lee, 43
Iowa, 404.
6 Ilutchings V. Manger, 41 N. Y. 155; Mallory v. Mariner, supra.
« Smith V. Kidd, 68 N. Y. 130.
' Ryan v. Tudor, 31 Kans. 306 ; Merrick v. Wagner, 44 111. 206.
8 Robertson v. Levy, 19 La. An. 327; Temple v. Pomroy, 4 Cray
(Mass.), 128; Jackson v. Bank, 02 Tenn. 154.
9 Camden Safe Dep. & T. Co. v. Abbott, 44 N. J. L. 2."i7 ; Batty r,
Carswell, 2 Johns. (N. Y.) 48; Nixon v. Palmer, 8 N. Y. 398 ; Farming-
ton Sav. Bank v. Buzzell, 61 X. H. 612.
10 Blackwell r. Ketcham, 53 Ind. 1S4; King v. Sparks, 77 Ga. 285.
11 Batty V. Carswell, 2 Johns. (N. Y.) 48; New York Iron Mine v.
Citizens' Bank, 44 Mich. 344; King v. Sparks, 77 Ga. 285. A slight
variation may not be fatal. Adams v. Flanagan, 36 Vt. 400.
1- AVullace v. Bank, 1 Ala. 505; .Etna N. B. r. Ins. Co., 50 Coim.
167.
CONTRACT FOR DISCLOSED PRINCIPAL. 147
The power to make or indorse negotiable instruments may
be implied as a necessary incident of powers expressly con-
ferred.i But the mere fact tliat the agent is authorized to
manage a business docs not of itself show a power to make
such instruments.^
§ 108. Contracts unauthorized.
. If the agent has neither actual nor apparent authority for
his act, the principal is not bound, for (1) he never authorized
the contract, and (2) he never led a reasonably prudent man
to believe that he authorized it. The third party must there-
fore look to the agent alone for redress.^ If an agent be
appointed by words in prwsenti, but it is agreed that the
agency shall not begin until the happening of some condition,
the principal is not liable for contracts entered into by the
agent in the interim unless the third party has been misled
by the exhibition by the agent of an unconditional power, or
by other conduct equivalent to a "holding out" on the part
of the principal."* A third person has no riglit to rely upon
the representations of the agent as to his authority,^
To this rule there are two exceptions, one based upon
doctrines peculiar to negotiable instruments, and one upon
statutory modifications. If the principal entrusts to the
agent negotiable paper, and the agent sells or pledges it for
a valuable consideration to a purchaser or pledgee without
notice of its diversion, the latter gets a good title as against
the principal, as fully as if the principal had authorized the
transfer.^ Under the Factors Acts a principal who entrusts
1 Edmunds v. Bushell, L. R. 1 Q. B. 97; Odiorne v. Maxcy, 13 Mass.
178; Yale v. Earaes, 1 Met. (Mass.) 486.
2 New York Iron Mine v. Bank, 39 Mich. 644 ; Temple v. Poraroy,
4 Gray (Mass.), 128; Perkins v. Boothby, 71 Me. 91.
8 Baines v. Ewing, L. R. 1 Ex. 320 ; Re Cunningham, 36 Ch. Div.
532; Jackson v. Bank, 92 Tenn. 154; Rice v. Peninsular Club, 52
Mich. 87.
4 Rathbun v. Snow, 123 N. Y. 343.
8 Ibid.
* Goodwin v. Robarts, 1 App. Cas. 476; Simmons v. London Joint
Stock Bank, 1892, App. Cas. 201 ; Cheever v. Pittsburgh, &c. R., 150
N. Y. 59.
148 PRINCIPAL AND TIIIliD I'AIiTY.
liis goods to a factor for sale is bound by any sale, plcdu'c, or
other disposition of the goods, to a purchaser for value and
without notice of the diversion, as fully as if such transfer
had been authorized.^
J; 109. Contracts voidable.
A principal is not bound by contracts made within the
scope of the authority where they are brought about by fiaud
or collusion between the agent and the third i)arty. Thus if
the third party promise the agent a commission or reward
for bringing about a contract between the one promising and
the principal of the agent, the contract so induced will be
voidable at the election of the principal. "' Any agreement or
understanding between one principal and the agent of another,
by which such agent is to receive a commission or reward if
he will use his influence with his principal to induce a con-
tract, or enter into a contract for his principal, is pernicious
and corrupt, and cannot be enforced at law. . . . Such agree-
ments are a fraud upon the principal, which entitle him to
avoid a contract made through such agency." ^ But tlie
principal may elect to take the benefit of the contract not-
withstanding the fraud, and in such case the third party will
be bound. And this is so even if the princi})al be a public
corporation, as a city, since the contract is neither malum
in se nor malum prohibitum, but one which the city might
have made.^ And after such election it may sue the third
party for fraud, and the agent for money had and received to
its use.*
2. In rarticular Agencies.
§ 110. Introductory.
Little lias been said heretofore as to the scope of particular
agencies bearing distinctive names, nor will the purpose of
til is work admit of any extended discussion of the subject.
1 Po^t, § 171.
2 City of Findlay v. Pertz, 66 Fed. Rep. 427; Smith r. Sorby, 3 Q. B.
D. 5.j2 n.
' City of Findlay ?'. Pertz. supra.
* Ibid. ; Mayor i;. Lever, 1891, 1 Q. B. 168.
CONTRACT FOR DISCLOSED PRINCirAL. 149
It will be useful, however, to call attention at this point to
the fact that some agents have by custom a wider apparent
authority than others, and that for the most part these are
agents who are regularly engaged in transacting a special
kind of business for the public generally. They are not, like
common carriers and innkeepers, obliged to serve everybody
who applies, and yet it is largely the custom to do so ; and
because of this, and the settled nature of their business, they
are governed by well understood mercantile customs, in the
light of which the principal on the one hand and the third
person on the other are always presumed to deal. Another
class of agents are those who serve but one principal, but
from the nature of the principal's business are representing
him in dealings with the public generally. These also, not
because of their own business, as in the first class, but
because of their principal's business, are governed by well
understood mercantile customs. The first class is illus-
trated by the agencies of factors, brokers, auctioneers, and
attorneys at law. The second class is illustrated by the
agencies of cashiers of banks, insurance agents, and ship-
masters.
§ 111. Factors.
(1) Definition. A factor is an agent whose regular busi-
ness it is to receive consignments of goods and sell them for
a commission. He may sell for the ordinary commission for
the services of such an agent, or he may sell for an increased
commission and guarantee his principal in the collection of
the price. In the first case, he is called simply a factor or
commission merchant ; in the second, he is called a del
credere factor or commission merchant, and is said to sell on
a del credere commission. ^ If he accompanies a vessel and
represents shippers at the ports where the vessel may touch,
he is termed a supercargo.
(2) Scope of authority. As between the principal and the
factor, the latter is bound to obey the instructions, and is
liable like any other agent for any damages suffered from
1 Ante, % 96.
150 PRINCIPAL AND TIIIIID PAKTY.
his failure to do so.^ He can depart from sndi instructions
only wlicn justified by an emergency in i\w nature of reason-
able necessity ,2 or where he acts to protect himself from loss
on his own advances or disbursements.^ But as between the
principal and third persons, the former is bound by the
contracts made by the factor within the apparent scope of
his authoritv. And this is very large. Custom has annexed
to the agency powers so extended that buyers of the goods
are o-enerally protected when they buy in the usual manner
and in. the course of commercial dealings, and these customs
have been supplemented by legislation looking to the same
end.* Accordingly the factor has power to sell the goods in
his own name, and at such time and for such prices as he
deems best ;^ to warrant them so far as warranties are usual
in the sale of similar goods '/' to receive payment in a sale
for cash, or negotiable paper in a sale on credit ; ' to sell on
credit so far as it is usual in similar cases to do so ;^ and even
to pledge the goods when necessary to secure the payment of
charges against them or a draft drawn against the prospective
proceeds by the principal.^ lie has no authority to barter
the goods in exchange for others ; '^^ or to pledge them except
to secure advances ; " or to receive anything for them except
lawful currency ; or to compromise or arbitrate or subse-
1 Talcott V. Chew, 27 Fed. Rep. 273; Phillips v. :\Ioir, G9 111. 155.
2 Greenleaf v. Moody, 13 Allen (Mass.), 363.
8 Davis V. Kobe, 36 Minn. 211 ; Weed v. Adams, 37 Conn. 378; Parker
V. Brancker, 22 Pick. (Mass.) 40. Cf. Sims v. Miller, 37 S. C. 402.
* Post, § 171.
6 Baring v. Corrie, 2 B. & A. 137; Smart r. Sandars, 3 C. B. 380.
<-' Dingle v. Hare, 7 C. B. n. s. 145; Randall v. Kehlor, GO Me. 37;
Argersinger v. Macnaughton, 114 X. Y. 535.
7 Drinkwater v. Goodwin, Cowp. 251 ; Daylight Burner Co. v. Odlin,
51 N. II. 56.
8 Houghton V. Matthews, 3 B. & P. 485; Goodenow v. Tyler, 7 Mass.
36; Pinkham v. Crocker, 77 Me. 503.
9 Boyce v. Bank, 22 Fed. Rep. 53.
10 Guen-eiro v. Peile, 3 B. & A. 616; Wheeler, &c. Co. v. Givan, 65
Mo. 89.
11 Martini I'. Coles, 1 M. & S. 140; Warner r. :\Iartin, 11 IIow. (U. S.)
209.
CONTRACT FOR DISCLOSED PRINCIPAL. 151
quently extend the time of payment of the amount due on
the sale.i The factor may sell in his own name, and it
follows that the customary powers partake largely of the
powers of an owner. The limitation is that the agent must
sell, not pledge, or barter ; but even this limitation has been
removed by statute in many jurisdictions for the protection of
innocent parties.^
(3) Rights and liaUlities of principal. For all contracts
made by the factor within the scope of the authority, as above
explained, the principal is liable, and under the Factors Acts
he is bound even where the factor pledges or barters the
goods for his own benefit.^ And this is true whether the
principal be disclosed or not. In like manner the principal
may avail himself of the benefits of the contract, whether
disclosed or not.* The subject of foreign principals dealing
through domestic factors is discussed hereafter.^
§ 112. Brokers.
(1) Definition. A broker is an agent or middleraaii whose
business it is to make a bargain for another, or bring persons
together to bargain, and receive a commission on the trans-
action as compensation.^ He differs from a factor in that he
does not usually have possession of the property which is the
subject matter of the transaction, and in that he deals in the
name of his principal. The field of brokerage is much larger
than that of factorage. The factor buys and sells goods.
The merchandise broker also does that ; but there are in
addition note and exchange brokers who buy and sell nego-
tiable paper and foreign exchange ; stock brokers who buy
and sell stocks, bonds, and other securities ; real estate brokers
who buy and sell, rent and mortgage real estate; insurance
1 Carnochan v. Gould, 1 Bailey (S. C), 179; Howard v. Chapman,
4 C. & P. 508.
2 Post, § 171. '^ Ibid.
" Post, § 129. s po^t, § 187.
« Sibbald v. Bethlehem Iron Co., 83 X. Y. 378. See this case also for
discussion of the question when a broker has earned his commissions;
and also Plant v. Thompson, 42 Kans. 6G4.
152 ruiNoir.vL and ttiikd i-autv.
brokers who negotiate insurance usually for the one insured ;
and other classes of brokers named lor tiie ]»articular character
of business transacted.
(2) Scijpi' of autliority. The scope of a broker's authority
is much narrower than that of a factor. He must obey in-
structions or act in accordance with recognized usages.^ A
merchandise broker is engaged, for instance, in selling goods
for his principal, but it is doubtful whether he lias any author-
ity to wan-ant them,^ although of course a warranty in the
nature of a condition would, if false, avoid the contract \^ and
a " commercial traveller" who represents but one principal is
to be distinguished from a broker,* He is authorized to make
the memorandum required to satisfy the Statute of Frauds.^
He may give credit, but only if usage warrants.^ But he has
no authority to sell in his ow^n name," or to agree to barter
or pledge, or to rescind a contract once made by him,^ nor
has he any authority to receive payment since he has not
possession of the goods.^ As to other brokers than those
engaged in buying and selling goods, their powers are fixed
almost wholly by custom, and the principal is bound by all
contracts within the limits of the custom.^*'
(3) Liahilltij of jrrmcipal. A principal is liable for the
contract of his broker within the scope of the authority,
and also for his frauds/^ but not beyond the scope of the
agency ,^2
^ AViltshiro v. Sims, 1 Camp. 258 ; Clark v. Cumming, 77 Ga. 6-4.
2 Dodd V. Farlow, 11 Allen (Mass.), 42(5 ; Smith v. Tracy, 3G X. Y. 79.
8 Forcheimer v. Stewart, 65 Iowa, 593.
* As in Pickcrt r. Marston, OS Wis. 465.
6 Parton v. Crofts, 16 C. B. n. s. 11.
6 Boorman v. Brown, 3 Q. B. 511; White v. Fuller, 67 Barb. (X. Y.)
207.
T Baring v. Corrie, 2 B. & A. 137.
8 Xenos V. Wickham, L. R. 2 II. L. 296; Saladin v. Mitchell, 45 111. 79.
« Higgins r. Moore, 34 X. Y. 417; Crosby y. Hill, 39 Oh. St. 100.
10 Skiff y. Stoddard, 63 Conn. 198; Markham v. Jaudon, 41 X. Y. 235,
256.
" Samo V. Ins. Co., 20 U. C. C. P. 405, affirmed 2 Can. Sup. C. 411.
^'^ Clark V. Cumming, 77 Ga. 64.
CONTRACT FOR DISCLOSED PRINCIPAL. 153
§ 113. Auctioneers.
(1) Definition. An auctioneer is an agent whose business
it is to sell property publicly to the highest bidder and receive
a commission on the proceeds of the sale. He may receive
compensation otherwise, or may work gratuitously, but his
habit is, and therefore an element of his business is, to re-
ceive commissions. He represents the seller in making the
terms of the sale, but may and usually does represent the
buyer also in reducing the terms to writing, to satisfy
the Statute of Frauds.^ Until the fall of the hammer he is
the agent of the seller • after that he is the agent of both
parties.
(2) Sco'pe of authority. As to his principal an auctioneer
must obey instructions like any other agent.^ As to third
persons authority is to be gathered from the customs usually
followed in auction sales. These are : to sell for cash, and
not on credit or for other goods or for negotiable paper ; ^ to
receive the price in cash at the time of the sale, or such a
deposit of cash as is prescribed by the terms of the sale ; and,
if it be not paid, to bring an action in his own name for its
recovery;* to follow the terms of the sale, when these are
known, and no others, so that if the terms prescribe for an
interest-bearing note, with surety, cash cannot be received
instead.^ Ordinarily he has no implied authority to warrant
the quality of the goods sold ; ^ or to rescind a sale once made ; '^
or to sell at private sale.^ If he exceeds the authority actually
conferred, and that implied from the nature of the agency,
the principal is not bound.^ But if he keeps within the
1 White V. Proctor, 4 Taunt. 209 ; Walker r. Herring, 21 Gratt. (Ya.)
678; Johnson r. Buck, 35 X. J. L. 338.
2 Farr v. John, 23 Iowa, 286.
8 Williams v. Evans, L. R. 1 Q. B. 352; Broughton v. Silloway, 114
Mass. 71.
* Thompson r. Kelly, 101 Mass. 291 ; Johnson v. Buck, su-pra.
* Morgan v. P>ast, 120 Ind. 42.
*> Blood V. French, 9 Gray (Mass.), 197; Payne v. Leconfield, 51 L. J.
Q. B. 642.
7 Nelson v. Aldridge, 2 Stark. 435.
8 Marsh v. Jelf, 3 F. & F. 234. 9 Bush v. Cole, 28 N. Y. 261.
154 PRINCIPAL AND THIRD PARTY.
autliority, the principal is liable for refusing to complete the
contract.^
§ 114. Attorneys at law.
(^1) Ihti/iition. An attorney at law is nn agent whose
business it is, as a duly (lualified oflicer of a court, to repre-
sent his principal in the conduct of litigation or other legal
proceedings. A distinction exists in England between bar-,
risters, who represent the client at the bar, that is, when
actually before the court, and S(jlicitors, who represent the
client generally throughout a legal proceeding.^ In the
United States, however, the distinctions between barristers,
or advocates, or counsel, and solicitors, or attorneys, or proc-
tors, has practically disai)peared. The term attorney at law
now includes the notion formerly conveyed by these separate
terms. The courts generally have the power to prescribe the
qualifications of those who appear before them to represent
litigants, and it has even been doubted whether the legisla-
ture could, without constitutional sanction, de[»rive the courts
of this power.^
(2) Scope of authority. The attorney is appointed to con-
duct the affairs of his client in court, and has therefore a
very wide discretion in their management. All the usual and
customary steps in a j^roceeding may be taken under this
implied or customary authority and will bind the client.
"An attorney at law has authority, by virtue of his employ-
ment as such, to do in behalf of his client all acts, in or out
of court, necessary or incidental to the })rosccution and man-
agement of the suit, and which affect the remedy only, and
not the cause of action." ^ It has been generally held in the
United States that this limitation of the authority to the con-
trol over remedies precludes the power to compromise the
1 Cockcroft V. Muller, 71 N. Y. 367.
"• See Sweet's Law Dictionary; 19 Am. Law Rev. 077. For the his-
tory of the rise of attorneys at law as a special class, see 1 Pollock and
Maitlanrl's Mist, of Eiig. Law. 190-196.
8 Matter of GoodelC 39 Wis. 232; In re Day, 181 111. 73.
* Moulton V. Bowker, 115 Mass. 36; Clark i'. Randall, 9 Wis. 135.
CONTRACT FOR DISCLOSED TRINCIPAL. 155
claim, cither before or after judgment.^ In England the hold-
ing is otherwise, and in some of the United States.^ But it
is held tliat he may submit the claim to arbitration. ^ He may
agree that property shall be sold pending an appeal as to the
validity of a lien, for which a decree of sale has already been
entered, and the money paid into court to abide the decision
on the appeal."^ He may direct a levy as a proper remedy for
the collection of a claim, and if the levy be wrongful the prin-
cipal is liable.^ In general he may control tlie management
of the proceeding, but he " may not compromise tlie rights of
his client outside of his conduct of the action, or accept less
than the full satisfaction sought, or release his client's right,
or subject him to a new cause of action." "^
§ 115. Bank cashiers.
(1) Definition. " The cashier is tlie executive officer,
through whom the whole financial operations of the bank
are conducted. He receives and pays out its moneys, collects
and pays its debts, and receives and transfers its commercial
securities. Tellers and other subordinate officers may be
appointed, but they are under his direction, and are, as it
were, the arms by w^hich designated portions of his various
functions are discharged." '' A bank cashier is the chief
executive agent of the bank; the directors are the delibera-
tive managing agents. " It is not wholly unapt to liken the
board of directors to a bench of judges, and the cashier to
the clerk of the court." ^
1 Whipple V. ^W\\tm&\^, 13 R. I. 512; Maddux v. Bevan, 39 Md. 485;
Watt V. Brookover, 35 W. Va. 323; Preston v. Hill, 50 Cal. 43.
2 Prestwich v. Poley, 18 C. B. n. 8. 806; Bonney v. Morrill, 57 Me. 368.
3 Faviell v. Eastern Counties R., 2 Ex. 344 ; Brooks v. New Durham,
55 N. H. 559; Sargeant v. Clark, 108 Pa. St. 588. Cf. McPherson v.
Cox, 86 N. Y. 472.
4 HaUiday v. Stuart, 151 U. S. 229.
5 Morris v. Salberg, 22 Q. B. D. 614; Caswell i'. Cross, 120 Mass.
545 ; Howell v. Caryl, 50 Mo. App. 440.
« Lewis V. Duane, 141 N. Y. 302, 314; Kirk's Appeal, 87 Pa. St. 243;
James v. Ricknell, 20 Q. B. D. 164.
7 Merchants' Bank v. State Bank, 10 Wall. (U. S.) 604, 650,
8 1 Morse on Banking, § 152.
156 PmNCIPAL AND THIRD PARTY.
(2) Scope of authority. Custom lias fixed with considera-
ble precision the authority of a bank cashier, and tiiis authority
ho may be presumed to possess without special dcle<,^ation
from the directors, and even as against a sjiceial restriction
nnknown to a third person dealing with the hank. The ques-
tion whether he does or does not possess authority to du any
particular act is ordinarily one for the coui't and not for the
jury.i By the powers inherent in his oftice a cashier has
anthority to draw checks or drafts upon the funds of the
bank deposited with other banking or trust comi)anies ; ^ to
indorse and transfer for collection, discount, or sale the nego-
tiable paper or securities owned by the bank ; ^ to buy and
sell bills of exchange;^ to borrow money ;^ to collect the
moneys due the bank ;6 and to certify checks drawn by de-
positors against funds in the bank." He has no power to
bind the bank to accept a draft to be drawn in the future,^
or to bind the bank on a certification of his own check, » or
as accommodation indorser of his own note or bill.^*^
§ 116. Shipmasters.
(1) Definition. A shipmaster is an agent who has entrusted
to him the management and government of the ship upon a
voyage. He is the first or head officer upon a merchantman,
and as such is responsible for the safety of the ship and cargo,
and is vested in consequence with very extensive powers.^^
1 Merchants' Bank v. State Bank, supra.
2 :\[echanics' Bank r. Bank of Columbia, 5 "Wlieat. (U. S.) 326.
8 Wild r. Bank, 3 Mason (U. S. C. C), 505.
" Unci.
6 Barnes v. Ontario Bank, 19 N. Y. 152; Grain i'. Bank, 11-1 Til. 516.
6 Concord v. Bank, 16 N. H. 26.
' Merchants' Bank v. State Bank, supra : Cooke r. State Bank, 52
N. Y. 96. A verbal certification was held good in Espy r. Bank, 18 Wall.
(U. S.) 604. Denying a cashier's inherent power to certify checks, see
Mussey v. Eagle Bank, 9 Met. (Mass.) 306.
8 Flannagan v. California N. Bank, 56 Fed. Rep. 959.
5 Claflin V. Farmers', &c. Bk., 25 N. Y. 293.
1'^ West St. Louis Sav. Bk. v. Shawnee County Bk., 95 U. S. 557.
Ji Hubbell V. Denison, 20 AVend. (N. Y.) 181; Martin v. Farnsworth,
1 Jones & Spencer (N. Y. City Sui^erior Court), 246.
CONTRACT FOR DISCLOSED PKINCIPAL. 157
(2) Scope of authority. As regards the navigation of the
vessel the master has ahsolute control and authority. As
regards discipline his authority is extensive, but its wilful
abuse will not render the owner liable to a seaman, though it
might to a passenger.^ And such discipline is justified at all
only on the high seas and not in port.^ As regards authority
to make contracts, the nature and extent of such authority is
determined by the customs of the seas and the necessities of
the situation, and is to be determined by the law of the
country to which the ship belongs.^ He has authority to
make " contracts relative to the usual employment of the
ship ; to give a warranty in such contracts ; to enter into
contracts for repairs and necessaries to the ship;" to sell a
perishable cargo to preserve it from destruction, or a wrecked
ship and cargo where it is impossible or highly imprudent to
attempt to carry them to their destination ; to hypothecate
the ship, freight, and cargo in case of extreme necessity ;
to borrow money in case of extreme necessity,^ The further
discussion of a shipmaster's powers belongs to a treatise on
shipping and admiralty law.
1 Gabrielson v. Waydell, 135 N. Y. 1.
2 Padmore v. Piltz, 44 Fed. Rep. 104.
8 The Karnak, L. R. 2 P. C. 505; The Gaetano and Maria, L. R.
7 P. D. 137; The August, 1891, Pro. 328.
4 Evans on Agency (2d ed.), pp. 146-152 ; Swell's ed. pp. 176-182 ;
Story on Agency, §§ 116-123; McCready v. Thorn, 51 N. Y. 454; Gunn
V. Roberts, L. R. 9 C. P. 331; Arthur v. Barton, 6 M. & W. 138.
158 PRINCIPAL AND THIRD PARTY.
K\
CHAPTER X.
Y ' CONTRACT OF AGENT IN BEHALF OF AN UNDISCLOSED PRINCIPAL.
§ 117. Introductory.
It sometimes haj)pens tliat an agent makes a contract in his
own name and ostensibly for his own benefit, but in reality
for the benefit of an undisclosed principal. In such a case
there are two relations established, — first, the relation of the
agent to the third person under the contract made in the
agent's name, and second, the relation of the principal to
the third person under the contract made for the principal's
benefit. The first relation will be discussed in a subsequent
chapter.^ We are now concerned with the liabilities and
rights of the undisclosed principal.
In order to make clear the outlines of a difficult branch of
the law we will discuss: (1) the doctrine of the privity of
contract in the English law and its general application to the
subject of the undisclosed principal ; (2) the rules applicable
to the liability of an undisclosed principal ; (3) the rules ap-
plicable to the rights of an undisclosed principal.
1. The Doctrine of Privity of Contract.
§ 118. General statement of the doctrine.
A fundamental notion of the common law is that a contract
creates strictly personal obligations between the contracting
parties. " A person has a right to select and determine with
whom he will contract, and cannot have another person thrust
upon him without his consent." ^ It was this notion that lay
at the basis of the common law rules as to the non-assignability
1 Post, § 196 e< seq.
2 Boston Ice Co. i'. Potter, 123 Mass. 28 ; Boultou v. Jones, 2 II. & N.
564.
CONTRACT FOR UNDISCLOSED PRINCIPAL. 159
of contracts ; ^ it has even yet yielded only to the extent of
allowing an assignee to enforce rights owing to his assignor
where the assignor has fully performed his obligations and it
can make no difference to the defendant to whom he pays
money or delivers goods, or where the assignee can fairly be
deputized to discharge the assignor's duties, the latter remain-
ing liable for any breach.^ It is still a question of much diffi-
culty as to how far executors or administrators succeed to the
rights and obligations of their decedents under operation of
law.3 The doctrine is very comjirehensive that "you have a
right to the benefit you contemplate from the character,
credit, and substance of the party with whom you contract."*
Even if B makes a promise to C, upon a consideration
moving from the latter, expressly for the benefit of D, D can-
not in England maintain an action upon the promise.^ In the
United States, however, such actions are generally allowed, at
least where at the time of the promise there is a duty or ob-
ligation owing from C to D which C seeks to dischai-ge or
provide for by giving to D the benefit of the contract with B.
This has been put upon the doctrine of agency and subsequent
ratification;^ upon the doctrine of a kind of common law
" trust " enforceable as for money or other thing had and re-
ceived to the benefit of C ; ' upon the doctrine " that the law,
1 Pollock on Cent. (6th ed.) 204, 701; Ames, 3 Harv. Law Rev. 338-
339.
2 Arkansas, &c. Co. v. Belden Co., 127 U. S. 379 ; Rochester Lantern
Co. V. Stiles, &c. Co., 135 K Y. 209; La Rue v. Groezinger, 84 Cal. 281;
Robson V. Drummond, 2 B. & Ad. 303; British Waggon Co. v. Lea, L. R.
5 Q B. D. 149.
3 Dickinson v. Calahan's Adni'rs, 19 Pa. St. 227; Lacy y. Getnian, 119
N. Y. 109; Drummond u. Crane, 159 Mass. 577.
* Humble v. Hunter, 12 Q. B. 310, 317; Boston Ice Co. v. Potter,
supra ; Arkansas, &c. Co. v Belden Co., svpra.
6 Tweddle v. Atkinson, 1 B. & S. 393. Accord Exchange Bank v.
Rice, 107 Mass. 37; Borden v. Boardman, 157 Mass. 410; Linneman v.
Moross, 98 Mich. 178.
^ See opinion of Johnson, C. J., and Denio, J., in Lawrence v. Fox,
20N. Y. 268.
' See Vrooman i;. Turner, 69 N. Y. 280; Jefferson v. Asch, 53 Minn.
446.
160 ITJ-NCIPAL AND TllIKD TARTY.
o{)eratin<r upon tlie act of the jturties, creates tlic duty, cstal*-
lislies the privity, and implies the promise and oblig"ation on
which the action is founded;"^ and upon a doctrine of con-
venience, namely, that " it accords the remedy to the party
Mho in most instances is chielly interested to enforce the
promise, and avoids multijdicity of actions."''^ The doctrine
as applied in the United States is confessedly an anomaly,
but serves to illustrate the fact that anomalous doctrines arc
sometimes admitted into the law where they aid to work out
su])stantial justice, and that the strict common law rule as to
j)rivity of contract has important exceptions.^
§ 119. Application to agency generally.
The licneral doctrines of agency do not run counter to the
fundamental dogma as to privity of contract. Where the
])riucipal is disclosed the third party deals with him, and not
with the agent, and relies upon his character, credit, and sub-
stance, and not upon that of the agent. The agency is merely
a means through which the minds of the principal and the
third party meet in mutual agreement. When once the con-
tract is formed the agent drops out. The dii'liculties arising
from unauthorized contracts subsequently ratified have already
been discussed.'* The difficulties arising in the enforcement
of rights against the agent upon an unauthorized contract not
subsequently ratified will be discussed hereafter.^ We have
now to consider tlie difTiculties attending the enforcement of
rights against an undisclosed ])rincipal, and the greater diffi-
culties attending the enforcement of rights by an undisclosed
principal.
§ 120. Application to contracts for undisclosed principal.
A more scri(jus difiiculty presents itself in the doctrines
peculiar to undisclosed princii)als. In the case of a conti-act
1 McDowell V. I.aev, 35 Wis. 171.
2 Lehow V. Simonton, 3 Colo. 3i0 ; Wood i-. Moriarty, 15 R. I. 518.
8 See Huffcut's Ausou on Coiit. pp. 279-282; Ilaniman on Cont.
pp. 216-228.
* Ante, § 38. An unauthorized contract made for an undisclosed princi-
pal cannot be ratified. Kcighley v. Durant, 1901, App. Cas. 210; ante, § 32.
* Post, § 183.
CONTRACT FOR UNDISCLOSED miNCIPAL. 161
made by an agent in his own name, as princij)al, tlie third
party obviously relies upon the character, credit, and sul)-
stance of the agent alone, and intends to acquire rights
against the agent and against no one else, and to incur obli-
gations to the agent and to no one else. So far at least as the
third party is concerned it is a contract between him and the
agent, and the principal is never for a moment in his contem-
plation. The strict application of the common law rule would
lead to the conclusion, therefore, that the principal could
neither sue nor be sued upon the contract.
Yet just the opposite conclusion prevails. The case escapes
the common law doctrine and establishes the sweeping rule
that an undisclosed principal may both sue and be sued upon
a contract made in his behalf or to his secret use by his
agent. " If an agent makes a contract in his own name, the
principal may sue and be sued upon it ; for it is a general
rule, that whenever an express contract is made, an action is
maintainable upon it, either in the name of the person with
whom it was actually made, or in the name of the person with
whom, in point of law, it was made." ^ The rule is probably
the outcome of a kind of common law equity, powerfully aided
and extended by the fiction of the identity of principal and
agent and the doctrine of reciprocity or mutuality of con-
tractual obligations. The rule has two distinct parts : (1) that
the undisclosed principal may be sued ; (2) that the undis-
closed principal may sue. The first is probably based upon
the notion that it is inequitable to allow the principal to take
the benefits of a contract made by his agent and compel the
third person to look only to the agent for compensation. The
second is based upon the notion that contract obligations re-
quire mutuality, and that, since the principal may be sued
he must also be permitted to sue. The fiction of identity is
employed to establish a real or true assent on the part of the
principal in place of an assent or promise constructed by
the law, such as is created in all that class of obligations
known as quasi-contracts. Whatever the true grounds of this
doctrine, it is at all events conceded that the one case in which
1 Cothay v. Feunell, 10 B. & C. 671.
U
1G2 PRINCirAL AND TIIIKD PARTY.
a person not a party to a contract may nnqnostionably sue
and also 1)C sued is the case of tlie undisclosed principal.
§ 121, Suits against undisclosed principal.
The action against an undisclosed i)i-incipal rests logically
upon the ground that the principal's estate has had the
benefit of the contract and ought to bear the burden. This
doctrine is as old as the Year Books in which wc read that an
action of debt was maintained against an abbot on the count
that the plaintiff had lent money and sold a horse to a monk,
" which money and horse came to the profit of the house,
etc." ^ It is illustrated in many modern cases, where, clearly,
the decision need not go further than the doctrine that where
the principal's estate is unjustly enriched at the expense of the
third party's, the latter may maintain assumpsit for the value
of the benefit conferred.^ Such an action does not logi-
cally rest upon a true contractual obligation arising from the
assent of the parties, but upon a quasi-contractual obligation
created by the law on grounds of justice and fair dealing.
But for the aid of the fiction of identity of principal and
agent the courts might have been driven into so treating it.
and limiting the recovery to the measure of benefits conferred.
In that case the doctrine would never have been extended to
include the second half of the rule which gives the undisclosed
jirincipal an action against the third party, except in the case
where the third person's estate had Ijcen unjustly enriched at
the expense of the principal's.
This is illustrated in the case of Kayton v. Barnctt.^ X
having declined to sell to P, the latter procured A to purchase.
X expressly stated that he would not sell to P, and A there-
upon assured X that he was not buying for P but for himself.
1 Y. B. 34 & :55 Edw. I. pp. 560-560 (1307). See also Doctor and Stu-
dent (1518), where we read (l)ia. ii. cli. 42): ''If the .servant lu that
case buy them in his own name, not speaking of his master, the master
shall not be charged, unless the things bought come to his use." xiud
see Gurratt v. Culluin, stated in Scott v. Surman, Willes, 400, 405.
2 Nelson v. Powell, 3 Doug. 410; Wilson v. Hart, 7 Taunt. 205; Kay-
ton V. Barnett, 116 N. Y. 625; Plenderson v. Mayhew, 2 Gill (INId.), 393.
« 116 X. Y. 625.
CONTEACT FOR UNDISCLOSED PRINCIPAL. 163
X was nevertheless allowed to maintain an action against P
for the price. The court through FoUett, Ch. J., said : " Not-
withstanding the assertion of the plaintiffs that they would
not sell to the defendants, they, through the circumvention of
Bishop and the defendants, did sell the property to the de-
fendants, who have had the benefit of it, and have never paid
the remainder of the purchase-price pursuant to their agree-
ment. Bishop was the defendants' agent. Bishop's mind
was, in this transaction, the defendants' mind, and so the
minds of the parties met, and the defendants having, through
their own and their agent's deception, acquired the plaintiffs'
property by purchase, cannot successfully assert that they are
not liable for the remainder of the purchase-price because
they, through their agent, succeeded in inducing the de-
fendants to do that which they did not intend to do, and,
perhaps, would not have done had the defendants not dealt
disingenuously."
Here is a curious mixture of the equitable notion that the
defendant ought to reimburse the plaintiff for the benefits
received, and the notion that the defendant had in verity
promised to do so because his agent had promised, and the
agent's mind is the principal's mind and so the minds of the
parties have met.
But the doctrine once established that the contract obliga-
tion rests upon assent, and it will speedily be extended beyond
the cases where benefits have been conferred, and the third
party will be given an action upon a bilateral executory con-
tract.i And actions will be given in cases where the principal
is guilty of no inequitable conduct, as where, for instance, he
has given his agent funds with wliich to purchase, and the
agent has purchased in his own name on credit, under circum-
stances where, had the agency been known, it would be reason-
able to infer that he had authority to purchase on credit.^
1 Episcopal Church v. Wiley, 2 Hill Ch. (S. C.) 584; s. c. 1 Riley,
Ch. (S. C.) 156; Schmaltz r. Avery, 10 Q. B. 655.
2 See remarks of Wallace, J., in Fradley v. Ilyland, 37 Fed. Rep. 49,
52-53, and the conclusion, " But it is probably too late to consider the
1G4 nuNcirAL and tiiikd party.
§ 122. Suits by undisclosed principal.
Having reached the conclusion, by aid of the fiction of
identity, that the minds of the parties have met, it is easy
to invoke the doctrine of recijirocity or mutuality of con-
tract and hold that the undisclosed principal may also sue
the thiid party, although, in fact, the third party never
undertook and never intended to undertake an obligation
in favor of the principal,^ " The contract of the agent is
the contract of the principal, and he may sue or be sued
thereon, though not named therein ; and notwithstanding
tlie rule of law that an agreement reduced to writing may
not be contradicted or varied by parol, it is well settled that
the ])rincipal may show that the agent who made the contract
in his own name was acting for him."^ And so it follows
that a contract made between A and B, each believing the
other to be acting in his own behalf, may be shown to be a
contract between P and X, the two undisclosed principals.^
Earlier cases which held that only the promisee in the
written instrument could sue upon it/ must be regarded as
overruled or overwhelmed by later decisions which proceed
on the theory that the nominal promisee (the agent) and
the real promisee (the principal) are identical.
§ 123. Parol evidence rule.
It is now settled law that the admission of parol evidence
to show that a written contract made in the name of the
agent was in fact made in behalf of an undisclosed, or
if disclosed, unnamed principal, does not violate the rule
questions thus suggested upon principle." See also Watteau v. Fenwick,
1893, 1 Q. B. 346 ; Hubbard v. Tenbrook, 124 Pa. St. 291.
1 Cothay v. Fennell, 10 B. & C. 671; Taintor u. Prendergast, 3 Hill
(N. Y.), 72; Eastern R. Co. v. Benedict, 5 Gray (Mass.), 561. For an
illustration of the difficulty of establishing this doctrine, see Scriuishire
V. Alderton, 2 Str. 1182.
2 Ford V. Williams, 21 How. (U. S.) 287; Burton v. Goodspeed, 69
111. 237.
8 Darrow v. Ilorne Produce Co., 57 Fed. Rep. 463.
* United States v. Parmele, 1 Paine (U. S. C. C), 252. Cf. Hunting-
ton V. Knox, 7 Cush. (Mass.) 371.
COXTKACT FOR UNDISCLOSED rKINGirAL. 165
against the admission of parol evidence to vary the terms
of a written contract.^ " Whatever the original merits of
the rule that a party not mentioned in a simple contract in
writing may be charged as principal upon oral evidence,
even where the writing gives no indication of an intent to
bind any other person than the signer, we cannot reopen it,
for it is as well settled as any part of the law of agency." ^
And this rule extends to contracts required by the Statute
of Frauds to be in writing.^ This rule must bo viewed in
connection with these qualifications : (1) that parol evidence
is not admissible to introduce into a sealed instrument or
a negotiable instrument a party not named or described in
the instrument;* (2) that parol evidence is not admissible
to discharge the agent from liability on a contract made in
his name, for " to allow evidence to be given that the party
who appears on the face of the instrument to be personally
a contracting party, is not such, would be to allow parol
evidence to contradict the written agreement, which cannot
be done;"^ (3) that parol evidence is not admissible to con-
tradict the express terms of a written instrument.^ Whether
any distinction should be taken between a case where there
is no disclosure of the principal whatever, and a case where
the principal is disclosed in the negotiation but not named
in the writing, is in dispute. It is contended that in the
latter case there is clearly an election to look to the agent
alone.'^ But this is treated as a question of fact in other
jurisdictions.^
1 Ford r. Williams, 21 How. (U. S.) 287: Huntington v. Knox,7 Cush.
(Mass.) 371 ; Darrow i'. Home Produce Co., 57 Fed. Rep. 463 ; Wm.
Lindeke Laud Co. v. Levy, 76 Minn. 364, overruling Powell v. Oleson, 32
Minn. 288.
2 Byiiigton r. Simpson, 134 Mass. 169.
8 Lerned v. Johns, 9 Allen (Mass.), 419; Kingsley v. Siebrecht, 92
Me. 23.
* Post, §§ 127-128, 134-135.
5 Higgins V. Senior, 8 M. & W. 834.
« Humble v. Hunter, 12 Q. B. 310.
7 Chandler v. Coe, 54 N. H. 561.
8 Byington v. Simpson, supra; Calder v. Dobell, L. R. 6 C. P. 486.
166 PRINCIPAL AND THIRD PAUTV.
2. Liahility of an Undisclosed Principal.
§ 124. General rule.
Sul)ject to the exceptions hereafter enumerated, an un-
disclosed principal is liable to a third jierson with whom
his agent has dealt within the scoj)e of the agency in the
same way and to the same extent as a disclosed principal,
although the third jierson gave exclusive credit to the agent
su])posing him to be the principal.^
This does not rest u])on the doctrine of " holding out the
agent," since obviously the third party has not been misled
in that I'ospect. It rests upon the anomalous docti'ines
already explained, and has been comj)ared to the liability
of a dormant partner or of a master for a servant's torts.^
Yet the doctrines as to the extent of an agent's powers seem
to be applied to the agent for an undisclosed principal in
the same way as to an agent of a disclosed princi[)al. " Once
it is established that the defendant was the real j)rincipal,
the ordinary doctrine as to principal and agent apjilies —
that the principal is liable for all the acts of the agent
which are within the authority usually confided to an agent
of that character, notwithstanding limitations, as between
the principal and the agent, put upon that authority. It is
said that it is only so where there has been a holding out
of authority — which cannot be said of a case where the
person supplying the goods knew nothing of the existence
of a principal. But I do not think so. Otherwise, in every
case of undisclosed principal, or at least in every case where
the fact of there being a principal was undisclosed, the secret
^ Thomson v. Davenport, 9 B. & C. 78; Kayton v. Barnett, 116 N. Y.
025; Ilubburd v. Tonbrook, 124 Pa. St. 291 ; Schendel v. Stevenson, 153
]\Iass. 351; Watteau v. Fenwick, 1893, 1 Q. B. .'VIO; Levitt r. Ilamblet,
1901, 1 K. B. 53.
^ Watteau v. Fenwick, supra. See the suggestion in IJyington v. Simp-
son (134 Mass. 109), that the liability of an undisclosed princii)al lesls
upon considerations similar to those which fix a master's liability for the
torts of his servant, — considerations which, ia this case, escape the doc-
trines of estoppel as to the fact of the agency, although, apparently, not
as to its extent.
CONTRACT FOR UNDISCLOSKD rillNClPAL. 107
limitation of authority would prevail and defeat the action
of the person dealing with the agent and then discovering
that he was an agent and had a principal." ^ It api)ears,
therefore, first, that an undisclosed principal is liable upon
a contract made by his agent because the agent's act is the
act of the principal or the agent's name has been adopted
by the principal for the purpose of the contract, and, second,
that having fictionally established the privity in this fashion,
the law goes on to ap{)ly the usual doctrines of ageucy in
ord':'r to determine the extent of the agent's authority. It
is obvious, however, that this is all sheer assumption and
that there can be in such a case no real basis for estoppel.
To the general rule of liability there are, however, certain
well defined exceptions or qualifications which must now be
noticed.
§ 125. First exception. — State of accounts.
The right of the third person to proceed against the un-
disclosed principal is subject to the state of accounts between
the principal and agent. The exact nature and extent of
this exception is, however, involved in some uncertainty.
(1) Origin of the doctrine. The leading case on this sub-
ject is Thomson v. Bavenport^^ where the dictum was pro-
nounced that, " if a person sells goods (supposing at the
time of the contract he is dealing with a principal), but
afterwards discovers that the person with whom he has
been dealing is not the principal in the transaction, but
agent for a third person, though he may in the meantime
have debited the agent with it, he may afterward recover
the amount from the real principal ; subject, however, to
this qualification, that the state of the account between the
principal and the agent is not altered to the prejudice of
the principal." This dictum was said to be too broad in
Heald V. Kemoorthy^ and the doctrine was there declared
1 AVatteau v. Fenwick, supra, per Wills, J. See criticism in 9 Law Q.
Rev. 111.
- 9 Barn. & Cress. 78, 86; 2 Smith's Leading Cases.
3 10 Ex. 739.
168 riiiNCirAi. and tiiikd takty.
tube that, "if the conduct of the seller [the tliinl person]
would make it unjust for him to call upon the buyer for
the money; as, for example, where the jjrincipal is induced
by the conduct of the seller to pay his agent the money on
the faith that the agent and seller have come to a settle-
ment on the matter, or if any representation to that effect
is made by the seller, either by words or conduct, the seller
cannot afterwards throw off the nuisk and sue the princi-
pal." In a later English case ^ a distinction was drawn
between the case where the existence of a principal is
wholly undisclosed, and the agent contracts as principal,
and the case where the existence of a principal is disclosed,
but the principal is unnamed and unknown ; the doctrine of
Thomson v. Davenport being held applicable to the first
state of facts, and the doctrine of Ileald v. Kenivorthy to
the second. But in Irvine v. Watsoii^^ this distinction is
said to be "difficult to understand," and the doctrine of
Heald V. Kenivorthy is expressly approved. The contro-
versy therefore is as to whether settlement in good faith
by the principal with the agent will discharge the {)rincii)al,
or whether the settlement must have been in reliance upon
such conduct on the i)art of the third person as will work
an estoppel against the latter.
(2) English doctrine. The English doctrine now is that
the principal is discharged from liability to the third person
only where the third person has by his conduct led the prin-
cipal to believe that there has been a scttlenifnt l)etween the
third person and the agent, or that, with knowledge of the
principal's liability, the third person elects to give credit
exclusively to the agcnt.-^ In other words the principal
must show that the third person is by positive conduct
estopped to claim recourse against the principal.
(3) American doctrine. The doctrine in the United
States seems to have followed the dictum in Thomson v.
1 Armstrong v. Stokes, L. 11. 7 Q. B. 598.
2 L. R. 5 Q. R. Div. 414.
3 Irvine r. Watson, supm ; Davison r. Donaldson, L. R. 9 Q. B. Div.
623 ; Pollock ou Cont. (Gtli ed.) 99.
CONTRACT FOR UNDISCLOSED PRINCIPAL. 169
Davenport. The principal is said to be discharged where
he has in good faith paid the agent or made such a change
in the state of the account between the agent and himself
that he would suffer loss if he should be compelled to pay
the seller.^ In other words mere delay on the jiart of the
third person may prejudice the principal and work an
estoppel without other and positive conduct.
§ 126. Second exception. — Election to hold agent.
Where the third party, after discovering the principal,
unequivocally elects to regard the agent as the sole respon-
sible contracting party, he cannot afterwards proceed against
the principal.^ What constitutes a final or unequivocal elec-
tion is a question of fact, though the conduct may be so
decisive as to establish an election in point of law, or so
indecisive as to render unwarranted a finding that there
was an election. Bringing an action against the agent has
an evidential force, but does not necessarily constitute an
election.^ It is generally held that an unsatisfied judgment
is not conclusive proof of an election;* though the ruling
is otherwise in England and some of our States.^ Proving
a claim in bankruptcy is not conclusive.® Nor taking the
agent's promissory note."
It has been held that where at the time the contract is
made the third party knows the principal, but accepts a
1 Fradley v. Hyland, 37 Fed. Rep. 49; Thomas v. Atkinson, 38 Ind.
248; Laing v. Butler, 37 Hun (N. Y.), 144; Knapp v. Simon, 96 N. Y.
284; Story on Agency, § 449 ; 23 Am. Law Rev. 565.
2 Addison c. Gandasequi, 4 Taunt. 574; Paterson v. Gandasequi, 15
East, 62; Kingsley v. Davis, 104 Mass. 178; Kendall r. Hamilton, L. R.
4 App. Cas. 504.
3 Cobb V. Knapp, 71 N. Y. 348 ; Steele Smith Grocery Co. v. Potthast,
109 Iowa, 413; Curtis v. Williamson, L. R. 10 Q. B. 57.
4 Beymer v. Bonsall, 79 Pa. St. 298; Maple r. R. Co., 40 Oh. St. 313 ;
Brown v. Reiraan, 48 N.Y. App. Div. 295.
5 Pollock on Cont. (6th ed.) 100, citing Priestley v. Feruie, 3 11. & C.
977; King.sley v. Davis, supra.
6 Curtis ;-. Williamson, L. R. 10 Q. B. 57.
T Merrill v. Kenyon, 48 Conn. 314 ; Pentz v. Stanton, 10 Wend. (N. Y.)
271 ; Harper v. Tiffin N. B., 54 Oh. St. 425.
170 ntlNCIPAL AND TIIIUIi PARTY.
written instnmu'iit in the name of the agent, he makes
an election to h)ok to the agent alone, and parol evi-
dence is inadmissible to charge the jjrincipal.^ iJut this is
doubtful.^
It is held in England that a foreign princi|)al cannot sue or
be sued on a contract made by his agent in EnglanJ unless it
clearly appears that the agent was authorized to make iiis
principal a party and that the principal, and not the agent,
was intended to be the contracting party.-"^ It is j)resumcd
that the third party gives credit exclusively to the agent
in such a case. In the United States it is held ihat there
is no such presumption, and the question whether exclusive
credit is given to the agent is one of fact.*
§ 127. Third exception. — Contract under seal.
Where the contract between the agent and third party
is under seal (the seal not being merely superfluous), the
principal is not liable. It is a strict rule of the common
law that only the parties named or described in a sealed
instrument can sue or be sued upon it.^ This rule involves
the question as to the form in which an agent should exe-
cute a sealed instriunent in order to bind his principal.
Where one partner (A. B.) under a power of attorney from
the other (C. D.) executed a scaled instrument, " A. B."
" For C. D., A. B." it was held that C. D. was bound.^ But
where the trustees of a church executed a sealed instru-
ment, " A. B., C. D., and E. F., trustees of the Baptist Ciiurch
of R," it was held that the church was not bound." The
1 Chandler v. Coe, 54 N. II. 5G1.
2 Byington v. Simpson, 134 Mass. 1G9 ; Merrill r. Kenyoii, 48 Conn.
.314 ; Calder v. Dobell, L. 11. 6 C. P. 480.
3 Die Ell)inj;«n- Actien-GeselLschaft v. Claye, L. 11. 8 Q. B. 313; Ilut-
ton V. Bulloch, L. II. Q. H. 572.
4 Kirkpatrick v. Stainer, 22 Wend. (N. Y.) 244; Kaiilbiuk v. Church-
ill, 59 N. II. 296; poxt, § 187..
5 Post, § 188; Briggs v. Partridge, 64 N. Y. 357; Borcherling r. Katz,
37 N. J. Eq. 150; lie Pickering's Claim, L. R. 6 Ch. App. 525.
8 Wilks V. Back, 2 East, 142; Mnssey v. Scott, 7 Cush. (Mass.) 215;
McDaniels r. Flower Brook Mfg. Co., 22 Vt. 274.
' Taft V. Brewster, 9 Johns. (N. Y.) 334.
^
CONTllACT FOR UNDISCLOSED PRINCIPAL. 171
recitals of the instrument, and particularly of the attesta-
tion clause, and the manner of the signing, must determine
whether the instrument is the obligation of the principal
or of the agent.^ Where an instrument is executed iu
behalf of the government, and the fact clearly appears by
the recitals, but the agent atlixes his own name and seal,
the government is bound and not the agent.'-^ But the
agent of a private principal must execute the instrument
in the name of, or on behalf of, his principal in order to
bind the latter.^ The rule applies equally to a principal
who is disclosed in the negotiations but whose name and
seal are not effectively affixed to the instrument.
In those states in which the statutes have made a seal
unnecessary to the validity of a deed, the courts nevertheless
treat the deed as a sealed instrument so far as concerns the
rule that an undisclosed principal can neither sue nor be
sued upon it.*
§ 128. Fourth exception. — Negotiable instrument.
Only the party whose name appears as the obligor on a
negotiable instrument can be sued upon it. Parol evidence
is therefore inadmissible to charge an undisclosed or unnamed
principal upon such an instrument.^ But if there be an am-
biguity on the face of the paper as to whether the principal
or agent is intended to be bound, parol evidence is admissible
to remove the ambiguity.**
1 Stinchfield v. Little, 1 Me. 231 ; Elwell v. Shaw, 16 Mass. 42 ; North-
western DistilUng Co. r. Brant, G9 111. 6.jS; Philadelphia, &c. K. v. How-
ard, 13 How. (U. S.) 307; Bradstreet v. Baker, U R. I. 546.
- Hodgson V. Dexter, 1 Cranch (U. S.), 345 ; Dawes v. Jackson,
9 Mass.- 490; Sheffield v. Watson, 3 Caines (N. Y.), 69; post, § 203.
3 The English Conveyancing Act (44 & 45 Vict. c. 41) provides (§ 46)
that a deed executed in the name of the donee of a power of attorney, by
the authority of the donor of the power, shall be as effectual as if exe-
cuted in the name of the donor.
* Sanger v. Warren, 91 Tex. 472.
5 Bradlee v. Boston Glass Manufactory, 16 Pick. (^Mass.) 347; Sparks
V. Dispatch Transfer Co., 101 Mo. 531 ; Ducarrey v. Gill, M. & M. 450.
6 Reeve r. First N. B., 54 N. J. L. 208; Beau v. Pioneer Mining Co.,
66 Cal. 451.
172 PRINCIPAL AND THIRD PARTY.
Whether the signature is that of the principal or that of
the agent must be determined by considering the recitals of
the instrument, the marginal headings, and the form of the
signature itself. The construction of signatures to negoti-
able instruments is fully discussed in a subsequent cha{)ter.^
It seems, however, that the third party may disregard the
negotiable instrument and proceed against the undisclosed
principal uj)un the common counts or original consideration.''^
o. liiylits of an Undisclosed Principal.
§ 129. General rule.
Subject to the exceptions and qualifications hereafter enu-
merated, an undisclosed princii)al may bring an action in
his own name upon contracts made by his agent in his behalf,
although the third party supposed that he was dealing with the
agent as principal.^ This rule is said to be the necessary cor-
ollary of the one which gives the third persona right of action
against the undisclosed principal, since mutuality of remedial
rights is clearly just. It follows that two undisclosed princi-
pals may contract through their respective agents, and that the
contract will give to each (subject to the enumerated exceptions)
the same rights and liabilities as if they had been disclosed
principals or had contracted in person.^ The rule is appli-
cable to del credere agencies as well as to ordinary agencies.^
This right of the principal is superior to the right of the
agent, and when the principal has once given notice of his
intention to exercise it, the third party will settle with the
agent at his peril.^ If the contract be in writing (not under
seal or negotiable), it does not violate the rule against vary-
1 Post, §§ 180-195.
2 Pentz V. Stanton. 10 Wend. (X. Y.) 271; Harper v. Tifiin X. 15., .")4
Oh. St. 425.
8 Norfolk V. Wortliy, 1 Camp. 337; Sadler v. Leigh, 4 Camp. 195;
Spurr V. Cass, L. R. 5 il. B. C5G; Huntington v. Knox, 7 Cusli. (Mass.)
371; Taintor r. Prendergast, 3 Hill (X. y.),72; Talcott r. Wabash 11.,
150 N. Y. 461 ; Barhani v. Bi-ll, 112 X. C. 131.
* Darrow v. Home Produce Co., 57 Fed. Rep. 463.
5 Hornby v. Lacy, 6 M. & S. 166.
*^ Pitts V. Mower, 18 Me. 361 ; Huntington v. Knox, supra; post, § 208.
CONTRACT FOR UNDISCLOSED PRINCIPAL. 173
ing- the terms of written instruments by parol to admit parol
evidence for tlie purpose of showing tlie real principal.^ But
it would vary the instrument to admit parol evidence to
discharge the agent.^
§ 130. First exception. — State of accounts.
The right of the undisclosed i)rincipal to sue the third
party is subject to the equities and the state of the accounts
existing l)etwcen the agent and the third party at the time
the right is asserted. In other words the principal cannot
assert his rights without leaving to the third party exactly the
same rights as if the agent had been in fact the principal.^
The cases applying this doctrine have been mainly those
where the agent sold goods in his own name, and under these
circumstances the distinction is made between the case where
the agent has possession of the goods, and where he has not.
In the former case the right of set-off which might be asserted
against the agent may be asserted against the undisclosed
principal ; in the latter case it may not.* But the doctrine
is equally applicable to contracts other than those for the sale
of goods.^
The doctrines under this head resolve themselves into a
general doctrine of estoppel. When the principal by his
conduct leads third persons to believe that the agent is the
principal, the real principal is estopped from asserting against
such third persons any claims to their prejudice. Thus if the
third person has paid the agent,^ or has a right of set-off
against him,' the principal cannot enforce his claim to the
^ Darrow i\ Home Produce Co., supra; ante, § 123.
2 Post, § 197.
8 Rabone v. Williams, 7 T. R. 360 n. ; George v. Clagett, 7 T. R. 359 ;
IMontagu v. Forwood, 1893, L. R. 2 Q. B. 350 ; Gardner c. Allen, 6 Ala.
187; Peel r. Shepherd, 58 Ga. 3G5; Taintor v. Prendergast, 3 Plill
(N. Y.), 72.
* Bernshouse r. Abbott, 45 N. J. L. 531.
^ INIontagu v. Forwood, supra.
^ Coates r. Lewes, 1 Camp. 44i ; Ramazotti v. Bowring, 7 C. B. n. s.
851.
■^ Borries v. Imperial Ottoman Bank, L. R. 9 C. P. 38; Montagu v.
Forwood, 1893, 2 Q. B. 350; Stebbins v. Walker, 46 Mich. 5.
174 rRINCU'AI- AND THIRD rAUTV.
prejudice of such paymeut or right of set-off. ^ But if before
such payment is made or such right of set-off accrues the
third person has received notice that tlic agent was not in
fact tlie principal, then he has not been misled and cannot
elaim an estoppel.^ The state of the third person's niiud is
the important inquiry. Did he or did he not know that the
aiient was not the real principal ? It seems that mere means
of knowledge will not be equivalent to notice.^ But if the
third person knew that the agent was contracting as agent,
although he did not know whose ageut, he caunot claim an
estoppel against the priucipal.-^ And it is even held that if
the agent is one who commonly contracts for undisclosed
principals, though also for himself, the third person cannot
assume that the agent is contracting for himself, and would
not therefore be entitled to a set-off as against the undisclosed
principal.^
Where an agent contracting as principal sells his principal's
goods and also his own in one contract, the principal cannot
sever the contract and maintain a separate suit for the value
of his own goods.^
Payment, or an allowance by way of set-off, to an agent
who iias a lien on the goods of his undisclosed principal, is
binding on the principal.'^
§ 131. Second exception. — Estoppel.
Analogous to the doctrine of the preceding section is the
rule that where the principal invests his agent with the
1 Pollacck c. Scholl, 51 X. Y. App. Div. 319.
- Mildred v. Maspons, S App. Cas. 874; Kaltenbach v. Lewis, 10 App.
Cas. 617; Henderson v. McNally, 48 N. Y. App. Div. 134; Rice, &c. Co.
V. Bank, 185 111. 422; Belfield v. National Supply Co., 189 Pa. St. 189.
8 Borries v. Imperial Ottoman Bank, L. R. 9 C. P. 38.
4 Ilsley V. Merriam, 7 Cush. (Mas.s.) 242; Evans v. Wain, 71 Pa. St.
G9 ; Seraenza v. Brinsley, 18 C. B. n. s. 467.
6 Baxter v. Sherman, 73 Minn. 434; Miller v. Lea, 35 ]\Id. 396; Cooke
jj. Eshelby, 12 App. Cas. 271. See criticism on this doctrine in 3 Law Q.
Rev. 358; and see Hogan v. Shorb, 24 Wend. (N. Y.) 458, 462, and
Wright V. Cabot, 89 N. Y. 570.
6 Roosevelt v. Doherty, 129 Mass. 301.
' Warner v. M'Kay, 1 M. & W. 591 ; Hudson v. Granger, 5 B. & A. 27.
CONTRACT FOR UNDISCLOSED PRINCIPAL. 175
indicia of ownership of goods, and lluis holds out the agent as
owner, he is estopped as against those who (hjal with the
agent as owner to set up liis own claim or title. ^ So, in any
case, where the principal has, by representing the agent to be
the principal, or by standing by and allowing innocent third
persons to deal with the agent as principal, induced such
innocent third persons to change their legal relations in such
a way as to make it incciuitable for the principal to claim the
rights of an undisclosed principal, he will l)e estopped from
maintaining an action in his own namc.^ Perhaps this ex-
ception is only an extension of the previous one. In that the
})rincipal is estopped to press his rights to the extent that the
third person would be injured ; in this it is assumed that he
cannot press his rights at all without injury to the third
person.
§ 132. Third exception. — Exclusive credit to agent.
Where the third person has clearly expressed his intention
to deal with the agent as principal, or where he has dealt with
the agent on terms of trust and confidence, or the nature of
the contract is fiduciary, the undisclosed principal cannot
claim the benefits of the contract. " Every man has a right
to elect what parties he will deal with. . . . And as a man's
right to refuse to enter into a contract is absolute, he is not
obliged to submit the validity of his reasons to a court or
jury."^ The intention to deal only with the agent maybe
found in the recitals of the written contract,^ or the negotia-
tions attending an oral one.^ In the first case the question
would be one of construction for the court ; in the latter, of
fact for the jury. The intention may be further inferred from
the executory nature of the contract, or where it is fiduciary,
1 Posit, § 170.
2 Ferrand v. Rischoffsheim, 4 C. B. N. s. 710, 716; Stebbins v. 'Walker,
46 Mich. 5; Pollock on Cont. (6th ed.) 98.
8 Winchester r. Howard, 97 Mass. 303 ; Humble v. Hunter, 12 Q. B.
810. Cf. Boston Ice Co. v. Potter, 123 Mass. 28.
* Humble v. Hunter, supra.
^ Winchester v. Howard, supra.
176 rUINCIPAL AND TIllKK PARTY.
or for personal skill or service.^ But in the latter case it
would seem that if the agent has personally discharged the
trust or performed the service, his undisclosed princii)al may
recover the com[)ensation.-
§ 133. Fourth exception. — Varying written instrument.
Where in a written instrument the agent has rei)rescnted
himself in express terms or recitals as tiie real and only
principal, the undisclosed principal cannot maintain an action
in his own name, since parol evidence would l)e inadmissible
to vary the express terms and recitals of the written instru-
ment or to deprive the third person of the benefit he contem-
plated from the character, credit, and substance of the one with
whom he contracted.^ This is the result of a rule of evidence
merely. But where the real princii)al re])resents himself
as agent for an midisclosed principal, he may afterwards
assume his real character and sue as princijial, since in such
a case the third party has not relied upon the character, credit,
oi- substance of any person other than the agent.^
§ 134. Fifth exception. — Sealed instrument.
Where a sealed instrument names the agent alone as the
obligee, the principal cannot maintain an action upon it in his
own name, owing to the technical rule that only the parties
named or described in a sealed instrument can sue or be
sued upon it.^ He must proceed in the name of the agent.
§135. Sixth exception. —Negotiable instrument.
Only the party named as payee in a negotiable instrument
can sue upon it.^ This is due to the technical rule of tlie law
1 Pollock on Cont. (Gth ed.) 97; Eggleston r. Boardman, 37 Mich. U;
Kelly V. Thuey, 102 Mo. 522.
2 Warder v. White, 14 111. App. .50, citing Grojan iv Wade. 2 Staikie,
44.3; King v. Batterson, 13 R. T. 117; Sullivan r. Shailer, 70 Conn. 733.
8 Hunjble v. Hunter, 12 Q. B. 310; Darrow v. Home Produce Co., 57
Fed. llcp. 463.
* Schmaltz v. Avery, 10 Q. B. 055.
6 Shack V. Anthony, 1 M. & S. 573; Violett v. Powell, 10 B. Mon.
(Kv.) 347; post, § 188.
6 Cocke V. Dickens, 4 Yerg. (Tenn.) 2Q; Grist v. Backhouse, 4 Dev.
CONTRACT FOR UNDISCLOSED PRINCIPAL. 177
merchant which coMfines the rights and liabilities upon nego-
tiable instruments to the parties named or described therein.
But if there be any ambiguity on the face of the instrument as
to who is intended to be the payee, parol evidence is admis-
sible to remove the ambiguity. And, unlike the case of the
maker, drawer, or acceptor, the addition of a descriptive term
like "agent," "treasurer," "cashier," etc., is now generally
held to create such an ambiguity.^ The same reason docs not
exist for forbidding a person not named as payee to sue as for
forbidding a person not named as payor to be sued, namely,
that certainty is required as to the obligors on negotiable in-
struments in order that such instruments may circulate freely.
Accordingly the technical rule forbidding an unnamed payee
to sue lias dwindled to narrow limits, and has in some cases
been abandoned altogether.^
& Battle (X. C), 362; Moore v. Penn, 5 Ala. 135; United States Bk. v.
Lyman, 1 Blatchf. (U. S. C. C.) 297 ; s. c. 2 Fed. Cas. 709.
1 Baldwin r. Bank, 1 Wall. (U. S.) 234; Commercial Bank v. French,
21 Pick. (Mass.) 486; Nichols v. Frothingham, 45 Me. 220; Nave v. First
Nat. Bk., 87 Jnd. 204.
2 McConnell v. East Point Land Co., 100 Ga. 129; post, § 207.
12
i.
178 PRINCU'AL AND TllIKD I'AUTY.
CHAPTER XL
ADMISSIONS AND DECLARATIONS OF THE AGENT.
§ 136. Object ill proving admissions of agent.
The admissions or declaration.s of ail agent may be sought to
be offered in evidence against the j>rincipal for any one of tliree
])urposes : (1) To establish ilie fact of tlie agency ; (2) to estab-
lish the nature or extent of the authority ; (3) to establish the ex-
istence or non-existence of some fact (other than the two named
above) which is material to the issue in controversy between
the parties. The competency of the admission or declaration
will depend in the first instance upon the i)urpose for wliidi it
is offered, and secondarily upon the relation of the admission
or declaration to the transaction in (luestion and the general
scope of the agency. It is incompetent for either of the first two
pur|)oscs named above, but may be competent for the third.
§ 137. When alw^ays inadmissible.
The admissions or declarations of an agent cannot be given
in evidence against the principal, eitiier (1) to establish the
fact of the agency, or (2) to establish the nature or extent of
the authority.^ The reason is obvious. The declaration
of the agent that he is agent, or that he has certain dele-
gated powers, is merely an attempt to clothe himself with
authority, and has no tendency to prove that he possesses in
fact the authority wliich he claims. He is holding himselt'
out as agent, whereas the requirement is that the principal
should liold him out as agent in order to work an estoj){)el
against the principal. It is therefore error to admit evidence
of wiiat the agent has said as to his own powers in an action
to liold the principal, and the error is not cured by a charge to
^ Hatch V. Squires, 11 Mich. 1S5; Howe IMacliiiie Co. v. (lark, 15
Kaiis. 102; Bn^hani /•. Peters, 1 (iiay (Ma.ss.), \-VJ; .Mitclium r. Diiiilap,
08 Mo. 418; Buller v. C, B. & Q. Ry. Co., 67 Iowa, 206.
ADMISSIONS BY AGENT. 179
the jury that the agency cannot be proved by the agent's own
decLarations, and it is even doubtful whether the withdrawing
of sucli evidence from the consideration of the jury would cure
the error.i Since his express declarations are incompetent to
prove his authority, a fortiori his conduct is incompetent.
It is therefore improper to charge a jury that they may find
the fact of the agency or of the authority if the conduct of the
agent was such as to lead the third party to believe that he
was authorized.^ It is the conduct of the principal and not of
the agent from which authority nmst be inferred.
This is far from saying, however, that an agent is an incom-
petent witness to prove the fact of the agency or authority.
Wliere parol evidence as to the existence of tlie agency or ex-
tent of the authority is admissible at all, the agent is as com-
petent a witness as any other person to testify under oath to
facts within his knowledge touching the agency .^ Even the
old rule of evidence which excluded the testimony of a party
in interest made an exception in favor of the evidence of an
agent produced to prove the fact of the agency.* And this
applies equally where a husband is the agent of his wife or a
wife of her husband.^ But if the authority be conferred
in writing, parol evidence of any kind is generally inadmis-
sible,^ unless it be where the question of authority is only
incidentally involved.'^
/ A confidential communication or report from the agent to
' his principal cannot be used as evidence against the piincipal
by third persons.^
^ Comegys r. American Lumber Co., 8 Wash. 661.
■^ Leu V. Mayer, .52 Kans. 419.
8 Indianapolis Chair Mfg. Co. v. Swift, 132 Ind. 197; Rice v. Gove, 22
Pick. (Mass.) 158.
* 1 Greeiileaf on Ev. § 416 ; Gould v. Norfolk Lead Co., 9 Cush. (Mass.)
338; Thayer r. Meeker, 86 111. 470.
^ OConner i\ Insurance Co., 31 Wis. 160; Roberts v. N. W. Nat. Ins.
Co., 90 Wis. 210.
6 Xeal c. Patten, 40 Ga. 363.
' Columbia Bridge Co. v. Geisse, 38 N. J. L. 39.
8 Langliorn i\ Allnut, 4 Taunt. 511; Re Devala Provident, &c. Co., 22
Ch. Div. 593.
180 PKINCIPAL AND THIRD PARTY.
§ 138. When admissible. — General rule.
If the admission of the agent is offered in evidence to
establish the existence or non-existence of some fact (other
than that of the existence or extent of the agency), it is neces-
sary, in order that the admission or declaration of the agent
may be binding on his principal, that the following elements
should concur : (1) the fact of the agency must be established ;
(2) the admission or declaration must be in regard to some
matter within the scope of the agent's authority ; (3) the
admission or declaration must (a) constitute a part of
the " n-s [/estce " of a transaction in which the agent was
acting for his principal, and (6) serve to characterize that
transaction.
The first two elements do not call for special discussion.
They involve considerations already familiar to the reader.
There must be an agency and the agent must be acting within
the scope of his authority in oi'der that any aet of his may be
binding on his principal. This is as true of his statements
as of his conduct. If the admissions or declarations have
reference to acts which the agent had no authority to perform,
or to any matter foreign to the agency, they stand on the same
level as statements of strangers and are clearly inadmissible.^
But if the principal refers a third person to an agent for in-
formation concerning a particular matter the statements of
the agent respecting such matter are evidence against the
principal.^
§139. "When admissible. — Res gestae.
It is said that the declaration of an agent to be competent
evidence against his principal must meet two requirements :
(rt) it must constitute a part of the res gestae of a transaction
in which tiie agent was acting for his princi])al ; (A) it must
1 1 Greenleaf on Ev. § 113; Fairlie v. Hastings, 10 Ves- Jr. 123; Bar-
nett V. South London Tram. Co., 18 Q. B. D. 815; Garth v. Howard, 8
Bing. 451; Fogg v. Pew, 10 Gray (Mass.), 409; Lamm v. Port Deposit,
&c. Assn., 49 Md. 233.
* Williams v. lanes, 1 Camix 3G4; Hood v. Reeve, 3 C. & P. 532.
ADMISSIONS BY AGENT. 181
be one which naturally accompanies the transaction and illus-
trates or unfolds its character or quality. ^
(a) The first requirement is briefly stated in the familiar
rule that the declaration must constitute a part of the res
gcstce. This merely means that what an agent says or does
in the conduct of a transaction for his principal is treated
as if it had been said or done by the principal, under the
application of the fiction of identity. The tavm res gestmi^
simply a convenient symbol for conveying this idea. It really
adds nothing, and, because of its literal vagueness and its
somewhat different use in other branches of the law, has led
to some darkening of counsel. If the phrase " of the res
gestce" were omitted from the first sentence in this section,
the idea conveyed would be precisely the same.
The first inquiry is, therefore, whether the declaration
was made as part of a transaction in which the agent was
acting for the principal. If made before or after the trans-
action, it is incompetent as against the principal.^ This
is stated very clearly in the leading case of White v.
Miller : 3
"The general rule is, that what one person says, out of
court, is not admissible to charge or bind another. The
exception is in cases of agency ; and in cases of agency, the
declarations of the agent are not competent to charge the
principal upon proof merely that the relation of principal and
agent existed when the declarations were made. It must
further appear that the agent, at the time the declarations
were made, was engaged in executing the authority conferred
upon him, and that the declarations related to, and were con-
nected with the business then depending, so that they con-
stituted a part of res gesfceJ^ ^
In the application of this rule tlie courts have not been
entirely harmonious in deciding when the declaration is a
1 White V. Miller, 71 N. Y. 118, 131; Butler v. ISIanhattun Ry. Co.,
143 N. Y. 417, 422.
2 Great W. Ry. v. Willis, IS C B. x. s. 748; Haven v. Brown, 7 Me.
421.
8 71 N. Y. 118, 135.
* See also Fairlie r. Hastings, 10 Ves. Jr. 123.
182 PKINCIPAL AND THIRD I'AKTY.
part of the transaction. Clearly a subsequent narration by
the agent is not.^ Clearly a contempoi'aneous statement by
way of inducement or representation is.^ In contract cases
there seems to be little difficulty in deciding whether the
declaration falls within the first or the second of these
classes, for the moment of the formation or completion of the
contract marks the tei'mination of the transaction.^ Yet
even in such cases admissions may be made, subsequent to the
formation of the contract but relating to it, which will be
proper evidence against the principal provided the agent in^
making the admissions was still within the ordinary course
of his employment or duties. Thus the statement of a station
agent to the police that he believes another servant has
absconded with a parcel delivered for carriage at that station
is admissible.^ So the acknowledgment of an agent in
charge of a business that a certain sum is due for goods
bought in the course of that business is admissible in order
to charge the principal or to take a case out of the Statute of
Limitations.^ It would seem logical to say that whenever an
admission or statement is made by an agent within his osten-
sible authority and operates to mislead a third person, or to
cause him to act, or refrain from acting,_ to his prejudice, the
1 Great W. Ry. v. Willis, 18 C. B. n. s. 748; Stiles v. Western R., 8
Met. (Mass.) 44; Phelps v. James, 86 Iowa, 398; Empire Mill Co. v.
Lovell, 77 Iowa, 100; White v. INIiller, supra : Fairlie v. Hastings, supra.
2 Peto V. Hague, 5 Esp. 134 ; Baring v. Clark, 19 Pick. (Mass.) 22C ;
Dick V. Cooper, 24 Pa. St. 217; Burnside r. Grand Trunk Ry., 47 N. H.
5.54.
^ Declarations in the course of a transaction amounting to warranties
or to fraud may be distinguished. In such cases the warranty or the
fraud is the main fact to be established. See, for example. Nelson v.
Cowing, 6 Hill (N. Y.), 336; Jeffrey v. Bigelow, 13 Wend. (N. Y.) 518 ;
Snialley r. Morris, 157 Pa. St. 349. Declarations which are authorized are
also to be distinguished, as where two persons converse by telephone
through the agency of a telephone operator. Oskamp v. Gadsden, 35
Neb. 7.
* Kirkstall Brewery Co. r. Furness Ry., L. R. 9 Q. B. 408. See also
!Morse v. Conn. Riv. R., 6 Gray (Mass.), 450; St. Louis, &c. R. v. Weaver,
35 Kans. 412.
^ Anderson v. Sanderson, Holt N. P. 591 ; Clifford v. Burton, 1 Bing.
199 ; Burt v. Palmer, 5 Esp. 145 ; Webb v. Smith, 6 Colo. 365.
ADMISSIONS BY AGENT. 183
principal should be bound by such admission or statement in
accordance with the usual doctrines of estoppel. ^ But where
no doctrine of estoppel can be invoked, then the question is
narrowed to one of evidence merely, and the inquiry is whether
the declaration constitutes a part of an authorized transaction
then pcndinir, and is therefore a part of the res gestce of that
transaction.^
In cases of pure tort in which no doctrine of estoppel is
api)licable, that is, in cases of declarations by servants adverse
to their masters' interests, the question is more difficult and
more confused, because it is ordinarily no part of the duty of
servants to make declarations or admissions for their masters.
Yet the courts have admitted declarations of servants made
in connection with such torts, where the servant's declaration
or admission is closely connected with his tortious act or
omission and serves to characterize it. How closely the
declaration must be connected in point of time with the act
or omission in order to be admissible as against the principal
is uncertain. The courts have shifted the line in accordance
with the peculiar circumstances of each case, and their inter-
pretation of the general rule. The test is that the declaration
must be in such close connection with the act or omission
constituting the tort as to be clearly spontaneous and unde-
signed, leaving no opportunity for the ])laying of a part or
the invention of explanations or excuses. If strictly con-
temporaneous, the declaration is admissible.^ If unquestion-
ably suliscquent both as to time and causal relation, the dec-
laration is inadmissible.^ If in point of time subsequent, but
in point of causal relation to the main act substantially con-
temporaneous, the declaration will be admitted by some courts
and rejected by others. One class of cases holds that if the
1 Ante, §§ 102-103.
2 Loomis V. New York &c. R., 159 Mass. 30.
8 Elledge v. Ry. Co., 100 Cal. 282; Bigloy r. Williams, 80 Pa. St.
107.
* Williamson v. Cambridge R., 144 ^lass. 148; Luby r. Hudson Riv.
R., 17 N. Y. 131; Packet Co. r. Clough, 20 Wall. (U. S.) 528; Worden
V. Humeston, &c. R. Co., 72 Iowa, 201.
184 PRINCIPAL AND TIIHM) TARTY.
declaration is clearly tlic result of the main act alone, and
not of that plus possible reliection on the part of the agent
or servant, it is admissible ; anotlior class rejects tliis doc-
trine as too refined for practical ai)i)lication, and holds to
the rule requiring a proximity in time, which might prop-
erly be described as instantaneously successive. This dif-
ference of judicial opinion is well illustrated in VicJcsburgj
^c. Railroad Co. v. O'Brien,^ the Supreme Court of the
United States standing five to four against the admission
of the declaration of a locomotive engineer made from ten
to twenty minutes after an accident. The minority dissented
on the ground that the modern cases have relaxed the strin-
gency of the rule requiring "perfect coincidence" of time.
Perhaps the weight of American authority favors such relax-
ation, guarded by the qualification that the peculiar facts of
each case must determine whether the declaration is unde-
signed and spontaneous,^
{h) The second requirement is that the declaration should
be one which illustrates or unfolds the character or quality
of the main act. " While proximity in point of time with
the act causing the injury is in every case of this kind
essential to make what was said by a third person [agent],
competent evidence against another [principal] as part of
the res gestce, that alone is insufficient, unless what was said
may he considered part of the principal fact, and so a part
of the act itself. But as in this case the . . . [remark] was
not one naturally accompanying the act, or calculated to
unfold its character or quality, it was not admissible as res
gesitoe. . . . Res gestce in a case like this implies substantial
coincidence in time, but if declarations of third persons are
not in their nature a part of the fact, they are not admissible
in evidence, however closely related in point of time."^
1 119 U. S. 99.
2 Alabama, &c. R. v. Hawk, 72 Ala. 112 -, Ohio. &c. Ry. v. Stein, 133
Ind. 243; Ilarriinan v. Stowe, 57 Mo. 93; Hermes i'. Chicago, &c. Ry.,
80 Wis. 500.
8 Butler V. Manhattan Ry. Co., 143 N. Y. 417, 423; Barker v. St.
Louis, &c. R., 126 Mo. 143.
ADMISSIONS BY AGENT. 185
§ 140. Limitation of the rule. — Adverse interest.
A qiialilicatioii of the above rule exists in cases where the
agent is known to be acting for himself, or to have an adverse
interest. Where, for example, the president of a company
pledges the stock of the company for a personal loan, his
representations as to its genuineness do not bind the com-
pany. The pledgee should know in such a case that the
agent's personal interest may lead him to betray his princi-
pal. " It is an old doctrine, from which there has never been
any departure, that an agent cannot bind his principal, even
in matters touching his agency, where he is known to be
acting for himself, or to have an adverse interest."^
1 Manhattan Life Ins. Co. v. Forty-second Street, &c. R., 139 N. Y.
146.
186 PRINCIPAL AND TIIIKD PAKTY.
CHAPTER XII.
NOTICE TO AGENT.
§ 141. General statement of the rule.
It is a general statement of the law that notice to the agent
in the course of his employment, and of such a nature that it
becomes his duty to communicate it to his principal, is notice
to the principal. In other words, the principal is chargeable
with notice of all the material facts that come to the knowl-
edge of his agent in a transaction in which the agent is act-
ing for the principal.^ If this were not so a purchaser could
always free himself from the possible equities arising from
the acquisition of knowledge of adverse rights in or to the
property purchased, by purchasing through an agent.^ It is
against the policy of the law to place one who deals through
an agent in a better position than one who deals in person.^
But the rule has a wider sweep than this. One who deals
through an agent may be placed in a worse position than one
who deals in person. By the application of the fiction of
identity all the knowledge present in the mind of the agent,
whenever or however acquired, may be treated as the knowl-
edge of the principal. In other words, if P employs A, and
it hapi)ens that A possesses information affecting the trans-
action, P will be charged with this knowledge; whereas, if P
employs B, who happens not to possess such information,
P will not be charged with notice.
The subject of notice has, therefore, two branches : (1)
where the notice is acquired by the agent in the course of
the transaction in respect of which it is invoked ; (2) where
the notice is acquired by the agent outside of the transaction
1 The Distilled Spirits, 11 Wall. (U. S.) 356; Hyatt v. Clark, 118
N. Y. 563.
2 Sheldon v. Cox, Amb. 624.
8 Kennedy v. Green, 3 Myl. & K. 699.
NOTlCIi TO AGENT. 187
in respect of wliich it is invoked, either (a) while he is agent,
or (b) before the agency begins.
§ 142. Notice acquired during the transaction.
All the authorities agree that notice acquired by the agent
in the course of the transaction which it affects, is notice to
the principal. " The rule that notice to the agent is con-
structive notice to the principal, is based on the presumption
tliat the agent has connnunicated to the principal the facts
connected with the subject-matter of his agency which came
to his notice. . . . Where others than the principal and agent
are concei'ned, the presumption that the agent has discharged
his duty to his principal in communicating facts of which he
has notice, is as conclusive as the presumption that the princi-
pal remembers the facts brought home to him personally." ^
It therefore follows that as to notice acquired by the agent
in the course of the transaction in respect of which the notice
is invoked, the principal is bound as fully as if he acquired
the notice in person, and whether the agent remembered the
fact at the final conclusion of the transaction or not.'-^
But if an agent is employed for a particular purpose, and
does not accomplish it, and subsequently another ^agent is
employed for the same purpose, and does accomplish it, notice
to the first agent, not communicated to the principal or to
the second agent, does not affect the transaction.^ So also
if an agent acquires notice in a transaction wholly foreign to
the one in question, his principal is not estopped within the
rule now under consideration.'*
§ 143 Notice acquired outside of transaction but in general
scope of agency.
A distinction must be drawn between an agent, like an
attorney, who acts for his principal in totally different trans-
1 Bierce v. Red Bluff Hotel Co., 31 Cal. 160, 166.
2 Hiern v. Mill, 13 Yes. 114; Blackburn v. Haslam. 21 Q. B. D. 14-1;
Bavvden v. London, &c. Co., 1802, 2 Q. B. 534; Suit r. Woodhall, 113
Mass. 391 : Hill v. North, 34 Vt. 604.
8 Blackburn i\ Vigors, 12 App. Cas. 531 : Irvine r. Grady, 85 Tex. 120.
* Tate V. Ilyslop, 15 Q. B. D. 368; Union N. B. v. German Ins. Co.,
71 Fed. Rep. 473.
188 PRINCIPAL AND THIRD PARTY.
actions, perhaps separated by a considerable period of time,
and an agent, like a bank cashier or a general manager, who
is engaged in a continuous series of transactions, all incidents
of the conduct of a general business.
As to the first, it is believed that the rule as to notice is
the same as in the case where the notice is acquired before
the agency begins.
As to the second, the rule as established by many of the
courts is the same as in the case of notice acquired in the
particular transaction. " The general rule is well established
that notice to an agent of a bank, or other corporation, en-
trusted with the management of its business, or of a par-
ticular branch of its business, is notice to the corporation, in
transactions conducted by such agent, acting for the corpora-
tion, within the scope of his authority, whether the knowledge
of such agent was acquired in the course of the particular
dealing, or on some prior occasion." ^ "Where the agency
is continuous, and concerned with a business made up of a
long series of transactions of a like nature, of the same
general character, it will be held that knowledge acquired as
agent in that business in any one or more of the transactions,
making up from time to time the whole business of the prin-
cipal, is notice to the agent and to the principal, which
will affect the latter in any other of those transactions in
which that agent is engaged, in which that knowledge is
material." ^
§ 144. Notice acquired before agency begins.
There are two views as to the effect of notice acquired by
the agent before the agency begins. It is believed that notice
acquired by the agent in a prior disconnected agency for the
same principal is to be treated as notice acquired before the
agency begins.
(1) The first view is that the principal is never to be
charged with notice of any fact learned by the agent before
the agency begins. This .rests upon the notion that the
1 Cragie v. Hadlev, 99 N. Y. 131, 134.
2 Ilolden V. New York and Erie Bank, 72 N. Y. 286, 292.
NOTICE TO AGENT. 189
identity of the principal and agent exists only during, tbe
time the agency exists. " The true reason of the limitation
is a technical one, tliat it is only during the agency that the
agent represents, and stands in the shoes of his principal.
Notice to him then is notice to his principal. Notice to him
twenty-four hours hefore the relation commenced is no more
notice than twenty-four hours after it had ceased would be." ^
(2) The second view is that notice acquired by an agent be-
fore the agency begins is notice to the pvluclpsd, provided that
the fact is present in the mind of the agent at the time of the
transaction as to which the notice is invoked, and provided
that the agent is at liberty to disclose it.^ The qualifications
to the rule are important. It must be shown that the agent
remembered the fact in question — had it present in his mind
— at the time he was acting for the principal ; in the absence
of such proof the knowledge will not be imputed to the prin-
cipal.3 Some cases hold that " if the agent acquires his infor-
mation so recently as to make it incredible that he should
have forgotten it, his principal will be bound." ^ It must also
appear that he was at liberty to disclose it, tliat is, that he
"would not be violating his duty to another principal in so
doing.^ And it appears that the burden is upon the one alleg-
ing the notice to establish these facts.^
§ 145. General qualifications.
There are two general qualifications which must be con-
sidered in connection with the general rule of notice.
. (1) The fact constituting the notice must have a material
1 Houseman v. Girard, &c. Ass'n, 81 Pa. St. 256, 262; McCorniick v.
Joseph, 83 Ala. 401 ; Satterfield v. Malone, 35 Fed. Rep. (Penn. Circuit)
445.
2 The Distilled Spirits, 11 Wall. (U. S.) 356; Fairfield Savings Bank
V. Chase, 72 Me. 226; Lebanon Savings Bank v. Hollenbeck, 29 Minn.
322; Burton v. Periy, 146 111. 71 ; Shafer v. Phoenix Ins. Co., 53 Wis. 361;
Dresser v. Norwood, 17 C. B. n. s. 466.
» Constant v. University of Rochester, 111 N. Y. 604.
* Brothers v. Bank, 84 Wis. 381, 395.
^ Constant v. University, supra.
6 Ibid.
190 PRINCIPAL AND THIRL) PAUTY.
bearing upon the subject-matter within the scope of the
agency. It is not enough that it has a material bearing upon
the subject-matter outside the scope of the agency. An agent
may be given only a very limited and special power over tlic
subject-matter, and the fact in question may have no bearing
upon the exercise of that power. In that case the knowledge
of the agent would not be imputed to the i)rincipal. '"The
knowledge or notice must come to an agent who has authority
to deal in rcfei'cnce to those matters which the knowledge or
notice affects. The facts of which the agent had notice must
be within the scope of the agency, so that it becomes his duty
to act upon them or communicate them to his principal. As
it is the rule that whether the principal is bound by contracts
entered into by the agent depends upon the nature and extent
of the agency, so docs the effect upon the princijial of notice
to the agent depend upon the same conditions." ^
(2) It can never be reasonably inferred that an agent will
communicate his knowledge to his principal where it is clearly
against his own interest to do so.^ Accordingly a princij)al is
not bound by notice acquired by his agent in a transaction
where the agent is acting adversely to his principal,^ or has
colluded with third persons to defraud his principal.^ This is
analogous to the case where an agent commits a wilfid tort
for his own ])urposcs, and not as a means of performing the
business entrusted to liim.^
§ 146. Application of rule to corporations.
The general rule that notice to an agent acting within the
scope of his authority and in regard to the subject-matter of
the agency, is notice to the ])rincipal, a])plics to corporations
as well as to individual jiriucipals.*^ Indeed, it is probably in
1 Trentor r. Potlien, 40 Minn. 2dS\ Pittman r. Sofley, 01 111. 155.
2 Cave r. Cave, 15 Cli. Div. G:!!); Barnes v. Trenton Gas Light Co., 27
N. J. Eq. 33; Innerarity v. Merchants' Nat. Bk., 139 Mass. 332.
8 Frenkel v. Hudson, 82 Ala. 158.
* Western Mortg. & Invest. Co. v. Ganzer, 63 Fed. Rep. 047 ; Hudson
r. Randolph, GO Fed. Rep. 210; Nat. L. Ins. Co. v. Minch, 53 N. Y. 144.
^ Allen r. South Boston R., 150 Mass. 200. Cf. Bank r. American
Dock & Trust Co., 143 N. Y. 559.
® Story on Agency, § 140 a; Duncan v. Jaudou, 15 Wall. (U. S.) 105;
NOTICE TO AGENT. 191
reference to corporations that the rule is most frequently in-
voked, for as is said in one case : " A corporation cannot see
or know anything except by the eyes or intelligence of its offi-
cers." ^ (Generally speaking, however, its application to both
individuals and corporations is governed by the same limita-
tions, and it is therefore only necessary to note, in this sec-
tion, that subject to a few exceptions, notice to either a
stockholder 2 or a single director ^ of a coi'poration is not re-
garded as notice to the corporation. But if the director acts
as a member of the board in passing upon the matter concern-
ing which he has notice, the corporation is charged with his
knowledge. " If the note is discounted by a bank, the mere
fact that one of the directors knew the fraud or illegality will
not prevent the bank from recovering ; but if the director who
has such knowledge acts for the bank, in discounting the note,
his act is the act of the bank, and the bank is aft'ectcd with
his knowledge."^ But if " the officer who has such knowledge
has also such connection with or interest in the subject-matter
of the transaction as to raise the presumption that he would
not communicate the fact in controversy, there is no imputa-
tion of notice to the corporation." ^
§ 147. Notice of sub-agent.
Does notice to a sub-agent stand upon the same footing as
notice to an agent ? The question was fully discussed in the
leading case of Hoover v. }Vise^ and the decision reached by
a divided court was that if the agent has power to apj)oint a
Union Gold Min. Co. v. Rocky INIt. N. B., 2 Colo. 248; Smith i-. Water
Comin., 38 Conn. 208.
1 Factors, &c. Co. v. Maine Dry Dock, &c. Co., 31 La. An. 149.
2 Housatonic Bk. v. Martin, 1 Mete (Mass.) 294; Union Canal Co. v.
Loyd, 4 W. & S. (Penn.) 393.
3 Powles V. Page, 3 C. B. 16; Westfield Bank v. Cornen, 37 N. Y. 320;
Fairfield Sav. Bk. v. Cliase, 72 ^le. 22G ; Farrel Foundry Co. v. Dart, 26
Conn. 370.
4 Bank v. Cushman, 121 Mass. 490. See also U. S. Bank v. Davis, 2
Hill (N. Y.), 451 ; Union Bank v. Campbell, 4 Humph. (Tenn.) 394.
^ Hatch V. Ferguson, 66 Fed. Rep. 668 ; Innerarity v. Bank, 139 Mass.
332.
« 91 U. S. 308.
192 PRINCIPAL AND THIRD PARTY,
sub-agent notice given to the sub-agent is notice to the j)rinci-
pal,but if the agent has not power to appoint a sub-agent then
notice to the sub-agent is not notice to the principah The
dissent in this case was, perhaps, rather on the ground that
the agent had authority to appoint the sub-agent than that the
rule of law enunciated by the majority was incorrect. The
case is a typical one. A principal employs an agent to make
a collection or to transact some other business which may re-
quire the assistance of an attorney at law. The agent em-
ploys an attorney, and the notice with which the principal is
sought to be charged is given to or acquired by the attorney.
Hoover v. Wise holds that this is not notice to the principal
since the attorney is the agent of the agent and not of the
principal. As Mr. Justice Miller points out in a dissenting
opinion, " the effect of the decision is, that a non-resident
creditor, by sending his claim to a lawyer through some indi-
rect agency, may secure all the advantages of priority and
preference which the attorney can obtain of the debtor, well
knowing his insolvency, without any resi)onsibility under the
Bankrupt Law." The view taken in this cRvSC by the majority
has not generally prevailed. It may be said to be the general
rule that, where the business confided to the agent reasonably
contemplates that the assistance of an attorney at law may be
required, the agent has authority to appoint an attorney, and
notice to the attorney will be notice to the principal.^ So if,
by custom, as in the case of insurance agencies, it is usual to
appoint sub-agents, notice to such a sub-agent will be notice
to the principal.^
1 Bates V. American Mortgage Co., 37 S. C. 88; Davis v. Waterman,
10 Vt. 520; Ryan v. Tudor, 31 Kans. 360.
2 Arff V. Star Fire Ins. Co., 125 N. Y. 57; Carpenter v. German Am.
Ins. Co., 135 N. Y. 298.
TORTS AND FKAUDS OF AGENT. 193
CHAPTER XIII.
TORTS, FRAUDS, AND MISREPRESENTATIONS OF AGENT.
1. ComHtuenf s Llahilittj for Torts of Representative.
§ 148. Distiuction between servant's torts and agent's torts.
A representative may render his constituent liable in tort
for the breach of an antecedent obligation fixed by the law.^
Such breach gives rise to an action ex delicto for damages.
Torts are the chief subject-matter of the law of master and
servant. A servant is employed to perform mechanical or
operative acts for his master. While so engaged he may
negligently or wilfully injure third persons. In such case it
is held that the master is liable for every wrong committed
by the servant in the course of the employment and for the
master's benefit.^ And it is immaterial whether the master
authorized or directed the act ; the first inquiry is whether it
was within the course of the employment, and a secondary
inquiry may be whether it was for the master's benefit.
" This rule is obviously founded on the great principle of
social duty, that every man in the management of his own
affairs, whether by himself or by his agents or servants, shall
so conduct them as not to injure another; and if he does not,
and another thereby sustains damage, he shall answer for
it," '^ that is, he ahall answer for it under those circumstances
where the injury, if committed in person, would constitute a
breach of legal duty.
1 For a discussion of the meaning and definition of " tort," see Bigelow
on Torts (7th ed.), PP- 1-30.
2 Pollock on Torts (.5th ed.), P- "*- et seq. ; Bigelow on Torts (7th ed.),
§§ 79-S2.
» Fai-well V. Boston, &c. R., 4 Mete. (Mass.) 19.
13
194 PRINCIPAL AND THIRD PARTV.
Contract is the chief subject-matter of tlie law of principal
and agent because an agent is employed mainly to influence
third persons to enter into new legal relations with the prin-
cipal. Ihit an agent may have authority, real or ostensible,
to make representations to third j)ersons which when acted
upon involve the [iriucipal in a tort liability. Accordingly we
have to discuss here such torts as may be committed by an
agent as agent, namely, torts arising from representations
made by the agent to a third person in order to induce him to
act. These torts differ from those committed by a servant
in this, that a servant injures a person by acting upon him or
his property, while an agent injures a person by induciug the
injured person to act to his own prejudice ; and this the
agent does by making representations calculated to influence
the conduct of the injured person.
§ 149. Basis of masters and of principal's liability for tort.
A master's liai)ility for the torts of his sei-vant rests upon
no well-defined legal princijdcs. It is clear that what he
commands he should be answeral)le for. It is now settled
that he may ratify a tort and become answerable therefor,
although a learned judge has recently said, — "If we were
contriving a new code to-day, we might hesitate to say that a
man could make himself a party to a bare tort, in any case,
merely by assenting to it after it had been committed."^
But as to why he is liable for a tort which he neither com-
manded nor ratified, it is difficult to explain. The whole
matter must be referred to grounds of social utility. A
master is answerable because the servant is about the mas-
ter's business, and it is, on the whole, better that the master
should suffer for defaults in the conduct of the business, than
that innocent third persons should bear the losses that such
defaults cast upon them.^ Whatever the reason, the rule is
established that the master is lialde for all torts committed
by his servant in the course of the employment and for the
^ Mr. Justice Holmes in Dempsey v. Chambers, 154 Mass. 330.
a See rollock on Torts (5th ed.) pp. 72-74.
TOUTS AND FRAUDS OF AGENT. 195
master's benefit, and in some cases even when tlie tort was
committed for the agent's own purposes.^
Many cases dealing with the liability of a principal for an
agent's torts, and even for misrepresentations not amounting
to tort, have sought to apply the same rule as in the case of
master and servant.^ But when it is remembered that an
agent commits a tort only by making a representation, it will
be perceived that the liability of the principal may be made to
rest upon grounds more solid, or at least more certain, than
those sustaining the liability of a master for a servant's torts.
Wo need only inquire (1) did the principal hold the agent
out as having authority to make the representation, and (2)
where the third person has been induced to act to his own
prejudice, did the third person act relying reasonably upon
the ostensible authority of the agent and the representations
which he made ? In other words we may solve the problem
of the liability of the principal for his agent's representations
upon the same reasoning as that employed in solving the
problem of the liability of the principal for the contracts of
his agent.'' A principal is responsible for every such repre-
sentation of his agent as is made within the scope of the
authority, that is, as he leads third persons reasonably to
believe that the agent possesses the authority to make.*
The liability of a principal for his agent's torts is therefore
referred to the doctrine of estoppel. It is the " scope of the
authority " and not the " course of the employment " that is
the test. An agent may have real or ostensible authority to
make representations. A servant may have real, but cannot
have ostensible, authority to commit torts. The doctrine of
1 See this more fully discussed in Book IT. under the head of " Master
and Servant ; " post, § 242 et seq.
2 Udell V. Atherton, 7 II. & N. 172 ; Barwick v. English Joint Stock
Co., L. R. 2 Ex. 259; British iNIutual Banking Co. v. Charnwood Forest
Ry. Co., 18 Q. B. D. 714; Friedlander v. Texas, &c. Ry., 130 U. S. 410;
Griswold v. Haven, 25 N. Y. 595, 600; ante, § 52 a.
8 Ante, §§ 102-103, 106.
* New York & N. II. R. i\ Schuyler, 34 X. Y. 30 ; Armour v. :Mich.
Cent. R., 65 X. Y. Ill ; Bank of Batavia v. New York, &c. R.. 106 N. Y.
195; Fifth Ave. Bank v. Forty-Second St., &c. Co., 137 N. Y. 231.
196 PRINCIPAL AND THIRD PARTY.
estoppel is sunicieiit to dctenninc the liability of a principal
for an agent's torts ; it can have no ap})lication to the liabil-
ity of a master for a servant's torts.
There are cases in which the master may be estopped to
deny tliat tlie wrong-doer is his servant, as where he re-
presents that he is practising a profession and thereby induces
third persons to be operated upon by one held out as his
skilled assistant.^ But this is estoppel to deny the existence
of the relation merely. The liability for a tort committed by
such ostensible servant is fixed by the ordinary rule applicable
to master and servant. Estoppel to deny the existence of
the relation could not be invoked where the third person is
not thereby induced to change his legal relations or position.^
§ 150. Nature of third persons remedies.
The person injured by a misrepresentation upon which he
relies to his damage may proceed in tort for deceit where the
misrepresentation was made with knowledge of its falsity or
with a reckless disregard of its truth or falsity. If, however,
the misrepresentation was made innocently, that is, with a
belief in its truth, no action in tort will lie.^
Misrepresentation may, however, give the injured party a
right to rescind a contract^ or it may work an estoppel.^ In
equity there is also a right of restitution which is very
similar to the common law action for damages.^ Misre-
prcs(Mitation is also a defence to an action for specific per-
formance in equity.
In the sections which follow, we shall first consider the
effect of misrepresentation by an agent in giving rise to an
action in tort for deceit, and shall then consider other aspects
1 Ilamion v. Siegel-Cooper Co., 167 X. Y. 24-4.
2 Smith ;-. Bailey, 1891, 2 Q. B. 40.'3.
8 Bigelow on Tort (7th ed.), §§ 1:39-141; Derry v. Peek, 1-1 App. Cas.
337.
* Ke<lirrave v. Hard, 20 Ch. Div. 1.
6 lluft'cut's Anson on Cont. pp. 199-203; Ewart on Estoppel, pp. 222-
237.
Ewart on Estoppel, pp. 222, 225.
TORTS AND FKAUDS OF AGENT. 197
of the question whether tlic particular remedy sought be in
tort, in contract, or by way of estoppel.
2. Liahilif y for Frauds and Misrepresentations of Agent.
§ 151. Fraud and misrepresentation generally.
Fraud is a term in the law of rather vague meaning. It is
often used to include: (1) misrepresentations which amount
to deceit and are remediable in an action for damages ; (2) mis-
representations whicli, whether amounting to deceit or not,
are either made terms in contracts or constitute inducements
to entering into contracts.^ Strictly the term fraud might well
be confined to misrepresentations which constitute actionable
deceit, while the term misrepresentation might be used to
designate those cases where there could be no action for deceit,
but the misrepresentation is either a term in the contract or
an inducement to entering into it. Fraud then might have
these results : first, it might give rise to an action for deceit ;
second, it might vitiate a contract; third, it might work an
estoppel. Misrepresentation might vitiate a contract or work
an estoppel, but it could not give rise to an action for deceit.
Two main problems confront us in discussing the liability
of a principal for the frauds of his agent: (1) is a personally
innocent principal liable in deceit for the wilful frauds of his
agent; (2) is a principal liable in any form for the frauds of
an agent not committed for the principal's benefit ?
§ 152. Fraud in relation to agency : deceit.
Deceit, considered as a tort for which an action for damages
will lie, consists of a false representation of a material fact,
made with knowledge of its falsity or with a reckless disre-
gard of whether it is true or false, and made with intent that
it should be acted upon by another, who, reasonably relying
upon the representation, does act upon it to his damage.'-^
A principal is liable in deceit for such a false representation
made by his agent when the agent has actual authority to
1 Huffcut's Anson on Cont. pp. 174-183.
- Bigelow on Torts (7th ed.), § 110; Pollock on Torts (5th ed.), pp.
269, 270.
198 PRINCIPAL AND THIRD PAKTY.
make the representation, when the principal ratifies the deceit,
or wlien the pi'incipal is estopped to deny that the agent has
authority to make the representation.^
The chief difficulty in proceeding against a principal for the
deceit of his agent arises in connection with the rule that one
in order to be liable for deceit must have made the represen-
tation with knowledge of its falsity or with reckless ignorance
of its truth or falsity. The question arises, is a personally
innocent principal liable for the fraud of his agent ? These
possible cases may be put : —
(1) The principal knows the representation to be false and
authorizes the agent to make it. In such a case the principal
is liable, and the knowledge or want of knowledge of the
agent is immaterial, although it would become material in an
action against the agent for deceit.'"^
(2) The principal knows the contrary of the representation
to be true, but does not expressly authorize the agent to make
any representation concerning the matter, (a) If the agent
knows the representation to be false, or makes it recklessly in
ignorance of its truth or falsity, the principal is liable provided
the agent has such ostensible authority to make a representa-
tion concerning the matter as to lead third persons to give it
credit and act upon it.^ (i) Even if the agent believes the
representation to be true, it is thought that the principal
should be liable, provided the agent has ostensible authority
to make such a representation, since the princij)al holds out
the agent as authorized to make a representation in his
])ehalf and should not be permitted, as against an innocent
party, to plead that he did not give his agent all necessary in-
formation within his own knowledge.* The leading case on
this is Corrifoot v. Fowke^ in which an agent represented that
1 Hern r. Nichols, 1 Salk. 289; Grammar v. Nixon, 1 Stra. 653.
2 Pollock on Torts (5th ed.), pp. 290-291.
8 Taylor v. Green, 8 C. & P. 316; Parke, B., in Cornfoot v. Fowke, 6
M. & W. 358, 373.
* Pollock on Torts (5th ed.), p. 291; Ludgater i\ Love, 41 L. T. K.
694; Mayer r. Dean, 115 N. Y. 556.
' 6 M. & W. 358.
TORTS AND FRAUDS OF AGENT. 199
there was no objection to a house he was authorized to let,
whereas, unknown to him but i<no\vn to his princij)al, there
was a brothel next door. In an action for rent the hirer
pleaded this fraud as a defence. It was held that the plea
was bad, although it would have been good if the principal
were shown to have intentionally concealed the circumstance
from his agent. ^ In Fuller v. Wihon^^ an agent employed to
sell a house represented it to be free from taxes, whereas,
known to his principal but unknown to him, it was sub-
ject to taxes. It was held that the principal was liable in
deceit.
(3) The principal has no knowledge or true belief concern-
ing the matter, and does not expressly authorize any repre-
sentation to be made concerning it. (a) If the agent l<nows
his representation to be false, the principal is liable provided
the agent had ostensible authority to make such a representa-
tion.2 {h) If the agent is also consciously ignorant of the
truth or falsity, the principal should be liable, since reckless
statements are equivalent to intentionally deceitful ones.
(4) The principal believes the facts to be as the agent rep-
resented them to be. {a) If the agent knows his represen-
tation to be false, the principal is liable, provided he had
actual or ostensible authority to make such representations.'*
(5) If the agent also believes his representations to be true,
1 " III Cornfoot v. Fowke, it is difficult to suppose that as a matter of
fact the agent's assertion can have been otherwise than reckless; what
was actually decided was that it was misdirection to tell the jury without
qualification ' that the representation made by the agent must have the
same effect as if made by the plaintiff himself;' the defendant's {)lea
averring fraud without qualitiation." Pollock on Torts (5th ed.), p. 291,
note. See criticism of this case in Fitzsimmons v. Joslin, 21 Vt. 121), 140-
142 ; National Exchange Co. v. Drew, 2 Macq. 103 ; Ludgater i\ Love, 44
L. T. R. 694.
2 3 Q. B. 58. Reversed on other grounds on appeal, 3 Q. B. 68, 1009.
3 Udell V. Atherton, 7 IT. & N. 172 (court equally divided) ; Barwick
V. English Joint Stock Bank, L. R. 2 Ex. 259 ; Mackay v. Commercial
Bank, L R. 5 P. C. 394 ; Swire v. Francis, 3 App. Cas. 106 ; Houlds-
worth V. Glasgow Bank, 5 App. Cas. 317 ; Indianapolis, &c. Ry. v. Tyng
63 N. Y. 653; City N. B. v. Dun, 51 Fed. Rep. 160.
* Pollock on Torts (5th ed.), pp. 293-294.
200 PRINCIPAL AM) TIIIKI) I'AKTV.
the principal is not liable, since neither principal nor agent
has been guilty of any hitent to deceive, or of a reckless dis-
regard of the conseiiuences of the representation.
It will be observed that deceit may be proved by showing
cither that the prinrijial and agent were both guilty of fraud,
or by showing that the principal was guilty of fraud, or by
showing that the agent was guilty of fraud while acting within
the scope of his authority. If both principal and agent were
innocent of fraud, then no action for deceit w' ill lie.
The idea has been put forward that a personally innocent
principal cannot be held liable in tort for deceit.^ But that
idea has not met with favor, and it now seems reasonably
clear that the personally innocent princi])al is liable in tort
for deceit, if his agent, while acting within the scope of his
authority, makes a deceitful representation knowing it to be
false, or consciously ignorant of its truth or falsity.''^
Under statutes authorizing an arrest in case of fraud in
contracting debt, it is held that a personally innocent lU'inci-
pal cannot be arrested for the fraud of his agent.^
§ 153. Fraud or misrepresentation for benefit of principal.
Leavin"- aside now the (piestion as to the particular form
of the remedy, we have to consider whether, in order to give
any remedy at all against the principal, the misrepresentation
of the agent must be made for the principal's benefit.
In the^ case of fraud committed by the agent within the
scope of his authority, and for the benefit of the principal, it
is now generally conceded that the principal is liable however
innocenli he may have been personally.-* Thus, if the agent is
1 Udell V. Athorton, 7 II. & N. 172; Western Bank v. Addie, L. R. 1
Sc. & 1). Cas. 145; Kennedy r. McKay, 43 N. J. L. 288; State v. Fred-
ericks 47 N. J. L. 40!) ; Keefe v. Sholl, 181 Pa. St. 90.
2 Barwick v. En<;lish Joint Stock Bank, L. R. 2 Ex. 2.j9 ; Jeffrey v.
Bigelow, l;i Wend. (X Y.) 518; White r. Sawyer, 16 (Jray (Mass.), 586;
City Nat Bank v. Dun. 51 Fod. Rep. 160; Peebles r. Patapsco Guano
Co., 77 N. C. 233; Wolfe r. Piigii, 101 Ind. 293, 303-306.
» Hathaway r. Johnson, 55 N. Y. 93.
* Barwick v. English Joint Stock Bank, L. R. 2 Ex. 250; Jeffrey >• Bige-
low, 13 Wend. (N. Y.) 518; Peebles v. Patapsco Guano Co., 77 N. C. 233 ;
TORTS AND FRAUDS OF AGENT. 201
authorized to sell lands and makes false representations while
so selling them, the principal is liable to the purchaser for
damages suffered in consequence of such false representa-
tions.^ " When a principal authorizes an agent to do a cer-
tain thing, he is answerable for and bound by the acts and
representations of the agent in accomplishing that end, even
though the agent is guilty of fraud in bringing about the re-
sult. Having given such authority, the principal is responsible
for the fraudulent as well as the fair means used by the agent,
if they are in the line of accomplishing the object of the
agency." ^
In any case where the principal has in his hands the fruits
of a contract made by his agent through misrepresentation
or fraud, it is clear that tlie misrepresentation was for the
principal's benefit and he remains responsible for the con-
sequences.^ Duress stands in this respect upon the same
footing as misrepresentation.'* No principle of law seems
better settled than that a man cannot reap the fruits of his
agent's frauds without also becoming subject to the burdens
of such fraud. ^
While it is sometimes stated that in order to render the
principal liable for his agent's misrepresentations, they must
be made for the principal's benefit, it is submitted that this
is too stringent, that the true rule is that they must be
within the scope of the authority, and that the fact that
they are for the principal's benefit has merely an evidential
force in determining whether they are within the scope of
the autliority. Representations of agents outside the scope
of the authority are of course not binding upon the princi-
Haskell v. Starbird, 152 Mass. 117; Busch r. Wilcox, 82 Mich. 315, s. c.
336; Griswold r. Gebbie, 126 Pa. St. 353; Wolfe v. Pugh, 101 Ind. 293;
Rhoda V. Aniiis, 75 Me. 17 ; Smalley v. Morris, 157 Pa. St. 349.
1 Haskell r. Starbird, supra: Griswold c. Gebbie, supra.
2 Wolfe V. Pugh, supra.
3 Bennett v. Judson, 21 N. Y. 238 ; Garner v. Mangam, 93 N. Y. 642;
Krumm v. Beach, 96 N. Y. 398; Fairchild v. McMahon, 139 N. Y. 290;
Wolfe V. Pugh, 101 Ind. 293, 304.
4 Adams v. Irving Nat. Bank, 116 N. Y. 606.
5 Myerhoff v. Daniels, 173 Pa. St. 555.
^K
202 PRINCIPAL AND TUIKD PARTY.
pal.^ Wliat is now insisted upon is that they are not nec-
essarily outside of the scope of the ostensible authority merely
because they are not, in fact, for the principal's benefit.
The difference between this rule and the rule that the
fraud must be for the principal's benefit is well illustrated
in the case of the issue of fictitious bills of lading" or ficti-
tious stock certilicates by an agent authorized to issue l)ills
of lading or stock certificates.^ It is also illustrated by the
conflict of opinion in the case where a local agent of a
mercantile agency replied falsely to a subscriber concerning
the financial standing of a merchant, not to benefit the
agency but to benefit the merchant, and give him a financial
credit which his circumstances did not warrant;^ Tlie trial
court thought that the fact that the princijjal was i)ersonally
innocent, and that the fraud was not for his benefit, was
immaterial.^ But the court on appeal thought otherwise,
although its decision rests in part upon the terms of the
subscriber's contract.^ Cases under this head are irrecon-
cilable. It remains to discuss them more in detail.
§ 154. Fraud for benefit of agent.
Where the fraud is committed within the apparent scope
of the authority, and under cover of the principal's name and
business, but for the benefit of the agent, there is a sharp
confiict of authority as to the liability of the principal.
In England it seems to be established that the j)rincipal
is never liable under such circumstances. In the leading
English case the statement was that, " The master is an-
swerable for every such wrong of the servant or agent as
is committed in the course of the service, and for the mas-
1 Browning v. Hinkle, 48 Minn. 541; Lamm v. Port Deposit Home-
stead As.so., 49 Md. 233 ; Bradford v. Hanover Ins. Co., 102 Fed. Rep. 48.
2 Post, §§ 1.55, 15G. See also ai>le, § 52 a.
' City Nat. Banlt v. Dun, 51 Fed. Rep. IGO; reversed in Dun r. City
Nat. Bank, 58 Fed. Rep. 174.
* 51 Fed. Rep. 100.
6 58 Fed. Rep. 174. Following Pollard v. Vinton, 105 U. S. 7 ; Fried-
lander V. R. Co., 130 U. S. 410; see post, §§ 155, 15G.
TORTS AND FRAUDS OF AGENT. 203
ter's benefit." ^ In a later case it was expressly held that
the limiting clause, "and for the master's benefit," is an.
essential element of the liability.^
In the United States two opposite views are taken. One
class of cases follows the English holding ; ^ another class
of cases holds that, " where the principal has clothed his
agent with power to do an act upon the existence of some
extrinsic fact* necessarily and peculiarly within the knowl-
edge of the agent, and of the existence of which the act of
executing the power is itself a representation, a third per-
son dealing with such agent in entire good faith, pursuant
to the apparent power, may rely upon the representation,
and the principal is estopped from denying its truth to
his prejudice."^ "If his [the agent's] position and the
confidence reposed in him were such as to enable him to
escape detection for the while, then the consequences of
his fraudulent acts should fall upon the bank, whose direc-
tors, by their misplaced confidence and gift of powers, made
them possible, and not upon others who, themselves acting
innocently and in good faith, were warranted in believing
the transaction to have been one coming within the cashier's
powers." ^
This conflict of judicial opinion is well illustrated in two
classes of cases : (1) where the agent fraudulently issues stock
certificates and sells them for his own benefit ; (2) where
^ Barwick v. English Joint Stock Bank, supra. And see Houldsworth
V. City of Glasgow Bank, L. R. 5 App. Cas. 317.
2 British Mutual Banking Co. v. Charnwood Forest R. Co., L. R. 18
Q. B. Div. 714.
3 Friedlander v. Texas, &c. Ry., 130 U. S. 416, and cases in succeed-
ing sections.
* Ordinarily an agent can commit a fraud for his own benefit only by
misrepresenting an extrinsic fact, as that a document is genuine or valid,
that a depositor has funds, and the like. In committing a fraud for his
principal's benefit, he usually misrepresents an intrinsic fact, as the quality
of an article sold.
6 Bank of Batavia v. New York, &c. R., 106 N. Y. 195, 199.
6 Phillips V. Mercantile Nat. Bk., 140 N. Y. 556, 563. And see cases
jn succeeding sections.
204 PRINCIPAL AND THIRD PARTY.
the agent fraudulently issues bills of lading and sells them
for his own benefit.
§ 155. Fraud for benefit of agent. — Issue of stock certificates.
If a stock transfer agent fraudulently issues stock cer-
tilicates in excess of the amount which the company may
lawfullv issue and, by collusion with the transferee of the
stock, sells them to innocent purchasers for value for his
own benefit, is the company liable in an action for damages
to the innocent purchasers of the stock ?
The English courts have answered this question in the
negative. The purchasers called upon the transfer agent to
inquire as to the validity of the stock, and were of course
informed that the stock was valid. The jMaster of the
Rolls (Lord Esher) said: "The secretary was held out by
the defendants as a person to answer such questions as
those put to him in the interest of the plaintiffs, and if he
had answered them falsely on behalf of the defendants, he
being then authorized by them to give answers for them,
it may well be that they would l)e liable. But although
what the secretary stated related to matters about which
he was authorized to give answers, he did not make the
statements for the defendant but for himself. ... I know
of no case where the employer has been held liable when
his servant has made statements not for his employer, but
in his own interest." ^ It has been thought that the United
States Supreme Court has held the same docti'ine, but the
case in question may well be distinguished on the ground
that the third i)arty w^as l)uying the stock of the agent, and
had therefore no right to rely on his representation whore
his interest was clearly adverse to that of his princii)al.''^
But it is clear that the tendency of that court is to follow
the Euglish doctrine.^
1 British Mutual Banking Co. v. Chavnwood Forest Ky , L. R. 18 Q.
B. Div. 714, 716-717.
2 Moores v. Citizens' Nat. Hk., Ill U. S. 156. Cf Bank of New York,
&c. I'. American Dock & Trust Co., 143 N. Y. .559.
8 Friedlander v. Texas, &o. Ry., 130 U. S. 416.
TOKTS AND FKAUDS OF AGENT. 205
A considerable number of American courts have answered
the question in the affirmative. The leading New York case^
presents an exhaustive examination of the whole subject,
after an argument by an array of eminent counsel rarely
united in one proceeding, and in an opinion by Noah Davis,
J., of singular ability and lucidity. The result is embodied
in the doctrine that where the principal authorizes an act
which necessarily involves in the doing of it a representa-
tion as to some extrinsic fact, that he assumes the risk that
the representation will be true. " He knows that the person
he authorizes to act for him, on condition of an extrinsic
fact, wliich in its nature must be peculiarly within the
knowledge of that person, cannot execute the power with-
out as res gestae making the representation that the fact
exists. With this knowledge he trusts him to do the act,
and consequently to make the representation which, if true,
is of course binding on the principal. But the doctrine
claimed is that he reserves the right to repudiate the act
if the representation be false. So he does as between him-
self and the agent, but not as to an innocent third party
who is deceived by it. The latter may answer, you entrusted
your agent with means effectually to deceive me by doing
an act which in all respects compared with the authority you
gave, and which act represented that an extrinsic fact known
to your agent or yourself, but unknown to me, existed, and
you have thus enabled your agent, by falsehood, to deceive
me, and must bear the consequences. The very power you
gave, since it could not be executed without a representa-
tion, has led me into this position, and therefore you are
estopped in justice to deny his" authority in this case. By
this I do not mean to argue that the principal authorizes
the false representation. He only, in fact, authorizes the
act which involves a representation, which, from his con-
fidence in his agent, he assumes will be true ; but it may
be false, and the risk that it may, he takes, because he gives
the confidence and credit which enables its falsity to prove
1 New York & New Haven R. v. Schuyler, 31 N. Y. 30, especially pp.
65-75.
206 PRINCIPAL AND THIRD PARTY.
injurious to an innocent party.'' ^ The doctrine tlius estab-
lished has been followed in many succeeding cases in New
York and elsewhere.- But the doctrine of these cases is
subject to the qualification that the purchaser must act in
good faith and prudently ; it is not good faith or prudence
to trust to the representation where the agent is known
to be acting for bimself in the sale of the stock.^ And, of
com'se, the agent must be acting within the apparent scope
of the powers entrusted to him ; an unauthoi-ized seizure of
the powers as a means of fraud, where no authority to exer-
cise them exists, will not render the principal liable*
§ 156. Fraud for benefit of agent. - — Issue of fictitious bills of
lading.
A similar question arises where the agent, being authorized
to issue bills of lading, issues fictitious bills of lading in the
name of a confederate and sells them through the confederate
to innocent purchasers.
In England it is held that the principal is not liable, the
argument being that the agent is authorized to do what is
nsual in his agency and it is not usual to issue fictitious bills of
lading.^ This play upon words, if resorted to in other cases,
would excuse the constituent for every tort of his representa-
tive. The English holding has been followed in the Federal
courts and in some of the State courts in this country.^
1 New York & New Haven R. c. Schuyler, 34 N. Y. 30, especially pp.
70-71.
2 Fifth Ave. Bk. v. Forty-second Street, &c. 11., 137 N. Y. 231 ; Tome
r. Parkersburg Branch R., 39 Md. 36. See also Allen v. South Boston R.,
1.50 Mass. 200: Farriugton t'. Same, 150 Mass. 406; American Wire &
Kail Co. V. Bayless, 91 Ky. 94; Appeal of Kisterbock, 127 Pa. St. 601.
8 IMoores v. Citizens' N. B., supra; Allen r. South Boston R., supra;
Farrington c. Same, supra , Bank of New York, &c. v. American Dock
& Trust Co., supra. Cf. New York & New Haven R. v. Schuyler, supra,
p. 64.
■» Manhattan Life Ins. Co. v. Forty-second Street, &c. R., 139 N. Y.
146.
6 Grant v. Norway, 10 C. B. 665; Cox i-. Bruce, L. R. 18 Q. B. Div.
147. Cf. Montai.Ejnac i-. Shitta, 15 App. Cas. 357.
« Pollard y. Vinton, 105 U. S. 7 ; Friedlander v. Texas, &c. Ry. 130
TORTS AND FRAUDS OF AGENT. 207
In the United States many courts hold the principal liable.
In a leading New York case,i the doctrine of the English
courts is expressly disapproved and the doctrine of estoppel
in pais api)lied. And this has been followed by subsequent
cases in the same and other jurisdictions.^ Even the courts
which liold the other doctrine recognize the essential justice
of this. " If the question was res integra we confess that it
seems to us that this argument would be very cogent." ^ The
doctrine is subject to the same qualifications as in its appli-
cation to the issue of stock certificates.*
§ 157. Fraud for benefit of agent. — Other illustrations.
The doctrine above explained and illustrated may be in-
voked under other circumstances too various to be referred
to in detail. Thus a bank cashier who employs his powers
to draw checks, for the purpose of converting the funds of
the bank to his own use, is using a trust and confidence
reposed in him by the bank, and the loss must fall on it
ratlier than on innocent parties.^ So an agent of a telegraph
company wlio employs his power to send telegrams as an
operator in the sending of forged telegrams requesting the
transmission of money, is abusing a trust and confidence
placed in him by the company, and the latter, rather than
the innocent receiver of the telegram, should bear the loss.^
U. S. 416 ; National Bank of Commerce v. Chicago, &c. R., 44 Minn. 224,
and cases there cited. The artificial reasoning of this class of cases is
illustrated by a comparison of the case last cited with jNIcCord v. Western
Union Tel. Co, 39 Minn. 181, where the same court ^vent to an even
questionable length in applying the doctrine of estoppel against the
principal.
1 Armour v. Michigan Central R., 65 N. Y. 111.
2 Bank of Batavia r. Xew York, &c. R., 106 N. Y. 195; Brooke v. N.
Y., &c. R., 108 Pa. St. 529; St. Louis, &c. R. v. Larned. 103 111. 293;
Wichita Bank v. Atchison, &c. R., 20 Kans. 519; Sioux City, &c. R. v.
First Nat. Bk., 10 Neb. 556; Fletcher v. G. W. El. Co., 12 So. Dak.
643.
3 National Bank of Commerce v. Chicago, &c. R., 44 Minn. 224, 235.
4 Bank of New York, &c. v. American Dock & Trust Co., 143 N. Y. 559.
5 Phillips V. Mercantile Nat. Bk., 140 N. Y. 556.
« McCord V. Western Union Tel. Co., 39 ?»Iinn. 181 ; Bank of Palo Alto
V. Pacific Postal Tel. Cable Co., 103 Fed. Rep. 841.
208 VRIXCirAL AND THIRD I'AKTY.
" Persons receiving despatches in the usual course of busi-
ness, when there is nothing to excite suspicion, are entitled
to rely upon the presumption that the agents entrusted with
the performance of the business of the company have faith-
fully and honestly discharged the duty owed by it to its
patrons, and that they would not knowingly send a false or
forged message ; and it would ordinarily be an unreasonable
and impracticable rule to require the receiver of a despatch
to investigate the question of the integrity and fidelity of the
defendant's agents in the performance of their duties, before
acting." ^
The result of the whole matter is this : one class of cases
insists upon the hard and fast rule that the fraud must be for
the principal's benefit in order to render him liable, while the
other class of cases gives to that fact only an evidential force
in determining the decisive question whether the representa-
tion was so far within the scope of the agent's ostensible
authority as to warrant third persons in relying upon it.
By applying to these cases the doctrines of estoppel already
set forth and clearly applicable to cases of contract, the latter
view appears to be more nearly in accord with the general
principles of agency.^
3. Liahilify for influencing the Conduct of other Persons
toward Plaintiff'.
§ 158. Representations about plaintiff.
Ill addition to making representations to plaintiff which
induce him to change his legal relations to his damage, an
agent may make representations about plaintiff which influ-
ence the conduct of third persons toward him to his damage.
It may be questioned whether lial)ility for such representa-
tions depends at all upon doctrines applicable to j)rincipal
and agent. These torts may be said to lie on the border
land between the two fields. As they originate in rci)rcscn-
tations they are within the usual class of duties devolved upon
agents as distinguished from servants. But as the injured
1 McCord V. W. U. Tel. Co., supra. « Ante, § 52 a.
TOUTS AND FRAUDS OF AGENT. 209
person is acted upon instead of being induced to act himself,
they are more nearly like the torts of a servant than like
those of an agent.^ Moreover it is doubtful whether any
doctrine of estojjpcl can be applied to them since the plaintiff
in tiiese cases has not been misled to his damage by any
representation of defendant's agent. These cases, therefore,
must be mainly solved by the doctrines applicable to the
torts of servants.^ They may, however, be here briefly
enumerated.
§ 159. Inducing breach or termination of contract.
It is actionable to induce a breach of contract by any
means, or to induce a termination (without breach), or the
non-formation, of a contract by unlawful means.^ Whether
it is actionable to induce termination or non-formation of a
contract by persuasion alone is in dispute.*
If an agent acting within the scope of his authority induces
X to break a contract with plaintiff, or by use of unlawful
means induces X to terminate, or to refuse to form, a con-
tract with plaintiff, the principal is liable to plaintiff for such
tortious act of his agcnt.^ He is not liable if the agent was
acting outside the scope of his authority or the course of his
employment.^
§ 160. Defamation.
A principal is liable in an action for defamation where his
agent publishes a libel while acting within the scope of his
authority, or usual course of the employment.^ A corpora-
1 Ante, §§ 148, 149.
2 Ante, § 149.
3 Lumley v. Gye, 2 E. & B. 216; Rice r. Manley, 66 N. Y. 82; Angle v.
Chicago, &c. Ry., 1.51 U. S. 1 ; Bigelow on Torts (7th ed.), pp. 127-133.
* Allen V. Flood, 1898, App. Cas. 1; Walker v. Cronin, 107 Mass.
5.5-"); Bigelow on Torts (7th ed.), pp. 115-123; post, § 295, ei seq.
5 Rlumenthal v. Shaw, 77 Fed. Rep. 9.54.
« Gniham v. St. Charles St. Ry., 47 La. An. 1656.
7 Dunn I'. Hall, 1 Carter (Ind.), 344; Fogg v. Boston & Lowell R.,
118 Mass. 513; Peterson v. W. U. Tel. Co., 75 Minn. 368; Long v.
Tribune Printing Co., 107 Mich. 207 ; Allen v. News Pub. Co., 81 Wis<
120 ; post, § 252.
14
210 PRINCIPAL AND THIRD PARTY.
tion may be held liable for libel ; ^ Itiit it must be shown tliat
tlie corporate agent had express or imi)lied authority to make
the communieation in behalf of the eorporation.^
An employer is ei'iminally lial>le for a libel published by his
agent or servant witliin tlie general scoi)e of the authority or
the L'm[)i()ymcnt,3 except as otherwise pi'ovided by statute.*
§ 161. False arrest and malicious prosecution.
Cases of false arrest are more fully treated under the head
of master and servant.^ Briefly it may be said that a princi-
pal or master is liable for a false arrest directed by his agent
or servant when such arrest is made in the course of the
employment and is intended to be in the employer's inter-
ests ; *^ l)ut not when such arrest is outside the course of the
employment'' or primarily in the public interest.^
While there are discordant decisions,^ it may be stated as
a general rule that for malicious prosecution instituted by an
agent or servant the employer is liable provided the institut-
ing of such j)rosecution was within the course of the emj)loy-
ment or the scope of the authority and was intended for the
employer's benefit. ^^
It has been held that corporations could not be made liable
1 Philadelphia, &c. R. v. Quigley, 21 IIow. (U. S.) 202; Iloboken
Printing, ike. Co. v. Kahn, 59 N. J. L. 218.
2 Wa.shington Gas Light Co. r. Lansden, 172 U. S. 5-34.
8 R. V. Gutch, Moo. & Mai. 433; R. v. Walter, 3 Esp. 21; R. v. Cooper,
8 Q. B. 533; People r. Clay, 80 111. 147 ; pnst, § 268,
* 6 & 7 Vict. c. 9G; Odgers on Libel & Slander (3d ed.), pp. 432-434;
N. Y. Penal Code, § 246.
6 Post, § 252.
8 Lynch v. :\Iet. &c. Ry., 90 N. Y. 77; Palineri v. Manhattan Ky,, 133
N. Y. 261; Staples i: Schmid, 18 R. I. 224.
T Bank r. Ow.ston, 4 A])p. Cas. 27<); Poulton v. I^ondon, &c. Rv., L. R.
2 Q. P,. 534.
8 Mulligan r. N. Y. & R. B. Ry., 129 X. Y. 506; Abrahams v. Dea-
kin, 1891, 1 Q. B. 516.
» Wallace v. Finberg, 46 Tex. 35 ; Carter v. Howe IMachine Co., 51
Md. 200.
" Reed v. Home Savings Bank, 130 Mass. 443; IIu8.sey v. Norfolk, &c.
R., 98 N. C. 34.
TORTS AND FRAUDS OF AGENT. 211
in an action for malicious prosecution ; ^ but most jurisdic-
tions have departed from the artificial reasoning of these
cases and hold a corporation liable for malicious prosecution
to the same extent as any principal ;^ also for malicious
conspiracy.^
1 Abrath v. Northeastern Ry., 11 App. Cas. 217; Owsley y. Montgom-
ery, &c. R., 37 Ala. 5G0.
2 Goodspeed r. East lladdani Bank, 22 Conn. 530; Vance v. Erie R.,
32 N. J. L. 334; Morton v. Met. Ins. Co., 31 Hun, 366; 103 N. Y. 645;
Williams v. Planters' Ins. Co., 57 Miss. 759.
8 Buffalo Lubricating Oil Co. v. Standard Oil Co., 106 N. Y. 669 ; 12
N. E. Rep. 825.
212 PRINCIPAL AND TIIIKD PARTY.
CriAPTER XIV.
LIABILITY OF THIRD PERSON TO PRINCIPAL.
^ 162. Introductory.
"We have thus fur spoken in this part mainly of the liabil-
ities of the principal for the acts of his agent. It now remains
to consider briefly the rights which the principal may acquire
from tlie acts of his agent, as against third j)ersons with whom
the agent deals. The liability of a third person to the princi-
pal may arise : (1) from a contract obligation of which the
principal is entitled to avail himself; (2) from a quasi-con-
tractual obligation of which the })rincipal is entitled to avail
himself ; (3) from a tort obligation of which the principal is
entitled to avail himself ; (4) from a trust obligation of which
the principal is entitled to avail himself in equity. Each of
these classes of liabilities will be briefly discussed.
1. Contract Ohligations.
§ 163. Contracts by agent.
A contract made by an agent in behalf of his ])rincij)al may
be either: (1) made by the agent in the name of tiie ))rincipal
within the scope of a prior authority ; (2) made by the agent
in the name of the principal outside the scope of a prior au-
thority. iMit subsequently ratified ; (3) made by the agent in
the name of a foreign ])rincipal ; (4) made by the agent in his
own name. The rights of the principal vary in accordance
with those variations in the manner of forming the contract.
§ 164. Contracts in the name of the principal.
(1) Authorized contracts. It is too clear to need demon-
stration that a contract made by an agent within his author-
ity, real or apparent, which would bind the principal will also
LIABILITY OF THIRD PARTY. 213
bind the third party. This is in accordance with the estal>-
lished doctrines of the mutuality of contractual obligations.
In such a case the principal is both the real and nominal party
in interest and is the only one who can sue or be sued upon
the contract.^
(2) Ratified coyitracts. An unauthorized contract made in
the name of the principal and subsequently ratified stands
upon the same footing as one previously authorized. The
ratification exonerates the agent from liability, relates back to
the time of the formation of the contract, and creates all the
rights and obligations in favor of and against the principal,
which would have sprung from an authorized contract. Ac-
cordingly after a binding ratification ^ the principal is the only
one who can sue or be sued upon such a contract/^ It has
recently been held by the House of Lords in England that an
unauthorized contract made in behalf of an undisclosed prin-
cipal cannot be ratified by him so as to enable him to sue or
be sued upon it.*
(3) Contract for foreign principal. It is a rule of the Eng-
lish law that prima facie a principal resident in one country is
not a party to a contract made in another country, by his
agent resident tbere, and that he can neither sue nor be sued
upon it ; but the presumption may be overcome by showing
that the agent bad authority to pledge his principal's credit
and that tbe third party accepted the credit, thus establishing
a privity of contract between the third party and the princi-
pal.^ The rule of the American law is otherwise as will be
seen hereafter.^
§ 165. Contracts in the name of the agent.
An agent may contract in his own name either : (1) for an
undisclosed principal ; (2) for a disclosed principal who, how-
1 Fail-lie v. Fenton, L. R. 5 Ex. 169; Sharp v. Jones, 18 Ind. 314;
Dicey on Parties to Actions, Rule 17.
2 Ante, §§ 31-44.
8 Ante, §§ 45-49 ; Ancona v. Marks, 7 H. & N. 686.
4 Keighiey v. Durant, 1901, App. Cas. 240.
6 Post, § 187,
6 Ibid.
214 PRIN'CirAL AND THIRD PARTY.
ever, is not named in the formal contract. Each case pre-
sents features involving the rights and liabilities of the
principal.
(1) Undisclosed principals. The rights and liabilities of an
undisclosed principal have already been considered. Subject
to the exceptions there enumerated the third person is liable
to the undisclosed principal in the same manner as if the
latter had been disclosed.^
(2) Unnamed principal. An agent may disclose his prin-
cipal and intend to make a contract in his behalf, l)ut fail of
this purpose by an omission to name the principal in the
formal instrument. In such a case if the instrument be a
simple contract the omission may be supplied and the princi-
pal may both sue and be sued upon the contract ; ^ but if the
instrument 1)C under seal or negotiable, parol evidence cannot,
at common law, be received even to effectuate the intention of
the parties,^ nor can it be received where by the terms of a
simple contract it clearly appears that exclusive rights and
credit were given to the agent.*
It follows that there are three cases in which the agent also
can sue : (1) where the agent contracts by deed in his own
name ; (2) where the agent contracts in a negotiable instru-
ment in his own name ; (3) where by the terms of a contract
rights under it are expressly restricted to the ngent.^ Where
one contracts really for himself, but ostensibly for another
whom he does not name, he may sue as principal.*^ In other
cases of simple contracts made for an undisclosed or unnamed
principal, the principal may sue, although the agent may also
sue in some cases.''
2. Quasi- Contract Obligations.
§ 166. Money paid by mistake.
It is a general |)rinciple of the law that money paid under a
mistake of material fact, in the belief that it is due, may be
recovered back in an action for money had and received,
1 Ante, §§ 129-135. " Post, § 197.
« Post, §§ 188, 189. * Ante, § 132; post, § 186.
6 Post, § 207. * Dicey on Parties, Rule 18.
^ Post, § 208.
LIABILITY OF THIRD PARTY. 215
where it would be against conscience for the payee to retain
it.^ The action is based on equitable principles and proceeds
upon the fiction that the defendant promised to pay the money
back. In this action it is immaterial whether the principal
paid the money in person or through an agent ; in either case
he is entitled to proceed in quasi contract for his remedy.
Accordingly a principal may maintain an action for money
had and received against a third person to whom an agent
has paid it under a mistalce of fact,^ or which is paid by him
under a mistake originating with his agent,^ or with a public
or quasi-public officer, on the strength of whose certificate he
relies.* The government may recover in this way money paid
by one of its agents under a mistake or misinterpretation of
law.^
§ 167. Money paid under duress or fraud.
Where a third person obtains from an agent by duress or
fraud moneys belonging to the principal, the latter may re-
cover the moneys so paid by his agent in an action for money
had and received.^ Such actions may always be maintained
by the real party in interest since they do not rest upon priv-
ity of contract, but upon the contract created by the law.''' If
an agent is compelled to pay illegal charges for the protection
of his principal's interests, the latter cannot proceed against
the agent but must proceed against the one making the unjust
exaction.^ The agent as well as the principal may, however,
proceed against the third party for the amount so paid under
duress.*
^ Keener on Quasi-Cont., Ch. IT.
2 United States v. Bavtlett, Daveis (U. S. Dist. C), 9, s. c. 2 "Ware, 17.
3 Lane v. Pere Marquette Boom Co., 02 jNIich 63.
* Talbot V. National Bank, 129 Mass. 07; Holmes v. Lucas Co., 53
Iowa, 211.
5 McElrath r. United States, 102 U. S. 426 ; Wisconsin Central R. v.
United States, 164 U. S. 190 ; United States i'. Dempsey, 104 Fed. Rep.
197.
^ Stevenson v. Mortimer, Cowp. 805 ; Demarest r. Barbadoes, 40 N.
J. L. 604.
7 Stevens v. Fitch, 11 Mete. (Mass.) 248
^ Holman v. Frost, 26 S. C. 290. ^ Stevenson v. Mortimer, supra.
216 PKIXCirAL AND THIRD PARTY.
Whore money belonging to tlic principal has been diverted
by the agent into the hands of a third person who takes with
notice of tiie breach of trust, the latter is lial)lc to the princi-
jial in ^(jiiiiy, and in some States in quasi-contract, as for
money iiad and received.^
3. Tort Obligations.
§ 168. Property diverted by agent. — General rule.
Where an agent disjwses of his principal's property beyond
the scope of the authority, the principal may recover it from
any one into whose hands it has passed.^ This doctrine rests
upon the maxims that a buyer gets no better title than the
seller had to give him, and that an owner cannot be divested
of his title without his consent. The third party is therefore
bound to show that the agent had the authority to transfer
the title, or that the principal's conduct has been such as to
work an estoppel. Authority may be shown in the usual ways;
namely, by previous grant, by subsequent ratification, by
necessity, and by estoppel.
To the general and sweeping rule as above stated, there are
two well recognized exceptions at the common law and a third
which has been created by statute in some jurisdictions. The
rule and the common law exceptions are well explained in the
case of Saltiis v. Everett,^ and may be here briefly summarized.
§ 169. Exceptions. (1) Negotiable instruments.
Where the proj)erty entrusted to the agent is currency, or
negotiable paper transferable by delivery, then under the rules
of the law merchant, a hona fide purchaser for value will take
a title good against the jiriucipal, even though the agent ex-
ceeds his powers or diverts the property to his own uses.* The
1 Post, §§ 177-179.
* Thompson v. Barnum, 49 Iowa, 392 ; Barker v. Dinsmore, 72 Pa. St.
427 ; Jackson v. Bank, 92 Tenn. 154; Morris v. Preston, 93 111. 215.
8 20 Wend. (N. Y.) 267.
■* Goodwin v. Robarts, L. R. 1 App. Cas. 476 ; London Stook Bank
V. Simmons, 1892, App. Cas. 201 ; Ayer v. Tilden, 15 Gray (Mass.), 178;
Bank r. Vanderhorst, 32 N. Y. 553.
LIABILITY OF THIRD PARTY. 217
doctrine is broader than the application to agency, since even
a thief can give good title to money, or paper that passes like
money. In agency, a principal can follow money or negoti-
able paper passing by transfer only where it is in the hands
of one who took with notice of his rights or who did not give
a valuable consideration for it. Purchase without notice and
for value cuts off the owner's rights. Where paper is restric-
tively indorsed, as " for collection," it is notice to all subse-
quent holders of the principal's title.^
But if the money or notes come into the third party's
hands mala fide, the principal may recover; in the case of
money, or notes turned into money, the action may be in
quasi-contract as for money had and received.''^ If an agent
places his principal's money on a wager and loses it, the
principal may sue the winner and recover the money .^
§ 170. Exceptions. (2) Indicia of ownership; ostensible owner-
ship.
Where the principal not only entrusts his property to the
agent, but also clothes the agent with the documentary evi-
dence of ownership of the property, and third persons have
reason to believe from such documentary evidence that the
agent is the owner, then a bona fide purchaser for value will
be protected as against the principal.* Thus where the prin-
cipal allows his property to stand on the books of a wharfinger
in the name of his agent, he cannot set up his title as against
a purchaser from the agent ;^ nor where he allows a vessel
to be enrolled in the name of his agent ;^ nor where he allows
his agent in purchasing goods to take a bill of sale in his own
1 Commercial Bank v. Armstrong, 148 U. S. 50 ; Butchers', &c. Bank
V. Hubbell, 117 N. Y. 384; Freeman's Bank v. National Tube Works,
151 Mass. 413.
2 Clarke v. Shee, Cowp. 197.
8 Vischer v. Yates, 11 Johns. (N. Y.) 23; Mason v. Waite, 17 Mass.
560 ; Donahoe v. McDonald, 92 Ky. 123.
4 Nixon V. Brown, 57 N. H. 34; McNeil v. Tenth N. B , 46 N. Y.
325.
6 Pickering v. Busk, 15 East, 38.
6 Calais Steamboat Co. v. Van Pelt, 2 Black (U. S.), 372.
218 PKI.N'CirAL AND TIIIUD rAKTY.
naine;^ nor where, uudi'r an ordinance which provides that
licenses shall be taken ont in the name of the owner, he
allows liis agent to take out a license for a public vehicle in
his own name.2 In all these and similar cases the true owner
is estopped by his representation, or acquiescence in the rep-
resentation, as to the agent's title, from setting uj) his own
against one who purchases from the agent on the strength
of the representation. But the document must be a represen-
tation as to title in order to work an estoj)pel, and the buyer
must rely upon it as such.^
Some cases of ostensible ownershij) are often confused
with the cases where the princij)al is estopped to deny the
agent's authority to sell as agent, that is, with cases of osten-
sible agency. But the distinction is clear. In these cases
the buyer treats the seller as owner, and the inquii-y is
whether the conduct of the true owner has been such as to
work an estoppel against him to deny such ostensible owner-
ship. In cases of ostensible agency, the buyer treats the seller
as agent for the true owner, and the inquiry is whether the
conduct of the principal has been such as to create an estoppel
to deny the ostensible agency.* Some cases decided on the
theory of ostensible agency might well have been decided
upon the theory of ostensible ownership.^ Thus if one sends
his goods to an auction room, but confers no documentary
indicia of title, it might be reasonably inferred that the
auctioneer is clothed with authority to sell them as agent.^
But if one sends his goods to the sales rooms of one who sells
on his own account, but not customarily as agent, and no
documentary indicia of title are conferred, the sole question
would seem to be (in the absence of express authority to
sell) ' whether the proprietor Is so far ostensible owner as to
^ Nixon ('. Brown, supra.
2 McCauley v. Brown, 2 Daly (N. Y. C P.), 426.
8 Hentz r. Miller, 94 N. Y. 64.
* Ewart on Estoppel, pp. 238-250.
» Biggs r. Evans, 1894, 1 Q. B. 88; ante, § 2, 52; Ewart on Estoppel,
pp. 484-185.
8 Lord Ellenborough in Pickering v. Busk, 15 East, 38.
T Smith V. Clews, 105 N. Y. 283.
LIABILITY OF TIIIKD TARTY. 219
estop the true owner in case of a sale to an innocent
purcliaser.^
§ 171. Exceptions. (3) Factors Acts.
A factor is one whose business it is to receive consignments
of goods and sell tlicm for a commission.^ But a factor may
also be a merchant buying and selling on his own account.
Whether selling in his own right or for another, he may sell
in his own name, and it follows that an innocent purchaser
may take the goods by barter, or for a pre-existing debt of
the factor, or in pledge for a contemporaneous debt, in igno-
rance of the fact that they belong to an undisclosed principal.
In any one of these cases the principal may reclaim bis goods
as against the innocent purchaser, for it is arbitrarily declared
to be the rule of law that the authority of the factor is only
to sell and not to barter, or pledge.^
Owing to the frauds made possible by this rule, and deem-
ing it better that where one of two innocent persons must
suffer he should bear the loss who reposed the trust in the
wrong-doer, the legislatures in several jurisdictions have
passed "Factors Acts" for the relief or protection of innocent
third parties. The most sweeping is the English Factors Act
of 1889 (52-53 Vict. c. 45) which supersedes earlier enact-
ments beginning with 4 Geo. IV. c. 88 (1823). The New
York Factors Act (1830 c. 179) is the beginning of similar
legislation in this country.^
The New York Act (§ 3) provides that : " Every factor or
other agent ^ entrusted with the possession of any bill of
lading, custom-house permit, or warehouse-keeper's receipt
for the delivery of any such^ merchandise, and every such
1 Levi V. Booth, 58 Md. 305; Biggs v. Evans, 1894, 1 Q. B. 88.
2 Ante, § 111.
8 Patterson v. Tash, 2 Str. 1178; Newbold v. Wright, 4 Rawle (Pa.),
195; Gray v. Agnew, 95 111. 315; Allen v. St. Louis Bank, 120 U. S. 20;
Warner v. Martin, 11 How. (U. S.) 209.
* See Stimson's Am. Statute Law, §§ 4380-4388. The English and
New York Acts will be found in the Appendix ; post, pp.
6 The English Act reads " mercantile agent."
« That is, any such as is described in § 1 of the Act, namely, mer-
chandise shipped in the name of the agent, or, under this clause of § 3,
220 PRINCIPAL AND THIRD PARTY.
factor or agent not having the documentary evidence of title
who sliall be entrusted with the possession of any merchandise
for the purpose of sale,^ or as security for any advances to be
made or obtained thereon,^ shall be deemed to be the true
owner thereof,"'^ so far as to give validity to any contract
made by such agent with any other person, for the sale or
disposition of the whole or any j)art of such merchandise, for
any money advanced, or negotiable obligation in writing given
by such other person upon the faith thereof."
The act (§4) further provides that taking such merchan-
dise from such an agent for an antecedent debt gives no right
or interest other than was possessed or might have been en-
forced by the agent himself ; and (§ 5) that in any case the
true owner may reclaim his property upon repaying the third
party any advances made by him or may recover a balance
due from a third party upon satisfying any demand justly due
such party. This act has been the subject of many judicial
decisions, a few of which may be noted.
It is to be observed that the factor or agent must be one
entrusted (flf) with a document of title as cnumci-atcd, or (6)
with possession of the goods for the purpose of sale, or as
security for advances to be made or obtained thereon. Calling
the agent a " trustee " does not prevent the act from operating
if the relation is in fact that of priuci[)al and agent.^ But an
merchandise of which the documentary evidence of title is in the agent's
name. First N. B. v. Shaw, 61 N. Y. 283, 300.
' Under the English Act tlie factor need not be entrusted with the
goods for the purpose of sale, or as security for advances; it is enough
that he is in possession with the consent of the owner. The Xew York
Act expressly provides that, " Nothing contained in this act shall author-
ize a common carrier, warehouse-keeper, or other Y)erson to whom mer-
chandise or other property may be committed for transportation or
storage only, to sell or hypothecate the same." § 7. This same result is
reached in the English Act by limiting the Act to " mercantile agents."
2 This is ostensible ownership. The English Act reads, "any sale,
pledge, or otlier disposition . . . shall ... be as valid as if he were expressly
authorized by tlie owner of the goods to make the same.'' This is osten-
sible agency in form.
8 Xew York Security & Trust Co. v. Lipman, 91 Hun, 554, allirmed,
157 N. Y. 551.
LIABILITY OF THIRD PARTY. 221
employee in the owner's store or place of business is not such
an agent, because in such case the possession of the agent is
the possession of the owner, and not such a " possession for
the purpose of sale " as is meant in the act.^ But the posses-
sion of a travelling salesman is possession by the agent within
the meaning of the act.^ Possession of the goods must be
for one of the purposes enumerated in order that the act shall
apply .^ Actual and not merely constructive possession is
necessary in the absence of documentary evidence of title;*
and such possession must have been given voluntarily by the
principal, for if the agent obtains the goods by trespass or
fraud he is not entrusted with thcm.^ If the agent be en-
trusted with a document of title this must be in his name.^
He must have been entrusted with it by the owner ; ^ but en-
trusting a factor with a primary document out of which the
one dealt with grows, is the same as entrusting him with the
latter directly.^ The documents of title to which the act
applies are only the three enumerated.^
It is to be observed that the third party must have made
a contract of sale, pledge, or otherwise, " upon the faith
thereof," that is, upon the faith of the appearance of owner-
ship in the agent. To entitle the third party to the protec-
tion of the statute, it must appear that he believed the factor
to be the true owner.^^ One making advances to a factor
upon goods know^n not to be the goods of the factor cannot
claim an estoppel under this act." But a mere delay between
1 Sage V. Shepard & Morse Lumber Co., 4 N. Y. App. Div. 290, af-
firmed, 158 N. Y. 672.
2 Cairns v. Page, 165 Mass. 552.
3 Moors V. Kidder, 34 Hun, 534, affirmed, 106 N. Y. 32.
* Howland v. Woodruff, 60 N. Y. 73.
5 Kinsey v. Leggett, 71 N. Y. 387; Soltau v. Gerdau, 119 N. Y. 380 •,
Prentice Co. v. Page, 164 Mass. 276.
6 First N. B. v. Shaw, 61 N. Y. 283.
' Bonito ('. Mosquera, 2 Bosw. (N. Y.) 401.
8 Cartwright v. Wilmerding, 24 N. Y. 521.
^ Bonito V. Mosquera, 2 Bosw. (N. Y.) 401; Western Transp, Co. v.
Barber, 50 N. Y. 544.
10 Stevens v. Wilson, 3 Den. 472 ; approved, 6 N. Y. 380.
11 Covell V. Hill, 6 N. Y. 374.
222 PRINCIPAL AND THIRD TARTY.
tlic time of the advance, and the actual transfer of the pledge,
is not fatal, if the advance was made on the faith thereof.^
Tlie effect of the Factors Acts is merely to extend the
general doctrine of estoppel to the correction of an especially
narrow judicial dogma. The courts decided that a factor
could not, without express authority, pledge his principal's
goods, whatever ai)ijearance of authority or of ownership he
might be vested with.^ Some courts have deplored this dog-
matic rule, but have felt bound by it.^ The legislatures have
aided the courts by extending the doctrines of estoppel to this
set of facts.*
§ 172. Forms of action for property or its value.
Wlien the principal's property has been converted by the
third party, the principal has his choice of several remedies.
If the property is still in the hands of the third party, an action
of replevin will lie for its recovery or an action of trover for
its value. If it has been sold by the third party, the tort may
be waived and an action of assumpsit brought as for money
had and received;^ and in some jurisdictions when the goods
liave not been sold, but have been kept or consumed, the prin-
cipal may waive the tort and sue in assumpsit as for goods
sold and delivered.'' If the third party took the property with
notice of the principal's rights or without giving a valuable
consideration, and has converted it into another form of prop-
erty, equity will, in many cases, fasten a trust upon the
property so obtained, and enforce the trust in favor of the
principal.'^ In the case of money, an action for money had
1 Cartwright v. AVilmerding, 24 N. Y. 521.
2 Patterson v. Tash, 2 Str. 1178; Newbold v. Wright, 4 Rawle (Pa.),
195; Gray r. Agnew, 95 111. 315.
8 Pickering v. Busk, 15 East, 38; Martini v. Coles, 1 M. & S. 140;
Horr V. Barker, 11 Cal. 393.
* See for an admirable review of this legislation, and its relation to the
doctrines of estoppel, Ewart on Estoppel, pp. 353-369.
^ Keener on Quasi-Cont., p. 170 et seq.
Ibid., pp. 192-195.
' Post, § 177.
LIABILITY OF TIIIUD PARTY. 223
and received will lie against successive holders until it comes
into the hands of a bona fide holder for value. ^
§ 173. Wrongs of fraud and malice.
The third person may become liable to the principal in tort,
aside from cases of conversion of property already noticed,
either: (1) for a fraud connected with a contract entered into
between the agent and the third person in behalf of the prin-
cipal ; (2) for a fraud committed on the principal by collusion
between the agent and the third person ; (3) for an unlawful
interference with the agent in the discharge of his duties, or
with the contract of agency. These classes of torts generally
involve either fraud or malice, — fraud in inducing the prin-
cipal to enter into a contract, or malice in unlawfully inter-
fering with a contract which the principal has already made.
§ 174. Frauds in making contract.
We have already seen that a principal is liable for the
frauds of his agent committed while making contracts with
third persons. Conversely the third person is liable to the
principal for frauds practised on the agent while the latter
is acting in behalf of the principal, since every person is liable
for his own torts to the person injured thereby. This proposi-
tion needs no discussion. It extends to frauds for which an
action for deceit will lie, as well as to those for which the
remedy is merely rescission of the contract.^
§ 175. Collusive fraud between agent and third person.
The third person and the agent may combine to commit
a fraud upon the principal. In such a case they are joint tort
feasors, and both are liable for the injury. Accordingly the
principal may maintain an action against the third person,
or the agent, or both jointly.^ The fact that the agent may be
held for his breach of trust does not prevent a recovery
^ Keener on Quasi-Cont., pp. 183-188.
2 Gushing v. Rice, 46 Me. 303; Perkins c. Evans, 61 Iowa, 35; White
V. Owen, 12 Vt. 361.
* Boston V. Simmons, 150 Mass. 401; Mayor i*. Lever, 1891, 1 Q. B.
168.
224 PRINCirAL AND TIIIKD l^VUTY.
against the tliird person, since the agent is guilty of two
wrongs : first, for his l)reach of trust as agent ; and second,
for the consuniniated consj)iracy with the third person to
injure the })hiintiff.^ If a contract has hcen made where the
agent was in collusion with the third jjci'son, the i)rinci{)al
may repudiate it- and recover damages either in tort or
assumpsit.^ So where the third person knows that the agent
is committing a fraud on his princii)al, he becomes a party to
the fraud by contracting witli such knowledge, and the con-
tract may be avoided by the principal/*
§ 176. luterference with agency.
The third person is liable to the principal for unlawfully
interfering with the agent or the agency. He is liable if he
unlawfully injures the agent, and thereby renders him unfit
to perform the duties of the agency;^ or if he unlawfully
interferes with the agent in the performance of the duties of
the agency.*^ He is also, liable for unlawfully inducing the
agent to break his contract of employment with the principal,^
though some cases hold that he is liable only where he has
used unlawful means, as force, threats, or fraud.^ Whether
the act of the third person in inducing the breach can ever be
justified, and if so on what grounds, seems not to be decided.
The doctrine has become much broader in its application than
inducing breach of contracts of employment, and extends to
breach of contract generally.'* Whctlior there is any remedy
1 Mayor v. Lever, supra ; Keator v. St. John, 42 Fed. Rep. 585.
^ Smith V. Sorby, 3 Q. R. D. 552 n.; Panama, &c. Co. v. India Rubber
Co., L. R. 10 Ch. App. 515; Miller v. R. R. Co., 83 Ala. 274.
3 City of Findlay v. Pertz, 60 Fed. Rep. 427; Gluspie r. Keator, 56
Fed. Rep. 203.
* Hegenmyer v. Mark.s, 37 IMinn. 6.
6 Ames r. Union Ry. Co., 117 Mass. 541; Daniel v. Swearengen, 6 S.
C. 297 ; po.«f, § 296.
6 St. Johnsbury, &o. R. Co. v. Hunt, 55 Vt. 570.
■? Lumley v. Gye, 2 El. & Bl. 216; Walker v. Cronin, 107 Mass. 555;
Haskins v. Royster, 70 N. C. 601. Bigelow on Torts (7th ed.), §§ 216, 247.
8 Rourlier v. Macauley, 91 Ky. 135.
» See Temperton v. Rus.scll, 1893, 1 Q. B. 715; Angle v. Chicago, &c.
Ry., 151 U. S. 1 ; post, § 298.
LIABILITY OF THIRD PARTY. 225
for inducing by persuasion the termination of a contract
terminable at will, is in dispute.^
If the principal brings an action for the loss of the services
of his agent occasioned by a negligent injury at the hands of
a third party, it seems that the contributory negligence of the
agent would be a bar to his recovery, though the principal is
personally free from blame.^
4. Trust Obligations.
§ 177. Constructive trusts.
Constructive trusts arise where one person has obtained
money or property which does not equitably belong to him
and which does equitably belong to another. Although the
one so obtaining the property of another has never expressly
or impliedly undertaken to hold it as trustee, yet equity
fastens upon him the character of a trustee and compels
him to account to the beneficial owner as such.-^ The trust
so " constructed " by equity is analogous to the contract " con-
structed " by the common, law in cases of quasi-contract.
§ 173. Following trust funds.
If an agent has come into the possession of property or
funds which are impressed with a trust in favor of his
principal, the principal may follow such property or funds,
or the proceeds of such property, so long as they can be
identified, or until they reach the hands of a bona fide pur-
chaser for value.* And if they become so commingled with
the property or funds of the agent that identification is im-
possible, the entire mass will be subject to a charge in favor
of the principal to the amount of the trust fund.'^
1 Ante, § 159; post. §§ 298-290.
2 Chicago, B. & Q. R. r. Honey, 63 Fed. Rep. 39.
^ 2 Pomeroy's Eq. Jurisp. § 1047.
4 Roca V. Byrne, 145 N. Y. 182; Peak v. Ellicott, 30 Ivans. 156; Van
Alen y. Am. Nat. Bk., 52 N. Y. 1 ; Nat. Bk. v. Ins. Co., 104 U. S. 54;
:McLeod V. Evans, 66 Wis. 401; Knatclibull v. Ilallett. L. R. 13 Ch. Div.
696.
5 Peak V. Ellicott, 30 Kans. 156; Frith i--. Cartland, 34 L. J. Ch. 301;
Broadbent v. Barlow, 3 DeG. F. & J. 570.
15
226 Pl'JNCII'AL AND THIRD PARTY.
In accordance with (his ixcneral doctrine, it is lield that
if a third person obtains from an agent tlie property of the
principal nnder cii-cumstanccs which give the third i)erson
no equitahle claim to it, equity will fasten upon the property
a trust for the benefit of the principal, and '■'• will follow the
fund through any number of transmutations and preserve
it for the owner as long as it can be identified," ^ or until
it passes into the hands of a bona fide purchaser for value.
It is not necessary that the trustee should be guilty of an
intent to defraud the principal ; he may intend no moral
wrong, yet if he comes into the possession of the property
with notice of the principal's rights, or as a volunteer not
taking for value, he is declared to hold in trust for the prin-
cipal.^ It is only where the superior equity of a bona fide
purchaser for value intervenes, or where the doctrine of
estoppel can be invoked, that the right of the principal to
pursue the trust fund is cut off.^ It is under the application
of this doctrine that banks are not allowed a banker's lien or
right of set-off against funds deposited by the agent where
the bank knows that the funds l)elong to the principal ; * that
attaching creditors of the agent are not allowed to reach the
fund so deposited ;^ and that a donee of the fund, or of prop-
erty purchased with it, is declared to l)o a trustee for the
lienefit of the jjrincipal.'' So also neither the assignee in bank-
ruptcy of an agent, nor the creditors of the agent, can claim, as
against the principal, any money or property entrusted by the
princi])al to the agent.''
In order that the right to follow the fund should exist it
is necessary that it be a fund to which title was in the prin-
cipal before the diversion. Where an agent fraudulently
1 Farmers', &c. Bank r. King, 57 Pa. St. 202.
2 2 Pomeroy's Eq. Jurisp. § 1048.
8 Anfe, §§ 169-171.
* National Bank v. Tns. Co., 104 U. S. 54; Baker v. New York N. B.,
100 N. Y. 31 ; Union, &c. Bk. v. Gillespie, 137 U. S. 411.
^ Farmers', &c. Bk. v. King, supra.
* Riehl c. Evansville F'oundry Ass'n, 10 1 Ind. 70.
'' Scott V. Surman, Willea, 400; Taylor v. Plunier, 3 M. & S. 562; Ex
pane Cooke, 4 Ch. Div. 123; Harris v. Truman, 9 Q. B. D. 264.
LTAIilLTTY OF THIRD PARTY. 227
took commissions from third persons and then invested the
fund so received, it was held that the principal could not
follow the fund into the investments, since it was not a fund
previously helonging to him, but a debt due him from the
agent for which an action for money had and received was
an appropriate remedy.^ It is further necessary that the
fiduciary relationship of principal and agent should be estab-
lished. If the relation is any other, as vendor and vendee,
the fund is that of the independent operator and cannot be
followed.^
§ 179. Legal remedies for diversion of trust fund.
The doctrine of following trust funds is a peculiarly equit-
able one, and it has been held that the only remedy in such
cases is in equity .^ But owing to the peculiarities of the
history of equity jurisdiction in some of the States, legal
remedies based on equitable principles are available.* In
such jurisdictions actions for money had and received may
be maintained by the principal against third parties into
whose hands the fund has passed. And if the principal's
money has been converted to the use of the third party, it
may be followed until it reaches the hands of a bona fide
holder for value, and recovered in an action as for money
had and received.^
1 Lister v. Stubbs, L. R. 45 Ch. Div. 1.
2 Ex parte White, L. R. 6 Ch. App. 397; ante, § 3.
8 Xational Bank v. Ins. Co., 104 U. S. 54.
4 Frazier v. Erie Bank, 8 Watts & Serg. (Pa.) 18; Shaffer y. Mont,
gomery, 05 Pa. St. 329; Frue v. Loring, 120 Mass. 507.
6 Keener on Quasi-Cont., pp. 183-188.
PART IV.
LEGAL EFFECT OF THE RELATION AS BETWEEN THE
AGENT AND THIRD PARTIES.
§ 180. Introduction.
We must once more, and for the last time, shift our point
of vicsv. We have now to consider the mutual rights and
obligations that may spring up between the agent and the
third party in consequence of the manner in which the agent
conducts himself toward the third party or the third party
toward the agent. Obviously it is not the purpose of the
agent or the third party to create obligations as between
themselves, and yet through carelessness, ignorance, mistake,
or fraud this may result. We will consider the subject
under two heads: (1) mutual rights and obligations arising
from contract; (2) mutual rights and obligations arising
from tort.
LIABILITY IN CONTRACT. 229
CHAPTER XV.
CONTRACT RELATIONS BETWEEN AGENT AND THIRD PARTY.
§ 181. Questions to be considered.
Where an agent outers into a contract on behalf of his
principal, he may bind the principal, or himself, or both,
or neither; but different rules govern the liability of pub-
lic agents. Where an agent has money equitably belonging
to a third person but which he assumes to hold for his princi-
pal, he may be liable to the third person in quasi-contract.
On the other hand, an agent who is under obligations to the
third party may have rights commensurate with his obli-
gations. This chapter deals therefore with the following
topics : —
1. Where the principal alone is bound by the contract.
2. Where the agent alone is bound by the contract.
3. Where both principal and agent are bound by the
contract.
4. Where neither principal nor agent is bound by the
contract.
5. Special rules applicable to public agents as to liability
upon contract.
6. Liability of agent in quasi-contract.
T. Liability of the third person to the agent upon the
contract.
1. Where the Principal alone is hound.
§ 182. Authorized contract.
Where the agent acts within the apparent scope of his
authority for a disclosed principal, and contracts in the
name of that principal, the latter alone is bound by the
230 AGENT AND THIRD PARTY.
contract.^ So where a principal, with full knowledge of the
facts, ratifies an unauthorized contract made in his name and
on his behalf, the principal alone is bound by the contract.^
Whether a written contract is made in the name of the
principal, or in the name of the agent, is a matter of
construction.^
Whether a verbal contract was made in tlie name of the
principal, and on his behalf, is a question of fact for the
jury>
2. Where the Agent alone is bound.
§ 183. (I) Unauthorized contract.
Where the agent knowingly, negligently, or mistakenly
holds himself out, either expressly or impliedly, as having
authority to act for a principal in a particular transaction,
when in fact he has no such authority, he is liable to the
third party who deals with him on the strength of such
representation for any damage the latter may suffer in con-
sequence of any change of his legal relations induced by
the representation.^ The question remains, in what kind of
an action may the third party pursue his remedy ?
(1) Agent not liable upon the contract. It is now gen-
erally agreed that the agent does not bind liimsclf upon
the contract. He does not bind his principal because he
lias no authority to do so ; he does not bind himself because
he is not a party to the contract, and the courts will not
create a new contract either against or in favor of the
1 Owen V. Gooch, 2 Esp. 567; Ex parte Ilartop, 12 Ves. 3-19; Robins
V. Bridge, 3 M. & W. 114; Whitney i'. Wyman, 101 U. S. 392; Bonynge
r. Field, 81 N. Y. 159; Covell t'. Hart, 14 Ilun (N. Y.), 2.V2.
2 Spittle V. Lavender, 2 Brod. & Biiig. 452; Grant v. Beard, 50 X. H.
129; Brown v. Bradlee, 1.50 Mass. 28; ante, §§ 46-49, 101.
8 Downnian v. Williams, 7 Q. B. 103; Southwell v. Bowditch, 1 C. P,
I). 374; Gadd v. Houghton, 1 Ex. Div. 357; post, §§ 186, 188, 189-195.
197.
* Jones V. Littledale, 6 A. & E. 486; Holding v. Elliott, 5 H. & N.
117 ; Williamson v. Barton, 7 H. & N. 899 ; Long v. Millar, 4 C. P. Div.
450.
6 CoUen V. Wright, 7 El. & Bl. 301 ; Kroeger r. Pitcairn, 101 Pa. St.
311.
LIABILITY IN CONTRACT. 231
agent.^ Some early New York cases ^ which held that an
action would lie upon the contract, must be regarded as
overruled,'' and other cases holding a similar doctrine^ as
opposed to the weight of authority.
(2) A(j' nt liable as for breach of warranty of authority.
Where the agent innocently exceeds his authority under cir-
cumstances not amounting to deceit, no action in tort can
be maintained.^ Yet clearly the third party has suffered as
great an injury as if the representation had been made
fraudulently. In order to provide a remedy in such an emer-
gency, the courts have invented the fiction that the agent
"warrants" his authority wiienever he makes a contract
for his principal, and allow an action for damages for the
breach of this warranty of authority.^ The fiction is well
enough, but it should not be allowed to disguise the fact
that this is a plain exception to the rule that no action lies
for an innocent misrepresentation.'' It serves the additional
purpose of giving an action against the estate of the agent
after his death, whereas a tort action would not survive.^
This rule is subject to the qualification that if the agent acts
in good faith, and the third party has full knowledge of all
the facts upon which the agent's belief is founded, there is
1 Ballon V. Talbot, 16 Mass. 461 ; J^IcCurdy v. Rogers, 21 Wis. 199 ;
Duncan v. Niles, ;}2 111. 532; Hall v. Craudall, 29 Cal. 568; Cole v.
O'Brien, 34 Xeb. 68; Noyes v. Loving, 55 Me. 408; Jenkins r. Hutchin-
son, 13 Q. B. 744 ; Lewis v. Nicholson, 18 Q. B. 503 ; Pollock on Cont.
(6th ed.) 101-103.
2 Dusenbury v. Ellis, 3 Johns. Cas. 70 ; White v. Skinner, 13 Johns.
307.
3 White V. Madison, 26 N. Y. 117 ; Dung r. Parker. 52 X. Y. 494 ;
Baltzen v. Nicolay, 53 N. Y. 467 ; Simmonds v. Moses, 100 N. Y. 140.
4 Dale c. Donaldson, 48 Ark. 188; Weare v. Gove, 44 N. H. 196.
5 Ante, § 152.
6 Collen V. Wright, 8 El. & Bl. 647; Suart v. Haigh, 9 T. L. Pv. 488;
Baltzen v. Nicolay, 53 N. Y. 467; Kroeger v. Pitcairn, 101 Pa. St. 311;
Weare v. Gove, 44 N. H. 196 ; Trust Co. v. Floyd, 47 Oh. St. 525; See-
berger v. McCormick, 178 111. 404, 415-419.
■? Firbank's Ex'rs v. Humphreys, 18 Q B. D. 54.
8 Pollock on Torts (5th ed.), pp. 60, note k, 508.
H.ili ACENT AND THIRD PAIiTY.
no implied warranty,^ and to the further qualification that
if the a<rcnt expressly or impliedly states he docs not war-
rant iiis authority, the implication of a warranty is rebutted.'^
It is neecssai-y, further, in order that tlie action may be
maintained, that tlie contract made by the agent should be
one which would be valid and enforceable against the j)rin-
cij)al if the agent had been duly authorized.^
(3) Aijent liable in tort for wilful deceit. If the agent
wilfidly misrepresents his authority, by express declaration
or by contract, he is liable to the injured party in an action
of deceit.'* The action ex delicto rests upon the wilful or
reckless conduct of the agent. If, as suggested above, the
fiction of implied w'arranty were rejected, and the action
based upon the representation, whether innocent or guilty,
an innocent misrepresentation by an agent would escape the
general rule that deceit requires wilfid or reckless repre-
sentations. It is necessary that the other elements of deceit
be present. The third party must actually be deceived. If
he knows all the facts, the agent is not liable.^
(4) Pleasure of damage for breach of ivarranty of authority.
The measnre of damages for breach of a warranty of author-
ity by an agent is all the loss resulting from such breach
as a natural and probable consequence thereof.*' Usually
this damage is the same that might have been recovered
against the principal in case the contract had been author-
ized and he had refused to perform it." If the third person
has brought an action against the ])rincipal and been de-
1 Siiiout V. Ilbery, 10 IM. & W. 1.
2 Lilly V. Sniales, 1892, 1 Q. B. 456 ; post, § 201.
8 Baltzen v. Nicolay, 53 N. Y. 467; Warr v. Joues, 21 W. R. 695;
Pow V. Davis, 1 B. & S. 220.
* Polhill V. Walter, .3 B. & Ad. 114 ; Rand.-U v. Triiueii, IS C. B. 786;
Noyes r. Loring, 55 Me. 408.
^ Michael v. Joiie.s, 81 Mo. 578; Hall r. Lauderdale, 46 X. Y. 70.
« Firbank's Ex'r.s r. Ihiinplirey.s, 18 Q. B. 1). 54; Meek v. Weiidt, 21
Q. B. I). 126; Re National Coffee Palace Co., 24 ( li. Div. 3!i7; Bush r.
Cole, 28 N. Y. 261; Sininionds v. Moses, 100 N. Y. 140; Taylor v. Nos-
traud, 134 N. Y. 108.
' Ibid., Trust Co. v. Floyd, 47 Oh. St. .525; Seeberger c. McCormick,
178 111. 404, 419.
LIABILITY IN COXTRACT. 233
featcd because of the want of autliority of the agent, he
may, in a subsequent action against the agent for breach
of the warranty of authority, recover in addition to the
usual damages the costs of the action against the principal.^
If the contract is unenforceable against the principal be-
cause of some defect or informality, other than the want of
authority of the agent, no damages can be recovered against
the agent based upon the breach of his warranty of author-
ity.'-^ Nor can the equitable doctrine of part i)erformance
be invoked so as to give a remedy in equity for damages for
breach of warranty of authority.'^ In order to maintain the
action for damages, the third person must show that the
principal has repudiated the contract and that damage has
resulted to plaintiff therefrom.^
§ 184. (II) Incompetent principal.
An agent is presumed to represent not only that he has
authority but that his principal was competent to give such
authority when it was given, and has not since, to the knowl-
edge of the agent, become incompetent.^ A breach of this
representation resulting in damage gives the same remedies
as a breach of the representation as to authority. But the
damage must have been suffered. If the principal be one, as
an infant,^ who may ratify or disaffirm at his election, it
must be shown that he has disaffirmed before an action will
lie against the agent.'^
§ 185. (Ill) Fictitious principal.
Where an agent contracts for an alleged principal who
is not in fact in existence at the time, he becomes personally
1 Riiiulell r. Trimen, 18 C. B. 78G ; Hughes v. Graeme, 3:3 L. J. Q. B.
333 ; Godwin v. Francis, L. R. 5 C. P. 295.
2 Pow V. Davis, 1 B. & S. 220; Baltzen v. Nicolay, 53 N. Y. 467.
3 Warr r. Jones, 24 AA'eekly Rep. 695.
* Patterson v. Lippiucott, 47 N. Y. L. 157.
6 Drew V. Nunn, L. R. 4 Q. B. D. 661 ; Hoppe v. Savior, 53 Mo.
App. 4.
^ In those jurisdictions where an infant's appointment of an agent is
not void, but voidable. — Ante, § 15.
' Patterson v. Lippiucott, 47 N. J. L. 457.
234 AGENT AND TIIIKD PAUTY.
liable on the contract as i)rinei])al/ except that he is not
liable where his jtrincipal dies without his knowledire.''^
The connnoncst case of a fictitious [UMuciijal is the case of
a j)rojected corporation whose promoters enter into contracts
in anticipation of its formation, and sign " as agents" for the
(named) corporation. Obviously there is no ])rincipal, as no
coi-poration exists. If it should never exist there could be no
question as to the sole liability of the j)romoters. But how if
it is in fact incorporated and '' ratifies " the contract of the
promoters ? There can be no real ratification in such a case
because it is the first essential of ratification that the princijjal
should be an existing person at the time the contract was
made."^ Accordingly the agent remains liable unkss, by
agreement among the three parties, the corporation after it is
in existence should be sul)stitutcd in jilace of the promoters.'^
This, however, amounts to the dischai'ge of the original con-
tract and the formation of a new one.
Another common case is where A contracts with X in
behalf of an unincorporated club or association. Here there
is a body of more or less clearly identified ])ersons who might
jointly or severally be responsible princii)als, as individuals,
but no legal entity composed of the members in the aggregate.
There is not even a partnership.'^ In such case if the agent
contracts in the name of a principal, which name conveys
the idea of a corporate entity, the agent is clearly liable.*^
Whether the members of the club are also liable depends uj)on
whether in fact they authorized A to make the contract.
Such authority may be found in the constitution or by-laws of
1 Kelner v. Baxter, L. R. 2 C. P. 174; IloUman v. Pulliii, 1 C. & E.
254; Patrick v. Bowman, 149 U. S. 411; Lewis v. Tilton, 64 Iowa, 220;
cf. Bartlett v. Tucker, 104 :Mass. 3o6.
••^ Smout V. Ilbery, 10 M. & \V. 1 ; Carriger r. Wliittingtoii, 26 Mo.
311.
8 Ante, § 32. But see Whitney v. Wyman, 101 U. S. 392; Oakes v.
Cattaraugus Water Co., 143 X. Y. 430.
6 Flemyng v. Hector, 2 M. & W. 172; Ash v. Guie, 97 Pa. St. 493.
« Lewis V. Tilton, 64 Iowa, 220; Blakely v. Bennecke, 59 Mo. 193;
Comfurt V. Graham, 87 Iowa, 295.
LIABILITY IN CONTRACT. 235
the club to which the members have assented/ or in the vote
of a meeting at which the members were present and in the
results of which they acquiesced.^ If the credit was extended
to the agent and not to the body he represents, the agent is
liable.^ But if the credit is extended to the club, or its
members, and not to the agent, and the agent was authorized
to procure such credit, then the club or its members, and not
the agent, will be liable.*
§ 186. (IV) Exclusive credit to agent.
" The seller who knows who the principal is, and, instead
of debiting the principal, debits the agent, is considered,
according to the authorities which have been referred to,^ as
consenting to look to the agent only, and is thereby precluded
from looking to the principal." ^ An agent may deal so as to
bind himself personally, although disclosing his ])rincipal ; it
is always a question of the intention and understanding of
the parties.^ Where in a sale the principal is known, but the
personal obligation of the agent alone is taken for the pur-
chase price, it is presumed that credit is given to the agent
and not to the principal.^ In cases where a principal is
undisclosed, the third party has an election between the
principal and the agent.^ In cases where the principal is
disclosed, the matter becomes one of the intention of the
parties at the time of the making of the contract. It
has been held that accepting a written contract in the name
of the agent, when the principal is known, is conclusive
1 Flemyng v. Hector, supra ; Todd v. Emly, 7 M. & W. 427.
2 Willcox V. Arnold, 162 Mass. 577; Heath v. Goslin, 80 Mo. 310.
3 Eichbaum v. Irons, 6 Watts & Serg. (Pa.) G7; ante, § 20.
* Pain r. Sample, 158 Pa. St. 428; Bennett v. Lathrop, 71 Conn. 61-3.
5 Paterson v. Gandasequi, 15 East, 62 ; Addison v. Gandasequi,
4 Taunt. 574; Maanss v. Henderson, 1 East, 335.
« Thomson v. Davenport, 9 B. & C. 78, 89.
■^ AVorthington v. Cowles, 112 Mass. 30; Kelly v. Thuey, 102 Mo. 522;
Williamson i\ Barton, 7 H. & N. 899.
8 Merrill );. Witherby, 120 Ala. 418: Paige v. Stone, 10 Mete. (Mass.)
160. But see Atlas S. S. Co. r. Colombian Land Co., 102 Fed. Rep. 358.
9 Ante, § 126; post, §§ 196, 197.
236 AGENT AND THIRD TAUTY.
evidence of an intent to look to the agent alouc ; ^ but this is
doubtful. 2
If the ostensible agent is really the principal, and is in fact
acting upon his own behalf, he is, of course, liable upon the
contract.^
§ 187. (V) Foreign principal.
Where the agent contracts in behalf of a foreign ])rincipal,
that is, one residing out of the jurisdiction, it is the rule of the
English law that the agent is presumed to pledge his own
credit, and that the third party does not rely upon the credit
of the ))rincipal, but exclusively upon the credit of the agent,
although the contract discloses the princij)al and the fact of
the agency.* But there is nothing to prevent one foreign
merchant from contracting with another througli the in-
strumentality of an agent, and if he docs so, he is, of course,
bound by his contract.^ And the agent may contract ex-
clusively for the foreign principal without recourse to himself.^
In the United States, this rule as to foreign principals has
been generally disapproved. It is held that there is no pre-
sumption that one dealing with an agent of a foreign principal
gives exclusive credit to the agent ; that it is in each case a
question of fact ; and that the fact that the principal resides
in a foreign jurisdiction has merely an evidential force.' In
reaching this conclusion the courts have probably been in-
1 Chandler v. Coe, 54 N. H. 561.
2 Ante, § 126; post, § 107.
B Carr v. Jackson, 21 L. J. Ex. 137; Isham v. Burgett, 157 Mass. .546;
cf. Heffron r. Pollard, 73 Tex. 96.
" Leake on Cont. (3d ed.) p. 417; Pollock on Cont. (6th ed.) p. 95;
Hutton r. Bulloch, L. R. 9 Q. B. 572; Die Elbinger Actien-GeselLschaft v.
Claye, L. R 8 Q. B. 313; Reynolds r. Peapes, 6 T. L. R. 49. But in
a recent I-^nglish work on Agency it is said that, "it now seems that there
is no presumption either way, and that it is always a question as to what
was the intention of the parties." — AVright on Agency, pp. 296, 297.
6 Flinn & Co. v. Iloyle, 63 L. J. Q. B. 1 (1894).
« Green >-. Kopke, 18 C. B. 549.
^ Kirkpatrick v. Stainer, 22 Wend. (N. Y.) 244; Oelricks v. Ford, 23
How. (U. S.) 49, 64, 65; Bray v. Kettfll, 1 Allen (Mass.), 80; Barry v.
Page, 10 Gray (Ma.ss.), 398 ; Kaulback v. Churcliill, 59 N. II. 296.
LIABILITY IN CONTRACT. 237
fiuenced by the consideration that the States of the Union
are, as to the law merchant, foreign to each other, and that
the English rule would work serious inconvenience to trade
jimong the States. ^ Even if the rule were admitted as to
principals resident in foreign countries generally, it would
jirobablv be denied as to those resident in two different States
of the Union. 2
§ 188. (VI) Contract under seaL
Where an agent makes a contract under seal in his own
name (the seal not being merely superfluous), the agent alone
is liable on the contract whether his principal be known or
unknown. It is a technical rule of the common law that
only those parties can be charged upon a sealed instrument
in whose names it is made, signed, and sealed.^ Nor is there
any remedy against the principal even in equity.* But if
the seal is superfluous it may be disregarded.^ If the instru-
ment be unsealed the principal may be held, even though it
be on a contract required by the Statute of Frauds to be in
writing.^
The recitals, covenants, testimonium clause, signature, and
seal must be examined in order to determine whether the
instrument is the deed of the principal or of the agent. The
instrument, in order to bind the principal, should be in his
name, under his seal, and should purport to be his deed ; the
form of the signature may be " P by A " or " A for P " or
" for P, A." ^ If the agent use apt words to charge him-
1 See Wharton on Agency, §§ 791-793.
2 Vawter v. Baker, 23 Ind. 63; Barry v. Fage, supra ; Barham v. Bell,
112 N. C. 131.
8 Cass V. Rudele, 2 Vern. 280; Appleton v. Biiiks, 5 East, 148; Han-
cock V. Hodgson, 4 Bing. 269 ; Briggs v. Partridge, 64 N. Y. 357 ; Kier-
Bted V. R. R^ Co., 69 N. Y. 343 ; Sanders v. Partridge, 108 Mass. 556.
4 Borcherling v. Katz, 37 N. J. Eq. 150.
5 Lancaster v. Knickerbocker Ice Co., 153 Pa. St. 427; Stowell v. El-
dred, 39 Wis. 614.
6 Beckham v. Drake, 9 M. & W. 79, 91; Briggs v. Partridge, supra;
Byington V. Simpson, 134 Mass. 169.
T Wilks V. Back, 2 East, 142; Mussey v. Scott, 7 Cush. (Mass.) 215;
238 AGENT AND THIRD TARTY.
self personally, he will l)e Ijoiind and not his principal.^ Thus
a deed reciting that it is executed in accordance with the
vote of a corporation, but concluding, " I hereunto set my
hand and seal," followed by the agent's name and a seal,
is the deed of the agent and not of the principal.^ JJut where
a deed recites that it is made by the " P Co. by A, agent,"
and concludes, "the parties have hereunto set their hands
and seals," and is signed "A, agent [seal]," the P Co, is
bound by the instrument, since it is held that the name of the
principal need not necessarily appear in the signature, pro-
vided it appear in the recitals, and the testimonium clause
describes the signature and seal as those of the principal.^
On the other hand the name of the agent need not appear in
the signature.*
In the case of public agents, the rule is that the agent is
not bound by a sealed instrument, unless the intent to make
himself personally liable is clearly disclosed, since it cannot
lightly be presumed that individuals have assumed pul)lic
burdens.^
§ 189. (VII) Negotiable instruments. — General rules.
Only the parties who are named or described in a negotiable
instrument can sue or be sued upon it. For our present pur-
pose we may state the rule to be that only the person in whose
Varnura v. Evans, 2 Mc:\Iull, (S. C), 409 ; Whitehead /•. Reddick, 12 Ired.
(N. C.) 95. But if there be no recitals showing the principal, it has been
held that a bond signed " A for F," is the bond of A. Bryson v. Lucas,
84 N. C. 680.
1 Taft V. Brewster, 9 Johns. (N. Y.) 334 ; Dayton v. Warne, 43 N. J.
L. 6.30.
2 Stinclifield r. Little, 1 Me. 231.
8 Bradstreet r. Baker, 14 11. I. 546. See also IMcDaniel v. Flower
Brook Mfg., Co., 22 Vt. 274; Martin r. Almond, 25 Mo. 313; City of
Kansas v. Hannibal, &c. 11., 77 Mo. 180; Whitford v. Laidler, 94 N. Y.
145.
* Devinney v. Eeynolds, 1 W. & S. (Pa.) 328: Forsyth r. Day, 41 Me.
382 ; Berkey v. Judd, 22 INIinn. 287. Contra, Wood i'. Goodridge, 6 Cush.
(Mass.) 117.
6 Hodgson V. Dexter, 1 Cranch (U. S.),345; Knight v. Clark, 48 N.
J. L. 22 ; post, § 203.
LIABILITY IN CONTRACT. 239
name a negotiable instrument is executed is liable upon it
and that parol evidence is inadmissible to prove that one who
executes a negotiable instrument in his own name did so in
behalf of an undisclosed principal, or of a principal disclosed
but unnamed in the instrument. ^
We have already seen that in the case of simple contracts
generally, parol evidence is admissible to show that an instru-
ment signed by A. B. was in fact signed by him in behalf of
P. Q., and that thereupon P. Q. may be held, though A. B.
will not be discharged.^ But in the case of sealed instru-
ments and negotiable instruments the rule is otherwise; —
the first because of the technical rules of the common law
governing sealed instruments ; the second because of the
technical rules of the law merchant governing negotiable
instruments. As to either no parol evidence is admissible to
cliange the legal effect of what appears upon the face of the
instrument.^
To this general rule there are two possible exceptions, so
far as concerns negotiable instruments : first, it is sometimes
held that where there is any indication by words of descrip-
tion or otherwise, that the person signing the paper signed as
agent for another, parol evidence may be admitted in an ac-
tion between the original parties, or those who took the paper
with full knowledge of the circumstances attending its exe-
cution, in order to show the actual understanding and intent
of such original parties ; second, it is held that where there
is a serious ambiguity on the face of the paper, parol evi-
dence may be introduced as between any party and a bona
fide holder for value in order to explain or remove such
ambiguity.
The first exception is not universally admitted. Some juris-
dictions adhere to tlie strict technical rule that parol evidenoe
1 Leadbitter v. Farrow, o M. & S. 345 ; Price v. Taylor, 5 11. & N.
540; Button v. INIarsh, L. R. 6 Q. B. 361; Cragin v. Lovell, 109 U. S.
194; Barlow v. Congregational Society, 8 Allen (Mass.), 400; Sturdivant
V. Hull, 59 Me. 172; Rendell v. Harriman, 75 Me. 497; Casco N. B. v.
Clark, 139 N. Y. 307. See ante, § 128.
2 Ante, § 123. See Leake on Cont. (6th ed.) pp. 441-442.
8 Briggs V. Partridge, 64 N. Y. 357.
240 AGENT AND TIIIUD PARTY.
is inadmissible to introduce into a neQ:otiable instrument any
person wiio is not by the terms thereof a party to the in-
strument, and that the ambiguity or doubt raised by sign-
ing '' A, agent," or " A, agent of P," or " A, treas.," ^ or " A,
treas. of P. Co.," is not sufficient to let in parol evidence even
as between the original parties to the paper or those who
stand in their shoes.^ On the other hand, there is a strong
authority for the exception to be found in the lioldiugs of
other jurisdictions.^
The second exception is also involved in considerable con-
flict and confusion. The face of the negotiable instrument
may disclose an ambiguity or doubt as to who is the real
maker, and in such a case it is said that parol evidence is
admissible to remove the ambiguity. At one extreme are
cases where clearly the instrument is upon its face the obli-
gation of the principal. At the other extreme are cases where
clearly the obligation is that of the agent. Between these
extremes, and shading into them by imperceptible degrees,
are cases of ambiguity or doubt. Some of these ambiguous
cases are resolved by the court as cases for interj)retation
npon an examination of the instrument. Some are resolved
by the aid of parol evidence introduced to remove that am-
biguity. Almost hopeless confusion arises from the fact that
practically the same instrument will be resolved by one court
by interpretation as the obligation of the principal, by another
as the obligation of the agent, and by a third in accordance
with the fact as established by parol evidence.^
1 Tucker Mfg. Co. v. Fuirbauks, 98 Mass. 101 ; Williams v. Second N.
B., 83 Iiid. 237 ; Collins v. Buckeye State Ins. Co., 17 Oh. St 215.
2 Metcalf V. Williams, 104 u' S. 93; Case Mfg. Co. v. Soxman, 138
U. S. 431 ; Brockway v. Allen, 17 Wend. (N. Y.) 40; Kean v. Davis, 21
N. J. L. 683 ; Keidan v. Winegar, 95 Mich. 433 ; Kline v. Bank, 50
Kaiis. 91 ; Janes v. Citizens' Bank, 9 Okla. 546, and cases there discussed,
overruling Keokuk Falls Imp. Co. v. Kingsland, &c. Co., 5 Okla. 32.
8 Compare, for example, Carpenter v. Farnsworth, 106 Mass. 561 ;
Casco National Bank v. Clark, 139 N. Y. 307 ; and Fraiikland r. John-
son, 147 111. 520. And compare Liebscher v. Kraus, 74 Wis. 387; Mat-
thews V. Dubuque Mattress Co., 87 Iowa, 246; and Reeve v. First Matioual
Bank, 54 N. J. L. 208.
LIABILITY IN CONTRACT. 241
Under such circumstances it is impossible to formulate
settled rules as to the interpretation of these intermediate
cases. Perhaps the most useful course will be to take up
the general classes of cases and ascertain the trend of judi-
cial oi)inion. The cases for construction fall first into three
classes : (1) where the construction rests upon the signature
alone; (2) where the construction rests upon the signature
aided by recitals in the body of the instrument ; (3) where
the construction rests upon the signature aided by marginal
recitals, memoranda, or headings. These will be considered
in the order named.
The parties upon a negotiable instrument may be the maker
of a promissory note or the drawer of a bill of exchange, or
the acceptor of a bill of exchange, or the indorser of a bill or
note. And fii'st of the maker or drawer.
§ 190. Same. — (1) Construction from signature alone.
1. The signature written by the agent as maker or drawer
may be unequivocally that of the principal, and the sole in-
quiry will be as to the authority of the agent to sign. The
following are such signatures. (1) P. Q. ; (2) P. Q., by his
agent A. B., or by A. B., agent, — or by A. B. ; (3) A. B.,
agent for P. Q. ; or A. B. for P. Q. ; (4) Pro. P. Q.—
A. B.i
2. The signature written by the agent as maker or drawer
may be unequivocally the signature of the agent alone, and
the agent alone will be bound. The following are such
signatures : (1) A. B. ; (2) A. B., agent ; (3) A. B., agent
of P. Q.;2 (4) A. B., president, or treasurer, etc. ; ^ (5) A.
1 1 Daniel on Neg. Inst. § 298 ; Long v. Colbnrn, 11 ]\Iass. 97; Ballou
V. Talbot, 16 Mass. 461; cf. Tannatt v. Rocky Mt. Nat. Bk., 1 Colo.
278; De Witt v. Walton, 9 N. Y. 571.
2 Sparks v. Dispatch Trans. Co., 104 Mo. 531; Pentz v. Stanton, 10
Wend. (N. Y.) 271; Williams v. Robbins, 16 Gray (Mass.), 77; Bank v.
Cook, 38 Oh. St. 442; Tarvcr v. Garlington, 27 S. C. 107; Cragin v.
Lovell, 109 U. S. 194.
3 Davis V. England, 141 Mass. 587; Hobson v. Hassett, 76 Cal. 203 ;
cf. Metcalf v. Williams, 104 U. S. 93, which was a case between original
parties, and Devendorf v. West Virginia, &c. Co., 17 W. Va. 135, which
16
242 AGENT AND THIKD TAKTY.
B., president, or treasurer, etc., of the P. Q, Co. ;^ (G) A. B.,
trustee.^
It has been thought that tlie signature " A. B., cashier,"
stands upon a different footing, but this is questionable.^ It
has also been hckl that there is a distinction between suits
brought by a party to the instrument, or one who stands in
his shoes, and suits by a bona fide holder for value. ^
3. The signature written by the agent as maker or drawer
mav be the signature of his principal followed by his own
signature with the descriptive words, " agent," "president,"
"treasurer," etc., added, as, for example, "The P. Q. Co.,
A. B., President." In such a case there are three holdings on
practically the same state of facts : (a) that it is the signa-
ture of the principal alone ;^ (h) that it is the signature of
both the principal and agent ;° {e) that it is an ambiguous
signature and parol evidence is admissible to explain it.^
Two other auxiliary holdings may be noted. First, the seal
of the corporation is to be given the same effect as the written
name of the corporation.^ Second, in a jurisdiction where
parol evidence would not be admitted to discharge the agent,
the instrument may be reformed in equity to work his dis-
charge, in case of proof of mutual mistake as to the form of
signature necessary.^
4. The principal may adoj)t the name of the agent as his
seems to proceed upon tlie theory that the principal had " adopted " tlie
agent's name.
1 Sturdivant v. Hull, 59 Me. 172; Rendell v. Ilarrinian, 75 Me. 497;
Tucker Mfg. Co. r. Fairbanks, 98 Mass. 101 ; Burlinganie v. Brewster,
79 111. 515;' I'.ank v. Cook, ;58 (3h. St. 442.
2 Price I'. Taylor, 5 H. & N. 540.
» See pout, § 194.
4 Anie, § 189.
6 Lieb.scher v. Kraus, 74 AVis. 387; Reeve v. First Nat. Bk., 54 N.J.
L 208; Grafton N. B. v. Wing, 172 Mass. 513.
« Matthews v. Dubuque INIattress Co., 87 Iowa, 246.
■^ Bean v. Pioneer Mining Co., CG Cal. 451 ; Case Mfg. Co. v. Soxnian,
138 U. S. 431.
8 Means v. Swormstedt, 32 Ind. 87; Scanlan v. Keith, 102 111. 634 j
Miller v. Roach, 1.50 Mass. 140.
* hee V. Percival, 85 Iowa, 639.
LIABILITY IN CONTRACT. 243
trading name, and in such cases the signature A. B, is the
signature of P. Q. Thus a corporation may trade under a
partnership name,^ or the name of an officer,^ or a partner-
ship under the name of an individual.^ This presents one
case, therefore, where parol proof may always be given to
charge a person whose (true) name does not appear upon the
negotiable instrument ; and, as tliis exception exists, it seems
it would be improper to sustain a demurrer to a complaint
alleging the agency, since " non constat but the plaintiff may
be able to bring his case under that exception." * At common
law a husband may adopt as his own the indorsement made
by his wife in her name upon a bill or note payable to her
order, and in such a case her signature is his signature.^ It
has been suggested that a bank adopts the name of its cashier
as its trading name in the drawing and indorsing of negotiable
paper, but the cases are easily explainable without resorting
to this assumption.^
§ 191. Same. — (2) Construction from signature aided by recitals
in the instrument.
6. The body of the instrument may contain recitals as to
the identity of the principal or the fact of the agency which,
taken with the signature of the maker or drawer, will either, — •
(a) render the obligation clearly that of the principal, or (5)
render the instrument so ambiguous as to raise a case for in-
terpretation or construction by the court, or (^) render the
instrument so ambiguous as to let in parol evidence to explain
it. It is in the treatment of this class of instruments that the
greatest diversity of views prevails. A few illustrations are
given to show the nature of the problem.
(a) Tiie following has been said to be clearly the obliga-
^ Melledge v. Boston Iron Co., .5 Cush. (Mass.) 158.
2 Devendorf v. West Virginia, &c. Co., 17 W. Va. 135.
8 Rumsey v. Briggs, l;39 N. Y. 323; Bank v. Mouteath, 1 Denio
(N.Y.), 402.
4 Tarver v. Garlington, 27 S. C. 107.
5 Hancock Bank v. Joy, 41 Me. 568.
® Poxt, § 194. Cf. dictum in Robinson v. Kanawha Valley bank, 44
Oh. St. 441, 448.
244 AGENT AN I) TIIIIUi PARTY.
tion of tlic principal : " We, as trustees (or \vc, trustees) of
the P. Q. Co., promise," etc., (signed) "A. B., C. D., trustees
of the P. Q. Co." ^ But the same recital with the signature
" A. B., C. D., trustees," was held to be the individual obliga-
tion of the signers.^ This is a very refined distinction, and of
doubtful utility. In another case it was held that a like re-
cital in an instrument signed "A. B., C. D.," with no official
description was clearly the obligation of the principal, but this
construction was, perhaps, aided by statute.^ (b) Cases fall-
ing under this head are only a phase of those just con-
sidered. But that the obligation is not clearly that of either
the j)rincipal or the agent is shown by the fact that one court
will hold practically the same instrument to bind the princi-
pal, while another court will hold it to bind the agent, and a
third to be so ambiguous as to admit parol evidence.'' Where a
note reads " we promise to pay for the P. Co.," and is signed
" A. B., C. D., trustees," it is held to bo the obligation of the
signers ])ersonally.^ (c) The following have been said to be so
ambiguous as to let in parol evidence : "The P. Q. Co. prom-
ises," etc., (signed) "A. B., Gen. Supt.;"" "The directors of
the P. Q. Co. promise," etc., (signed) " A. B., C. D.," with no
additional words indicating agency;'^ " Pay to the order of
the P.'Q. Co.," etc., (signed) " A. B., President P. Q. Co." ^
§ 192. Same. — (3) Construction from signature aided by mar-
ginal heading or memoranda.
6. The margin of the instrument may contain headings or
memoranda disclosing the identity of the principal, or the fact
1 Barlow v. Congregational Society, 8 Allen (Mass.), 460; Blanchard
V. Kaull, 44 Cal. 440; ^"ew Market Savings Bank v. Gillet, 100 111. 2.54.
■^ Powers ('. Briggs, 79 111. 493. Contrn, Barlow v. Congregational
Society, supra; Aggs v. Nicholson, 1 H. & N. 10.5.
* Simpson v. Garland, 12 Me. 40.
* Compare, for example. Simpson v. (Jarland, supra, with Pack i'.
White, 78 Ky. 243, and McKensey v. Edwards, 88 Ky. 272.
6 Allan V. Miller, 22 L. T. R. 825. See also Bradlee v. Boston Glass
Manufactory, 16 Pick. (Mass.) 347.
Frankland v. Johnson, 147 111. 520.
■' IMcKensey v. Edwards, 88 Ky. 272.
8 Kean v, Davis, 21 N. J. L. 683.
A)*-
LIABILITY IN CONTRACT. 245
of the agency, which, taken with the signature of the maker
or drawer, will raise a case for interpretation. But there is
the widest divergence in the decisions as to the effect of the
interpretation.
(a) Headings. It has been held that negotiable instruments
headed with the name and, possibly, address of the principal
and signed " A. B., agent," or " president," " secretary," etc.,
is the obligation of the principal whose name is thus disclosed
upon the instrument.^ But other cases are to the contrary .2
And where one agent of the principal so named draws upon
another signing "A. B., agent," and the latter accepts, signing
" C. D., agent," the acceptor is personally bound since the
force of the heading is exhausted in qualifying the liability of
the drawer.^ In the leading case of Mechanics' Bank v. Bank
of Columbia,* the instrument was headed " Mechanics' Bank
of Alexandria" and signed " Wm. Paton, Jr.," with no words
indicative of agency. The court held the instrument ambigu-
ous and admitted parol evidence to explain it. Had the signa-
ture been followed by the word "cashier," it would have been
held unequivocally the obligation of the bank.^ This case is
the origin of a vague doctrine that the signature of a cashier
stands upon a different footing from that of other agents, but
clearly it is to be explained in accordance with the rule gov-
erning an ambiguity appearing on the face of the instru-
ment.
(5) Marginal memoranda. It has been held that negoti-
able instruments with the name of the principal across the
end, and signed "A. B., agent," or "president," "treasurer,"
etc., are the obligations of the principal whose name is thus
disclosed upon the instrument.^ But the contrary decision
1 Hitchcock V. Buchanan, 105 U. S. 416; Olcott <;. Tioga R. R. Co.,
27 N. Y. 5i6.
2 Cf. Casco Xat. Bk. v. Clark, 139 N. Y. 305.
3 Slawson v. Lonng, 5 Allen (Mass.), 340.
4 5 Wheat. (U. S.) 326.
5 Mr. Justice Lamar in Falk v. Moebs, 127 U. S. 597, 606.
® Carpenter v. Farnsworth, 106 Mass. 561; Chipman v. Foster, 119
Mass. 189,
246 AGENT AND THIRD PARTY.
lias been reached in other cases, ^ thougli with a snsigestion
that the i-esult might have been otherwise had the action been
between the original parties.^
§ 193. Same. — Acceptors of bills of exchange.
The above illustrations cover mainly the cases of makers of
promissory notes and drawers of bills of exchange, as to whom,
in these matters, there is no distinction.^ We have yet to
consider the cases of acceptors of bills of exchange and in-
dorsers of bills or notes.
A bill of exeliange is drawn upon some designated person,
known as the drawee. If he accepts the bill he is bound as
acceptor, and the mere fact that he adds " agent," or " presi-
dent," " treasurer," etc., after his signature will not render
his unnamed principal liable. The following will illustrate
the phases of this (piestion :
(1) The bill may be drawn on " A. B." and accepted by
'•A. B.; " or drawn on "A. B., agent," and accepted by "A.
B., agent;" or drawn on "A. B., agent of P. Q.," and ac-
cepted by " A. B., agent of P. Q." In the first two cases there
is general agreement that, in the absence of recitals -or other
indications of the identity of the principal, A. B. alone is
bound.* In the third case there is disagreement, one case
holding the obligation clearly that of the agent/' and another
holding parol evidence admissible to explain it.*^ But there
seems to be no more reason for giving the term " agent of
P. Q." any different construction here than when added to
the signature of a maker or drawer.
(2) The bill may be drawn on " A. B." and accepted by
"P. Q. by A. B., agent." Here clearly A. B. is not bound.
But neither is P. Q., because P. Q. is not the drawee, and
1 Casco Nat. Bk. r. Clark, 1:39 N. Y. 305; First X. B. v. AVallis, 150
N. Y. 455.
2 Ante, § ISO.
8 Tucker Mfg. Co. i\ Fairbanks, OS ^ilass. 101.
* Mare v. Charles, 5 El. & Bl. 978 ; Slawson v. Loring, 5 Allen (Mass.),
340.
6 ISIoss V. Livingston, 4 Coinst. (4 N. Y.) 20S.
« Shelton v. Darling, 2 Conn. 435 ; Laflin, &c. Co. v. Sinsheimer, 48
Md. 411.
LIABILITY IN CONTRACT. 247
only the drawee can accept.^ But if in such a case the bill
is accepted " A. B. as agent of P. Q.," or " A. B. for P. Q.," it
seems that the agent is bound, because where a bill is drawn
on an agent personally, and he accepts it in his own name, he
is liable, even though he indicates that he is signing for or on
behalf of a princi[)al.^
(3) The bill may be drawn on " P. Q." and accepted by
" A. B., agent." Here it would seem that only P. Q. is liable,
for as only the drawee can accept, it is clear that "A. B.,
agent," is to be read " A. B., agent for the drawee." ^ In any
event A. B. is not liable because the bill is not drawn upon
him, and only the drawee can, accept.*
(4) The bill may be drawn on " A. B., agent," etc., but
may bear other marks indicating that A. B. is the agent of
the drawer. This is held to be the case where a bill is
drawn by "The P. Q. Co., by C. D., Pres't," upon "A. B.,
Treas.," with a direction to charge to the account of the
company.^ But it is difficult to reconcile the cases upon this
point.^
§ 194. Same. — Indorsers of bills and notes.
In the case of indorsers of bills and notes the whole doc-
trine of terms descriptio personce seems to have broken down.
The indorsement of the payee or subsequent holder is neces-
sary to transfer the title to the paper ; the addition of the
term " agent " is indicative that the indorsement is in a repre-
sentative capacity for that purpose ; and the courts have prac-
tically arrived at the conclusion that where tlie instrument is
payable to " A. B., agent," and indorsed "A. B., agent," that
it may be shown that A. B. was acting as agent for an un-
named principal: for example, "A. B., treasurer;"" " A. B.,
1 Walker v. Bank, 9 N.Y. .582.
2 Nicholls V. Diamond, 9 Ex. 154; Jones v. Jackson, 22 L. T. R 828.
8 Soughegan Nat. Bk. v. Boardman, 46 Minn. 293, 29G (dictum).
4 Okell r. Charles, 34 L. T. R. 822.
^ Hager v. Rice, 4 Colo. 90.
^ Robinson v. Kanawha Valley Bank, 44 Oh. St. 441.
■^ Babcock I'. Beman, 11 N. Y. 200; Soughegan Nat. Bk. v. Boardman,
46 Minn. 293.
248 AGENT AND THIRD TAKTY.
agent of tlie P. Q. Co.;"^ "A. B., cashier." ^ And some cases
have gone to the length of lioldnig that in a note payable to
"A. B., sec. and treas.," signed '' P. Q. Co., A. B., sec. and
treas.," and indorsed " A. B., sec. and treas.," the indorsement
was conclusively that of the P. Q. Co.^
The conrts have not always distinguished between cases in-
volving the liability of a maker or drawer or acceptor, and
cases involving the lial)ility of a payee indor.ser, and needless
"anarchy" has resulted from the confusion.* The distinction
is, however, a valid one and is supported by the decisions.
Indeed, the supposed distinction between "A. B., cashier," and
"A. B., agent," is largely if not wholly explained by the fact
that most of the cases holding the signature " A. B., cashier,"
to be the signature of the bank of which A. B. is shown to be
cashier, are cases of indorsement;^ where this was not the
case the instrument bore the name of the bank upon the
margin;^ or it was a case in which the bank brought suit
upon a bill or note in which "A. B., cashier," was named as
payee."
§ 195. Same. — Summary.
It will be seen that the vexed question is, what creates an
ambiguity on the face of an instrument? In their desire
to render negotiable instruments certain, and to avoid deciding
that an ambiguity exists, the courts have reached exactly
opposite conclusions as to the legal effect of practically
1 Vater v. Lewis, 36 Ind. 288; Nichols v. Frothinghain, 45 Ue. 220.
2 First Nat. Bk. ;;. Hall. U N. Y. 395.
3 Falk V. Moebs, 127 U. S. 597.
4 See Falk v. Moebs, 127 U. S. 507, 60G. See Grafton N. B. v. Wing,
172 Ma.ss. 513.
5 Bank of Genesee v. Patchin, 13 N. Y. 309, 8. c. 19 N. Y. 312; Bank
of New York v. Bank of Ohio, 29 N. Y. 619 ; Folger v. Chase, 18 Pick.
(Mass.) 63; Garland v. Dover, 19 Me. 441; Houghton v. First Nat. Bk.,
26 Wis. 663; Bank of the State v. Wheeler, 21 Ind. 90 ; Arnold v. Swen-
8on, (Tex.) 44 S. W. 870.
6 Mechanics' Bank v. Bank of Columbia, 5 Wheat. (U. S.) 326; ante,
§ 192.
7 Baldwin v. Bank, 1 Wall. (U. S.) 234; Nave v. First Nat. Bk., 87
Ind. 204 ; ante, § 135.
LIABILITY IN CONTRACT. 249
identical instrnmcnts. No stronger evidence is needed to
prove that such an instrument is ambiguous. If reasonable
men may differ as to the meaning of an instrument, a case
of ambiguity is raised which should be determined by the aid
of extrinsic evidence. The following rules seem to be justified
by an examination and comparison of the cases : —
(1) An ambiguity is not created merely by words descrip-
tive of agency added to the signature, except (a) where there
are two signatures and the one with the descriptive words
follows the other, and (6) in cases of indorsement.
(2) An ambiguity may be created by recitals or marginal
memoranda, disclosing the name of the principal, which,
if read with the signature and its descriptive words, would
leave a reasonable doubt as to which party is intended to be
charged.
(3) An ambiguity is created by merely descriptive words
following an indorsement.
(4) Parol evidence is always admissible to show that the
principal does business under the name of the agent.
3. Where both Principal and Agent are hound.
§ 196. (I) Undisclosed principal.
Where an agent contracts in his own name, whether by
parol or in writing (other than sealed or negotiable instru-
ments), for an undisclosed principal, both the agent and the
principal are liable, and the third party may elect which he
will hold.^ Even W'here a negotiable instrument is given by
the agent in his own name, the payee by disregarding the
instrument may proceed against the principal upon the origi-
nal consideration.'-^ But a pi'incipal is not undisclosed merely
because he is not named ; if the third person knows the agent
is acting for a particular principal, and there is no specific
contract binding the agent personally, the sole remedy will be
1 Simon v. Motives, 3 Burr. 1921 ; Royce v. Allen, 28 Vt. 234 ; Arger^
singer V. Macnaughton, 114 N. Y. 535; Pierce v. Johnson, 34 Conn. 274.
As to what constitutes an election, see ante, § 126.
2 Pentz V. Stanton, 10 Wend. (N. Y.) 271.
250 AGENT AND THIRD PARTY.
against the principal.^ It is not enougli, however, to exon-
erate the agent that the third person discovers the existence
and identity of the principal before the contract is jjcrfornied
if the princijjal was unknown when the contract was niade.^
Of course the third person might then make an election to
hold the principal, but the evidence of such election must be
convincing.^
If the third person knows that the agent is acting for some
principal, but does not know who the principal is, the agent is
liable as well as the principal,* unless he contracts in such
form as to rebut the presumption of personal liability.^ Even
where he contracts " as agent for my principals," or " as agent
for owners," it may be shown that by custom the agent un-
dertakes a person liability.^
§ 197. (II) Simple contract so executed as to render agent liable.
If an agent contracts personally in a simple written con-
tract, he is personally liable even though his principal is
disclosed and may, at the option of the other contracting
party, also be held liable. Whether the agent has contracted
personally depends upon the intention of the parties as dis-
closed by the terms of the contract and the attendant circum-
stances. A written contract may be that of the principal
alone, that of the agent alone, or that of both principal and
agent. In the first case only the principal is bound ;''' in tlie
second case only the agent is bound by the terms of the
written instrument, but parol evidence is admissible to show
that the principal is also bound, but not to show that the
agent is not bound ; ^ in the third case both are bound by the
1 Chase v. Debolt, 7 111. 371 ; Boston, &c. R. v. Wliitcher, 1 Allen
(Mass.), 497; Johnson v. Armstrong, 83 Tex. 325.
2 Forney v. Shipp, 4 Jones' L. (N. C.) 527.
^ Hutchinson i'. Wheeler, 3 Allen (Mass.), 577.
* Ilobhouse v. Hamilton, 1 Hog. 401; Cobb v. Knapp, 71 N. Y. 348.
6 Southwell V. Bovvditch, 1 C. P. D. 374.
« Hutchinson v. Tatham, L. R. 8 C. P. 482; Piko r. Oni,rlcy, IS Q. B.
D. 708; Fleet v. Murton, L. R. 7 Q. B. 126 ; cf. Waddell v. ' Mordecai,
3 Hill (S. C), 22.
7 Ante, § 182. 8 ^^te, § 123.
LIABILITY IN CONTRACT. 251
very terms of the instrument,^ but only according to the
terms. 2
The rule as concerns parol evidence is that it may be intro-
duced to fix liability upon an unnamed principal, but not to
exonerate an agent who has made himself liable by the terms
of tlie contract. This rests upon the consideration that such
evidence, introduced for the first purpose, does not contradict
the written agreement, but merely shows that it also binds
another, whereas, if offered for the second purpose, it does con-
tradict the written agreement by seeking to establish that the
agreement does not bind liim whom it purports to bind.^
" A principal may be charged upon a written parol execu-
tory contract entered into by an agent in his own name,
within his authority, although the name of the principal does
not appear in the instrument, and was not disclosed, and the
party dealing with the agent supposed that he was acting
for himself, and this doctrine obtains as well in respect to
contracts which are required to be in writing, as to tliose
where a writing is not essential to their validity. It is, doubt-
less, somewhat difficult to reconcile the doctrine here stated
with the rule that parol evidence is inadmissible to change, en-
large, or vary a written contract, and the argument upon which
it is supported savors of subtlety and refinement. . . . What-
ever ground there may have been originally to question the
legal soundness of the doctrine referred to, it is now too
firmly establislied to be overtlirown, and I am of the opinion
that the practical effect of the rule as now declared is to
promote justice and fair dealing." *
" But, on the other hand, to allow evidence to be given that
the party who appears on the face of the instrument to be
personally a contracting party, is not such, would be to allow
1 Young V. Schuler, 11 Q. B. D. 651.
2 Oglesby v. Yglesias, El. Bl. & El. 930.
3 Jones V. Littledale, 6 A. & E. 486; Higgins v. Senior, 8 M. & W.
834; Cream City Glass Co. v. Friedlander, 84 Wis. 53; Leake on Cent.
(3ded.) p. 413; ante, § 123.
4 Briggs V. Partridge, 64 N. Y. 357. See also Waddill v. Sebree, 88
Va. 1012.
252 AGENT AND THIRD PARTY.
parol evidence to contradict the written agreement, which
cannot be done." ^
The construction of written contracts is for the court, where
there is no ambiguity to be explained by parol evidence.^ If
the contract is executed by the agent in his own name, and
tliere be nothing intlie instrument to qualify the effect of sueli
signature, the agent is held to have contracted personally.^
The mere addition to the signature of the term "agent," or
the mere description of himself as agent in the body of the
written instrument, creates no presumption that he did not in-
tend to contract personally.* Terms may be inserted, however,
negativing the idea of personal liability. Thus, " we have
soid you on account of J. M, & Co.," signed in the agents' own
names, does not create a personal liability against the agents.^
On the other hand the signature might clearly be apt to bind
the principal and not the agent, and yet be so qualified by the
terms of the contract itself as to render the agent liable.^
§ 198. (IIIj Effect of custom.
Where an agent contracts, though as agent, in a capacity
or business where, by custom, the agent is usually liable, the
agent and the principal are both |)resumi)tively liable and the
third party may elect which he will hold. The clearest case
of this kind is that of the master of a ship who, when con-
tracting within his authority, binds both himself and the
owner according to the custom of the maritime law,' though
the effect of the custom may be overcome by proof of contrary
intent.^ The custom of trade may be shown in other cases to
impose liability upon the agent.^
1 Higgins V. Senior, 8 M. & W. 834.
2 Norton v. Herron, 1 C. & P. 618; McCollin r. Gilpin, 6 Q. B. D. 516.
8 Parker v. Winlow, 7 El. & Bl. 942; Paice v. Walker, L. R. 5 Ex.
173 (but see Gadd v. Houghton, L. R. 1 Ex. D. 3.37, where Paice v.
Walker is doubted); Brown v. Bradlee, 156 Mass. 28.
< JbuJ. ; Walker v. Bank, 9 N. Y. 582.
6 Gadd V. Houghton, 1 Ex. Div. 3.57; Ogden r. Hall, 40 L. T. R. 751.
6 Lennard v. Robinson, 5 El. & Bl. 125 ; cf. Heffron v. Pollard, 73 Tex. 96.
f Tlic Salacia, 32 L. J. Adm. 41 ; Sydnor v. Kurd, 8 Tex. 98.
8 James r. Bixby, 11 !Mass. 34.
9 Pike V. Onglev, 18 Q. B. 1) 70S
LIABILITY IN CONTRACT. 253
It lias also been held that although an agent has so con-
tracted as to bind his principal alone, yet proof of custom
may be introduced to show that the agent is also liable
unless such proof is repugnant to the express terms of the
writing. These cases, however, are those where the princi-
pal is not specifically named, as where the agent contracts
"as agent for owner," or "as agent for om- principals."^
§ 199. (IV) Interest in subject-matter.
Where an agent has an interest in the subject-matter of
the contract, the agent and the principal are both liable, and
the third party may elect which he will hold. Such is the
case where an auctioneer sells goods, for he has a special
property in the goods and could maintain an action for the
price. It follows that he is liable personally for refusing to
accept the highest bid,^ or for refusing to deliver the goods
in his possession sold by him for a disclosed principal,^ or for
failing to give authority to enter and take the property sold ;*
but he does not warrant title.^
4. Wiere neither Principal nor Agent is hound.
§ 200. (I; Revocation of authority by death.
Where the agent's authority, unknown to him, has been
revoked by the death of his principal, and subsequent to such
revocation he makes a contract in behalf of the former prin-
cipal, no one is bound by the contract : not the estate of the
principal, because the agency is revoked;^ not the agent,
because there is a presumption that those who deal with an
agent assume the risk that the authority may be terminated
by death. '^
1 A7i(e, p. 250, note 6.
2 Warlow V. Harrison, 1 El. & El. 309.
8 Woolfe V. Ilorne, 2 Q. B. D. 355.
4 Wood V. Baxter, 49 L. T. R. 45.
5 Ibkl.
6 Blades i'. Free, 9 B. & C. 167: Long v. Thayer, 150 U. S. 520 ; atite,
§71.
7 Farmers', &c. Co. v. Wilson, 139 N. Y. 284; Smout v. Hbery, 10 M.
& W. 1; Carriger v. Whittiugton, 26 Mo. 311.
254 AGENT AND TIIIRU PARTY-
§ 201. (II) Disclosure of facts affecting authority.
Where an aireiit discloses to a third party all the material
facts alTecting the scojje of his authority, and with full knowl-
edge of such facts the third party enters into a contract with
the principal through the agent, which contract is in excess
of tlie agent's anthority, no one is bonnd : neither the princi-
pal, for he never authorized the contract ; nor the agent, for he
never warranted his authority.^ An agent's liability on a
contract executed in tlie name of his principal rests on the
implied warranties as to the existence and competence of his
principal, and the sniticiency of the authority .^ 15ut clearly
no such warranty can be implied when the third party is as
fully informed of all the facts as is the agent himself.
§ 202. (Ill) Insufficiency of form.
Where the agent contracts in the name of his principal
and within the scope of his authority, but employs an insuffi-
cient form of contract, no one is bound : not the principal, for
the contract cannot be enforced, and not the agent, for he
cannot be said to warrant the sufficiency of the form of the
contract.''^
If the defect be that an agent of a corporation has attached
his own seal instead of the corporate seal, it seems that while
the agent is not liable, the corporation may be held account-
able in an action of assumpsit for benefits conferred.^
5. Special Case of Public Agents.
§ 203. Public agents.
The rules governing the liabilities of a private agent are
not generally applicable to j)ublic agents. There is a strong
1 Lilly V. Smales, 1892, 1 Q. B. 450; INIichael v. Jones, 84 Mo. 578;
Ware v. Morgan, G7 Ala. 4G1 ; Newman v. Sylvester, 42 Ind. lOG ; Hall
r. Lauderdale, 4G N. Y. 70 ; Snow v. llix, 54 Vt. 478.
" See anle^ § 18:5.
8 Abbey v. Chase, G Cash. (Mass.) 54; Hopkins v. Mohaffy, 11 S. &
R. (Pa.) 126; Neufeld v. Beidler, 37 111. App. M. See Beattie v. Lord
Ebury, L. R. 7 Ch. App. 777.
* Whitford v. Laidler, 94 N. Y. 145; McCauUey v. Jenney, 5 Houst.
(Del.) 32.
LIABILITY IN CONTRACT. 255
presumption that a public agent docs not intend to bind liim-
self personally, or to become a party to the contract. Even
a contract under seal, made in the name of a public agent,
will be construed to be the contract of the government and
not of the agent, where, in case of a private agency, such a
result would be impossible;^ a fortiori \l the contract be not
under seal.^ But the presumption in the agent's favor may
be overcome by clear proof of an intent to render himself
personally liable."^
There seems to be no good reason why the same indulgence
should not be granted to public officers who sign negotiable
instruments, adding words descriptive of their office, and
several cases have distinctly decided that such officers are
entitled to the usual presumption.* But the doctrine is over-
looked or questioned in other cases.^
^ome cases make a further distinction to the effect that
the presumption docs not extend in any case to the officers
of a muuicipality or town which is capable of making con-
tracts for itself and is liable to be sued thereon.^
A public agent is not liable for breach of implied warranty
of authority, since no warranty will be implied in such cases.'
6. Liability of Agent in Quasi-cojitract
§ 204. Money paid to agent by mistake or fraud.
An agent is liable to a third party in quasi-contract under
the following circumstances : —
1 Hodgson V. Dexter, 1 Cranch (U. S.), 343; Knight v. Clark, 48
N. J. L. 22.
2 Macbeath v. Haldimand, 1 T. R. 172; Walker r. Swartwout, 12
Johns. (N. Y.) 443; Savage v. Gibbs, 4 Gray (Mass.), 601; Parks v.
Ross, 11 How. (U. S.) 362.
8 Clutterbuck v. Coffin, 3 M. & G. 842; Auty v. Hutchinson, 6 C. B.
266; Simonds v. Heard, 23 Pick. (Mass.) 120; Brown v. Bradlee, 156
Mass. 28.
* Monticello v. Kendall, 72 Tnd. 91; Sanborn v. Neal, 4 Minn. 126;
IklcClellan v. Reynolds, 49 Mo. 312.
5 Cahokia v. Rautenberg, 88 111. 219 ; Wing v. Glick, 56 Iowa, 473.
6 Providence v. Miller, 11 R. I. 272; Brown v. Bradlee, supra.
7 Dunn V. Macdonald, 1897, 1 Q. B. 401.
256 AGENT AND THIRD PAKTY.
(1) Where tlic third party has paid money to the agent,
as agent, from a mistake of fact, or upon a consideration
which fails, and notice is given the agent before he pays the
money over to his principal, or otherwise changes his legal
position on the strength of such payment, the agent is liable
to the tliird person.^ But if the agent has i)aid the money
over to his principal, or has changed his legal position to his
detriment upon the strength of the payment, he is not liable.^
If the agent has not acted as agent, but for an undisclosed
principal, the case escapes the doctrines of agency and is
treated like any case of payment of money by mistake/^
(2) Where the third party is induced by the fraud of the
agent to pay him money, he may recover the money from the
agent, whether the latter has paid it over to his pi-incipal or
not."* The same result follows if an agent receives for his
principal money which the law forbids him to receive, as from
an insolvent debtor.^ If the duress or fraud is that of the
principal and not the agent, the latter would be protected by
a payment in good faith to the former.*^
(3) Where the third party pays the money to the agent
through compulsion or extortion, even though no notice has
been given and the agent has paid the money to the principal,
an action may be brought against the agent for its recovery.''
But where the third party pays the money voluntarily, or
1 Duller i: Ilarnson, Cowp. 565; Cox r. Prentice, 3 M. & Sel. 344-, La
Farge r. Kiieeland, 7 Cow. (-N. Y.) 450; Caljot v. Shaw, 148 Mass. 459;
Shepard v. Slierin. 43 Minn. 382; O'Connor r. Clopton, GO Miss. 349;
Smith V. Binder, 75 111. 492.
2 Holland V. Russell, 4 B. & S. 14; Ellis v. Goulton, 1.S93. 1 Q. B.
350 ; r. S. V. Pinover, 3 Fed. Rep. 305 ; Fry v. Lockwood, 4 Cow. (N. Y.)
454.
» Newall r. Tonilinson, L. R. G C. P. 405; Smith v. Kelly, 43 Mich.
390.
* Snowdf.n v. Davis, 1 Taunt. 359; Smith v. Sjeap, 12 M. & W. 585;
Moore n. Shield.s, 121 Ind. 267; Larkin v. Ilapgood, 56 Vt. 597.
6 Larkin v. Hajjgood, 56 Vt. 597; Ex parte Edwards, 13 Q. B. D.
747.
6 Owen V. Cronk, 1895, 1 Q. B. 265.
» Elliott V. Swartwout, 10 Pet. (U. S.) 137.
LIABILITY IN CONTRACT. 257
where a personally innocent agent has before notice paid the
money over to the principal, the agent is not liable.^
§ 205. Money received to the use of the third party.
(4) Where the ngent has received money from his prin-
cipal to be paid to the third party, and undertakes with such
party so to pay it, but instead converts it to his own use, tlie
third party may, at his election, proceed against the agent
as for money had and received to his use.^ But he is not
liable in such case unless he has agreed expressly or impliedly
to pay the third person.^ An election to hold the agent is
final and discharges the principal from further liability.'* If
the agent after receiving the money promises to pay the third
party, he is liable upon his promise, and " No consideration
need pass as between the agent and the creditor. The funds
in his hands are a sufficient consideration for his agreement." ^
And it has been held that if the third party requests the agent
to pay to X the money which the principal directed the agent
to pay to the third party, and the agent agrees to do so, X
may maintain an action against the agent. " An action for
* money had and received ' is a most liberal action, and may
be as comprehensive as a bill in equity."^ This falls under
the doctrine of a " promise for the benefit of a third person,"
and escapes the general doctrine as to privity of contract.^
7. Liahility of Tliird Person to Agent.
§ 206, Introduction.
Since the agent may be liable, either solely, or in common
with the principal, on contracts entered into in behalf of the
1 Owen V. Cronk, 1895, 1 Q. B. 265.
2 Crowfoot V. Gurney, 9 Bing. 37-2; Walker r. Eostron, 9 M. & W.
411; Keene v. Sage, 75 Me. 138; Beach v. Ficke, 94 Iowa, 283.
3 Howell V. Batt, 5 B. & A. 504; Malcolm v. Scott, 5 Ex. 601 ; Baron
V. Husband, 4 B. & A. 611.
* Beach v. Ficke, supra.
5 Goodwin v. Bowden, 54 Me. 424.
^ Keene v. Sage, supra.
T Ante, § 118.
17
258 AGENT AND THIRD rARTT.
latter, it should follow that the contractual obligation is
recipi'ocal and that the third person is also liable to the agent.
Such is found to be the case. The right of the agent to
sue the third person may be treated under the following
classes : —
1. Where the agent alone may sue.
2. Where tlie agent or principal may sue, but the princi-
pal may control the suit.
3. Where the agent or principal may sue, but the princi-
pal cannot control the suit.
§ 207. (I) Where the agent alone may sue.
1. Sealed instruments. Where an agent contracts in his
own name in a sealed instrument, he alone can sue upon
it.^ But it seems that any defence good against his prin-
cipal may be set up in such suit, since the action, though in
the name of the agent, is for the benefit of the princi])al.2
So also any defence good against the agent may be set up,
even if it would not be good against the principal in case
he could sue in his own namc.^ It follows that the third
party may avail himself of any defence or set-off that would
be good against either principal or agent, for he is entitled
to defend against the party of record, and he is equally en-
titled to defend against the one for whose use the action is
brought.
2. Negotiable instruments. It is also a technical rule of
the law merchant that if the agent is named as the payee
of a negotiable instrument, he alone can sue upon it.'* As
already pointed out, this technical rule has very generally
been ignored in cases where there is any indication by the
addition of the word " agent," or its equivalent, that the
1 Ante, §§ 134, 188; Shack v. Anthony, 1 M. & S. 573; Berkeley v.
Hardy, 5 B. & C. 355; Clarke v. Courtney, 5 Pet. (U. S.) 319.
^ Bliss V. Sneath, 10:5 Cal. 43; cf. Isberg v. Bowden, 8 Ex. 852, which
must be regarded as inapplicable where equitable defences are permitted.
8 Gibson v. Winter, 5 B. & A. 9G.
* §§ 1.35, 194; United States Bank v. Lyman, 20 Vt. 666; Fuller v.
Hooper, 3 Gray (Mass.), 334; Grist v. Backhouse, 4 Dev. & B. (N. C.)
362; Cocke v. Dickens, 4 Yerg. (Tenu.) 29.
LIABILITY IN CONTKACT. 259
payee is a representative of an unnamed principal.^ This
is especially true of instruments payable to one described
as " cashier." 2 The technical rule itself can give little real
difficulty, since the payee may by indorsement confer an
unquestioned right upon the principal to maintain the
action.
3. Right restricted to agent. Where the right to sue on
a contract is by its express terms restricted to the agent, he
alone can sue.^
4. Ostensible agent really principal. Where one contracts
as an agent, but is in reality the principal, he may sue upon
the contract, provided after knowledge of the fact that he
is the I'eal principal the third party recognizes him as prin-
cipal,* or in case the identity of the principal is not a con-
trolling consideration in the contract,^ and due notice of the
facts has been given to the third party before action is
brought.^ It has been held, however, that where a memo-
randum is signed by brokers as agents for an unnamed
principal, and they afterward declare themselves as princi-
pals, the memorandum so signed does not satisfy the Statute
of FraudsJ But where the agent James represented that
he was the principal John, and made and executed a contract
in the name of John, it was held in an action by John that
the Statute of Frauds was satisfied.^ If the agent intends
and professes to contract for a principal and not for him-
1 Ante, § 135.
2 First N. B. v. Hall, 44 N. Y. 395.
3 Ante, § 133; Humble v. Hunter, 12 Q. B. 310; Lucas v. De la Cour,
1 M. & S. 249.
4 Rayner v. Grote, 15 M. & W. 359.
5 Schmaltz v. Avery, 16 Q. B. 655, where plaintiff contracted in hia
own name "as agent for the freighter," ami the court held that as the
supposed freighter was not named, the defendants could not have con-
tracted with reference to his solvency or credit.
6 Bickerton v. Burrell, 5 M. & S. 383.
' Sharman v. Brandt, L. R. 6 Q. B. 720. There are some expressions
in this case indicating that the ostensible agent could not sue because the
contract was not made with hira.
8 Hunter v. Giddiugs, 97 Mass. 41.
2G0 AGENT AND THIRD PARTY.
self, the fact that the principal is non-cxistciit or under
disability docs not make the agent a contracting party.^
A distinction has been stated between cases where the
ostensible agent names a principal, and where he asserts
his agency but does not name his principal.^ In the first
case it is said the ostensible agent cannot sue because
clearly there was no intention to give credit to him,^ while
in the second case he may sue because there was at least
no intention manifested to give credit to any other person.^
It is admitted, however, that even in the first case the agent
may sue if the contract has been performed by him with the
acquiescence of the third party ,''^ and it has been suggested
that the same result would follow if the agent, before bring-
ing the action, gives due notice of the actual state of the
facts.^
§ 208. (II) Where either agent or principal may sue.
The agent or the principal may sue on contracts made by
the agent on behalf of his principal, — (1) where, the agent
contracts personally," or (2) where the agent has a special
property in the subject-matter of the contract or a bene-
ficial interest in it.^
(1) Where the agent and principal are both bound on the
contract,^ the primary right to maintain an action against
the third party is in the principal, but, subject to his
assent express or tacit,^*^ the agent may maintain an action
1 Ilollman v. Pullin, 1 C. & E. 254.
2 Dicey on Parties (Am. ed.), Rules 18 and 10, pp. 164-1G8; Mccham
on Agency, § 7G0.
^ Compare Boulton v. Jones, 2 II. & N. 56-1; Boston Ice Co. v. Potter,
123 Mass. 28.
^ Schmaltz v. Avery, supra.
6 Rayner v. Grote, supra.
6 Bickerton v. Burrell, 5 M. & S. 383 ; Foster v. Smith, 2 Cold. (Tenn.)
474.
' J n^e, §§196-198.
8 Ante, § 109.
• Ante, § 196 et seq.
" Sadler v. Leigh, 4 Camp. 194.
LIABILITY IN CONTRACT. 261
wherever an action could be maintained against the agent.^
" It is a well-established rule of law that when a contract
not under seal, is made with an agent in his own name
for an undisclosed principal, either the agent or the prin-
cipal may sue. If the agent sues, it is no ground of defence
that the beneficial interest is in another, or that the plain-
tiff, when he recovers, will be bound to account to another.
. . . The agent's right is, of course, subordinate to and
liable to the control of the principal, to the extent of his
interest. He may supersede it by suing in his own name,
or otherwise suspend or extinguish it, subject only to the
special right or lien which the agent may have acquired." ^
The right of the agent to sue ceases with the termination
of the agency, whether the agency is terminated by the act
of the parties or by operation of law.-^
These cases are those in which the agent contracts in his
own name, but in behalf of his principal, the contract not
being under seal, or a negotiable instrument, or expressly
restricted to the agent,*
In these cases the right of the agent to sue ceases upon
the intervention of the principal, and a settlement with the
principal is a good defence to an action by the agent.^
The right of the agent to sue does not pass to his assignee
in bankruptcy where the agent has no beneficial interest in
the contract.^
The third party may avail himself of any defence or set-
1 Joseph V. Knox, 3 Camp. 320; Gardiner v. Davis, 2 C. & P. 49;
Cooke V. Wilson, 1 C B. n. s. 153; U. S. Tel. Co. i-. Gildersleeve, 29
Md. 232; Ludwig v. Gillespie, 105 N. Y. 653. This right is not
taken away by code provisions requiring actions to be brought in the
name of the real party in interest. Albany, &c. Co. i'. Lundberg, 121
U. S. 451 ; Harrigan v. Welch, 49 Mo. App. 496 ; Rowe v. Rand, 111 Ind.
206.
2 Rhoades v. Blackiston, 106 Mass. 334.
8 Miller v. State Bank of Duluth, 57 Minn. 319.
4 Ante, §§ 123, 196-199.
6 Sadler v. Leigh, 4 Camp. 195; Atkinson v. Cotesworth, 3 B. & C. 647;
Dickenson v. Naul, 4 B. & A. 638.
6 Rhoades v. Blackiston, 106 Mass. 334.
262 AGENT AND THIRD PARTY.
off good against the agent, as well as any good against his
{)rineij)al.^
§ 209. (Ill) Same. — "Where principal cannot control the suit.
(2) Where the agent has a special property in or lien
upon the subject-matter of the contract,'^ he may maintain
an action in his own name free from the control of the
princiiial,'' at least to the extent of his interest. But such
an interest must exist in order to give the agent a right
of action;* though this will be presumed where the agent
is one who usually has such an interest, as an auctioneer ^
or factor.^ The measure of damages is the same whether
the suit be brought in the name of the agent or in that
of the principal." A settlement with the principal cannot
be ])leaded as a defence to the agent's action ^ unless the
agent has led the third person to believe that he acquiesces
in such settlement.^
§ 210. Liability in quasi-contract.
Where the agent has paid money by mistake to the third
party, he may maintain an action for its recovery. It seems
either the principal or the agent may sue,^*^ and as the agent
is liable to the principal for negligence in the conduct of
the business, this may be the only way in which the agent
can protect himself against loss.^^
1 Smith V. Lyon, 3 Camp. 465 ; Gibson v. Winter, 5 B. & A. 96.
2 Ante, § i;i9.
* Chitty on Pleading, p. 8; Driiikwater v. Goodwin, Cowp. 251; Rowe
V. Rand, 111 Ind. 206; Thompson v. Kelly, 101 Mass. 291.
* Fairlie v. Fenton, L. R. 5 Ex. 109. (Brokers do not usually have
such interest.)
6 Williams v. Millington, 1 H. Bl. 81 ; Minturn v. Main, 7 N. Y. 220.
« Drinkwater v. Goodwin, Cowp. 251 ; Groover v. Warfield, 50 Ga. 614.
' Evrit I'. Bancroft, 22 Oh. St. 172.
« Atkyns v. Amber, 2 Esp. 49:5; Robinson v. Rutter, 4 El. & Bl. 954.
e Grice r. Kenrick, L. R. 5 Q. B. 340.
" Stevenson v. Mortimer, Cowp. 805; Oora v. Bruce, 12 East, 225;
Holt r. Ely, 1 El. & Bl. 795.
" Kent V. Bernstein, 12 Allen (xMass.), 342.
LIABILITY IN TOUT. 263
CHAPTER XVI.
TORTS BETWEEN AGENT AND THIRD PARTY.
§ 211. Agent liable for misfeasance.
An agent is personally liable to third persons for loss or
damage occasioned to them by his misfeasance when acting
on behalf of his principal, whether the act or omission
constituting the misfeasance was authorized or not.^ It is
no defence to allege his principal's orders, or that he acted in
good faith believing his principal had directed only what
might lawfully be done.^ " The warrant of no man, not even
the king himself, can excuse the doing of an illegal act, for
although the commanders are trespassers, so are also the
persons who did the fact." ^ It is immaterial that the agent
derives no personal benefit from the wrong.
.4
§ 212. "Whether agent liable for non-feasance.
An agent is not liable to a third person for a mere non-
feasance, or not doing at all that which he has agreed with
his principal to do. This is merely another way of stating
that no one can sue for a breach of duty except the one to
whom the duty is owing.^ The first problem in such cases is
1 Cullen V. Thomson, 4 Macq. 424; Swift v. Jewsbury, L. R. 9 Q. B.
301; Campbell r. Hillman, 15 B. Mon. (Ky.) 508; Weber v, Weber, 47
Mich. 569; Hamlin v. Abell, 120 Mo. 188.
2 Bates V. Pilling, 6 B. & C. 38; Mill v Hawker, L. R. 10 Ex. 92; Lee
V. Mathews, 10 Ala. 682; Williams v. Merle, 11 Wend. (N. Y.) 80.
3 Sands V. Child, 3 Lev. 352. See also Whitfield v. Lord Le Despencer,
2 Cowp. 754. The command of the State is, however, a defence in an
action by a subject of a foreign State. Bnron v. Denman, 2 Ex. 167 ;
Pollock on Torts (5th ed.), pp. 104-109; post, § 294.
* Weber v. Weber, supra.
5 Dicey on Parties (Am. ed.), p. 489 ; Story on Agency, § 309 ; Lane
V. Cotton, 12 Mod. 472; Delaney v. Rochereau, 34 La. An. 1123.
264 AGENT AND THIRD PARTY.
to ascertain whether any duty is owing to any other pcrs(ni
than the principal, or specifically to the third person injured
by the non-feasance.
Whether an act or omission resulting in injury to a tliird
person is a mere non-feasance, or whether it is a misfeasance
or breach of duty toward a third person, involves distinctions
of a subtle character.^ This matter will be more fully treated
in a subsequent section.^
§ 213. Special instances of misfeasance.
(1) Fraud. An agent is personally liable for his own
frauds committed in the course of the agency, although com-
mitted for the ])rinci pal's benefit.^ " A person cannot avoid
responsibility merely because he gets no personal advantage
from his fraud. All persons who are active in defrauding others
are liable for what they do, whether they act in one capacity
or another. . . . While it may be true that the j)rincipal is
often liable for the fraud of his agent though himself honest,
his own fraud will not exonerate his fraudulent agent." ^ It
is, of course, necessary that the essential elements of deceit
should be present in order to found an action in tort. There-
fore if the agent makes the representation believing it to be
true, he is not guilty of fraud, although his principal may
have known it to be false.^ But if he knows it to be false,
then whether his princij)al knew it or not, and whether it
was authorized or unauthorized, he is liable.**
(2) Conversion. " Any ])crson who, however innocently,
1 Delaney r. Kochereau, .tuprn : Osborne v. Morgan, 130 Mass. 102;
Baird v. Shipman, 132 111. 10.
2 Post, § 291.
8 Swift *•. Jewsbury, L. R. 9 Q. B. 301 ; Campbell v. Ilillman, 15 B.
Mon. (Ky.) 508; Ileddeu v. (iriffin, 136 Mass. 229 ; Allen r. llartfield,
70 111. 358; Clark /•. Levering, 37 Minn. 120; Hamlin v. Abell, 120 Mo.
188.
♦ Weber v. Weber, 47 Mich. 509.
'' Eaglesfield r. Londonderry, 38 L. T. 303; 20 W. R. 510. See ante,
§ 152.
6 Pollock on Torts (5tli ed.), pp. 290-291; Ilempfling v. Burr, .59 Mich.
294.
LIABILITY IN TORT. 265
obtains possession of goods of a person who has been fraud-
ulently deprived of them, and disposes of them, whether for
his own benefit or that of any other person, is guilty of
conversion." ^ Accordingly an agent is bound to know that
his principal has title to the goods which form the subject-
matter of the agency. " He who assumes to deal or inter-
meddle with personal property which is not his own must see
to it that he has a warrant therefor from some one who is
authorized to give it." ^ If an agent sells stolen bonds for
the thief and pays the proceeds over to his principal, he is
liable to the true owner for conversion, and it is no defence
that he acted innocently or that the bonds were negotiable.^
So if one act innocently as the agent of one of two joint
owners of a chattel and sell the entire chattel without the
consent of the other joint owner, he is liable for conversion.*
A doubt was expressed by some of the judges in the case
of Rollins V, Fowler ° whether the rule was as broad as is
above stated, and one American case at least has held that a
factor is not liable for selling stolen goods unless after demand
or notice.*" But the weight of authority sustains the rule.^
The agent is therefore liable to the true owner if, having
possession of the latter's goods, although believing them to
belong to the principal, he sells and delivers them,^ or un-
qualifiedly refuses to deliver them up to the true owner upon
demand.^ But if he have not possession, a mere contract to
sell is not a conversion. ^"^ So also a mere transportation of
1 Rollins V. Fowler, L. R. 7 H. L. 757.
2 Spraights v. Hawley, 39 N. Y. 441.
3 Kimball v. Billings, 55 Me. 147 ; Swim v. Wilson, 90 Cal. 126.
* Perminter v. Kelly, 18 Ala. 716.
6 L. R. 7 H. L. 757.
6 Roach V. Turk, 9 Heisk. (Tenn.) 708. And see Leuthold v. Fair-
child, 35 Minn. 99, 111.
^ Hoffman v. Carow, 20 Wend. 21, s c. 22 Wend. 285; Rice v. Yocura,
155 Pa. St. 538 J Robinson v. Bird, 158 Mass. 357.
8 Consolidated Co. v. Curtis, 1892, 1 Q. B. 495.
9 Alexander v. Southey, 5 B. & Aid. 247 ; Spraights v. Hawley, 89
N. Y. 441.
10 Barker v. Furlong, 1891, 2 Ch. 172.
26G AGENT AND THIRD PAKTY.
the goods for the possessor is not a conversion, where it
results only in a change of position and not of property or
possession. 1
(3) Other wrongs. An agent is personally liable for an
illegal use of process, ^ malicious prosecution, ^ libel, ^ in-
fringement of patent, ^ or other act of misfeasance.
§ 214. Whether principal and agent are liable jointly.
The question as to whether the principal and agent may
be sued jointly has given rise to some discussion. Two
classes of cases are distinguishable :
(1) Where the principal and agent are in fact joint tort-
feasors, as where the princij)al commands the wrong to be
done, and therefore purposely participates in it, the two
may be sued jointly.^ They are in no different position than
any other joint tort-feasors. In trespass all participants are
regarded as joint tort-feasors." If there are two or more
principals, one or all or any number may be joined.^
(2) Where the principal and agent arc not in fact joint
■wrong-doers, but the ijrincipal's liability rests upon the ground
of public policy heretofore explained,^ there is a difference of
opinion as to whether the two are liable jointly. As stated
above, if both are liable in trcsj)ass, they arc regarded as
joint wrong-doers ; but if the princii)al is liable in an action
on the case, simply because of his position as principal, it has
been held that a joint action would not lie.^'' But it is believed
that the w^eight of authority is otherwise, and that in any
1 Metcalf V. :\IcLaughUn, 122 Mass. 81; Gurley i'. Arnistead, 148
Mass. 267.
2 Bennett v. Bayes, 5 H. & X. 391.
3 Wallace v. Finberg, 46 Tex. 3.>; Green i'. Elgie, 5 Q. B. 99.
* Maloney i'. Bartley, 3 Camp. 210.
^ Nobel's Exp. Co. v. Jones, 8 App. Cas. 5.
^ Moore V. Fitchburg R., 4 Gray (Mass.), 465.
' Ilewett V. Swift, 3 Allen (Mass.), 420.
* Roberts v, Johnson, 58 N. Y. 613.
» Ante, §§ 1 18-150.
'° Parsons v. Wiiichell, 5 Gush. (Mass.) 592 ; Campbell v. Portland
Sugar Co., 02 Me. 552, 500.
LIABILITY IN TORT. 267
case where an action would lie against the two severally it
will lie against them jointly .^
§ 215. Liability of third person to agent for torts.
The third person is liable to the agent for torts com-
mitted against him ; but the torts that may be committed
against him as agent are not numerous.
(1) Where the agent has a special property in the goods
which form the subject-matter of the agency, he may maintain
an action for an injury to the goods or for their conversion.
In such cases he is both bailee and agent, and it is a general
rule of law that a bailee, or a possessor having a special
property in the goods, may maintain an action against such
as injure or take away the chattel.^ Indeed it is not clear
that anything more than possession is necessary to sustain
the action.^
(2) Where the agent is engaged in the sale of a specific
article, his compensation being by way of commission on his
sales, a false and libellous statement concerning such articles,
which diminishes his sales and profits, will found an action
against the one making the statement.^
(3) We have already seen that the principal may main-
tain an action against any one who unjustifiably induces the
agent to quit the employment.^ In the same way, and for
the same reasons, the agent may maintain an action against
any one who induces the principal to dismiss him from the
employment.^
1 Dicey on Parties (Am. ed. 1879), 490; Stevens v. Midland R., 10
Ex. 3.52; Phelps v. Wait, 30 N. Y. 78; Shearer v. Evans, 89 Ind. 400;
cf. White V. Sawyer, 16 Gray (Mass.), 586.
2 Moore v. Robinson, 2 B. & A. 817; Fitzhugh v. Wiman, 9 N. Y. 559,
567; Little v. Fossett, 34 Me. 545; Robinson v. Webb, 11 Bush (Ky.),
464, 483.
3 Pollock on Torts (5th ed.), pp. 313-321 ; Donahoe v. McDonald, 92
Ky. 123.
" * Weiss V. Whittemore, 28 Mich. 366.
5 Ante, § 176. See also § 159.
6 Post, § 299 : Chipley v. Atkinson, 23 Fla. 206 ; cf. Allen v. Flood,
1898, App. Cas. 1.
BOOK 11.
MASTER AND SERVANT.
INTRODUCTION.
§ 216. Scope of the subject of master and servant.
A servant is a representative vested with authority to per-
form operative acts for his master. He is not vested with
authority, as servant, to create new primary obligations. He
may, however, in the course of the employment, commit a
breach of the existing primary obligations of his master and
thus give rise to the secondary obligation to pay damages.
If the primary obligation was an involuntary one, or if, being
voluntary, it was one to which the law annexed additional
involuntary ones, we call the breach of it a tort.^
The chief subject-matter of the law of master and servant
is tort. A servant in performing operative acts for his mas-
ter may wilfully or inadvertently cause injury to the person
or property of a third person, and such third person may be a
stranger to the service or may be a fellow-servant. The main
problem of the law of master and servant is to determine the
nature and extent of the master's liability for such torts.
Other problems concern themselves with the liability of the
master for his own personal torts resulting in injury to a ser-
vant, with the liability of a servant for his own torts, and
with the criminal liability of a master for the offences of his
servant. But the central problem is the nature and extent
of a master's liability for the tortious acts or omissions of his
servant resulting in injury to a stranger or to another servant.
At the outset, however, it is necessary to determine that
the relation of master and servant actually exists, and this, so
far as not already treated,^ calls for preliminary discussion.
In discussing the matters characteristic of the law of mas-
ter and servant, we shall, without needlessly traversing the
1 Ante, §§ 4-6. 2 j^nte, Part I.
MASTER AND SERVANT.
ground already covered in this work, address ourselves to the
following inquiries : —
I. Who is a servant; that is, when does the relation of
master and servant exist in fact, so that the master is liable
for any of the acts or omissions of the servant ?
II. For what acts or omissions of a servant resulting in
injurv to a third person is the master liable? In connection
with this we shall inquire to what extent a master is liable
criminally, if at all, for offences committed by his servant.
We shall also inquire whether the doctrine of respondeat
superior is applicable to puljlic ofhcers and bodies.
III. For what acts or omissions of a servant resulting in
injury to a fellow-servant is the master of the two servants
liable? In connection with this we shall inrpiire for what
personal acts or omissions of his own resulting in injury to a
servant the master is liable.
IV. To what extent is a servant liable for his own torts
resulting in injury to strangers or to fellow-servants?
V. For what torts affecting the relation is a third person
liable either to the master or the servant ?
PAKT I.
WHO IS A SERVANT?
§ 217. Introductory.
We have already noted the distinction between a servant
and an agent.^ We have now to inquire whether one who is
performing operative or ministerial acts for another is in the
conventional relation of a servant to a master or whether (1)
he is an independent contractor ; (2) his services have or
have not been transferred to a new master ; (3) he is compul-
sorily employed or in compulsory service * (4) he is a sub-
servant or a volunteer.
1 Ante, §§ 4-6.
18
274 WUO IS A SEKVA^'T?
CHAPTER XVII.
INDEPENDENT CONTRACTORS.
§ 218. General rule.
A distinction is taken between a servant and an independent
contractor. When a person desires a particular act done he
may either hire a workman to do it, retaining control of the
servant and directing his work, or he may let the job. by con-
tract, simply stipulating that it shall be done in accordance
with certain specifications, but retaining no control over the
contractor, or over his methods of work. In the first case the
workman is a servant ; in the second, he is an independent
contractor. In the first case the employer is legally respon-
sible for the acts of the employee done in the course of the
business ; in the second, he is not generally responsible for
such acts.
Whether the employer retains such control over the work
to be done, and the manner of doing it, as to render himself
responsible for injuries occasioned by the negligence of the
employee (or contractor) in the performance of the work
depends upon the construction to be given to the contract. ^
Subject to the exceptions below enumerated, one who lets a
contract for work and retains no control over the work, or
the methods of doing it, is not liable for the negligence or
other wrong of the contractor.'^
To this general rule there are several exceptions.^
1 Liiinehan v. Rollins, 137 Mass. 123.
* Lawrence v. Shipman, 39 Conn. 586; Blake v. Ferris, 5 N. Y. 48;
Ilexamer v. Webb, 101 N. Y. 377 ; Atlanta K. Co. v. Kimberly, 87 Ga.
161; Foster t'. Wadsworth-IIowland Co., 168 111. 514; Sinjrer Mfg. Co.
V. Rahn, 132 U. S. 518; Halliday y. Nat. Tel. Co., 1891, 1 Q. B. 221. See
Sadler v. Ilenlock, 4 E. & B. 570 ; Brackett v. Lubke, 4 Allen (Mass.),
138, for cases open to doubt.
* See various exceptions stated in Atlanta R. v. Kimberly, 87 Ga.
INDEPENDENT CONTRACTORS. 275
§ 219. Exceptions : (1) selecting competent contractor.
It is sometimes stated that a person may be liable for the
negligence of an independent contractor if he did not use
reasonable care to select one competent to perform the work
contracted for.^ There 'are occasional dicta to this effect,^
and perhaps one or two cases involving to some extent an
affirmation of the doctrine ; but there are some cases squarely
denying the doctrine.^ It is urged that the exception to the
general rule, if once admitted, would run counter to business
customs under which a contractor may estimate and contract
for work and afterward sub-let it to others who are special-
ists, would go far toward destroying the whole doctrine appli-
cable to. independent contractors, and would " open a new and
unlimited field for actions for negligence." ^ It is urged on
the other hand that the exception imposes on one having
work performed only a duty which he fairly owes to the public
or to adjoining owners.^
§ 220. Exceptions : (2) contracting for nuisance.
If the employer contracts for a nuisance or other unlawful
act, he remains liable to any person injured in consequence of
the performance of the contract.^ Perhaps the exception is
even broader than this. In one case it is stated, by way of
dictum, to be this : " If a contractor faithfully performs his
contract, and a third person is injured by the contractor, in
the course of its due performance, or by its result, the em-
ployer is liable, for he causes the precise act to be done which
161 ; Lawrence v. Shipman, 39 Conn. 586 ; Engel v. Eureka Club, 137
N. Y. 100, 101 ; Berg v. Parsons, 156 N. Y. 109, 115.
1 Berg V. Parsons, 90 Hun (N. Y.), 267 (overruled in 156 N. Y. 109,
three judges dissenting); Norwalk Gaslight Co. i;..Norwalk, 63 Conn.
495, 528-529; Brannock v. Elmore, 114 Mo. 55; Sebeck v. Plattdeutsche
Volkfest Verein, 64 N. J. L. 624.
2 Lawrence v. Shipman, 39 Conn. 586.
8 Berg V. Parsons, 156 N. Y. 109 ; Schip v. Pabst Brewing Co., 64
Minn. 22.
* Ibid.
^ Dissenting opinion in Berg v. Parsons, 156 N. Y. 109.
« Ellis V. Sheffield Gas Consumers Co., 2 E. &B. 767; Deford v. State,
30 Md. 179; Ketcham v. Newman, 141 N. Y. 205.
276 WHO IS A SERVANT?
occasions the injury." ^ Whichever rule more correctly states
the exception, it is at least true that where the contract calls
for the doing of an act that is itself wrongful, the employer
remains liable for all the consequences, practically as a joint
tort-feasor with the contractor.
§ 221. Exceptions : (3) contracting for unsafe result.
If the employer contracts for improper materials or an
unsafe plan, or generally an unsafe result, he remains liable
for damages occasioned thereby although the work is done by
an independent contractor.^ " The owner cannot dictate that
his building be constructed of improper materials or upon an
unsafe plan, and escape liability for injuries caused thereby
because he made a contract with a third person to build it."^
§ 222. Exceptions : (4) statutory liability to conduct work effi-
ciently.
If the employer is under an obligation of positive law to do
a particular thing, or to observe particular safeguards, he
cannot relieve himself of this liability by putting the work
into the hands of an independent contractor.^ Thus, if he is
empowered by statute to construct a bridge, but to have it
open for navigation within a specified time, he is not relieved
of liability for obstructing navigation because the independent
contractor failed to observe the terms of the contract.^ If a
permit to place building material in the street is coupled with
a condition that it be lighted and guarded, the lot owner is
liable for the failure of a contractor to light and guard
material deposited there.^
The rule under this head has been extended to cases where
a railroad is by statute authorized to construct its road across
* Lawrence v. Shipman, 39 Conn. 58G.
2 Gorliam r. Gross, 125 Mass. 232.
8 Meier c. Morgan, 82 Wis. 289.
* Hole V. Sittingbourne R. Co., 6 II. & N. 488; 30 L. J. Ex. 81;
Reuben v. Swigart, 7 Oh. Dec. 638 ; Downey v. Low, 22 N. Y. App. Div.
460.
^ Hole V. R. Co., supra.
* Reuben v. Swigart, supra.
INDEPENDENT CONTRACTORS. 277
a highway, and by the negligence of an independent con-
tractor the highway is rendered unsafe, even though the
statute does not expressly require the railroad to observe
particular safeguards. ^
§ 223. Exceptions : (5) contract liability to conduct w^ork safely.
If the employer by express contract has agreed to do an
act efficiently and safely, he cannot, by sub-letting the work
to an independent contractor, relieve himself from liability
under his express contract. Thus where a company under-
took to lay water-pipes in a city, and agreed with the city to
protect all persons from damages and to be responsible for
damages to all persons, and afterward sub-let the work to a
contractor, who in using a steam-drill injured a traveller, it
was held that the company was liable.^ But where a license
was given by a city to a landowner to construct a sewer on
condition that the work be guarded and lighted, and that the
licensee should be answerable to any person injured by the
failure so to do, it was held that the licensee was not
liable for such neglect on the part of an independent
contractor.^
§ 224. Exceptions: (6) extra-hazardous work.
If the work to be executed is extra-hazardous, and such
that in the natural course of things injurious consequences
are likely to ensue, unless suitable means are adopted to pre-
vent such consequences, the employer is liable unless he uses
due care in the adoption of such means.^
This exception to the general rule has not met with univer-
sal favor. It has been applied in the cases just cited to the
excavation of lands endangering the support of adjoining
1 Deming v. Terminal Ry. Co., 49 N. Y. App. Div. 493.
2 Water Company p. Ware, 16 Wall. 566.
8 Blake v. Ferris, 5 N. Y. 48.
4 Bower v. Peate, L. R. 1 Q. B. D. 321 ; 4.5 L. J. Q. B. 446 ; Black v.
Christchurch Finance Co., 1894, A. C. 48; Thompson t'. Lowell, &c. Ry.,
170 Mass. 577 ; Cameron v. Oberlin, 19 Ind. App. 142 ; Norwalk Gaslight
Co. V. Norwalk, 63 Conn. 495; Bonaparte y. Wiseman, 89 Md. 12; Cov-
ington, &c. Bridge Co. v. Steinbrock, 61 Oh. St. 215; Wetherbee v. Par-
tridge, 175 Mass. 185.
278 WHO IS a servant?
property, to an exhibition of marksmanship, to the clearing
of land by fire, to the removal of dangerous walls, and to
blasting.
It has been rejected in the case of a contract for blasting,^
for an exhibition of balloon ascension,^ and for the setting
of fires.^
§ 225. Exceptions : (7) safety of premises.
If the owner of property contracts for work to be done
upon it, he is, as to invitees, bound to keep the premises in a
safe condition and cannot excuse himself on the ground that
the work is under the exclusive control of a contractor.* The
rule extends to the protection of pedestrians in a public way
injured by inadvertently falling into unguarded excavations
adjacent to the sidewalk,^ and to the protection of users of
a highway against defective overhanging structures.^
The early case of Bush v. Steinman' carried this doctrine to
the extreme point of holding that where work is done on an
owner's premises he ought to reserve control over the methods,
and if he does not, is liable for all results. The case has been
unfavorably commented upon in England and America, and is
probably not now^ law.^
§ 226. Exceptions : (8) interference by employer.
If the employer reserves the right to interfere with the
method of work, and to direct and control, the em])loyer is
substantially a master and remains liable under the usual
doctrines applicable to master and servant.^ If the employer,
1 Berg V. Parsons, 156 N. Y. 109. See M'Xamee i-. Hunt, 87 Fed. R.
298.
2 Smith V. Benick, 87 Md. GIO.
8 St. Louis, &c. R. V. Yonley, 53 Ark. 503.
* Curtis V. Kiley, 153 INIass. 123 ; Coughtry v. Globe Woolen Co., 56
N. Y. 124.
5 Wiggin V. St. Louis, 135 Mo. .558.
« Tarry i;. Ashton, L. R. 1 Q. B. D. 311.
' 1 B. & P. 401.
8 Reedie v. London & N. W. Ry., 4 Exch. 244, 256; Pollock on
Torts (5th ed.), p. 76, note h : Blake v. Ferris, 5 N. Y. 48, 62-64. See
also Strauss v. City of Louisville (Ky.), 55 S. W. 1075.
9 Linnehan v. Rollins, 137 iMass. 123.
INDEPENDENT CONTRACTORS. 279
having reserved no right to interfere, does in fact interfere,
and the injury complained of is the natural result of such in-
terference, the employer is liable.^ In the one case he is still
the master and liable as such for the negligence of his ser-
vants ; in the other case he is himself the actor and liable for
the natural and probable results of his own acts.
§ 227. Resumption of control by owner.
After the work of the contractor is completed and the
owner resumes control of his property he is, of course, liable
for its safe condition. It is sometimes a nice question
whether the owner has resumed control, but this is essen-
tially a question of fact and not of law.^
1 Lawrence i\ Shipman, 39 Conn. 586, 590; Berg r. Parsons, 156 N.Y.
109, 115; Atlanta R. v. Kimberly, 87 Ga. 161, 168.
2 Read v. East Providence Fire Dist., 20 R. I. 574 ; Higgins v. W. U.
Tel. Co., 156 N. Y. 75.
280 WHO IS A SEliVANT?
CHAPTER XYIII.
TRANSFER OP SERVICE.
§ 228. General rule.
The general servant of one may be put tcmporarilj at the
service of another and the question then arises whether he is
for the time being the servant of that other. The cases upon
this are not entirely harmonious and it seems hardly possible
to extract from them a satisfactory test. In general it may
be said that if tlie transfer of service is complete so as to give
the transferee the unqualified control of the servant, the trans-
feree becomes for the time the master of the servant so as to
render him liable for the servant's wrongful acts and to give
him the benefit of the fellow-servant rule.^ While this rule
may fairly be regarded as stating the law of the decided
cases, it must be noted that in applying it, the courts have
reached divergent results upon essentially similar facts.
§ 229. Hiring horses and driver.
Where one hires horses and carriage with a driver from a
livery-stable keeper, the driver is the servant of the livery-
stable keeper and not of the hirer.^ The hirer is not liable
for the driver's negligence, nor is the negligence of the driver
imputable to the hirer so as to bar the latter's recovery in
case he is injured by the combined negligence of the driver and
some third person. Neither is the driver a fellow-servant of
a servant of the hirer. The hirer may recover from the owner
for the negligent management of the vehicle resulting in
injury to liim.^
1 Rourke v. White Moss Colliery Co., L. R. 2 C. V. D. 205; Donovan
V. Laing, L. R. 1893, 1 Q. B. 62.0; Hasty v. Sears, 157 Mass. 123;
Hardy v. Shedden Co., 78 Fed. Rep. 610 ; Gagnon v. Uaua, 69 N. H.264.
2 Little V. Hackett, 116 U. S. 366; New York, L. E. & W. R. v. Stein-
brenner, 47 N. J. L. 161 ; Lewis v. Long Island R., 162 N. Y. 52, 66.
8 But where one hires a horse, carriage, and driver, to be used iu tak-
TRANSFER OF SERVICE. 281
From this typical case there are two variations.
First, the hirer may own his own carriage and hire horses
with a driver. This was the case of Laugher v. Pointer^ in
which the court was evenly divided. In the later case of
Quarman v. Burnett,^ where the hirer not only hired the
horses and a driver, but also furnished a special livery for
the driver, the doubts left open in the prior case were settled
in favor of the view that the coachman was not the servant of
the hirer. The doctrine of this case has been followed in
many subsequent English and American cases.^
In a recent case the hirer owned a hoisting tackle affixed to
his warehouse, and a truckman sent a horse and driver to do
some hoisting. Owing to the negligence of a servant of the
hirer the driver was injured. It was held that the driver was
the servant of the truckman and not a fellow-servant of the
negligent employee.* " The plaintiff represented his general
master, the truckman, and was all the time his servant, and
did not become in any legal sense the servant of the defend-
ant any more than he would if employed to move the goods to
a railway station on the truck, and if not such servant he
could not, of course, have become the co-servant of the de-
fendant's regular workman."
But where a truckman hired a truck and team and driver to
another, and the latter built upon the truck a superstructure
for seats which broke and injured the driver, it was held that
ing out goods for exhibition and sale, the owner of the carriage is not
liable for the loss of the goods which the hirer or his agent leaves un-
guarded in the carriage, even though the driver leave the carriage unat-
tended while the hirer is absent. Abrahams v. Bullock, 17 T. L. Rep.
557.
1 5 B. & C. 547. The case was afterwards heard by twelve judges,
but the decision is unreported. It is known that the judges were divided,
but whether equally is not clear. See remarks of Lord Russell of Killo-
wen in Jones v. ScuUard, 1S98, 2 Q. B. 565, 570.
2 6 M. & W. 499.
3 Jones V. Corporation of Liverpool, L. R. 14 Q. B. D. 890 ; Joslin v.
Grand Rapids Ice Co., 50 Mich. 516 ; Huff v. Ford, 126 Mass. 24; Rear
gan V. Casey, 160 Mass. 374; Burton v. G. H. & S. R., 61 Tex. 526.
4 Murray v. Dwight, 161 N. Y. 301.
282 WHO IS a servant?
the driver was the hirer's servant and that the truckman was
not liahle. The case was further put upon tlic ground that
the driver assumed the risk, so far as the truckman was in-
volved, of the increased danger resulting from tlie act of the
hirer in building the superstructure.^ Referring to the car-
riage cases cited above the court says : " But the present, we
think, is clearly distinguishable from such a case, because here
was not the ordinary hiring of a carriage for a trip, but it was
the hiring of a truck to be built upon, so that its nature as a
vehicle was changed, and then a separate hiring of the means
of locomotion."
Second, the hirer may own his own horses and carriage and
the livery-stable keeper may furnish a driver. Under these
circumstances, it was recently decided that the jury were
justified in finding that the driver was the servant of the
liirer.2 " The principle to be extracted from the cases is
that, if the hirer simply applies to the livery-stable keeper to
drive him between certain points or for a certain period of
time, and the latter supplies all necessary for that purpose,
the hirer is in no sense responsible for any negligence on the
part of the driver. But it seems to me to be altogether a dif-
ferent case where the brougham, the horse, the harness, and
the livery are the property of the person hiring the services
of the driver. And in such case, especially if, as here, the
driver has driven the hirer for a considerable period of time
and been approved by him, and the horse is one the charac-
teristics of which neither the livery-stable keeper nor the driver
has had any practical opportunity of becoming acquainted with,
there is, it seems to me, evidence upon which a jury would
be justified in coming to the conclusion that the driver was
upon the occasion in question acting as the servant, not
of the Every-stable keeper, but of the person who hired
him." 8
1 Hardy v. Shedden Co., 78 Fed. GIO.
e Jones v. Scullard, 1898, 2 Q. B. 565.
8 Lord Russell of Killowen, C. J., in Jones v. Scullard, 1898, 2 Q. B.
5G5, 574-575.
TRANSFER OF SERVICE. 283
§ 230. Hiring machine and operator.
Another type of cases upon the transfer of service is made up
of instances of the loan or rental of a machine or mechanical
device of some sort together with an operator. In such cases
the operator is the general servant of the owner of the ma-
chine, but may become temporarily the special servant of the
hirer. Thus the loan of an engine with an engineer to run
it/ or of a hoisting crane with a man to operate it,^ has been
held in England to constitute the operator the servant of the
hirer where the latter had full control over him. " For some
purposes, no doubt, the man was the servant of the defend-
ants [owners of the crane]. Probably, if he had let the
crane get out of order by his neglect, and in consequence any
one was injured thereby, the defendants might be liable; but
the accident in this case did not happen from that cause, but
from the manner of working the crane." ^ The cases are dis-
tinguished from the " carriage cases " on the ground that the
driver of a carriage is not put under the control of the hirer.
It has also been held that the engineer and crew of a railroad
switching engine operating temporarily upon the private
switch of a mill-owner, and under his orders, are the ser-
vants for the time of the mill-owner and not of the railroad
company.* So also where a railroad company lets a contract
for the construction of a track and agrees to furnish and does
furnish a construction train with an operating crew, the crew
are held to be the servants of the constructor, and not of the
company.^ One or two cases holding a different doctrine, and
following the " carriage cases," have not met with approval.^
So also if the owner of a lighter charters the boat and crew
to another, he is not liable for the negligence of the captain.^
1 Rourke v. White Moss CoTliery Co., L. R. 2 C. P. D. 205.
2 Donovan v. Laing, 1893, 1 Q. B. 629. ' Ibid. p. 632.
4 Mclnerney v. T>. & H. Canal Co., 151 N. Y. 411.
s Miller v. Minnesota & Northwestern Ry., 76 Iowa, 655; Powell o.
Construction Co., 88 Tenn. 692 ; Byrne v. Kansas City, &c. R., 61 Fed.
R. 605.
6 Burton v. G. H. & S. A. Ry., 61 Tex. 526 ; New Orleans, &c. R. v.
Norwood, 62 Miss. 565. See also Coggin v. Central R. Co., 62 Ga. 685.
' Anderson v. Beyer, 156 N. Y. 93.
284 ^VII0 IS a servant ?
The assent or non-ass^ent of the servant to the transfer of
service and the substitution of masters may be an important
element in determining whether such transfer is complete, and
this question may be so doubtful as to require the verdict of
a jury for its determination.^
§ 231. Servants sent to work on another's premises.
If the general master is asked to furnish a workman for a
particular service, and does furnish the workman, who is sent
to work upon the hirer's premises, is the workman the ser-
vant of the hirer and a fellow-servant of the hirer's regular
workmen? Here, again, the answer must depend upon the
facts as to the extent of the hirer's control and the under-
standing or assent of the workman. Where an employer was
asked to send a workman to make rcj)airs upon the hirer's
mill or elevator, it was held that the workman was a servant
for the time being of the hirer and a fellow-servant of the
hirer's regular employees.^ In both cases it would seem that
the workman understood the situation and imi)liedly sub-
mitted himself to the temporary master. In like manner a
contractor doing work on another's premises may temporarily
borrow an employee of that other under such circumstances
as to render the employee temporarily the servant of the
contractor,^
§ 232. Physicians employed for benefit of servants or passengers.
If a railroad or other comi)any employs a competent physi-
cian or surgeon to attend persons injured in its service or
business, such physician or surgeon is not the servant of the
company and the company is not liable for his negligence or
malpractice,* even though by law the company is required to
1 Delaware, Lackawanna, &c. R. Co., v. W. R. Hardy, 59 N. J. L. 35.
2 Ewan V. Lippincott, 47 X. J. L. 192; Hasty v. Sears, 157 jNIass. 123;
Samuelian v. American Tool Co., 168 Mass. 12. See also Wyllie v.
Palmer, 137 N. Y. 248.
8 Higgins V. W. U. Tel. Co., 156 N. Y. 75.
* Laul.hpim V. DeK. N. S. Co., 107 N. Y. 228; Secord v. Ry., 18 Fed.
R. 221 ; Quiiin v. R., 94 Tenn. 713; York v. Chicago, &c. R., 98 Iowa,
544 ; Atchison, &c. R. v. Zeiler, 54 Kans. 340 ; Pittsburgh, &c. R. v.
Sullivan, 141 Ind. 83.
TRANSFER OF SERVICE. 285
provide a duly qualified medical practitioner.^ The passenger
or employee may avail himself of the services of such practi-
tioner or not, and the company has practically no control over
the treatment or care given by the physician to his patient.
But wiierc the company deducts a fixed sum from the wages
of employees with which to provide hospital facilities and sur-
geons, it is liable to an employee for damages resulting from
its negligence in providing an incompetent surgeon.'-^ The
liability of charity hospitals is considered hereafter.^
§ 233. Sleeping-car porters also servants of railroad company.
It has been held that the conductor and porter of a drawing-
room car or a sleeping car are the servants of the railroad
company which makes this car a part of its train, although
the car is owned and operated by a separate company and the
conductor and porter are employees of that company. The
negligence or wilful wrongs of such servants as to matters
involving the safety or security of passengers, is the negli-
gence or wrong of the railroad company.*
» Allan V. State Steamship Co., 132 N. Y. 91; O'Brien v. Cunard
Steamship Co., 154 Mass. 272.
2 Wabash R. v. Kelley, 153 Ind. 119. See also Richardson v. Carbon
Hill Coal Co., 10 Wash. 648 ; Cummings v. Chicago, &c. R., 89 111. App.
199.
8 Post, § 261.
* Thorpe v. N. Y. C. & H. R. R., 76 N. Y. 402; Dwinelle v. N. Y. C.
& H. R. R., 120 N. Y. 117 ; Pennsylvania Co. v. Roy, 102 U. S. 451;
Railroad Co. v. Walrath, 38 Oh. St. 461 ; Williams v. Pullman Palace
Car Co., 40 La. An. 417.
286 WHO IS A SERVANT?
CHAPTER XTX.
COMPULSORY EMPLOYMENT OR SERVICE.
§ 234. Meaning.
Freedom of choice of servants seems to be necessary in order
that the master should be liable for the servants' defaults.
Freedom of choice of masters, or at least of service, seems to
be necessary in order that the servant should be held to have
assumed the risks of his employment. If, therefore, one is
compelled by law to accept the services of another, he ought
not to be held liable for the injuries occasioned by that other's
acts or omissions. If, on the other hand, one is compelled
by law to serve another, he ought not to be held to be a
fellow-servant of other employees so as to bar him from
recovering for their negligence, since the basis of the fellow-
servant rule is that the servant in entering the employment
voluntarily assumes the risks of the default of fellow-servants.
We have then to consider the case of compulsory employment
of a servant and the case of the com])ulsory rendering of ser-
vices, in determining the question, Who is a servant ?
§ 235. Liability for servant compulsorily employed.
In some cases — as in the em{)loyment of pilots — the em-
ployer is required by law to employ only regularly designated
or licensed persons and in some instances is bound to take
the first of such persons who presents himself. As the free-
dom of choice is thus limited — or entirely eliminated — the
question arises whether the employee is really the servant of
the employer so as to render the latter liable under the usual
doctrines applicable to master and servant.
The case of limited selection has generally been decided in
accordance with the usual doctrine of master and servant.
So long as there is a power of selection, even though among
COMPULSORY EMPLOYMENT OR SERVICE. 287
a small number, the employer chooses his own servant and
must remain liable for his acts within the scope of the em-
ployment. Thus where the statute required that any barge
navigating the Thames should have on board one authorized
or licensed bargeman (of whom it appeared there were about
six thousand), it was held that a proprietor of a barge was
liable for the negligence of one of the licensed bargemen
selected by him.^ And where pilotage statutes are construed
as not compulsory, the shipowner is held liable for tlie negli-
gence of the pilot.2 Where a mining company is required by
law to select an engineer from among those licensed by the
state, the company cannot escape liability for tlie incompe-
tence of an engineer so selected on the plea that the certificate
of the state examiners is conclusive as to the holder's com-
petence.^ But, contra, where the company was required to
employ a licensed foreman a statute making the company
liable for the foreman's negligence was declared unconstitu-
tional.4
If the employment of a particular person, or of the first of
a class to present himself, is compulsory, the employer is not
liable for the misconduct of such person. Thus, it is said
that a shipowner is not liable for the negligence of a com-
pulsory pilot, because the pilot is not deemed to be acting as
his servant, but as an officer imposed by the state.^ There
are numerous English authorities to support this proposition,^
and the English statutes now expressly provide that the
owner shall not be liable for the acts of the compulsory pilot.^
1 Martin v. Temperley, 4 Q. B. 298.
2 Bussey v. Donaldson, 4 Dall. (Pa.) 206; Yates v. Brown, 8 Pick.
(Mass.) 22; Dennison v. Seymour, 9 Wend. (N. Y.) 9.
3 Consolidated Coal Co. v. Seniger, 179 111. 370, 374-375.
* Durldu V. Kingston Coal Co., 171 Pa. St. 193.
* Story on Agency, § 456 a.
6 The Maria, 1 W. Rob. Adm. 95 ; Lucey v. Ingram, 6 M. & W. 302 ;
The Halley, L. R. 2 P. C. 193. But if the master still remains in con-
trol, although compelled to avail himself of the assistance of a pilot, the
shipowner is liable. The Guy Mannering, L. R. 7 P. D. 52; The
Agnes Otto, L. R. 12 P. D. 56; The Prins Hendrik, 1899, P. 177.
' Merchants' Shipping Act, 1894, § 633, replacing § 388 of Act of
1854.
288 WHO IS A SERVANT?
Wliilc it has been held by tlio Supreme Court of the United
States that under the maritime law the ship is liable for dam-
ages occasioned by the negligence of a compulsory pilot/ it
has recently been distinctly held that in an action at common
law the shipowner is not liable for injuries due to the negli-
gence of a pilot accepted compulsorily.^
§ 236. Status of one compelled to serve.
The question concerning pilots also arises when the pilot
is injured through the negligence of a member of the crew.
In such case is the pilot barred of recovery upon the ground
that his injury is due to the negligence of a fellow-servant ?
Where the statute made the employment of the pilot com-
pulsory and also compelled the pilot to serve, and also fixed
the compensation, and further provided that the owner should
not be liable for the pilot as for a servant, it was held that
the pilot was not a fellow-servant of the crew and could
recover for injuries sustained through the negligence of one
of them.^
If a convict is hired out by the state to an employer, there
are two questions : (1) Is the employer liable as master for
the torts of such convict ? (2) Is the convict a servant
within the meaning of the fellow-servant rule ?
Upon the first point there would seem to be no difficulty,
since the employer has had entire freedom of choice and ought
to be liable for the act of the convict in the same way as for
the act of any other servant. He is also liable to such ser-
vant for defects in machinery or other breach of his duty as
master.*
Upon the second point the case stands upon a different
basis. The convict has had no freedom of choice, has not
chosen his master, and ought not to be held, therefore, to have
1 The China, 7 Wall. (U. S.) 53 ; Ralli i'. Troop, 157 U. S. 386, 402 ;
The John G. Stevens, 170 U. S. 113, 120; The Barnstable, 181 U. S.
464. The English decisions are to the contrary.
2 Homer Ramsdell Transportation Co. v. La Compaguie Generale
Transatlanlique, 21 S. C. Rep. 831.
8 Smith V. Steele, L. R. 10 Q. B. 125.
* Hartwig v. Bay State, &c. Co., 43 Hun (N. Y,), 425.
COMPULSORY EMPLOYMENT OR SERVICE. 289
assumed any of the risks connected with the service. He is
not a fellow-servant of free employees and may therefoi'e
recover for injuries occasioned by their negligence.^ He is
not free to refuse obedience to any command, and this want
of freedom of action may negative the existence of contribu-
tory negligence.^
§ 237. Parent and child.
A parent is liable for the torts of his minor children living
with him only when he would be liable for the tort of a con-
tract servant under similar circumstances or when he partici-
pates in the tort by authorizing or ratifying it. There is no
such relation existing between the parent and child as will
make the acts of the child any more binding upon the parent
than the acts of any other person. Accordingly, if the child
commits a tort not in the course of the parent's affairs and
neither authorized nor ratified by the parent, the latter is not
liable for the consequences of such act.^ Evidence tending to
connect the parent with the wrongful act, as that he had
acquiesced in former similar acts of the child upon his prem-
ises, is competent and should be received,'^ but this is not on
the ground of agency. Since an unemancipated minor child
can have no action against his parent for a personal tort,^ it
follows that the question whether a minor child compelled by
law to serve his parent is a fellow-servant of other servants
of the parent, cannot arise.
§ .238. Husband and -wife.
The common law liability of a husband for his wife's torts
did not rest upon the doctrine of agency. It extended to a
liability for ante-nuptial torts where no such agency could
have been predicated.^ It rested upon the necessity of joining
1 Buckalew v. Tennessee Coal, &c. Co., 112 Ala. 146; Boswell v. Barn-
hart, 96 Ga. 521.
2 Dalheim v. Lemon, 45 Fed Rep. 225, 233.
8 Tifft V. Tifft, 4 Denio (N. Y), 175; Paul v. Hummel, 43 Mo. 119 ;
Brohl V. Lingeman, 41 Mich. 711 ; Baker v. Morris, 33 Kans. 580.
* Hoverson v. Noker, 60 Wis. 511.
6 Hewlett V. George, 68 Miss. 703.
® Hawk V. Harman, 5 Binney (Pa.), 43.
19
290 WHO IS A SERVANT?
the liiisbancl in all actions against the wife and upon the fact
that he became entitled to her personalty and the usufruct
of her realty. In cases where he was not, in fact, a participant
in the tort, it was necessary to join the wife in the action ;
but where the tort was committed in the husband's presence
and by his command or encouragement, he could be sued
alone.' A wife could, of course, be a servant in fact and
act under authority, and in such case the husband's liability
might be put ui)on the ordinary rule of agency.
Modern statutes which give to married women the control
and benefit of their own property and enable them to sue or
to be sued alone, have greatly modified the common law
doctrine of the husband's liability for his wife's torts.
Since a husband cannot be sued by his wife for a personal
tort during the marital relation, or even after divorce for a
personal tort committed during the marital relation,^ it fol-
lows that the question whether she is a fellow-servant of
other servants of the husband, cannot well arise.
1 Angel V. Felton, 8 Johns. (N. Y.) 149; Kosminsky v. Goldberg, 44
Ark. 401.
2 Phillips V. Barnet, 1 Q. B. D. 436 ; Abbott v. Abbott, 67 Me. 304.
SUB-SEEVANTS AND VOLUNTEERS. 291
CHAPTER XX.
SUB-SERVANTS AND VOLUNTEERS.
§ 239. Sub-servants.i
It is generally conceded that, aside from the cases of com-
pulsory employment or compulsory service just considered,
one is free to select his own servants, and that in order to
create the relation it is necessary to have the consent of both
parties, express or implied. Where, therefore, one servant
employs a sub-servant to assist liim in the master's business,
the sub-servant does not become the servant of the master
unless the first servant had authority to employ the sub-
servant or unless such employment was ratified by the master.^
Whether such authority may be derived from necessity has
already been considered.^ It has also been pointed out that
one may be liable for the consequences of the acts or omis-
sions of those who are not his servants at all upon the doc-
trine that " where a man is in possession of fixed property,
he must take care that it is so used and managed by those
whom he brings upon the premises as not to be dangerous
to others. In that view he is held liable, not for the negli-
gence of another, but for his own personal negligence in not
preventing or abating a nuisance on his own premises." *
It should also be noted that where a servant employs a
sub-servant, liability may attach to the master, not for the
mere negligence of the sub-servant, but for the concurring
negligence of the servant himself in intrusting the business
1 See ante, §§ 92-95.
2 Haluptzok V. Great Northern Ry., 55 IMinn. 446.
8 Ante, § 59 ; Gwilliara v. Twist, 1895, 2 Q. B. 84.
* Mitchell, J., in Haluptzok v. Great Northern Ry. , supra. Perhaps
Bush V. Stelnman, 1 Bos. & P., 404, and Althorf v. Wolfe, 22 N. Y. 355,
may be supported on this theory, though both cases have been much dis-
cussed and criticised.
292 WHO IS A SERVANT ?
to the sub-servant or in failing to use due care to conduct it
himself.^ In Althorf v. Wolft\^ a servant who had been
directed to remove the ice and snow from the roof of his
master's house, secured a friend to assist him, and, while
both were so engaged, a passer-by was struck by the falling
ice and killed. It was held that the owner (master) was
liable whether the ice that occasioned the injury was thrown
by the servant or his friend. The reasons given are diverse,
and the decision may rest upon the idea of implied authority,
or of ratification (of which there was some evidence), or of
the negligence of the servant in directing or controlling the
work, or of the duty of the occupier of premises not to permit
his i)roperty to become a nuisance-
Whatever other grounds of liability may exist, it is clear
upon princij)le that the master is not liable as master unless
the sub-servant has been engaged with his consent, express
or implied, or unless he has ratified the engagement, or un-
less there be established a case of necessity which may, after
all, be taken to be merely a case of the enlargement of the
authority because of the necessity.^
§ 240. Volunteers.
A volunteer is one who, without the request or consent of
M or his authorized agent, undertakes to perform a service
for M. This may be as a mere interloper or it may be in
order to advance some interest of the volunteer or of his
master. In the first case the volunteer is essentially a tres-
passer, or at most a licensee, and his acts cannot bind M,*
nor can he recover for any injury he may suffer while in the
voluntary service.^ It is immaterial that he may have been
requested to assist by a servant of M, provided the servant
had no authority to engage assistants.^ Such request may
» Booth I'. Mister, 7 Car. & P. 66 ; Althorf v. Wolfe, 22 N. Y. 355;
Engelhart v. Farrant, 1S97, 1 Q. B. 240.
^ 22 N. Y. 3.35.
8 Gwilliam v. Twist, supra.
* Ante, § 239.
B Church V. Chicago, &c. Ry., 50 Minn. 218.
• Church V. Chicago, &c. Ry., supra.
SUB-SERVANTS AND VOLUNTEERS. 293
save the volunteer from being regarded as a trespasser, but
he still assumes all the risks of the temporary service, except
that he does not assume the risk of the wanton injury, or an
injury recklessly inflicted after knowledge of his dangerous
situation.^
If, however, the volunteer performs the service at the
request of M's servants, but not for M's benefit primarily,
but to expedite his own or his master's business, he is not
a trespasser and does not assume the risks, and may recover
if negligently injured.^ In such case the volunteer is not
M's servant so as to render M liable for his negligence ; on
the other hand he is in the position of any third person in-
jured by M's servants.
In case the volunteer renders a beneficial service for the
alleged master, in his presence or with his knowledge, and
is suffered to proceed without dissent, an assent may be
implied and the relation of master and servant established
to an extent necessary to render the master liable to third
persons for the tortious acts of the volunteer done in the
course of such service.^
1 Evarts v. St. Paul, &c. Ry., 56 Minn. 141.
2 Easou V. S. & E. T. Ry., 65 Tex. 577 ; Street Ry. v. Bolton, 43 Oh.
St. 224 ; Welch v. Maine Cent. R., 86 Me. 552.
8 HUl V. Morey, 26 Vt. 178.
PART II.
LIABILITY OF MASTER FOR TORTS AND CRIMES OF
SERVANT.
§ 241. Introductory.
The main object of the relation of master and servant is
that the servant shall perform operative acts for the master.
In so doing the servant may wilfully or negligently injure
the person or property of some third person. To determine
the grounds of liability in such a case, together with the
extent and limits of liability, is one of the problems we have
now to consider. We have also to consider whether the
liability is the same in case the employer is a public political
entity like a state or city, or is a i)ublic charity. The ser-
vant may, while about his master's business, commit a crime,
and we liave also to inquire whether the master can be held
liable in a criminal prosecution for such offence.
LIABILITY OF MASTER FOR TORTS OF SERVANT. 295
CHAPTER XXI.
LIABILITY OF MASTER TO THIRD PERSONS FOR TORTS OP
SERVANT.
§ 242. Conditions of liability.
In order that a master shall be held liable to third persons
for torts committed by his servant resulting in injury to
them, it must appear :
(I.) That the wrongdoer was in fact the servant of the one
sought to be charged with liability ;
(II.) That the servant was at the time of the commission
of the tort about his master's business ;
(III.) That the servant was acting within the course of
his employment ;
(IV.) If the tort was wilful, either (1) that the servant
was acting within the course of the employment and in the
furtherance of it, or (2) that the master had voluntarily un-
dertaken toward the injured party the particular obligation
broken by the servant and had intrusted the performance of
the obligation to the servant who committed the breach of
it, or (3) that the master had intrusted the servant with
such dangerous instrumentalities that the risk of their wilful
misuse ought to rest upon the master.
§ 243. (I.) The "wrongdoer must be defendant's servant.
The doctrine of respondeat superior rests upon the relation
of master and servant. It must therefore appear that such a
relation does in fact exist. It does not exist merely because
of the relation of parent and child,^ husband and wife,^ or
employer and employee.^ It may be that the wrongdoer was
1 See ante, § 237. 2 gee ante, § 238.
8 See ante, § 217.
296 LIAIJILITV OF MASTER
an independent contractor,^ or a volunteer,^ in which case, sub-
ject to the qualifications liereinbcforc mentioned, the employer
is not liable for the torts of such persons. It may be that the
one sought to be charged has been compelled by law to employ
the wrongdoer.^ It may be that the employer is a public
entity or officer or public charity.* Or it may be that while
the wrongdoer is the general servant of the one sought to be
charged there has been such a temi)orary ti-ansfer of service
to another as to render the wrongdoer the servant for the time
being of the transferee.^ In all these and other cases the
question becomes a vital one whctlicr the one sought to be
charged is in fact the responsil)le master of the wrong-
doer.
In some cases there may be a presumption that the wrong-
doer was the servant of the one sought to be charged. If the
latter is the owner of a vehicle which, by negligent manage-
ment, has been the cause of injury to another, there is a pre-
sumption that the one in charge of the vehicle was the
servant of the owner, and the latter has the burden of show-
ing that the relation did not exist.^ The old notion ^ that if
the owner sent a vehicle out with his name upon it he was
estopi)ed to deny that the driver was his servant, has been
distinctly repudiated.^
There are few cases in wliich estoppel plays any part in
the law of master and servant. Yet one may be estopped to
deny that another is his servant where by so representing him
thii-d persons have been induced to intrust their person or
property to his care or treatment.^
1 See ante, § 218 et seq. « See ante, § 240.
8 See ante, § 235. * See post, § 257 et seq.
6 See ante, § 228 et seq.
« Nonis V. Kohler, 41 N. Y. 42; Svenson v. Atlantic Mail Steamship
Co., 57 N. Y. 108.
7 See Stables r. Eley, 1 C. & P. 014.
8 Smith V. Bailey, 1891, 2 Q. B. 403.
« Ilamion v. Siegel-Cooper Co., 107 N. Y. 244. Defemlants represent
that they conduct a dentistry establishment. Plaintiff is treated there by
S. In an action against defendants for injuries resulting from S's unskil-
ful treatment, it is held that defendants are estopped to deny that S is
their servant, or to show that S is an independent contractor.
FOR TORTS OF SERVANT. 297
§ 244. (II.) The servant must be about his master's business.
Obviously one may be in the general service of another and
yet at times attend to business or pleasure for himself. Acts
done during the time the servant is at liberty cannot render
the master liable. A master may lend his horse and vehicle
to a servant and give the servant his liberty, and during the
time that the servant is using the horse and vehicle for his
own ends the master is not liable for the servant's negligence.^
Nor is he liable if the servant without his consent takes the
horse and vehicle for ends of his own.^ But if the servant
while about his master's business makes a slight deviation for
ends of his own the master remains liable, as, where the ser-
vant drives out of the most direct route for personal ends,^
or where a pilot diverges from the direct course for ends not
connected with his master's business."*
" In such cases it is, and must usually remain, a question
depending upon the degree of deviation and all the attendant
circumstances. In cases where the deviation is slight and not
unusual, the court may, and often will, as matter of law, de-
termine that the servant was still executing his master's busi-
ness. So, too, where the deviation is very marked and unusual,
the court in like manner may determine that the servant was
not on the master's business at all, but on his own. Cases
falling between these extremes will be regarded as involving
merely a question of fact, to be left to the jury or other trier
of such questions." ^
Railway workmen who build a fire in order to heat coffee
for their dinner are not acting for the railway, and the latter
is not liable unless it be the duty of such workmen to guard
1 Bard v. Yohii, 26 Pa. St. 482; Maddox v. Brown, 71 Me. 432)
Campbell v. Providence, 9 R. I. 262.
3 Mitchell V. Crassweller, 13 C. B. 237 ; Stone r. Hills, 45 Conn. 44;
Fiske V. Enders (Conn.), 47 Atl. 681; Storry r. Ashton, L. R. 4 Q.'B.
476; Cousins i'. Hannibal, &c. R., 66 Mo. 572.
8 Joel V. Morison, 6 C. & P. 501 ; Sleath v. Wilson, 9 C. & P. 607;
Patten v. Rea, 2 C. B. n. s. 606; Mulvehill v. Bates, 31 Minn. 364;
Ritchie v. Waller, 63 Conn. 155.
* Quinn v. Power, 87 N. Y. 535.
6 Ritchie v. Waller, 63 Conn. 155, 161.
298 LIABILITY OF MASTER
against fire;^ in the latter case it would seem that tlic negli-
gence in not extinguishing it would be the negligence of the
master.^
§ 245. (Ill) The servant must be acting within the course of
his employment.
Subject to the possible exceptions to be hereafter mentioned,^
the master is liable for the torts of his servant only when the
servant's act or omission is within the course of his employ-
ment.'* The mere fact that the servant is in the employment
of the master is, of course, never sufficient to charge the mas-
ter with the consequences of the servant's misconduct.*' It
must further appear that the act or omission constituting the
misconduct was expressly or impliedly within the scope or
course of the servant's employment.*'
This is essentially a question of fact, and the decision of it
may rest upon any one or more of several considerations.
First, the particular act may be expressly authorized by the
master, in which case there would be no doubt that it is one
of the ends to be accomplished by the employment." Second,
it may be ratified by the master, in which case it stands upon
the same footing as an act previously authorized.^ Third, it
may be an act which the master reasonably led his servant to
believe was authorized, although in fact the master never
intended to authorize such an act, in which case the master is
liable.^ Fourth, it may be an act incidental to the duties
actually prescribed or one which servants employed in a
similar capacity usually have power to do, in which case it
i Moiier r. St. Paul, &c. R., 31 Minn. 351.
2 Chapman v. N. Y. Cent., &c. K., 33 N. Y. 369.
« See post, §§ 252-254.
* See ante, § 148 et seq.
6 Aldrich r. Boston & Worcester R. , 100 Mass. 31; Walton f. N. Y.
&c. Co., 139 Mass. 550; Wiltse r. State Bridge Co., 63 Mich. 639.
« Burns v. Poulsom, L. R. 8 C. P. 563.
T Blackstone, Coram. I., 429-430; post, § 246.
» Dempsey v. Chambers, 154 Mass. 330; Niras v. Mt. Ilermon School,
160 Mass. 177 ; post, § 247.
9 May lu Bliss, 22 Vt. 477 ; Moir v. Hopkins, 16 111. 313 } post, § 248.
FOR TORTS OF SERVANT. 299
will be presumed that the particular servant in question has
been authorized to do it.^ Fifth, it may be an act which the
servant performs in the course of the business intrusted to
him by the master and intended by the servant to be for the
master's benefit, in which case it will be held to be within the
scope of the employment, although the master never author-
ized or intended to authorize it.^ Sixth, it may be an act not
authorized or ratified, done by the servant while about the
master's business but not intended for the master's benefit, in
wliich case the master is not usually liable.^ The last case put
involves, however, further questions of considerable nicety
which will be treated hereafter.*
Although the immediate cause of the injury may be the act
of a servant who is outside the scope of his employment, a pre-
cedent and proximate cause may be the negligence of a ser-
vant who is within the scope of the employment. Thus where
the master intrusts the driving of a van to A and the delivery
of parcels from it to B with instructions that A is forbidden to
leave the van and B is forbidden to drive it, and A does leave
the van and B drives it and injuries a person, the master is
liable, not for the negligence of B, for he is outside the scope
of his employment, but for the negligence of A in leaving the
van unattended.^
§ 246. — (1) Acts commanded by master.
If one commands another to commit a tort he becomes
thereby a party to the tort and liable as a tort-feasor to the in-
jured party .^ This does not rest necessarily upon any relation
of master or servant but upon the notion that the one directing
1 West Jersey & Seashore R. v. Welsh, 62 N. J. L. 655 ; post, § 249.
2 Burns v. Poulsom, L. R. 2 C. P. 563 ; Evans v. Davidson, 53 Md.
245 ; Pahneri v. Metropolitan Ry., 133 N. Y. 261 ; post, § 250.
« Bowler v. O'Connell, 162 Mass. 319; Mulligan y. New York, &c. Ry.,
129 N. Y. 506 ; post, § 251.
* See post, §§252-254; ante, §§ 151-157.
6 Engelhart v. Farrant, 1897, 1 Q. B. 240 ; Williams v. Koehler, 41
App. Div. (N. Y.) 426.
« Hen-ing v. Iloppock, 15 N. Y. 409 ; Dyett v. Hyman, 129 N. Y. 351.
For early cases on particular command, see 7 Harv. L. Rev. 384 et seq.
300 LIABILITY OF MASTER
tlic wrong is a participant in it, and he and the servant may
be sued jointly in trespass.^ In such case it is not necessary
tliat the sj)cciric act should be commanded ; it is enough that
the master has directed his servant generally to use force, or
to commit a trespass, or to do any similar act under given cir-
cumstances, and that the servant in carrying out these instruc-
tions has committed the tort complained of.^ Even where the
master commands a lawful act but the servant by mistake does
an unlawful one, the master may be held liable for the tres-
pass.^ The cases of an express command to do an unlawful
act shade imperceptibly into the cases where the command is to
conduct a certain businesG for the master and the question is
whether the particular wrongful act is within the course of the
employment.* Thus the acts of conductors or other trainmen
in expelling trespassers from railway trains may be treated
as the execution of a command or as the natural incident of
the particular employment,^
If a master is liable in trespass for an unlawful assault or
entry he is liable only for the natural consequences. Thus if
he commands his servant to break and enter another's prem-
ises for a particular purpose, he is not liable if the servant
steals personal property while there.®
§ 247. — (2) Acts ratified by master.
The doctrine of ratification has already been fully treated.'
So far as concerns the ratification of torts it may be added
that there is a question whether a merely personal tort, stand-
ing alone, can be ratified so as to make the one ratifying it
a trespasser ah initio.^ The question, however, does not usu-
1 Hewett V. Swift, 3 Allen (Mass.), 420; Smith v. Webster, 23 Mich.
298; Ketcham v. Newman, 141 N. Y. 205.
2 Tbid.j Barden v. Felch, 109 Mass. 154.
« Maier v. Randolph, 33 Kans. 340 ; May v. Bliss, 22 Vt. 477 ; Moir v.
Hopkins, 16 111. 313.
* AVigmore, 7 Ilarv. L. Rev., p. 399 et seq.
6 Rounds V. Delaware, &c. R., 64 N. Y. 129; Illinois Central R. v,
Latham, 72 Miss. 32.
« Searle v. Parke, 68 N. H. 311. » Ante, §§ 30-49.
8 Adams v. Freeman, 9 Johns. (N. Y.) 117 ; Dempsey v. Chambers,
154 Mass. 330, 333.
FOR TORTS OF SI'RYANT. 301
ally come up in that form. It arises when a master wishing
to take advantage of an unauthorized act of his servant,
ratifies the act and accepts its benefits, and is then sought to
be charged with some tort committed by the servant in the
performance of it.^ Thus a teamster without authority deliv-
ered for defendant a load of coal ordered by plaintiff, and in
so doing broke plaintiff's plate-glass windows. Defendant
ratified the act of delivery and it was held that he thereby
became liable for the tort connected with it.^ " Tlie defend-
ant's ratification of the employment established the relation
of master and servant from the beginning with all its inci-
dents, including the anomalous liability for his negligent acts."
In other words, if the defendant had engaged the teamster to
deliver the coal he would have been liable for the negligence
connected with the employment : so, also, when he ratified the
unauthorized act. To the same effect are other cascs.^
If a servant commit an assault or other wrong while in the
master's employment it is not a ratification of the tort merely
to continue the servant in the employment.*
Acquiescence in the continuing negligent or wilful conduct
of a servant may render the master liable, as acquiescence
in a custom of workmen to throw off fire-wood from a con-
struction train for their own private use,° or in a custom of
cash-boys to snap pins for their amusement.^
§ 248. — (3) Acts which master reasonably led servant to believe
■were authorized.
The master may by his instructions lead a servant to
believe that certain powers are intrusted to him. In such
^ " Acceptance of benefits " by the principal or master is, at least, the
best evidence of ratification, and may, historically, have been the origin
of the doctrine. Arite, §§ 34, 121 ; 7 Harv. L. Rev. p. 387-388, note.
2 Dempsey v. Chambers, 15-i Mass. 330.
8 Niras V. Mt. Hermon Boys' School, 160 Mass. 177; Lee v. Lord, 76
Wis. 582.
" Williams v. Pullman Palace Car Co., 40 La. An. 87 ; Gulf, &c. Ry.
V. Kirkbride, 79 Tex. 457; Donivan v. Manhattan Ry., 1 Misc. (N. Y.)
368.
6 Fletcher v. Baltimore & Potomac R., 168 U. S. 13.5.
« Swinarton v. Le Boutillier, 7 Misc. (N. Y.) 639, aff'd, U8N.Y.752.
302 LTABILITY OF MASTER
a case, if this conclusion is one reasonably reached by the
servant, the acts of the latter within the limits of the sup-
posed authority will bind the master. Thus, if the master
instructs the servant to go to a certain field and kill a
beef, and the servant kills by mistake the animal of X,
believing it to be the one meant by the master, the latter
is liable for the trespass.^ If the master tells the servant
to take from a mill-yard such lumber as the mill-owner
may point out as belonging to the master and the mill-
owner points out lumber belonging to X and the servant
takes it away, the master is liable.^ If the master tells the
servant to go and get X's team and the servant takes the team
without X's consent and injures it, the master is liable.^ In
all of these cases the master intended something different
from the result actually accomplished, but the servant acted
upon the instructions as he reasonably understood them, and
the master is bound by the act so performed within the
scope of the employment and the instructions as nndci'stood.
Although the master intended that his animal and not X's
should be killed, that his lumber and not X's should be taken,
and that X's team should be taken only with X's consent, yet
if the servant reasonably believed that he was acting within
his instructions, the master must bear the loss occasioned
by the error.
§ 249. — (4) Acts impliedly authorized.
In addition to the acts expressly commanded or authorized,
there are others which may fairly be implied as necessary or
usually incidental to those actually authorized.* Frequently
the whole problem of whether a given act is within the course
or scope of the employment hinges upon this consideration.
1 Maier v. Randolph, 33 Kans. 340.
2 May V. Bliss, 22 Yt. 477.
8 Moir r. Hopkins, IG HI. 313.
* Professor Wigmore has shown liow, in the English law, the modern
doctrine of " the course of the employment " grew out of the earlier doc-
trine of an implied command, 7 Harv. L. Rev. 383. " Whatever a servant
is permitted to do in the usual course of his business is equivalent to a
general command." Blackstone, Comm. I. 430.
FOR TORTS OF SKRVANT. 303
Thus where a booking clerk of a railway company had caused
the arrest of a person who he thought had been attempting
to rob the till, the liability of the master was made to depend
upon the answer to the inquiry whether the arrest was a
necessary means of protecting the property committed to the
servant's care.^ So in a case where trainmen with excessive
or improper force remove trespassers from the trains, the
liability of the company rests upon the implied authority
given to trainmen to protect the property under their care
from such trespassers.^ To some extcut this authority may
also be said to rest upon custom or usage.^ In general,
whatever are the customary powers of servants in like occu-
pations or whatever powers are reasonably incidental to those
actually conferred, will be inferentially the powers of the
servant in question. Even an express grant of the particu-
lar power to another servant may not be sufhcient to rebut
the inference that such implied power is incidental to the
occupation.'*
The distinction between an express authority and an implied
authority is clearly brought out in the cases dealing with the
authority of railway trainmen to remove trespassers from
their trains. It is usual for railway companies to confer
upon conductors or other trainmen an express authority to
remove trespassers, and when such authority is exercised
there is no doubt whatever that the conductor is doing an act
within the course of his employment.^ If, however, a tres-
passer is removed by a brakeman there may be no such
express authority, and the question arises whether there is an
implied authority. If no express authority has been conferred
upon a particular trainman then there is an implied authority
for any trainman to remove the trespasser since the confiding
of the care of the property to servants carries with it an
implied authority to do any act reasonably necessary for its
1 Allen V. London, &c. Ry., L. R. 6 Q. B. 65.
2 West Jersey & Seashore R. v. Welsh, 62 N. J. L. 655.
8 Ibid. Hoffman v. R. Co., 87 N. Y. 25.
* Ibid.
6 Illinois Cent. R. v. King, 179 111. 91.
304 LIAP.ILITY OF MASTER
protection.^ If express authority has been given to a particu-
lar trainman, as the conductor, will there still be an implied
authority in other trainmen ? It has been held that there
will. " When the company committed to the conductor and
his crew of brakemen the custody and care of its freight
train, and thereby gave implied power to exclude and expel
therefrom any unauthorized persons intruding thereon in
contravention of the design and purpose of the com{)any in
running such a train, I think that the implication is not
rebutted by proof that it had selected one of its servants and
given him express authority in respect of such trespassers.
The express grant is not inconsistent with the implied author-
ity." 2 But if the express authority is given to one servant,
and is expressly forbidden to all others, the oj)inion has been
expressed that, as to trespassers at least, the presumption that
the others had an implied authority would be rebutted.^
It is to be noted that these cases cannot proceed upon the
doctrines of estoppel since no one is misled to his damage
by the appearance of authority.^ The primary (juestion is
whether the servant is acting in " the course of the employ-
ment," and in answering this it is proper to take account of
any implied authority to act as he did.
§ 250. — (5) Acts for master "a benefit.
A negligent act is not ordiuai-ily intentional and the dam-
age is inadvertent. Hence in negligence cases the inquiry
rarely proceeds beyond the problem whether the act or omis-
sion was in the course of the employment. In wilful torts,
however, the damage is advertent and the inquiry is directed
to the additional ])oint whether the act was intended for the
master's benefit. If so intended by a servant in the course of
liis employment the master is liable.^ It is conceivable that
1 Hoffman v. X. Y. Cent, &c. K,., 87 N. Y. 25. Contra, International,
&c. Ry. V. Anderson, 82 Tex. 516; Chicago, &c. 11. v. Brackman, 78 111.
Ajip. 141, and cases cited.
^ West Jersey & Seashore R. v. Welsh, 62 N. J. L. 635, 663.
8 Brevig v. Chicago, &c. II., 64 Minn. 168, 174-175.
* A nte, §§ .5, 52 a.
6 Poxt. § 252.
Q^K © ^~;^(0-^,^^•c^-
FOR TORTS OF SERVANT. 305
a sei'vant may intend to be negligent, that is he may know
that he is not using the care proportioned to the circum-
stances, without intending to produce damage thereby. In
such a case the inquiry may be proper whether the servant
intended to further his master's, or his own, interests by such
wilful departure from the standard of care.^ It is clearly the
law that all acts done by the servant in the course of the
employment and in the furtherance of it, that is supposedly
for the master's benefit, will, if they result in damage to third
persons, render the master liable.^
§ 251. — (6) Acts for servant's benefit.
Whore an act is clearly for the servant's benefit the negli- ^
gent performance of it resulting in injury to a third person
will not render the master liable, because, in such case, the
servant is outside the course of the employment.^ But where
the act is so closely connected with the master's affairs that,
though the servant may derive some benefit from it, it may
, fairly be regarded as within the course of the employment,
the master will be liable.*
In case of wilful torts it is said that if the tort is not for
the master's benefit, the master will not be liable,^ but this is
subject to exceptions and qualifications heretofore ^ and here-
after'^ noted. ^
§ 252. (IV.) Wilful or malicious torts : (1) in furtherance of
the employment.
In the case of wilful or malicious torts it is easier to estab-
lish that the servant has departed from the course of his
1 Philadelphia & Reading R. v. Derby, 14 IIow. (U. S.) 468 ; Weed u.
Panama R., 17 N. Y. 362.
2 Barw ick v. English Joint Stock Bank, L. R. 2 Ex. 259 ; Evans v.
Davidson, 53 Md. 245. Post, § 252. For cases on fraud and deceit see
ante, §§ 151-157.
^ Morier v. St. Paul, &c. R., 31 Minn. 351 ; ante, § 244.
* Quinn v. Power, 87 N. Y. 535 ; Ritchie v. Waller, J3 Conn. 155 : atite,
§ 244.
6 Atite, § 154.
6 Ante, §§ 155-157.
7 Post, §§ 252-254.
20
306 LIABILITY OF MASTER
employment for ends of his own than in the case of merely
negligent torts. Some early cases, indeed, lent color to the
idea that the proof of wilfulness or malice would itself con-
clusively establish that the servant had quit sight of the
object for which he was emj)loyed and entered upon some
independent end suggested by his own malice.^ Later cases
have, however, overthrown this obviously incorrect notion and
establislied the rule for wilful torts that the master is liable
if such wilful acts are committed within the course of the
employment and in furtherance of it.^ It is noticeable that
the cases establishing the general rule were those between
passenger and carrier, but the rule now extends beyond this
relation. In the case of wilful as well as negligent torts the
test is, was the servant acting for his master and within the
course of the employment?'^ In such cases there is usually
an authority to do a certain thing, as to remove a trespasser,
and the wrong consists in an excess of force or other im-
proper method. Clearly in such cases the servant is acting
for the master, and in the course of the employment, and the
master is liable.
In New York the doctrine of Wriglit v. Wilcox'^ was fol-
lowed down to and including Isaacs v. Third Avenue Railroad
Co.^ but was soon after qualified in accordance with the mod-
ern rule. It is said in Mott v. Consumers' Ice Co.,^ speaking
of the language employed in the earlier cases, that " These
intimations are subject to the material qualification, that the
acts designated ' wilful,' are not done in the course of the ser-
vice, and were not such as the servant intended and believed
to be for the interest of the master." The general rule is
said in that case to be, " that for the acts of the servant,
» M'Maiius V. Crickett, 1 East, 106; Wright v. Wilcox, 19 Weud.
(N. Y.) 313.
'^ Seymour r. Greenwood, 7 II. & N. 355; Liinpus r. London General
Omnibus Co., 1 II. & C. 52(3; Iliggiiis c. Watervlirt Turnpike Co., 46
N. Y. 23; Rounds v. Delaware, &c. R., 01 N. Y. 12!); Hoffman v. N. Y.
Cent., &c. R., 87 N. Y. 25 ; Howe v. Xewmarch, 12 Allen (Mass.) 49.
8 Rounds I'. Delaware, &c. R., supra.
* 19 Wend. 343.
« 47 N. Y. 122. 73 N. Y. 543.
FOR TORTS OF SERVANT. 307
within the general scope of his employment, while engaged in
his master's business, and done with a view to the further-
ance of tliat business and the master's interest, the master
will be responsible, whether the act be done negligently, wan-
tonly, or even wilfully." And such is now the recognized
rule in New York.^
A contract relation may strengthen the case as against the
master. Thus, if the master is under contract to deliver pure
milk and his servant out of malice adulterates it, the master
is liable for the consequences.^
That the servant disobeyed the orders of the master is
never a sufficient defence.^ It must be shown further that he
ceased to act for the master and in the course of the employ-
ment.* This is a question of fact and must frequently be
submitted to the jury.^
Assault. If in removing a trespasser the servant uses an
excess of force or puts the trespasser in unnecessary danger,
tlie master is liable for all damages sustained provided the
servant was acting within the course of the employment and
in the furtherance of it.'' But if the servant was exercising
his implied authority for private ends of his own, as to extort
money, tben the master is not liable.^ And if a brakeman
accept a bribe to permit a trespasser to ride upon the train
and afterward eject the trespasser, the latter will have no
action against the railway company since he and the brake-
man are joint trespassers.^
If a street-car driver wilfully and maliciously drives his car
against a vehicle which is obstructing the track, it is a ques-
tion of fact whether he does this in the course of the employ-
^ Bounds V. Delaware, &c. R. supra.
2 Straiiahan v. Coit, 55 Oh. St. 398 ; post, § 253.
8 Philadelphia, &c. R. v. Derby, 14 How. (U. S.) 468 ; Fitzsimmons w.
Railway Co., 98 Mich. 257.
* Andrews v. Green, 62 N. II. 436.
5 French v. Cresswell, 13 Ore. 418.
« Rounds V. Delaware, &c. R., 64 N. Y. 129.
^ Illinois Central v. Latham, 72 Miss. 33.
8 Brevig r. Chicago, &c. Ry., 64 Minn. 168. See also Keating v. R.,
97 Mich. 154 ; Chicago, &c. R. v. West, 125 111. 320.
308 LIAJJILITY OF MASTER
meat in order to get a clear track or whether he does it for
private spite and malice.^ So also where a janitor having
charge of a room wilfully shoved a ladder upon which a work-
man was standing, it is a question of fact whether the janitor
did this in order to facilitate his work for the master or out
of personal spite and malice.''^ Some cases may be so clearly
outside the scope of the employment that the court will nut
submit the question to a jury.^ Others may be so clearly
within the scope of the employment that the court will so
decide. Between these extremes are all the doubtful cases in
which the question is to be decided by the jury.^
It is not a bar to the plaintiff's recovery that he provoked
the assault. The primary question is whether the servant
was impelled by the purpose of furthering his master's affairs.
If so the master is liable, although the provocation may be
given in evidence in mitigation of damages.^ If not, then the
master is not ordinarily liable,^ though tiie relation of carrier
and passenger may vary the result.''
Arrest. Cases of unlawful arrest involve nice questions
as to implied authority. If the arrest is supposedly in the
master's interests and in the course of the emi)loyment, the
master is liable,^ but if in the interest of the public, then,
although the occasion for the arrest may arise in the course
of the employment, the master is not liable.^ Thus, if a
1 Cohen v. Dry Dock, &c. R., 69 N. Y. 170; Baltimore, &c. R. v. Tierce,
89 Md. 495.
2 Nelson Business College Co. v. Lloyd, CO Oh. St. 418.
8 Johanson v. Tioneer Fuel Co., 72 Minn. 405; Rudgeair v. Reading
Traction Co., 180 Pa. St. 333; Brown v. Boston Ice Co. (Mass.), 59 N, E.
644 ; Grimes v. Young, 51 N. Y. App. Div. 239.
4 Dyer v. Munday, 1895, 1 Q. B. 742 ; Bergman v. Hendrickson, 106
Wis. 434.
6 Bergman v. Hendrickson, supra.
6 Scott V. Central Park. &c. R., 53 Ilun (N. Y.), 414. But see Weber
V. Brooklyn, &c. R., 47 App. Div. 306.
"> Post, § 253.
8 Palmeri v. Manhattan Ry., 133 N. Y. 261 ; Staples v. Schmid, 18 R. I.
224 ; Smith r. Munch, 65 Minn. 256.
» Mulligan v. N. Y. & R. B. Ry., 129 N. Y. 506 ; Abrahams v. Deakin,
1891, 1 Q. B. 516.
FOR TORTS OF SERVANT. 309
ticket-agent causes an arrest in order to secure good money
in place of what he considers bad money, this is in the
master's interest ; but if he causes an arrest in consequence
of a warning by the police, he is acting in the interest of the
public.^ The distinction seems to be that a servant may have
an implied authority to protect his master's interests by caus-
ing the arrest of a person who is believed to be infringing
them, but that he has no implied authority to seek to punish
such a person after the attempt has ceased.^ To lock in a
passenger who refuses to pay his fare or give up his ticket
is an act done for the master, and within the course of the
employment.^
Whether a servant has any implied authority to cause an
arrest must depend upon the nature of his duties. " The
authority to arrest is only implied where the duties which an
agent is employed to discharge could not be properly dis-
charged without the power to arrest offenders promptly and
on the spot." ^ It has been held that a clerk in a store has no
such implied power to arrest and search a customer suspected
of having stolen the employer's goods.^ But this seems
clearly incorrect in the light of subsequent decisions.**
In some jurisdictions it seems to be held that a servant
must have express authority from the master to cause an
arrest, or to set the criminal law in motion.'^
Other ivilful torts. A master is liable for libel,^ malicious
prosecution,^ deceit,^*^ infringement of patent,^^ or other wilful
1 Mulligan v. N. Y. & R. B. Ry., 129 N. Y. 506 ; Abrahams v. Deakin,
1891, IQ-B. 516.
2 Allen V. London & S. W. Ry., L. R. 6 Q. B. 65.
8 Farry v. Great Northern Ry., 1898, 2 Ir. 352.
* Ashton V. Spiers, 9 Times Law Rep. 606.
6 Mali i;. Lord, 39 N. Y. 381.
^ See criticism in Staples v. Schmid, 18 R. I. 224; Knowlesy. Bullene,
71 Mo. App. 341 ; Fortiine v. Trainor, 47 N. Y. St. Rep. 58 ; aff'd. 141
N. Y. 605 ; Mallach v. Ridley, 6 N. Y. St. Rep. 651; 15 lb. 4.
' Turnpike Co. v. Green, 86 Md. 161.
8 Andres v. Wells, 7 Johns. (N. Y.) 260; Bruce i'. Reed, 104 Pa. St. 408
9 Reed v. Home Savings Bank, 130 Mass. 443.
10 Ante, §§ 151-157.
11 Sykes v. Howarth, L. R. 12 Ch. Div. 826.
310 LIABILITY OF MASTER
or malicious wrongs committed by the servant and within the
course of the employment. It has sometimes been held that
a master is liable for such torts only wlicn expressly com-
manded or ratified,^ and it was once thought that corporations
could not be liable for torts involving wilfulness or malice ;2
but these notions have practically passed away with a better
understanding of the true ground for such liability.^
§ 253. — (2) Wilful or malicious injuries to passengers.
A carrier is under a high degree of duty, vohmtarily as-
sumed, to passengers, and among these duties is the obliga-
tion to protect them from all misconduct on the part of its
servants. Tiie ordinary limits of liability for wilful and
malicious acts do not bound this obligation. Whether the
servant is acting for the master or for himself the master is
liable for all wilful or malicious injuries inflicted by the ser-
yant upon the passenger.^ Some cases fail to make this dis-
tinction between the liability of a master for the malicious
torts of servants toward third persons generally and toward
third persons to whom the master owes a special duty,^ but
the weight of authority is now decidedly in favor of such a
distinction, and in New York the contrary decisions have
been overruled.^
It is necessary in order that the doctrine be applicable that the
relation of carrier and passenger should actually exist. It is
often a nice question whether the relation has begun or has been
terminated, but this lies outside the scope of this subject." It
1 Wallace v. Finberg, 46 Tex. 35.
^ 5 Thompson on Corporations, § 6275 et seq.
8 Philadelphia, &c. R. v. Quigley, 21 IIow. (U. S.) 202 ; Goodspeed v.
East Iladdam Bank, 22 Conn. 530.
* Stewart v. Brooklyn, &c. R., 90 N. Y. 588 ; Dwinelle r. N. Y. Cent.
& II. R. R., 120 N. Y. 'll7 ; Craker v. Chicago, &c. R., 36 Wis. 057 ; Haver
V. Central R., 62 X. J. L. 282.
6 Allen V. Railway Co., L. R. 6 Q. B.65 ; Isaacs v. R. Co., 47 X. Y. 122.
« Stewart v. R. Co., 90 X. Y. 588.
T See INIcGilvray r. West End Ry., 164 Mass. 122 ; Wise v. Ry. Co.,
91 Ky. 537; Central Ry. v. Peacock, 69 Md. 257; Peeples v. Ry., 60 Ga.
281 ; Krantz v. R, 12 Utah, 104.
FOR TORTS OF SERVANT. 3H
may continue even after the passenger has once left the prem-
ises if lie afterwards returns for his baggage.^
This doctrine also has some application beyond the special
relation of carrier and passenger in cases where by contract
the master has voluntarily undertaken a particular duty
toward a definite person, and has intrusted the discharge of
the duty to a servant.^
That the liability of a carrier for wilful attacks upon pas-
sengers stands upon a different footing from the ordinary
liability of a master for the torts of his servant is further
illustrated by the fact that a carrier is liable to a passenger
for the assault upon him by another passenger if, after due
notice, the carrier does not take proper measures to protect
the passenger so menaced or assaulted.^
If, however, a passenger provokes an assault by indecent
and insulting language, it seems he may lose the high degree
of protection involved in the relation of carrier and passenger,
and, in such case, he can recover only if the servant was
acting within the scope of the employment. Thus, if a pas-
senger provokes a servant of the carrier to an assault outside
the scope of the employment, the master is not liable.^ But
if one provokes a servant to an assault within the scope of
the employment, the master is liable.^
§ 254. — (3) Misuse of dangerous instrumentalities.
If the master intrusts the care and use of an inherently
dangerous instrumentality to a servant, he remains liable for
any want of care on the part of the servant and also for any
■wanton, malicious, or mischievous use of the instrument by
the servant.^
1 Daniel v. R., 117 N. C. .592. Cf. Little Miami R. v. Wetmore, 19
Oh. St. 110.
2 Stranahan, &c. Co. v. Coit, 55 Oh. St. 398.
8 Flint V. Xorwich, 34 Conn. 554; Lucy v. Ry., 64 Minn. 7; Putnam
V. R. Co., 55 N. Y. 108 ; Meyer v. Ry., 54 Fed.' R. 116 ; Pittsburg, &c.
Ry. V. Pillow, 76 Pa. St. 510; Chicago & Alton R. v. Pillsbury, 123 HI. 9,
4 Scott V. Central Park, &c. R., 53 Hun (N. Y.) 414. But see Weber
V. Brooklyn, &c. R., 47 N. Y. App. Div. 306.
5 Bergman v. Hendrickson, 106 Wis. 434.
« Pittsburgh, &c. R. v. Shields, 47 Oh. St. 387.
312 LIABILITY OF MASTER
Tlie typical case is tlic misuse of torpedoes intrusted by a
railway company to the care of trainmen. These are supplied
for use in case of fog. If a trainman makes a use or misuse
of tlicra for his own ends, as to celebrate a public holiday or
to have sport with timid persons, is the railway company
liable for any damaije suffered therein' by third persons? It
has been held that it is liable, upon the ground that the
servant having been intrusted with the safe keeping of the
dangerous instrumentality, the master is liable for a want of
care whether such want of care is due to negligence or wilful-
ness. The duty of the servant is not only to use the torpedoes
when requisite, l)ut to keep them safely when not in use. In
taking them from the place where they are kept, and, in mere
caprice, using them for his own ends, he violates the duty of
safe keeping and renders the master liable.^
This doctrine has not met with universal approval, and
other torpedo cases have been decided upon a strict applica-
tion of the doctrine that the master is liable for a wilful or
malicious act only when the servant does the act for the
master in the course of the employment.^
If the torpedoes are taken by a servant, as a fireman, to
whose care they are not confided, the master would not be
liable.^
Another somewhat similar class of cases is that in which
an engineer blows his whistle or lets off steam merely for
the purpose of frightening horses, and not in the furtherance
of any business or duty of the master. The almost universal
opinion is that the master is liable under such circumstances.
If the servant is engaged in operating the instrumentality
intrusted to him and while so engaged wilfully perverts the
agency to the purpose of wanton mischief, it is all the same
as if he had produced the same result by negligence or
inattention.*
1 Hid.
2 Smith V. N. Y. Cent. & 11. R. R., 78 Hun (N. Y.) 524.
8 Chicago, &c. R. v. P^pperson, 26 111. App. 72.
* Toledo, &c. Ry. i\ Harmon, 47 111. 298; Chicago, &c. Ry. v. Dickson,
63 111. 151; Bittle v. Camden & Atl. R., 55 N. J. L. 015; Georgia R. v.
FOR TORTS OF SERVANT. 313
Where an engineer in order to frighten passengers on a
street car started his engine suddenly and thereby caused a
passenger to jump and injure herself, it has been held that
the engineer was acting outside the scope of his duties and
the company was not liable.^ This conclusion is contrary to
the cases cited above and appears to lose sight of the prin-
ciples upon which those cases were decided. It has also
been held that a hand-car is not dangerous enough to be
brought within the rule.^ If the servant is not authorized
to run the locomotive, clearly his running it for ends of his
own would be outside the scope of the employment.^ A cus-
tom of non-authorized servants to use a locomotive, known
to the master, may be equivalent to an authority.'*
§ 255. Liability of master for exemplary damages.
A master is liable for exemplary damages for a tort of a
servant which he either commands or ratifies if he would be
liable for such damages in case he had personally committed
the tort.^
If the master has not commanded or ratified such tort,
but is held liable simply upon the doctrine that the servant
has acted for him within the scope of the employment, there
is a sharp conflict of authority. Many jurisdictions hold the
master, whether a natural person or a corporation, not liable
in punitive damages under such circumstances.^ Other
jurisdictions, while holding the same as to masters who
are natural persons, hold that corporations are liable in
Newsorae, 60 Ga. 492 ; Texas & P. Ry. i'. Scoville, 62 Fed. R. 730; Cobb
V. Columbia, &c. R., 37 S. C. 194; Skipper v. Clifton Mfg. Co. (S. Car.),
36 S. E. Rep. 509.
1 Stephenson v. Southern Pac. Co., 93 Calif. 558.
2 Branch v. International, &c. Ry., 92 Tex. 288.
8 Cousins V. Hannibal & St. Jo. R., 66 Mo. 572.
^ East St. Louis Connecting Ry. v. Reames, 173 111. 582.
6 Denver, &c. R. v. Harris, 122 U. S. 597.
6 Cleghorn v. N. Y. Cent. & H. R. R., 56 N. Y. 44 ; Haines ». Schultz,
50 N. J. L, 481; Craker v. Chicago, &c. R., 36 Wis. 657; Warner v.
Southern Pac. R., 113 Calif. 105; Maisenbacker v. Society Concordia, 71
Conn. 369; Lake Shore, &c. R. v. Prentice. 147 U. S. IQl^i. :
314 LIABILITY OF MASTER FOR TORTS OF SERVANT.
punitive damages since corporations can act only through
agents.^
§ 256. Imputed notice.
Knowledge of a servant concerning property committed to
his care is the knowledge of the master. Hence, if the ser-
vant knows of the vicious tendencies of an animal of which
he has charge this knowledge is imputed to the master.^
1 Goddard v. Grand Trunk R., 57 ^le. 202 ; Thiladelphia, &c. R. v.
Larkin, 47 Md. 155; Atlantic, &c. R. v. Dunn, 19 Oh. St. 162; lb. 590;
Citizens' Street R. v. Willoeby, 134 Ind. 563; Wheeler, &c. Co. v. Boyce,
36 Kans. 350.
- Brice v. Bauer, 108 N. Y. 428 ; Clowdis v. Fresno, &c. Co., 118 Calif.
315.
LIABILITY OF PUBLIC BODIES FOE TORTS OF SERVANTS. 315
CHAPTER XXII.
LIABILITY OF PUBLIC AGENCIES OR PUBLIC CHARITIES FOR TORTS
OF SERVANTS.
§ 257. General doctrine.
While a private person or corporation may be liable for the
torts of servants, a public corporation, entity, person, or
charity, is not ordinarily liable for the torts of officers or
servants. This is placed on doctrines of public policy and
expediency. It may be said, subject to qualifications to be
hereafter noted, that the doctrine of respondeat superior does
not apply, — (1) to the state or its agencies generally, (2) to
municipalities so far as they are acting in a governmental
capacity, (3) to public officers generally, (4) to public charities.
§ 258. Liability of the State and its agencies for torts of officers.
The Federal or State governments are not liable for the
torts of their officers.^
Counties are not liable for the torts of their officers, unless
such liability is fixed by positive law.^ Even negligence in
the construction of roads and bridges does not render a
county liable according to the great weight of authority ;3
nor does negligence in the construction or maintenance of
county buildings, as court houses and jails.* New England
towns stand in this respect upon the same basis as counties,^
as, indeed, do all such quasi-corporations as townships, school-
districts, road-districts, and the like.^ In many jurisdictions
1 Mechera, Public Officers, §§ 848, 849.
2 7 Am. & Eng. Encyc. of Law (2d ed.), pp. 947-953.
8 lUd, p. 950 ; Markey v. County of Queens, 154 N. Y. 675, contra in
Penn. and Md.
* Ihid, p. 949.
6 Dillon, Munic. Corp., § 962.
6 Ibid, § 963.
316 LIABILITY OF PUBLIC BODIES
statutes expressly confer a remedy as against such quasi-
corporations especially for injuries resulting from defective
highways.^
§ 259. Liability of municipal corporation for torts of officers and
servants.
Municipal corporations, or chartered cities, villages, or
towns, stand ui)on a somewhat different basis. It is said
that in the case of such cor j)orat ions the j)crsons comprising
them are regarded as having voluntarily sought the powers
conferred and must therefore be held to a higher degree of
liability. Moreover such powers may include not only the
usual public governmental powers, but also special powers
or franchises, such as the power to supply gas, electric light,
water, wharves, and the like. In the exercise of these latter
powers the municipality is acting in much the same capacity
as a private corporation engaged in the same business. Thus
in Hill V. Boston,^ it was held that the city was not liable for
a defective stairway in a public school-house, and that in
general a city is liable (in the absence of statute) only when
the duty for breach of which the action is brought is a new
one, and is such as is ordinarily performed by a trading
company. This distinction would exclude municipal liability
for defective highways, and the court in the case cited argues
strongly for such a result, but the great weight of American
authority is now to the effect that such a liability exists.^
It follows that municipal and quasi-municipal corporations,
so far as they are acting in a governmental or discretionary
character for public ends are not liable for the negligent or
wilful wrongs committed by their agents or servants.* But
where distinct duties are imposed upon them, purely minis-
terial and involving no exercise of discretion, the same lia-
bility attaches as in the case of private persons doing the
1 Ibid, § 1000 and notes.
2 122 Mass. 344.
8 Dillon, IVIunic. Corps. §§ 1017-1023 ; Conrad v. Ithaca, 16 N. Y. 158.
* City of Richmond v. Long's Adm'r, 17 Gratt. (Va.) 375; City of
Anderso'n r. East, 117 Ind. 126 ; Hines i;. Charlotte, 72 Mich. 278.
FOR TORTS OF SERVANTS. 317
same duty.^ Thus a city is not liable for the negligence of
its officer in shooting at an unmuzzled dog,^ nor for the neg-
ligent acts of members of its fire department,^ or of any of
the other of its agents or servants engaged in governmental
or police duties.^ A city is not rendered liable by the alle-
gation or proof that it appointed an incompetent officer.^
But it is liable for failure to keep its streets in proper repair,®
or properly to plan and construct its public worksJ
§ 260. Liability of public officer for torts of subordinates.
Public officers who act for the public generally, and not
for private individuals who may have need of special service,
are not liable for the torts of subordinates duly and properly
selected. A subordinate is regarded, like the officer himself,
as an agent of the public. Each is liable for his own torts,
but one is not liable for the torts of the other.^ A post-
master is not liable for the tort of a deputy or clerk, unless
some personal negligence of his own be proved.^ A collector
of customs is not liable for the negligence of his subordinate.^^
An army or naval officer is not liable for the negligence, or
other wrong, of an inferior officer,ii unless he has participated
in such wrongful act.^'-^
1 Seymour v. Cummins, 119 Ind. 148; Bates v. Westborough, 151 Mass.
174; Barron v. Detroit, 94 Mich. 601. But see Howard v. Worcester, 153
Mass. 426
2 Whitfield V. Paris, 84 Tex. 431 ; Culver v. Streator, 130 111. 238.
3 Dodge V. Granger, 17 R. I. 664; Gillespie v. Lincoln, 35 Neb. 34.
4 Robfnson v. Rohr, 73 Wis. 436 ; O'Leary v. Marquette, 79 Mich. 281 ;
Dillon, Munic. Corp. §§ 975-977.
6 Craig y. Charleston, 180 111. 154; Mclllhenny v. Wilmington, 127
N. C. 146.
6 Conrad v. Ithaca, 16 N. Y. 158.
' Barron v. Detroit, 94 Mich. 601 ; Seymour v. Cummins, 119 Ind. 148.
8 Lane v. Cotton, 1 Ld. Raym. 646 ; Governors, &c. v. Meredith, 4 T.
R. 794.
9 Dunlop V. Munroe, 7 Cranch, 242; Keenan v. Southworth, 110 Mass.
474 ; Hutchins v. Brackett, 22 N. H. 252; Con well v. Voorhees, 13 Ohio,
523.
10 Robertson v. Sichel, 127 U. S. 507.
11 Nicholson v. Mouncey, 15 East, 384.
12 Castle V. Duryee, 1 Abb. App. (N. Y.) 327.
318 LIABILITY OF PUBLIC BODIES
In like manner a i)ublic trustee, as a scliool trustee, is not
liable for the negligence of workmen or servants employed
to make repairs upon a public building.^ Nor is a receiver
acting under the orders of the court liable for the torts of
servants em])loyed by him.-
Public olhcers who act for individuals, as sheriffs,^ re-
corders of deeds,** clerks of courts,^ and others whose acts
are ministerial or administrative,^ are liable to the individuals
for whom they act for any negligence or other tort of a sub-
ordinate committed in the course of oflicial transactions.
This rule of liability is very frequently applied in the case
of sheriffs^
§ 261. Public charities.
Upon the question whether a public charitable corporation
or trust is liable for the negligence or other torts of its agents
and servants, there are these diverse holdings : —
(1) It is sometimes held that the trust funds contributed
for charitable objects cannot be diverted to the payment of
damages occasioned by the negligence or other torts of agents
and servants.^ Under this holding it could make no differ-
ence whether the one injured was a gratuitous recipient of
the bounty, one who paid for the service, or an outsider. Nor
could it make any difference whether the negligent person was
one charged with the administration of the fund or a mere
servant.
(2) The doctrine that the charitable funds cannot be reached
in payment of damages for torts, has been doubted or repudi-
1 Donovan v. McAlpin, 85 N. Y. 185; Wash v. Trustees, 96 N. Y.427.
2 Cardot v. Barney, 03 N. Y. 281.
8 M'Intyre v. Trumbull, 7 Johns. (N. Y.) 35; Prosser v. Coots, 50
Mich. 26-2; State v. Moore, 19 Mo. 3G9.
* Russell V. Lavvton, 14 Wis. 202.
5 McNutt V. Livingston, 15 Miss. G41 ; Moore v. McKinney, GO Iowa,
367.
6 Wood V. Farnell, 50 Ala. 546.
7 Mechem, Public Oflicers, § 798.
8 Duncan v. Findlater, 6 CI. & Fin. 89 1 (flictim) ; Feoffees of Ileriot's
Hospital V. Ross, 12 CI. & Fin. 507 ; Fire Ins. Patrol v. Boyd, 120 Pa. St.
624, also 113 Pa. St. 269 ; Dowries v. Harper, 101 Mich. 555.
FOR TORTS OF SERVANTS. 319
ated bj other courts, but there has been no agreement as to
the nature and extent of the liability of the charity.
(«) The general doctrine of respondeat superior has been
applied and the charity held like any other master for the
torts of servants.^
(5) The general doctrine of respondeat superior has been
admitted, but it has been held that one accepting the services
or bounty of the charity is a mere licensee and must take the
service as he finds it, that is, " that there is no liability on
the part of charitable corporations, arising out of the adminis-
tration of the charity, to those who accept their bounty." ^
Under this doctrine there is a further divergence of opinion
as to whether one who pays for the service is a recipient of
the bounty. One case holds that he is, treating the payment
as a mere contribution to the charity.^ Other cases seem to
regard the payment as imposing a special duty toward the
payer for breach of whicli an action will lie. ^
(c) The general doctrine of respondeat superior has not
been admitted, and recovery is limited to those cases where
it is shown that the administrators of the charity were them-
selves negligent in the appointment of incompetent servants
or in the discharge of some other corporate or specially im-
posed duty." The theory of this class of cases seems to be
the one most generally acceptable, namely, that while a
charitable corporation may be liable for negligence in the
^ Glavin v. Rhode Island Hospital, 12 R. I. 411; Foreman v. Mayor,
L. R. 6 Q. B. 214. See also Donaldson v. Commissioners, 30 NewBruns.
279.
^ Powers V. IVl ass. Hqinoeo|mthic Hospital, 101 Fed. Rep. 896. And
see Gooch v. Association, 109 Mass/SoS;
8 Ibid.
* Ward V. St. Vincent's Hospital, 39 N. Y. App. Div. 624 ; Richard-
son V. Carbon Hill Coal Co., 6 Wash. 52, S. C. 10 Wash. 648. See Glavin
V. Rhode Island Hospital, supra.
* McDonald v. Massachusetts General Hospital, 120 Mass. 432 ; Union
Pacific Ry. v. Artist, 60 Fed. Rep. 365; Joel v. Woman's Hospital, 89
Hun (N. y.), 73; Van Tassell v. Manhattan Eye & Ear Hospital, 39 N. Y.
St. Rep. 781, 15 N. Y. Supp. 620; Hearns v. AVaterbury Hospital, 66 Conn.
98; Eighmy v. Union Pac. Ry., 93 Iowa, 538; Richardson v. Carbon
Hill Coal Co., 10 Wash. 648.
320 LIABILITY OF PUBLIC BODIES
performance of a corporate dut}-, the doctrine of respondeat
superior is not applicable to it so as to render it liable for the
torts of its servants.^ This is merely an extension to chari-
ties of a doctrine elsewhere applied, that officers or trustees
for public purposes are exempt from liability for torts of
servants 2 but not for their own torts j^ quaiilied by the
further consideration that some duties are imposed upon
public bodies in such a way tliat they cannot rid themselves
of liability by putting the performance of the duty into hands
of servants.* Under this view a charitable hospital, for
example, has imposed upon it the duty to use due care to
provide safe and suitable hospital appliances and skilled
and competent physicians, surgeons, and nurses, and for a
failure to fulfil this duty it would be liable to one injured
thereby; but having fulfilled this duty, it is not liable for the
negligence of such attendants or servants.^ It is further to
be noted that physicians and surgeons arc not the servants
of the hospital or other body that furnishes them and that in
any event liability can attach only for negligently furnishing
incompetent practitioners.^
Two classes of cor{)orations or agencies must be distin-
guished. First, where a corporation or board of managers
exercises governmental ])Owers as an agent of the state or
municipality, it falls under the head of })ublic agencies
already considered.'^ Second, private corporations organized
for the protection of some interest of their supporters, as a
" protective association " supported by insurance companies,
1 See the very full and able discussion by Hamersley, J., iu Ilearns v.
Waterbury Hospital, O'j Conn. 98.
'- Ilolliday r. St. Leonard's, 11 C. B. N. s. 192.
8 Mersey Docks v. Gibbs, L. R. 1 II. L. 93; Coe v. Wise, 5 B. & S.
440.
* Mersey Docks v. Gibbs, supra.
5 Union Pacific Ry. v. Artist, 60 Fed. Rep. supra ; Ilearns v. Water-
bury Hospital, supra.
6 Ante, § 2:52.
' City of Richmond i'. Long's Adm'r, 17 Gratt. (Va.) 375 ; Benton v.
Trustees, 140 Mass. 13 ; Williamson v. Louisville Industrial School, 95
Ky. 251.
FOE TORTS OF SERVANTS. 321
are not public charities merely because they incidentally
render aid gratuitously to outsiders.^
§ 262. Liability of private person served by public ofiBcer.
Any person may avail himself of the services of a public
officer. If he directs the doing of a lawful act he is not
liable if the officer does an unlawful one or carries out the
mandate by unlawful means.^ In order to render the em-
ployer liable it is necessary to show that he either directed
an unlawful act or subsequently ratified it ; ^ in such cases
the employer becomes a participant in the unlawful act.
Even where the statute requires the keepers of places of
amusement who apply for a special police officer to pay his
salary and " to be liable to parties aggrieved by any official
misconduct of such police officer, to the same extent as for
the torts of agents and servants in their employment," it is
held that such an officer is not a servant and the person who
applies for his appointment and pays his salary is not liable
for his official misconduct in which such person does not par-
ticipate.* But such officer, if in fact also a servant in and
about the place, may act either as officer or as servant : if he
acts as officer the employer is not liable on the doctrine of
respondeat superior ^^ but if he acts as servant the employer
may be liable on that doctrine.^
^ Newcomb ik Boston Protective Department, 151 Mass. 215; {Cf. Fire
Ins. Patrol v. Boyd, supra); Chapin v. Holyoke, &c. Assn., 165 Mass. 280.
See also Wabash R. v. Kelley, 153 Ind. 119.
2 Sutherland v. Ingalls, (33 Mich. 620.
8 Hyde v. Cooper, 26 Vt. 552. See Mechem on Public Officers, §§ 904-
907.
* Healey v. Lothrop, 171 Mass. 263.
6 Ibid. '
6 Dickson v. Waldron, 135 Ind. 507.
21
322 LIABILITY OF MASTER
CnAPTER XXIII.
LTAinLTTY OF MASTER FOR PENALTIES AND CRIMES.
§ 263. Introductory.
An agent or servant in the course of his master's business
may do an act which is subject to a penalty or to punishment
as a crime. Such an act may give rise to an action by a pri-
vate person to recover a penalty, or to a criminal prosecution
by the state. The problem in either case is whether the act of
a servant in the conduct of the master's business and in the
course of the employment, but not authorized or participated
in by the master, will subject the latter to the penalty or to
a conviction for crime.
§ 264. Liability to private penalties.
Penalties recoverable by private persons are usually the
result of the commission of a statutory tort, that is a tort
created and defined by statute and not by the common law.
There seems to be no distinction between the liability of a
constituent for the act of his representative amounting to a
common-law tort and an act amounting to a statutory tort.
In either case the test is whether the act was done by the agent
or servant in the master's behalf and in the course of the
employment.
The question arises frequently under the statutes giving a
wife an action for a penalty, or for damages sustained, for
the sale of into.Kicating liquors to her husband. By these
statutes, an act which might otherwise be lawful is made
unlawful and is prohibited under penalty. A servant's breach
of a statutory prohibition of this nature, committed while
acting within the scope of his employment, renders the mas-
ter liable in a civil action by the person aggrieved, for the
FOR CRIMES OF SERVANTS. 323
prescribed penalty. Thus, in a Massachusetts case,^ it is said ;
" We sec no reason why the general principle wliich governs
the responsibility of the master for the acts of his servant
should not apply in the case at bar. The action is brought
under a statute which makes that a tort which was not so
before, and provides for the recovery of damages against the
tort-feasor. The tort consists in selling intoxicating liquor
to one who has the habit of using it to excess, after notice of
his habit and a request from his wife not to sell such liquor
to him. The defendant engages in the business of selling
liquor voluntarily. He chooses to intrust the details of the
business to a servant. If he forbids the making of sales to
the intemperate person, and his servant negligently, through
forgetfulness of the instruction given him, or through a fail-
ure to recognize the person, continues to make sales to that
person, there is no reason why the defendant should not be
responsible for the wrongful act. The sale is his sale, made
in the performance of his business, and is an act within the
general scope of the servant's employment."
So also where statutes fix a penalty for the denial of equal
civil rights to all persons, irrespective of color, a servant
acting within the scope of his employment may render the
master liable to the penalty, even though the master directs
the servant to extend equal rights to colored persons.^
§ 265. Criminal liability generally.
The criminal liability of the principal is not governed by
the same rules as his civil liability. The presumption of
authority which arises from the relation of the parties and
involves the principal in liability, is counter-balanced in the
criminal law by the fundamental notion that every man is to
be presumed innocent until he is proved guilty. From this
presumption the conclusion is natural that a criminal act
committed by the agent should be presumed to be committed
contrary to, and not in obedience to, the directions of the
1 George i'. Gobey, 128 Mass. 289. See also Kreiter r. Nichols, 28
Mich. 496 ; Bodge v. Hughes, 53 N. H. 614.
2 Bryan v. Adler, 97 Wis. 124.
324 LIABILITY OF MASTER
principal. Something more than the mere fact that the
agent was acting within the scope of his emph)}inont must
therefore be sliown in order to make the principal answerable
in a criminal proceeding ; it must ordinarily be shown that
the crime was committed by the principal's direction and
authority, or at least resulted from his negligence. " Crimi-
nal responsibility on the part of the principal for the act of
his agent or servant in the course of his employment, implies
some degree of moral guilt or delinquency, manifested either
by direct participation in or assent to the act, or by want of
proper care and oversight or other negligence in reference to
the business which he has thus intrusted to another."*
The general rule is, therefore, that a master is not liable
criminally for an offence committed by his servant.
To this general rule there seem to be several exceptions
within somewhat ill-defiuud limits, notably in the case of the
violation of revenue laws, licensing laws, health hiws, and in
the case of libel and nuisance.
The exceptions may be stated as follows: A master is
liable criminally for the criminal act of his servant committed
in the course of the employment, —
(1) if expressly or impliedly the statute defining the
offence penalizes the proprietor of a business or of property
in case the prohibited act is done in the conduct of his busi-
ness or property without reference to his knowledge or assent ;
(2) if he has authorized, assented to, or participated in the act;
(3) if by his negligent failure to exercise due control over
the conduct of his business or property he has suffered the
act to be done by a servant in the course of the employment.
§ 266. Absolute liability.
Where the statute defining an offence penalizes one whose
business is carried on in a manner prohibited by the statute,
it is immaterial whether the failure to comply with the statu-
tory requirement is due to a personal default of the proprietor
of the business, or to a default on the part of one to whom he
has intrusted the conduct of the business. In either case the
1 Comm. I'. Morgan, 107 Mass. 199. See also Bisliop, dim. Law, "Vol. 1.,
§649.
FOR CRIMES OF SERVANTS. 325
proprietor is liable to the penalty. This may be illustrated
by reference to licensing laws and health laws.
Licensing Laivs, When the state grants a license to do
that which without the license would be unlawful, it may
impose a penalty for any violation of the conditions, whether
by the licensee or by those to whom he intrusts the conduct
of the husiness.^ It is often a question of nice construction
whether the law imposes an absolute liability to conduct the
business in a particular way, or whether it renders the licensee
liable only for an intentional violation.^ If the former, then
the master is liable for a violation by his servant, even though
contrary to the will and the positive orders of the master ; ^
if the latter, then the master is liable only if he knew of or
countenanced the violation.* A sale by an agent or servant
in the ordinary course of the employment, but contrary to law,
makes a prima facie case against the master which the latter
may rebut by proof that such sale was in good faith for-
bidden by him.^
Many cases have arisen in which a master is sought to be
held criminally liable for some violation by his servant of the
laws governing the sale of intoxicating liquors and the con-
duct of the premises where such sales are made. It is quite
impossible to reconcile all of the cases under this head. The
decision depends frequently upon a nice construction of the
language of the statute.
If the statute, however, imposes an absolute duty upon the
defendant, as the duty to keep his saloon closed at certain
hours, or to place or remove screens at certain hours, then a
violation of this duty will render the master liable to the
penalty although the violation may be due to the wilful
disobedience of a servant.^
1 Collman v. Mills, 1897, 1 Q. B. 396.
^ See cases discussed in Bond v. Evans, L. R. 21 Q. B. D. 249.
8 Mullins V. CoUins, L. R. 9 Q. B. 292 ; Bond v. Evans, L. R. 21 Q. B.
D. 249.
* Kearley v. Tonga, 60 L. J. M. C. 159; Coram, v. Nichols, 10 Met.
(Mass.) 259 ; Comm. v. Wachendorf, 141 Mass. 270.
5 State V. McCance, 110 Mo. 398.
6 People V. Roby, 52 Mich. 577; Comm. v. Kelley, 140 Mass. 441.
326 LIABILITY OF MASTER
In some jurisdictions the statutes are so framed as to make
a dealer liable for any violation of the liquor laws upon his
premises, whether by his own act or by the act of a servant.
In such case the dealer cannot escape liability by proving
that the violation was contrary to his orders or will.^
Health Laws. Health laws to prevent the adulteration of
foods, or the sale of one product under the guise of another,
are very common. They provide variously for private penal-
ties, public penalties, or indictment. The liability of a master
for the violation of the law by his servant will frequently
depend upon the form of the statute. In the case of Rex v.
Dixon^ the defendant was indicted for using alum in bread
contrary to the statute and convicted upon proof that the
alum was put in the bread by his foreman. Under a New
York statute providing that the penalty for knowingly sell-
ing diluted or skimmed milk should be recoverable by
the person to whom it was sold, it was held that in an
action for the penalty, proof that the defendant's servants
in the course of the employment, and in his behalf or interest,
sold the skimmed milk, warrants the jury in finding that the
act was authorized.^ Under an act providing that one
who knowingly sells oleomargarine, except in duly marked
and stamped packages, shall be fined and imprisoned, it
has been held that proof of an unlawful sale at defendant's
place of business in the usual course of business by defend-
ant's clerk is sufficient evidence of a violation to sustain a
conviction.'*
In many cases the question is whether on a fair construc-
tion of the law the master was intended to be made criminally
liable for acts done by a servant within the scope of the employ-
ment but contrary to the orders and will of the master.^
1 Noecker v. People, 91 111. 494; Carroll v. State, 63 Md. 551 ; McCut-
cheon v. People, 69 111. 601 ; MuUins v. Collins, L. 11. 9 Q. B. 292 ; Bond
V. Evans, L. II. 21 Q. B. D. 249.
"- 3 M. & S. 11.
8 Verona Central Cheese Co. v. Mnrtaugh, 50 N. Y. 314.
* PraUier v. United States, 9 App. Cas. D. C. 82.
' Coppen V. Moore, 1898, 2 Q. B. 306.
FOE CRIMES OF SERVANTS. 327
§ 267. Authority.
If the act is done by the authority of the master he is a
participant in it and punishable as such. It has been held,
however, that a crime cannot be ratified.^ Authority may
be express or implied, and most of the confusion in the
cases has been due to a difference in view, frequently unrec-
ognized as such, as to the inference of authority to be drawn
from the doing of the criminal act by the servant in the
course of the employment.
It seems that proof of an illegal sale, whether it be a sale
without a license, or a sale under a license but at forbidden
hours or to forbidden persons, made by defendant's servant
in charge of the defendant's place of business, may, if unex-
plained, warrant the jury in inferring that the sale was author-
ized .^ But it is hardly correct to say that such proof raises
a presumption of fact, and it may always be rebutted by proof
that the sale was made without the master's knowledge, and
in opposition to his will and purpose.^
If a liquor dealer in good faith instructs his clerks not to
sell to minors but leaves them to judge of minority by the
appearance of the customer, and one sells to a minor, be-
lieving him from appearance to be an adult, it is held that
the master is not criminally liable, since there can be no doubt
that there was no authority to sell.^
In the case of the violation of revenue laws, the action by
the state is frequently in the nature of an action of debt
to recover a penalty. If the act or omission giving rise
to the proceeding has been the act or omission of a servant
in the course of his employment the master may be liable to
the penalty in the same way and for the same reason as in the
case of torts committed by the servant. If the servant's act is
commanded or ratified, the case is clear. If not commanded
1 Morse v. State, 6 Conn. 9.
'' Comm. V. Nichols, 10 Met. (Mass.) 259 , Comm. t;. Briant, 142 Mass.
463; Comm. v. Wachendorf, 141 Mass. 270.
s Ibid. ; Anderson v. State, 22 Oh. St. 305 ; Comm. v. Stevens, 153
Mass. 421; State v. McCance, 110 Mo. 398.
* Comm. V. Stevens, 153 Mass. 421.
328 LIABILITY OF MASTER FOR CRIMES OF SERVANTS.
or ratified, there is still the usual question whether the act is
done in behalf of the master and in the course of the
employment.^
§ 268. Negligent failure to control.
The negligent failure to control duly his business activities
may render the master liable criminally for the act of a
servant.
Lihel. Indictments for libel may stand upon this basis.
If a libellous article is printed by or for the defendant, or sold
at his shop, this is prima facie evidence of his guilt,^ and he
does not rebut this merely by showing that he did not know
of the libel or authorize it.^ It seems that in order to escape
liability he must show that he did not know of or authorize
the libel and that its publication was not duo to any want of
care or caution on his part in the conduct of his business.*
Nuisance. Indictments for nuisance, although criminal in
form, may be in effect a kind of public action for tort. This
is the case where the nuisance is injurious to the property
rights of many but, being common, gives rise to no private
action without proof of special damage. In such case the
master is liable upon evidence which would support a civil
action for damages. Thus the owner of a quarry is liable
criminally for nuisance for tiie acts of his servants in cast-
ing rubbish into a public stream, in the course of the employ-
ment, although he may have forbidden them to do so.^ The
president and directors of a company may be convicted of a
nuisance, although personally ignorant that it exists.*"
* Attorney-General v. Siddon, 1 C. & J. 220; Attorney-General c.
Riddle, 2 C. & J. 493.
2 Rex V. Almon, 5 Burr. 2086; Clay v. People. 80 111. 147.
8 Rex I'. Gutch, Mood. & Malk. 4:33; Rex v. Walter, 3 Esp. 21. (But
see for present English law, 6 & 7 Vict. c. 96, s. 7, and R. v. Ilolbrook,
L. R. 3 Q. B. 1). 00, 4 Q. B. D. 42.)
* Comin. V. Morgan, 107 Mass. 199; State v. Mason, 26 Ore. 273.
« Queen v. Stephens, L. R. 1 Q. B. 702.
« Rex V. Medley, 6 C. & P. 292.
A
PART III,
LIABILITY OF MASTER FOR INJURIES TO SERVANT.
§ 269. Introductory.
This part deals, — (1) with the liability of a master to one
servant for an injury due to the act or omission of another
servant, and (2) with the liability of a master to a servant for
an injury due to an act or omission of the master himself.
Under the first head are discussed the subjects of " fellow-
servants " and " vice-principals " ; under the second head the
general duties of a master to his servant.
330 LIABILITY OF MASTER
CHAPTER XXIY.
LIABILITY OF MASTER TO ONE SERVANT FOR TORTS OF
ANOTHER SERVANT.
§ 270. Classification of servants.
For our jtrescut purpose wu may divide all the servants of a
common master engaged in a common service into two classes,
namely, fellow-servants and vice-principals. In the first class
are included all the servants engaged in purely operative acts,
while in the second class are included all those to whom are
delegated what, for want of a better term, we may call admin-
istrative acts.
It will be recalled that the distinction between an agent
and a servant lies in the nature of the act to be performed.
An agent is authorized to create new primary obligations ; a
servant is authorized to perform operative or ministerial acts
not intended to create new primary obligations.^ So also
the distinction between a fellow-servant and a vice-principal
lies in the nature of the act to be performed. If it be an
operative act, the employee is a fellow-servant of all other
employees ; if it be an administi'ative act, the employee is a
vice-principal in the sense that his act is the act of the
master.
It will also be recalled that the distinction thus made
between agents and servants leads to im})ortant legal conse-
quences in fixing the liability of the employer.^ So also the
distinction here made between fellow-servants and vice-
principals leads to important legal consequences in fixing the
liability of a master to one servant for the tort of another.
It will also be recalled that the same employee may be both
an agent and servant.^ So also the same employee may be
1 Anle, §§ 4-G. 2 ^^^te, § 5. 8 Ayite, § 6.
FOE TORTS TO SERVANT. 331
both a fellow-servant and a vice-principal, for, since it is tlic
nature of the act to be performed that determines the classifi-
cation and its consequences, it is obvious that the same em-
ployee may perform at one moment an operative act and at
another moment an administrative act.i A few courts,
indeed, insist that an employee whose chief duties are admin-
istrative shall always be regarded as a vice-principal whatever
act he may happen to perform,^ but this is not in accord with
the reason of the case or with the weight of authority .^
The term " vice-principal " is not in all respects happily
chosen, since it carries with it a suggestion of the relation of
principal and agent, but it is now firmly fixed and serves its
purpose if correctly understood.
§ 271. The fellow-servant rule.
To the rule that a master is liable for the torts of his ser-
vant committed within the scope of the employment, there is
one highly important exception, known as the " fellow-servant
rule." This exception may be stated as follows : —
A master is not liable for personal injuries occasioned to
one servant by the tort of a fellow-servant employed in the
same common service, unless (1) the fellow-servant is acting
as a deputy-master or vice-principal,'* or (2) the master has'
negligently selected an incompetent fellow-servant, or negli-j
gently retained one,^ or (3) by statute the master is madq
liable to one servant for the wrongful act or default of i
fellow-servant.^
Various reasons have been given for this exception, the
most generally accepted being that there is in every such
contract of employment an implied terra that the servant
shall assume all the ordinary risks of the business, including
the negligence of fellow-servants under the limitations indi-
cated above.^ But this is rather an attempted assimilation of
1 Post, § 276. 2 Post, § 275. » Post, § 276.
* Post, § 274. For convenience and simplicity this is put in the form
of an exception to the general rule.
5 Post, § 278.
6 Post, § 279.
' " When a man enters into the service of a master, he tacitly agrees
332 LIABILITY OF MASTER
the exception to recognized legal conceptions than a reason
or an explanation for the existence of the exception. Why
such a tacit term should be read into every contract of em-
ployment remains unexplained except upon an antecedent
theory that it is good general policy, serving useful social
and industrial ends, that it should be so.^ Whether such a
theory is well founded it is now too late to inquire except in
the consideration of remedial legislation. As a rule for the
guidance of courts in the administration of justice the excep-
tion is firmly established and is universally applied, though
not without important divergences in interpretation and in its
application to particular sets of facts, as, for instance, in the
meaning of " common service" and " deputy-master or vice-
principal," and, in general, in the determination in special
instances of who are and who are not "fellow-servants."
§ 272. Evolution of the rule.
The earliest case suggesting the fellow-servant rule is that
of Priestley v. Foivler^ decided in 1837 in the English Court
of Exchequer, but the question was not necessarily involved
in the decision of that case. The earliest actual decision was
in the case of Murray v. South Carolina Railroad Company^
handed down by the Court of Errors of South Carolina in
1841. The leading American case is that of Farwell v. Boston
and Worcester Railroad Company^ decided by the Supreme
Judicial Court of Massachusetts in 1842 in an able opinion by
Chief-Justice Shaw, and followed in the other jurisdictions.^
to take upon himself to bear all ordinary risks wliicli are incident to
his employment, and, amongst otliers, the possibility of injury happening
to him from the negligent acts of his fellow-servants or fellow-workmen."
Archibald, J., in Lovell v. Howell, 1 C. P. D. Kil.
1 Farwell i\ Boston & Worcester R., 4 Met. (Mass.) 40.
2 3 M. & W. 1. Followed in Hutchinson v. York, 5 Exch. 313; Tar-
rant ». Webb, 18 C. B. 797; Morgan r. Vale of Neath R., L. R. 1 Q. B.
149, and subsequent cases. Adopted for Scotland, Bartonshill Coal Co.
V. Reid, 3 Macq. H. L. 266.
8 1 McMull. Law, 385.
4 4 Met. 49.
6 Brown v. Maxwell (1S44), 6 Hill (X. Y.), .592 ; Coon v. Syracuse,
&c. R. (1851), 6 Barb. 231, affirmed, 5 N. Y. 492; Ryan v. Cumberland
FOR TOUTS TO SERVANT. 333
In the Murray Case the action was by a fireman for injuries
sustained by the negligence of the engineer, and it was held
by the majority of the court (seven to three) that it was not
incident to the contract of employment that the company
should guarantee him against the negligence of a co-servant,
and that such negligence was one of the risks assumed by the
plaintiff. In the Farwell Case the action was by an engineer
for injuries occasioned by the negligence of a switchman, and
it was held that " he who engages in the employment of
another for the performance of specified duties and services,
for compensation, takes upon himself the natural and ordinary
risks and perils incident to the performance of such services,
and in legal presumption, the compensation is adjusted
accordingly ; and we are not aware of any principle which
should except the perils arising from the carelessness and
negligence of those who are in the same employment." It is
argued that each servant is an observer of the conduct of the
others and can give notice of any misconduct, incapacity, or
neglect, and can leave the service in case the employer con-
tinues such incompetent servants. The argument that the
servants were in different departments and therefore the rule
of observing and influencing the conduct of each other ought
not to apply, was dismissed as one likely to lead to great
inconvenience in specific cases. Finally the whole matter is
placed upon the docti'ine that " the implied contract of the
master does not extend to indemnify the servant against the
negligence of any one but himself ; and he is not liable in
tort, as for the negligence of his servant, because the person
suffering does not stand toward him in the relation of a
stranger, but is one whose rights are regulated by contract
express or implied."
In the leading New York case of Coon v. Tlie Si/racuse and
Utica Bailroad,^ a track repairer was injured through the neg-
R,, 23 Pa. St. 384; Mad River, &c. R. v. Barber, 5 Oh. St. 511; Ilonner
». 111., &c. R., 15 111. 550; Madison R. v. Bacon, 6 Ind. 205; Sullivan r.
Miss., &c. R., 11 Iowa, 421; Fraker v. St. Paul, &c. R., 32 Minn. 54;
Cooper V. Milwaukee, &c. R., 23 Wis. 668.
1 5 N. Y. 492, affirming 6 Barb. 231.
334 LIABILITY OF ^L\STER
lio-encc of trainmen, and it was held he could not recover, the
court contenting itself with resting upon the authority of the
English, South Carolina, and Massachusetts cases. Later
Xcw York cases accept the rule as unquestioned. ^
In the leading Pennsylvania case of Riinn v. Cumlerland
Valley Railroad Company'^ a track laborer while riding to his
work on a gravel train was injured by the negligence of the
engineer or conductor, and it was held that he could not
recover from the company. The court (two judges dissent-
ing) follows the earlier cases, saying, " Where we find a road
BO well beaten, it is easy to follow it, and its beaten character
is an indication that we may follow it with safety. The rule
announced by these cases is, that where several persons are
employed in the same general service, and one is injured from
the carelessness of another, the employer is not responsiljle."
The court then argues that the rule is one of convenience and
necessary to the proper conduct of business enterprises.
The rule laid down in these leading cases has been adhered
to in those jurisdictions and followed, with slight variations,
in others. The English and Massachusetts cases were imme-
diately discussed in Story on Agency ,3 and through this classic
the fellow-servant doctrine was heralded to the profession at
large and received general recognition from the courts.
Such variations of the rule as are found in a few states are
rather the result of the shifting application of the rule than
of any essentially different statement of it. Such are the
" superior officer " doctrine of Ohio,* Nebraska,^ and one or
two other states ; ^ and the " different department " doctrine
of Illinois," Missouri,^ and some other states.^
1 Ru.ssell V. Hudson Riv. R. Co., 17 N. Y. 134; Sherman v. Rochester,
&c. R., 17 N. Y. 153 ; Wright v. New York Cent. R., 25 N. Y. 562 ; Cris-
pin V. Babbitt, 81 N. Y. 516.
2 23 Pa. St. 381 (1854).
8 2(1 ed., 1813; 3d ed., 1816, §§ 453 fM53/.
* Little Miami R. i;. Stevens, 20 Ohio, 415.
6 Union Pac. R. v. Doyle, 50 Neb. 5.')5.
6 Armstrong v. Oregon, &e. R., 8 Utah, 420; Richmond, &c. R. v.
Williams, 86 Va. 165 ; Nix v. Texas, &c. R., 82 Tex. 473.
7 Chicago, &c. R. v. Moranda, 93 111. 302.
8 Dixon V. Chicago, &c. R., 109 Mo. 413. « Post, § 273.
FOR TORTS TO SERVANT. 335
The rule is of comparatively modern origin, but its almost
universal acceptance would seem to indicate that it rests on
some substantial considerations of public policy that have
constrained courts everywhere to follow it. It has been
modified, however, in some jurisdictions by legislative action,
of which more hereafter.^
§ 273. "Fellow-servants employed in the same common service."
In order that the rule should apply it is necessary that the
servant injured and the servant at fault should be fellow-ser-
vants employed in the same service. They must have a
common master, and for this reason it has been held that the
employees of a palace-car company are not fellow-servants of
the railj-oad company that hauls the palace car as a part of
its passenger train.^ This excludes from the category an
independent contractor ^ and the servants of such contractor
in their relation to the servants of the employer of the inde-
pendent contractor'^ or to the servants of another independent
contractor engaged by the same employer.^ It also excludes,
for another reason, compulsory servants, like pilots ^ and
convicts,^ since such servants not being free to contract
cannot be said to have contracted to assume the risks of the
negligence of those with whom they are compelled to work.
On the other hand there may be such a transfer of service
for the time being as to render the general servant of A
temporarily the servant of B and the fellow-servant of B's
servants.^
So a volunteer assumes the same risks as a servant by
contract, and becomes, therefore, while so volunteering, a
fellow-servant of the regular servants of the person in whose
1 Post, § 279.
2 Jones V. St. Louis S. W. Ry., 125 Mo. 668; Hughson v. Richmond,
&c. R. R., 2 D. C. App. Cas. 98.
8 Ante, § 218 et seq.
* Murray v. Dwight, 161 N. Y. 301.
6 Johnson v. Lindsay, 1891, A. C. 371.
6 Smith V. Steele, L. R. 10 Q. B. 125. See ante, § 236.
7 Buckalew v. Tennessee Coal Co., 112 Ala. 146. Ante, § 236.
8 Ewan V. Lippincott, 47 N. J. L. 192. See ante, § 228 et seq.
336 LIABILITY OF MASTER
interest he volunteers.^ Perhaps tlie better doctrine is that
the vohintcer is not a servant at all, and assumes all the risks
of the situation except that of wanton injury .^
The term fellow-servant also excludes such servants as,
under the test to be aj)i)lied in a particular jurisdiction, fall
within the category of deputy-master or vice-princij)al.^
" Employed in the same common service " has a narrower
meaning than " employed by the same master," since the
same person may be engaged in two or more enterprises
which have no essential relation to each other, or different
departments of the same general business may be so dis-
sociated as to be regarded as constituting different enter-
prises. An attempt has been made to refine upon this notion
in such a way as to cut up the railroad business into different
departments and exclude from the fellow-servant rule em-
ployees working in such different departments. This attempt
has been successful in a few states,* but it is generally held
that the railway employee assumes the risk of negligence in
any department and that the whole business must be regarded
as constituting one enterprise.^ The general rule, outside of
the states where the " different department " doctrine pre-
vails, is that servants are engaged in the same common
service whenever each might reasonably foresee, when engag-
ing in the employment, that the negligence of the others is a
risk to be encountered in the course of such service. This
brings the test fairly within the reason of the fellow-servant
rule, namely, that a servant undertakes the ordinary risks of
the service including the negligence of other servants. The
"different department" doctrine is a logical extension of
another reason given for the fellow-servant rule, namely, that
1 Osborne v. Knox, 68 Me. 49.
2 Church V. Chicago, &c. R., 50 Minn. 218. Ante, § 240.
8 Post, § 274.
* Chicago, &c. R. v. Moranda, 93 111. 302 ; Dixon v. Chicago, &c. R.,
109 Mo. 413 ; Atchison, &c. R. v. ]\IcKee, 37 Kans. 592 ; Union Pac. R. v.
Erickson, 41 Neb. 1; Armstrong r. Oregon, &c. R., 8 Utah, 420.
* Northern Pac. R. r. Ilanibly, 154 U. S. 349, and cases there cited:
Wright V. New York Central R. Co., 25 N. Y. 562 j Bjodeur v. Valley
Falls Co., 16 R. I. 448.
FOR TORTS TO SERVANT. 337
a servant is in a better position than the master to ascertain
and guard against the negligence of those with whom he is
employed : clearly this could apply only to those cases where
he is, cither generally or in a particular case, actually associated
with the negligent servant in such a way as to be able to ob-
serve him and to exercise some influence over his conduct.^
Under the general rule a track repairer is the fellow-servant
of a trainman,^ while under the "different department" doc-
trine he is not.^ Under the general rule a baggageman and
an engineer are fellow-servants, while under the special rule
they have been held not to be so, although both are employed
upon the same train,^
It is everywhere admitted that two servants of the same
master may be engaged in such totally different undertakings
that neither can fairly be regarded as having assumed the
risk of the negligence of the other. Thus where M is engaged
in the ocean carrying trade, the seamen on one of his vessels
are not to be regarded as the fellow-servants of the seamen
on another of his vessels.^ It is equally clear that under the
general rule the trainmen on one railway train are the fellow-
servants of the trainmen on another.^ Between these extremes
one might suggest the case of the servants on two ferry boats
run by the same master and plying between the same points.
The driver of a wagon employed in a master's meat busi-
ness is not in the same common service with a hod- carrier
employed by tlie same master in the construction of a building
intended for the extension of such meat business.'^
Where one railway company runs its cars over the tracks
of another, the employees of the latter are not fellow-servants
of the employees of the former.^ So an employee on a
1 See Chicago, &c. R. v. Swan, 176 111. 424.
2 Coon V. Syracuse, &c. R., 5 N. Y. 492.
8 Chicago, &c. R. v. Moranda, 93 111. 302.
* Chicago, &c. R. v. Swan, 176 111. 424.
6 The Petrel, 1893, P. 320.
6 Oakes v. Mase, 165 U. S. 363.
' McTaggart v. Eastman's Co., 28 N. Y. Misc. 127.
8 Smith V. New York, &c. R., 19 N. Y. 127 ; Murphy v. New York,
&c. R., 118 N. Y. 527.
22
338 LIABILITY OF MASTER
liglitercr is not a fellow-servant of the seamen on a vessel
employing the ligliterer.i Generally in an action against a
third person (not the master) the concurring negligence of a
fellow-servant of the plaintiff will not bar a recovery .2
§274. First exception. — The vice-principal doctrine.
The rule then is that the master is not liable for i)crsonal
injuries occasioned to one servant by the tort of a fellow-
servant employed in the same common service. But the
master is liable for his own negligence resulting in personal
iujuncs to his servant.'^ lie is also liable for the negligence
of his dei)uty resulting in injuries to his servant. This
deputy is known in the law as a vice-principal, and it now
becomes necessary to ascertain who is, and who is not, a
vice-principal.
At least two pretty well-defined tests have been applied for
the solution of this problem: (1) that one is a vice-principal
who has general superintendence and control of a business, or
of some defined department of a business, and that a servant
under his control and direction is not his fellow-servant^; (2)
that one is a vice-principal who is engaged in performing for
the master an administrative act which the law docs not per-
mit the latter to assign to any one, and that one so performing
a non-assignable act is not the fellow-servant of any other
employee.^ It will be observed that the first test regards the
rank and authority of the employee as decisive, while the
second test regards the character of the act performed, and
not rank or authority, as decisive. The first may be called
the " superior officer test " and the second the " non-assign-
able duty test."
1 Svenson v. A. M. S. Co., 57 N. Y. 108.
2 Seaman v. Koehler, 122 N. Y. 646; Perry v. Lansing, 17 llun
(N.Y.), 34.
8 Post, § 280 et acq.
< Little Miami R. Co. v. Stevens, 20 Ohio, 415; Union Pac. R. Co. v.
Doyle, 50 Neb. 555 ; Moon v. Richmond, &c. R., 78 Va. 715.
5 Crispin v. Babbitt, 81 N. Y. 516 ; New p:iigland R. Co. v. Conroy,
175 U. S. 323.
FOR TORTS TO SERVANT. 339
§ 275. Same. — The superior officer test.
The superior ofiicer test seems to have had its origin in the
case of Little Miami Railroad v. Stevens ' decided by the Su-
preme Court of Ohio in 1851, and has been most fully worked
out and explained by that court. As stated in a recent case
the doctrine is that, " The implied obligation of the servant to
assume all risks incident to the employment, including that of
injury occasioned by the negligence of a fellow-servant, has
no application where the servant by whose negligent conduct
or act the injury is inflicted, sustains the relation of a superior
in authority to the one receiving the injury. . . . Where one
servant is placed by his employer in a position of subordina-
tion to, and subject to the orders and control of another, and
such inferior servant, without fault, and while in the discharge
of his duties, is injured by the negligence of the superior ser-
vant, the master is liable for such injury." ^ Nebraska also
follows this doctrine.^
This rule, with some confusing variations, has been adopted
in whole or in part in a few other states. In Illinois it is
adopted to this extent, namely, that the master is liable to an
inferior servant for the negligence of a superior servant, pro-
vided the superior is negligent in the exercise of the power
over the inferior conferred upon him by the master, " If
the negligence complained of consists of some act done or
omitted by one having such authority, which relates to his
duties as a co-laborer with those under his control, and which
might just as readily have happened with one of them having
no such authority, the common master will not be liable. . . .
But when the negligent act complained of arises out of, and
is the direct result of the exercise of, the authority conferred
upon him by the master over his co-laborers, the master will
be liable." * In Texas it is adopted subject to the additional
qualification that the superior must have authority to hire
1 20 Ohio, 415.
2 Berea Stone Co. v. Kraft, 31 Oh. St. 287, 291-292.
8 Union Pac. R. v. Doyle, 50 Neb. 555.
4 Chicago & Alton R. v. May, 108 111. 288; Meyer v. 111. Cent. R.,
177 111. 591.
340 LIABILITY OF MASTER
and discharge the inferior.^ In Kentucky the master is liable
if the superior servant was " grossly " negligent, but not other-
wise.'-^ In several other states the Ohio rule is recognized to
some extent.'' The great weight of judicial authority is, how-
ever, opposed to this test.
By statutes in several jurisdictions the superior officer test
is made a part of the positive law. Thus the "■ Employers'
Liability Acts " malve the master liable for the negligence of
any j)erson in the service who has any superintendence and
while exercising such superintendence, or of any person in the
service to whose orders or directions the workman at the time
of the injury was bound to conform and did conform to his
injury, or (beyond this test) of any person in the service who
has charge or control of any signal, switch, locomotive engine,
or train, etc., upon any railway.* In some states similiar acts
exist applicable only to railroads.^ In other states the fellow-
servant rule is either totally abolished as to railroads or mate-
rially modified.^
§276. Same. — The non-assignable duty test.
Most of the American jurisdictions recognize and apply the
"non-assignable duty" test in determining who is or who is
not a vicc-i)rincipal. This test has its foundation in the con-
1 Missouri Pac. R. v. Williams, 75 Tex. 4; Nix v. Texas, &c. R., 82
Tex. 473.
2 Louisville, &c. R. v. Collins, 2 Duv. 114 ; Greer v. Louisville, &c. R.,
94 Ky. 109.
8 Moor V. Railroad, 85 Mo. 588; Russ v. Wabash W. Ry., 112 Mo.
45; Mason v. Richmond, &c. R., Ill N. C. 452, s. c. 114 N. C. 718;
Railroad w. Spence, 93 Tenn. 173 ; Electric Ry, r. Lawson, 101 Tenn. 406;
Andreson i\ Ogden, &c. Co., 8 Utah, 128; Armstrong v. Railway Co.,
8 Utah, 420.
* 43 & 44 Vict. c. 42 ; Alabama Code, §§ 2590-2592 ; Colorado L., 1893,
c. 77; Indiana Acts, 1893, c. 130; Massachusetts Acts, 1S94, c. 499.
See Utah L., 189G, c. 24. Post, § 279.
6 Arkansas Statutes, §§ 6248-6250; Mississippi Const., § 193; Ohio
L. 1890, p. 149, Post, § 279.
« Florida L. of 1891, c. 4071; Georgia Code, § 3036; Iowa Code,
§ 1307 ; Kansas L. 1874, c. 93 ; Wisconsin L. of 1893, c 220, Post,
§279.
FOR TORTS TO SERVANT. 341
ception that a master owes to his servants certain duties for
the proper performance of which he remains always liable ir-
respective of whether he performs them in person^ or through
representatives ; or, to put it in another way, the servant does
not assume the risk of the due performance of these duties
even though he is aware that they are to be performed by a
co-servant. In order to grasp this test it is necessary first to
enumerate the duties which the master owes to his servants
and for the due performance of which he remains always
liable.
A master is bound to use due care, either personally or
through a vice-principal, to provide and maintain : —
(1) A sufficient number of competent servants ;2
(2) Suitable instrumentalities, including a safe place to
work and safe tools and appliances;^
(3) Suitable inspection of such instrumentalities;*
(4) Suitable general rules and regulations for the govern-
ment of the service ; ^
(5) Suitable special orders necessary to the safety of the
service ; ^
(6) Suitable warning of any unusual or extraordinary
risk ; ^
(7) Suitable supervision necessary to meet the above re-
quirements.^
Any servant, whatever his grade or rank, to whom the
master delegates the performance of any of the above duties
is a vice-principal while engaged in such performance, al-
'oO
1 See post, § 282.
2 Flike r. Boston & A. R., 53 N. Y. 549 ; Coppins v. New York Cent.
&c. R., 122 N. Y. 557 ; Wabash Ry. v. McDaniels, 107 U. S. 454.
8 Fuller V. Jewett, 80 N. Y. 46; Ford v. Fitchburg R., 110 Mass. 240.
4 Bailey v. Rome, &c. R., 139 N. Y. 302 ; Nord Deutscher, &c. Co. v. ^
Ingebregsten, 57 N. J. L. 400. Cf. Cregan v. Marston, 126 N. Y. 568. Q^
6 Abel V. Delaware & H. C. Co., 103 N. Y. 581 ; Ibid. 128 N. Y. 662.
8 Hankins v. New York, &c. R., 142 N. Y. 416.
7 Mather v. Rillston, 156 U. S. 391; Fox v. Peninsular Lead Works,
84 Mich. 676; Smith v. Oxford Iron Co., 42 N. J. L. 467.
8 AVhittaker v. D. & H. C. Co., 126 N. Y. 544; Wabash Ry. v.
McDaniels, 107 U. S. 454.
342 LIABILITY OF MASTER
though as to his other duties he may be a fellow-scrvaait.^ Any
servant, whatever his grade or rank, who is engaged in an
operative act, as distinguished from one of the above prepara-
tive or rcguKative acts, is a fellow-servant and not a vice-prin-
cipal, although as to his duties generally he may be a
vice-principal.- In other words, the nature of the act, and
not the grade or rank of the actor, constitutes the test. The
situation is much the same as if the statutes prescribed that
every employer should observe the above requirements, in
which case it would be no answer that the neglect to do so
was the neglect of the fellow-servant of the plaintiff.^
The leading case is Crispin v. Babbitt^ where it appears
that a general superintendent or head man of defendant's iron
works negligently let on steam and started a wheel on which
plaintiff was at work. It was held that this was an operative
act and not the performance of any non-assignable duty, and
that the superintendent was, therefore, in the doing of that act,
the fellow-servant of the plaintiff. " The liability of the
master does not depend upon the grade or rank of the em-
ployee whose negligence causes the injury. A superintendent
of a factory, although having power to employ men, or repre-
sent the master in other respects, is, in the management of
the machinery, a fellow-servant of the other operatives. On
the same principle, however low the grade or rank of the em-
ployee, the master is liable for injuries caused by him to an-
other servant, if they result from the omission of some duty of
the master, which he has confided to such inferior employee."
The rule thus laid down has been accepted by the United
States Supreme Court,^ and by the courts of upwaids of thirty
states.^
It will be observed that the rule has two aspects in its
^ Northern Pac. K. v. Herbert, 116 U. S. 642; cases cited supra.
2 Crispin r. Babbitt, 81 N. Y. 516.
8 New York, &c. K. v. Lainbright, 5 Oli. Cir. Ct. R. 433.
* 81 N. Y. 516.
* Central R. v. Keegan, 160 U. S. 259 ; New England R. v. Conroy,
175 U. S. 323, overruling Chicago, &c. R. v. Ross, 112 U. S. 377.
8 See 1 Sh. & Red. on Neg., § 232 ; 12 Am. & Eng. Ency. of Law (2d
ed.), pp. 948-970.
FOR TORTS TO SERVANT. 343
application to concrete facts : (1) An employee whose duties
arc mainly those of a vice-principal may by the doing of an
operative act become a fellow-servant ; ^ (2) An employee
whose duties are mainly operative may by being intrusted
with the performance of a non-assignable duty become a vice-
principal.2 It follows that the same servant may occupy a
dual position, and be at one moment, in the performance of one
act, a vice-principal, and the next moment, in the performance
of another act, a fellow-servant. The superior othcer test is
antagonistic to the first aspect of the non-assignable duty test,
but not to the second. A superior officer is in Ohio a vice-
principal, even though performing an operative act.^ But an
operative might, conceivably, become a vice-principal also if
performing a non-assignaV)le duty.* In other words the second
aspect of the non-assignable duty test may be united to the
superior officer test (as it is in Illinois) ° and thus make the
most liberal common law rule in favor of the servant.
Certain employees are, as to their ordinary duties, vice-
principals, and a default upon their part as to those duties is
a default of the master. A president of a corporation,^ a
superintendent,'' a train despatcher,^ or a regular car inspec-
tor,^ and other superior officers charged with administrative
duties, are as to such duties vice-principals ; but if they tem-
porarily perform operative acts they are fellow-servants.^'^ On
the other ha.nd conductors of railway trains,^^ engineers,^^ and
1 Donnelly v. San Francisco Bridge Co., 117 Cal. 417; Crispin v.
Babbitt, 81 N. Y. 516.
2 Nixon V. Selby, &c. Co., 102 Cal. 458.
3 Berea Stone Co. v. Kraft, 31 Oh. St. 287.
* IMobile, &c. R. v. Godfrey. 155 Til. 78, a jurisdiction that also holds
to the superior officer test (Chicago & A. R. v. May, 108 111. 2S8).
6 Ibid. 6 Smith V. Iron Co., 42 N. J. L. 467.
7 Chapman v. Erie Co., 55 N. Y. 579; Sheehan v. R. Co., 91 N. Y.
332; Johnson v. Xat. Bank, 79 Wis. 414.
« Hankins v. R. Co., 142 N. Y. 416 ; Ilunn v. IMichigan, &c. R., 78
Mich. 513; Felton v. Harbeson, 104 Fed. Rep. 737.
9 Eaton V. New York Cent., &c. R., 1G3 N. Y. 391.
10 Crispin v. Babbitt, 81 N. Y. 516.
" Slater v. Jewett, 85 N. Y. 61.
12 Harvey v. R. Co., 88 N. Y. 481 ; Capper v. R. Co., 103 Ind. 305.
344 LIABILITY OF MASTER
trainmen generally,^ are as to their ordinary duties fcllow-
seivants of other employees engaged in operative acts.
§ 277. Same. — Summary of vice-principal doctrines.
A master remains liable to his servant lor the negligence
of a vice-principal. To determine who is a vice-pi'incipal
there are two tests. But these are not in their entirety
antagonistic, and there may therefore be a combination of the
one with a part of the other. This leads to these possible
results :
(1) The rank of the negligent servant is the sole test. If
the negligent employee is a superior officer of the injured
employee, the master is liable irrespective of the character of
the act.2 If the negligent servant is not a superior officer of
the injured servant, the master is not liable whatever the
character of the act."^
(2) The character of the act is the sole test. If the superior
officer performs an operative act he is a fellow-servant.* If
an inferior servant performs a non-assignable duty, he is a
vice-principal.^
(3) The rank of the negligent servant is a sufficient test in
case the negligent servant is the superior of the injured ser-
vant.^ In other cases the character of the act is the proper
test."
It is doubtful whether, even in Ohio, the first result would
be accepted in its logical entirety. In the greater number of
jurisdictions the second result seems to be accepted, while in
a few the combination indicated in the third is accepted.
§ 278. Second exception. — Incompetent fello-wr-servants.
If the master negligently selects incompetent servants or
negligently retains them, he is liable to a fellow-servant injured
1 Roberts v. R. Co., 33 Minn. 218; Ewald v. R. Co., 70 Wis. 420.
2 Rerea Stone Co. v. Kraft, 31 Oh. St. 287.
8 Rivilroad Co. v. Fitzpatrick, 42 Oil. St. 318 ; Coal & Mining Co. v.
Clay, 51 Oh. St. 512, 559 (semble).
* Crispin v. Babbitt, 81 X. Y. 516.
6 Fuller V. Jewett, 80 N. Y. 46.
8 Chicago & A. R. v. May, 108 111. 288.
' Mobile, &c. R. v. Godfrey, 155 111. 78.
rOK TORTS TO SERVANT. 345
through the negligence of such incompetents.^ To furnish
safe servants is one of the master's duties, like the furnishing
of safe instrumentalities, and he must use due care to perform
it. " Incompetency exists, not alone in physical or mental
attributes, but in the disposition with which a servant per-
forms his duties. If he habitually neglects these duties, he
becomes unreliable, and although he may be physically and
mentally able to do well all that is required of him, his dispo-
sition toward his work and toward the general safety of the
work of his employer and to his fellow-servants, makes him
an incompetent man." ^ The master must be wanting in due
care, that is, he must be negligent in hiring or negligent in
retaining the servant after notice, or reasonable means of
notice, of such incompetency.^ A single negligent act of a
servant is not sufficient evidence of incompetence.* But evi-
dence of the servant's reputation for intemperance or other
disability is competent.^ The question is one of fact.^
§ 279. Third exception. — Statutory provisions.
The liability of a master to one servant for the negligence
of another has been much enlarged by statute. These statutes
are sometimes general in their nature, and sometimes made
applicable only to railroad corporations.
Employers' Liability Acts. The first of these acts is the
English Employers' Liability Act passed in 1880.'' This act
provides :
(1) When personal injury is caused to a workman^ by
1 Coppins V. New York Cent., &c. R., 122 N. Y. 557.
2 Ihid., p. 564.
3 Cameron v. New York Cent., &c. R., 145 N. Y. 400.
* Baulec v. N. Y., &c. R., .59 N. Y. 356 ; Evansville R. v. Guyton, 115
Ind. 450.
5 Chicago & A. R. v. Snllivan, 63 111. 293; Hilts v. Chicago, &c. R., 55
Mich. 437.
6 Mann v. Delaware & H. C. Co., 91 N. Y. 495; Sutherland v. Troy,
&c. R., 125 N. Y. 737; Wall v. Delaware, &c. R., 54 Hun, 454, affirmed,
125 N. Y. 727.
' 43 & 44 Vict. c. 42.
8 As defined by Employers and Workmen Act, 1875, i. e. railway ser'
346 LIABILITY OF MASTER
reason of any defect in the condition of the ways, works,
machinery, or plant connected with or iised in the business
of the employer, which defect arose from or had not been dis-
covered or remedied owing to the negligence of the cinjjloycr
or of some person in the service of the employer and in-
trusted by him with the duty of seeing that the ways, works,
machinery, or plant were in proper condition, — the workman
shall have the same right of compensation and remedies
against the employer as if the workman had not been a work-
man of, nor in the service of the employer, nor engaged in his
work,i unless the woi-kman knew of the defect or negligence
which caused the injury, and failed within a reasonable time
to give, or cause to be given, information thereof to the
employer or some person superior to himself in the service of
the employer, unless he was aware that the employer or such
superior already knew of the said defect or neglect.^
(2) Where personal injury is caused to a workman by
reason of the negligence of any person in the service of the
employer who has any superintendence intrusted to him^
whilst in the exercise of such superintendence, — the work-
man shall have, etc. [same as in section 1].
(3) Where personal injury is caused to a workman by
reason of the negligence of any person in the service of the
em))loycr to whose oi-dcrs or directions the workman at the
time of the injury was bound to conform, and did conform,
where such injury resulted from his having so conformed, —
the workman shall have, etc. [same as in section 1].
vants, manual laborers, etc., not including seamen or domestic servants.
Sec. 8 of the Act.
1 This somewhat infelicitous clause is interpreted to mean, — the doc-
trine of the implied assuniptinn by the workmen of these risks, including
the negligence of a fellow-servant, shall not apply. Griffiths v. Earl of
Dudley, Q. B. Div. ;5fi.5.
2 This clau.se retains the doctrine of contributory negligence and the
a.ssumption of risk known to the servant but unknown to the master.
The whole of this section is probably law in most of the United States
under the non-assignable duty test.
8 Cleans a person whose sole or principal duty is tliat of superintend-
ence and who is not ordinarily engaged in manual labor. Sec. 8 of the
Act.
FOR TORTS TO SERVANT. 347
(4) Where personal injury is caused to a workman by
reason of the act or omission of any person in the service of
the employer done or made in obedience to rules or by-laws
of the employer, or in obedience to particular instructions
given by any person delegated with the authority of the em-
ployer in that behalf, and the injury resulted from some
impropriety or defect in the rules, by-laws, or instructions, —
the workman shall have, etc. [same as in section 1].
(5) Where personal injury is caused to a workman by
reason of the negligence of any person in the service of the
employer who has the charge and control of any signal points,
locomotive engine or train upon a railway, — the workman
shall have, etc. [same as in section 1].^
The action must be brought within six months, or in case
of death, within one year from the time of death,^ and notice
of the injury must be given within six weeks. The amount
recoverable shall not exceed the equivalent of the estimated
earnings during three years preceding the injury of a person
in the same grade, in like employment, and in the district in
which the workman is employed at the time of the injury .^
The terms of this act with some local variations have been
adopted by statute in Alabama (Code, §§ 2590-2592), Colo-
rado (L. 1893, c. 77), Indiana (Acts of' 1893, c. 180), and
Massachusetts (Acts of 1887, c. 270, amended by Acts of
1894, c. 499).4 Mississippi (L. 1896, c. 87) adopts substantially
the provisions of section 2.
Railroad Employers' Liahility Acts. In the above acts a
special liability is fixed upon railroad employers by section 5.
Some states have passed acts fixing such a liability without
^ Tn some of the states the list indudes switch, car, or any part of the
track of a railway. See Alabama Code, § 2590-2592. Indiana adds
telegraph office, switchyard, shop, round-house, Acts of 1893, c. 130.
2 In Massachusetts one year ; in Colorado, two j'ears. In Alabama
and Indiana governed by general statute of limitations,
3 In Massachusetts .fiOOO or |5000 is the limit according to prescribed
circumstances. The other statutes leave the matter in the same situation
as to damages as in an action at common law.
* For a discussion of these acts see Reno, Employers' Liability Acts.
For the Mass. Act, see Appendix, post.
348 LIABILITY OF MASTER
enlarging the liability of other employers. The earliest of these
acts antedating the English act was passed in Georgia in 1855.^
It j)rovidcs : —
'• If tlie person injured is himsclC an employee of the [rail-
road] company, and the damage was caused by another em-
ployee, and Avithout fault or negligence on the part of the
person injured, his employment by the comi)any shall be no
bar to his recovery."
Florida has an enactment in almost similar tcrms.^ Kan-
sas has one in more general terras, but to similar effect.^
So also Missouri^ Iowa has one limited to injuries oc-
casioned by the use and operation of the railroad.^ Texas
has one similarly limited.*^ Wisconsin has one covering de-
fects in instrumentalities and negligence of fellow-servantsJ
Other states have statutes making the railroad liable to an
inferior servant for any injury due to the negligence of a su-
perior, or of a person having control and direction of the
injured servant.®
Whether the servant may by special contract deprive him-
self of the benefit of these statutes is a disputed question.
At common law it has generally been held that a contract
made in advance whereby an employee agrees to release and
discharge his employer for any injury that may be received by
reason of the negligence of the employer, or of his servants,
is contrary to jiublic policy and void.^ In Georgia, however,
such a contract is held valid. ^*^
1 Code, § 2323 (303G). 2 l, igoi, c. 4071.
8 L. 1874, c. 93. * Rev. St., § 2873.
5 Code, 1897, § 2071. s L. 1897, Sp. Sess., c. 6.
7 L. 1893, c. 220 ; Statutes 1898, § 1810.
8 Arkansas St., § G248 ; Mississippi Const., § 193, and Code, § 35.59; Mis-
souri Rev. St., § 2874 ; Montana Civil Code, § 905 ; Ohio L. 1890, p. 149 ;
Texas Rev. St., § 45G0/,- Utah Rev. St., § 1342.
» Reno, Employers' Liability Acts, § 8 ; Ry. Co. v. Spangler, 44 Oh.
St. 471 ; Little Rock, &c. Ry. v. Eubanks, 48 Ark. 460 ; Johnson i: Rich-
mond, &c. Ry., 80 Va. 975 ; 2 Tlioiiipson on Neg., 1025 ; Roe.sner v.
Hermann, 8 Fed. Rep. 782; Louisville, &c. R. Co. v. Orr, 91 Ala. 548.
10 Western, &c. Ry. v. Bishop, 50 Ga. 405; Fulton ISIills v. Wilson, 89
Ga. 318. In New York the precise question has not risen for decision,
and the Court of Appeals has carefully refrained from expressing its
FOR TORTS TO SERVANT. 349
By statute, under the Employers' Liability Acts, the question
presents itself under two aspects. First, in some jurisdictions
the statute does not in express terms forbid the making of
such contracts. This is the case under the English and Ala-
bama statutes, but diametrically opposite results have been
reached by the courts in those jurisdictions. In England it
has been held that it is not contrary to the policy of the stat-
ute to allow an employee to waive the benefit of the act by
contract, and that such a contract is binding not only upon the
employee himself, but also upon his representatives.^ In Al-
abama, it has been held that such a contract is void as con-
trary to public policy.2 Second, in some states the statute
expressly forbids the making of such contracts. This is the
case under the statutes in Indiana,^ lowa,^ Massachusetts,^
Minnesota,^ Mississippi," Texas,^ Wisconsin,^ and Wyoming.^^
That part of the Ohio statute making this restriction^^ has
been held unconstitutional.^^
opinion on the question in cases where it might have done so. Purdy v.
Rome, &c. Railroad Company, 125 N. Y. 209.
^ Griffiths V. Dudley, 9 Q. B. D. 357. Reno, Employers' Liability
Acts, § 6.
2 Hissong V. Richmond, &c. Ry., 91 Ala. 514.
3 Laws of 1893, ch. 130, § 5.
* Code, § 1307.
5 St. 1894, ch. 508, § 6.
6 Laws of 1887, ch. 13.
' Constitution (1890), § 193.
8 Laws of 1891, ch. 24, §2.
9 Laws of 1893, ch. 220.
10 Laws of 1890-91, ch. 28.
" St. of Apr. 2, 1890 (Ohio Laws, vol. 87, p. 149).
12 Shaver v. Penn. Co., 71 Fed. 931.
350 LIABILITY OF MASTER
CHAPTER XXV.
LL\BIL1TY OF MASTER TO SERVANTS FOR HIS OWN TORTS.
§ 280. Introductory.
The liability of a master to his servants for torts may be due
to his own personal act or omission, or to the act or omission
of his representative. We have discussed the latter situation
and have seen within what limits the master is liable to one
servant for the torts of another. It now remains to discuss
the liability of the master for his own personal torts resulting
in damages to his servant. These torts uuiy be either negli-
gent or wilful. If negligent, they may be either operative
acts or omissions, or acts or omissions connected with the per-
formance of one of the non-assignable duties heretofore
enumerated.
§ 281. Negligent operative act.
If the master is working with his servants in operating the
machinery of the service, he is liable for any injury to them
arising from his negligence. He is not a fellow-servant when
so engaged. Any representative of his, however high in rank,
may become a fellow-servant if engaged in an operative act,^
but not so the master himself. It is no part of the implied
contract of a servant to assume any risk as to the master's
negligence under any circumstances. It follows that a
servant may recover for any injury due to the master's
personal negligence.^ If the master is a partnership, the
negligence of one partner is the negligence of all.^ If the
master's negligence united with the negligence of a fel-
1 Crispin v. Babbitt, 81 N. Y. 516.
* Lorentz v. Kobinson, 61 Md. 64.
8 Ashwortli r. Stanwix, 3 El. & El. 701.
TO SERVANTS FOR HIS OWN TORTS. 351
low-servant causes the injury, the master is liable, provided
his negligence is a proximate concurring cause.^
§ 282. Negligent performance of non-assignable duties.
The non-assignable duties of the master have already been
enumerated.^ The master is bound to use due care in the
performance of these duties and is liable to a servant injured
in consequence of his failure to do so. If he negligently fails
to furnish a safe place to work or safe instrumentalities, or a
sufficient number of competent servants, or suitable rules and
regulations, or proper warning of extraordinary risks, or proper
inspection, he is liable to any servant injured in consequence
of such negligent failure.^ These are personal duties, and,
whoever may be delegated to perform them, the law always
treats the case as if the master were personally performing
them. The degree of care required of the master in the dis-
charge of these duties is said to be ordinary care, that is the
care which reasonably prudent men would use under like cir-
cumstances.* This is so in the case of railroad companies,^
although as to passengers they are bound to use the utmost
care that human vigilance makes possible.^ Accordingly the
master is not bound to provide the very best or most approved
appliances, but only those which are reasonably fit and safe,'^
Conformity to the usage of other similar employers does not
of itself conclusively show due care.^ Having supplied them
he is not liable if a fellow-servant negligently fails to use them
or to use them properly.^ So if it is a part of the servant's own
1 Cone V. Delaware, &c. R., 81 N. Y. 206 ; Ellis v. New York, &c. R.,
95 N. Y. 546 ; Franklin v. R. Co., 37 Minn. 409.
2 Ante, § 276.
^ Cases cited in § 276, ante.
* Washington, &c. R. v. McDade, 135 U. S. 554 ; Painton v. Northern
Cent. R. ; 83 N. Y. 7 ; Probst v. Delamater, 100 N. Y. 206.
5 Chicago, &c. R. v. Kerr, 148 III. 605.
6 Carroll v. Staten Is. R., 58 N. Y. 126 ; Palmer v. Delaware & H. C.
Co., 120 N. Y. 170.
' Harley ;;. Buffalo, &c. Co., 142 N. Y. 31 ; Conway v. 111. Cent. R.,
50 Iowa, 465.
8 Wabash Ry. v. McDaniels, 107 U. S. 454.
» Harley v. Buffalo Car Mfg. Co., 142 N. Y- 31.
3.j2 liability of master
duty to construct for himself a scaffold or other apj)liance, and
suitable material is furnished for this purpose, the master is
not liable if it is improperly constructed/ whereas he would
be liable if he supplied the scaffold to the servant ready con-
structed for the latter's use.*^ In the employment of fellow-
servants, the master is bound to use reasonable care and
diligence to select those who are competent and reliable and
not to continue in the em[)loymcnt those who are unfit or
unreliable.^ If due diligence has been used in selecting a
servant, subsequent facts disclosing unfitness must be brought
actually or constructively to the master's notice before he will
be deemed negligent in continuing the servant in the employ-
ment."* The master must also use due care to have a suffi-
cient number of competent servants.^ The same rule of
due care applies in the promulgating and enforcing suitable
rules for the government of the service,^ giving warning of
unusual or extraordinary risks,^ though in the latter case
it seems actual notice, and not due care to give notice, is
the requirement.^ So also due care is the test as to inspec-
tion and oversight of a])plianccs and servants.^
§ 283. Assumption of risk.
The doctrine that the master is liable to the servant for
the negligent failure to perform any one of the personal or
1 Hogan V. Smith, 125 N. Y. 774; Marsh v. Herman, 47 Minn. 537.
s Manning v. llogan, 78 N. Y. C15. Cf. Benzing v. Steinway, 101 N. Y.
547.
3 Laning v. N. Y. Cent., &c. R., 49 N. Y. 521 ; Chapman v. Erie R.,
55 N. Y. 570 ; Cameron v. N. Y. Cent., &c. R., 145 N. Y. 4U0 ; AVabash
Ry. V. McDaniels, 107 U. S. 454.
* Whittaker r. Delaware, &c. R., 126 N. Y. 544; Cameron v. N. Y.
Cent., &c. R., 145 N. Y. 400 ; Park v. N. Y. Cent., &c. R., 155 N. Y. 215.
Some states permit evidence of general reputation for incompetency.
6 Flike V. Boston, &c. R., 53 N. Y. 549 ; Pennsylvania Co. v. McCaf-
frey, 130 Ind. 430.
6 Slater v. Jewett, 85 N. Y. Gl; Abel v. Delaware, &c. Co., 103 N. Y.
581, 12S N. Y. GC2.
7 Mather v. Rillston, 156 U. S. 391; Fox v. Peninsular Lead Works,
84 Midi. 076.
8 Wheeler v. Wason Mfg. Co., 135 Mass. 294.
» Byrne v. Eastmans Co., 163 N. Y. 461.
TO SERVANTS FOR HIS OWN TORTS. 353
non-assignable duties, is subject to the qualification that the
servant may voluntarily assume the risk arising from such
failure.! By the contract of employment the master ordi-
narily assumes the risk as to the performance of these duties
and the servant assumes all the other risks of the service.^
But if, at the time the contract is made and the servant
enters the employment, he knows and fully comprehends
that the conditions then existing increase his risks ^beyond
those which, in the absence of such knowledge, he would
otherwise expect to encounter, he is said to voluntarily as-
sume the added risks and the master is relieved to that
extent of the risks which he would otherwise be deemed to
undertake.* The implied terms as to the risks are modified
by the actual facts known and appreciated by the servant at
the time of making the contract, or, to state another reason
for the same result, the servant cannot recover damages for
injuries arising from a danger which he voluntai'ily and with
full appreciation of the risk encounters. If, therefore, the
servant, with full knowledge and appreciation of tlie added
danger, engages to work in an unsafe place (that is not as
safe as due care on the part of the master would make it)
he assumes the risk of the situation as it is and cannot re-
cover from the master for an injury resulting from it.^
But what of risks arising subsequent to the contract, or
not known to the servant until after he has entered upon
the employment ? In such a case it cannot be said that he
impliedly contracted to assume them, unless, indeed, it be
argued that he impliedly contracted to assume any risks of
which he subsequently receives notice, a contention that
1 See Bigelow on Torts (7th ed.), §§ 753-764.
2 Consolidated Coal Co. v. Haenni, 146 111. 614.
3 Mere knowledge of defects is not enough : there must also be an ap-
preciation of the added risk. Cook v. R. Co., 31 Minn. 45.
* Coombs i\ New Bedford Cordage Co., 102 Mass. 572 ; Mahoney v.
Dore, 155 Mass. 51-3 ; Powers v. New York R., 98 N. Y. 274; Crown v.
Orr, 140 N. Y. 450; Ragon v. Toledo R., 97 Mich. 265.
5 Sweeney v. Berlin, &c. Co., 101 N. Y. 520; Knisley v. Pratt, 148 N. Y.
372; O'Maley v. South Boston Gaslight Co., 158 Mass. 135; Saxton v.
Hawkaworth, 20 L. T. n. s. 851, Cases supra.
23
354 LIABILITY OF MASTER
would push the doctrine of the implied terms to its extreme
limits. In such cases the courts fall back upon the maxim
volenti non fit injuria, and hold that if the servant remains
in the employment after a full knowledge and appreciation
of the risk arising from the failure of the master to perform
any one of the personal or non-assignable duties, and for
such a length of time and under such circumstances as to
be satisfactory evidence of his intent to assume the risk
rather than abandon the service, the risk is shifted from the
master to the servant and the latter cannot recover for an
injury arising from it.^ Whether the evidence is sufficient
to establish a voluntary assumption of the risk is a question
of fact.^ Mere knowledge of the risk is not enough: the
maxim is not ^'- scienti non fit injuria''' but ^'•volenti non fit
injuria''^ Remaining in the employment after knowledge
of the risk is not conclusive,* although, as in other similar
cases, the court may think it conclusive under the facts and
circumstances of a particular casc.^
Whether there is any distinction between cases where the
risk is primarily thrown on the employer by the common law
and cases where it is imposed upon him by statute, the courts
are not agreed. It is generally held that there may be an
assumption by the servant of the general statutory risks
enumerated in the Employers' Liability Acts.^ But a dis-
tinction is taken between such cases and the case where the
statute prescribes a specific duty, as the blocking of guard-
rails and switches or the fencing of machinery, and the
master fails to comply with the statute. In such a case some
1 Ciriack v. Merchants' Woolen Co., 151 Mass. 152.
2 Smith V. Baker, 1891, A. C. 325; Mahoney v. Dore, 155 Mass. 513;
Great N. Ry. v. Kasischke, 104 Fed. Rep. 440.
8 Smith ('. Baker, supra, pp. 337, 355. But see Powers v. New York,
&c. R., 98 N. Y. 274.
* Ibid. ; Northern Pac. R. v. Mares, 123 U. S. 710 ; Hawley v. North-
ern Central R., 82 N. Y. 370.
6 M'Peck V. Central Vt. R., 79 Fed. Rep. 590; Powers i'. New York,
&c. R., 98 N. Y. 274.
« O'Maley v. South Boston Gaslight Co., 158 Mass. 135.
TO SERVANTS FOR HIS OWN TORTS. 355
courts hold that the risk cannot be shifted to the servant,^
while other courts hold that it may.^ Assumption of risk
is to be clearly distinguished from contributory negligence
which is a bar whether the master's duties arise at common
law or by statute.^
While the doctrine of the assumption of the risk is thus
firmly established, it is subject to certain important qualifi-
cations which may now be briefly enumerated.
(1) The servant must know and clearly appreciate the
risk arising from the master's failure to perform one of the
prescribed duties. In other words the assumption of the
risk must be really voluntary. This is a question of fact
and should ordinarily be left to the jury.^ The facts may,
however, be so obvious that the court will determine as an
indisputable inference that the servant did assume the risks.^
Risks existing at the time the servant enters the employment,
and of which he has actual or constructive notice, are gener-
ally held to be voluntarily assumed.^ Risks arising after he
enters the service are not shifted to the servant until he has
consciously and volimtarily encountered them for such a
time as to be satisfactory evidence of assumption."
(2) The servant must not be acting under coercion, as a
convict^ or a seaman,^ or a terrorized foreigner,^'' or, possibly,
a minor.ii But a fear of discharge, or a threat of discharge,
1 Narramore v. Cleveland, &c. Ry., 96 Fed. Rep. 298.
2 Knisley v. Pratt, 148 N. Y. 372, 149 N. Y. 582.
^ Narramore v. Cleveland, &c. Ry., 96 Fed. Rep. 298 ; Freeman v. Glens
Falls Paper Mill Co., 70 Hun, 530, affirmed 142 N. Y. 639.
4 Smith V. Baker, 1891, A. C. 325.
5 O'Maley v. South Boston Gaslight Co. ,158 Mass. 135. See the differ-
ence of judicial opinion in Davis r. Forbes, 171 Mass. 548.
8 Coombs V. New Bedford Cordage Co., 102 Mass. 572; Mahoney v.
Dore, 155 Mass. 513 ; Crown v. On; 140 N. Y. 450. But see Wallace v.
Central Vermont R., 138 N. Y. 302.
T Smith r. Baker, 1891, A. C 325; Libby v. Scherman, 146 111. 540.
8 Chattahoochee Brick Co. v. Braswell, 92 Ga. 631.
9 Eldridge v. Atlas Steamship Co., 134 N. Y. 187.
10 Wells & F. Co. V. Gortorski, 50 111. App. 445.
11 Brazil Coal Co. v. Gaffney, 119 Ind. 455 ; Kehler y. Schwenk, 151 Pa.
St. 505. Infancy in and of itself does not prevent the assumption of risfe
356 LIABILITY OF MASTER
is not coercion,^ thoudi it seems to be considered by some
courts evidence that the servant was not acting voluntarily.^
(3) The servant must not be acting under necessity, as
where a new risk arises subsequent to the employment which
he must for the once reluctantly encounter.'^
(4) If the master promises to remedy the defect the ser-
vant does not assume the risk during such time as may rea-
sonably be allowed for the performance of the promise,* or
until all reasonable expectation that the promise will be per-
formed is at an cnd,^ unless the danger is so imminent that
no prudent person would encounter it.^
(o) The servant may reasonably rely upon the master's
superior judgment in case the latter assures him there is no
danger, unless the danger is so obvious that the assurance
ought not to influence the conduct of a reasonably prudent
man in like circumstances^
§ 284. Contributory negligence.
The doctrine that the master is liable to the servant for
the negligent failure to perform any one of the personal or
non-assignable duties, is subject to the further qualification
that the servant cannot recover for injuries due in any proxi-
mate degree to his own contributory negligence.^ This is
De Graff v. New York Cent., &c. R., 76 N. Y. 125; Michael v. Stanley, 75
Md. 464.
1 Sweeney v. Berlin, &c. Co., 101 N". Y. 520; Dougherty v. West Supe-
rior Iron Co., 88 Wis. 343.
2 ]\Ia.son V. Richmond, &c. R., Ill N. C 482; Richmond, &c. R. v. Nor-
ment, 84 Va. 167.
' Fitzgerald v. Connecticut Paper Co., 155 Mass. 155.
* Illinois Steel Co. v. Mann, 170 111. 200.
^ Ibid., dissenting opinion.
8 Hough V. Texas, &c. R., 100 U. S. 213 ; Northern Pac. R. v. Bab-
cock, 154 U. S. 10(1; Smith v. Backus, 64 'SUnn. 447; Laning v. N. Y. Cent.,
&c. R., 49 N. Y. 521; Indianapolis, cScc. R. c. Watson, 114 Ind. 20.
■' Chicago Brick Co. v. Sol)kowiak, 148 111. 573 ; ^^'agner v. Jayne Chem-
ical Co., 147 Pa. St. 475; Haas v. Balch, 50 Fed. Rep. 984. Cf. Davis v.
Forbes, 171 Mass. 548.
s Elliott V. Chicago, &c. Ry., 150 U. S. 245; Pennsylvania R. v. Zink,
126 Pa. St. 288.
TO SERVANTS FOR HIS OWN TORTS. 357
merely a part of the general doctrine of contributory negli-
gence. The distinction between assumption of risk and con-
tributory negligence must be kept in mind.^ Both issues
may be raised in the same case. For instance, plaintiff al-
leges that the platform on which he worked was unsafe and
that it was unlighted. If it was unsafe the question is, did
he assume the risk ? If it was unlighted but suitable torches
were furnished which plaintiff failed to use, the question is,
was plaintiff guilty of contributory negligence "i^
§ 285. Wilful torts.
A master is liable to a servant for wilful torts committed
against him as he is to any other person. In certain cases,
however, the law allows a defence of justification or excuse
or privilege based upon the relationship, as, for instance, the
defence of discipline in an action for assault upon a seaman,^
or of privileged communication in an action for slander in
giving the servant a bad character.
If a master is asked the character of a servant who is or
has been in his employ his communication to another actual
or prospective master is conditionally privileged.^ If he vol-
unteers the information he may be privileged under certain
circumstances, but stronger evidence of bona fides will be
required.^ If he has given a favorable character and after-
wards discovers facts which lead him to doubt the character
of the servant, he is privileged to volunteer the new facts to
the employer.*' If he dismisses a servant, he may inform his
other servants of the reason.^ His conditional privilege is
overcome, however, by proof of express malice. That what
he said was false is not proof of malice ; but that he knew
1 Narramore v. Cleveland, &c. R., 96 Fed. Rep. 298.
2 Kaaie v. Troy Steel Co., 139 N. Y. 369.
8 Michaelson v. Denison, 3 Day (Conn.), 294; Brown v. Howard, 14
Johns. (N. Y.) 119.
< Pattison v. Jones, 8 B. & C. 578.
6 Ibid.
6 Fowles V. Bowen, 30 N. Y. 20.
' Somerville v. Hawkins, 10 C. B. 583; Hunt v. Great N. Ry , 1891,
2 Q. B. 189.
353 LIABILITY OF MASTER TO SERVANTS FOR HIS OWN TORTS.
it to be false is the best evidence, and that he knew it to be
false may be inferred from the fact that he is giving a bad
character in order to compel the servant to remain in his
own service.^
A.t common law a master is under no obligation to give his
servant a letter of recommendation or any statement as to
his character upon the termination of the relationship.^ This
question has been revived in modern cases in consequence
of a system of " clearance cards " adopted by raili-oads where-
by an employee leaving the service is given a statement as
to the cause of his departure from it. But it is held that in
the absence of a contract to give such a card, or of an es-
tablished usage in view of which contracts of service are
made, there is no obligation resting upon the master to give
the card.^ But it has been held that when a class of em-
ployers mutually agree not to employ a servant formerly in
the service of another without the presentation of a clearance
card, that it becomes the duty of any party to such agi'eement
to give a clearance card to a servant entitled to it, and that
withholding it is equivalent to a statement that the servant
is within a proscribed class."*
Blacklisting employees, that is circulating a list of dis-
charged employees among a class of employers who have an
understanding that they will not employ persons so listed, is
an actionable wrong for which the blacklisted employee may
have an action at law,^ but not, it seems, an injunction.^
Many states make such blacklisting a crime."
1 Jackson v. Hopperton, 16 C. B. N. s. 829.
2 Carrol v. Bird, 3 Esp. 201; Cleveland, &c. R. r. Jenkins, 17i 111. 398.
* Cleveland, &c. R. v. Jenkins, supra.
* New York, &c. Ry. v. SchafEer, 17 Ohio Circ. Ct. Rep. 77.
6 Blumenthal v. Shaw, 77 Fed. Rep. 954 ; Hundley v. Louisville, &c.
R. (Ky.). 48 S. W. 429; Mattison v. L. S. & M. S. Ry.. 3 Oil. Dec. 526.
8 Worthiniiton v. Waring, 157 INIass. 421.
T Colorado L. 1897, c. 31 ; Conn. L. 1897, c. 184 ; Towa Code, § 5027 ;
Minn. L. 1892, c. 174; Mo. L. 1891, p. 122; N. Dak. Const., § 212,
Code, § 7U42 ; Wis. Stat., § 4466 6.
PART IV.
LIABILITY OF SERVANT FOR TORTS.
§ 286. Introductory.
A servant's torts may be either those of non-feasance or
those of misfeasance. The injured party may be either the
master, a fellow-servant, or a stranger. We have now to
consider each of these cases.
360 LIABILITY OF SERVANT
CHAPTER XXVI.
servants' liability for torts.
1. Liability to master.
§ 287. Gratuitous service.
We have already seen that if one without consideration
promises to do a service for another, that not doing the
service at all is no actionable wrong, however seriously the
promisee may be damaged thereby.^ This is a mere non-
feasance, and as there is no consideration for the promise no
action can be maintained.
But if the gratuitous agent enter upon the performance of
the duty and is negligent or unskilful where he may reason-
ably be held to have undertaken for care and skill, the em-
ployer may recover damages for the injury occasioned thereby .^
If one intrust a horse to another as gratuitous servant or
bailee to be shown to a third })erson, and the gratuitous
servant, being conversant with and skilled in horses, negli-
gently rides the horse upon slippery grounds so that it falls
and is injured, the gratuitous servant or bailee is liable.^
The distinction here taken between non-feasance and mis-
feasance in the case of a gratuitous agent or servant sued
by the employer, is taken as to a paid servant sued by a
third person who is injured in consequence of the servant's
negligence.
§ 288. Paid service.
If the servant agrees upon a consideration to perform a
service and neglects to do so to the damage of the master,
^ Ante, §§ 29, 97 ; Wilkinson v. Coverdale, 1 Esp. 75; Thorne v. Deas,
4 Johns. (N. Y.) 84.
2 Ante, §§ 97-98; Whiteheafl v. Greetham, 2 Biiig. 4G4.
« Wilson V. Brett, 11 M. & W. 113.
FOR TOUTS TO CO-SERVANT. 361
the latter may maintain an action for the loss.^ In such a
case it is immaterial whether the negligence is merely a non-
feasance or a misfeasance, since the consideration supports
the promise to act, and to act with care and skill.
For any negligence in the discharge of his duties resulting
in damage to the master, the servant is liable,^ but not for
accidental loss or injury not due to negligence.^ If, in con-
sequence of the servant's wrongful act, the master, being
himself not personally at fault, is obliged to pay damages to
a third person, he may recoup the same from the servant by
way of indemnity.*
2. Liability to fellow-servant.
§ 289. Servant liable to co-servant for misfeasance.
There can be no doubt of one servant's liability to another
for any wilful tort.^
Notwithstanding the authority of some early cases,^ it is
established law that one servant is also liable to a fellow-
servant for negligence in the performance of the duties of the
service.'^ But some courts make a subtle distinction between
misfeasance and non-feasance, and hold the negligent servant
1 Ante, §§ 88-89.
2 Countess of Salop v. Crompton, Cro. Eiiz. 777 ; Lewson v. Kirk,
Cro. Jac. 265; Mobile, &c. R. v. Clanton, 59 Ala. 392; Gilson v. Collins,
66 111. 136.
3 Savage v. Walthew, 11 Mod. 135; Walker v. Guarantee Ass'n, 18
Q. B. 277 ; Rechtscherd v. Accommodation Bank, 47 Mo. 181 ; Page v.
Wells, 37 Mich. 415 ; Johnson v. Martin, 11 La. An. 27.
* Green v. New River Co., 4 T. R. 589 ; Pritchard v. Hitchcock,
6 M. & G. 151; Grand Trunk Ry. v. Latham, 63 Me. 177; Challiss i-.
Wylie, 35 Kans. 506 ; Oceanic, &c. Nav. Co. v. Compania, &c. Espanola,
134 N. Y. 461, 467.
6 Reg. V. Huntley, 3 Car. & K. 142.
6 Southcote V. Stanley, 1 Hurl. & N. 247 (dictum) ; Albro v. Jaquith,
4 Gray (Mass.), 99.
'' Osborne v. Morgan, 130 Mass. 102; Griffiths v. Wolfram, 22 Minn.
185; Greenberg v. Whitcomb Lumber Co., 90 Wis. 225; Lawton v.
Waite, 103 Wis. 244; Daves v. Southern Pac. Co., 98 Cal. 19; Martin v.
Louisville, &c. R., 95 Ky. 612 ; Warax v. Cincinnati, &c. R., 72 Fed.
Rep. 037.
362 LIABILITY OF SERVANT
liable to the injured servant for the former but not for the
latter.^ While the distinction is a valid one between bare
non-feasance (not doing at all) and misfeasance (doing ill
either by commission or omission after performance begun),
the distinction between commission and omission after per-
formance is once begun has led to considerable confusion.
This subject will be discussed in the succeeding sections.
3. Liability to third persons.
§ 290. Liable for misfeasance, but not for non-feasance.
In dealing with the liability of the servant for his torts we
are met at the outset with the distinction between non-
feasance and misfeasance. The statement is that a servant
is liable to third persons (including fellow-servants) for his
misfeasance resulting in injury, but not for his non-feasance;
that as to the first he cannot shield himself behind the plea
that he was acting in behalf of, or under the command of, a
master, since every man is liable for his own positive wrongs,^
but that as to the second, he is liable only to the master,
since no one but the master can complain that a servant has
not done what he undertook to do.^ It becomes necessary,
therefore, to examine these two concepts of the law as bearing
upon the liability of an agent for his torts.
§ 291. Meaning of non-feasance.
" Non-feasance is the omission of an act which a person
ought to do ; misfeasance is the improper doing of an act
which a person might lawfully do; and malfeasance is the
doing of an act which a person ought not to do at all."*
1 Burns v. Pethcal, 75 IIuii (X. Y.),437; Murray v. Usher, 117 N. Y.
542.
2 Perkins v. Smith, 1 Wils. 328; Weber v. Weber, 47 Mich. 569;
Phelps r. Wait, 30 N. Y. 78 ; Johnson v. Barber, 10 111. 425 ; Mitchell v.
Harmony, 13 How. (U. S.) 115 ; Estes v. Worthington, 30 Fed. Rep. 465.
8 Lane v. Cotton, 12 Mod. 472, 488; Whitfield v. Lord Le Despencer,
2 Cowp. 754; Denny v. Manhattan R., 2 Deaio, 115, affirmed 5 Ibid. 639 ;
cases cited in succeeding section.
* Bell V. Josselyu, 3 Gray (Mass.), 311.
FOR TORTS TO THIRD PERSONS. 363
Strictly, as applied to this subject, non-feasance means the
not doing at all by a servant of the thing which by his under-
taking with the master he has agreed to do. Strictly, it does
not extend to a case where a servant has once entered
upon the performance of the contractual obligation and then
neglected to do something which by his contract or promise
he has undertaken to do. This is the view taken of the dis-
tinction between non-feasance and misfeasance in cases of
gratuitous agencies where the question arises between princi-
pal and agent,! and it is the view taken by the best considered
authorities in cases of negligence arising between an agent or
servant and third persons. "It is often said in the books
that an agent is responsible to third persons for misfeasance
only, and not for non-feasance. And it is doubtless true that
if an agent never does anything toward carrrying out his con-
tract with his principal, but wholly omits or neglects to do so,
the principal is the only person who can maintain any action
against him for the non-feasance. But if the agent once
actually undertakes and enters upon the execution of a par-
ticular work, it is his duty to use reasonable care in the manner
of executing it, so as not to cause any injury to third persons
which may be the natural consequence of his acts ; and he
cannot, by abandoning its execution midway and leaving
things in a dangerous condition, exempt himself from liability
to any person who suffers injury by reason of his having so
left them without proper safeguards. This is not non-feasance,
or doing nothing ; but it is misfeasance, doing improperly." ^
Suppose that a representative undertakes the general man-
agement of real estate, agreeing to lease it, collect the rents,
pay the taxes, keep it insured, repair it when necessary and
so on, and that he enters upon the performance of his duties,
all of which he faithfully performs except as to the repairs, and
that, as to those, he allows the premises to be so dangerously
1 Thorne v. Deas, 4 Johns. (N. Y.) 84 ; ante, §§ 97, 286.
2 Osborne v. Morgan, 130 Mass. 102. And see Bell v. Josselyn, 3
Gray (Mass.), 309, where a servant was held liable for negligently failing
to examine the state of water-pipes before letting the water into them,
whereby a lower tenant's rooms were flooded and damaged.
364 LIABILITY OF SERVANT
out of repair that X is injured in consequence of their defec-
tive condition ; can X recover for his injuries against the
representative ? The question has been answered in the nega-
tive on this state of facts by the Federal courts and the courts
of the state of Louisiana,^ and these cases are now regarded
as the leading American authorities.^ Another court has
reached the same conclusion where it was alleged that the
omission uf the representative was malicious and with the
intent to injure the plaintiff.^ Other courts, however, have
taken the opposite view, holding that the representative
is liable for his own negligent omissions in the management
of his principal's premises, where he has once entered upon
the discharge of his duties.*
The latter view seems more consonant with sound princi-
ples, for it distinguishes between negligence and non-feasance.
Had the representative entered upon the repair of the premises
and done his work ill, he would undoubtedly have been liable,"
Why not also when he enters upon the care of the premises
by taking " possession " of them for his employer and doing all
that a possessor should except repair? If non-feasance were
confined to cases where the representative simply fails to enter
upon the performance of his duties at all, much confusion
would be avoided and a fundamental principle of personal
obligation for one's own acts and omissions would be
vindicated.^
Yet under the latter view it must be observed that the
representative cannot be held to a continuing liability for
the negligent condition of premises or for negligent and dan-
gerous structures. He might be liable so long as he remains
* Delaupy v. Rochereau, 34 La. An. 1123; Carey v. Rochereau, 16
Fed. Rep. 87.
* See also Murray v. Usher, 117 N. Y. 542; Van Antwerp v. Linton,
89 Ilun (N. Y.), 417; Dean v. Brock, 11 Ind. App. 507.
* Feltus V. Swan, 62 Miss. 415.
« Baird v. Shipinan, 1-32 111. 10; Campbell r. Portland Sugar Co., 62
Me. 5.52, 566; Mayer r. Hutchinson Building Co., 104 Ala. 611.
^ Harriman v. Stowe, 57 Mo. 93.
« See Kelly v. Metropolitan Ry., 1895, 1 Q. B. 944.
FOR TORTS TO THIRD TERSONS. 365
in control, but not after he has surrendered control to his
employer or departed the service.^
§ 292. Misfeasance.
Differences of opinion exist as to whether particular omis-
sions of duty constitute non-feasance or misfeasance, but
there is general agreement that for all of his acts or omissions
constituting misfeasance the agent or servant is personally
liable.2 For all wilful torts he is clearly liable.^ For all negli-
gent torts amounting to misfeasance he is as clearly liable.*
The obligation imposed by the law upon all persons cannot
be disturbed by the creation of new relations by contract or
other undertaking to which the injured person is not a party.
But it must appear that the servant was in fact negligent ; the
mere fact that some act of his was a remote cause of damage
is not enough.^
Whether the master and servant may be joined in one
action as joint tort-feasors, has already been considered.^
§ 293. Liability for torts of fellow-servants.
A servant is not liable for the torts of his fellow-servants
in wliich he did not participate even though he is their supe-
rior officer." To this there is an exception in the case of a
ship-master who is liable for the negligence of all on ship-
board to the same extent as if he were acting for himself
alone and the employees were his own servants.^ So also the
managing editor of a paper is liable for a libel published in it
1 Baird v. Shipman, supra. Cf. Curtin v. Somerset, UO Pa. St. 70;
Daugherty v. Herzog, 145 Ind. 255.
2 Ante, §§ 211-214.
3 Ihid.
4 Phelps V. Wait, 30 N. Y. 78; Bell v. Josselyn, 3 Gray (Mass.), 309 ;
Mayer v. Hutchinson Building Co., 104 Ala. 611 ; Wright v. Comptou, 53
liid. 337 ; Johnson v. Barber, 10 111. 425; Harriman v. Stowe,57 Mo. 93.
5 Hill V. Caverly. 7 N. H. 215.
6 Anfe, § 214; Warax v. Cincinnati, &c. R., 72 Fed. Rep. 637, and
cases there cited.
' Stone V. Cartwright, 6 T. R. 411 ; Brown v. Lent, 20 Vt. 529.
8 Kennedy v. Ryall, 67 N. Y. 379.
366 LIABILITY OF SERVANT FOR TORTS TO THIRD PERSONS.
to the same extent as if he were the proprietor, and this is so
whether he knows of the publication or not.^
§ 294. Public servants ; acta of state.
The rule of personal liability for torts extends to public as
well as to jn-ivate servants. A public principal is not ordi-
narily liable for the torts of his subordinates,^ but each sub-
ordinate is liable for his own torts, and cannot shield himself
behind the command of his su{)erior."^
To tliis rule there is one exception. A public agent is not
liable to the subject of a foreign state for an act done under
authority of the agent's state or duly ratified by the state,'*
In such cases the relief of the party injured must be sought
through his own state department from the government of
the wrongdoer. This doctrine is applicable only when the
wrongdoer and the injured party are subjects of different
states and only when the wrongdoer's state authorizes or
ratifies his act. The defence of an " Act of State " is not
applicable between subjects or citizens of the same state.^ In
such cases the actor is protected only if his act was in fact
lawful.
1 Smith V. Utley, 92 Wis. 133.
2 Ante, § 260.
8 ]\IitchelI V. Harmony, 13 How. (U. S.) 115; Terrill v. Kankiii, 2
Bush (Ky. ), 453 ; Head v. Porter, 48 Fed. Rep. 481 ; Stanley v. Schwalby,
85 Tex. 348.
4 Buron v. Denman, 2 Ex. 107; Secretary of State for India v.
Karaachee Boye Sahaba, 7 Moo. lad. App. 470, 13 Moo. P. C. 22 ; Dow
V. Johnson, 100 U. S. 158.
« Walker v. Baird, 1892, A. C. 491 ; Head v. Porter, 48 Fed. Rep. 481.
PART V.
LIABILITY OF THIRD PERSON FOR TORTS TO MASTER
OR SERVANT.
§ 295. Introductory.
A third person may render himself liable to the master by
injuring the servant so as to impair the value of his services,
by seducing the servant, or by enticing the servant away from
the service. He may render himself liable to the servant by
procuring his discharge from the service or by inducing a
prospective master not to employ him.
368 LIABILITY OF TllIKD PEltSON
CHAPTER XXVTL
LIABILITY OP THIRD PERSON FOR TORTS.
§ 296. Personal injuries to servant.
A master is entitled to the services of his servant, and one
who injures or restrains the servant so as to render him
unfit to labor is liable to the master for the resulting damages
occasioned by the loss of services whether the injury be wilful
or negligent.^ Thus the third person is liable for an as-
sault,^ false arrest,^ false imprisonment,* negligence,^ or other
tort^ to the servant which deprives the master of the services
to which he is entitled. To this rule there are two qualifica-
tions resting upon authority but of doubtful validity : (1) if
the defendant is under a contract duty toward the servant to
carry him safely and owing to the breach of this duty the ser-
vant is injured, negligently or intentionally, the master can-
not recover;" (2) if the injury to the servant results in
instantaneous death the master cannot recover.^ Both of
these exceptions seem to be without solid foundation and
both have been criticised and condemned.^
1 Gilbert v. Sohwenck, 14 ^I. & W. 488; Hall r. Hollander, 4 B. & C
660; Dixon v. Bell, 5 M. & S. 108; Ames v. Union By. Co., 117 Mass.
541 ; St. Johnsbury, &c. R. v. Hunt, 55 Vt. 570 ; ante, § 176.
2 Gilbert v. Schwenck, supra.
8 St. Johnsbury, &c. R. v. Hunt, supra.
* Woodward ^^^Vashburn, 3 Deuio (X. Y.), 369.
6 Dixon c. Bell, 5 M. & S. 198.
6 Durden i-. Barnett, 7 Ala. 169.
T Alton i;. Midland Ry., 19 C. B. n. s. 213; Fairmount Ry. v. Stutler,
54 Pa. St. 075; Bigelow on Torts (7th ed.), §§ 390, 801-804.
8 Osborn v. Gillett, L. R. 8 Ex. 88; Bigelow on Torts (7th ed.), § 391.
9 Pollock on Torts (5th ed.), pp. 59-61, 512-514. See also Ames v.
Union Ky., supra.
FOR TORTS. 369
A parent recovers under the theory of service for injuries
to a minor child, and may also recover as damages the
necessary expenses incurred for medical attendance and
care.^
§ 297. Seduction of servant.
Akin to the action for injury to a servant is the action for
seduction of a female child or servant to whose services the
parent or master is entitled.^ In such case the parent recovers
ostensibly for loss of service and must show some slight ser-
vice ^ or right to service ^ as the basis of his action.^ It is not
enough to prove the seduction merely ; damages from loss of
services must also be shown. English cases seem to re-
quire proof of pregnancy or other disabling disease,^ but the
American cases are to the effect that where the proximate I'e-
sult of the seduction is a loss of health incapacitating the
daughter for service the damages are sufficiently established.'^
While loss of service or the right to service must be shown
as the basis of the action, the law allows additional substantial
damages to be awarded to the parent for the humiliation and
injury to his feelings resulting from the seduction.^
If after the death of the father the daughter remains with
and serves the mother, the latter may maintain an action for
seduction based upon the loss of service.^ So any person
actually standing in loco parentis may maintain an action, as
1 Hunt V. Wotton, T. Raym. 259; Dennis v. Clark, 2 Cush. (Mass.)
347; Horgan v. Pacific Mills, 158 Mass. 402.
2 Bigelow on Torts (7th ed.), §§ 256-273.
8 Bennett v. Allcott, 2 T. R. 1G6 ; Carr v. Clarke, 2 Chit. Rep. 260.
* Martin v. Payne, 9 Johns. (N. Y.) 387, disapproving Dean v. Peel,
5 East, 45; Mulvehall v. Miliward, 11 N. Y. 343; Furman v. Van Sise,
56 N. Y. 435.
6 Grinnell v. Wells, 7 M. & G. 1033 ; Bartley v. Richtmyer, 4 N. Y. 38.
^ Eager v. Grimwood, 1 Ex. 61.
7 Abrahams v. Kidney, 104 Mass. 222 ; White v. Nellis, 31 N. Y. 405.
8 Phelin v. Kenderdine, 20 Pa. St. 354; Fox v. Stevens, 13 Minn. 272;
Lipe V. Eisenlerd, 32 N. Y. 229 ; Lawyer v. Fritcher, 130 N. Y. 239.
9 Moran v. Dawes, 4 Cow. (N. Y.) 412; Gray i\ Durland, 51 N. Y.
424; Furman v. Van Sise, 56 N. Y. 435; Abrahams v. Kidney, 104 Mass.
222.
24
370 LIABILITY OF THIRD PEKSON
a step-fcitlicr, brother, aunt, or cousin,^ or any person who is
actually a master though not a relative,"'^ though in the latter
case damages would probably be for loss of service only.^
The consent of the daughter cannot bar the parent's action.
The consent of the parent, however, bars his action * or per-
haps such misconduct in the parental relation as contributed
to the injury.^ J3ut if the parent's consent to a marriage be
obtained by the false representation of the defendant that he
is single, the parent may maintain an action for seduction.^
§ 298. Euticing away a servant.
A third person who with notice'^ of the existence of the re-
lation of master and servant entices or procures the servant
to quit the employment,^ or who, with notice of the relation,
harbors and keeps the servant of another as his servant,^ is
liable to the master for all damages resulting therefrom.^^
" A i)crson who with notice interrupts the relation subsisting
between master and servant by procuring the servant to de-
part from the master's service, or by harboring and keeping
him as servant after he has quit it, and during the time stipu-
lated for as the period of service, whereby the master is in-
jured, commits a wrongful act for which he is responsible at
law." li
1 Howard v. Ciowthor, 8 M. & W. GOl ; Davidson v. Goodall, 18 N. II.
423-, Wood on M. & S. §244.
2 Fore.s v. Wilson, Peake, 55.
8 Bigelow on Torts (7th ed.), § 273.
* HollLs V. Wells, 3 Penn. L. J. 169 ; Seagar v. Slingerland, 2 Cai.
(N.Y.)219.
6 Reddie v. Sooolt, Peake, 240; Anthon's N. P. (N. Y.) 2G7.
6 Lawyer r. Fritclier, 130 N. Y. 239.
"> Fores v. Wilson, Peake, 55; Stuart v. Simpson, 1 Wend. (N. Y.)
376; Butterfield v. Ashley, 6 Cush. (Mass.) 249; Clark v. Clark, 63
N. J. L. 1.
8 Hart V. Aldridge, Cowp. 54; Scidmore v. Smith, 13 Johns. (N. Y.)
322; Carew v. Rutherford, 106 Mass. 1; Bixby i'. Dunlap, 56 N. H. 456;
Jones V. Blocker, 43 Ga. 331; Haskins v. Royster, 70 N. C. 601.
9 Blake i\ Lanyon, 6 T. R. 221; Sargent v. Mathewson, 38 X. II. 54;
Caughey v. Smith, 47 N. Y. 244.
10 Ante, § 176.
^1 Crompton, J., in Lumley v. Gye, 2 El. & Bl. 216. In this case an
FOR TORTS. 371
Such relation may arise from contract or from status,
as in the case of an infant ^ or a wife.^ In an action for
enticement it must appear that the servant is actually in
the service ; if he has already abandoned it the defendant
cannot be said to have enticed him away.^ Whether there
must be a binding contract or obligation to serve is not clear.
Where the enticement of one actually rendering service is
for an immoral purpose, and not in the way of competition, it
is held that it is immaterial that there is no binding contract
of service.^ But where the enticement is for a competitive
purpose, that is, whore defendant entices the servant at will
of plaintiff to leave plaintiff's employment and enter defend-
ant's, the decisions are in conflict.^
As to who is a servant within the meaning of this doctrine
there is some conflict. In a leading English case it was held
that enticing away an actress was actionable,^ while in an
American case this was held non-actionable. "^ In most juris-
dictions, however, this narrower question has ceased to be of
importance in view of the broader doctrine concerning the
liability for inducing breach of contract.
The doctrine that it is actionable to induce a servant to com-
mit a breach of a contract of service has been generalized into
the more comprehensive doctrine that it is actionable to induce
actress was induced to quit the employment of a theatre manager. It was
held that defendant was liable to the employer. Coleridge, J., dissented,
maintaining that the sole liability rested upon the Statute of Laborers
(23 Edw. III.), and that the actress was not a servant within the mean-
ing of that statute.
^ Caughey v. Smith, supra ; Lawyer v. Fritcher, 130 N. Y. 239.
2 Winsinore i'. Greenbank, Willes, 577; Hutcheson v. Peck, 5 Johns.
(N. Y.) 196; Hadley v. Heywood, 121 Mass. 236. • The action of a hus-
band is not, however, solely for loss of service, but includes the loss of
consortium as well.
8 Caughey v. Smith, supra.
4 Evans v. Walton, L. R. 2 C. P. 615; Ball v. Bruce, 21 111. 161 ; Noice
r. Brown, 39 N. J. L. 569.
5 Salter v. Howard, 43 Ga. 601 (actionable) ; Campbell v. Cooper, 34
N. H. 49 (non-actionable). See next section.
« Lumley v. Gye, 2 El. & Bl. 216.
' Bourlier Bros. v. Macauley, 91 Ky. 135.
372 LIABILITY OF THIRD PEKSON
any contractor to commit a breach of his contract,^ although
some cases have held that this generalization is unsound. ^
All jurisdictions agree that it is actionable to procure a
breach of contract by the employment of intrinsically un-
lawful means, as force or fraud ; ^ and this is so even if the
contract be an unenforceable one. ^
§ 299. Procuring discharge or non-employment of servant.
It is also actionable to induce or persuade a master to dis-
charge his servant with whom he has a binding contract of
service,^ except in tliose jurisdictions which refuse to recog-
nize the general rule that it is actionable to procure a breach
of contract by more ])ersuasion. *^ Even in those jurisdictions
it is actionable if unlawful means are used as force, intimida-
tion, or fraud. "
Is it actionable to induce or persuade a master to discharge
a servant-at-will, that is a servant who may be discharged
without committing a breach of contract ? It has recently
been held in England, overruling prior cases, that it is not
unless unlawful means are used to produce the discharge. ^
But the general American doctrine seems to be otherwise, and
to ])rocced upon the theory that intentionally causing damage
to the servant by inducing his discharge is actionable unless
it can be justified. ^
^ Lumley v. Gye, siipTn ; Bowen r. Ilall, 6 Q. B. Div. 333; Temperton
V. Russell, isiKB, 1 Q. B. 715; Walker v. Croiiiii, 107 Mass. 555; IMorau
V. Dunphy (Mass.), 59 N. E. 125; Angle v. Chicago, &c. Ry., 151 U. S.
1 ; Jones r. Stanly, 7G N. C. 355.
2 Ashley v. Dixon, 18 N. Y. 430; Chambers v. Baldwin, 91 Ky. 121;
Boyson v. Thorn, 98 Cal. 578; Glencoe Land, &c. Co. v. Commission
Co., 138 Mo. 439.
8 Ibid. ; Aldridge v. Stuyvesant, 1 Hall (X. Y.), 210.
4 Benton v. Pratt, 2 Wend. (N. Y.) 385; Rice v. Manley, 66 N. Y. 82.
6 Chipley v. Atkinson, 23 Fla. 206.
' Note 2, supra.
' Supra. See Shoe Co. v. Saxey, 131 Mo. 212; Wick China Co. v.
Brown, 104 Pa. St. 449.
8 Allen r. Flood, 1898, A. C. 1. See also National Protective Ass'n
t;. Cuinming, 53 N. Y. App. Div. 227.
» Plant V. Woods, 176 Mass. 492: Curran v. Galen, 152 N. Y. 33.
FOR TORTS. 373
" In view of the series of decisions by this court, we can-
not admit a doubt that maliciously and without justifiable
cause to induce a third person to end his employment of the
plaintiff, whether the inducement be false slanders or success-
ful persuasion, is an actionable tort. ... In the case of a
contract of employment, even when the employment is at will,
the fact that the employer is free from liability for discharg-
ing the plaintiff does not carry with it immunity to the de-
fendant who has controlled the employer's action to the plain-
tiff's harm." i
Wliat is here said of inducing an employer to discharge a
servant-at-will is also applicable to cases where an employer
of labor is induced not to engage the services of plaintiff at
all. 2 In neither case is the employer guilty of any breach of
an obligation ; the wrong, if any, is that of the defendant in
interfering with the plaintiff's occupation or means of liveli-
hood.
§ 300. Summary of law as to interference with contractual rela-
tions.
It will be observed that there are two different views enter-
tained as to the basis of liability for interference with contract
relations.
(1) The first is that there is no tort unless either (a) the
act induced is itself unlawful, namely, the breach of a binding
contract, or (^) the means used to induce the act are unlaw-
ful ; 3 And two jurisdictions admit only the second test in
any case (except possibly the enticement of servants from
their masters).* What constitutes unlawful means, and,
particularly, what constitutes intimidation or coercion, cannot
be regarded as settled. ^ (2) The second doctrine is that it is
1 Holmes, C. J., in Moran v. Dunphy (Mass.), 59 N. E. 125.
2 Blumenthal v. Shaw, 77 Fed. Rep. 954.
8 Allen V. Flood, 1898, A. C. 1.
* Chambers v. Baldwin, 91 Ky. 121; Bourlier Brothers i;. Macauley,
91 Ky. 135; Boyson v. Thorn, 98 Cal. 578.
5 Vegelahn v. Guntner, 167 Mass. 92 ; O'Neil v. Behanua, 182 Pa. St.
236; :\Iackall v. Ratchford, 82 Fed. Rep. 41.
374 LIABILITY OF TIIIKD TERSON FOR TORTS.
an actionable tort to inflict intentional damage upon the plain-
tiff by inducing another to break a contract with him, or to
terminate one without breach, or not to enter into one, unless
there be a lawful excuse or justification for so doing. ^ What
constitutes lawful excuse or justification cannot be regarded
as settled.2
1 Walker v. Cronin, 107 Mass. 555; Moran v. Dunphy (Mass.), 59
N. E. 125; Chipley v. Atkinson, 23 Fla. 206; Graham v. St. Charles Ry.,
47 La. An. 214, 1(356.
2 Vegelahu v. Guntner, 167 Mass. 92 ; Hopkins v. Oxley Stave Co., 83
Fed. Rep. 912. See 37 Am. Law Reg. n. s. p. 273.
APPENDIX.
NEW YORK FACTORS ACT, 1830.
L. 1830, c. 179.
An Act for the Amendment of the Laiv Relative to Principals and
Factors or Agents.
§ 1. A person in whose name any merchandise shall be shipped,
shall be deemed the true owner thereof, so far as to entitle the
consignee of such m.erchandise to a lien thereon,
1. For any money advanced, or negotiable security given by
such consignee, to or for the use of the person in whose name
such shipment is made ; and,
2. For any money or negotiable security received by the per-
son in whose name such shipment is made, to or for the use of
such consignee.
§ 2. Such lien does not exist where the consignee has notice by
the bill of lading or otherwise, when or before money is advanced
or security is given by liim, or when or before such money or se-
curity is received by the person in whose name the shipment is
made, that such person is not the actual and bona fide owner
thereof.^
§ 3. Every factor or other agent, intrusted with the possession
of any bill of lading, custom-house permit, or warehouse-keeper's
receipt for the delivery of any such merchandise, and every such
factor or agent not having the documentary evidence of title, who
shall be intrusted with the possession of any merchandise for the
purpose of sale, or as a security for any advances to be made or
obtained thereon, shall be deemed to be the true owner thereof,
so far as to give validity to any contract made by such agent with
1 Sects. 1 and 2 are now cited as § 72 of " The Lien Law " (L. 1897,
c. 418, repealing §§ 1 and 2 of L. 1830, o. 179).
37G APPENDIX.
anj' other person, for the sale or dispositiou of the whole or any
part of such merchandise, for any money advanced, or negotiable
instrument or otlier obligation in writing given by such other
person upon tlie faith thereof.
§ 4. Every person who shall hereafter accept or take any such
merchandise in deposit for any such agent, as a security for any
antecedent debt or demand, shall not acquire thereby, or enforce
any right or interest in or to such merchandise or document,
other than was possessed or might have been enforced by such
agent at the time of such deposit.
§ 5. Nothing contained in the two last preceding sections of
this act, shall be construed to prevent the true owner of any mer-
chandise so deposited, from demanding or receiving the same,
upon repayment of the money advanced, or on restoration of the
security given, on the deposit of such merchandise, and upon sat-
isfying such lien as may exist thereon in favor of the agent who
may have deposited the same; nor from recovering any balance
which may remain in the hands of tlie person with whom such
merchandise shall have been deposited, as the produce of the sale
thereof, after satisfying the amount justly due to such person by
reason of sucli deposit.
§ 6. Nothing contained in this Act shall authorize a common
carrier, warehouse-keeper, or other person to whom merchandise
or other property may be committed for transportation or storage
only, to sell or hypothecate the same.
§ 7. [Repealed by L. 1886, ch. 593.]
§ 8. Nothing contained in the last preceding section, shall be
construed to prevent the Court of Chancery from compelling dis-
covery, or granting relief upon any bill to be filed in that court
by the owner of any merchandise so intrusted or consigned,
against the factor or agent by whom such merchandise shall have
been applied or sold contrary to the provisions of the said section,
or against any person who shall have been knowingly a party to
such fraudulent application or sale thereof ; but no answer to any
such bill shall be read in evidence against the defendant making
the same, on the trial of any indictment for the fraud charged in
the bill.
FACTORS ACTS. 377
ENGLISH FACTORS ACT, 1889.
52 & 53 Vict. c. 45.
An Act to Amend and Consolidate the Factors Acts.
[26th August, 1889.]
Be it enacted by the Queen's most Excellent Majesty, by and with
the advice and consent of the Lords Spiritual and Temporal,
and Commons, in this present Parliament assembled, and by
the authority of the same, as follows : —
Preliminary.
1. For the Purposes of this Act — (1) The expression "mer-
cantile agent" shall mean a mercantile agent having in the cus-
tomary course of his business as such agent authority either to
sell goods, or to consign goods for the purpose of sale, or to buy
goods, or to raise money on the security of goods : (2) A person
shall be deemed to be in possession of goods or of the documents
of title to goods, where the goods or documents are in his actual
custody or are held by any other person subject to his control or
for him or on his behalf: (3) The expression "goods" shall
include wares and merchandise : (4) The expression " document
of title " shall include any bill of lading, dock warrant, warehouse-
keeper's certificate, and warrant or order for the delivery of
goods, and any other document used in the ordinary course of
business as proof of the possession or control of goods, or author-
izing or purporting to authorize, either by endorsement or by
delivery, the possessor of the document to transfer or receive
goods thereby represented : (5) The expression " pledge " shall
include any contract pledging, or giving lien or security on, goods,
whether in consideration of an original advance or of any further
or continuing advance or of any pecuniary liability : (6) The ex-
pression " person " shall include any body of persons corporate or
unincorporate.
Disposition by Mercantile Agents.
2. — (1) "Where a mercantile agent is, with the consent of the
owner, in possession of goods or of the documents of title to
goods, any sale, pledge, or other disposition of the goods, made
378 APPENDIX.
by him when acting in the ordinary course of business of a mer-
cantile agent, shall, subject to the provisions of this Act, be as
valid as if he were expressly authorized by the owner of the
goods to make the same ; provided that the person taking under
the disposition acts in good faith, and has not at the time of the
disposition notice that the person making the disposition has not
the authority to make the same. (2) Where a mercantile agent
has, with the consent of the owner, been in possession of goods
or of the documents of title to goods, any sale, pledge, or other
disposition, which would have been valid if the consent had con-
tinued, shall be valid notwithstanding the determination of the
consent : provided that the person taking under the disposition
has not at the time thereof notice that the consent has been de-
termined. (3) Where a mercantile agent has obtained possession
of any documents of title to goods by reason of his being or hav-
ing been, with the consent of the owner, in possession of the
goods represented thereby, or of any other documents of title to
the goods, his possession of the first-mentioned documents shall,
for the purposes of this Act, be deemed to be the consent of the
owner. (4) Yov the purposes of this Act the consent of the
owner shall be presumed in the absence of evidence to the con-
trary.
3. A pledge of the documents of title to goods shall be deemed
to be a pledge of the goods.
4. AVhere a mercantile agent pledges goods as security for a
debt or liability due from the pledgor to the pledgee before the
time of the ])ledge, the pledgee shall acquire no further right to
the goods than could have been enforced by the pledgor at the
time of the pledge.
5. The consideration necessary for the validity of a sale,
pledge, or other disposition, of goods, in pursuance of this Act,
may be either a payment in cash, or the delivery or transfer of
other goods, or of a document of title to goods, or of a negotiable
security, or any other valuable consideration ; but where goods
are pledged by a mercantile agent in consideration of the delivery
or transfer of other goods, or of a document of title to goods, or
of a negotiable security, the pledgee shall acquire no right or in-
terest in the goods so pledged in excess of the value of the goods,
documents, or security when so delivered or transferred in ex-
change.
6. For the purposes of this Act an agreement made with a
FACTORS ACTS. 379
mercantile agent through a clerk or other person authorized in
the ordinary course of business to make contracts of sale or pledge
on his behalf shall be deemed to be an agreement with the agent.
7. — (1) Where the owner of goods has given possession of the
goods to another person for the purpose of consignment or sale,
or has shipped the goods in the name of another person, and the
consignee of the goods has not had notice that such person is not
the owner of the goods, the consignee shall, in respect of advances
made to or for the use of such person, have the same lien on the
goods as if such person were the owner of the goods, and may
transfer any such lien to another person. (2) Nothing in this
section shall limit or affect the validity of any sale, pledge, or
disposition by a mercantile agent.
Disjiositlons hy Sellers and Buyers of Goods.
8. Where a person, having sold goods, continues, or is, in pos-
session of the goods or of the documents of title to the goods, the
delivery or transfer by that person, or by a mercantile agent act-
ing for him, of the goods or documents of title under any sale,
pledge, or other disposition thereof, or under any agreement for
sale, pledge, or other disposition thereof, to any person receiving
the same in good faith and without notice of the previous sale,
shall have the same effect as if the person making the delivery or
transfer were expressly authorized by the owner of the goods to
make the same.
9. Where a person, having bought or agreed to buy goods,
obtains with the consent of the seller possession of the goods or
the documents of title to the goods, the delivery or transfer, by
that person or by a mercantile agent acting for him, of the goods
or documents of title, under any sale, pledge, or other disposition
thereof, or under any agreement for sale, pledge, or other dispo-
sition thereof, to any person receiving the same in good faith and
without notice of any lien or other right of the original seller in
respect of the goods, shall have the same effect as if the person
making the delivery or transfer were a mercantile agent in pos-
session of the goods or documents of title with the consent of the
owner.
10. Where a document of title to goods has been lawfully
transferred to a person as a buyer or owner of tlie goods, and that
person transfers the document to a person who takes the docu-
380 APPENDIX.
ment in good faith and for valuable consideration, the last-men-
tioned transfer shall have the same effect for defeating any
vendor's lien or right of stoppage in transitu as a transfer of a
bill of lading has for defeating the right of stoppage in transitu.
Supplemental.
11. For the purposes of this Act, the transfer of a document
may be by endorsement, or, where the document is by custom or
by its express terms transferable by delivery, or makes the goods
deliverable to the bearer, then by delivery.
12. — (1) Nothing in this Act shall authorize an agent to ex-
ceed or depart from his authority as between himself and his prin-
cipal, or exempt him from any liability, civil or criminal, for so
doing. (2) Nothing in this Act shall prevent the owner of goods
from recovering the goods from an agent or his trustee in bank-
ruptcy at any time before the sale or pledge thereof, or shall pre-
vent the owner of goods pledged by an agent from having the
right to redeem the goods at any time before the sale thereof, on
satisfying the claim for which the goods were pledged, and pay-
ing to the agent, if by him required, any money in respect of
which the agent would by law be entitled to retain the goods or
the documents of title thereto, or any of them, by way of lien as
against the owner, or from recovering from any person with whom
the goods have been pledged any balance of money remaining in
his hands as the produce of the sale of the goods after deducting
the amount of his lien. (3) Nothing in this Act shall prevent
the owner of goods sold by an agent from recovering from the
buyer the price agreed to be paid for the same, or any part of that
price, subject to any right of set-olf on the part of the buyer
against the agent.
13. The provisions of this Act shall be construed in amplifica-
tion and not in derogation of the powers exercisable by an agent
independently of this Act.
14. The enactments mentioned in the schedule to this Act are
hereby repealed as from the commencement of this Act, but this
repeal shall not affect any right acquired or liability incurred
before the commencement of this Act under any enactment
hereby repealed.^
1 Repeals 4 Geo. IV. c. 83; 6 Geo. IV. c. 94; 5 & 6 Vict. c. 39; 40 &
41 Vict. c. 39.
EMPLOYEKS' LIABILITY ACT. 381
15. This Act shall commence and come into operation on the
first day of January one thousand eight hundred and ninety.
16. This Act shall not extend to Scotland.^
17. This Act may be cited as the Factors Act, 1889.
MASSACHUSETTS EMPLOYERS' LIABILITY ACT
OF 1887, WITH AMENDMENTS TO
JANUARY 1, 1901.
Statute 1887, ch. 270.
An Act to extend and regulate the Uahility of employers to make com-
pensation for personal injuries suffered by employees in their
service.
§ 1. Where, after the passage of this Act, personal injury is
caused to an employee who is himself in the exercise of due care
and diligence at the time, —
(1.) By reason of any defect in the condition of the ways, works,
or machinery connected with or used in the business of the
employer, which arose from or had not been discovered or
remedied owing to, the negligence of the employer, or of
any person in the service of the employer and intrusted by
him with the duty of seeing that the ways, works, or
machinery were in proper condition ; or
(2.) By reason of the negligence of any person in the service of
the employer, intrusted with and exercising superintend-
ence, whose sole or principal duty is that of superintend-
ence, or, in the absence of such superintendent, of any
person acting as superintendent with the authority or con-
sent of such employer ; ^ or
(3.) By reason of the negligence of any person in the service of
the employer who has the charge or control of any signal,
switch, locomotive engine, or train upon a railroad, —
the employee, or, in case the injury results in death, the legal
representatives of such employee, shall have the same right of
compensation and remedies against the employer as if the em-
^ Extended to Scotland, with slight modifications, by 53 & 5i Vict,
c. 40.
* As amended St. 1894, c. 499.
382 APPENDIX.
ployee had not been an employee of nor in the service of the em-
ployer, nor engaged in its work.
And in case such death is not instantaneous, or is preceded by
conscious suffering, said legal representatives may in the action
brought under this section, except as hereinafter provided, also
recover damages for sucli death. The total damages awarded
hereunder, both for said death and said injury, shall not exceed
five thousand dollars, and shall be apportioned by the jury be-
tween the legal representatives and the persons, if any, entitled,
under the succeeding section of this Act, to bring an action for
instantaneous death. If there are no such persons, then no
damages for such death shall be recovered, and the damages, so
far as the same are awarded for said death, shall be assessed with
reference to the degree of culpability of the employer herein, or
the person for whose negligence he is made liable.^
A car in use by or in the possession of a railroad company
shall be considered a part of the ways, or machinery of the com-
pany using or having the same in possession, within the meaning
of this Act, whether such car is owned by it or by some otlier
company or person. ^
One or more cars in motion, whether attached to an engine or
not, shall constitute a train within the meaning of this Act.^
Any person who, as a part of his duty for the time being,
physically controls or directs the movements of a signal, switch
or train shall be deemed to be a person in charge or control of a
signal, switch or train within the meaning of this Act.^
§ 2. Where an employee is instantly killed, or dies without
conscious suffering, as the result of the negligence of an employer,
or of the negligence of any person for whose negligence the em-
ployer is liable under the provisions of this Act, the widow of the
deceased, or, in case there is no widow the next of kin, provided
that such next of kin were at the time of the death of sucli em-
ployee dependent upon the wages of such employee for support,
may maintain an action for damages therefor, and may recover in
the same manner, to the same extent, as if the death of the de-
ceased had not been instantaneous, or as if the deceased had con-
sciously suffered.
1 This paragraph was added by St. 1892, c. 200.
2 This paragraph was added by St. 1893, c. 3.')9.
• This paragraph was added by St. 1897, c. 491.
employers' liability act. 383
§ 3. Except in actions brought by the personal representatives
under section one of this Act to recover damages for both the in-
jury and death of an employee, the amount of compensation re-
ceivable under this Act in cases of personal injury sliall not
exceed the sum of four thousand dollars. In case of death which
follows instantaneously or without conscious suffering, compen-
sation in lieu thereof may be recovered in not less than five hun-
dred and not more than five thousand dollars, to be assessed with
reference to the degree of culpability of the employer herein, or
the person for whose negligence he is made liable ; and no action
for the recovery of compensation for injury or death under this
Act shall be maintained, unless notice of the time, place, and
cause of the injury is given to the employer within sixty days,
and the action is commenced within one year, from the occur-
rence of the accident causing the injury or death. The notice re-
quired by this section shall be in writing, signed by the person
injured or by some one in his behalf; but if from physical or
mental incapacity it is impossible for the person injured to give
the notice within the time provided in said section, he may give
the same within ten days after such incapacity is removed, and
in case of his death without having given the notice and without
having been for ten days at any time after his injury of sufficient
capacity to give the notice, his executor or administrator may
give such notice within sixty days after his appointment. But
no notice given under the provisions of this section shall be
deemed to be invalid or insufficient solely by reason of any inac-
curacy in stating the time, place or cause of the injury : provided,
it is shown that there was no intention to mislead, and that the
party entitled to notice was not in fact misled thereby.^
§ 4. Whenever an employer enters into a contract, either writ-
ten or verbal, with an independent contractor to do part of such
employer's work or whenever such contractor enters into a con-
tract with a sub-contractor to do all or any part of tlie work com-
prised in such contractor's contract with the employer, such
contract or sub-contract shall not bar the liability of the employer
for injuries to the employees of such contractor or sub-contractor,
by reason of any defect in the condition of the ways, works, ma-
chinery, or plant, if they are the property of the employer, or
furnished by him, and if such defect arose, or had not been dis-
"^ As amended and re-enacted by St. 1900, c. 446.
384 APPENDIX.
covered or remedied, through the negligence of the employer, or
of some person intrusted by him with the duty of seeing that
they were in proper condition.
§ 5. An employee or his legal representatives shall not be en-
titled under this Act to any right of compensation or remedy
against his employer in any case where such employee knew of
the defect or negligence wliich caused the injury, and failed
within a reasonable time to give, or cause to be given, informa-
tion thereof to the employer, or to some person superior to him-
self in the service of the employer, who had intrusted to him
some general superintendence.
§ 0, Any employer who shall have contributed to an insurance
fund created and maintained for the mutual purpose of indem-
nifying an employee for personal injuries for which compensa-
tion may be recovered under this Act, or to any relief society
formed under chapter two hundred and forty-four of the Acts of
the year eighteen hundred and eighty-two, as authorized by chap-
ter one hundred and twenty-five of the Acts of the year eighteen
hundred and eighty-six, may prove, in mitigation of the damages
recoverable by an employee under this Act, such proportion of
the pecuniary benefit which has been received by such employee
from any such fund or society, on account of such contribution
of said employer, as the contribution of such employer to such
fund or society bears to the whole contribution thereto.
§ 7. This Act shall not apply to injuries caused to domestic
servants or farm laborers by other fellow-employees, and shall
take effect on the first day of September, eighteen hundred and
eighty-seven.
INDEX.
INDEX.
Abandonment :
Page
of ageucy by agent » 82
See Renunciatiok.
Acceptance of Bill :
liability of agent » 246
Accounting :
as duty of agent 112-115
keeping accounts . 113
rendering accounts 113
set-ofE 114
delivery of funds 114
agent not to deny principal's title 112
Acquiescence :
ratification by 48-50
Action :
as evidence of ratification 48
auctioneer may bring, when 153, 262
by and against undisclosed principal 158-177
to recover money paid by mistake or fraud 214-215
in equity 225
against agent 230-249, 255-257
against agent or principal 249-253
against third person by agent 257-262
Admissions of Agent :
cannot prove agency 178
when admissible against principal 180-184
when inadmissible 178, 185
Adverse Interest:
agent not to assume 34,110-112
renders admissions incompetent 185
Agency :
general signification 5-6, 10 n, 14
distinguished from other relations 6-10, 120-121
division of subject 10, 21-22
formation of 23-76
by agreement 24-41
383 INDEX.
Agency — continued. Page
by contract 24-39
by gratuitous assent 40-41
by ratiticatioii 42-61
by estoppel 62-71
by necessity 72-76
termination of 77-90
by agreement 77-78
by revocation 78-82, 96-99
by renunciation 82, 100
by operation of law 82-87
by change of law 83
by change in subject-matter 83
by death 84
by insanity 84
by illness 85
by marriage 85
by constraint of law 85
by bankruptcy 86
by war 86
irrevocable agencies 87-90
unlawful interference with 224, 267
Agent :
definition 17, 18
distinguished from servant 10-17
classification 19-21
general and special agents 19-21, 132-134
competency of 34
joint-agents 35
sub-agents 36, 115-120
gratuitous agents 40, 122-125
renunciation of agency 82, 100
death of, insanity, illness, etc 84-86
irrevocable interest in agency 87-90
compensation of 9--103
reimbursement of 103
indemnity to 104
obligations to principal 106-125
rights against principal 92-105
public agent 1'^*) -^^
obligations to third parties 229-253, 263-267
rights against third parties 257-262, 267
really the principal 259
Agreement :
formation of agency by 24-41
termination of agency by 77-78
INDEX. 389
Alien : Page
as principal 33, 86
Apparent Authority :
doctrine of 15,17,65-68,128-132
of general and special agents 132-134
of public agents 134
elements of 135-140
illustrations of 140-147
of servant 301
Apparent Ownership. See Indicia of Ownership.
Assault :
liability of master for servant's 307
Assignment :
of contract of service 10
of rights and obligations of principal 105
of obligations of agent 115-120
of obligations generally 158
Association. See Voluntary Societies.
Assumption of Risk :
by servant 352
Attorneys at Law :
powers and duties as agents 154
Auctioneers :
powers and duties as agents 153
Authority of Agent :
how conferred 5, 23, 26
how terminated 77
apparent authority 128-132
general and special agents 132-134
public agents • . . . 134
elements of 135-140
illustrations 140-147
in particular agencies 148-157
Bailment :
distinguished from agency 8
Bank:
liability for collection of paper 119
gratuitous directors 124
rights and liabilities on paper signed by cashier 242, 243, 245, 248
See Cashier.
Bankruptcy :
effect on agency 86
390 INDEX.
Bill of Lading : Page
issue of fictitious -U6
Brokers :
powers and duties as agent 151
Carrier :
liability to passenger for servant's wilful torts 310
Cashier of Bank :
powers and duties as agent 155
signing negotiable instruments 242,243,245,248
Charities :
liability for torts of agents and servants 318
Clubs. See Voluntary Societies.
Collection Agent :
powers of 144
Compensation of Agent or Servant :
how fixed 92-94
how secured 94-95
for unauthorized act 95
conditional 95-96
upon revocation of agency 96-99
upon renunciation of agency 100
■when acting for both parties 101
for illegal services 102
Compulsory Employment or Service:
meaning 286
liability of master for servant compulsorily employed .... 286
status of one compelled to serve 288
parent and child 289
husband and wife 289
Conductor :
agent or servant 18
agent by necessity 75
Consideration :
in contract of agency 26
Constituent :
generic term 5
* includes principal and master 5-6
Contract :
object of agency to create 12
agency by 24-39
liy agent for disclosed principal 127-1')7
by agent for undisclosed principal ir)8-177
privitv of 158-1(35
inducing breach of 209, 224, 207, 370
INDEX. 391
Contract — continued. Pagfe
inducing termination, -without breach 209, 224
interference with, generally 372-373
liability of agent on 250
Contractor, Independent :
distinguished from agent 9
Contributory Negligence :
of servant 356
Conversion :
liability of third person to principal for 216
liability of agent to third person for 264-266
Convict :
whether a fellow-servant 288
Corporations :
as principals 31
executing specialty 38
ratification by 44,234
notice to agent of 190
municipal, liability for act of agent 316
County :
liability for torts of oflBcers 315
Course of the Employment :
distinguished from scope of the authority 195
basis of master's liability 298
in case of wilful torts 305
Crimes of Servants :
liability of master for 323
absolute liability 324
authority to commit 327
negligent failure to control 328
Custom :
authority implied from 138-140
effect on liability of agent 252
Damages :
for revocation of agency 96-98
for remuneration of agency 100-101
for disobedience or negligence of agent 106-109, 117
for breach of warranty of authority 232
exemplary, liability of master for 313
See Liability; Obligation.
Death :
terminates agency 84
effect on contracts 253
392 INDEX.
Deceit : Pa^
an anomalous tort 4 n, 12, 13
liability of principal for agent's 68, 197-200
liability of third person 223, 207
liability of agent 232, 204
See Fraud.
Declarations of Agent :
whether admissible against principal 178-185
Deed. See Skalp;d Instruments.
Defamation :
liability of principal for agent's 209, 309
liability of master to servant for 357
Del credere Agency :
definition 21
distinguished from sale 7
nature of liability 120-122
Delegation of Duties by Agent :
sub-agents 36
no assignment of obligations 115-120
delegation of duties 116-117
authorized appointment of sub-agents 118-120
See Sub-Servants.
Dissolution of Agency :
forms of 77-90
Divisible Contract:
\vhether contract of service is 100
Documents of Title. See Indicia of Ownership.
Duties. See Liabilities ; Obligation.
Election :
to ratify or disaffirm 59
to hold agent or principal 109
Employers' Liability Acts :
provisions of 345, 381-384
Enticing away Servant :
liability for 370
Estoppel :
basis of principal's liability 13-15, 17
agency by 62-71
meaning of 62-64
relied upon to establish agency 65
relied upon to establish extent of agency 66, 128-135
application to torts . 68, 195, 197-211, 296
INDEX. 393
Estoppel — continued. Page
to deny ownership 217-222
to deny that agent is principal 174
limits of doctrine 70-71
Evidence :
to show that agent is acting for undisclosed principal . . . 164
to vary written instrument 170, 250-252
of agent to establish agency 179
admissions of agent as 178-185
Execution of Instruments :
sealed instruments 37, 170, 237
negotiable instruments 238-249
under statute of frauds 37
simple contracts 250, 254
Factors :
powers and liabilities of 149
Factors Acts :
provisions and effect of 147, 219-222, 375-381
False Arrest:
by agent, liability of principal 210
by servant, liability of master 308
False Representations:
by agent as to authority 230-233
by agent for principal 197-208
Fello-w-Servants :
the fellow-servant rule 331
evolution of the rule 332
who are 335
vice-principal 338
superior-officer test 339
non -assignable duty test 340
summary 344
incompetent 344
liability of one, to another 361
liability of one, for another's torts 365
Fictitious Principals :
no ratification 44
liability of agent 233
Foreign Principal :
liability of 170, 213
liability of agent of 236
Forgery :
ratification of 58
394 INDEX.
Form : Page
of appointment of agent 36
of ratification of contract 55
See Seal; Statute of Frauds; Execution of Instruments.
Fraud :
of agent on principal 110, 148
of agent on third person 197-208,232,2(34
for benefit of principal 200
for benefit of agent 202
of third person on principal 215, 223
Frauds, Statute of. See Statute of Frauds.
Gambling Contracts :
employment to make illegal 39, 102
General Agent:
distinguished from special agent 19-21, 132-134
whether distinction of any value 20
authority of 132-134
Good Faith :
as duty of agent 110-112
Gratuitous Agents:
liability of principal 40
liability of agent to principal 40, 122-125, 360
Holding out:
works an estoppel against principal 15, 64, 130, 195
See Estoppel.
Husband and "Wife :
liability of husband for necessaries furnished wife 72
liability for torts of wife 289
Identity:
fiction of ^' ^*
as applicable to notice 186-19-
as applicable to undisclosed principals 161
Illegality. See Legality of Contract.
Illness or Incapacity :
terminates agency
Impossibility :
discharge of agency by 8--o7
change in law
change in subject-matter °^
dcatli, insanity, war, etc 84-87
Incompetency. See Parties,
INDEX. 395
Indemnity : Page
to agent by prin3ipal 104
Independent Contractor :
distinguished from servant 9, 274
employer not liable for torts of 274
exceptions to rule :
selecting competent contractor 275
contracting for nuisance 275
contracting for unsafe result 276
statutory requirements 276
contract liability to do work safely 277
extra-hazardous work 277
safety of premises 278
interference by employer 278
resumption of control by employer 279
Indicia of O'wnership :
principal conferring on agent 8,174,217
Infants :
as principals 27
as agents 34, 74
ratification by 53-55
Insanity. See Lunatics.
Insurance Agent :
general powers of 143
Irrevocable Agencies :
power coupled with an interest 88
power coupled with an obligation 89
Joint Parties:
as principals 33
as agents 35
Joint Tort-feasors:
principal and agent as 266
Judgment :
as evidence of an election 169
Knowledge :
of agent as notice to principal 186
Lease:
distinguished from agency 8
Legality of Contract:
agency for illegal objects 39
ratification of illegal act 56-59
396 INDEX.
Legality of Contract — continued. Page
.subsequent illegality (53
coiiipeusatiou 102, 104
Liability :
basis of principal's or master's 13-17
of principal to agent 92-105
of agent to principal 100-125
of principal to third party 127-211
of third party to principal 212-227
of agent to third party 229-257, 2f;:}-267
of third party to agent 257-202, 2G7
of master for torts of servants 295-321
of master to servant 330 et seq.
Libel :
by agent or servant 209, 309, 328
Lien :
tif agent for compensation 94
Lunatics :
as principals 28-30
as agents 34
insanity terminates agency 84
Manager of business :
powers of 142
Marriage :
effect on agency 85
Married Women :
as principals 30, 38, 85
as agents 34
See HusBAXD and Wife.
Master :
distinguished from principal 10-17
basis of liability for tort of servant 13-17,194
conditions of liability for torts of servant 295
wrongdoer must be defendant's servant 295
serA-ant must be about master's business 297
servant must be acting within course of the employment . 298
acts commanded 299
acts ratified 300
acts master leads servant reasonably to believe author-
ized 301
acts impliedly authorized 302
acts for master's benefit 804
acts for servant's benefit 305
■wilful or malicious torts 305
INDEX. 397
Master — continued, Page
iu furtherance of employment 305
wilful injuries to passengers 310
misuse of dangerous instrumentalities 311
liability for exemplary damages 313
imputed notice to 314
liability for penalties 322
liability for crimes of servant 323
absolute liability 324
authorized acts 327
negligent failure to control 328
liability for injuries to one servant by another 330
classification of servants 330
fellow-servant rule 331
statement of 331
evolution of ^32
common service 335
vice-principal doctrine 338
superior officer test 339
non-assignable duty test 340
summary 344
incompetent fellow-servants 344
employers' liability acts 345
liability to servant for his own torts 350
negligent operative act 350
negligent performance of non-assignable duties .... 351
assumption of risk by servant 352
contributory negligence of servant 356
wilful torts to servants 357
action against third person 368
for personal injury to servant 368
for seduction of servant 369
for enticing away servant 370
Master and Servant :
law of, distinguished from law of principal and agent . . . 10-17
See Master; Servant.
Misrepresentation :
liability of principal for agent's 62-71, 197-211
liability of agent for, as to authority 230-233
See Estoppel.
Mistake :
effect of, on ratification ^1
money paid under '^'^^
Municipal Corporations :
liability for torts of officers 316
398 INDEX.
Necessity : Page
agency by 72-76
agency of wife 72-74
agency of infant child 74
agency of sliipraaster 74
agency of nnpaid vendor '5
agency of conductors, drivers, etc 75-7G
Negligence :
of agent generally 108, 3G0
of gratuitous agent 122-125,360
of agent toward third parties 263
See Torts.
Negotiable Instruments :
agent authorized to execute 146
parties cannot be introduced into by parol .... 165,171,176
title to, when diverted by agent 147, 216
liability of agent who signs 238-249
signature to, construction 241-247
indorsement of 247
Non-assignable Duties:
doctrine of master's 340, 351
Non-feasance :
liability of agent for 263, 362
Notice :
ratification of unauthorized 57
of termination of agency 58, 60, 62, 80, 81
to agent, when binding on principal 186-192
imputed to master 314
Nuisance :
contracting for 275
criminal liability of master 328
Obedience:
as duty of agent 106-108
Obligation :
incurred by representation 4
primary antecedent 3, 10, 11, 15, 193
secondary substituted 3, 11, 16, 193
resting on assent 24-61
created by estoppel 62-71
created by necessity 72-76
of principal to agent 92-105
non-assignability 105, 115-120, 158
of agent to principal 106-125
of principal to third party 127-211
of third party to principal 212-227
INDEX. 399
Obligation — continued. Page
of agent to third party 229-257, 263-207
of third party to agent 257-262, 267
See Liability.
OflScers. See Public Agknts ; Supkrior Officers.
Ostensible Authority :
test of principal's liability 15, 17, 65-68, 128-147, 218
meaning 129
See Apparent Authority.
Ostensible Ownership :
conferred on agent works estoppel 8, 217-222
Ownership. See Indicia of Ownership.
Parent and Child :
liability of parent for necessaries furnished child 74
liability of parent for torts of child 289
Parol Evidence :
to introduce undisclosed principal into a contract . . 164, 176, 250
to explain ambiguity 239
Parties to Contract of Agency :
competency of 27-36
infants 27, 34
insane 28
married women 30
corporations 31
partnerships 32
clubs, etc 32
aliens • 33
joint parties 33, 35
Partnership :
distinguished from agency 7
as principal 32
as agent 35
executing specialty 38
Passengers :
liability of carrier for wilful injuries to 310
Payment:
authority of agent to receive 138, 140, 144, 150, 153
Penalties :
liability of master to, for acts of servant 322
Physician :
engaged by servant 75
whether a servant 284
Pilot :
whether a servant 286
400 INDEX.
Pledge : P^
of i>rincipal's goods by agent .... 141, 150-151, 152, 219-222
Po'wer coupled ■with an Interest :
iiieaiiiiig of phrase 88
Power coupled with an Obligation :
iiuauiiig of phrase 89
Power of Attorney :
how coustrued 135
Powers of Agent. See Autiiouiit of Agent.
Principal :
distinguished from master 10-17
basis of liability 13-17
competency of 27-33, 53
joint-principals • 33
gratuitous 40
ratification by 42-61
estoppel of 02-71
by necessity 72-76
renunciation by 78-81
dcatli, insanity, etc. of 81-87
obligations to agents 02-105
cannot assign rights or obligations 105
rights against agent 106-125
liabilities to third persons 127-211
bound by admissions of agent 178-185
bound by notice to agent 186-192
rights against third parties 212-227
Privity of Contract :
between sub-agent and principal 115-120
between third party and undisclosed principal 158-165
Promoters :
ratification of contracts of 44, 233-234
Prudence :
as duty of agent 108
Public Agents :
several or joint 36
authority of 134
liability of 254, 366
Public Principal:
liability on agent's contracts 134
liability for servant's torts 315
liability of state and its agencies 315
liability of municipal corporations 316
liability of public officers 317
INDEX. 401
Public Principal — continued. Page
liability of public charities • . . . . 318
liability of private person served by public officer 321
Purchase :
agent authorized to 141
Quasi contract :
in recovering for necessaries 73
liability of third person in 214-216, 202
liability of agent in 255-257
Ratification :
meaning 42
elements of 43-59
existing principal necessary 44
act done professedly for principal 44-45
assent of principal 46
by conduct 48
by silence 49
must be in toto 50
must be free from mistake or fraud 50
has third party right to recede ? 52
competency of principal 53
form of ratification 55
legality of act ratified 56
of forgery 58
of notice of intent 57
of void act 58
of torts 300
legal effects of 59-61
is irrevocable 59
as between pi'incipal and third party 59
as between principal and strangers 60
as between principal and agent 60, 95
as between agent and third party 61
Reimbursement of Agent:
liability of principal 103
Remedies :
of agent against principal 94, 96
of principal against agent 112-115
of principal against third party 222, 225
of third party against agent 229 et ser/.
of agent against third party 258-262
of third parties against principal for agent's misrepresentations 196
Renunciation of Agency:
when possible 82
26
402 INDEX.
Renunciation of Agency — continued. Page
notice of ^~
effect of 82, lUO
Representation (Agency) :
moaning of 3-5, 10 n.
basis of doctrines of 11
kinds of 5
principal and agent 17
master and servant 17
distinction between 10-13
Representative :
generic term 5
includes agent and servant 5
Res gestae:
meaning and application 180
Revocation of Agency:
wlien possible . 78
what amounts to 79
notice of 80
effect of 81,96
when impossible 87-90
See Terminatio'n of Agency.
Sale:
distinguished from agency 7
authority of agent to make 140
by factors 149, 219
by brokers 151
by auctioneer 153
by shipmaster 150
recovery of property sold without authority 216-222
Scope of Authority: See Authokity ; Apparent Authority.
Seal:
when necessary 37, 55
Sealed Instruments :
authority to execute 37, 55
authority to fill blanks in 38
parties cannot be introduced into by parol .... 170, 176, 258
liability of agent who signs 237
construction of signatures 170, 237
Seduction:
of servant 3G9
Servant:
definition 17, 18, 271
distinguished from agent 10-17
INDEX. 403
Servant — cnniinued. Page
may be also agent 18
classification 21 330
who is and who is not a 273 295
independent contractor 274
transfer of service . 280
compulsory employment 286
sub-servauts 291
volunteers 292
liability of master for torts of 295
liability of public master for torts of 315
liability of public charity for torts of 318
liability of private person served by public officer 321
liability of master for crimes of ;322
liability of master to one servant for torts of a fellow-servant . 330
fellow-servants 331
vice-principals 338
superior officers 339
master's non-assignable duties to 341
incompetent, master's liability for 344
rights under employers' liability acts 345
master's liability to, for his own torts 350, 357
assumption of risk by 352
contributory negligence of 356
liability of servant for his torts 359
liability to master 360
liability to fellow-servant 361
liability to third persons 362
non-feasance 362
misfeasance 365
liability for torts of fellow-servants 365
liability of third person for torts to 367
personal injuries to 368
seduction of 369
enticing away 370
procuring discharge of 372
Set-off:
by agent 114
to agent 174
Shipmaster:
agency of 74
powers 156
Silence:
whether a form of ratification 49
Special Agent :
definition 19
404 INDEX.
Special Agents — continued. Page
distint,niislRMl from general agent 19-21, 1:52
wlielliLT distinction of any value 19-20
autiioiity of 132-134
State:
liability for torts of officers 315
acts of, as a defence 3G6
Statute of Frauds:
agency for more tlian a year 36
agent authorized in writing 37
ratification 5fj
parol evidence rule 105
Sub-agent:
how appointed 36
power of agent to appoint 115-120
notice to 191
torts of 291
Sub-servants:
whether master liable for acts of 291
See Sub-Agent.
Superior OfiBcer:
whether a vice-principal 339
Termination of Agency :
forms of 77-90
See Agency.
Title to Property :
agent not to deny principal's 112
when sold without authority 216-222
Torts :
of agent, liability of principal for 16-17, 193-211
ratification of . " 50-59, 194
liability of third person to principal for 216-222
liability of agent to third person for 203-267
joint liability of agent and principal 206
liability of third person to agent for 207
chief subject-matter of law of master and servant .... 12, 271
liability of master for servant's 10-17, 194, 295
liability of public agencies for servant's 315
liability of master to one servant for another servant's . . . 330
liability of master to servant for his own 350
liability of servant for his own 3.59
liability of third person for 367
See Master; Servant.
INDEX. 405
Transfer of Service : Page
general rule 10, 280
hiring horses and driver 280
hiring machine and operator 283
servant sent to work on another's premises 284
physicians employed to treat servants or passengers .... 284
sleeping car porters 285
Trust Funds:
following trust funds 225
Trusts:
distinguished from agency 7
constructive 225
following trust funds 225
Unauthorized Acts :
basis of principal's liability for U-17, 60, 128-132
rjitification of 42-Gl
compensation for 95
liability of agent to third party 230-233
Undisclosed Principal :
general doctrines 158-165
liability of 162, 166-172
rights of 164, 172-177
liability of agent of 249
Usage. See Custom.
Vendor :
agency of unpaid 75
Vice-Principal :
doctrine of 338
test as to who is 338
superior officer test 339
non-assignable duty test 340
summary 314
Voluntary Societies :
as principals 32, 234
liability of agent of 234
Volunteer:
whether his acts render involuntary master liable . - . . . . 292
whether he may recover for injury occasioned by a servant . . 292
"War:
effect on agency 33, 86
"Warranty :
authority of agent to give 141
authority of factor to give 150
406 INDEX.
Warranty — continued. Page
authority of broker to give loi
autliority of auotioiioer to give 153
"Warranty of Authority :
liability of agent on 231, 254
"Wife :
agency of 5, 72-7 1
as principal . . '. 30
* See Married Women.
Wilful Torts:
liability of master for servant's 305,310,311
liability of master to servant for 357
to servant 368
UNIVERSITY OF CAUFORNIA LIBRARY
Los Angdes
This book is DUE on the last date stamped below.
OCT i ^ 1978
C«r library l^»c*d
OCT 2 5 1978
PSD 1916 8/77
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f^iU-. r\ fiJitlf^
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LAW LTBUARY
UNIVERSITY OF CALIFORNIA
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