is employed to deal or make a contract there has an implied authority to act in the usual way. [386] But the principal will not be bound by any rule or custom of trade made after the transaction was completed, however it might bind the agent; and if he deviates from the course usual in the line of business in which he is employed, he not only has no authority, in fact, but does not seem to have any, and, consequently, cannot bind his principal thereby. [388] Wherever acts are done inconsistently with express directions or with the customary transactions from which agency may be implied, there is an excess of authority, and the principal is not bound. [390] A subsequent ratification is equivalent to a prior command, and the great maxim of agency, "Qui facit per alium facit per se," has a retrospective effect. [391] Such ratification may be inferred from the conduct of the principal, as well as expressed by him in words." The principal cannot ratify a part of the transaction and repudiate the rest, but must adopt the whole or none.1 But where a person at the time of doing an act does not profess to be therein acting as an agent, there is nothing, strictly speaking, to ratify; and another person, however interested, cannot afterwards, by adopting the act, make the former his agent, and thereby incur any liability or take any benefit under the authorized act.2 [392] Wherever the person who contracts with an agent knows that that agent's authority is limited, and nevertheless contracts with him beyond those limits, he does so at his peril, for the principal is not bound.3 7. See Tiffany on Agency, 174. 8. See preceding note. 9. As to what acts may be ratified, see Tiffany on Agency, 48. 5 1. Brewer v. Sparrow, 7 B. & C. 310. 2. See Tiffany on Agency, 70. 3. Tiffany on Agency, 180. LECTURE X. [394] PRINCIPAL AND AGENT. THEIR RESPECTIVE LIABILITIES.-AGENCY OF BROKERS, FACTORS, PARTNERS, WIVES.-RECAPITULATION. REMEDIES BY ACTION.-STATUTES OF LIMITATION. As regards the power of the principal to take advantage of his agent's contracts, where the agent, when he makes the contract, states who his principal is, and states that he is contracting on the behalf of that principal, or where (though there may be no express statement to that effect) the circumstances of the transaction can be shown to have been so completely within the knowledge of the parties to it that there can be no doubt that it was understood at the time that the person who actually made the contract made it as an agent, and intended to make it on behalf of his principal; in such cases the principal has a right to take advantage of it, and enforce it to the fullest extent. Where a contract not under seal is made by an agent in his own name for an undisclosed principal, either the agent or the principal may sue upon it; the defendant, in the latter case, being entitled to be placed in the same situation at the time of the disclosure as if the agent had been the contracting party.* [396] But if the purchaser knew all along that he was dealing with an agent, he cannot set off, in an action by the principal for the price of goods bought by him of the agent, a debt due from the agent to himself." [398] Where the principal does not intervene, but allows the agent to sue in his own name, two consequences follow: first, the defendant may avail himself of all defences which would be good against the agent, who is by the supposition the plaintiff on the record; secondly, he may avail himself of those which would be good against the principal for whose sole use the action has been brought. [400] An unknown principal, when discovered, is liable on the 4. Sims v. Bond, 5 B. & Ad. 393. 5. Baring v. Anie, 2 B. & Ad. 137; Parker v. Donaldson, 2 W. & S. 9. contracts which his agent makes for him. [401] On the other hand, if the agent contract without naming any principal, he is himself the person prima facie responsible; and though the other party may, in most cases, elect to charge the employer on discovering him, yet he need not do so, but may, if he please, continue to look to the agent. He may also elect to charge either the agent or his principal, where the agent, at the time of making the contract, says that he has a principal, but declines to say who that principal is. [402] This election when once made, is binding. The rule upon this subject is thus laid down by Lord Tenterdem: "If a person sells goods, supposing at the time of the contract that he is dealing with the 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 afterwards 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. [403] On the other hand, if, at the time of the sale, the seller knows, not only that the person who is nominally dealing with him is not principal but agent, and also knows who the principal really is, and notwithstanding all that knowledge, deals with him, and him alone, then the seller cannot afterwards, on the failure of the agent, turn round and charge the principal, having once made his election at the time when he had the power of choosing between the one and the other." [404] Where a British merchant is buying for a foreigner, according to the universal understanding of merchants and of all persons in trade, the credit is then considered to be given to the British buyer, and not to the foreigner, although, of course, a contract may be made by the agent so as to charge the foreigner and not himself. [405] The 6. See, generally, the leading cases, Paterson v. Gandasequi, 15 East, 62; 2 Smith's L. C. (7th Am. Ed.) *348; Addison v. Gandasequi, 4 Taunt. 573; 2 Smith's L. C. *353; Thompson v. Davenport, 9 B. & C. 78; 2 Smith's L. C. *358 and notes; Tiffany on Agency, 364, 365. question, which is liable- the foreign principal, or the English agent is one of intention, in which the fact that the principal debtor is a foreigner residing abroad, renders it highly improbable that the credit should have been given to him. But there is this qualification to the right of election, namely, that if the state of accounts between the agent and principal have been altered, so that the principal would be [unjustly] subjected to a loss by the other contracting party's election, the right of election is in such case lost. Still, this qualification is itself subject to a minor one, namely, that the principal cannot, by prematurely and improperly settling with his agent, deprive the other contracting party of his right of election." [406] An agent making and signing a contract as such would in general, in the absence of a custom to the contrary, not be liable or entitled to sue upon it.8 [411] Yet, in "every contract, if the agent chooses to make himself a contracting party, the other contracting party may either sue the agent who has himself contracted, though on behalf of another, or he may sue the principal who has contracted through his agent; and this, whether the principal was known at the time or not, or whether it was or was not known that he was a principal." [412] And as in such a case the agent is liable, so also he has a right to sue. Partnership is the result of a contract whereby two or more persons agree to combine property or labor for the purpose of a common undertaking, and the acquisition of a common profit.' [413] One party may contribute all the money, or all the stock, or all the labor necessary for the purposes of the firm. But in order to make people liable as partners to each other, it is necessary that there should be a community of profits, although one of them 7. See next note, supra. 8. Fleet v. Murton, L. R. 7 Q. B. 129. 9. Christofferson v. Hansen, L. R. 7 Q. B. 513, per Blackburn, J. 1. See post, where the subject of partnership receives special treat ment. See, generally, as to what constitutes a partnership, Gilmore on Partnership (1911), ch. 1. may stipulate to be indemnified against loss. This, however, respects their mutual claims, for, however they may stipulate with each other, all who take a share in the profits, and all who allow themselves to be described and held out as partners, are liable as such to those to whom they have. so held themselves out. Supposing the parties to have become partners, the result is that each individual partner constitutes the others his agents for the purposes of entering into all contracts for him within the scope of the partnership concern, and consequently that he is liable to the performance of all such contracts in the same manner as if entered into personally by himself.2 In general no new member can be introduced into the partnership without the consent of all the partners. Where there is no specific authority, the individual members will be liable upon the partnership contracts, or not, according as the contract is in the ordinary course of the partnership business or not. [414] 3 There is nothing, however, to prevent the parties from confining the credit to an individual partner; and it is a question for the jury whether this has or has not been done. [415] If a person contract with another person, knowing him alone in the transaction, he may sue him only. If, after the contract be made, he discover that he had a secret partner who had an interest in the contract, he is at liberty to sue that secret partner jointly with him, but he is not bound so to do. [416] If a person, contracting with another for goods, delivers an invoice made out to a firm, and nothing is said as to the persons composing it, he takes his chance who are the partners in that firm. [417] If, indeed, the party represents himself as the only person composing the firm, an action may be brought against him alone; or if, on being asked who his partners are, he refused to give 2. The powers of partners among themselves are governed by the partnership agreement. Gilmore on Partship, 275. As to third parties the rule is well stated in the text, supra. |