Contracts with Agents. in such a case, the usual course of business is for the person who CH. IX. s. 1. is in possession of the horse to have all the powers of an owner in respect of the sale (n). But, except in such a case, the servant of a private owner, entrusted to sell and deliver a horse on one particular occasion, is not by law authorised to bind his master by a warranty; and the buyer who takes a warranty from such an agent, takes it at the risk of being able to prove that he had the principal's authority (0). credit. So, if a servant has been allowed by his master to purchase Purchase of goods upon credit, the latter is answerable for goods bought on goods on credit by that servant, although without his master's authority. "If a man send his servant with ready money to buy goods, and the servant buy upon credit, the master is not chargeable. But if the servant usually buy for the master upon tick, and the servant buy some things without the master's order, yet if the master were trusted by the trader, he is liable" (p). Thus, where the defendant, who was a dealer in iron, and known by the plaintiff to be so, though they had never before had dealings together, sent a waterman to the plaintiff for iron on trust, and paid for it afterwards; and he then sent the man with ready money, but upon this occasion the man received the goods without paying for them; it was ruled, that the sending the man upon trust the first time, amounted to giving him credit, so as to charge the defendant upon a second contract (q). And so, where a tradesman in the country had many times employed A. B. as his agent, to purchase goods from the plaintiff, a London dealer, on credit: it was held that A. B. was thereby constituted the general agent of the country tradesman; and that the latter was liable for goods which A. B. had subsequently bought as from the defendant, but without orders, and had appropriated to his, the agent's, own use ('). But where a servant is supplied by his master with money to pay over to a tradesman, with whom the dealings have always been for ready money, the master is not liable if the servant do not pay the tradesman; because the servant was never authorised to pledge his master's credit (s). So, where the servant has invariably paid the account whenever it amounted to a certain sum, the master is not liable, if the tradesman allow the account to remain undischarged until it amount to a larger sum; for, by (n) See per Cur., Brady v. Todd (1861), 9 C. B., N. S. 592; Alexander v. Gibson (1811), 2 Camp. 555; 11 R. R. 795; Brooks v. Hassall (1883), 49 L. T. 569. (0) Per Cur., Brady v. Todd (1861), 9 C. B., N. S. 592, 605. (p) Per Holt, C.J., Anon. (1691), 1 Show. 95; and see Nickson v. Brohan CH. IX. s. 1. with Agents. so doing, he is presumed to give credit to the servant (t). And where the master is in the habit of paying ready money for articles furnished in certain quantities to his family; if the tradesPurchase on credit-contd. man suffer additional articles of the same sort to be delivered at the master's house without informing the master, or satisfying himself that they were for his use, when in fact they were not, the master is not responsible (u). Liability of Hambro v. Factors and brokers are general agents. Where, however, the servant is once authorised to pledge his master's credit, the latter is liable, though he subsequently furnish the servant with money to settle the demand, which he omits to do (x); and the same rules are equally applicable to other cases. Thus, where A. owned a sawmill, and B., his foreman, contracted as his agent, but without any express authority, to supply the plaintiff with Scotch fir staves, the contract was held binding on A., on the presumption of B.'s general authority to enter into such contracts (y). It was held by Bigham, J., in Hambro v. Burnand-a case in which one underwriter at Lloyd's subscribed, in pursuance of a general authority, his own name and that of four other underwriters to a "guarantee policy" in favour of a company of which he was director-that a principal is not liable to a third party for an authorised act done by the agent purely for his own benefit (z); but the judgment in this case against the subscribing agent, and for the other four defendants, was reversed by the Court of Appeal, which was of opinion that as the subscribing agent had acted within his authority, his motives were immaterial, and that all the five underwriters were liable on the policy (a). Factors and brokers are both general agents. And hence, it follows, that-except in cases where it is known to be usual to limit their authority, although the actual limit may not be known (b)-all contracts made by them in the ordinary course of their employment, without notice by third parties of their private instructions, and without fraud or collusion, are binding on their principals (c). And this is the case, whether the parties with whom they deal have notice of the agency or not (d). (t) Stubbingv. Heintz (1791), Peake, 66. (u) Pearce v. Rogers (1800), 3 Esp. 214. (x) Wyland's case, 3 Salk. 234; Bolton v. Hildersden (1698), 1 Ld. Raym. 225; S. C. nom. Boulton v. Arlsden, 3 Salk. 234. (y) Richardson v. Cartwright (1844), 1 C. & K. 328. (z) Hambro v. Burnand, [1903] 2 K. B. 399, per Bigham, J., without a jury, pointing out in an elaborate judg ment that the authorities in contract were inconclusive on either side, but referring to British Mutual, &c., Co. v. Charnwood, &c., Co., p. 231, note (m), infra, and other analogous cases in tort. (a) Hambro v. Burnand, [1904] 2 K. B.; 10 C. A., stay of execution granted pending appeal to House of Lords. (b) See Baines v. Ewing (1866), L. R., 1 Ex. 320. (c) Daniel v. Adams (1764), Amb. 495; Petties v. Soame (1590), Goldsb. 138; Pickering v. Busk (1812), 15 East, 38; 13 R. R. 364; Whitehead v. Tuckett (1812), 400; 13 R. R. 509. (d) See Factors Act, 1889 (52 & 53 Vict. c. 47), post, p. 235. Contracts with Agents. bound by Principal not agent's act unconnected business. But, whether the agent be invested with a general or a special CH. IX. s. 1. authority, the principal is not bound if the agent's act or contract do not fall within the general purview or scope of his powers, or if it be wholly unconnected with the business entrusted to his direction. For instance, a domestic servant who has never been employed in any other capacity, cannot bind his master by pur- with chasing goods unconnected with domestic use, or by accepting bills entrusted of exchange in his master's name. So, a factor has no power, without special authority to that effect, to accept or indorse bills, so as to charge his principal (e). So, the secretary or manager of a company has not, in general, any authority as such, to accept or negotiate bills for the company (f); he is a mere servant, no person can assume that he has any authority to represent anything at all, and so the company is not bound in the way of estoppel by what he says, unless of course there is evidence that in the particular case the secretary had authority to make the representation (g). But where it is a secretary's duty to issue shares in a proper form, the company are estopped from alleging that shares apparently in due form were forged by the secretary (h). Nor has the manager of a mine any implied authority to borrow Borrowing. money on the credit of the shareholders, even for the purposes of the mine (i); and a promissory note made by the manager abroad of an English company was decided not to bind the company, it not being shown that the signing of the promissory note was either necessary or within the ordinary course of business of the company (k). Nor is a railway company liable to a surgeon for services rendered to a passenger who has been injured whilst travelling on their railway, such services having been rendered merely at the request of a guard or superintendent in the employ of the company (1). Neither is a principal liable in an action of Fraud, deceit for the fraudulent misrepresentations of his agent not made for the principal's benefit but for the private ends of the servant (m); and although the telegraph company are the agent of (e) Hogg v. Snaith (1808), 1 Taunt. 347; 9 R. R. 788; Murray v. East India Company (1821), 5 B. & Al. 204. (f) Beveridge v. Beveridge (1872), L. R., 2 Sc. Ap. 183. (g) Newlands v. National Employers' Accident Association (1885), 54 L. J., Q. B. 428, C. A.; Barnett v. South London Tramways Co. (1887), 18 Q. B. D. 815, C. A. (h) Shaw v. Port Philip Gold Co. (1884), 13 Q. B. D. 103. (i) Ricketts v. Bennett (1847), 4 C. B. 686; Hawtayne v. Bourne (1841), 7 M. & W. 595; but see Montaignac v. Shitta (1890), 15 App. Cas. 357, in which the agent of a firm was held to have authority to borrow on special terms 532. (1) Cox v. Midland Railway Company (1849), 3 Exch. 268. Where similar services were rendered to a servant of the company, at the request of the general manager, the company was held liable; Walker v. Great Western Railway Company (1867), L. R., 2 Ex. 228. (m) British Mutual Banking Co. v. Charnwood Forest Railway Company (1887), 18 Q. B. D. 714, C. A., distinguishing Barwick v. English Joint Stock Bank (1867), L. R., 2 Ex. 259. Contracts with Agents. CH. IX. s. 1. the sender of the message, yet that is only to transmit the message as it is, and so if they send a wrong message, whereby a larger quantity of goods are delivered, the sender will not be liable therefor in an action for goods sold and delivered (n). Principal bound by acts subordinate plishment of agent's instructions. Still an agent or servant, though employed in a particular business only, is primâ facie authorised to bind his principal, by to the accom- doing such subordinate acts as are necessarily or usually employed in carrying into effect the object of the principal power (o). Thus, the master of a ship is appointed to conduct its navigation to a favourable termination; and so, when payments, for which ready money is required, must be made during the voyage, and the ship is in a foreign port where the owner has no agent; or in an English port, which is distant from the owner's residence, and where he has no agent; the master has power, as incidental to his appointment, to borrow money on the owner's credit, in order to make such payments for necessaries (p). How far agent know ledge of principal. Correlative to the doctrine as to how far the principal is knowledge of bound by his agent's representations is the question how far he is bound by the agent's silence or non-disclosure. It depends on how large is the authority of the agent; does he represent the principal in everything, or has he a narrow and limited authority? Where the employment of the agent is such that in respect of the particular matter in question he really does represent the principal, the formula that the knowledge of the agent is the knowledge of the principal is correct. And further, as to captains and ship agents, there is imputed to the owner all the information with regard to his own property which the agent to whom the management of that property is committed possessed at the time, and might, in the ordinary course of things, have committed to his employer (q). Effect of custom. Sale on credit. And the usage of the trade or business in which an agent is employed, will likewise, in the absence of express directions, frequently determine the liability of the latter (1). Thus an agent may bind his principal by selling goods on a reasonable credit, if it be customary in the particular trade to dispose of goods on such terms (s). But if the agent be retained (0) Howard v. Baillie (1796), 2 H. Bl. (p) The Pontida (1889), 9 P. D. 177, 4 Moo. & Rob. 79; Kleinwort v. Cassa Marittima of Genoa (1877), 2 App. Cas. 156. (q) Blackburn v. Vigers (1887), 12 App. Cas. 531; Blackburn v. Haslam (1888), 21 Q. B. D. 144. (r) See Graves v. Legy (1857), 2 H. & N. 210 Ex. Ch. ; Johnston v. Usborne (1841), 11 Ad. & E. 549. (s) Scott v. Surman (1742), Willes, Contracts with Agents. to sell goods, and to deliver the same according to the terms of CH. IX. s. 1. the contract, to such porson as shall become the purchaser ; and the terms of the contract made by the agent be that the goods are to be paid for on delivery: the agent has no authority to part with them except on payment of the purchase-money (t). So it is not usual to sell stock on credit (u), or to give credit for goods sold at an auction (x), but the usage of the trade to accept a cheque at auctions in lieu of cash for the deposit is not unreasonable; so that if the cheque is dishonoured, there is no liability for negligence (y); the rule being that an agent employed Payment by to receive money may not take anything but cash, unless it is cheque. in accordance with the ordinary course of business to receive a cheque (z). But the custom must be reasonable in the consideration of the Trade custom must be Court, otherwise it will not be recognised as binding principals reasonable. who are ignorant of it, and who have not consented to act upon it (a). Where the authority was given to several, they must all join in Authority to exercising it, or the principal will not be bound (b). several. Agent cannot, in general, delegate his Nor can an agent, except with the express or implied assent of the principal, delegate his authority (c); and the principal will not be bound by the act or contract of a sub-agent, whose appointment authority. is not thus sanctioned, and this rule of the civil law-Delegata potestas non potest delegari—especially applies where the personal skill of the agent is essential, or where there is a trust, confidence, or discretionary power reposed in the agent (d). But the assent of the principal may and ought to be implied wherever, from the conduct of the parties to the original contract of agency, or from the usage of trade, or the nature of the particular business which is the subject of the agency, it may reasonably be presumed that the parties originally intended that the agent should have such authority; or where, in the course of the employment, unforeseen 400; Houghton v. Matthews (1803), 3 B. & P. 485. (t) Boorman v. Brown (1842), 3 Q. B. 511, Ex. Ch. (u) Henderson v. Barnewall (1827), 1 Y. & J. 387; Wiltshire v. Sims (1808), 1 Camp. 258; 10 R. R. 673. (x) Brown v. Staton (1816), 2 Chit. 353. (y) Furrer v. Lacy, Hartland & Co. (1885), 31 Ch. D. 42, C. A. (*) See Pape v. Westacott, [1894] 1 Q. B. at p. 283, per Davey, L.J. (a) Robinson v. Mollett (1875), L. R., 7 H. L. 802; Perry v. Barnett (1885), 15 Q. B. D. 388, C. A.; and see Harker v. Edwards (1887), 57 L. J., Q. B. 147, C. A. (b) Brown v. Andrew (1849), 18 L. J., Q. B. 153; Bell v. Nixm (1832), 9 Bing. 393. But this rule would seem not to be strictly followed in cases of mercantile agency. Story on Agency, 9th ed., §§ 42, 43; Evans on Agency, 2nd ed., p. 42; Godfrey v. Saunders (1770), 3 Wils. 73; Dickson v. Lodge (1816), 1 Stark. 226. (c) Cockran v. Irlam (1813), 2 M. & S. 301, 303; Trueman v. Loder (1840), 11 A. & E. 589; Henderson v. Barnewall (1827), 1 Y. & J. 387. (d) Evans on Principal and Agent, 2nd ed., pp. 46-57; Livermore on Principal and Agent, Ch. II., sect. 4. |