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getting the money. If an agent takes the check
of a person in good credit at the time of his taking
the check, but such person subsequently becomes
insolvent, the agent is discharged (g).

On receiving payment for any goods sold by
him, the agent should place the money to his prin-
cipal's credit, or should transmit it to him, or other-
wise lodge it or dispose of it according to what his
instructions or usual course of dealing with his
principal may be (h). If a banker, with whom an
agent has deposited his principal's money to the
latter's credit (he being on good credit at the time
of such deposit), subsequently fails, the agent will
be discharged from liability (i).

Where an agent is employed to sell goods of a
perishable nature, he may, if such a course seems
best for his employer, sell them at a considerable
sacrifice (/).

(g) Story. § 200.

(/() Russeil V. Hanketj, 6 T. R. 12 ; Story, § 202.
(i) Ex parte Parsons, Ambl. 219. This was the case of a
trustee, but the principle is the same.
U) Story, § 141.



54 duties and obligations of agents

Sect. 3.

duties and obligations of agents employed
to receive or deliver goods.

The duties and obligations of agents employed to
receive and deliver goods are regulated by the same
principles which govern the conduct of all other
agents. But as has been above intimated, the
liabilities of a common carrier are greater than those
of ordinary agents. In most instances, persons
employed to receive or deliver goods for the purpose
of transmission to others are carriers, who may be
divided into those icho are, and those who are not
common carriers.

Of the duties and liabilities of a common car-
rier it will be as well to say a few words. All
who openly profess to carry passengers or goods
for hire by land, or by water, are common carriers,
and are bound to exercise their calling for all who
are willing to employ them. lie is, at common
law, responsible for every injury sustained by any
goods committed to him, occasioned by any means
whatever, except the act of God or the king's ene-
mies. His extraordinary liabilities were imposed
upon him in consequence of the public nature of
his emi)loyment, which rendeied his good conduct
a matter of importance to the whole community.
When, by the increase of 'property, this liability



EMPLOYED TO RECEIVE OR DELIVER GOODS. 55

became intolerably dangerous, carriers began to
post up and distribute written notices, to the effect
that they would not be accountable for property of
more than a specified value, unless the owner had
insured and paid an additional premium for it. If
this notice was not communicated to the employer,
it was, of course, ineffectual. But if it would be
brought home to his knowledge, it was looked upon
as incorporated into his agreement with the carrier,
and he became bound by its contents (^). For the
purpose of adjusting the differences which after-
wards arose between carriers and their employers
on the construction of these notices, an act was
passed to regulate the responsibility of carriers (/),
by which it was enacted, that no one shall be enti-
tled to recover the value of certain goods which are
enumerated in the act (being chiefly of large value
in a small compass), if lost by a carrier, if the value
thereof in the aggregate exceed 10/., unless at the
time of the delivery to such carrier the value of the
goods has been declared, and an increased charge
paid for the extra care, which is required to be
taken of them (;w). The carrier may demand for
such articles an increased rate of charge, which is
to be notified by a notice affixed in his office, and



(k) Coggs V. Bernard, 1 Smith, L. C. p. 82.
(0 11 Geo. 4 & 1 Will. 4, c. 68.
(;«) Sect. 1.



56 DUTIES AND OBLIGATIONS OF AGENTS

customers are bound thereby, without further proof
of the notice having come to their knowledge (w).
Carriers who omit to fix the notice are precluded
from the benefit of the act, and they can no longer
limit their responsibility in respect of articles not
within the act (o). Special contracts, however, be-
tween the carrier and his employer are still allowed,
and are not affected by the statute (p). By sec. 8,
the act is not to protect carriers from their liability
to answer for the felonious acts of their servants,
nor is it to protect the carrier's servant from
answerino- for his own neglect or misconduct. It
has been held, that notwithstanding the statute, the
carrier is still answerable for gross neglect on his
part, which has occasioned a loss of property, such
as the act directed to be insured, even although the
owner has neglected to insure it ; for the protection
given to the carrier by this act is substituted for the
protection which he formerly derived from his own
notice, and the former, therefore, will not now pro-
tect him in a case, in which the latter, in conse-
quence of his own neglect, would not have been
allowed to do so {(]).

Common carriers are bound to exercise the
greatest possible care in the performance of their

(h) Sect. 2.
(o) Sect. 4.
(p) Sect. 6.
(7) Oweti V. Burticti, ■!• Twyr. 142,



EMPLOYED TO RECEIVE OR DELIVER GOODS. 57

duty (r). But it seems "that greatest possible
care" only means what is generally bestowed in the
custody of goods by persons in a similar situation ;
or what, if there is no usage to guide the conduct
of the persons to whom they are committed, would
reasonably be bestowed. Nothing in this life is
done so perfectly as to be incapable of being done
with greater care and caution (s) ; and, therefore,
evidence will be received to show what had been
usually done by the persons sought to be charged
for a loss.

Carriers by water generally stipulate in their bills
of lading that they shall be discharged from liability
for losses occasioned by " the act of God, the
king's enemies, fire, and all and every other dangers
and accidents of the seas, rivers and navigations of
what nature and kind soever," the first two of
which exemptions they enjoyed at common, and
that from loss by fire under 26 Geo. 3, c. 86, s. 2.
In their charter-parties they also stipulate that they
shall be protected from various risks. They are
further protected by stat. 26 Geo. 3, c. 86, from
making good loss or damage to any gold, silver,
diamonds, watches, jewels or precious stones sus-
tained by any robbery, embezzlement, making

(r) Coggs V. Bernard, Smith's L. Cases, p. 82 ; Nurse v. Slue,
2 Lev. 69.

(s) Per C. B. Pollock, Rothschild v. R. M. Steam Company, 19
L.T. 334.

d5



58 DUTIES AND OBLIGATIONS OF AGENTS

away or secreting thereof, unless the owner or
shipper has, at the time of shipping, declared the
nature and value thereof in writing, fi Geo. 4, c.
155, s. 53, exempts them from liability from damage
arising from the want of a duly qualified pilot,
unless incurred by their own refusal or neglect to
take one on board; and by sec. 55 from liability
for loss incurred through the default or incom-
petency of a licensed pilot. Where their common
law liability remains, it is much narrowed by the
following acts, viz., 7 Geo. 4, c. 15, which exempts
them from making good losses incurred by the
misconduct of the master and mariners, without
their privity, to a greater extent than the value of
the ship and freight (s). '26 Geo. 3, c. 86, sec. 1,
which extends the above enactment to all cases of
loss by robbery by whomsoever committed, and 53
Geo. 3, c. 159, which extends it to all cases of loss
occasioned without their default or privity ; but this
act does not extend to vessels used solely on rivers or
inland navigations, nor to any shij) not duly regis-
tered according to law; nor do any of the acts extend
to lighters and gabbets (t). It should also be ob-
served that the benefit of the three last-mentioned
acts extends to owners only, not to masters; and that
the last act contains an express clause against re-

(s) See Suttoji V. Mitchell, 1 T. R. IS.
(/) Hunter v. M'Gown, 1 Bligli, 573.



EMPLOYED TO RECEIVE OR DELIVER GOODS. 59

lieving the master, though he may happen also lo
be a part owner (u).

If" a man, who is not a common carrier, receives
goods for the purpose of conveying them, he must
do his best to carry them safely ; and a promise is
mipHed that the goods shall be carried and kept
safe from all hazards, which reasonable skill and
care could have guarded against {(). It is obvious
that many nice and intricate questions must arise
between carriers, both common and others, and
their employers, for which the reader is referred to
other treatises («).



Sect. 4.
liabilities of agents to their principals.
Mr. Justice Story, in his work on agency, de-
votes a chapter to the consideration of the liabilities
of agents. Now, the liabilities of agents to their
principals can only arise on the neglect of some
duty, or on some misfeasance in the course of their
employment. Most of the rules, which aj)ply to
the nature and directness of any damage on a loss
being caused by one person to another, apply with
equal force to that occasioned to a principal by his

(u) See miso7i v. Dickson, 2 B. & A. 2.

(t) Webb V. Page, 6 Sc. N. R. 957 ; Brind v. Dale, 8 C. & P.
209.

(u) See Addison on Contracts (Carriers), vol. i.



60 DUTIES AND OBLIGATIONS OF AGENTS :

agent; and, for any such loss, the agent will be
bound to make full indemnity. In such cases it is
wholly immaterial, whether the loss or damage be
direct to the property of the principal, or whether it
arise from the compensation or reparation, which he
has been obliged to make to third persons, in dis-
charge of his liability to them for the acts or omis-
sion of his agent (v). Where the breach of duty is
clear, it will, in the absence of all evidence of other
damage, be presumed that the party has sus-
tained a nominal damage (w).

A breach of any of the duties or obligations,
which, as above mentioned, devolve on agents, will
render them liable to the principal for any loss sus-
tained thereby, if such loss is fairly attributable to
such breach, as a natural and just consequence (a:).
There must be a real loss or actual damage, and
not a merely probable or possible one. Thus, if a
ship insured has deviated from the voyage, or if the
insurance being illegal, the agent has neglected to
follow his instructions to insure, the principal can-
not recover, for he cannot have sustained any real
loss by the neglect (y).

The appropriate form of action against an agent
who has connnitted a breach of duty will, according

(v) Story, § '217 a.

(w) M.irzetH v. U'illiams, 1 B. & Ad. 415.

(x) Ciffrey v. Darby, 6 Ves. ¥J0.

{,j) Story, § 222.



LIABILITIES TO THEIR PRINCIPALS. 61

to the nature of the case, be either a breach of con-
tract, express or imphed ; or it may be an action
for the tort committed by him. In some cases, it
is at the election of the principal which form of
action he will bring. It has recently been decided,
that an action on the case for the wrong may be
brought for a nonfeasance as well as for a mis-
feasance (s).

It is, as we have seen, one of the duties of an
agent in making a contract to do all that will make
it binding upon the party contracted with. If,
therefore, a broker do not make a contract entered
into on behalf of his principal binding on the op-
posite party, he will be liable to his principal for
any damage resulting from the omission {a). If
agents have received from their principals instruc-
tions which are directory, " as you may invest in
the purchase of silk, &c.," but which they treat as
discretionary and neglect to comply with, they are
liable to their principals for the breach of con-
tract {b). Where some oil had been delivered to a
broker to dispose of for his employers, on the terms
that it was to be paid for on delivery, but the
broker permitted the purchaser to get possession
of it without paying the price, he was held to be

{z) Boorman v. Brown, 3 Q. B. 526, in error,
(rt) Sievewright v. Richardson, Lord Campbell, 20th February,
1852 ; 19 Law Times, 10.

(i) Entwistle v. Dent, 1 Exch. 812 ; 18 L. J., Exch., 138.



62 DUTIES AND OBLIGATIONS OF AGENTS :

liable to an action for the tort arising from his neg-
ligence, as well as in assumpsit (c).

Of del credere commissions. — A del credere coxa-
mission is one in which a person who is appointed
agent, in consideration of a larger commission being
allowed him, guarantees the ])ayment by any
persons to wliom he disposes of any goods {d). A
factor acting under a del credere commission, even
if he had sold to a person in good credit, who had
subsequently become insolvent, would be personally
responsible to his principal for the amount (c).
But, even in a case of del credere commission, a
factor will not be held primarily liable to his prin-
cipal, but will be treated as a surety for the person
to whom the sale is made ; and it is well esta-
blished, that he is not liable to |)ay until a default
has been made by the buyer (/). It seems that if
the money is once received from the buyer, and it
becomes necessary for the agent to remit the
amount to his principal, and he does so by bills,
which are dishonoured, the agent is still liable, and
nothing short of the same payment, which would
discharge the purchaser, is sufficient to absolve a
factor under a del credere commission. He is not,
like a common factor, discharged by the circum-

(c) Boorman v. Brown, 3 Q. B. 5'2(J, in error.

(d) Smitli, M. L. p. 98.

((') Grove V. Dubois, 1 T. R. 112.

(/) Morris v. Cleasby, 4 M. & Selw. 566.



LIABILITIES TO THEIR PRINCIPALS. 63

stance of the parties to the bills being in good
credit at the time when he took them, but must be
at the risk of the remittances {g).

It would appear, that an agent who has received
payment for something committed to him for sale,
if the transaction is single, and apart from other
matters, in which he is agent to the same principal,
is bound to pay over the sum immediately it is re-
ceived, and is not entitled to withhold payment
until the general account is taken {/i). And thus,
where a conveyance has been made to an agent
fraudulently, he must reconvey before he has the
account taken (i).



Sect. 5.

defences of agents against claims of their
principals.

The defences of agents against the claims made
upon them by their principals may be the same that
any other person may set up against any demands
made upon them, as the illegality of the contract
sought to be enforced, damnum absque injur id, and
others. But perhaps the defence most commonly

( £■) Lucas V. Groning, 7 Taunt. 164 ; Mackenzie v. Scott, 6 Bro.
P. C. 280, Tomlin's edit.

Qi) Gordon v. Pym, 3 Hare, 223.

(?) Treveylan v. Chanter, 9 Beav. 190.



64 DUTIES AND OBLIGATIONS OF AGENTS :

relied upon by agents requires some notice, and
this is the subsequent ratification of their acts and
conduct by their principals, for omnis rati/iihitio
retrotrahitur et mandato (squiparatur. Where a
principal, upon a full knowledge of all circum-
stances, deliberately ratifies the acts, contracts, or
omissions of his agent, he will be bound thereby as
fully to all intents and purposes as though he had
originally given him direct authority in the pre-
mises, to the extent to which such acts, contracts,
or omissions reach, if the agent, at the time of his
acting, &c., assume to act as agent (j). Even
where an agent assumes to act for a principal,
without any authority to do so, or where he very
much exceeds his authority, if he has sortie autho-
rity, the principal may subsequently ratify the act,
and such ratification will be a good defence to an
action brought against the agent by the principal,
whether for breach of contract, or on the case for
the tort (k). A ratification of a contract, required
to be in writing, renders the agent who has made
the contract a person duly authorized for that pur-
pose (Z). But the ratification must be made with
a full knowledge of all circumstances, or it will not



(_;■) Wilson v. Tummen, 6 Sc. N. 11. 90t ; Doe v. Goldwin, 2
Q.B. US.

{k) Smilh V. Cddogan, 2 T. R. 188, n.
{1)2 Addison on Contracts, p. (J'JO.



DEFENCES AGAINST CLAIMS OF PRINCIPALS. 65

be binding upon ratifier (m). The recognition of
the acts of a suh-agent will bind a principal, in the
same manner as though he had given to his agent
power to appoint such sub agent (n). Where a
ratification is estabHshed as to a part, it operates as
a confirmation of the whole of that particular trans-
action of the agent (o). The principal must adopt
the whole or none. A ratification once deliberately
made upon full knowledge of the circumstances
becomes eo instanti obligatory, and cannot after-
wards be revoked or recalled {p). An agent had
been secretly employed on behalf of a bankrupt to
lay out some of his money in India bonds. The
assignees discovered the fact, and seized some of
the bonds which were in the agent's hands, and
accepted them as part of the estate ; and afterwards
brought an action against the agent for the money
with which the bonds were purchased. The Court
was of opinion that the acceptance of some of the
bonds was an affirmance of the agent's act in lay-
ing out the money, and that the assignees could not
avow one part of the transaction and disavow
another {q).

As to the mode of the ratification being made,

{m) Horsfall v. Fauntleroy, 10 B. & C. 755 ; Story, § 243.
(«) Coles V. Trecothkk, 9 Ves. 236; Story, § 249.
(o) Ferguson v. Carrington, 9 B. & C. 59; Sniith v. Hodson, 4;
T. R. 211.

(p) Smith V. Cadogan, 2 T.R. 189, n.
Iq) Wilson V. Poulter, 2 Str. 859.



6Q DUTIES AND OBLIGATIONS OF AGENTS :

of course an express ratification, whether by parol
or in writing, will be sufficient to validate any
previously void acts of the agent; but to make
good an act, which the agent executes by sealing,
such as a deed, the principal's assent must also be
expressed by deed (r). The greater number of
cases of ratification arise from some simple act of
recognition, or some course of action on the part of
the principal, fiom which his intended approval is
implied ; and slight circumstances and small mat-
ters are sometimes sufficient to raise the presump-
tion of a ratification. Long acquiescence, and
even silence, will sometimes amount thereto. Whe-
ther it so operates, depends much on the relation
between the parties, their habits of business, and
the usages of trade. Thus, among merchants, it is
the duty of a merchant on receiving a letter from
their correspondent, if he be his agent, living in
some other place, to answer it within a reasonable
time, or he will be presumed to admit the propriety
of his correspondent's acts (.9). If a principal,
when goods have been sold by his agent without
authority, should sue the purchaser for the amount,
his doing so will be considered a ratification of the

(r) Story, § 252.

(i) Prince V. Clark, 1 B. & C. 186; Story, § 258. Mr. Story adds,
oven if no ])rior relation of ])riiicipal and agent existed between
tlie parties, if the party wlio lias acted for aiiDtlier jjives notice to
liini of wli.it he has done, the silence of the latter allbrds a pre-
siiniptioM that he ratifies the act.



DEFENCES AGAINST CLAIMS OF PRINCIPALS. 67

sale ; or, again, if he should sue the agent for
money received on a sale.

It is a good defence if the misconduct of the
agent has been followed by no loss or damage
whatever to the principal; for damnum absque in-
juria, and injuria absque damno are equally objec-
tions to the recovery of any damages by \he prin-
cipal. A few instances, in which the principal
cannot recover, if the agent sets up and establishes
such a defence, have been stated already.

The agent may also defend himself by showing
that he acted under an overwhelming necessity, or
in a manner best suited to meet some extraordinary
emergency. He may also set up as a defence that
the act which he is instructed to perform was
against public policy, and that if he had performed
it, the principal would not have been permitted to
take any advantage of it. So that it would seem
to follow from this, that if a principal order his
agent to sell any stock, which he has not at the
time, no action could be maintained against the
agent for his neglect to comply with his instruc-
tions; nor can the seller enforce the contract oi-
maintain an action for the price of the stock. If
the subject of the agency is illegal or immoral, the
principal has no redress against the agent for any
wrong done in that transaction. If o-oods have
been committed to an agent, to procure their being



68 DUTIES AND OBLIGATIONS OF AGENTS.

smuggled into a country, and sold there against its
laws, the principal will be equally disabled to
maintain a suit against the agent in the courts of
that country for the goods themselves, as he will
be to maintain a suit for the proceeds of the goods
if sold. The rule in such cases is melior est con-
ditio possidentis. But, it would appear, that if the
principal repents and revokes his orders, before
anything is done, he may recover back the money
or goods delivered for the illegal purpose.

It will be a good defence, if an agent can prove
that his authority was capable of two different con-
structions, and that acting fairly and in good faith,
he adopted one which might reasonably be put
upon it, although his principal might have intended
that the other should be followed {t). We shall
hereafter consider the ratification of contracts by
principals with respect to third persons.

(0 Story, § 1\ ; Loraine v. Cartwright, 3 Wash. Cir. 151 ;
Courcier v. Palter, 4 Wash. Cir. 551.



( 69 )



CHAPTER III.

THE RIGHTS OF AGENTS AGAINST THEIR
PRINCIPALS.

Sect. 1.
right to commission, expenses, etc.
On completion of the duty which they respectively
undertake, both the agent to purchase and the
agent to sell are entitled to their commission. If
a certain amount has been fixed upon as their re-
compense, that will be the sum he is entitled to
receive. If no agreement is made as to what he
shall receive, he will be entitled to that amount of
compensation which is usually paid in similar
transactions, according to the custom of trade (a).
In mercantile transactions, the amount of commis-
sion, if not fixed upon by special agreement, is
easily ascertainable by the usage of trade, which
also determines the cases in which it is due ; and
in some instances is so powerful, that although an
agent may have taken trouble in the performance
of the task committed to him, if nothing result

(a) Eicke v. Mayer, 3 Camp. 412; Chapman v. De Tastet, 2
Stark. 204.



70 RIGHTS OF AGENTS AGAINST PRINCIPALS:

from his labours, it takes away his right to remu-
neration (b). In some instances, the amount of
commission payable is regulated by Act of Parlia-
ment, among others, that to solicitors or brokers
for procuring a loan is fixed (c). If there be nei-
ther an agreement, a course of dealing, or an Act
of ParHament, by which the right to receive com-
pensation, or the extent of it can be ascertained,
in case of any difference arising and an action
being brought by the agent to recover compensa-
tion, the whole case must be left to a jury to de-
termine the right and the value of the agent's
services, when all that he does in that capacity
must be taken into consideration (d). If an amount
is payable to an agent by agreement, and he does
any work in the discharge of his duty as agent,
he cannot make any extra charge for that work;
but if the service is beyond his duty as an agent,
he may charge for it separately, and it is for a
jury to decide the question (t). Where an agent
claimed a commission for work and labour, a plea
that he was a broker in the city of London, and
was not duly licensed, was held bad ; a broker
must be a mediator between other persons, and
semhle, that brokerage must relate to goods and

(i) Bull \. Priri; .') M. & H. 2.

(c) 12 Anne, st. 2, c. IC, s. 2; 31 Geo. 2, c. 10, s. 30; 17
Geo. 3, c. 26.

(d) Story, § SSfi.

(k) Marshall V. Parsons, 9 Car. & P. G-'jC.



TO COMMISSION, EXPENSES, ETC. 71

money, and not merely to personal contracts for
work and labour (/").

As a general rule, an agent cannot recover his
commission until the completion of the duty for
which it is payable (^), nor unless he performs the
whole of the duty. But in certain cases compen-
sation is recoverable, though the work committed
to the agent be not completed. Thus, if an em-
ployer retains and enjoys the benefit of what was


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Online LibraryEzekiel Charles PetgraveA manual of the law of principal and agent → online text (page 5 of 21)