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ance of lands to himself and wife, of a 34 ; Wigg v. Wigg, 1 Atk. 384.
prior unregistered mortgage, it was held (w) Lord Langdale, M. R., Hargreaves
not to operate as notice to the wife, so v. Rothwell, 1 Keen, 159. And see
as to give the mortgage a preference in Mountford v. Scott, 3 Madd. 34.
[68]



CH. III.] AGENTS. *65

ing the time of the solicitor's employment in that transac-
tion; (iv) the other, that where a purchaser employs the same
solicitor as the vendor, he is affected with notice of whatever
that solicitor had notice of, in his capacity of solicitor for either
vendor or purchaser, in the transaction in which he is so em-
ployed, (x) The first, it is evident, is so far qualified by the
second, that where the circumstance of the solicitor's being
employed for two parties is in the case, a purchaser, in the
language of Sir J. Wigram, may be affected with notice- of
what the solicitor knew as solicitor for the vendor, although
as solicitor for the vendor he may have acquired his know-
ledge before he was retained by the purchaser — whatever the
solicitor, during the time of his retainer, knows as solicitor for
either party, may possibly in some cases affect both, without
* reference to the time when his knowledge was first acquired.
Any other qualification of the principle limiting the client's
liability to notice acquired in the same transaction, the dis-
tinguished judge referred to does not acknowledge, (xx) If,
however, one assume to act as agent of another, and cause
an act to be done for him of which the latter afterwards
takes the benefit, he must take it charged with notice of such
matters as appear to have been at the time within the know-
ledge and recollection of the agent. («/)

On the other hand, knowledge possessed by a principal



(w) Wigram, V. C-, Fuller v. Ben- no man can be supposed always to cany
nett, 2 Hare, 402, 403. And Lord Hard- in his mind the recollection of former
wicke in declaring the same doctrine, in occurrences ; and moreover, in the case
Worsley v. Scarborough, 3 Atk. 392, of the attorney or counsel it might be
said it would be very mischievous if it contrary to his duty to reveal the confi-
were otherwise, for the man of most dential communications of his client,
practice and greatest eminence would To visit the principal with consti'uctive
then be the most dangerous to employ, notice, it is necessary that the know-
And see Warrick v. Warrick, 3 Atk. 294. ledge of the agent or attorney should be
— In Hood V. Fahnestock, 8 Watts, 489, gained, in the course of the same trans-
it was held, that if one in the course of action in which he is employed by his
his business as agent, attorney, or coun- client." Bracken v. Miller, 4 W. & Serg.
sel for another, obtain knowledge from 102, S. P.

which a trust would arise, and after- (x) Wigram, V. C, Fuller v. Bennett,

wards becomes the agent, attorney, or 2 Hare, 402.

counsel of a subsequent purchaser in an (xx) See Judgment, Fuller v. Bennett,

independent and unconnected transac- 2 Hare, 402, where the cases are review-

tion, his previous knowledge is not no- ed and much discussed,

tice to such other person for whom he {y) Hovey v. Blanchard, 13 N. H.

acts. " The reason is [per Sergeant, J. 145.



delivering the opinion of the court,] that



[69]



66* THE LAW OF CONTRACTS. [BOOK I.

affects a transaction, although the transaction took place
through an agent to whom the knowledge w^as not commu-
nicated, (jjij) As, if a principal knew of defences to a pro-
missory note available only against a purchaser with know-
ledge, and this principal bought the note by an agent, who
had no knowledge of these defences, they might still be
enforced against the principal.

Much question has arisen as to the effect on a corporation,
of notice to one who is a member or officer of it. By some
it is held that the notice must be made formally to the corpo-
ration, [z) and it has been contended on the other hand, that
the notice is enough if given to any director, or any member
of a board which manages the affairs of the corporation, (a)
We consider these views extreme and inaccurate; and should
state as the rule of law that a notice to a corporation binds
it, only when made to an officer, whether president, director,
•trustee, committee-man, or otherwise, whose situation and
relation to the corporation imply that he has authority to act
for the corporation in the particular matter in regard to which
the notice is given, (b)

SECTION XI.
OF SHIPMASTERS.

A master of a ship has, by the policy of the law-merchant,

(yy) In Willis v. Bank of Eng. 4 A. italics is not an essential part of the

& El. 21, 39, the doctrine of notice was rule. Certainly, Mayhcw v. Earaes,

thus stated by Lord Denman: " The ge- (3 B. & Cress. 601,) cited by tlie Icarn-

neral rule of law is that notice to the ed chief justice, is very far from cstab-

principal is notice to all his agents. May- lishing the naked doctrine that notice

hew V. Eames ; at any rate if there be to the principal is notice eo instanti to

reasonable time, as there was here, ybr the the agent.

principal to communicate that notice to his (z) Louisiana State Bank v. Scnecal,

agents, before the event ichich raises the 13 Louis. Rep. 525.
question happens. . . We have been press- (a) Bank of U. S. v. Davis, 2 Hill,

ed with the inconvenience of requiring (N.Y.) 451 ; North River Bank v. Aymar,

every trading company to communicate 3 Hill (N. Y.) 262.
to their agents everywhere whatever (b) See Powles v. Page, 3 C. B. 16;

notices they may receive; but the argu- Porter y. Bank of Rutland, 19 Vermont,

ment ab inconvenienti is seldom entitled R. 410, 425 ; Fulton Bank v. N. Y. & S.

to much weight in deciding legal ques- Canal Co. 4 Paige, 127 ; National Bank

tions; and, if it were, other inconve- «. Norton, 1 Hill (N.Y.) R. 575; The

niences of a more serious nature would New Hope, &c. Co. v. The Phoenix

obviously grow out of a different deci- Bank, 3 Comst. 156, 166 ; Story on

sion." It may be considered worth in- Agency, §§ 140 a- 140 d.
quiry whether the clause we liave put in
[70]



CH. III.] AGENTS. *67

some authority not usually implied in other cases of general
agency, (c) Thus, he may borrow money, if the exigencies
and necessities of his position require it, and make his owner
liable, and pledge the ship (by bottomry, for the most part)
for the repayment, (d) But this authority does not usually
extend to cases where the principal can personally act> as
in the home port, (e) or in a port where the owner has a
specific agent for this purpose, (/) and by parity of reason
not in a port so near the owner's home that he may be con-
sulted, without inconvenience and injurious delay, (^g-) So,
too, under such circumstances, he may, without any special
authority, sell the property intrusted to him, in a case of
extreme necessity, and in the exercise of a sound discretion.
Nor need this necessity be actual, in order to justify the mas-
ter and make the sale valid. If the ship was in a peril,
which, as estimated from all the facts then within his means
of knowledge, was imminent, and made it the most prudent
course to sell the ship as she was, without further endeavors
*to get her out of her dangerous position, this is enough, and
the sale is justified and valid, although the purchasers suc-
ceed in saving her, and events prove that this might have
been done by the master. For a sudden and entire change
of wind or weather, or some other favorable circumstance
which no one at the time could have rationally expected,
might be the means of her safety ; and the powers and duty
of the master must not depend on matters which are alike
beyond control and foresight. (A)

(c) Whether an action may be main- ton v. The Eandolph, Gilp. E. 457 ;
tained against an owner, which is Ship Lavinia v. Barchiy, 1 Wash. C. C.
grounded on the exercise of this peculiar R. 49 ; Lord Ahinger, Arthur v. Barton,
and extraordinary authority by one who 6 M. & W. 138.

was not the master on the register, but (/) Pritchard v. Schooner Lady Ho-

by appointment of the owner had vir- ratia. Bee's Ad. R. 167.

tually acted as master, qucere : see Stone- (<7) Johns v. Simons, 2 Q. B. 425 ; Ar-

house r. Gent, 2 Q. B. 431 n. thur v. Barton, 6 M. & W. 138 ; Mack-

(d) Barnard v. Bridgeman, Moore, intosh i; Mitcheson, 4 Exch. 175; Bel-
918 ; Weston v. Wright, 7 M. & W. don r. Campbell, 20 Law J. Rep. N. S.
396 ; Arthur v. Barton, 6 M. & W. 138 ; Exch. 342, 6 Law & Eq. R. 473, where
The Gratitudine, 3 Rob. Ad. R. 240; Robinson v. Lyall, 7 Price, 592, was
Stainbank v. Penning, 6 E. L. & E. 412 ; questioned.

The Fortitude, 3 Summer, R. 228. (h) The Brig Sarah Ann, 2 Sumner,

(e) Lister v. Baxter, Stra. 695 ; Pat- 206 ; Hunter v. Parker, 7 M. & W.322.

[71]



67



THE LAW OF CONTRACTS.



[book I.



SECTION XII.

OF AN ACTION AGAINST AN AGENT TO DETERMINE THE RIGHT
OF A PRINCIPAL.



It is a rule of law in respect of all agencies, that where
money is paid to one as agent, to which another as principal
has color of right, the right of the principal cannot be tried
in an action brought by the party paying the money against
the agent as for money had and received to the use of such
party ; but such action should be brought against the princi-
pal, (i) For a party who deals with an agent (acting as



(i) Bamford v. Shuttleworth, 11 A.
& El. 926; Sadler v. Evans, 4 Burr.
1984; Horsfall v. Handley, 8 Taunt.
136; Costisan v. Newland, 12 Barb.
456. Yet if notice not to pay over have
been given, then the agent may be sued.
Lord Mansfield, Sadler v. Evans, 4 Burr.
1986 ; Edwards v. Hodding, 5 Taunt.
815 ; Hearsey v. Pruyn, 7 Johns. R. 179 ;
Elliott V. Swartwout, 10 Peters, 137 ;
Bend v. Hoyt, 13 Peters, 263 ; La
Farge v. Kneeland, 7 Cow. 456. See
however as to the liability of col-
lectors of tlie customs, Cary v. Cur-
tis, 3 Howard, Sup. Ct. R. 236.—
And in some cases it has been held
that even without notice, the agent may
be held liable for money had and re-
ceived, if he have not actually paid over
the money to the principal, or done
something' equivalent to it: and the
mere entering the amount to the credit
of the principal, or making a rest, is not
equivalent to payment over. Bullcr v.
Harrison, Cowper, 565 ; Cox v. Pren-
tice, 3 M. & Sel. 344. But upon these
cases Mr. Smith comments as follows :
" It will be observed that in neither of
these cases could the principal himself
ever by possibility have claimed to re-
tain tlie money for a single instant, had
it reached his hands, the payment hav-
ing been made by the plaintiff under
pure mistake of facts, and being void
ah initio, as soon as that mistake was
discovered, so that the agent would not
have been estopped from denying his
principal's title to the money, any more
than the factor of J. S. of Jamaica, who
[72]



has received money paid to him under
the supposition of his employer being
J. S. of Trinidad, would be estopped
from retaining that money against his
employer, in order to return it to the
person who paid it to him. Besides
which, in Buller i\ Harrison, had the
agent paid the money he received from
the underwriter in discharge of the foul
loss, over to his principal, he would have
rendei-ed himself an instrument of fraud
which no agent can be obliged to do.
Except in such cases as these, the
maxim respondeat superior has been ap-
plied, and tlie agent held responsible
to no one but his principal." Merc.
Law, B. 1, c. 5, sec 7. In Snowdon
V. Davis, 1 Taunt. 359, a sheriff liad
issued a warrant on mesne process, to
distrain the goods of A. ; the bailiff
levied the debt upon the goods of B.,
and paid it over. Beld, that money
had and received would lie against the
bailiff. Mansfield, C. J., said, " The
bailiff pays the money over to the she-
riff, and the sheriff to the exchequer, and
it is objected, that as it has been paid
over, the action for money had and re-
ceived does not lie against the bailiff;
and this is compared to the case of an
agent, and the authorities are cited of
Sadler v. Evans ; Campbell v. Hall, 1
Cowp. 204 ; Buller I'. Harrison, 2 Cowp.
565, and several others. lu the case of
Sadler v. Evans, the money was paid to
the agent of Lady Windsor for Lady
Windsor's use ; in that of Buller v. Har-
rison the money was paid to the broker,
expressly for the benefit of the assured.



CH. III.]



AGENTS.



68



such, and within the scope of his authority) has, in general,
no right to separate him from his principal and hold him
liable in his personal capacity. The agent owes an account
of his actions to his principal, and that he may be able to
render that account, the law, except under special circum-
stances, refuses to impose upon him a duty to any third
party.

We here close all that was proposed to be said of agents
as parties to contracts entered into by them in their repre-
sentative capacity. The relation between agent and prin-
cipal constitutes itself a distinct contract, and the considera-
tions growing out of it would, in a strictly accurate division,
find a place in that part of this work which treats of the Sub-
ject- Matter of contracts. But it has been deemed expedient
in this instance, as in some others, to sacrifice logical order
to the convenience of the reader ; and such observations as
seem to be required by the contract of Agency, properly so
called, are subjoined in the following section.



In Pond V. Underwood, the money was
paid for the use of the administrator.
Can it in this case be said with any pro-
priety, that the money was paid to the
bailiff for the purpose of paying it to the
sheriff, or to the intent that the sheriff
might pay it into the exchequer ? The
plaintiff pays it under the terror of pro-
cess, to redeem his goods, not with an
intent that it should be delivered over
to any one in particular." But this case
has been regarded by high authority as
estabhshing a stronger doctrine than
that on which Sir James Mansfield ap-
pears to have placed it. In Smith v.
Sleap, 12 M. & W. 588, Parke, B., re-
ferring to Snowdon v. Davis, said, " It
was there held that a party who had re-
ceived money wrongfully could not set
up as a defence that he had received it
for, and paid it over to, a third per-
son." In the same case a dictum of the
Court of Exchequer is reported, to the



effect that a payment to A. expressly as
the agent of B., for the purpose of re-
deeming goods wrongfully detained by
B., and a receipt by A. expressly for B.
would make a case upon which an ac-
tion against A. for money had and re-
ceived, could be maintained. And in
the case of Parker v. Bristol and Exeter
Railway, 7 E. L. & E. 528, where the
defendants had refused to deliver the
plaintiff's goods until he paid an excess
over the proper amount due for freight
money, it was held that he might main-
tain an action to recover this excess
from the defendants although they re-
ceived a portion of it only as agents for
the Great Western Railway Company;
the principle being " that an action for
money had and received lies to recover
back money which has been obtained
through compulsion even although it
has been received by an agent who act-
ed for the principal."



VOL. I.



[73]



69* - 70* THE LAW OF CONTRACTS. [BOOK I.



SECTION XIII.

THE RIGHTS AND OBLIGATIONS OF PRINCIPAL AND AGENT AS TO

EACH OTHER.

An agent with instructions is bound to regard them in
every point ; nor can he depart from them, without making
* himself responsible for the consequences, (j) If he have no
instructions, or indistinct or partial instructions, his duty will
depend upon the intention and understanding of the parties.
This may be gathered from the circumstances of the case,
and especially, from the general custom and usage in relation
to that kind of business, (k) But he cannot defend himself
by showing a conformity to usage, if he has disobeyed posi-
tive instructions. If loss ensue from his disregard to his in-
structions, he must sustain it ; if profit, he cannot retain it,
but it belongs to his principal. (/)

A principal discharges his agent from responsibility for
deviation from his instructions, when he accepts the bene-
fit of his act. (wz) He may reject the transaction altoge-
*ther; (n) and if he advanced money on goods which his agent

ij) Leverick v. Meigs, 1 Cow. 645; 27; Sykes v. Giles, 5 M. & W. G45;
Marshall, C. J., Maneila v. Barry, 3 Kingston v. Wilson, 4 Wash. Cir. C.
Cranch, 415, 439 ; Kingston v. Kincaid, 315. — And if the agent is employed to
1 Wash. C- C. R. 454 ; Kundlci;. Moore, act in some particular business or trade,
3 Johns. Cas. 36 ; Loraine v. Cart- he may bind his principal by following
Wright, 3 Wash. C. C. R. 151; Fergu- the usages of that trade, whether the
son V. Porter, 3 Florida, 27. — "And principal is aware of them or not. Pol-
no motive connected Avith the interest lock v. Stables, 12 Q. B. 765; Baylifte
of the principal, however honestly en- v. Butterworth, 1 Exch. 425 ; there
tertained, or however wisely adopted, Parke, B., distinguishing the case of
can excuse a breach of the instructions." Bartlett v. Pentland, 10 B & Cress. 760,
Washington, J„ in Courcier ;;. Ritter, 4 said, " That however is a different ques-
Wash. C. C. 11. 549, 551 : but compare tion from the present, which is one of
Forrestier u. Boardman, 1 Story, 43. — contract. In thecase of acow/zart which
If in obedience to the instructions, the a person orders another to make for
agent do an act which is illegal in fact, him, he is bound by that contract if it
though not clearly in itself a breach of is made in the usual way."
law, nor known by the agent to be so, (/) Catlin v. Bell, 4 Camp. 184 ; Park-
he is entitled to be indemnified by the ist v- Alexander, 1 Johns. Ch. 394 ; Se-
principal for the consequences. Betts gar r. Edwards, 11 Leigh, 213.
V. Gibbins, 2 Ad. & El. 57; Adarason (?«) Clarke v. Perrier, 2 Frecm.48;
V. Jarvis, 4 Bing. 66, 72. Prince v. Clark, 1 B. & C. 186.

{k} Marzetti v. Williams, 1 B. & Ad. (n) Roe v. Prideaux, 10 East, 158. —

415; Sutton v. Tatham, 10 Ad. & El. If however an agent has done more than

[74]



CH. III.] AGENTS. *71

purchased in violation of his authority, he is not bound to
return the goods to the agent when he repudiates the sale, but
has his lien on them, and may hold them as the property of
*the agent, (o) Bat he must reject the transaction at once, and
decisively, as soon as fully acquainted with it. For if he
delays doing this, that he may have his chance of making a
profit, or if he performs acts of ownership over the property,
he accepts it, and confirms the doings of the agent, (p.)

Some conflict appears to exist as to the right of an agent
to delegate his authority. On the one hand, the general
principle, that delegatus non potest delegare, is certain, (q)
An agent can do for his principal only that which his princi-
pal authorizes ; and if the principal appoints an agent to act
for him as his representative in any particular business, this
agent has not thereby a right to make another person the
representative of his principal. The employment and trust
are personal; they may rest on some ground of personal
preference and confidence, and on the knowledge which the
principal has of his agent's ability, and the belief he has of
his integrity. But if the agent, merely by virtue of his
agency, may substitute one person in his stead, he may



he was authorized to do, the execution, (q) Combe's Case, 9 Co. R. 75 b, 76
though void as to the excess, may be a. — This maxim has frequent applica-
held good for the rest, at least in equity, tion in cases of powers. Ingram v. la-
But it is necessary in such a case that gram, 2 Atk. 88 ; Alexander v. Alex-
the boundaries between the excess and ander, 2 Ves. Sen. 643 ; Hamilton v.
the execution of the power should be Royse, 2 S. & Lef. 330. — A notice to
clearly distinguishable. Sir Thomas quit, given by an agent of an agent, is
Clarke, V. C, Alexander i\ Alexander, not sufficient without a recognition by
2 Ves. Sen. 644; Campbell i\ Leach, the principal. Doe u. Robinson, 3 Bing.
Ambl. 740 ; Vanada y. Hopkins, 1 J. J. N. C. 677. — An attachment for non-
Marsh. 285, 294 ; Sugden on JPowers, payment of costs cannot be supported
Ch. 9, sec. 8. — And in some cases it by a demand of the costs by a third
has been held at law that an agent tran- person, authorized by the attorney to
scending his authority in part, binds his receive them. Clark v. Dignum, 3 M. «&
principal for the part which was per- W. 319. — In an action on an agree-
formed in accordance with the author- ment for the sale of goods, at a valu-
ity. Gordon v. Buchanan, 5 Yerg. 71 ; ation to be made by A., the issue was,
Johnson i;. Blasdale, 1 Smedes& Marsh, whether a valuation was made by A.
R. 17. — See Wintle v. Crowther, 1 C. & It appeared that the goods were in fact
Jer. 316. valued by B., A.'s clerk. Held, that the

(o) Lord Hardivicke, Cornwall v. Wil- defendant was not bound by it, unless it

son, 1 Ves. Sen. 510 ; Lord Eldon, were shown that it was agreed between

Kemp V. Pryor, 7 Ves. 240, 247. the parties that B.'s valuation should be

(p) Prince v. Clark, 1 B. & Cress, taken as A.'s ; and that the fact of the

186 ; Cornwall v. Wilson, 1 Ves. Sen. defendant's seeing B. valuing, and

509. making no objection until B. told him

[75]



72*



THE LAW OF CONTRACTS.



[book I.



another, or any other, and thus compel the principal to be
represented by one whom he does not know, or be bound by
obhgations cast upon him by one whom he does know, and
because he knows *him would refuse to employ. But, on the
other hand, the principal may, if he chooses, give this very
power to his agent. (/•) In the common printed forms of
letters of attorney, we usually find the phrase, " with power
of substitution," and after this a promise to ratify whatever
the attorney, " or his substitute," may lawfully do in the
premises. That the agent has this power, when it is given to
him in this way, cannot be doubted. But, it must be as cer-
tain that the principal may confer the same power other-
wise; and not only by other language, but without any
express words whatever, (s) If a principal constitutes an
agent to do a business, which obviously and from its very
nature cannot be done by the agent otherwise than through a
substitute, or if there exists in relation to that business a
known and established usage of substitution, in either case
the principal would be held to have expected and have author-
ized such substitution, (t) So too where an agent without
authority appoints a substitute, the principal may, either by
words or acts, so confirm and ratify such substitution, as to



the amount, was not evidence of such
agreement. Ess v. Tiuscott, 2 M. &
W. 385 — A broker cannot delegate his
authority. Henderson r. Barnewall, 1
Y. & Jer. 387 ; Cockran v. Irlam, 2
M. & Sel. 301, note. — Nor can a factor.
Solly V. Rathbonc, 2 M. & Sel. 298;
Catlin r. Bell, 4 Camp. 183. — A dis-
tinction, however, is to be taken be-
tween the employment of a servant and
the delegation of the authority. An
agent, like another person, may act by
the hand of a servant as well as by his
own hand, in cases where the act is
merely physical, or where mind enters
into it so little that it would be absurd
to say that the difference between one
mind and another could be of any
moment. Lord Ellenhorough, Mason v.
Joseph, 1 Smith, 406. See also Powell
V. Tuttle, 3 Coms. 396.

(r) Palliser v. Ord, Bunb. 166. —A
power coupled with an interest, given to
A. and his assiqns, passes with the inte-

[76]



rest to A.'s devisee, to the executor of
that devisee, and to the assignee of the
devisee, &c. ; for the word assigns in-
cludes both assignees in law and in
fact. IIow V. Whitefield, 1 Vent. 338,
339 ; S. C. as How v. Whitebanck, 1
Freeman, 476.

(s) Moon V. Guardians of Whitney
Union, 3 Bing, N. C. 814 ; Gillis v.
Bailey, 1 Foster (N. H.) 149.

(t) An architect employed by defend-
ants to draw a specification for a build-
ing proposed to be erected, himself em-
ployed the plaintiff to make out the
quantities, which work was to be paid
for by the successful competitor for the
building contract ; the jury found a
usage for architects to have their quan-
tities made out by surveyors : — it
was held that the plaintiff was entitled
to recover compensation from the de-



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