* 629

* Every contract made with an agent in relation to the business of the agency, is a contract with the principal,

course of commercial dealing, originated in the case of Paterson v. Tash, in Str. 1178, which was a nisi prius decision of C. J. Lee; though it has been suggested that the report of that case was inaccurate. In the year 1823, the merits of that rule were discussed in the British Parliament, and the discussion was followed by the statutes of 6 Geo. IV. ch. 94, and 7 & 8 Geo. IV. ch. 29, for the better protection of the property of merchants and others in their dealings with factors and agents, by which a factor was authorized to pledge, to a certain extent, the goods of his principal. A great deal may be properly said against the principle of the old rule, and, with the exception of England, it is contrary to the law and policy of all the commercial nations of Europe. See the report of the committee of the English House of Commons, which led to the statute of 4 Geo. IV. On the European continent, possession constitutes title to movable property, so far as to secure bona fide purchasers, and persons making advances of money or credit on the pledge of property by the lawful possessor. There may be something in the commercial policy of the rule alluded to by the English judges; but it would seem to be a conclusion of superior justice and wisdom, that a factor or commercial agent, clothed by his principal with the apparent symbols of ownership of property, should be deemed the true owner in respect to third persons dealing with him fairly in the course of business, as purchasers or mortgagees, and under an ignorance of his real character. See 1 Bell's Com. 483-489.

By the statute of 5 & 6 Vict. c. 39, in amendment of the law relating to advances bonâ fide made to agents intrusted with goods, any agent intrusted with the possession of goods, or of the documents of title to goods, is to be deemed owner of such goods and documents so far as to give validity to any contract or agreement by way of pledge, lien, or security bonâ fide made by any person with such agent so intrusted, as well for any original loan, advance, or payment made upon the security of such goods or documents, as also for any further or continuing advance in respect thereof; and such contract shall be binding upon and against the owner of such goods and others interested therein, notwithstanding the person claiming such pledge or lien may have had notice that the person with whom such contract is made is only an agent.1

The statute law of New York has changed the former rule of the English courts on this subject. By the Act of April 16, 1830, it was enacted, (and an Act of the state of Rhode Island, passed since the session of January, 1831, and of Pennsylvania, in 1834, Purdon's Dig. 402, are to the same effect,) that the person in whose name goods were shipped should be deemed the owner, so far as to entitle the consignee to a lien thereon for his advances and liabilities or the use of the consignor, and for moneys or securities received by the consignor to his use. But the lien is not to exist, if the consignee had previous notice, by the bill of lading or otherwise, that the consignor was not the actual and bona fide owner. Every factor intrusted with the possession of any bill of lading, custom-house permit, or warehouse keepers' receipt for the delivery of the goods, or

1 See, for interpretation of English statutes on this subject, Navulshaw v. Brownrigg, 13 Eng. L. & Eq. 261.

Nor does the lien exist, when property, intrusted by the owner to an agent, to be shipped in the owner's name, is, without authority, shipped by the agent in his own name. Covill r. Hill, 4 Denio, 323. S. C. 1 N. Y. 522. Stevens v. Wilson, 3 Denio, 472. Cook v. Beal, 1 Bosw. 497.

entered into through the instrumentality of the agent, provided the agent acts in the name of his principal. The party so dealing with the agent is bound to his principal; * and the *630 principal, and not the agent, is bound to the party. It is a general rule, standing on strong foundations, and pervading every system of juripsrudence, that where an agent is duly constituted, and names his principal, and contracts in his name, and does not exceed his authority, the principal is responsible, and not the agent. (a) The agent becomes personally liable only when the principal is not known, or where there is no responsible principal, or where the agent becomes liable by an undertaking in his own

with the possession of goods for sale, or as security for advances, shall be deemed the owner, so far as to render valid any contract by him for the sale or disposition thereof, in whole or in part, for moneys advanced, or any responsibility in writing assumed upon the faith thereof.3 The true owner will be entitled to the goods on repayment of the advances, or restoration of the security given on the deposit of the goods, and on satisfying any lien that the agent may have thereon. The Act does not authorize a common carrier, warehouse-keeper, or other person to whom goods may be committed for transportation or storage, to sell, or hypothecate the same. Acts of fraud committed by factors or agents, in breach of their duty in that character, are punishable as misdemeanors. It has been held under this Act that a contract of sale by a factor or agent, intrusted with goods for sale, will protect the purchaser, though no money be advanced, or negotiable instrument, or other obligation be given at the time of the sale. Jennings v. Merrill, 20 Wendell, 1.4

This Act is founded chiefly upon the provisions of the British statute of 6 Geo. IV. ch. 94, passed in 1825, in pursuance of the recommendation contained in the report of a select committee from the British House of Commons, of Jauuary, 1823. So, by the Civil Code of Louisiana, art. 3214, every consignee or commission agent, who has made advances on goods consigned to him, or placed in his hands to be sold for account of the consignor, has a privilege for the amount of those advances, with interest and charges on the value of the goods, if they are at his disposal, in his stores, or in a public warehouse, or if, before their arrival, he can show by a bill of lading or letter of advice, that they have been dispatched to him.

(a) Emerigon, Traité des Ass. tom. ii. p. 465. Lord Erskine, 12 Vesey, 352. Davis v. M'Arthur, 4 Greenl. 82, note. Owen v. Gooch, 2 Esq. N. P. 567. Ware J., in the case of The Rebecca, Ware, 205. Roberts v. Austin, 5 Wharton, 313.

It has been lately enacted in Massachusetts, that pledgees or second consignees, who have made advances in good faith, upon goods of which their consignors had possession, with the right of sale or consignment, shall, under certain restrictions, have the same lien as they would be entitled to if their consignors, depositors, or pledgors were the actual owners. Sup. Rev. St. ch. 216, 1849.

Walther v. Wetmore, 1 E. D. Smith (N. Y.) 7. And see Bonito v. Mosquera, 2 Bosw. 401, for the construction of this act.

name, or when he exceeds his power. (6) 2 If he makes the contract in behalf of his principal, and discloses his name at the

(b) Thomas v. Bishop, 2 Str. 955. Leadbitter v. Farrow, 5 Maule & Selw. 345. Dusenbury v. Ellis, 3 Johns. Cas. 70. Parker C. J., Stackpole v. Arnold, 11 Mass. 29, and Hastings v. Lovering, 2 Pick. 221. Hampton v. Speckenagle, 9 Serg. & Rawle, 212. Lazarus v. Shearer, 2 Ala. (N. S.) 718. Woodes v. Dennett, 9 N. Hamp. 55. When the agent becomes personally bound by his own assumption, his principal is not liable. Taber v. Cannon, 4 Metcalf, 456. C. J. Shaw says, that the case of Stackpole v. Arnold, establishing this doctrine, is of the highest authority. Where an agent voluntarily disobeys the instructions of his principal, and converts to his own use moneys belonging to his principal, to which a definite and specific destination was given, and the article he was directed to buy subsequently acquires additional value, the agent has been held responsible, not merely for the money with interest, but for the article. Short v. Skipwith, 1 Brockenb. 103. It is likewise a general rule, that the omission of an agent to keep his principal regularly informed of the state of the interest intrusted to him, renders him responsible for the damages his principal may sustain by such neglect ; and if the principal be injuriously misled by the information given, so as to place reliance on an outstanding debt, the agent will be deemed to have made the debt his own. Harvey v. Turner, 4 Rawle, 223. Arrot v. Brown, 6 Whart. 1. It is also a general rule, that notice to an agent is notice to his principal. So, notice to one of the directors

1 Notice to the agent to bind the principal, must be within the scope of his agency, and relate to the very business in which he is engaged, or is represented as being engaged, by authority of his principal. Such knowledge must have been acquired, "while he is acting for the principal, in the course of the very transaction which becomes the subject of the suit." 2 Hill (N. Y.) 461. Hiern v. Mill, 13 Vesey, 120. Bracken v. Miller, 4 Watts & Serg. 111; or "so near before it, that the agent must be presumed to recollect it." Story on Agency, 140. Hargreaves v. Rothwell, 1 Keen, 154. Hood v. Fahnestock, 8 Watts, 489. Nixon v. Hamilton, 2 Dru. & Walsh, 364, 390, 392. Griffith v. Griffith, 1 Hoff. Ch. 158. Notice to the agent of a defective title in purchasing property does not affect the ignorant principal in selling the same. Ross v. Houston, 25 Miss. 591.

Ashley v. Baillie, 2
Perkins v. Brad-

The above doctrine is, of course, applicable to attorneys or counsel. Vesey, 370. Griffith v. Griffith, 6 Paige, 315. 2 Spence Eq. Jur. 753-761. ley, 1 Hare, 219. Hood v. Fahnestock, 8 Watts, 489. Lord Eldon, in Mountford v. Scott, Tur. & Russ. 279, was inclined to qualify the doctrine, that notice to the attorney in one transaction is not to be taken as notice to him in another, where the one transaction followed so close on the other as to render it impossible to suppose that the attorney had forgotten it. And see 1 Keen, 154, supra, remarks of Ld. Ch. Plunket, in Nixon v. Hamilton, 2 Dra. & Walsh, 364, 392.

The cases are probably reconciled by the principle mentioned above, that the knowledge of the attorney is effectual, when acquired "so near before the transaction in question that he must be presumed to recollect it."

The same rules as to notice apply to the agents of incorporated companies. Hence, notice

2 A promissory note, in the body of which "A. promises to pay" a certain sum, and signed "B., agent for A.," does not bind B. personally on the contract, although he had no legal authority from A. to give such note. Jefts v. York, 10 Cush. (Mass.) 324. An agent who has authority to bind his principal by the name of "the Churchman," does not bind him by a note reading, "I promise to pay," and signed "D. H., agent for the Churchman." Dewitt v. Walton, 5 Selden (N. Y.) 571. Hegeman v. Johnson, 35 Barb. (N. Y.) 200.

time, he is not personally liable, even though he should take a note

of a bank, while engaged in the business of the bank, is notice to the bank. Bank of U. S. v. Davis, 2 Hill (N. Y.) 451, 461. It is not consistent with the summary view taken in this lecture of the law of agency, to enter into a detail of the particular responsibilities of agents. We must be content to state generally the principle that the agent is liable to his principal for all losses and damages arising from violations of his duty as agent, by reason of misconduct, delinquency, stretch, or abuse of power, or negligences, provided the loss or damage be reasonably attributable to the same. The illustrations of the general principle are to be seen in the authorities stated or referred to in the treatises at large on agency, and especially in Livermore on Agency, ch. 8, Paley on Agency, by Lloyd, passim, and particularly pp. 7–20, 46, 55, 100, 130–149, 212–240, 294-304, 335-342, 386-390, in Story on Agency, ch. 8, and in Sedgwick on the Measure of Damages, as between principal and agent. Treatise, ch. 12.8

to the cashier, or other agent of a bank, especially if given officially, is notice to the bank. Fulton Bank v. N. Y. & S. Canal Co. 4 Paige, 127. National Bank v. Norton, 1 Hill (N. Y.) 575, 578. The New Hope, &c., Co. v. The Phenix Bank, 3 Comst. 166. But notice to a mere stockholder is not notice to the company; Powles v. Page, 3 M. G. & Scott, 16; H. & L. Banks v. Martin, 1 Metcalf, 308; though notice to an acting director would be. North River Bank v. Aymar, 3 Hill (N. Y.) 262, 274, 275. See, also, 2 Hill (N. Y.) 451, 464. It was held, in Louisiana State Bank v. Senecal, 13 Louis. 525, 527, that nothing short of official notice to the board will bind the bank. Mr. Justice Story, in his work on Agency, 2d ed. §§ 140-6, argues strongly in favor of the position in this latter case. See, also, 9 Barr, 27. But it has been held, that notice to the president is notice to the bank. Porter v. The Bank of Rutland, 19 Vermont, 425.

If a principal authorize a general agent to appoint a sub-agent, then notice to the subagent will be notice to the principal. Boyd v. Vanderkemp, 1 Barb. Ch. 273. So, if a person adopt the act of another, who assumed to act as his agent, he will be charged with notice of such facts as were within the knowledge of the agent at the time of doing the act. Hovey v. Blanchard, 13 N. Hamp. 145.

It has been held, that notice to a clerk in a mercantile house, not to furnish goods, except upon a written order, is not notice to his principal. Grant v. Cole, 8 Ala. 519.

The authorities on the subject of notice to agents are collected, and largely commented upon, in Story on Agency, § 140, a, b, c, d, and in Paley on Agency, Dunlap's ed. pp. 262268.

As to constructive notices, generally applicable to both principals and agents, the reader will find the doctrine laid down in the following cases with clearness and succinctness: "The cases in which a constructive notice has been established, resolve themselves into two classes: First, cases in which the party charged has had actual notice, that the property in dispute was in fact charged, incumbered, or in some way affected; and the court has therefore bound him with constructive notice of facts and instruments, to a knowledge of which he would have been led, by an inquiry after the charge, incumbrance, or other circumstance affecting the property of which he had actual notice; and, secondly, cases in which the court has been satisfied, by the evidence before it, that the party charged had designedly abstained from inquiry, for the very purpose of avoiding notice." Jones v. Smith, 1 Hare, 43-55. Idem, 1 Phil. 253.

"It is the well-established principle, that whatever is notice enough to excite attention, and put the party upon his guard, and call for inquiry, is notice of everything to which such inquiry might have led. When a person has sufficient information to lead him to a fact, he shall be deemed conversant of it." Kennedy v. Green, 3 My. & K. 719, 721, 722. Sugden, V. & P. 1052. It is the present disposition of courts of equity not to extend the doctrine of constructive notices. Jones v. Smith, 1 Phil. 254.

A broker who had negotiated a sale, and was agent of the vendee to ship the article

for the goods sold, payable to himself. (e). But if a person would excuse himself from responsibility on the ground of agency, he

must show that he disclosed his principal at the time of *631 making the contract, * and that he acted on his behalf, so as to enable the party with whom he deals to have recourse to the principal, in case the agent had authority to bind him. (a) 1

(c) Owen v. Gooch, 2 Esp. N. P. 567. Rathbone v. Budlong, 15 Johns. 1. Goodenow v. Tyler, 7 Mass. 36. Greely v. Bartlett, 1 Greenl. 172. Corlies v. Cumming, 6 Cowen, 181. The agent is not liable individually, if he draws a bill of exchange which is protested, provided he declares himself at the same time to be the agent of the drawers. Zacharie v. Nash, 13 Louis. 20. The agent is personally liable, though he discloses the name of his principal, if he signs a contract which does not show upon the face of it that he contracts as agent. Mills v. Hunt, 20 Wendell, 431. But if he drew the bill in his own name, without stating his agency, he is personally liable, though the payee knew he was but an agent. Newhall v. Dunlap, 14 Maine, 180. He must disclose his principal's name, though he sell as auctioneer, or he will be personally liable. Mills v. Hunt, 20 Wendell, 431. If he acts simply in his own name, he binds himself and not his principal. This is the general rule, but controlled by circumstances. Bank of Rochester v. Monteath, 1 Denio, 402.

(a) Mauri v. Heffernan, 13 Johns. 58. Seaber v. Hawkes, 5 Moore & Pa. 549. Ormsby v. Kendall, 2 Ark. 338. Mr. Justice Story, in his Treatise on Agency, §§ 268, 290, lays down the rule that agents or factors for merchants residing in foreign countries, are personally liable on contracts made by them for their principals, and this without any distinction, whether they describe themselves as agents or not. The legal presumption is, that the credit is given to the agent exclusively. The Supreme Court of New York, in Kirkpatrick v. Stainer, adhered, however, to the old rule, and held that the agent was not personally responsible when he appeared in the transaction as an agent only, and dealt with the plaintiff in that known character. The court held, that there was no distinction known to our law on this point, between an agent acting for a foreign and for a domestic house. This decision was affirmed in the Court of Errors, in December, 1839. 22 Wendell, 244. Mr. Senator Verplanck gave the opinion of the Court of Errors, and he examined the question with learning and ability. He held that there was no general presumption known to our law and commercial usages; that the credit in such cases was given exclusively to the agent, and that the English cases, on which

bought, is not bound to examine its quality and reject it if not in compliance with the contract. Zwilchenbart v. Alexander, 1 Best & Smith, 234.

4 Taking the note of an agent with a knowledge of the agency, and that the principal was bound, has been held to be a discharge of the principal. Paige v. Stone, 10 Metcalf, 160. See, also, Wilkins v. Reed, 6 Greenl. 220. It is enacted, in Wisconsin, that every note or bill signed by an agent, shall bind the principal, if the agent had authority to sign. Rev. Stat. Wis. 1849, ch. 44.

1 When the act of the agent will admit of more than one construction, the court will adopt that which will bind the principal, and not that which will bind the agent merely. Dyer v. Burnham, 25 Maine, 13. Story on Agency, § 154.

If the person dealing with an agent have actual notice of the agency, his rights will be the same as though the agent himself had disclosed it. Chase v. Deboit, 2 Gilm. 371.