the contrary the result should be a loss the agent must bear the loss.

38. What is the implied authority of an agent whose duty it is to make sales?

If he be in possession of the goods it is implied that he has authority to receive payment, and if customary he may warrant the quality or title of the thing sold. To be entitled to give credit would not be implied. If the party in possession of the goods had no authority to act, nor was entitled to the possession of the goods, the assumed principal will be protected in his title to the goods.

Negotiable paper payable to bearer would be an exception to the above.

39. When may an agent make or indorse negotiable paper?

This is not one of the implied authorities of an agent unless it can be inferred from the principal having permitted himself to be bound frequently by such act. If the sale or discount of a negotiable instrument be one of the duties of an agent, he would be entitled to endorse it if necessary in making the transfer.

40. In what manner must an agent execute sealed instruments?

Sealed instruments being technical in form, the law imposes on an agent the necessity of making, signing and sealing of such contracts in the name of the principal by himself as agent. The agent declares his intention to act for a principal by adding something descriptive of his character as agent, otherwise he himself will be bound and not the principal.

If a contract would be valid without a seal, and is executed by the agent, he will be permitted to introduce parol evidence to show that it is the contract of his principal. The agent should execute such contracts in the name of his principal and thus avoid possible trouble.

41. How should an agent execute negotiable instruments?

In the making of notes, drafts, etc., the agent is wisest who signs first the principal's name and then adds his own as agent. Even the signing of the agent's name first, followed by the name of the principal; as, W. X. agent for Y. Z.,

while apparently safe, has been held to bind the agent. The signing of the agent's name alone, and then adding the term agent, or agent of, will bind the agent unless there is something else appearing in the contract to indicate who the principal is and that he should be bound.

Aside from negotiable paper the same strict rule does not apply to the making of other simple contracts, yet good business practice would suggest the making of any contract so that there could be no doubt as to who was principal and who was agent.

42. To what compensation is an agent entitled?

In case there is an agreement as to wages the contract will control, but if nothing has been said about the pay it will be implied that there will be a reasonable compensation. The fraud or gross negligence of the agent may deprive him of the right to compensation. If the principal should revoke the agent's authority without due cause, the agent certainly has a right to recover pay for the value of all services rendered and damages that may ensue from failure to secure suitable employment after making due effort. If it be an agency for an indefinite period, upon revocation the agent should recover for the time he was actually engaged. If an agent agree to sell certain property, and is to receive a commission for making the sale, the principal may revoke his authority before the agency is executed and the agent may receive nothing for his labor. This is a harsh rule and will not be enforced if the agent has almost completed the transaction. An agreement may be made to the effect that the agent shall be permitted to entirely complete the undertaking and he can then recover the value of the service rendered.

43. What compensation will an agent receive who abandons the service of his principal?

If the agency be for a definite period a strict rule would give the agent no compensation, yet he may be permitted sometimes to recover reasonable pay for what he has done after deducting the damage done the principal by leaving his employ.

44. What remedy has an agent who is wrongfully discharged?

An agent who is hired for a definite time and discharged without cause before the period is completed, may sue for damages, regarding the contract as still being in force. An agent

discharged from the employ of a principal must use due diligence to secure other employment, not necessarily of a different kind or of an objectionable nature, but such sums as he may earn in the employ of another will be deducted from the amount to be recovered from the principal for his unlawful discharge.

45. What are the agent's rights to reimbursement?

Should the agent make any advances or pay any expenses necessary to the execution of the agency, he is entitled to be reimbursed at the hands of the principal.

An agent is entitled to protection if, in the course of the agency, acting in good faith, he should infringe upon the rights of another or trespass upon the property of another. An agent is answerable for any wrongful act done wilfully the same as though acting for himself.

46. What lien does an agent have?

An agent has a right of lien on the goods of his principal for his charges. The lien may be either general or particular. In the first case the agent may hold the goods for any charges accruing or balance due him, in the second case the lien will only hold the goods upon which the charges have accrued.

47. When may an agent withhold the goods of his principal?

If the agent has bought and paid for the goods out of his own money, or has become himself responsible for the price, he can hold the goods till the principal reimburses him. The agent under such conditions may exercise the right of "stoppage in transitu" if the principal be insolvent.

48. When may the third party look to either principal or agent?

If at the time the contract was entered into the agent did not disclose the principal, and afterward he is discovered, the third party may exercise a choice as to which he will charge. This must be done within a reasonable time, and having selected which one he will hold responsible, he cannot afterward change to the other.

49. For what statements and representations of the agent is the principal responsible?

As long as the agent acts strictly within the limits of his

authority, either express or implied, his acts are as binding as though the principal had acted personally. Hence, any statements or representations made by the agent during the negotiation of a contract within the scope of his authority are binding on his principal.

50. What is notice to the agent said to be?

Notice to the agent is said to be notice to the principal, and the principal is bound by such notice, even though the agent should not communicate the same to him. After the agent's authority is terminated notice to him is not binding on the principal.

51. When is the principal liable for the torts of the agent? Every person is required to use due care in the execution of his own business and should he employ some one to act for him, the same care and responsibility is still imputed to him. Consequently the wrongful act of the agent, while acting within the scope of the business, is the act of the principal. The agent may act in violation of orders, or to some extent maliciously, and still place the responsibility on the principal. If the agent goes beyond his authority or scope of business of course the principal is not responsible. The principal is responsible for any damage growing out of false or fraudulent statements made by the agent if made within the general scope of his agency.

52. Is a person dealing with a special agent bound, at his peril, to know the extent of his authority?

Since the authority of a special agent is much limited, the rule is that the third party must have a knowledge of its scope. Should he fail to discover this he deals at his own risk and cannot hold the principal responsible.

2

مان آن

2

PARTNERSHIP

"When two persons are liable for one and the same thing, if one makes default, the other must bear the whole."

1. What is a partnership?

A partnership is a contract relation wherein two or more competent persons unite their capital, labor or skill in some lawful undertaking, agreeing to share the gains and losses.

2. What name is usually applied to the persons forming such a contract?

They are called individually partners or copartners and collectively a firm.

3. Does a partnership have a legal entity?

No, it is only recognized as a group of individuals having a joint purpose and interested in a common result. It forms no artificial person as does a corporation.

4. What is the effect of a conveyance to a copartnership in the name of the firm?

It is insufficient to convey the legal title.

5. Why is this so?

Because the copartnership, as such, is not a legal person either natural or artificial.

6. How is a partnership created?

As to the partners themselves, only by agreement, and never by operation of law. As to third parties it may be implied.

7. What is usually implied in every partnership?

That each partner has brought something into the busi

ness.

8. By what test or tests may we know whether a partnership exists or not?