CHAPTER III. TERMINATION OF THE RELATION. 45. Methods of termination.-As the formation of the relation of principal and agent depends fundamentally upon the will of the parties, the relation in the same way continues and so it is terminated. There are cases, however, wherein the relationship is terminated by operation of law. In general, there are three modes by which the relationship is terminated: First, by express or implied limitation; second, by the act of the parties; and third, by operation of law. When reference is made to the termination of the relationship by limitation it is understood that the period of time for the fulfillment of the agency has been reached, or that the time allowed for the performance of the particular act has passed. In the case of an agent being engaged for a particular purpose the agency comes to an end at once upon his accomplishment of the object.56 46. Same subject-By original agreement. Where there is an express agreement between the principal and the agent, limiting the agency to a definite time, the relationship is terminated when the time fixed has been reached. Notice of the termination of the agency under such conditions is 56 Moore v. Stone, 40 Iowa 259, LEADING ILLUSTRATIVE CASES; Ahern v. Baker, 34 Minn. 98. generally unnecessary. Should the parties, however, continue their relationship by mutual consent after the expiration of the stated period it will be presumed that the original contract is continued for a further like period. But the contract between the parties must be looked at and, as in all other contracts, the element of intention of the parties thereunder will play a strong part in its construction. 47. Same subject-By subsequent agreement.An agreement made between the parties subsequent to the formation of the relation, cancelling and rescinding their original agreement, will, of course, put an end to the agency. As in other agreements there must be present in the rescinding contract the essential element of consideration. So, too, if either party abandons the contract of agency, or his rights thereunder, this will be deemed sufficient to terminate the relation. The subsequent agreement will not be effectual, however, to terminate the agency if the power conferred on the agent be coupled with an interest.57 48. Same subject-By revocation of authority. -Where an agency has been properly created it is a general rule that it may be terminated by the principal by revocation of the authority conferred and by the agent by renunciation of the appointment. There are certain exceptions which will be noted below. It is the general rule that all simple agencies, so called, are revocable at the will of the principal. But in cases of simple agencies the principal cannot always relieve himself from the dam 57 Chambers v. Seay, 73 Ala. 372. See also § 51. ages, if any, incurred by a breach of the contract of employment; and vice versa the agent, notwithstanding his renunciation, may be held responsible for damages to the principal. Simple agencies are distinguished from agencies or powers "coupled with an interest," as will be shown. If I authorize a real estate agent to sell my house for $5,000 and agree to pay him a commission of 211⁄2 per cent at the time of sale, I may revoke the agency and cancel the authority at any time without incurring liability to the agent. If, however, I say to the agent that I desire him to advertise the sale of the house in certain newspapers and that I will pay him his expenses as well as his commission, I shall be liable to the agent for his expenses if I revoke the agency before sale.58 49. Same subject. The principal's right to revoke is distinct from his power to revoke. He may, in many cases, exercise the power of revocation, but he may be right or wrong in so doing; that is, right or wrong in the eyes of the law. A principal is generally in a position to so exercise his power as to deprive the agent of the means and authority of accomplishing the purpose of the agency. In the cases of contracts of employment where the contract covers a period of a year, for example, at a stipulated weekly, monthly, or yearly compensation, the principal has the power to terminate the employment by discharging the agent but he has not a complete legal right to do so, for in an action brought by the agent under the contract the prin58 Blackstone v. Buttermore, 53 Pa. St. 266. cipal will be compelled to pay damages for the breach thereof. As held in the Pennsylvania case cited in footnote 58, even where the principal confers authority upon an agent by power of attorney to sell lots and the power contains a clause that the same is irrevocable prior to a certain day, nevertheless the principal has the power to revoke the agency prior to the expiration of the time limit. The agent, however, has a right of action for damages under the contract.59 Where a positive and absolute contract to employ an agent for five years is made it must be carried out. If the principal exercises his power to revoke the contract, the agent may hold the principal liable thereunder even where the principal was obliged by law to discontinue his business in the particular state.60 It has been held, as has already been indicated, that where a contract of employment for a specified period, say for one year, is made and at the expiration of the period the parties continue their relations as under the original contract, the law will presume a continuance for another year, and a revocation of the agent's employment will subject the principal to damages.61 50. Same subject-The element of good faith.— It was laid down in an important case62 that the question of good faith on the part of the principal 59 Blackstone v. Buttermore, 53 Pa. St. 266. 60 Lewis v. Atlas Mutual Life Ins. Co., 61 Mo. 534. 61 Standard Oil Co. v. Gilbert, 84 Ga. 714. 62 Sibbald v. Bethlehem Iron Co., 83 N. Y. 378. plays a strong part in deciding the question of his liability or non-liability in revoking the agency. In the case mentioned the agent had been employed to sell certain railroad supplies on a commission basis, and after great labor and expense on his part he was unsuccessful. The agency was terminated and shortly afterwards the principal dealt with certain parties with whom the agent had been previously negotiating. It was determined that if the act of the principal in revoking the agent's authority was in good faith the agent could not recover. It was said that a broker always works on a contingency and that his reward comes only with success. matters not, it was said, that ultimate good resulted from the efforts of the agent to the principal, after the termination of the agency. The controversy was decided on the particular ground that, the agency being a simple agency, it was revocable at the will of the principal acting in good faith. It 51. Same subject-Power coupled with an interest. When the power given to an agent is coupled with an interest the principal has neither the right nor the power to revoke the agency. What is a "power coupled with an interest?" In a leading case upon the subjects it is said that such an interest "must be an interest in the thing itself. In other words, the power must be engrafted on an estate in the thing. A power coupled with an interest is a power which accompanies, or is connected with, an interest. The power and the interest are united in the same person. But if we * * * 63 Hunt v. Rousmanier's Adm'rs, 8 Wheat. 174 (U. S.). |