CH. IX. s. 1. himself at the time of making the agreement was, that he should not be liable as principal thereon (u). Contracts with Agents. Liability of agent knowingly acting without authority. Liability of agent unknowingly acting without authority. Collen v. Wright. Oliver v. Bank of England. Damages. Though the mere action in excess of authority will not of itself entail personal liability (x), an agent is personally liable to third parties whenever, in his dealing with them, he knowingly exceeds his authority-if the want of authority be not known to the person with whom he deals (y), or the extent of it be fraudulently misrepresented by him (2). Moreover, an agent who, having no authority, believes himself to have it and innocently misrepresents himself to a third party as having it, is personally liable to such third party for the consequences of the innocent misrepresentation. So it was held by the Exchequer Chamber in Collen v. Wright (a), by the Court of Appeal in Oliver v. Bank of England, and by the House of Lords in Starkey v. Bank of England, [1903] A. C. 114 (b). From the two latter of these cases it appears that the liability does not only apply to contracts, but extends to any case in which a person professing to have authority as agent induces another to act in a matter of business on the faith of his having that authority. The action will lie against the agent, on an implied contract by him, that he had the authority which he professed to have (c); and it will not be necessary to prove a fraudulent as well as a false representation (d). The damages recoverable in these cases from the agent will be such as naturally flow from his act. Where an agent bought a ship without authority for 6,000l., and his principal repudiating the contract, the seller had to resell for 5,500l., the agent became liable for the 500l. (e); brokers selling wool for repudiating principals became liable to the purchasers for the costs of an unsuccessful action by (u)_Wake v. Harrop (1862), 1 H. & C. 202, Ex. Ch. (x) Lewis v. Nicholson (1858), 18 Q. B. 503. (y) Harper v. Williams (1843), 4 Q. B. 219, 232; Downman v. Williams (1845), 7 Q. B. 103. (z) See Smout v. Ilbery (1842), 10 M. & W. 1, 9. (a) Collen v. Wright (1857), 8 E. & B. 647, Ex. Ch. (Cockburn, C.J., dissenting), affirming Lord Campbell, C.J., and Crompton and Wightman, JJ. In this case the plaintiff had contracted with an innocent land agent for 12 years' lease of a farm. (b) Starkey v. Bank of England, [1903] A. C.114; Oliver v. Bank of England, [1902] 1 Ch. 610, C. A., per Vaughan Williams, Stirling, and Cozens-Hardy, L.JJ., aff. Kekewich, J. In this case the defendants, who had innocently acted under a forged power of attorney for the sale of stock, and had had to re-transfer the stock to the plaintiff as a co-owner whose signature had been forged, recovered damages by the third-party procedure against a stockbroker who had innocently demanded to act under the power, on the ground that by so demanding he had impliedly warranted an authority to demand. (c) Per Jervis, C.J., Randell v. Trimen (1856), 18 C. B. 786, 794; Collen v. Wright (1857), 8 E. & B. 647, Ex. Ch. ; Warlow v. Harrison (1858), 1 E. & E. 295; and compare Firbank v. Humphreys (1886), 18 Q. B. D. 54, C. A., with Elkington v. Hurter, [1892] 2 Ch. 452. (d) Per Jervis, C.J., Randell v. Trimen (1856), 18 C. B. 786. (e) Simons v. Patchett (1857), 7 E. & B. 568. CH. IX, s. 1. Contracts with Agents. Excess of the purchasers against the principals (ƒ), and the same principle applies to a contract for a grant (g), or for a renewal (h) of a lease. But the agent will not be liable in such cases, unless the misrepresentation complained of be as to some matter of fact; and a authorityrepresentation by the agent, founded on a mistaken view of the contd. extent of his authority in point of law, will not render him liable to the person to whom such representation was made (i). Nor will the mere fact of an agent entering into a contract without authority render him liable to be sued on the contract itself. And accordingly it has been held, that where a party who has no authority so to do executes a written instrument in the name of another, and adds his own name thereto only as agent for that other, he cannot be treated as a party to that instrument, and be sued upon it, unless it be shown that he was the real principal (k). is bad. Likewise, correlatively, if an agent is employed to sell a When prinparticular thing and receives money for his principal in the course cipal's title of his agency, still, if the person who employs him has no right to the money, the agent is not entitled to hand it over to him, and is liable for it to the true owner if he does hand it over (l). liable after death of principal. Smout v. Ilbery. An agent continuing to act upon an original authority may Agent not represent it as continuing during ignorance of its determination personally by death, and is not personally liable upon a contract executed after determination unknown to the agent. This was held in Smout v. Ilbery (m). There a man who had been in the habit of dealing with the plaintiff for meat supplied to his house went abroad, leaving his wife and family resident in this country, and died abroad. It was held that although there was no remedy against the deceased husband, the wife was not liable for goods supplied to her after his death before she knew of it, the continuance of the life of the principal, the husband, being equally within the knowledge of the agent, the wife, and the plaintiff. The (f) Hughes v. Græme (1864), 33 L. J., Q. B. 335. (g) Collen v. Wright, supra, note (a). (h) Spedding v. Nevell (1869), L. R., 4 C. P. 212; and see Godwin v. Francis (1870), L. R.,5 C. P. 295; Richardson v. Williamson (1871), L. R., 6 Q. B. 276; Weeks v. Propert (1873), L. R., 8 C. P. 427; Ex parte Panmure (1883), 24 Ch. D. 367, C. A.; Meek v. Wendt (1888), 21 Q. B. D. 126. (i) Beattie v. Lord Ebury (1872), L. R., 7 Ch. 777, 800. (k) Jenkins v. Hutchinson (1849), 13 Q. B. 744, 752. See also Wilson v. Barthrop (1837), 2 M. & W. 863; Lewis v. Nicholson (1852), 18 Q. B. 503; and as to what is sufficient evidence of this, Carr v. Jackson (1852), 7 Exch. 382. (1) Ex parte Edwards (1884), 13 Q. B. D. 747, following Sharland v. In Ex parte Edwards the principal had (m) Smout v. Ilbery (1842), 10 M. & W. 10. CH. IX. s. 1. Contracts with Agents. Liability of agent by usage of trade. Foreign factor. principle of this case applies just as much to the dissolution of a company as to the death of a person: this was held in a case where a solicitor acting for a company was held liable for costs incurred after he ought to have known of the dissolution, but not before (n). By usage of trade in certain cases, an agent who contracts expressly "as agent," but without naming his principal, is held to be personally liable on such contract (o). So, by the usage of the Stock Exchange, its members deal with each other as principals, whether they act as brokers or not; and parties outside, who employ members as brokers are not recognised in transactions between members (p). So, by the usage of the London Dry Goods Market, a broker who contracts for the purchase of goods, without disclosing his principal, is liable to the vendor for the price of the goods, if the principal does not pay (q). And so, according to the ordinary course of trade in insurance cases, the insurance broker is held to be primâ facie liable to the underwriter, for all premiums payable on policies which he effects for him (1). And so by the custom of the hop trade, which makes the broker liable for an undisclosed principal, Ongley & Co., who sold "for and on account of owner," were held liable in an action for non-delivery of hops, although they were clearly not liable on the contract itself, because such a custom is not inconsistent with the contract, though it would have been inconsistent if the custom were to exclude the liability of the owner; and it was further laid down that on this custom, even if the owner's name had been disclosed after the making of the contract, the buyer might have sued either the principal or the broker (s). Lastly, when a factor in this country buys for a merchant abroad, the presumption is that the credit is given to the British buyer, and not to the foreigner (t). But it seems that there is no rule of law which makes the agent personally liable in such cases; and that his liability will always depend on the intention of the parties, which intention is to be collected from the terms of the contract itself, as explained by the custom or usage of trade, where any such can be shown to exist (u). (n) Salton v. New Beeston Cycle Co., [1900] 1 Ch. 43, per Stirling, J. (0) Dale v. Humfrey (1858), in Cam. Scac., E., B. & E. 1004, Ex. Ch. ; Fleet v. Murton (1871), L. R., 7 Q. B. 126; Hutchinson v. Tatham (1873), L. R., 8 C. P. 482. (p) See Merry v. Nickalls (1872), L. R., 7 Ch. 733; Seymour v. Bridge (1885), 14 Q. B. D. 460; Perry v. Barnett (1885), 15 Q. B. D. 388, C. A. (q) Imperial Bank v. London and St. Katharine Docks Company (1877), 5 Ch. D. 195. (r) Per Bayley, J., Power v. Butcher (1829), 10 B. & C. 329, 340; per Lord Tenterden, C.J., Scott v. Irving (1830), 1 B. & Ad. 605. (s) Pike v. Ongley (1887), 18 Q. B. D. 708, C. A.; aliter, if the written contract is inconsistent, Barrow v. Dyster (1884), 13 Q. B. D. 635. (t) Per Lord Tenterden, C.J., Thomson v. Davenport (1829), 9 B. & C. 78; Heald v. Kenworthy (1855), 10 Exch. 739; and see Smyth v. Anderson (1849), 7 C. B. 21, 33; Hutton v. Bullock (1874), L. R., 9 Q. B. 572, Ex. Ch. (u) Green v. Kopke (1856), 18 C. B. 549; Mahoney v. Kekulé (1854), 14 C. B. 390. (f) Secret Commission and Bribery. CH. IX. s. 1. Contracts Recovery of profits by from agent. principal From third party. action. All profits made by an agent, either directly or indirectly, in with Agents. the course of the agency belong to the principal, and may be recovered by him from the agent as money received to the use of the principal (x), or the principal may adopt the agent's agreement, and recover from the other party thereto any money which he may be liable to pay to the agent under it (y). If money be received by an agent for his principal, in the course Illegal transof an illegal transaction to which both are parties, the latter cannot sue the former for money had and received (z). But a principal who has lodged money in his agent's hands for an illegal purpose, may, before the money is so applied, countermand the agent's authority, and recover the money back in this action (a). An agent who receives money for the use of his principal, cannot defend an action by the latter for money received to his use, on the ground that such money was paid to him, the agent, by a third party, under an illegal contract between the latter and the plaintiff (b). When an agent violates his duty to the principal he will be liable Liability to to indemnify the latter for any loss sustained by him, provided principal. that the loss is the natural result of such violation of duty; for an agent to buy, if he buys goods of a description other than that ordered, is not liable to pay the difference between the value of the goods ordered and the goods bought, but merely the loss actually sustained by the principal in consequence of the goods not being of the description ordered (c). mission. Boston Deep Sea Fishing If the agent takes any secret commission, this may be recovered Secret comby the principal, for it is a gross offence and justifies dismissal (d). In addition to being bound to pay over secret profit to his principal, the agent forfeits his own commission by receiving such profit (e). An agent receiving money is bound to pay it over to his principal on request, and if he refuse, is liable for interest (x) Parker v. M'Kenna (1874), L. R., 10 Ch. 96; Phosphate Sewage Co. v. Hartmont (1877), 5 Ch. D., at p. 452, C. A.; De Bussche v. Alt (1878), 8 Ch. D. 286, C. A. (y) Whaley Bridge Co. v. Green (1879), 5 Q. B. D. 109. (z) Farmer v. Russell (1796), 1 B. & P. 296; Nicholson v. Gooch (1856), 5 E. & B. 999. (a) Taylor v. Lendey (1807), 9 East, 49. (b) Bone v. Eckless (1860), 5 H. & N. 925; Bousfield v. Wilson (1846), 16 M. & W. 185; Tenant v. Elliott (1797), 1 B. & P. 3; 4 R. R. 755. (c) Cassaboglou v. Gibbs (1883), 11 Q. B. D. 797, C. A.; Evans on Agency, (d) Boston Deep Sea Fishing Co. v. (e) Andrews v. Ramsay & Co., [1903] 2 K. B. 635, affirming judgment of Clerkenwell County Court. Co. v. Ansell. CH. IX. s. 1. from the date of refusal (ƒ), and an agent for commission, forfeits the commission by becoming himself the purchaser (ƒƒ). Contracts with Agents. Bribed agent. Sea Fishing The receipt of a commission from the parties with whom an Boston Deep agent is employed to negotiate is good ground for his dismissal, as was held by the Court of Appeal in a case where the managing director of a fishing company on a five years' engagement contracted for the construction of certain fishing smacks, and unknown to the company took a commission of 1 per cent. on the price from one shipbuilding company and of 50l. from another (g). Cotton, L.J., observed: Salford (Mayor of) v. Lever. Shipway v. "If a servant, or a managing director, or any person who is authorised to act and is acting for another in the matter of any contract, receives, as regards the contract, any sum, whether by way of percentage or otherwise, from the person with whom he is dealing on behalf of his principal, he is committing a breach of duty. It is not an honest act, and, in my opinion, it is a sufficient act to show that he cannot be trusted to perform the duties which he has undertaken as servant or agent. .." It has also been held by a Court of Appeal that if a bribed agent induces his principal to enter into a contract with the party bribing, and the contract turns out to be disadvantageous, the principal may recover the amount of the bribe from the agent and also damages from the agent and the party bribing, jointly or severally, for any loss resulting from the contract, without any deduction for the amount of the bribe. This was in Mayor &c., of Salford v. Lever, in which the plaintiffs owned the borough gasworks, and the defendant, a coal merchant, who had agreed to pay to the manager of the plaintiffs, having the duty of examining tenders for the supply of coal and advising the plaintiff's thereon, a secret commission or bribe of 1s. a ton, and then, in order to recoup himself for the commission so promised, inserted in the tenders a price in excess by 18. per ton of the prices he would otherwise have asked (h). And in Shipway v. Broadwood (i) it was further held that where the plaintiff had sold a pair of horses to the defendant subject to their being passed as sound by a named veterinary surgeon to be employed by the defendant, and the surgeon passed the horses. after accepting an offer of an unascertained amount and not proved (f) Harsant v. Blaine (1887), 56 L. J., Q. B. 511, C. A.; Bridger v. Savage (1884), 15 Q. B. D. 363. (ff) Salomons v. Pender (1865), 34 (g) Boston Deep Sea Fishing Co. v. Corrupt Practices Act, 1889, 52 & 53 Vict. c. 69, Chitty's Statutes, tit. "Local Government." A Prevention of Corruption Bill, first introduced by the late, and afterwards by the present, Lord Chief Justice of England and by the Lord Chancellor, imposing a criminal liability on bribed agents and their bribers, has again (1904) failed to pass. (i) Shipway v. Broadwood [1899], 1 Q. B. 369, C. A. |