CHAPTER 29 THE DUTIES AND LIABILITIES IN CONTRACT OF PERSONS. (THE AUTHORITY § 228. General rule. § 229. Unauthorized assertion by agent of his authority. § 230. Express, implied and apparent authority. § 231. Implied and apparent authority in general and special agencies. § 232. Construction of special appointments. § 233. Implied (or apparent) power of agent to borrow money. § 234. Implied (or apparent) power of agent to bind principal upon commercial paper. § 235. Implied (or apparent) power of agent to sell personal property. § 236. Implied (or apparent) power of agent who has indicia of title to sell goods. § 237. Implied (or apparent) power of agent to sell, to receive payment. § 238 Implied (or apparent) authority of selling agent to extend credit on sales. § 239. Implied (or apparent) authority of buying agent to buy on credit. § 240. Implied (or apparent) power to warrant. § 241. Admissions of agent. § 242. Authority of agent to receive notice. § 228. (Agency, Sec. 44.) General rule. (See also Central Trust Co. v. Bridges, supra, Case 202.) Case 227. Law v. Stokes, 3 Vroom (N. J.) 249. Facts: Suit brought to recover the amount of a bill of goods sold by Law to Stokes. Defense: That the goods were paid for by payment to Law's agent. Denial that the person paid was plaintiff's agent to receive payment. Plaintiff, Law, was an importer of earthenware, and Stokes a hotel keeper. Stokes on July 5, 1865, bought at Law's store earthenware amounting to $320.85 from an agent by the name of Sheridan employed by Law to sell goods on commission. Sheridan sold the goods on credit to be paid on August 1, 1865. On July 6, 1865, the goods were shipped, and a letter was sent by Law to Stokes, which said, in part, "please remit amount direct to me." Inclosed was a bill on the head of which were the words, in red letters, "All remittances on account, or in settlement of bills must be made direct to the principal; salesman not authorized to collect." On August 16, 1865, defendant paid Sheridan for the goods at defendant's hotel, taking receipt signed "J. B. Sheridan, for Henry D. Law." Sheridan absconded with the money. Defendant claims never to have seen the letter, and the bill was handled by his son, who was his bookkeeper and who never read the bill head. Point Involved: The authority of the agent as determined by the acts and notices of the principal in appointing him. DEPUE, J.: A principal is bound by the acts of his agent within the authority he has actually given him, which includes not only the precise act which he expressly authorizes him to do, but also whatever usually belongs to the doing of it, or is necessary to its performance. Beyond that, he is liable for the acts of the agent within the appearance of authority which the principal himself knowingly permits the agent to assume, or which he holds the agent out to the public as possessing. For the acts of the agent, within his express authority the principal is liable, because the act of the agent is the act of the principal. For the acts of the agent, within the scope of the authority he holds the agent out as having, or knowingly permits him to assume, the principal is made responsible; because to permit him to dispute the authority of the agent in such cases would be to enable him to commit a fraud upon innocent persons. In whichever way the liability of the principal is established, it must flow from the act of the principal. And when established, it cannot on the one hand be qualified by the secret instructions of the principal nor on the other hand be enlarged only by the unauthorized representations of the agent. * "Where an agent is intrusted with the possession of goods, with an unrestrained power to sell (Higgins v. Moore, 6 Bosw. 344) or payments are made over the counter of the principal's store to a shopman accustomed to receive money there for his employer (Kaye v. Brett, 5 Ex. 269), the authority to receive payment will be implied in favor of innocent persons, because the principal by his own act gives the agent an authority to receive such payment. But if the principal forbids such payments, and requires all payments to be made to himself personally, or to a cashier, and gives a customer notice thereof, the customer would have no right to insist upon the apparent rather than the real authority of the agent. "In the case now before the Court, Sheridan had not the possession of the goods. The sale was made on credit, and the payment was made to him, not over the plaintiff's counter at his place of business, but at defendant's hotel. (The Court, here, holds that the weight of the evidence was that defendant got the letter, but irrespective of that, defendant's son got the bill head, and was defendant's agent in that respect, and what he knew or should have known in respect to the agent's limited authority was binding on the defendant. Judgment for plaintiff. But regardness of that fact there was, as shown by the court's reasoning above, no apparent authority in the agent to collect the money under the circumstances of the case.) * * Question 227: (1) State the three classes of powers which as stated by the Court, an agent may possess. (2) May the principal qualify the power of the agent by secret instructions? (3) May the agent enlarge his authority by his own statements? Why? (4) When will the power to receive payment be implied? § 229. (Agency, Sec. 45.) Unauthorized assertions by agent of his authority. (Note: The case of Law v. Stokes, supra, and National Bank of Peoria v. Nichols, post, as well as generally the other cases in this chapter bring out clearly, that a person dealing with an agent cannot rest his case upon the assertions by the supposed agent as to his own authority. "An agent cannot confer power upon himself, and therefore his agency or authority cannot be established by showing what he said or what he did. The source of authority is the principal, and the power of the agent can be proved only by tracing it to that source in some word or act of the alleged principal." It is of course true, as a practical proposition, that people dealing with agents do take the agent's word for his authority, but in the event the principal repudiates, then the agent's authority must be traced back to something the principal said or did by which he conferred or apparently conferred the authority in question. Any other doctrine would place it in any one's power to bind others merely by claiming to be agent.) § 230. (Agency, Sec. 46.) Express, implied and apparent authority. (Note: Authority of an agent may be classified.) 1. Real authority. a. Express, that is, stated in language oral or written. b. Implied, that is, deduced from the express grant. 2. Apparent, that is, seeming, though perhaps not real. § 231. (Agency, Sec. 47.) Implied and apparent authority in general and special agencies. (See cases under next section.) § 232. (Agency, Sec. 48.) Construction of special appointments. Case 228. Wood v. McCain, 7 Alabama, 800, 42 Amer. Decisions, 612. Facts: Stedman, being about to leave the State gave one Revis a letter of authority, calling Revis his "general agent," and authorizing him "to transact his business in this State" and delivered Revis accounts due Stedman for medical services rendered to various parties "for settlement." One Wood was surety for Stedman for certain indebtedness, and when Wood found that Stedman had left the State, leaving the indebtedness unpaid, he prevailed on Revis to assign the accounts to him so that he might collect and hold the funds as indemnity against his liability as surety. Wood, as such assignee sues McCain a debtor to Stedman, and McCain resists suit on the ground that Wood has no title to the claim. Point Involved: Whether a power generally to transact another's business and to collect and settle accounts receivable gives any power to assign such accounts to principal's surety for his indemnity. Generally, of the powers of universal, general and special agents. "It is supposed by the counsel for the plaintiff in error, that as Revis was the general agent of his principal, it must be presumed he was authorized to make the assignment in question. This conclusion is by no means a necessary sequence from the premises. General, are clearly distinguishable from universal agents, that is from such as may be appointed to do all the acts, which the principal can personally do and which he may lawfully delegate the power to another to do. 'Such a universal agency may potentially exist; but it must be of the very rarest occurrence. And, indeed, it is difficult,' says Mr. Justice Story, 'to conceive of the existence of such an agency, inasmuch as it would be to make such an agent the complete master, not merely dux facti, but dominus rerum, the complete disposer of all the rights and property of the principal.' Such an unusual authority will never be inferred from any general expressions, however broad, but the law will restrain them to the particular business of the party, in respect to which, it is presumed, his intention to delegate the authority was principally directed. Thus, if a merchant in view of his temporary absence, should delegate to an agent |