The authority of an agent may be either general or special aecordiug to the class to which the agent belongs. The authority of agents by implica tion, ostensible agents, and agents by necessity have already been considered on page 44. Generally as between the agent and his principal the authority of the agent will depend entirely upon the terms of the agreement between them ; and for the purpose of discovering the extent of the authority, such an agree ment must be strictly construed ; that is to say, it must be read as nearly as possible in its literal meaning, and without inferring from it other and differ ent meanings. But .it must be construed so as to include all the necessary means of executing the authority. When investigating a case as between the principal, agent, and third parties, the extent of the agent% powers will depend upon the ostensible authority given to the agent, for a secret limita tion of powers is no answer to the claims of third parties who are unaware of such a limitation. But if the agent's authority is known to be special, the third party must make himself acquainted with its limit, unless by the conduct of the principal he is prevented from doing so, or unless the prin cipal leads him to reasonably infer that the authority is of a particular nature and extent.
There are certain classes of agents such as brokers, auctioneers, Sze., whose authority is implied, and as we have already seen in the case of the stockbroker who was bound, because of the Stock Exchange rules, to buy certain shares to the disadvantage of his principal, the person who employs an agent of such a special class impliedly gives him authority to follow the usual custom and rules, and do the usual acts pertaining to such class. Thus an authority to settle losses on a policy of insurance has been held to include a right to refer the matter to arbitration ; and an authority to " sign for me and in my name .. any and every contract . . . and from time to time to negotiate, make sale, dispose of, assign and transfer " cestain notes, was held to authorise a sale, though not a pledge. So, in a recent case, where the third party sued the principal for specific performance of a contract to sell a house, the principal had written to his agents in the words following : " Please sell for me my houses . . . and I agree to pay you by way of commission the sum of Q per cent. on the purchase price accepted," and had afterwards written a letter to the agents, who were also acting for the purchaser, accepting their client's offer of seven hundred and eighty•five pounds for the property, it was held that the direction to sell included an authority to the agent to make and sign on behalf of the vendor a binding contract for sale.
But not only does the law look to authorities with a view to extending, or at least liberally construing them ; it also protects the principal against the agent in any way exceeding the definite limits of his agency. Thus if, for example, the authority to the knowledge of the third party is for a special agent who is a member of a firm, to sell and receive payment in cash and pay the same to the principal ; but such agent, instead of so receiving payment, takes therefor a cheque payable to his firm, which banks it and afterwards, without the knowledge or consent of the principal, credits him with the amount thereof in respect of a debt due to the firm, then both the third party and the agent are liable to the principal for the amount of purchase-money.
If all agent represents himself to a third party as having an authority which in fact he has not, and the third party suffers a loss thereby, then even though the agent may have bond believed that he possessed such authority, the third party not knowing of such absence of authority, the agent is liable to the third party in an action for breach of warranty of As regards third general rule is that an agent is not personally liable on the contract, but the principal is always so. There are many exceptions to the rule, but they mainly depend upon the principle that the law endeavours to meet the real honesty and justice of a else, so tha4 where goods, for instance, are placed in the hands of a factor for sale, and are sold by him under circumstances that are calculated to induce, and do induce, a purchaser to believe that he is dealing with a principal, the latter is not permitted afterwards to tell the purchaser that the character he him self has allowed the factor to assume did not really belong to him. For the purchaser may have bought for the express purpose of setting off the price of the goods against a debt due to him from the seller. But the case would be different if the purchaser had notice at the time, that the seller was acting merely as the agent of another, for in such a case there would be no honesty in allowing the purchaser to set off a bad debt at the expense of the principal.
We will now consider the rights and liabilities of third parties under the following important circumstances. (a) Where the principal is disclosed. If a contract is in writing, and the agent appears therein as principal, although known in fact to be contracting as agent only, the agent is liable on the con tract unless he can show that the contract was so drawn by mistake, or that there was a collateral agreement that he should not be liable. But this would not be the prinza fizcie rule if the contract were not in writing, for under such circumstances the presumption would be that the principal alone has any liabilities and rights, unless the agent is able to prove that he was treated as an agent merely, and was not to be held liable in any event. He would in fact be liable in cases where he was commission agent for a foreign principal, or where the principal was incapable or where the custom of trade makes him liable, even though his principal were disclosed. If the agent has an interest, e.g. a lien, on the proceeds of a contract not in writing, he may himself sue thereon, even though his principal is disclosed.