Similarly, every act which an agent does in the course of his employment, and within the apparent scope of his authority, is binding upon the principal. But the agent must not actually be unauthorized, to the knowledge of the third person, to do the act. If the third person knows that the agent is exceeding his authority, he will not be allowed to take advantage of the principal. Thus the general manager of an amusement company engages a hall and orders the printing of advertising matter in preparation for the appearance of a foreign orchestra. The regulations of the company provide that all transactions shall be for cash. The company is liable, unless the third per son had notice that the manager acted beyond his au thority. His acts were within the apparent scope of his authority as general manager. The test is, then, that the extent of the agent's authority is (as between his principal and third persons) to be measured by the extent of his usual employment—by employing him the principal holds him out as his representative for the matter of the employment, and third persons in good faith are entitled to treat with him in connec tion with matters in the usual course of such employ ment. So it has been held that where the manager of a business which was carried on in his name, the real principal being undisclosed, ordered goods for the business, and in so doing exceeded his authority, the undisclosed principal was bound.' 31. Acts exceeding the scope of authority.—For such acts the principal is not bound, unless he has au thorized or ratified them. What acts are, or are not within the scope of the agent's authority or in the course of his employment, will have to be determined in each case. The courts will generally hold that an agent may adopt measures necessary or usual for carrying the main intention of the principal into ef fect.' Thus it has been held that an agent who is employed to get a bill discounted, may, perhaps, un less expressly restricted, indorse it in the name of his employer; that an agent appointed to receive rents and make leases can fix the period of the lease, and that a broker who is employed to issue a policy of insurance may settle the loss. On the other hand, it has been held that a bank is not bound where one of its man agers, without authority, guarantees payment of a draft, it not being within the ordinary scope of his authority to do so. Nor is a principal bound who in structed an agent to find a tenant for a property but not to grant a lease without consulting him, where, without consulting him, the agent granted for twelve years.
The principal is not bound toward third persons who deal with an agent who to their knowledge is exceeding his authority. Thus a broker has posses sion of certain goods upon which he has a lien for advances. He pledges the goods to a person who knows that in so doing he is exceeding his authority. The pledgee acquires no right; he cannot even retain the goods for the amount of the broker's lien, the lien not having been transferred under the circumstances.
32. Termination of agency.—The relation of prin cipal and agent arises from contract, express or im plied. The relation is terminated as other contracts are terminated, thus : (a) By the accomplishment of the particular busi ness or transaction. If a solicitor is retained to con duct a case, unless it is otherwise agreed, his man date ceases upon the rendering of the judgment. An auctioneer is instructed to sell certain goods; on the completion of the sale his authority ceases.
(b) By the expiration of the time for which the mandate is given. This may depend upon the terms of the contract. It may depend upon usage or the custom of trade. Thus a broker is authorized to sell certain goods. By the custom of trade his authority to sell may lapse with the expiry of the day during which the order is given.
(c) By the destruction of the subject matter.of the agency.
(d) By the happening of some event which renders the agency unlawful, or upon the happening of which it has been agreed the authority shall cease.
(e) By notice of revocation given by the principal to the agent, subject to the agent's right to damages in case of breach of contract.
(f) By notice of renunciation given by the agent to the principal. The agent may be liable for damages if his renunciation is unjustifiable.
(g) By the death of the principal or of the agent.
(h) By some change in the condition of either party by which his capacity is affected, as by lunacy, unsoundness of mind, interdiction, bankruptcy, or, where the principal is a corporation or company, by the dissolution of the corporation or company.
It may be stated as a general rule, that acts of the agent done in ignorance of the death of the principal or of any other cause whereby the mandate is extin guished, are valid. Nor does a revocation by the prin cipal affect third parties who may deal with the agent in good faith, without notice that the agent's authority has ceased.