3. Agency by a person will be held as a principal toward third parties who in good faith contract with someone who is not his agent, under the belief that he is so, when by his words or conduct he gives reasonable cause for such belief, as, for example, when by his words or conduct he represents or per mits it to be represented that another is his agent. He is estopped from denying that such person is his agent, on the ground that he has really held him out to be so. The necessity for the rule is obvious. A might know that B was acting as his agent in a cer tain matter and be quite satisfied if B made a profit for him, but be ready to deny the fact of agency if B made a loss. That third parties in good faith may be protected, the person who holds another out as his agent in such a way, may not deny liability as a prin cipal if reverses come.
So it has been held that no estoppel by conduct to deny an agent's authority is established on the part of the principal, merely because one of its directors, who had no particular management of the property in question, upon being shown a contract for the sale of pulp wood from the principal's land made by an agent who was employed for another purpose and for that alone, said nothing until he returned to the head office, where he lost no time in informing the other directors as to the sale, resulting in the princi pal's solicitors at once taking the necessary steps to protect the principal's interest.' It has also been held that where one learns that an other had without authority been purporting to act in his name, he owes a duty to the third person with whom the transaction has taken place, to inform him that the transaction was without authority, and a failure in this duty may operate as an estoppel against a subsequent denial of authority as regards obliga tions afterward entered into by such third person on the faith of the pretended agency.' 4. Agency by certain conditions a person may without express authority bind another. The authority may even be denied. If a husband de serts his wife and leaves her unprovided, she may, as an agent of necessity, pledge his credit for necessaries in keeping with her station in life, as he is bound by law to provide for her. Nor may he revoke her au thority in this respect. But it must be shown that the articles obtained by the wife are necessaries, and that the husband is in default to supply them. The same rule is generally applicable in the case of chil dren. If a boy's father refuses to supply him with necessary clothing, a purchase thereof by the boy binds the father. Or if A ships a horse by railway, consigned to himself at a station on the company's line, and he has not arranged for its reception, the railway company must reasonably care for the horse, and for that purpose is an agent of necessity of the shipper. A conductor in charge of a train, in case of accident, would be an agent of necessity of the com pany in summoning medical assistance. The cap tain of a ship may be an agent of necessity to buy supplies, or even to sell the cargo.
5. Who may be principal.—As agency is a matter of contract, the general rule is that any person who has capacity to contract has capacity to enter into an agency agreement. Hence an'inf ant or a lunatic may be held bound under a contract entered into with his authority by his agent, if under the circumstances he would be bound had he himself made the contract. If an insane person appoints an agent at a time when he has not been adjudged insane, and the agent was ignorant of his insanity, the appointment is binding on him. As between such a principal and third par ties he will be bound where, tho at the time of the ap pointment of the agent he was sane, he later became insane to the knowledge of the agent but not to the knowledge of the third parties. The third parties under such circumstances are entitled to protection; but an insane person is also so entitled, and agency contracts made on his behalf by an agent with per sons aware of his condition may be set aside by the insane principal, or rather, by his representatives. A person insane, or whose intellect is clouded, by rea son, for instance, of a paralytic stroke, could not give a valid power of attorney, tho in a lucid interval he might.
Generally under the English law, a married woman, being separate as to property and entitled to deal with her property and affairs as freely as if she were un married, may act as an agent and may appoint agents by whose contracts in her behalf she will be bound. In Quebec, a married woman who executes a man date given to her, binds the mandator, but she could not be sued unless her husband were made a party to the action; nor would an action upon her agency con tract succeed unless her husband were a party to the contract. Tho if she were a public trader, duly au thorized by her husband, she could, in the course of her business, appoint an agent, in which case her hus band also would be bound, if they were common as to propeity. If separate as to property, she may do and make alone all acts and contracts connected with the administration of her property, which might in clude the appointment of agents; 6. When a business may be a principal.—A cor poration acts thru its agents, the directors, who in turn may appoint other agents for the carrying on of the company's operations. But a corporation cannot thru an agent do or accomplish any act ultra vires of its charter. A partnership business is carried on, as will later appear, on the basis of a reciprocal rela tion of principal and agent among the partners. Probably a partner may appoint an agent to perform certain of his duties, tho the consent of his co-part ners would in some circumstances be necessary. In the case of an unincorporated society or association, an agent would ordinarily be appointed by the members, not by the society which lacks corporate existence, and the members who appoint him or ratify his appointment or contracts would be bound.