The apparent authority is the real authority. And where the third party had knowledge of the terms of the agent's special authority, he will not be able to hold the principal for the acts of the agent which exceed such authority. If the authority is inferred from a course of dealings or the conduct of the princi pal, then the liability of the principal toward third persons will be based upon the extent of the agent's usual or customary authority. Innocent third per sons are entitled to deal with an agent so accredited where he acts within the seeming course of such em ployment. Hence the rule that one partner may bind his co-partners in all acts done in the usual course of the partnership business. Thus, also, if A sends B with ready money to buy certain goods, and B gets the goods and charges them to A, A is not bound.
But if A is in the habit of dealing on "tick" with C, and B buys goods from C for himself and charges them to A, A will be bound, if C is in good faith. Or if A allows his clerk B, as a general rule and in the course of business, to accept drafts or indorse notes, and B does so on an occasion and does not account for the money, A may be held liable.
14. General and special principal may attempt to restrict by private instructions the actions of a general agent, i.e., an agent appointed by the principal to transact all his business of a particular kind. The agent may exceed these instructions, and yet, as towards third parties treating with him as a general agent, bind his principal. As Lord Black burn has said: Where an agent is clothed with ostensible authority, no private instructions prevent his acts within the scope of that authority from binding his principal. Where his authority depends, and is known to those who deal with the agent to depend, on a written mandate, it may be necessary to pro duce or account for the non-production of that writing, in order to prove what was the scope of the agent's authority.' But if the agent is a particular agent, employed for one special act or transaction, then the third party must be careful to discover the exact extent of the agent's authority. Even the general agent, with the wide powers which the term implies, must act accord ing to the custom of trade or the usage of the par ticular business. Any departure therefrom will be sufficient to put the third party on his guard. Thus, a broker is supposed to sell stock for cash. If. he is authorized to sell shares for a client, he cannot sell on credit, unless the authorization so provides. Yet a principal can scarcely object where an agent executes his mandate in a manner more advantageous to him than that specified, and in such case the agent will not be held to have exceeded his powers.
15. Authority in ambiguous an agent's instructions fairly admit of more than one interpreta tion, and he in good faith adopts one or the other of them, the principal will be bound—tho he may not have intended the construction which has been acted upon. Thus, where an agent is instructed to dispose of fifty shares of stock at one hundred dollars a share, or over, he is entitled to sell at one hundred dollars, tho the market price may be rising. It has also been held by the House of Lords that where an agent was authorized to buy and ship five hundred tons of sugar, and he was told that if he could secure a suitable ves sel, fifty tons more or less did not matter, be had fairly and properly executed his mandate by securing a shipment of four hundred 16. Power of an agent acts un
der special written authority, he is said to act under "power of attorney." The writing may be signed be fore a notary under seal, or may be executed before witnesses. Its terms will be strictly interpreted to include only the powers mentioned and those which are an essential corollary' thereof.
The following is a form of power of attorney which might be adopted by a financial firm when giving a power of attorney to one of its branch managers, and of course the form could be altered to provide for any action on the part of the agent. This is a gen eral, rather than a special power of attorney.
17. Implied agent, as was hinted in the preceding section, has implied authority to do what may be necessary or incidental to the due and effective execution of his mandate; and in so doing will bind his principal. Thus, if an agent is employed to go thru the country and sell goods, he has implied au thority to hire a carriage to get to stations or to cus tomers. If by careless driving he causes an injury to horse or carriage, his principal will be bound to wards the owner thereof. A person who is author ized to buy goods for his firm, has implied authority to pay for them and to give receipts, and also to Par range discounts. But it has been held that where an agent is instructed to find a purchaser and to make a contract for the sale of a house, his duty ends there, and he has no implied authority to receive the pur chase money. A lawyer authorized to sue upon a note has implied authority to take payment and give a discharge. But an agent who is intrusted with goods which he is to sell, cannot pledge them under any im plied authority. The general rule to be observed is that acts done by way of implied authority in con nection with either a special or a general man date, must be not only incidental to, but in accord ance with, the usage or custom of the particular busi ness. Thus, an insurance broker who is authorized to issue d policy, has no authority to cancel the con tract on the policy: his ordinary duty as a broker is to make contracts of insurance, and not to cancel them, once they are validly entered upon. As to an agent's authority implied from special customs, Bow stead says: Every agent has implied authority to act, in the execution of his express authority, according to the usage and customs of the particular place, market or business in which he is employed. Provided that no agent has implied authority to act in accordance with any usage or custom which is unrea sonable, unless the principal had notice of such usage or cus tom at the time when he conferred the authority, or to act in accordance with any usage or custom which is unlawful. The question whether any particular usage or custom is un reasonable or unlawful is a question of law. In particular, a usage or custom which changes the intrinsic character of the contract of agency, or a usage or custom whereby an agent who is authorized to receive payment of money may receive payment by way of set-off, or by way of a settlement of accounts between himself and the person from whom he is authorized to receive payment, is unreasonable.