A gratuitous agent is liable for gross negligence in the course of his agency, but not for mere want of skill, unless he is in a situation from which skill may be implied. But an omission to exercise such skill as he actually possesses or has held himself out to possess, or such skill as may reasonably be implied from his profession or employment, or to exercise such skill and diligence as he is in the habit of exercising in re gard to his own affairs, is deemed to be gross negli gence for the consequences of which he is responsible to the So that where a customer de posited certain securities with his bankers for safe keeping, the bankers receiving no reward for taking care of them, and the securities were stolen by a clerk in the banker's employ, it was held that as the bankers acted gratuitously, they were not liable, as there was no evidence of gross negligence on their part.
24. Measure Of by his negli gence or some other breach of duty an agent causes loss to his principal, the latter's claim against him will be for the amount of the actual loss sustained, i.e., such loss as would naturally result, or such as the agent, in the circumstances, might reasonably have known and expected would result. Hence, if an agent employed to insure his principal's goods neglects to do so, and they are destroyed by fire, he will be just as liable as the underwriters would have been had he effected the insurance. In another case, a commis sion agent in Hong Kong was instructed to buy a quantity of a certain kind of opium. He bought and shipped an inferior kind. It was held that the proper measure of damages was the loss actually sustained by the principal in consequence of the opium not be ing of the description ordered, and not the difference between the value of the kind ordered and of that shipped.' 25. Agent not liable on agency contracts.—An agent who acts in the name of his principal and within the bounds of his mandate, is not personally liable to third persons with whom he contracts. When we speak of an agent acting within the bounds of his man date, we include, of course, acts in excess of his au thority which the principal ratifies. If he contracts personally, tho on behalf of his principal, he may be sued in his own name, tho the principal may be known to the third person contracting. So it has been held that where an agent buys goods at a sale by auction, and gives his own name which is entered as that of the buyer he is liable, unless it is clearly proved that to the knowledge of the auctioneer he did not intend to bind himself. In such a case, it is proved that he did not "contract personally." But where an agent acts for an undisclosed principal, he is, in all cases, personally liable. He will even be liable for damages for non-performance of his contract. His offer to disclose his principal later will not help him. So that if an auctioneer, acting for an undis closed principal, sold a potato crop still in the earth, to be removed at the expense of the buyer, he would be held to have contracted to give authority to enter the field for the purpose of digging and removing the potatoes. He would also be considered to have war ranted that he had authority to sell.
It follows that if an agent makes a contract with a third party ostensibly on behalf of his principal, but in reality beyond the scope of his authority, he is in the position of having warranted to such third person that he had the authority he seemed to have. If he had not such authority, then he has deceived the third person and has committed a breach of warranty for which he may be sued. If he wilfully misrepre sents facts regarding the thing or matters which are the subject of his agency, he has deceived and is liable in damages. If he knowingly declares himself to be and acts as the agent of a non-existent or incompetent person, he will be personally liable. There is no cause of action for breach of implied warranty where there is no misrepresentation of the fact of authority, e.g., where the person signing in a representative capacity tells the person with whom he is dealing that he has no authority, but the negotiations proceed in anticipation of their being confirmed by the principal.' But when, in the course of his agency, he signs a deed in his own name, thus becoming a party thereto, tho he may be described as representing a principal who is named, he will be personally liable. If the principal is undisclosed, not only will he be person ally liable, but he alone could sue the other party thereto to enforce the contract, on the principle that a person/who is neither a party to a deed nor men tioned therein, cannot sue upon it.' So also when a
person makes a contract, professedly as agent but actually for himself as principal, he is personally liable.
An agent will be bound to repay money to a third person where it has been paid to him for the use of his principal, and (1) the agent has contracted per sonally and the credit is not given exclusively to the principal or (2) the agent has obtained payment by fraud or threat or (3) the agent, having had pay ment but before delivery. to his principal, is notified by the third party that the latter intends to demand repayment because of error, fraud, threats, and so 26. Actions by general rule is that an agent cannot sue on a contract made professedly on behalf of a principal. There are certain exceptions to the rule. Naturally where he contracts persbnally, or on behalf of an undisclosed principal, he may sue in person. But a factor, who according to our defini tion has a special property in the subject matter of the agency, in that he has a lien for any balance due him on the price of goods sold by him, may person ally sue therefor. Generally speaking, he will also be liable to third persons when his principal resides in a foreign country. It has been held that both a factor and an auctioneer may sue personally for the price of goods sold by them for their principals. If an agent has paid away his principal's money by error, he may sue in his own name to recover. Or he may sue in damages anyone who causes injury to the goods of his principal which are in his possession. In such cases the agents sue as trustees for their principals. But it has been held (and rightly so) that an agent cannot sue to recover money promised him by a third person as a bribe, tho he may not have been influenced in any respect thereby.' 27. Remuneration of agent.—The chief right of an agent against his principal is to receive his remunera tion or commission. The amount to which he is en titled depends upon the express or implied contract between himself and his principal. Where there is no express contract, an implied contract will be sought in the custom or usage of the particular trade or busi ness entered upon, from the circumstances surround ing the employment or from the conduct of the prin cipal. In the absence of custom or usage, according to the English rule, it is said that there is an implied contract to pay reasonable The Que bec rule is embodied in an article which provides that the mandate is gratuitous unless there is an agreement or an established usage to the Where an agent has carried out his instructions and has, say, brought a purchaser to the vendor, his principal, and the principal then does not complete the sale, it has been held that the agent is entitled to his commission. But he will not be entitled to commission, in the ab sence of a special contract to that effect, where the precise event which his services were sought to bring about has not resulted therefrom. And where by ex press contract a commission has been named, no im plied contract based on custom or usage can be urged against the express contract. Thus, if an agent, A, contracts with a wholesale drygoods firm that he shall receive a commission of five per cent on "all sales ef fected or orders executed by him," it has been held that if one or more purchasers become insolvent be fore payment, he is entitled to his commission tho it may be the custom of the trade that an agent will not receive commission in respect of bad debts. If the principal revokes the appointment he pays no com mission, tho the agent is entitled to be indemnified for his labor and expense. So it has been held that where all that a real estate broker, who had an exclu sive right to sell property, did toward making a sale was to advertise it in a newspaper before the owner effected a sale thereof, the agency was revoked, and the agent could recover only for the services actually performed, and not the compensation agreed upon in case he should make a sale.' In the absence of a contrary agreement, an agent is entitled to commission only on the transaction which he brings about—he cannot extend his right to some subsequent transaction. Thus, if an agent is author ized to find a lessee of a house and he does so, he re ceives his commission; if the tenant later buys the house, the agent cannot claim a commission on the sale. The sale does not arise directly from his agency.