Under certain circumstances, also, the agent may be deprived of his commission. If he has been employed for an illegal purpose, he can claim no reward; or if he has been guilty of misconduct—bad faith or fraud, —or if he has been grossly negligent and as a result his employer receives no benefit thru his agency, or if lie betrays his trust and acts against his principal.
28. Agent's right to indemnity.—A principal must indemnify his agent for all obligations contracted by him toward third persons, within the limit of his pow ers, or even where be has exceeded his powers and his acts have been ratified. The principal must likewise reimburse the expenses and charges which the agent has incurred in the execution of the mandate. This is true even where, without fault on the part of the agent, the business undertaken does not turn out suc cessfully. An agent is also entitled to receive repay ment of all advances he has made on behalf of the principal in the regular course of employment. Such advances the principal is presumed to have asked him to make.
The principal's request may be inferred, where the ad vances are made in the regular course of trade, or even on the spur of some pressing exigency not provided for by any ordi nary rule, since the employer may fairly be taken to have authorized the employe to do, under any circumstances, that which a prudent man would conceive necessary for the safe guard of hi§ interests, e.g., to insure a cargo, which is in extraordinary danger on account of the lateness of the sea son. But if an agent think fit to make a payment out of the 'regular course of business, he will not, unless he can show circumstances from which his principal's authority may be inferred, or his principal adopts it, be entitled to repayment. Moreover, tho he is entitled to be repaid his regular expenses, yet if he conduct himself so negligently as to incur expenses which would not have been necessary had he acted rightly, he will be allowed nothing on account of them.
Upon proper advances made by the agent the prin cipal must pay interest. The principal must also in demnify the agent who is not in fault for losses caused him by the execution of the mandate, but not for losses caused by his disobedience or negligence. Hence if A authorizes an insurance broker, B, to execute a pol icy of fire insurance, and he revokes B's authority be fore the contract is completed, but B goes ahead, has the contract completed and pays the premium, he can not recover the premium from A, because he has acted without authority. But where an agent, in ignorance of the extinction of his mandate by the death of his principal, or for other cause, continues the execution of his mandate, he must be indemnified, for all such acts as are within his powers, by the principal or his legal representatives.
29. Lien, of agents.—As we have seen, the princi pal is bound to reimburse the expenses and charges which the agent has incurred in the execution of the mandate, and to pay him the salary or other compen sation to which he may be entitled. To secure pay ment, the agent has a privilege and right of prefer ence, a lien, for the payment of what is due him, upon the things placed in his hands and upon the proceeds of the sale or disposal thereof. There are certain con ditions to the existence of his lien—he must have ob tained possession lawfully in the course of the agency; there must be no agreement adverse to his right; he must not have received the goods for a purpose or under instructions incompatible with a right of lien. Such a lien is known as a possessory lien—which means that the agent has a right to retain the property until his claim has been satisfied. But the fact that he exercises his right of lien does not prevent his tak ing action upon the debt. In such case, he holds the goods which are under lien as a collateral security.' He may lose his lien by parting voluntarily with the goods, unless he is fraudulently induced to give up possession, or unless he gets an agreement that tho lie parts with the goods his lien continues in force. By contract, express or implied, he may waive his lien.
30. Acts performed within the powers of the man date.—The general rule is that the principal is bound in favor of third persons for all the acts of his agent, done in execution and within the powers of the man date. In particular instances—as in the case of a factor whose principal resides in a foreign country, or in case of an agreement or of the usage of trade—the agent may alone be bound for his acts, but these cases are exceptional. So that where the agent acts strictly within the/scope of his authority, he binds his principal toward third persons who deal with him in good faith, even tho he may have acted adversely to his principal's interests. So if A is authorized in writing by B to buy and sell cheese, and A buys a large quantity of cheese in his principal's name from C, sells it and pockets the proceeds without paying C, B will be held toward C, because, tho A acted fraudulently, he was, so far as C knew, acting strictly within his actual au thority. Tho C must be in good faith, it is not re quired of him, in the presence of such an express au thority, to go behind it to discover whether the agent is buying for himself or for his principal. The ap parent authority is the real authority.