AGENT (Lat. agens, acting, pres. part. of ague, to act). A modern term in English law. As a generic term, it includes every one author ized to act for and represent another; but it is often used in a specific sense to denote one authorized to act for another in making con tracts between that other, called the principal, and third persons. Blackstone dues not employ it, and it rarely occurs in law dictionaries, di gests, or decisions before the nineteenth century. For a time after its appearance it is used inter changeably with the word servant. During the last century, however, the tendency of judges and law writers has been toward a complete dif ferentiation of the terms "agent" and "servant." A fair illustration of the result is afforded by the following provisions of the California Civil Code: "An agent is one who represents another, called the principal, in dealings with third persons." "A servant is one who is employed to render personal service to his employer. otherwise than in the pursuit of an independent calling, and who in such service remains entirely under the control and direction of the latter, who is called his master." Using "agent." then, to denote a person authorized to act for and represent an other in business transactions with third per sons, and reserving the rules relating to master and servant (q.v.) for a separate article, let us consider, (1 ) how agency is constituted, (2) the liability of the principal to third parties, (3) the liability of the agent to third parties.
(4) the liabilities of principal and agent to each other, (5) the termination of agency.
(1.) Ordinarily, the relation of principal and agent originates in a contract (q.v.) between the parties, but it may exist without a contract, as where A gratuitously undertakes to do .an act for B. The relationship may rest upon ratifica tion, instead of a precedent agreement. For ex ample: A does an act avowedly as B's agent, without authority from B. The act does not bind B, unless he accepts it as done on his be half. If he does so accept it, his ratification is equivalent in law to a precedent appointment of A as agent. Even without appointing A or ratifying his acts, B may become liable for those acts, because his conduct induces third parties to believe that A is B's agent. In such a case there is agency by estoppel (q.v.). Still another form of agency is that which is created by the law, as where the law authorizes a wife to pledge her Inediand's eredit for necessaries. the language of a learned judge. "the law cre ates a compulsory agency, and her request is his request." (2.) A principal who has authorized an agent to do an act for him, or has ratified the act, is liable to third persons precisely as if the act had been done by him. As a rule, the principal
is disclosed to the third party, and the latter un derstands that the transaction is between them, the agent being a mere conduit for the transmis sion of the principal's consent. But even though the principal is not disclosed. nay, even though the third party may refuse to enter into a trans action with the principal and may insist upon contracting with the agent as a principal, yet upon discovering that the transaction was for the principal's benefit and authorized by him, the third party may hold the principal Iiable. To this extraordinary liability of an undisclosed principal there are sundry limitations. If thb third party has taken a written contract under seal or negotiable paper, duly executed by the agent in his own name, he cannot sue the prin cipal on that instrument, because technical law permits only the parties to such a writing to be sued on it. Again, the third party may lose his right of action against an undisclosed principal by a final choice or election (q.v.) to hold the agent only; or by undue delay in proceeding against the principal. The principal may be liable to third parties for his agent's acts which he has never authorized, or which he has even forbidden. His liability in such cases depends upon whether the acts were done within the scope of the agent's apparent authority; for the principal will not be allowed to show that he secretly forbade what he appears to have author ized. What is the scope of an agent's authority depends upon the facts of the particular ease, including ordinary business usages relating thereto. As the agent is, in law, a mere con duit of the principal's will, and thus identified with the principal, knowledge acquired by, or notice given to, the former during his agency, at least, is imputed to the latter. An exception to this rule exists where the agent acquires the knowledge or receives the notice in a transac tion conducted by him in fraud of the principal. In such a case the agent cannot be expected to disclose his knowledge to the principal, and the legal fiction that the principal and agent are but one person will not be pressed so far as to work palpable injustice. It should be noted in this connection that when an undisclosed prin cipal is liable to he sued by the third party, he is entitled, as a rule, to sue. This correlative right, however, he will not be allowed to enforce to the third party's injury. For example: any defense which the third party could have set up, had he been sued by the agent, he can interpose to an action by the principal.