It was held in [1901] 1 Ch. 344, that where an agent makes a contract for the 4rinelpal in the name of the principal, but claims no authority, there is no implied warranty, the rule being that the agent is liable on an im plied warranty of authority only when the other party relied on the existence of au thority in fact. In that case, Kekewich, J., points out that the modern rule of implied warranty laid down in Collen v. Wright, 8 El. & Bl. 647 (to which this case•is a curious exception), that a person making a contract as agent, in the name of the principal, pliedly contracts that he has authority, and, if he has not, he is liable in an action on such implied contract ; overruling the opin ion in Smout v. Ilberry, 10 M. & W. 12, which held that a professed agent for a named principal cannot be held personally liable without some sort of actual personal default.
Where the principal gives notice to the debtor not to pay money to the agent, unless the agent has a superior right, from a lien or otherwise, the amount of any payment afterwards made to the agent may be re covered by the principal from the debtor ; Story, Ag. § 429 ; 4 Camp. 60 ; Corlies v. Cumming, 6 Cow. (N. Y.) 186. Money paid by an agent may also be recovered by the principal under any of the following circum stances : first, where the consideration fails; second, where money is paid by an agent through mistake ; third, where money is il legally extorted from an agent in the course of his employment ; fourth, where the money of the principal has been fraudulently ap plied by the agent to an illegal and prohib ited purpose ; Paley, Ag. 335. When goods are intrusted to an agent for a specific pur pose, a delivery by him for a different pur pose, or in a manner not authorized by the commission, passes no property in them, and they may, therefore, be reclaimed by the owner; Paley, Ag. 340; Peters v. Ballistier, 3 Pick. (Mass.) 495. Third persons are also liable to the principal for any tort or in jury done to his property or rights in the course of the agency. If both the agent and third person have been parties to the tort or injury, they are jointly as well as sever ally liable to the principal, and be may main tain an action against both or either of them. Story, Ag. § 436 ; 3 Maule & S. 562.
The Liabilities of 'the Principal to His Agent or to Third Persons—To the Agent. The liabilities of the principal to his agent are—to reimburse him all his advances, ex penses, and disbursements lawfully incurred about the agency, and also to pay him inter est upon such advances and disbursements whenever interest may fairly be presumed to have been stipulated for or to be due to the agent ; Story, Ag. § 335; Paley, Ag. 107, 108
second, to pay him his conimissions as agreed upon, or according to the usage of trade, ex cept in cases of gratuitous agency ; Story, Ag. § 324 ; third, to indemnify the agent when, without his own default, he has sus tained damages in following the directions of his principal : for example, when the agent has innocently sold the goods of a third per son, under the direction or authority of his principal, and a third person recovers damag es against the agent, the latter will be enti tled to reimbursement from the principal; Story, Ag. § 339 ; Greene v. Goddard, 9 (Mass.) 212.
To Third Persons. The principal is bound to fufill all the engagements made by the agent for or in the name of the principa1,1 which come within tho scope of his usual employment, although the agent in the par ticular instance has in fact exceeded or vio 1 lated his private instructions; Story, Ag. 443; Fitzsimmons v. Joslin, 21 Vt. 129, 52 Am. Dec. 46 ; Bryant v. Moore, 26 Me. 84, 45 Am. Dec. 96; Ruggles v. Ins. Co., 114 N. Y. 415, 21 N. E. 1000, 11 Am. St. Rep. 674; Sails v. Miller, 98 Mo. 478, 11 S. W. 970. See [1893] 1 Q. B. 346. And where an exclu sive credit is not .given to the agent, the principal is liable to third persons upon con tracts made by his agent within the scope of his authority, although the agent con tracts in his own name and does not dis close his agency ; Story, Ag. § 446. But if the principal and agent are both known, and exclusive credit be given to the latter, the principal will not be liable though the agent should subsequently become insolvent ; Story, Ag. § 447. When goods are sold to a Person who in fact is the agent of another, but the seller has no knowledge of the agen cy, the latter may elect to make the pal his debtor on discovering him ; Merrill v. Kenyon, 48 Conn. 314, 40. Am. Rep. 174 ; Ben jamin v. Birmingham, 50 Ark. 433, 8 S. W. 183. The same principle applies where the seller is informed at the time of the sale that the buyer is an agent, but is not informed who the principal is; 9 B. & C. 78; Raymond v. Proprietors of C. & E. Mills, 2 Mete. (Mass.) 319. Where money is paid by a third person to the agent, by mistake or up on a consideration that has failed, the prin cipal will be liable to repay it although he may never have received it from his agent ; Story, Ag. § 451; Paley, Ag. 293; 2 Esp. 509.