PRINCIPAL AND AGENT. Agency is a relation between two or more persons, by which one party, usually called the agent or attorney, is authorized to do certain acts for, or in relation to the rights or property of, the other, who is denominated the principal, constituent, or employer. Prof. Joel Parker, MS. Lect. 1851.
A contract by which one person, with greater or less discretionary power, under takes to represent another in certain busi ness relations. Wharf.. Ag. 1.
The right on the part of the agent to act, is termed his authority or power; In some instances the authority or power must be exercised in the name of the principal, and the act done is for his benefit alone. In others, it may be executed in the name of the agent, and if the power is coupled with an interest on the part of the agent, it may be executed for his own benefit; Prof. Joel Parker, Harvard Law School Lect. 1851.
The principal is one who, being competent swi juris tq do any act for his own benefit or on his own account, confides it to another person to do for him. 1 Domat b. 1, tit. 15, Introd.; Story, Ag. § 3.
The agent is one who undertakes to trans act some business, or to manage some affair, for another, by the authority and on account of the latter, and to render an account of it; 1 Livermore, Ag. 67. See Co. Litt. 207; 1 B. & P. 316.
The term is one of a very wide application, and includes a great mady classes of persons to which distinctive appellations are given ; as, factors, brokers, attorneys, cashiers of banks, auctioneers, clerks, super cargoes, con signees, ships' husbands, masters of ships, and the like.
Other names for an agent are proxy, dele gate, representative ; and for principal, em ployer, constituent or chief ; Mech. Agency § 3. In fact the terms agent and attorney are often used synonymously. Thus, a letter or power of attorney is constantly spoken of as the formal instrument by which an agency is created ; Paley, Ag. Dunl. ed. 1, n.
No word is more commonly used than agent ; [1897] A. C. 180. It is sometimes used as meaning one who has no principal, but who on his own account offers for sale some particular article having a special name; 39 L. J. Ch. 36.
"The line of demarkation between the rela tion of principal and agent, and that of mas ter and servant is exceedingly difficult to de fine; . . . the two relations are essen tially similar; . . . the difference be tween them is one of degree only, and not of kind ;" Mechem, Agency § 2. It is that the former relates to commercial or business transactions and the latter deals with mat ters of manual or mechanical execution ; Kingan & Co. v. Silvers, 13 Ind. App. 80, 37 N. E. 413. A contract giving the right to sell all the product of a company for five years at a certain commission was merely an employment to sell on commission and did not create the relation of master and servant; Morrow v. Ice Co., 211 Pa. 445, 60 Atl. 1004. An agency to manage, lease and sell proper ty and pay expenses upon it and to collect debts and pay over the money received to the principal, is fiduciary in its character ; Zetelle v. Myers, 19 Grat. (Va.) 62. The cor respondent of a firm of brokers who receiv ed money on representations that they would purchase options on the Chicago Board of Trade and who shared with him the commis sions taken, was not an agent of either party, but a particeps eriminvis in a gambling en terprise; Munns v. Commission Co., 117 Ia. 516, 91 N. W. 789. But where a bank repre sented itself as acting as agent for one who corresponded directly with the other person respecting loan applications, which the bank offered to submit to the plaintiff's assignor, it was merely an agent and not liable for the proposed lender's failure to furnish the money and to accept the loan ; Klay v. Bank,
122 Ia. 506, 98 N. W. 315. Where a canner agreed to ship to defendant for sale the en tire output of his establishment during the season it made him merely an agent and not a joint owner of the shipments; Elwell v. Coon (N. J.) 46 Atl. 580. But an offer to furnish engines on defendant's order at cer tain discounts and terms for a year did not create an agency but merely gave the right to purchase at the discount; Russell & Co. v. McSwegan, 84 N. Y. Supp. 614. Another text writer says that agency and service are "distinguishable . . . by the fact that the former relates to business transactions, in which there is more or less discretion al lowed to the employee, while the latter re lates to manual services which the employee is, as a rule, obliged to perform under spe cific orders ;" Whart. Agency, §§ 19, 20. Me chem also points out in the section above cited that agency relates to transactions with third persons and implies more or less of dis cretion in the agent, whereas service has ref erence to actions upon or about things in which the servant acts under the direction and control of the master. He adds truly that this distinction is not altogether satis factory in its application, as, except in the very lowest form of service, more or less dis cretion is allowed the servant ; and in almost any form of agency, the agent is subject to the specific control of the principal. Usual ly, however, "the distinction is sufficiently clear for practical purposes, particularly as the same principles of law will ordinarily be applied to either relation." In distinguishing between partnership and agency, it is to be remembered primarily that each partner acts in every transaction as Principal for himself and as agent for the oth er members of the firm. And hence the ques tion sometimes arises whether the action tak en by one person was as the agent of another who would be entitled to the benefits of the transaction, or partly on his own behalf and partly on the behalf of others jointly interest ed in him. In the former case there would be an agency and in the latter a partnership, and in dealing with such questions, it is nec essary to remember that each partner does act in the dual capacity of principal and agent; Cox v. Hickman, 8 H. L. Cas. 268, 311; Worrall v. Munn, 5 N. Y. 229, 239, 55 Am. Dec. 330. No general rule can be stat ed which will determine the character of the transaction as between those two relations in every case, but each must depend upon circumstances which show the intentions of the parties and determine the construction of the contract; see Grinton v. Strong, 148 Ill. 587, 36 N. E. 559.
Another question may arise as to whether the transaction is one between principal and agent for the sale of goods by the latter for the account of the former, and this may affect not only the parties themselves but their obligations and liabilities to third per sons. In these cases, also, resort must be had to the construction of the contract and the light which may be thrown upon it by proof of the intention of the parties; Bay liss v. Davis, 47 Ia. 340; see SALE; and for a collection of cases on this particular point see Clark & Skyles, Ag. p. 16 et seq., §§ 8-10.
Another distinction which is involved in many caps is whether a person is an inde pendent contractor or an agent, he being in the former case in no sense under the control of the person for whom he is working. See