Part 2

When a person is really acting as an agent, but this is not known by the persons with whom he is doing business, he is liable to them as if he were the principal. It often happens for various reasons that agents do not disclose their principals. Suppose a dealer finds out that the agent presumably acting for himself was, in truth, acting for another, could the real principal be held responsible and the agent escape, or could both be held? The answer is, after discovering the real principal, both can be held, or either of them. The failure of an agent to disclose his agency will not make him individually liable if the other party knew that he was dealing with a principal with whom he had had dealings through the agent's predecessor. Notice of the agency to one member of a firm is not sufficient notice to the firm to release the agent from personal responsibility in subsequent transactions with another member who did not know and was not informed of the agency. Again, the liability must be determined by the conditions existing at the time of the contract, his subsequent disclosure will not relieve the agent. Finally, while the agent may be held in such a case, the principal also is liable, except on instruments negotiable and under seal, on the discovery of his relationship as principal.

While secret instructions to an agent that are unknown to persons dealing with him do not bind them, the principal is liable for any acts within the scope of his agent's authority connected with the business conducted by his agent for him. Some very difficult questions arise in applying this rule. A car conductor is instructed to treat passengers civilly and to use no harsh means with them, save in extreme cases. How far may a conductor go with a disorderly passenger? Very likely he would be justified in putting him off; suppose the conductor was angry and administered hard and needless kicks in the operation? His principal surely would not be liable, though the conductor doubtless would be. Suppose in buying a railway ticket the agent loses his temper and calls you a liar and a thief, you would have an action against him for slander, unless you happened to be one, but you would have no action against his principal for the company did not employ him to slander its patrons; to do this was clearly not in the scope of his employment.

An agent must not act for both parties in any transaction unless this is understood by both of them. Nor can an agent receive any personal profit from a transaction. Whatever profit there may be should be given to the principal. Thus if an agent is authorized to buy a piece of property for his principal and buys it for himself, or hides the transaction under the name of another, the principal, after discovering what his agent has done, can proceed to obtain the property.

An agent must be faithful and exercise reasonable skill and diligence. Money belonging to the principal should be deposited in the principal's name, or, if in the agent's name, his agency should be added; otherwise if the bank failed the agent would be responsible for the loss. Again, if the agent deposited the money in his own name the true owner could proceed against the bank to recover it.

A principal is liable for the statements and representations of his agent that have been expressly authorized. He is also liable even for false and fraudulent representations made in the course of the agent's employment, especially those resulting in a contract from which the principal reaped a benefit. Even though the statements may not have been expressly authorized, such authority may be implied by law because they are the natural and ordinary incidents of the agent's position. Thus the position of a business manager often calls for a great variety of acts, orders, notices, and the like, and statements made while performing them are regarded as within the line of his duty.

An agency may end at a fixed time, or when the particular object for creating it has been accomplished, or by agreement of the parties. In many cases an agency is created for an indefinite period, and in these either party can terminate it whenever he desires. There are some limitations to this principle. Neither party can wantonly sever the relation at the loss of the other; and if one of them did he would be liable for the damage sustained by the other. Likewise if the agent has an interest of his own in the undertaking the principal cannot terminate it before its completion without the agent's consent. Such a rule is needful for his security. The bankruptcy of a business agent operates as a revocation of his authority, but not when the act to be done is of a personal nature like the execution of a deed.

If the principal becomes insane and unable to exercise an intelligent direction of his business, his condition operates as a revocation or suspension for the time being of his agent's authority. If on recovering, he manifests no will to terminate his agent's authority, it may be considered as a mere suspension, and his assent to acts done during the suspension may be inferred from his forbearing to express dissent when they come to his knowledge. Likewise an agent's insanity terminates or suspends the agency for the time being unless he has an interest of his own in the matter. Partial derangement or monomania will not have that effect unless the mania relates to the agency, or destroys the agent's ability to perform it.

Again, the marriage of a principal in some cases, unless a statute has changed the common law, will revoke the power previously given, especially when its execution will defeat or impair rights acquired by marriage. Thus should a man give a power of attorney to another to sell his homestead, but before effecting a sale the principal should marry, his marriage would revoke the power. By marrying the wife acquires an interest in the property which cannot be taken away from her without her consent by joining in a deed of conveyance with her husband. Likewise the marriage of a woman would operate to revoke a power of attorney previously given by her whenever its execution would defeat the rights acquired by her husband. An agent's marriage usually will not affect the continuance of his agency.

When an agency is terminated it is often needful for the principal to notify all customers for his protection, otherwise they might continue to do business with the agent, supposing he was thus acting, and involve him perhaps in heavy loss. This rule applies especially to partnerships, each member of which is an agent with general authority to do the kind of business in which it is engaged.

If the authority of an agent in writing is revoked, but is still left with him and is shown to a third person who, having no knowledge of the revocation, makes a contract with him, the principal will be held for its execution.

Another rule of law may be given. The law assumes that any knowledge acquired by an agent concerning his principal's business, will be communicated to his principal, who is bound thereby. This rule though is often difficult to apply. Thus, if a cashier of a bank should learn that a note was defective, which was afterward discounted by his bank, it would be regarded as having knowledge of the defect, because it was the cashier's duty to inform the proper officials before they discounted it.

The death of either agent or principal terminates the agency except in cases of personal interest. And when an agent has appointed a substitute or subagent without direct authority, and for his own convenience, the agent's death annuls the authority of the subagent or substitute, even though the agent was given the right of substitution. But if the subagent's authority is derived directly from the principal, it is not affected by the agent's death.

=Agreement to Purchase Land.=--An agreement to purchase land must be in writing to be valid. Oral or parol agreements may be made to do many things, but everywhere the law makes an exception of agreements relating to land purchases. A statute that is quite similar in the states requires this agreement to be in writing and signed by the party against whom it is to be enforced. Thus if the seller wishes to enforce such an agreement, he must produce a writing signed by the purchaser; if the latter wishes to hold the seller, he must do the same thing. The better way is to have the writing signed by both parties.

How complete must the writing be? It need not mention the sum to be paid for the land; it can be signed with a lead pencil: a stamp signature will suffice. The entire agreement need not be on one piece of paper. If it can be made out from written correspondence between the two parties this will be enough.

To this rule of law are some exceptions. Therefore if an oral agreement for the sale of land is followed by putting the buyer into possession, the law will compel the seller to give him a deed. The proceeding would consist of a petition addressed to a court of equity, which would inquire into the facts, and if they were true, would compel the seller to give the purchaser a deed of the land. The reason for making this exception is, the purchaser would be a trespasser had he no right to be there: to justify his possession the law permits him to prove, if he can, his purchase of the land; and if he has bought it, of course he ought to have a deed of his title.

Once, a purchaser who made an oral agreement and paid part of the purchase money could compel the seller to give him a deed, and many still think such action is sufficient to bind the bargain. This is no longer the law. The practice gave rise to much fraud: A would assert that he gave money to B to pay for land when in truth it was given for some other purpose. So the courts abandoned the rule founded on the part payment of the purchase price. A can however get back his money.

An option to purchase land, contained in an agreement to sell, must be exercised within a reasonable time, if none is fixed in the agreement. See _Deed_.

=Auctioneer.=--An auctioneer, employed by a person to sell his property, is primarily the owner's agent only, and he remains his exclusive agent to the moment when he accepts the purchaser's bid and knocks down the property to him. On accepting the bid the auctioneer is deemed to be the agent of the purchaser also, so far as is needful to complete the sale; he may therefore bind the purchaser by entering his name to the sale and by signing the memorandum thereof. His signing is sufficient to satisfy the Statute of Frauds in any state conferring on an agent authority to make and contract for the sale of real and personal property without requiring his authority to be in writing. His agency may begin before the time of the sale and continue after it. Again, the entry of the purchaser's name must be made by the auctioneer or his clerk immediately on the acceptance of the bid and the striking down of the property at the place of sale. It cannot be made afterward. The auctioneer at the sale is the agent of the purchaser who by the act of bidding calls on him or his clerk to put down his name as the purchaser. In such case there is little danger of fraud. If the auctioneer could afterward do this he might change the name, substitute another, and so perpetrate a fraud.

A sale by auction is complete by the Sales Act when the auctioneer announces its completion by the fall of the hammer, or in other customary manner. Until such announcement is made, any bidder may retract his bid; and the auctioneer may withdraw the goods from sale unless the auction has been announced to be without reserve.

Authority may be conferred on an auctioneer in the same manner as on any other agent for the sale of similar property, verbally or in writing. Even to make a contract for the sale of real estate, oral authority to the auctioneer is sufficient, in the absence of a statute to the contrary.

Authority to sell property does not of itself imply authority to sell it at auction, and the purchaser therefore who has notice of the agent's authority or knowledge sufficient to put him on inquiry, acquires no title to the property thus purchased. If goods are sent to an auction room to sell, this is deemed sufficient evidence of authority to sell them in that manner and to protect whoever buys them.

As an auctioneer is ordinarily a special agent, the purchaser is supposed to know the terms and conditions imposed by the seller on the agent. The seller or owner therefore is not bound by any terms stated by the auctioneer differing from those given to him. If the owner has imposed no terms on him, then he has the implied authority usually existing in such cases.

An auctioneer has authority to accept the bid most favorable to the seller when the sale is made without reserve and to strike down the property to the purchaser. He cannot therefore consistently with his duty to his principal refuse to accept bids, unless the bidder is irresponsible or refuses to comply with the terms of the sale. He is justified in rejecting the bids of insane persons, minors, drunken persons, trustees of the property, and perhaps in some cases of married women.

An auctioneer cannot transfer his duty to another. This rule does not prevent him from employing others to do incidental things connected with the keeping and the moving of the property. He cannot sell on credit contrary to his instructions or custom; nor would he be secure in following custom if instructed to do otherwise. After the bid has been accepted the bidder has no authority to withdraw it without the owner's consent, nor can he be permitted to do so by the auctioneer. Nor can he sell at private sale if his instruction is to sell publicly, nor can he justify himself even if he acted in good faith and sold the property for more than the minimum price fixed by the owners. Nor can he sell the property to himself, nor authorize any other person to bid and purchase for him either directly or indirectly. It is impossible with good faith to combine the inconsistent capacities of seller and buyer, crier and bidder, in one and the same transaction.

He has no authority to warrant the quality of property sold except custom or authority is expressly given to him. Nor is he an insurer of the safety of the goods entrusted to him for sale; he must however use ordinary and reasonable care in keeping them. Lastly, an auctioneer should disclose his principal and contract in his name. If one bought property therefore supposing it belonged to A, when in fact it belonged to B, through any manipulation of the auctioneer, the bidder would not be bound.

=Automobile.=--The members of the public have a right to use the public avenues for the purpose of travel and of transporting property: nor has the driver of horses any right in the road superior to the right of the driver of an automobile. Each has the same rights, and each is equally restricted in exercising them by the corresponding rights of the other.

Again, the public ways are not confined to the original use of them, nor to horses and ordinary carriages. "The use to which the public thoroughfare may be put comprehends all modern means of carrying including the electric street railroad and automobile." It has been declared that the fact that motor vehicles may be novel and unusual in appearance and for that reason are likely to frighten horses which are unaccustomed to see them, is no reason why the courts should adopt the view of prohibiting such machines.

The general rule is that all travelers have equal rights to use the highways. An automobile therefore has the same rights and no more than those of a footman.

The mere fact that automobiles are run by motor power, and may be operated at a dangerous and high rate of speed, gives them no superior rights on the highway over other vehicles, any more so than would the driving of a race horse give the driver superior rights on the highway over his less fortunate neighbor who is pursuing his journey behind a slower horse.

There is no authority or power in the state to exclude non-resident motorists from the public ways, nor have the states power to place greater restrictions or burdens on non-resident automobilists than those imposed on their own citizens.

A license to operate an automobile is merely a privilege. It does not constitute a contract, consequently it does not necessarily pass to a purchaser of the vehicle, and may, for a good reason, be revoked. Moreover the charge imposed for the privilege of operating a motor on the highway is not generally considered a tax, only a mere license or privilege fee.

An automobile may be hired from the owner. This is called in law a bailment. The bailor is not responsible generally for any negligence of the hirer in operating the car. Nor is the rule changed should the hirer be an unskilled person, unless he was an immature child or clearly lacking in mental capacity, or was intoxicated. Where the owner of an automobile delivered it to another by agreement, who was to pay the purchase price from the money derived from its use, and thereafter had complete control of the machine, his negligence could not be charged to the seller.

Again, where an automobile is hired and the chauffeur is also furnished by the owner, who pays him for operating the car, and the hirer has no authority over him except to direct his ways of going, the chauffeur is regarded as the servant of the owner. He, therefore, and not the hirer is responsible for the negligence of the chauffeur. Of course, the rule would be changed if the hirer assumed the management of the car: then the hirer alone would be liable for the chauffeur's negligence.

A party who hires an automobile from another is bound to take only ordinary care of it and is not responsible for damage whenever ordinary prudence has been exercised while the car was in his custody. If lost through theft, or is injured as a result of violence, the hirer is only answerable when these consequences were clearly the result of his own imprudence or negligence. The hirer though must account for the loss or injury. Having done this, the proof of negligence or want of care is thrown on the bailor.

If the hirer should sell the automobile without authority to a third party, the owner or bailor may bring an action against even an innocent purchaser who believed that the hirer had the title and power to sell.

There is an implied obligation on the hirer's part to use the car only for the purpose and in the manner for which it was hired. And if it is used in a different way and for a longer time, the hirer may be responsible for a loss even though this was inevitable.

Suppose the hirer misuses the car, what can the owner do? He can repossess himself, if this can be done peaceably, otherwise he must bring an action for the purpose. As the hirer acquires a qualified title to the property, he can maintain an action against all persons except the owner, and even against him so far as the contract of letting may set forth the relations between them.

When an owner or hirer undertakes to convey a passenger to a specified place and, while on the way, the car breaks down, if it cannot be properly mended at the time and the owner or hirer is able to furnish another, the law requires him to do so and thus fulfil his contract.

"The owner of a motor vehicle," says Huddy, "is of course entitled to compensation for the use of the machine. If a definite sum is not stated in the contract between the parties, there arises an implied undertaking that the hirer shall pay a reasonable amount. One who uses another's automobile without consent or knowledge of the owner, may be liable to pay a reasonable hire therefor. In case the hirer is a corporation, there may arise the question whether the agent of the company making the contract has authority to bind the company. Where a machine is hired for joy riding on Sunday, it has been held that the contract is illegal and the hirer cannot recover for the use of the automobile."

The speed of automobiles along the public highways may be regulated by law. A municipality may forbid the use of some kinds of motor vehicles on certain streets, but it cannot broadly exclude all of them from all the streets. The rules regulating travel on highways in this country are called, "the law of the road." The object of these rules is to prevent collisions and other accidents, which would be likely to occur if no regulations existed.

A pedestrian who is about to cross a street may rely on the law of the road that vehicles will approach on the proper side of the street. This rule however does not apply to travelers walking along a rural highway. Huddy says: "When overtaking or meeting such a person, it is the duty of both the pedestrian and the driver of the machine to exercise ordinary care to avoid a collision, but no rule is, as a general proposition, definitely prescribed as to which side of the pedestrian the passage shall be made."

The law of the road requiring vehicles to pass each other on the right, contrary to the English custom, has been reënforced in many or all the states by statutory enactments, and applies also to automobiles. When, therefore, two vehicles meet and collide on a public highway, which is wide enough for them to pass with safety, the traveler on the wrong side of the road is responsible for the injury sustained by the other. But a traveler is not justified in getting his machine on the right-hand side of the road and then proceeding regardless of other travelers; on the contrary, the duty of exercising reasonable care to avoid injuries to others still continues.

Not only must each one pass to the right, but each must pass on his own side of the center line of the highway, or wrought part of the road. And when the road is covered with snow, travelers who meet must turn to the right of the traveled part of the road as it then appears, regardless of what would be the traveled part when the snow is gone. After passing the rear of the forward vehicle an automobilist must exercise reasonable care in turning back toward the right into the center of the highway, and if he turns too soon he may be liable for damages caused by striking or frightening the horses. "If two vehicles meet in the street, it is the duty of each of them, as seasonably as he can, to get each on his own right-hand side of the traveled way of the street."

The rights of travelers along intersecting streets are equal, and each must exercise ordinary care to avoid injury to the other. An automobilist nearing an intersection should run at proper speed, have his car under reasonable control, and along the right-hand side of the street. If two travelers approach the street crossing at the same time neither is justified in assuming that the other will stop to let him pass. When one vehicle reaches the intersection directly in advance of the other, he is generally accorded the right of way, and the other should delay his progress to enable the other to pass in safety.

The driver of an automobile may be charged with negligence if, without warning to a vehicle approaching from the rear, he turns or backs his machine and causes a collision. Indeed, it is negligence for a chauffeur to back his machine on a city street or public highway without looking backward; and especially if one backs his car on a street car track without looking for street cars.