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her husband. So, indeed, might a lunatic bind people who were foolish enough to employ him.
It may here be observed that if an acceptance be taken from an infant for a debt which he owes, he will, though not bound by the acceptance, be entitled to credit, like any other person, for the time the bill has to run, during which he cannot be sued either on the bill or on the original debt.
6. But to ascertain whether a person is capable of personally binding himself is generally far easier than to discover, in cases where he affects to act as agent, whether he is capable of binding those whom he pretends to represent. This, which at first sight would appear simple, will be found to require careful
It is scarcely necessary to say that where one man appoints another his agent, (which may be by word of mouth as well as by writing, and no particular form is necessary,) the agent becomes able to bind his principal as to all matters within the scope of his authority. We are not speaking now of contracts under seal, 2. e. by deed, to execute which the agent must be appointed by deed, for this work does not treat of any contracts which come under that class.
7. But it is not merely by virtue of an actual authority that one man becomes able to bind another; for A may hold such a position with regard to B, as that without such authority to act as agent, nay, the face of an express contract not to act as agent, A will be presumed by the law to have authority so to act, and will be capable of binding B in contracts made by all persons who are not aware of the actual arrangement between A and B.
In other words, a man who is not actually an agent, may be an agent to the world, though in so acting he be exceeding his authority, or even be guilty of a breach of contract as between himself and his supposed principal.
Authority, therefore, is divided into real and presumptive; real being where a man has actually or impliedly authorized another to do certain acts; and presumptive being where a man by his conduct holds out another as being authorized to bind him: for whether that other be really authorized or not, the public have under certain circumstances a right to conclude that such authority exists.
In fact real authority arises from the act of the principal, and presumptive authority from the appearances held out to the world. And both these kinds of authority may be either limited, i.e. as to time, particular acts or mode of business, or general, i. e. extending to all acts connected with the principal's affairs at all times. If the supposed agent acts without, or exceeds his real authority, and has no presumptive authority, he alone is liable.
8. In case of doubt whether a man has real authority or not, the best course, where practicable, is to ask his principal. Where the alleged authority is in writing, and is shewn to you, you must judge for yourself of its sufficiency, and whether the act which the agent proposes to do is within its scope.
There are many cases where you may be quite sure that a man is agent for another for some purposes, as in the case of clerks, foremen, attorneys, &c.; but you are not entitled to presume from the situations of those persons that they are capable of binding their employer in bill transactions; you must therefore be satisfied before dealing with them that they have a distinct authority, or a presumptive one, from a ratification of their former dealings.
9. An agent may have a special or limited authority referring to a single bill or note, or he may have a general authority to become a party to all bills or notes: clerks, and foremen at home, and other agents at a distance, are often general agents. A general authority to transact business does not enable the agent to bind his principal by accepting or endorsing bills. And special or limited authorities to accept or endorse are construed strictly.
10. We will now pass on to the cases of presumptive authority; that is, cases where, not knowing whether a man is authorized or not, you may presume that he is so.
Authority may be presumed from custom and acquiescence; as where A had been in the habit of endorsing and accepting for B in his name, and B had recognized A's acts, (as by paying the bills or otherwise,) B cannot defend an action on one of A's acceptances, on the ground that it is a forgery. And it is a question for a jury whether a man has held out another to the world as his agent by thus ratifying and adopting his acts.
Where an agent proposes to endorse bills which are
already in his hands, it is quite as important to inquire into his authority, as if he were about to draw or accept a bill; for, unless he be authorized, the only person bound by such indorsement will be the agent himself.
This refers to bills payable to order; if, however, the bills are payable to bearer, the agent may be presumed to have authority to transfer. But in whatever way the bills are payable, the transferee, if he knows the agent has no authority to transfer, cannot recover on the bills.
And when overdue bills, even though payable to bearer, are improperly transferred by an agent, the transferee cannot recover upon them, though he were ignorant of the absence of authority to transfer. The fact of their being overdue should put the transferee upon his enquiry; he takes them at his peril.
11. When a general agent is once constituted, his authority is presumed to continue till notice is given of its revocation. When a customer has dealt with a principal through an agent, or has become acquainted with the fact of his agency through business transactions, the customer is entitled to presume that the agency continues, until he has individually received notice that it has ceased. To persons who have not had such dealings with the firm, notice in the Gazette is sufficient.
12. An agent cannot appoint another person to act for him, unless specially authorized to do so.
An agent putting his name to a bill or note, does so either by writing his principal's name alone, or with the addition of his own.
If he omit to write his principal's name, his principal is not bound.
If the principal's name be written by a pretended agent, without authority, the principal is not bound.
If the agent write his own name as well as his principal's, he is bound as well as his principal, unless the agent's ministerial character clearly appear by the addition of such words as " per procuration,' or but only as agent for C. D.," &c. Where a bill drawn on a company was accepted by their agent, thus"Accepted, per H. B.," and where another drawn on a mining company was accepted by the purser, thus—
Accepted, W. C., Purser," the additions to the names were considered to be mere matter of description, and the agent was held to be personally liable.
Neither the general agent, nor the purser, of a costbook mining company can sign bills or notes so as to bind the company, but they themselves will be bound.
13. An agent holding a bill or note may sue and recover upon it the same as the principal; but if the principal cannot recover, no more can the agent.
So a principal, though his name do not appear on the bill or note, may take the benefit of it, if it be held for him by his agent; but is subject to any defence that might be set up against his agent. Thus, where a principal delivered a bill to his agent to be discounted, and the agent treated it as his own, and the transferee who discounted it only paid the agent a part of the money, the principal was held entitled to recover the remainder of the money from the discounter. But in that case, if the defendant, the discounter, had had a set-off against the agent, it could have been successfully pleaded against the principal.
14. The most important kind af agency, and that concerning which the greatest number of disputes arises is the agency which one partner exercises for another.
A partnership, it is important to observe, takes place whenever two or more persons participate, or are entitled to participate, in the profits of an undertaking.
In În every mercantile undertaking each partner is an agent capable of binding his co-partners in partnership transactions, by becoming a party to bills or notes in the name of the firm.
I have said "in a mercantile undertaking," for where the partnership is for other purposes, as for instance in case of farming, medical, and law partnerships, one partner cannot bind his co-partners by bills or notes.
A partner in a cost-book mine cannot bind his copartners by bills.
I have said "in the name of the firm," for the ordinary name of the firm must be signed on the instrument without any substantial variation.
If a bill be accepted, or a note made by a partner in his own name, the firm will not be liable to the holder, although the proceeds were applied to partnership purposes.
15. Whatever agreement may have been made among the partners, persons not aware of its nature may always presume that each partner has authority to bind the
others by bills or notes. It will always be safe, therefore, for persons so circumstanced to take a bill or note on which the name of the firm is written by one of the partners.
There are four kinds of partners, (1) ordinary, (2) dormant or secret, (3) retired, and (4) ostensible or nominal.
The presumption of authority to bind the two lastmentioned classes only arises under certain circumstances.
Ordinary partners are those who participate, or are entitled to participate, in the profits of the firm, and are recognised in that capacity.
Dormant partners are those who take a part of the profits without being ostensibly members of the firm.
Retired partners are those who have ceased to take or be entitled to the profits of the firm, directly or indirectly.
Ostensible partners are those who, by word or act, have held themselves out as partners, whether they are so or not.
Dormant partners will be bound, though the person dealing with the firm is not aware of the existence of such partners at the time of the contract.
Retired partners will be bound, unless the person dealing with the firm has notice of their retirement. This notice should be given to customers individually, and it is usual to apprize the public by means of a notice in the London Gazette. This notice, however, is by no means necessary, for there are many other circumstances, such as a change of names over the door, or on the invoices, or, in case of bankers, on the cheques, &c., from which it will be presumed that those acquainted with the place of business, or who had seen the invoices, or in case of bankers the altered cheques, knew of the change in the firm.
Ostensible partners, (that is, those who are merely ostensible partners,) are only liable to those to whom they have been held out as partners.
We will endeavour to illustrate the different rights which a contracting party may have against a dormant and an ostensible partner.
If at the time you deal with the firm of " A and B," you know that C is a dormant partner, and that D is an