contract for themselves. The reason for this is that many persons are competent to execute what they would be incompetent to conceive or direct. Thus an infant above seven years may be an agent for many purposes, and even at common law a wife might be an agent for her husband. Corporations and partnerships are frequently organized for the purpose of acting as agents for others. 409. Who Cannot be an Agent.-One cannot be an agent if in his duties or his relations to others, he would be compelled to assume inconsistent obligations. He owes a loyalty to the interests of his principal and he cannot discharge the duties of his position when his own interests are adverse. He cannot, unknown to his principal, act for both parties. A, a real estate agent, is requested by B to find and purchase for him a piece of land. A, knowing that C is the owner of such property, secures from him the agency for its sale. He then represents to B that he has bought C's land, and to C he represents that he has sold his land to B. There is no sale. An agent for a buyer contracts to employ his best skill to secure the property at as low a price as possible, and an agent for the seller contracts to get the best price possible. These duties are absolutely inconsistent, and one or the other must be neglected. 410. How Agents are Appointed. It is the general rule of law that no one can become the agent of another except by the will of the principal. But to this rule there is an exception when the agency is created by law. An example of this is where a husband turns his wife away through no fault of hers, when she may pledge his credit for necessaries, even against his will. The will of the principal, mentioned in the general rule above, may be expressed in a variety of ways. It may be by word of mouth, by a written instrument, or it may be by specialty. In many cases it may be implied from the acts of the principal, or the agent's previously unauthorized acts may be adopted and ratified. 411. Nature of Appointment. -The larger proportion of agencies may be, and are, created by parol, but the statutes of many States1 require that an agent created to make certain contracts must be appointed in writing. This class of contracts usually embraces those included in the Statute of Frauds. The appointment must always be of as high a nature as the trust to be executed, that is, if the 1Alabama, Arkansas, California, Colorado, Illinois, Michigan, Missouri, Nebraska, New Hampshire, New Jersey, Ohio, Pennsylvania. instrument to be executed by the agent must be under seal, the authority to execute it must also be under seal. In the absence of any statutory regulation to the contrary, unless the instrument to be executed is to be under seal, authority to execute a written instrument may be conferred orally, for an oral authority is of as high a nature as a written. The formal manner of appointing an agent is by power of attorney. This is an instrument under seal and is the authority that must be given when the agent is to execute an instrument under seal. If it be for a conveyance of real estate it should be so executed as to entitle it to be admitted for record. In those States where acknowledgment is necessary for that purpose, it must also be acknowledged. know All Men by Tbese Presents, That I, the undersigned, George H. McElvain, of the City of Galesburg, County of Knox and State of Illinois, have this day made, constituted and appointed, and do by these presents make, constitute and appoint L. H. Young, of the City of Chicago, in the County of Cook and State of Illinois, my true and lawful attorney, for me and in my name, to sell and dispose of, absolutely, in fee simple, the following described lot, tract or parcel of land, or any part thereof, situate, lying and being in the County of Cook, and State aforesaid, to wit: Lot 10, of Block 8, in Cooper's Addition to the city of Evanston, according to the recorded plat thereof, for such price or sum of money, and to such person or persons as he shall think fit and convenient; and also for me and in my name, and as my act and deed, to sign, execute, acknowledge and deliver such deed or deeds, and conveyance or conveyances, for the absolute sale and disposal thereof, or of any part thereof, with such clause or clauses, covenant or covenants, and agreement or agreements, to be therein contained, as my said attorney may think fit and expedient; hereby ratifying and confirming all such deeds, conveyances, bargains and sales which shall at any time hereafter be made by said attorney touching or concerning the premises. In Testimony Whereof, I have hereunto set my hand and seal, on this tenth day of August, A. D. 1901. GEORGE H. McELVAIN. [SEAL.] POWER OF ATTORNEY. A power of attorney should be acknowledged, and in some cases, as in the above form, it should also be recorded. 412. When Agency is Implied.--Whenever a person has held out another as his agent, or has knowingly permitted such other to act as his agent, or when his acts have been such as to reasonably warrant the presumption that such other is his agent, he will not be permitted to deny it to the injury of third persons. In these cases the agent has apparent authority. A stood by and permitted B to make a contract for him. He afterwards wished to repudiate the contract, claiming want of authority on B's part, but was not allowed to do so, for B's authority was implied. A, knowing that B was collecting money on his account, made no objection. When B failed to pay it over, A attempted to again collect it from his debtor, claiming that B had no authority. It was decided that B had implied authority. 413. Notice to Agent.-Whatever comes to the notice of the agent in reference to the principal's business, is deemed to be notice to the principal. The principal is also presumed to know what the agent has done while acting for him. CHAPTER XXXIV. AGENCY-CONTINUED. 414. Introduction. As we have previously remarked, there are three persons concerned in the law of agency, viz.: Agent, principal and third person. These each have rights, duties and liabilities to the other two. Rights will not be discussed, for the duties and liabilities of one party are generally reciprocally the rights of the other. For convenience these duties and liabilities will be discussed in the following order: I. Duties and Liabilities of Agent. II. Duties and Liabilities of Principal. 1. To Principal. 2. To Third Person. (1. To Agent. 2. To Third Person. 1. To Agent. 2. To Principal. DUTIES OF AGENT TO PRINCIPAL. 415. Agent Must be Loyal.-The agent must be loyal to his trust. He must not have personal interests that are adverse to his principal's. An agent authorized to purchase property cannot become the purchaser himself, and if he does he will be held to hold it as a trustee for his principal. A, a confidential agent of the lessee of a theatre, shortly before his principal's lease expired, secretly procured a lease of the theatre for a new term to himself. The court decided the lease was procured in violation of the agent's duties, and that he held it for his principal. All profits made in the course of the agency belong to the principal. It matters not whether such profit be the result of the performance or violation of the agent's duty. 416. Agent Must Obey Instructions. He must obey all reasonable and lawful instructions, and should he fail to do so, and a loss occurs thereby, he will be liable. He cannot, however, be held responsible for refusal to perform illegal or immoral acts. He may also be excused when a sudden emergency arises, which will not permit of delay for communication with the principal. In the absence of any positive instructions to the contrary, the agent will be justified in conforming to established usages and customs. The burden of proving disobedience of instructions lies on the principal. 417. Agent Must Not be Negligent.-The question of the care that the agent is bound to take of his principal's property, we have already discussed under the head of bailment. In addition to this the agent must use care and skill in the transaction of the principal's business. When the principal is made liable through the negligence of his agent, he can collect in turn from the agent the amount, including costs. A was instructed by his principal, B, to secure an insurance policy of $1,000 on a certain house. A neglected to do so, and the house burning down, he was held liable for the $1,000, less the premium. When a paper due at a distant point is left at a bank for collection, and it is forwarded to a local bank, there is a conflict of authority as to whose agent the local bank is. The question really is, is the transmitting bank liable for the neglect of the correspondent bank in making the collection and transmitting the proceeds, or is the correspondent bank liable directly to the owner? The former is held in some States1 and the latter in others." 418. Agent Must Account for Money and Property.-The agent is bound to account to his principal for all money and property which may come into his hands during the agency and by virtue of it. As has been remarked, all profits which result from transactions either within or beyond the scope of the agent's authority, belong to the principal. For this purpose it is the agent's duty to keep correct accounts. It is also his duty to keep the principal's property and funds separate from his own, and if he does so commingle them that 1 New York, Michigan, Ohio, New Jersey, Montana and Indiana. 2 Massachusetts, Connecticut, Maryland, Illinois, Wisconsin, Iowa, Mississippi, Missouri, Tennessee, Pennsylvania and Louisiana. he cannot discriminate between the two, all such property and funds belong to the principal. In case it becomes necessary for an agent to deposit his principal's funds in a bank, if he would escape personal liability in case of the failure of the bank, he should deposit it in his principal's name in a bank of good credit. 419. Agent to Give Notice.-It is the duty of the agent to give his principal reasonable and timely notice of every material fact which would be necessary for the principal to know to protect his interests. DUTIES OF AGENTS TO THIRD PERSONS. 420. Liability.--While an agent's duties, as such, are to his principal, yet in the performance of those duties he is bound to exercise a due regard for the rights of others. It is said that no man increases or diminishes his obligation to strangers by becoming an agent. He is liable in the transaction of his own business for any injury to others resulting from his fraud or negligence. So too, in transacting his principal's business, if he be negligent he is personally responsible for the result. It matters not that he was proceeding according to instructions, for no one can confer upon another authority to commit a fraud, or do an unlawful act. The principal also, in some cases, may be liable. The agent is liable: 1. When he exceeds his authority. 2. When the principal is unknown. 3. When the agent contracts personally. 4. When it is the custom to become personally responsible. 421. When he Exceeds his Authority.-No one is supposed to know so well as the agent himself what his authority is. He may bind the principal, but when he exceeds his authority he will be bound himself, and it matters not that he acted in good faith. 422. When the Principal is Not Known.-The agent is made personally responsible in this case, because the contract must have been entered into on account of his responsibility. A committee appointed by a political meeting ordered a public dinner. It was held that the members of the committee were personally responsible for the cost of the dinner. 423. When Agent Contracts Personally.-Often, for the sake of his interest in the contract, the agent agrees to become personally |