Special powers of attorney or appointments will not be extended by implication to include any act not necessary or reasonable to carry into effect the purpose of the grant.
On the general principle that a person need not give another any power to represent him, and if he does give him power, need not give him more than he desires, an appointment of an agent is not to be extended beyond reasonable implication. Of course it is true that an ambiguously worded authority will be most strongly construed against the maker, but nothing will be read into the power that is not fairly there59
59. Reese v. Medlock, 27 Tex. 120.
A few examples illustrate this rule.
Example 16. P gave A a power of attorney to collect his debts, calling A his "general agent" to transact his business. A assigned the debts to B who brought suit against one of P's debtors. The debtor questioned B's right to bring the suit. Held, that A's authority was confined to the collection of debts and that he had no authority to assign a claim to B even though he was called a general agent. His authority will depend entirely upon that which was actually given him.60
Example 17. P gave A a power of attorney to make, indorse, draw and accept commercial paper in A's behalf. T served on A a notice of dishonor of commercial paper. Held that A had no implied authority to receive such notice to bind P.61
An agent has no implied or apparent power to borrow money unless it is practically indispensable to enable him to carry out the express power.
It will readily be seen that the power of an agent to borrow money is one by which he can readily work hurt to his principal; and while the principal may confer it, and very frequently does, it is not a power that will be readily inferred. To be implied "it must be practically indispensable to the execution of the duties really delegated in order to justify its inference."62 It is noteworthy that in a search of the cases the courts have very rarely held the power to be implied. It is practically necessary to the protection of a lender that he have the principal's word for it that the agent has power to borrow money.
60. Wood v. McCain, 7 Ala. 800.
61. Wilcox v. Routh, 9 Smedes & Marsh (Miss.) 476.
62. Consol. Nat. Bk. v. P. C. S. S. Co., 95 Cal. 1.
Example 18. N appointed H a general manager giving him charge of one of its eleven agencies, with power to sell, to employ assistants, to collect accounts, to pay bills and to rent a building. He borrowed money from the bank in which he kept his agency account. Not repay-ingfthe loan, the principal was sued. Held, that from the facts shown no power to borrow money in his principal's behalf would be inferred. The fact that defendant carried on the sale of its products through the medium of agencies distributed over the country would be no ground for a conclusion that the various agents for making sales of machinery and collecting the proceeds were clothed with authority to borrow money.63
The fact that an agent has actual power to go into debt for the purchase of supplies, renting premises, etc., gives him no implied or apparent power to borrow money for those purposes. For such borrowed money may be diverted from its rightful purpose. Surely I can give an agent an authority to buy goods from A without giving him power to borrow money with which to pay for such goods.
The implied power to make or indorse negotiable instruments is strictly confined to those cases in which it is necessary in order to enable the agent to carry out the main power conferred upon him.
The power to bind a principal upon commercial paper is, like the power to borrow money, a dangerous power. It will not lightly be inferred. It will however, be upheld where reasonably necessary to the execution of the powers conceded.
63. Merchant's Nat. Bk. v. Nichols, 223 111. 41.
The power to collect a debt, even if it be collectable in cash, gives the agent no authority to endorse a check given in payment of it and a bank will be held liable for cashing the check for the agent; for the bank has no right to increase the principal's risk of loss by converting such paper into cash.64
The power to collect gives the agent no authority to take paper payable to himself, even though he could have collected in cash.65
An agent has no apparent power to sell personal property from the mere fact of the principal's giving him possession.
An agent, or for that matter, any bailee, to whom personal property has been entrusted has thereby no apparent authority to sell the same, even though he be a dealer in that line of goods.66
So, it has been held that a travelling salesman entrusted with a sample case has no apparent right to sell it.67 And see the subject developed in Sales in this series to the effect that clothing another with mere possession of goods without more, does not establish the true owner to assert his title against a purchaser.
One who clothes another with the indicia of title is estopped to set up his ownership against an innocent purchaser for value of the property represented by such indicia.
64. Jackson Paper Bag Co. v. Com. Nat. Bk., 199 111. 151.
65. Baldwin v. Tucker, 112 Ky. 282, 57 L. R. A. 451., 65 S. W. 841 (Contra: Galbraith v. Weber, 107 Pac. 1050 (Wash.), a case which seems unsound).
66. Levi v. Booth, 58 Md. 305, 42 Am. Rep. 332.
67. Kohn v. Washer, 64 Tex. 131, 53 Am. Rep. 745.
Upon the principle of estoppel one who not only confers upon another the possession of goods, but clothes him with indicia of title, that is, warehouse receipts, bills of lading or other documentary insignia in the agent's name with the principal's consent, confers an apparent ownership which prevents the true owner from asserting his title against one who has dealt with the agent as owner provided he relied on the appearance of title, was innocent of the truth, and gave value.68
68. Calais Steamboat Co. v. Scudder, 2 Bl. (U. S.) 372, Pickering v. Busk, 15 East. 38.
The above situation can hardly be called one of agency in any phase. It is a doctrine of estoppel to assert ownership.