An agent who has power to sell does not have implied or apparent power to receive the price unless (1) he has and delivers possession of the property sold, or (2) is otherwise placed in a position from which a person would reasonably presume he had such power.
It has been said that there is no apparent power in an agent to receive the price of an article sold by him unless he delivers the thing as he sells it, or is "behind the counter," that is, occupies a position with the principal's assent from which it is reasonable to presume that he is placed there to receive the price. If he is "behind the counter" he has apparent authority to receive payment wherever it reasonably appears he is there for that purpose whether he or some other agent took part in the original transaction.
Example 19. L is an importer of earthenware. A is his salesman. A sells goods to S a hotel keeper. Afterwards A goes to S's place of business and collects, and does not account for the money. L sues S, and held that he can recover.69
Example 20. G, a dealer in safes, employed B to travel and take orders for safes. B took an order from K which was transmitted to G. Afterwards B collected from K and did not account to G. G sued K. Held, he could recover.70
An agent to sell has no implied or apparent authority to sell on credit unless it is a custom of the trade or under the facts it is reasonable to presume he has such power.
An agent does not have implied or apparent authority to sell on credit unless the facts are as above stated.71
An agent with power to buy has impliedly power to buy on credit unless he is furnished cash, and has apparent power even when furnished with cash if there is a custom of the trade to buy on credit, or if the circumstances justify a belief in such power.
The power to sell on credit is not fraught with much danger to third persons, as the third person has not paid the price and at most can be made only to account for the goods or the price; but the power of an agent to buy on credit is more dangerous. In such case the third person may have parted with his goods to an agent who had cash to pay for them who absconds with both goods and cash, leaving the third person with no claim against the principal unless he can maintain a position that the agent had power to buy on credit. If an agent is furnished with the cash he has no implied power to buy on credit, at least generally speaking.72 But does he have apparent power? It has been held that if he is a general agent he has such power.73 The true rule would seem to be that if the extent of his agency and all the circumstances fairly indicate that he has such authority the third person may rely upon such appearance of authority.
69. Law v. Stokes, 3 Vroom (N. Y.) 249-.
70. Greenwood v. Keaton, 9 111. Ap. 183.
71. Norton v. Nevills, 174 Mass. 243, 54 N. E. 537.
An agent having authority to sell has implied or apparent power to make only those warranties usually made in the usage of the trade.
Whether an agent having authority to sell personal property has the power to warrant the same when that power has not been expressly conferred, has caused a difference of opinion among the authorities. It is perhaps more generally held that there is an implied and therefore an apparent authority of the agent to bind the principal upon warranties of articles sold by the agent under the authority of the principal where such warranties are customary in the trade.74
In this connection it must be remembered that a seller of an article impliedly warrants as to its merchantability, fitness for purpose purchased, etc., under the general law of sales according to the rules which we develop in connection with that subject, regardless of the fact whether the sale is by the principal or his agent. A study of the cases will reveal that the courts have not always kept this fact in mind. The authority of the agent cannot be in question and ought not to be considered where were the same sale made by the principal there would be an implied warranty of quality. The question now under consideration is the power of the agent to expressly warrant in cases in which the same warranty would not be implied. If it would be implied the fact that the agent puts it in words ought to be immaterial and add nothing to the case one way or another.
72. Komorowski v. Krumdick, 56 Wise. 23.
73. Pac. Biscuit Co. v. Dugger, 40 Oreg. 362, 67 Pac. 32. (General agent was instructed not to use credit.)
74. Johns v. Jaycox, 67 Wash. 403.
The admissions of the agent are binding on the principal when made in reference to and as a part of the act which he is authorized to do.
If the agent makes admissions in reference to the act which he is authorized to do, as a part of the transaction, the principal is bound by such admissions and they may be used against him. It is essential that the admission be made as a part of the act which he is authorized to do, and from this it follows that admissions made after the act is over, so that they do not form a part of the act are not binding upon the principal. So they are not binding if made before the act is begun; they are not a part of it and therefore are not admissible. It does not follow from this that there may not be some little separation between the doing of the act and the making of the admission, so long as it is made as really a part of it. Each case must be decided on its own peculiar grounds and the court must consider whether the admissions are a part of the thing done - the res gestae - or are an afterthought, or independent of the act. The reason of the rule is that a principal ought not to be bound by assertions made at any time and possibly out of wrong motives, and when the truth may be consciously or unconsciously departed from, as a result of deliberation; but if they are spontaneously uttered by the agent at or about the time the act is done and as a part of it, they possess the likelihood of truth.75 The agent may, of course, testify at the trial for or against the principal. We are considering above the right of other witnesses to testify to the prior admissions of the agent as binding upon his principal.
Notice given to an agent while acting as such is notice to the principal and the knowledge of the agent which he possesses at the time of the transaction will be imputed to the principal, (1) unless it is his duty not to disclose it, or (2) unless he is known to be acting adversely to the principal.
A principal is constructively present when the agent acts for him and in the act the agent and the principal are identified together. Whatever notice the agent receives in respect to the transaction which he is carrying on is notice to the principal, and whatever knowledge the agent has in respect to that transaction is presumed to be the knowledge of the principal.
If the knowledge which the agent has is knowledge that he is not at liberty to disclose to his principal, it will not be imputed to the principal. Thus disclosures confidentially made by one client to an attorney at law cannot rightfully be disclosed to another client, and therefore will not be imputed to that client, though they affect the matter of the agency.
So if an agent is known to be acting adversely to his principal, it is not to be presumed that notice given to him or knowledge in any way acquired by him will be imparted to the principal, and therefore the principal is not bound thereby.76
75. Shafer v. Laycock, 168 Pa. 497.
76. Cowan v. Curran, 216 111. 598.