Story Case

Lea Tompkins was appointed an agent by Fred Mechem to sign Mechem's name as surety on a non-negotiable note for Edward Neil. Mechem gave instructions that the note should not be for more than thirty days. Neil persuaded Tompkins to sign a note for sixty days, and the note was given to one Hill, who brought suit against Mechem as surety, upon failure to pay by Neil. Has Mechem a defense?

Ruling Court Case. Thornton Vs. Boyden, Volume 31 Illinois Reports, Page 200

Thornton, being the owner of certain land, conveyed it to one Lee, in trust, to secure the payment of a debt owed by Thornton to Boyden. In this conveyance to Lee, it was provided that in case Thornton should fail to pay the debt by a certain named day, Lee might proceed to sell the premises "at public auction, at the front door of the court house, at the county seat, in Mercer County, for cash in hand, first giving thirty days' notice of the time, place and terms of sale, in one or more of the newspapers printed in the county."

Thornton did not pay the debt by the day named, so it became necessary to make a sale. Lee, pursuant to instructions contained in the conveyance to him, made a proper and complete publication of his intention to sell the land in question. On the day set for the sale, he published in the same paper that it was postponed for five days. At that time, that is, five days later, the sale was made, and Boyden purchased the same. Thornton then sues Boyden for the recovery of the land, basing his claim upon the fact that Lee exceeded his authority in making the sale.

Justice Breese delivered the opinion:

Here Lee was a special agent for a special purpose, with only limited authority. In order to have bound his principal, he should have acted in strict accordance with his power, but instead he made the sale with only five days' notice, and so it is not binding upon the principal. "The acts of a special agent are not binding on his principal unless they are strictly within his authority."

Ruling Law. Story Case Answer

Special authority is power conferred upon an agent to do a special act, or perform a special mission. Here, as in a case of general authority, the principal is bound if the agent acts within the apparent scope of authority. However, in determining the liability of the principal for acts of a special agent, it is fundamental that the authority must be strictly exercised. A third person who knowingly deals with an agent of this character, must at his peril ascertain the nature and extent of the agent's authority. But, even in respect to special authority, an agent has certain implied and incidental powers, which the principal can limit only when third persons are acquainted with such limitations.

Mechem has a valid defense. Tompkins exceeded his authority and Mechem is not bound as surety.