(a) An Agent Is a Person Who Represents His Principal in Dealing With Third Persons.

(b) A Servant Is a Person Who Acts for His Master in a Ministerial Capacity.

Story Case

William Avery called up the office of the Northern Transfer Company and requested that an auto truck be sent to his factory to carry a number of packages to the freight station. When the truck arrived, Avery asked the driver what the charge would be for six trips and the driver answered that he would make a reduced rate to Avery of three dollars per hour. The driver worked a total of five hours. At the end of the month the transfer company rendered a bill for $20, charging the usual rate of $4 per hour. Avery refused to pay more than $15, on the ground that his contract was for that amount. The transfer company contended that the driver was only a servant and had, therefore, no authority to contract. Suit was brought for $20. For whom should the finding of the Court be made?

Ruling Court Case. James Moore Vs. Solomon Teekle, Volume 144 Ohio Reports, Page 421

The plaintiff was the owner of a stallion which he hired out for breeding purposes. The price of services was advertised as $5 for the season. The stallion was put with the mare for that period.

The defendant contended that he should only pay $3.50 since the groom, who had the stallion in charge made a special agreement to that effect.

If the groom was an agent with power to negotiate with third persons, there might have been such liability; but the plaintiff contended that the groom was a mere servant who could exercise no such discretionary authority.

Justice Moore gave the decision of the Court.

The Court held that the groom was a mere servant, whose only power was the charge and care of the horse; and as such servant he had no power to bind his principal to a contract. Therefore judgment was given for the plaintiff.

Exiling Law. Story Case Answer

The relation of master and servant is very similar to that of principal and agent. The terms agent and servant are often interchangeably used. It is, indeed, very difficult to determine the exact and fundamental difference between them. It is sometimes said that it is a difference, not in kind, but in degree.

Roughly speaking, an agent is one who represents his principal with the special end in view of making contracts for his principal with third persons. On the other hand, a servant is one who acts for his master in a mere ministerial capacity. He performs menial tasks; he is not given a great deal of discretion; he deals with things. Often, of course, he may deal with persons, but has no power to make binding contracts for his principal. To the extent that he may bind his principal upon contract is he an agent and not a servant.

To illustrate the foregoing distinction; if A sends X out to buy a horse for him; X, in purchasing the horse, is acting as an agent. But if A has already made the purchase and sends X to bring the horse home, X is acting then as a mere servant.

In the Story Case, Avery had already made his contract with the transfer company, and since it failed to expressly stipulate a price when the truck was ordered, the customary price was intended. The driver of the truck was a mere servant, without authority in this case to contract.

However, if it had appeared that there was a custom prevailing in that community whereby the drivers of trucks were allowed to make contracts at reduced rates, for a series of trips, then the driver could have bound the transfer company. The custom would have been included within the powers of the driver, even though nothing concerning such custom was mentioned between Avery and the transfer company.