The law of agency is now of very great importance. Such is the complexity of human affairs in civilized society, that very few persons are able to transact all their business, supply all their wants, and accomplish all their purposes, without sometimes employing another person to represent them, and act for them, and in their stead. Such person becomes their agent, and the person employing an agent is his principal.
There are two principles in relation to the law of agency on one of which it is founded, while the other measures the responsibility of the principal for the acts of an agent. The first of these is, that the agent is but the instrument of the principal, who acts by him; and a principal assumes the relations, acquires the rights, and incurs the obligations which are the proper results of his acts, equally, whether he does these mediately, or directly; whether he uses an unconscious and material instrument, or a living and intelligent instrument; whether he signs his name by a pen which he takes from the table, or by a man whom he requests to sign his name for him. In either case, the thing done is the act of the principal; and, to a considerable extent, the law identifies the agent with the principal, although for some purposes, and in some respects, the agent incurs his own share of responsibility, or acquires his own rights, by the act which he performs as the act of another. The second of these principles is, that, as between the principal and a third party who has supposed himself to deal with a principal by means of one purporting to be his agent, the principal is responsible * for and is bound by the acts of his agent on either of two grounds, which may co-exist, and may not. One of these is, that he has actually created this agency; the other is, that he has, by words or acts, fully authorized the third party to believe the person to be his agent. If he has justified the belief of the third party, that this person had from him sufficient authority to do, as his agent, that precise thing, it is no answer, on his part, to say that the agent had no authority, or one which did not reach so far, and that it was a mistake on the part of the third party. It may have been his mistake, but the question then is, whether the principal led this third party into the mistake. And in deciding this question, all the circumstances of the transaction, and especially the customary usages in relation to such transactions, come into consideration.
This principle applies to, and may indeed, be said to create, the distinction between a general agent and a particular agent. (a) A general agent is one authorized to transact all his principal's business, or all his business of some particular kind. A particular agent is one authorized to do one or two special things. But it is not always easy to find a precise rule which determines with certainty between these two kinds of agency. A manufacturing corporation may authorize A to purchase all their cotton, and he is then their general agent for this special purpose, or to purchase all the cotton they may * have occasion to buy in New Orleans, and then he may be called their general agent for this special purpose in that place. Or to purchase the cargoes that shall come from such a plantation, or shall arrive in such a ship or ships, or five hundred bales of cotton, and then he should rather be regarded as their particular agent for this particular transaction.
But there is a material distinction between authority, and instructions uncommunicated, and not intended to be communicated to the third party dealing with the agent. Such instructions qualify the liability of the principal neither in the case of a general agency nor of a particular agency.(aa)
(a) See Jacques v. Todd, 3 Wend. 83; Anderson v. Coonley, 21 Wend. 279; Savage v. Rix, 9 N. H. 263; Whitehead v. Tuckett, 15 East, 400. The term Agency seems to imply two quite distinct things, namely, a contract between principal and agent, and the legal means by which the principal is made, without his direct participation, a party to a contract with a third person. No advantage, but only confusion, seems to result from blending these two tilings. If, in considering agency in the latter aspect, the domestic contract between principal and agent could be excluded from the mind, and reserved for separate observation, it might conveniently be laid down as the rule of law that the principal is in all cases bound for acts of the agent done within the scope of his authority, and never except for those. In the case of a particular agent, the scope of authority is measured by the express directions he has received; in the case of a general agent the law permits usage to enter in and enlarge the liability of the principal. This usage, however, is not a uniform, unvarying rule, in other words there is no common scope of authority predicable of every general agent. To say of a certain one that he is a general agent is not enough to describe his powers, or to determine the extent of his principal's liability; it is next to be ascertained for what particular business he is thus general agent. This done, the agency is brought within a class, and the qualities attach to it which the law, using the light of mercantile custom, affixes to the class at large.
(aa) The sound rule of law is set forth by Parker, C. J., giving the judgment of the court in Hatch v. Taylor, 10 N. H. 538: "It is, we think, apparent enough, that all which may be said to a special agent, about the mode in which his agency is to be executed, even if said at the time that the authority is conferred or the agency constituted, cannot be regarded as part of the authority itself, or as a qualification or limitation upon it. There may be, at all times, upon the constitution of a special agency, and there often is, not only an authority given to the agent, in virtue of which he is to do the act proposed, but also certain communications, addressed to the private ear of the agent, although they relate to the manner in which the authority is to be executed, and are intended as a guide to direct its execution. These communications may, to a certain extent, be intended to limit the action of the agent; that is, the principal intends and expects that they shall be regarded and adhered to, in the execution of the agency; and should the agent depart from them, he would violate the instructions given him by the principal at the time when he was constituted agent, and execute the act he was expected to perform in a case in which the principal did not intend that it should be done. And yet, in such case he may have acted entirely within the scope of the authority given him, and the principal be bound by his acts. This could not be so, if those communications were limitations upon the authority of the agent. It is only because they are not to be regarded as part of the authority given, or a limitation upon that authority, that the act of the agent is valid, although done in violation of them; and the matter depends upon the character of the communications thus made by the principal, and disregarded by the agent. Thus, where one person employs another to sell a horse, and instructs him to sell him for S100, if no more can be obtained, but to get the best price he can, and not to sell him for less than that sum, and not to state how low he is authorized to sell, because that will prevent him from obtaining more. Such a private instruction can with no propriety be deemed a limitation upon his authority to sell, because it is a secret matter between the principal and agent, which any person proposing to purchase is not to know, at least until the bargain is completed.