This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A contract of agency not creating a power coupled with an interest is terminated by the death of either party.1 Thus authority to sell property,2 as personalty,3 or to collect money,4 is revoked by the death of the principal. In some cases, however, transactions of third persons with agents after the death of the principal, but in ignorance thereof, have been upheld as binding on the principal's estate. Thus payment to an agent,5 or a purchase of goods by him,6 or delivery of notes by him,7 have, contrary to the general rule, been upheld under such circumstances. So a contract to prosecute a claim, which was in part performed after the client's death, has been held not to be discharged.8 Some of the cases, however, which appear to support this proposition really depend upon principles of estoppel. The administrator of the decedent,9 or those who succeed the principal in interest,10 have, with full knowledge of the material facts, elected to accept the benefits of the agent's acts, and are therefore estopped to deny his authority.11
31 Turk v. Nicholson, 30 Ia. 407. 32 Turk v. Nicholson, 30 Ia. 407.
1 England, In re Overweg , 1 Ch. 209; Hovey v. Blakeman, 4 Ves. Jr. 596.
United States. Howe Sewing Machine Co. v. Rosensteel, 24 Fed. 583.
Massachusetts. Mills v. Smith, 193 Mass. 11, 6 L. R. A. (N.S.) 885, 78 N. E. 765.
Michigan. Adriance v. Rutherford, 57 Mich. 170, 23 N. W. 718.
Nebraska. Homan v. Redick, 97 Neb. 299, L. R. A. 1915C, 601, 149 N. W. 782.
Ohio. McDonald v. Black, 20 Ohio 185, 55 Am. Dec. 448.
2 Hunt v. Rousmanier, 21 U. S. (8 Wheat.) 174, 5 L. ed. 589; Scruggs v. Driver, 31 Ala. 274; Travers v. Crane,
15 Cal. 12 ; Lewis v. Kerr, 17 Ia. 73; Harris v. Irving, 28 Cal. 645.
3 Dickinson v. Calahan, 19 Pa. St. 227.
4 Weber v. Bridgeman, 113 N. Y. 600, 21 N. E. 985; Davis v. Bank, 46 Vt. 728.
5 Cassiday v. McKenzie, 4 Watts & S. (Pa.) 282, 30 Am. Dec. 76.
6 Garrett v. Trabue, 82 Ala. 227, 3 So. 149; Davis v. Davis, 93 Ala. 173, 9 So. 736.
7 Nicolet v. Pillot, 24 Wend. (N. Y.) 240.
8 Wylie v. Coxe, 56 U. S. (15 How.) 415, 14 L. ed. 753.
9 Succession of Zenon & Elsie La-bauve, 34 La. Ann. 1187.
10 Ish v. Crane, 8 O. S. 520, s. c. 13 O. S. 574.
11 See Sec. 1739 and 1764.
The rule that the death of the principal terminates the contract of agency, is not limited to cases in which the agent has attempted to bind his principal by a contract made after the death of the principal; but the death of the principal terminates such authority for all purposes.12 An agent is not entitled to commissions on collections or remittances after the death of the principal,13 nor is he entitled to be indemnified by his principal's estate against transactions into which he has entered after the death of the principal.14 If the agent's power is also coupled with an interest in the subject of the agency, the death of the principal15 does not revoke the power of the agent. What constitutes a power coupled with an interest is a question on which the courts have disagreed. A power of sale in a mortgage to be exercised by the mortgagee has been held in some states to be such a power coupled with an interest that it is not revoked by the death of the mortgagor,11 and the same principle has been applied to powers of sale in deeds of trust.17 In other states the death of the mortgagor is held to revoke a power of sale in a mortgage.11