§ 200. Having now considered the competency of persons to contract in their own behalf, we shall proceed to the consideration of contracts made by third persons, having no original interest in the subjectrmatter, in behalf of the parties essentially and principally interested. And in the consideration of this subject, we shall first treat of the principles governing the contracts of agents in general, and then shall proceed to the contracts of special agents acting under peculiar circumstances, which modify their powers and liabilities.
§ 201. In the first place, as to the general principles relating to the contracts of agents. Whenever any person, competent to do any act for himself, employs another person to do it, the employer is called the principal, the person employed is called the agent; and the relation created between the parties is termed an agency.1 When the agency is created by a formal written instrument, especially if it be under seal, such instrument is called a letter of attorney.2
§ 202. Whatever a person may do in his own right, he may do by an agent. Every person, therefore, may be a principal, if he be of full age, unless legally or actually disabled. The usual rules of disability to contract, before stated, apply equally to principals.3
§ 203. Any person may be an agent, who is not actually disabled by weakness of mind, or want of understanding. Legal disability to contract will not incapacitate a person from becoming an agent.1 Thus, although a person under age cannot contract so as to render himself responsible, he can, nevertheless, contract as agent for another person, so as to bind such person.2 So a slave may be an agent, even in those countries where he cannot contract for himself.3 A wife may be agent for her husband,4 and vice versa.6 No person can take upon himself, however, incompatible duties and characters, as agent, or become agent in a transaction, where he has an adverse interest or employment; for the principal is presumed to stipulate for the disinterested skill and diligence of the agent, applied for his exclusive benefit. Thus, the assignee of a bankrupt cannot purchase the debts or estate of the bankrupt on his own account.6 So, also, if an agent secretly sell his own goods to his principal, the principal may avoid the agreement. So, if he purchase as principal, goods which he sells as agent, the contract is void.7 An insurance agent cannot insure his own goods in his own company, and bind them.8 So, where an agent was appointed by the trustees of an unincorporated land company, to receive the shares at a certain price in the final settlement with purchasers for lots, it was held, that he could not purchase stock for his own use, but that a purchase by him would be regarded as made for the use of the company.1 And if it appear that an agent has purchased the estate of his principal in the name of another person, instead of his own, however fair the transaction may be in other respects, it has no validity in a court of equity.2 Nor is it necessary in such case to show that the sale was made at an under value.3 An agent may, however, purchase of his principal, if he deal with him openly, disclosing all that he knows with respect to the property.4
1 Story on Agency, § 3.
2 By foreign writers such an instrument is called a procuration, and the agent a procurator. Dig. Lib. 3, tit. 3, 1. 1; Heinecc. ad Pand. Lib. 3, tit. 3, § 415, 423; Pothier, Pand. Lib. 3, tit. 3, n. 2.
3 Story on Agency, § 6. Ante, chap. ii.
1 Co. Litt. 52 a; Bac. Abr. Authority, B.; Emerson v. Blonden, 1 Esp. 142; Story on Agency, § 7.
2 Watkins v. Vince, 2 Stark. 368;• Pothier on Oblig. 450.
3 The Governor v. Daily, 14 Ala. 469.
4 Felker v. Emerson, 16 Vt. 653; Edgerton v. Thomas, 5 Seld. 40.
5 Ready v. Bragg, 1 Head, 511.
6 Parkist v. Alexander, 1 Johns. Ch. 397; 1 Story, Eq. Jur. § 314, 316, 321, 322.
7 Paley on Agency, by Lloyd, 3d ed. ch. 1, pt. 1, § 7, n. 5, p. 33; 1 Story, Eq. Jur. § 310, 315, 316; Story on Agency, § 9, 211, and cases cited; Wright v. Dannah, 2 Camp. 203; Gillett v. Peppercorne, 3 Beavan, 78; Barker v. Marine Ins. Co., 2 Mason, 369; Church v. Marine Ins. Co., 1 Mason, 341; Dixon v. Broomfield, 2 Chit. 205; Lees v. Nuttall, 1 Russ. & Myl. 53; 8. c. 2 Myl. & K. 819; Copeland v. Mercantile Ins. Co., 6 Pick. 198; Reed v. Warner, 5 Paige, 650; Lowther v. Lowther, 13 Ves. 103; Reed v. Norris, 2 Myl. & Cr. 374; Beal v. M'Kiernan, 6 La. 407; Bac. Abr. Authority, D.; Story on Agency, § 13; Conkey v. Bond, 36 N. Y. 427 (1867); Bunker v. Miles, 30 Me. 431; Walker v. Palmer, 24 Ala. 358; Charter v. Trevelyan, 11 CI. & Finn. 714.
8 Bentley v. Columbia Ins. Co., 19 Barb. 595; 17 N. Y. 421.
§ 204. Although, generally, a person may delegate authority to another, to do whatever he can do himself, yet if the act to be done be either unlawful, or if it be a personal trust or confidence which he is impliedly prohibited from delegating, he may not do it by another.5 Thus, if a power to sell an estate or make a lease, be given to another, as attorney, or executor, it cannot be delegated;6 because the ability and integrity of the individual constitute the reason of the trust. The same rule applies generally to brokers and factors.7 Whenever, therefore, it is intended that an agent shall have power to delegate his authority, it should be expressly given to him. Yet whenever such authority is required by law, or by usage of trade, or is implied in the nature of the contract, it may be delegated;8 and the substituted agent will be responsible to the original agent, as well as to the principal.1 The authority of a sub-agent, given with consent of the principal, is not determined by the death of the agent appointing him.2 But the authority of a sub-agent, appointed without due authority, terminates with the death of the first agent, for he is in such cases the principal of the sub-agent, and the latter must look alone to the principal agent for compensation.3