But although, if a person employs a broker to transact business for him upon a market with the usages of which he, the principal, is unacquainted, he gives authority to the broker to make contracts *upon the footing of such usages, provided they are such as regulate the mode of performing the contracts and do not change their intrinsic character, yet if on the other hand the custom or usage is of such a character as to be completely at variance with the relation between the broker and principal, it is not binding on the principal, who is ignorant of the usage (r).1
(q) Bayley v. Wilkins, 7 C. B. (62 E. C. L. E.) 886.
Again, the power of the master of a ship to bind his owners being but a branch of the general law of agency, it is clear that when a master contracts as such in a foreign port to carry goods for a foreigner, his authority to bind his owner is that conferred by the law of the country to which his ship belongs; and the flag of his ship is notice to all the world that his implied authority is limited by the law of that flag (s). Where a defendant carried on the business of horsedealer, and S., who assisted him in his business, and was also himself a horsedealer, sold for him a horse to the plaintiff, and warranted him to be sound, it was held that, it being within the scope of a horsedealer's business to give a warranty whenever the giving of a warranty may form part of the transaction, no *evidence was admissible to show that the defendant forbade S. to warrant (t).
(r) Robinson v. Mollett, L. R. 7 H. L. 802, 44 L. J. (C. P.) 362, reversing Mollett v. Robinson, L. R. 5 C. P. 646; lb. 7 C. P. 84; S. C. 39 L. J. (C. P.) 290; 41 lb. 65.
(s) Lloyd v. Guibert, 33 L. J. (Q. B.) 241; 35 lb. 74; L. R. 1 Q. B. 115 (Ex. Ch.)
1 In order that a rule or custom should be binding upon a principal who had no notice of it, it has been held that it must be reasonable. Thus in Evans v. Wain, 71 Pa. St. 75, Williams, J., said: "Such a custom, if proved, would have constituted no defence to the plaintiff's action. If there is a custom among stockbrokers," he continued, " when dealing with others, to appropriate money belonging to the principal to the payment of his broker's indebtedness, the sooner it is abolished the better; Malus ususu est abolendus. A custom so iniquitous can never obtain the force or sanction of law." In Day v. Holmes, 103 Mass. 309, Morton, J., said: " The usage alleged by the plaintiffs to exist among stockbrokers in Boston cannot avail them. There are many forcible objections to it; but a conclusive one is, that it is against sound policy and good morals, it authorizes the broker in his discretion to disregard his instructions, and, instead of acting solely in the interest of his principal, to speculate upon the transaction for his own benefit. It creates in the agent an interest adverse to his principal, and is inconsistent with his duty and the obligations which the law imposes upon him when he enters into the contract of agency. Such a usage, unknown to the principal, cannot be supported." See also Tomkins v. Saflery, L. R. 3 App. Cas 213; Shaw v. Spencer, 100 Mass. 382.
Of course the principal would not be bound by any rule or custom of trade made after the transaction was completed, however it might bind the agent (u); and it will appear equally clear that if he deviates from the course usual in the line of business in which he is employed, he not only has no authority in fact, but does not seem to have any, and consequently, cannot bind his principal thereby. Thus, although the master of a ship can bind the owners by a bill of lading for goods received on board the ship, a bill of lading, although in the usual terms, given by the master, in an instance where goods had never been received on board, does not bind the owners even in the hands of an assignee. All persons taking a bill of lading by endorsement or otherwise, have notice that the master's authority is limited to signing bills of lading' for goods received on board, and must themselves bear the consequences of the master's falsehood (x). On a somewhat similar principle, in a case where the defendant authorized an insurance broker at Liverpool to underwrite policies not *exceeding a certain amount, and the broker acted in excess of his authority, the principal was held not liable, it being the custom at Liverpool to impose a secret limit on the amount for which an insurance broker can sign his principal's name (y).
(t) Howard v. Sheward, L. R. 2 C. P. 148; 36 L J. (C. P.) 42.
(u) Westropp v. Solomon, 8 C. B. (65 E. C. L. R.) 345.
(x) Grant v. Norway, 20 L. J. (C. P.) 98; 10 C. B. (70 E. C. L. R.) 665, S. C. See Hubbersty v. Ward, 22 L J. (Ex.) 113; 8 Ex. 330; Coleman v. Riches, 24 L. J. (C. P.) 125; 16 C. B. (81 E. C. L. R.) 104.
(y) Baines v. Ewing, L. R. 1 Ex. 320; 35 L. J. (Ex.) 194. 442
It has no doubt been observed in the examples just given, that in some of them the extent of the agent's authority is expressly prescribed, in some partly expressed and partly not expressed, and in others altogether implied. It is implied from the position or capacity in which a person acts. Of this description is the agency of factors, brokers, of partners, wives, and servants, all of whom have an implied or constructive authority to bind those for whom they act, or are held to act, as we shall presently see more at large. The usages of trade form material points in determining the authority of an agent; and the custom of an individual as to the general mode and scope of his dealings with tradesmen, would, as we have seen, limit the implied authority of his servants to bind him by their orders. Wherever acts are done inconsistently with express directions or with the customary transactions from which agency may be implied, there is an excess of authority, and the principal is not bound.1 In Flemyng v. Hector (z), it was held, on similar *grounds, that where there is a managing committee of a club who choose to deal on credit instead of for ready money payments, which they were alone authorized by the members to do, the members are not bound by such contracts.