It is the agent's duty to disclose to his principal any information he may have relevant to the agency, and the presumption is that he does make such disclosure, except where he has some private purpose, the accomplishment of which would be imperiled thereby. (Sec. 248.)
The agent may, as a necessary incident of powers expressly conferred, make and endorse negotiable paper in the transaction of his principal's business. (Sec. 249.)
In some jurisdictions an action against an agent for conversion of his principal's money will not lie, and the only remedy is an action on contract, but in New York an action in tort will lie to recover money which the agent refuses to deliver to his principal. (Sec. 250.)
"An agent is bound not only to good faith but to reasonable diligence, and to such skill as is ordinarily possessed by persons of common capacity engaged in the same business. Whether or not he has exercised such skill and diligence is usually a question of fact; but its omission is equally a breach of his obligation and injurious to his principal, whether it be the result of inattention or incapacity, or of an intent to defraud."1
1 Heinemann v. Heard, 50 N. Y. 35 (1872); Clark & Skyles on Agency, Sec. 392 et seq.
"It is a well-settled principle of morals as well as of law, that the agent must faithfully serve his principal. However unquestioned may be the honesty of the agent, or his impartiality between his own interests and those of his principal, he is bound to the exercise of all his skill, ability and industry in favor of his principal. As an agent to sell, it is his duty to get the highest fair price; and this duty is wholly incompatible with his wish to buy. In every trust this principle prevails. No agent or trustee can deal with the subject matter of his trust, except for the benefit of his principal. * * * And the rule in equity is, that any act by an agent in respect to the subject matter of the agency, injurious to the principal, may be avoided by the principal, and where an agent to sell becomes the purchaser, the court will presume that the transaction was injurious, and will not permit the agent to contradict the presumption.2 The policy of this rule is obvious. The confidence reposed in the agent must not be abused. His position of trust must not be employed to his own advantage, or to the injury of his principal. In short, while in the employment of his principal, his principal's interest must be his interest, and he may have no interest which, conflicting with those of his principal, can work injury to the latter."3
"It is the unquestionable duty of an agent to act in matters touching the agency with a sole regard to the interests of his principal. The agent in accepting the employment undertakes to manage the interests confided to him, and discharge the trust reposed in him to the best of his ability for the benefit of his principal. The compensation to which he is entitled is the consideration for the engagement into which he enters. The reward is the inducement to the service, and faithful service is generally the condition upon which the reward becomes due. An agent for sale cannot sacrifice the property of the principal for the sake of his commissions, but the desire of earning them is generally a motive to diligence, and an incentive to exertion. When the duty and interest of the agent coincide, and he does the act which his duty prompts, but the impelling motive is the interest which he is to derive from it, and not the duty, the act must stand justified although the motive may be criticised. There is in the case supposed, no conflict between his duty and his interest. The act corresponds with the duty, but the motive which prompted it is a low and inferior one. This cannot, however, affect the validity of the act as between the principal and agent."4
2Citing Coles v. Thecothick, 9 Ves. 234. 247.
3 McDonald v. Lord, 26 How. Pr. 407 (N. Y. 1864) ; Clark & Skyles on Agency, Sec. 404 et eq. See also Sec. 59-71 supra.