Sec. 258. General Statement

The principal is liable generally to third parties for the torts of his agent in the course of his employment, but not for the willful trespass of his agent, committed without color of right or semblance of authority. (Sec. 260-262.)

The principal, whether known or unknown, may be held on a contract made with authority by an agent, though in the agent's name, unless exclusive credit is given to the agent. (Sec. 263.)

Subject to certain limitations, notice to the agent is notice to the principal. (Sec. 264-266.)

There is a difference of opinion as to whether acceptance of a bonus by the agent affects the principal's security. (Sec. 267.)

Sec. 259. Scope Of Chapter

In the present work devoted primarily to the law relating to real estate brokers, it is impossible to do more than present the most general principles bearing upon the liability of a principal to third parties for the acts of his agent. The law applicable to the relation of principal and agent generally, is of such magnitude that eminent writers have devoted entire volumes to it, and for any detailed investigation reference should be had to the works of these writers.1

1 Story on Ag.; Mechem on Ag.; Clark & Skyles on Ag.; Reinhard on Ag.; Huff-cut on Ag.

Sec. 260. Liability Of Principal For Agent's Wrongdoing

"The principal is liable in a civil suit to third persons for the frauds, deceits, concealments, misrepresentations, torts, negligences and other malfeasances and misfeasances of his agent in the course of his employment, although the principal did not authorize, justify or participate in, or indeed know of such misconduct, or even if he forbade the acts, or disapproved of them. This rule of liability is not based upon any presumed authority in the agent to do the act, but upon the ground of public policy, and that it is more reasonable where one of two innocent persons must suffer from the wrongful act of a third person, that the principal who has placed the agent in the position of trust and confidence should suffer than a stranger. * * * All that is necessary to render the principal liable for the malfeasance or torts of the agent is that the tort must be committed in the course of the agency; not that the agency authorized it, or * * that the employment afforded the means of committing the injury."2 The principal is not, however, liable for the willful trespass of his agent, committed without color of right or semblance of authority.3

Sec. 261. Liability Of Principal Who Accepts Benefits Of Agent's Acts

Acceptance by the principal of the fruits of the agent's efforts, though the principal be innocent, may place the principal in a position where he will be regarded as having assumed responsibility for the instrumentalities which the agent has employed to effect the transaction.4

2 Lee v. Village of Sandy Hill. 40 N. Y. 448 (1860). But see Sec. 271 infra. 3Lee v. Village of Sandy Hill, 40 N. Y. 448 (1869); Erie City Iron Works v. Barber, 106 Pa. St. 138 (1884). See also Wheeler v. McGuire, 2 L. E. A. 810 (Ala. 1888).

4 See Sec. 254-257 supra.