Sec. 275. Warranty Of Authority To Make Contract

The principle is applicable to frequent situations. A few illustrative cases will suffice to show its application. In Rowland v. Hall, 121 App. Div. 459 (N. Y. 1907), the agent signed a contract of sale, supposing that an "estate" owned the property, for he had dealt with the supposed " executor " of the estate and collected the rents and managed the property for him for years. Meanwhile, the "executor," who had "power of attorney" from the owners, conveyed the property to a third party and the third party refused to recognize the contract. It was held that the agent was liable for the payment made to him by the purchaser on account of the purchase price.

22 Citing Kroeger v. Pitcairn, 101 Pa. St. 311; 8 Walt, Act. and Def., 62. 23 Citing Baltzen v. Nlcolay, 53 N. T. 467.

In Elliott v. Asiel, 120 App. Div. 829 (N. Y. 1907), the defendant entered into an agreement to sell real estate and designated the vendor as "Estate of Hannah Asiel," and signed the contract "Jacob Asiel, administrator of the Estate of Hannah Asiel." As ordinarily an administrator has nothing to do with the real estate of the deceased,24 and in this case the heirs refused to recognize the contract, a dismissal of the purchaser's complaint was reversed, the court saying that the contract was a personal contract of Jacob Asiel; that as administrator, without special leave of the surrogate, he had nothing to do with the real estate and had no power to make the contract. "It purported to be a contract of the estate, and the administrator by making it implied that he as administrator was authorized to make such a contract and was responsible to the defendant (sic) for any damages sustained in consequence of a breach of that implied agreement." 25

Sec. 276. Reason Of Liability Of Agent For Unauthorized Acts

"The rule, that the agent is liable when he acts without authority, is founded upon the supposition that there has been some wrong or omission on his part, either in misrepresenting, or in affirming, or in concealing the authority under which he assumes to act."26 If the agent acts within his instructions, and in good faith, especially when the facts are equally known to both parties, he is not personally responsible although it may happen that the authority itself is void.27

24 See Sec. 207 supra.

25 See as to broker's authority to sign contract, Ch. IV supra.

26 Hall v. Lauderdale, 46 N. Y. 70 (1871).

In Baltzen v. Nicolay, 53 N. Y. 467 (1873), where the agent set up the statute of frauds, no written contract having been made, the court, after citing White v. Madison, 26 N. Y. 117 (1862),28 says: "The reason why the agent is liable in damages to the person with whom he contracts, when he exceeds his authority, is that the party dealing with him is deprived of any remedy upon the contract against the principal. The contract, though in form the contract of the principal, is not his in fact, and it is but just that the loss occasioned by there being no valid contract with him should be borne by the agent who contracted for him without authority. In order to make the agent liable in such a case, however, the unauthorized contract must be one which the law would enforce against the principal if it had been authorized by him.29 Otherwise the anomaly would exist of giving a right of action against the assumed agent for an unauthorized representation of his power to make a contract, when the breach of the contract itself, if he had been authorized to make it, would have furnished no ground of action. That the agent who makes a contract for an undisclosed principal is personally bound by it, although the party dealing with him may know the general fact that he is acting as agent, is well settled; nor does the fact that the agent is an auctioneer, and that the contract arises upon a sale by him as such, withdraw it from the operation of the rule."

Where an agent signs a contract of sale which the owner repudiates, it does not deprive the agent of compensation for services if he produced a purchaser ready, willing and able.30

27 Hall v. Lauderdale, 46 N. Y. 70 (1871).

28 See Sec. 273, 274 supra.

29 Citing Dung v. Parker, 52 N. Y. 494.

30 Monroe v. Snow, 131 111. 135 (1801). And see Sec. 117-119 supra.