Principal and Agent

THE law of principal and agent is of very general interest, and incessant application in the commercial world; and the rights and duties which belong to that relation ought to be accurately, as well as universally understood. And while recommending that title to the attention of the student, as well as of the practicing lawyer, I will give a summary view of those general principles, which apply at large to every branch of the subject, and more especially to agencies that relate to commercial concerns.

(1.) Agency, how constituted.

Agency is founded upon a contract either express or implied, by which one of the parties confines to the other the management of some business, to be transacted in his name, or on his account, and by which the other assumes to do the business, and to render an account of it. The authority of the agent may be created by deed, or writing, or verbally without writing; and for the ordinary purposes of business and commerce, the latter is sufficient.¹ The agency may be inferred from the relation of the parties, and the nature of the employment, without proof of any express appointment.² It is sufficient, that there be satisfactory evidence of the fact that the principal employed the agent, and that the agent undertook the trust. The extent of the authority of an agent will sometimes be extended or varied on the ground of implied authority, according to the pressure of circumstances connected with the business with which he is entrusted.³ If an agent, however, is to convey real estate, or any interest in land, or to make livery of seizin, the appointment must be in writing according to the statute of frauds of 29 Charles II.⁴ and adopted with us; and where the conveyance is required to be by deed, the authority to the attorney to execute it must be commensurate in point of solemnity, and be by deed also.⁵

The agency must be antecedently given, or be subsequently adopted; and in the latter case, there must be some act of recognition. But an acquiescence in the assumed agency of another, when the acts of the agent. are brought to the knowledge of the principal, is equivalent to an express authority. By permitting another to hold himself out to the world as his agent, the principal adopts his acts, and will be held bound to the person who gives credit thereafter to the other in the capacity of his agent. Thus, where a person sent his servant to a shopkeeper for goods upon credit, and paid for them afterwards and sent the same servant again to the same place for goods, and with money to pay for them, and the servant receives the goods, but embezzles the cash, the master was held answerable for the goods, for he had given credit to his servant by adopting his former act.⁶ So, where a broker had usually signed policies of insurance for another person, or an agent was in the habit of drawing bills on another, the authority was implied from the fact that the principal had assumed and ratified the acts, and he was held bound by a repetition of such acts, where there was no proof of notice of any revocation of the power, or of collusion between a third party and the agent.⁷ It is the prior conduct of the principal that affords just ground to infer a continuance of the agency in that particular business, and the rule is founded on obvious principles of justice and policy. It was familiar to the Roman law,⁸ and is equally so in the law of modern Europe, and in the jurisprudence of this country.⁹

Emerigon states an interesting case within his experience, of the presumption. of ratification of an act from omission in due season to dissent from it. A merchant of Palermo wrote to a house at Marseilles, that he had shipped goods consigned to them, to be sold on his account. The ship being out of time, the consignees at Marseilles caused the cargo to be insured on account of their friend at Palermo, and gave hirn advice of it. He received the letter and made no reply, and the vessel arriving safe, he refused to account for the premium paid by the consignees, under the pretense they had insured without orders. But the reception of the letter, and the subsequent silence, were deemed by the law merchant equivalent to a ratification of the act. At this day, and with us, the authority would be implied from the duty of the consignee, without the aid of the subsequent silence, though the ground taken at Marseilles was undoubtedly sufficient; and it is a very clear and salutary rule in relation to agencies, that where the principal, with knowledge of all the facts, adopts or acquiesces in the acts done under an assumed agency, he cannot be heard afterwards to impeach them, under the pretense that they were done without authority, or even contrary to instructions. Omnis ratihabitio mandato aequiparatur. When the principal is informed of what has been done, he must dissent, and give notice of it in a reasonable time, and if he does not, his assent and ratification will be presumed.¹⁰

The Roman law would oblige a person to indemnify an assumed agent acting without authority, and without any assent or acquiescence given to the act, provided it was an act necessary and useful at its commencement.¹¹ But the English law has never gone to that extent; and, therefore, if A. owes a debt to B., and C. chooses to pay it without authority, the law will not raise a promise in A. to indemnify C., for if that were so, it would be in the power of C. to make A. his debtor nolens volens.¹² If there be any relation between the parties, a payment without authority may be binding on the person for whose use it was made, if it be made under the pressure of a situation in which one party was involved by the other’s breach of faith. A surety, from his relation to the principal debtor, has an interest, and a right to see that the debt be paid, and if he pays to relieve himself, it is money paid to and for the use of the other.¹³ So, in the case mentioned by Lord Kenyon,¹⁴ from Rolle’s Abridgment, where a party met to dine at a tavern, and all except one went away after dinner without paying their quota of the tavern bill, and the one remaining paid the whole bill; he was held entitled to recover from the others their aliquot proportions. The recovery must have been upon the principle, that as a special association they stood in the light of sureties for each other, and each was under an obligation to see that the bill was paid.

(2.) Of the power and duty of agents.

An agent who is entrusted with general powers, must exercise a sound discretion. If his powers are special, and limited, he must strictly follow them. If A. authorizes B. to buy an estate for him at 50 dollars per acre, and he gives 51 dollars an acre, A. is not bound to pay that price; but the better opinion is, that if B. offers to pay the excess out of his own pocket, A. is then bound to take the estate. This case is stated in the civil law, and the most equitable conclusion among the civilians is, that A. is bound to take the estate at the price prescribed. Majori summae minor inest.¹⁵ So, where an agent was directed to cause a ship to be insured at a premium not exceeding three percent., and the agent not being able to effect insurance at that premium, gave three and a quarter percent. The assured refused to reimburse any part of the premium, under the pretense that his correspondent had exceeded his orders; but the French admiralty decreed, that he should refund the three percent.; and Valin thinks they might have gone further, and made him pay the quarter percent, ex bono et aequo, because, he says, it is permitted, in the of trade, for factors to go a little beyond their orders when they are not very precise and absolute.¹⁶ The decree was undoubtedly correct, and the injustice of the defense disturbed in some degree the usually accurate and severe judgment of Valin.

If the agent executes the commission of his principal in part only, as if he be directed to purchase fifty shares of bank stock,and he purchases thirty only; or if he be directed to cause 2,000 dollars to be insured on a particular ship, and he effects an insurance for 1,000 dollars, and no more, it then becomes a question, whether the principal be bound to take the stock, or pay the premium. The principal may perhaps be bound to the extent of the execution of the commission in this case, though it has not been executed to the utmost extent; and this seems to have been the conclusion of the civil law.¹⁷ But a distinction is to be made according to the nature of the subject. If a power be given to buy a house, with an adjoining wharf and store, and the agent buys the house only, the principal would not be bound to take the house, for the inducement to the purchase has failed. So, if he be instructed to purchase the fee of a certain farm, and he purchase an interest for life or years only, or he purchases only the undivided right of a tenant in common in the farm, in these cases the principal ought not to be bound to take such a limited interest, because his object would be defeated. It might be otherwise, if the agent was directed to buy a farm of 150 acres, and he buys one corresponding to the directions as nearly as possible, containing 140 acres only. The Roman lawyers considered and discussed those questions with their usual sagacity and spirit of equity; and whether the principal would or would not be bound by an act executed in part only, depends in a measure upon the reason of the thing, and the nature and object of the purchase.¹⁸

If the agent does what he was authorized to do, and something more, it will be good, as we have seen, so far as he was authorized to go, and the excess only would be void. If an agent has a power to lease for twenty-one years, and he leases for twenty-six years, the lease in equity would be void only for the excess, because the line of distinction between the good execution of the power and the excess, can be easily made.¹⁹ But, at law, even such a lease would not be good pro tanto, or for the twenty-one years, according to a late English decision in the K. B.²⁰ If, however, the agent does a different business from that he was authorized to do, the principal is not bound, though it might even be more advantageous to him; as if he was instructed to buy such a house of A., and he purchased the adjoining house of B. at a better bargain; or if he was instructed to have the ship of his correspondent insured, and he insured the cargo. The principal is not bound, because the agent departed from the subject matter of the instruction.²¹

There is a very important distinction on the subject of the powers of an agent, between a general agent and one appointed for a special purpose. The acts of a general agent. will bind his principal so long as he keeps within the general scope of his authority, though he may act contrary to his private instructions; and the rule is necessary to prevent fraud, and encourage confidence in dealing. But an agent constituted for a particular purpose, and under a limited power, cannot bind his principal if he exceeds his power.²² The special authority must be strictly pursued; and whoever deals with an agent constituted for a special purpose, deals at his peril, when the agent passes the precise limits of his power. Thus, where the holder of a bill of exchange desired A. to get it discounted, but positively refused to endorse it, and A. procured it to be endorsed by B., it was held, that the original holder was not bound by the act of B., who was a special agent under a limited authority not to endorse the bill.²³

So, in the case of Batty v. Carswell,²⁴ A. authorized B. to sign his name to a note for 250 dollars, payable in six months, and he signed one payable in sixty days; and the court held that A. was not liable, because the special authority was not strictly pursued. On the other hand, if the servant of a horse dealer, and who sells for hire, but with express instructions not to warrant as to soundness, and he does warrant, the master is held to be bound, because the servant, having a general authority to sell, acted within the general scope of his authority, and the public cannot be supposed to be acquainted with the private conversations between the master and servant.²⁵ So, if a broker, whose business it is to buy and sell goods in his own name, be entrusted by a merchant with the possession and apparent control of his goods, it is an implied authority to sell, and the principal will be concluded by the sale. There would be no safety in mercantile dealings if it were not so. If the principal sends his goods to a place where it is the ordinary business of the person to whom they are confided to sell, a power to sell is implied. If one sends goods to an auction room, it is not to be supposed they were sent there merely for safe keeping. The principal will be bound, and the purchaser safe, by a sale under those circumstances.

The presumption of an authority to sell in these cases, is inferred from the nature of the business of the agent, and it fails when the case²⁶ will not warrant the presumption of his being a common agent for the sale of property of that description. If, therefore, a person entrusts his watch to a watchmaker to be repaired, the watchmaker is not exhibited to the world as owner, and credit is not given to him as such merely because he has possession of the watch, and the owner would not be bound by his sale.²⁷

A factor or commission merchant may sell on credit, without any special authority for that purpose. It is now the well settled usage, that a factor or agent employed to sell, may sell in the usual way, and consequently, he may sell on credit without incurring risk, provided he be not restrained by his instructions, and does not unreasonably extend the term of credit, and provided he uses due diligence to ascertain the solvency of the purchaser.²⁸ But the factor cannot sell on credit in a case in which it is not the usage, as the sale of stock for instance, unless he be expressly authorized, because this would be to sell in an unusual manner.²⁹ Nor can he bind his principal to other modes of payment, than a payment in money at the time of sale, or on the usual credit. He cannot bind his principal to allow a set-off on the part of the purchaser.³⁰ If the factor, in a case duly authorized, sells on credit, and takes a negotiable note payable to himself, the note is taken in trust for his principal, and subject to his order; and if the purchaser should become insolvent before the day of payrnent, the circumstances of the factor having taken the note in his own name, would not render him personally responsible to his principal.³¹

Even if the factor should guarantee the sale, and undertake to pay if the purchaser failed, or should sell without disclosing his principal, the note taken by him as factor would still belong to the principal, and he might waive the guaranty, and claim possession of the note, or give notice to the purchaser not to pay it to the factor. In such a case, if the factor should fail, the note would not pass to his assignees to the prejudice of his principal; and if the assignees should receive payment from the vendee, they would be responsible to the principal; for the debt was not in law due to them, but to the principal, and did not pass under the assignment.³² Though payment to a factor, for goods sold by him, be valid, the principal may control the collection, and sue for the price in his own name, or, for damages for non-performance of the contract; and it is immaterial whether the agent was an auctioneer or a common factor.³³

There are some cases in which a factor sells on credit at his own risk. When he acts undera del credere commission, for an additional premium, he becomes liable to his principal when the purchase money falls due; for he is substituted for:the purchaser, and is bound to pay, not conditionally, but absolutely, and in the first instance. The principal may call on him without looking to the actual vendee. This is the language of the case of Grove v. Dubois,³⁴ and it seems to have been adopted and followed in Leverick v. Meigs,³⁵ and yet there is some difficulty and want of precision in the cases on the subject. It is said, that a factor under a del credere commission, is a guarantor of the sale, and that the notes he takes from the purchaser belong to his principal, equally as if he had only guaranteed them. If he sells under a del credere commission, he is to be considered, as between himself and the vendee, as the sole owner of the goods; and yet he is considered only as a surety.³⁶ In some late cases in the C. B. in England,³⁷ the doctrine of the case of Grove v. Dubois was much questioned; and it was considered to be a vexata quaestio, whether a del credere commission was a contract of guaranty merely on default of the vendee, or one altogether distinct from it, requiring a previous resort to the purchaser.

Though a factor may sell and bind his principal, he cannot pledge the goods as a security for his own debt, not even though there be the formality of a bill of parcels and a receipt. The principal may recover the goods of the pawnee; and his ignorance that the factor held the goods in the character of factor, is no excuse. The principal is not even obliged to tender to the pawnee the balance due from the principal to the factor, for the lien which the factor might have had for such a balance is personal, and cannot be transferred by his tortious act, in pledging the goods for his own debt. Though the factor should barter the goods of his principal, yet no property passes by that act any more than in the case of pledging them, and the owner may sue the innocent purchaser in trover.³⁸

The doctrine that a factor cannot pledge, is sustained so strictly, that it is admitted that he cannot do it by endorsement and delivery of the bill of lading, any more than by delivery of the goods themselves.³⁹ To pledge the goods of the principal, is beyond the scope of the factor’s power; and every attempt to do it under color of a sale, is tortious and void. If the pawnee will call for the letter of advice, or make due inquiry as to the source from whence the goods came, he can discover, say the cases, that the possessor held the goods as factor, and not as vendee, and he is bound to know, at his peril, the extent of the factor’s power.⁴⁰ There may be a question, in some instances, whether the res gesta amounted to a sale on the part of the factor, or was a mere deposit or pledge as collateral security for his debt. But when it appears that the goods were really pledged, it is settled, that it is an act beyond the authority of the factor, and the principal may look to the pawnee. There is an exception to the rule in the case of negotiable paper, for there possession and property go together, and carry with them a disposing power. A factor may pledge the negotiable paper of his principal as a security for his own debt, and it will bind the principal, unless he can charge the party with notice of the fraud, or of want of title in the agent.⁴¹

But though the factor cannot pledge the goods of his principal as his own, he may deliver them to a third person for his own security, with notice of his lien, and, as his agent, to keep possession for him. Such a change of the lien does not divest the factor of his right, for it is, in effect, a continuance of the factor’s possession.⁴² So, if a factor, having goods consigned to him for sale, should put them into the hands of an auctioneer, or commission merchant connected with the auctioneer in business, to be sold, the auctioneer may safely make an advance on the goods for purposes connected with the sale, and as part payment in advance, or in anticipation of the sale, according to the ordinary usage in such cases.⁴³ But if the goods be put into the hands of an auctioneer to sell, and instead of advancing money upon them in immediate reference to the sale according to usage, the auctioneer should become a pawnbroker, and advance money on the goods by way of loan, and in the character of pawnor, instead of seller, he has no lien on the goods. It may be difficult, perhaps, to discriminate in all cases between the two characters. It will be a matter of evidence, and of fact, under the circumstances.

The distinction was declared in Martini v. Coles,⁴⁴ and it was observed in that case, that it would have been as well if the law had been, that where it was equivocal whether the party acted as principal or factor, a pledge in a case free from fraud should be valid. To guard against abuse and fraud, it is admitted, that if the factor be exhibited to the world as owner with the assent of his principal, and by that means obtains credit, the principal will be liable. It was suggested, in the case last mentioned, that perhaps if a consignment of goods to a factor to sell, be accompanied with a bill drawn on the factor for the whole, or part of the price of the consignment, an advance to take up the bill of the consignor, and appropriated to that end, might be considered as an advance under the authority given by the principal, so as to bind him to a pledge by the factor for that purpose.

But in Graham v. Dyster,⁴⁵ it was decided by the K. B., that though the principal draws upon his factor for the amount of the consignment, and the goods were sent to the factor to be dealt with according to his discretion, the factor could not pledge the goods, even in that case, to raise money to meet the bills. This was a very hard application of the general rule, and the cases go so far as to hold, that though there should be a request of the consignor accompanying the consignment, that his agent, the consignee, would make remittances in anticipation of sales, that circumstance does not give an authority to pledge the goods to raise money for the remittance.⁴⁶ In this last case, which was so late as 1824, the judges of the K. B. expressed themselves decidedly in favor of the policy and expediency of the general rule of law, that a factor cannot pledge. They considered it to be one of the greatest safeguards which the foreign merchant had in making consignments of goods to England; and that, as a measure of policy, the rule ought not to be altered. It operated to increase the foreign commerce of the kingdom, and was founded, it was said, upon a very plain reason, viz. that he who gave credit should be vigilant in ascertaining whether the party pledging had, or had not, authority so to deal with the goods, and that the knowledge might always be obtained from the bill of lading, and letters of advice.⁴⁷

Every contract made with an agent in relation to the business of the agency, is a contract with the principal, provided the agent acts in the name of his principal. The party so dealing with the agent is bound to his principal; and the principal, and not the agent, is bound to the party. It is a general rule, standing on strong foundations, and pervading every system of jurisprudence, that where an agent is duly constituted, and names his principal, and contracts in his name, the principal is responsible, and not the agent.⁴⁸ The agent becomes personally liable, only when the principal is not known, or where there is no responsible principal, or where the agent becomes liable by an undertaking in his own name, or when he exceeds his power.⁴⁹ If he makes the contract in behalf of his principal, and discloses his name at the time, he is not personally liable, not even though he should take a note for the goods sold payable to himself.⁵⁰ But if a person would excuse himself from responsibility on the ground of agency, he must show that he disclosed his principal at the time of making the contract, and that he acted on his behalf, so as to enable the party with whom he deals to have recourse to the principal, in case the agent had authority to bind him.⁵¹ And if the agent even buys in his own narne, but for the benefit of his principal, and without disclosing his name, the principal is also bound as well as the agent, provided the goods come to his use.⁵²

The attorney who executes a power, as by giving a deed, must do it in the name of his principal; for if he executes in his own name, though he describes himself to be the agent or attorney of his principal, the deed is held to be void; and the attorney is not bound, even though he had no authority to execute the deed, when it appears on the face of it to be the deed of the principal⁵³ But if the agent binds himself personally, and engages expressly in his own name, he will be held responsible, though he should, in the contract or covenant, give himself the description or character of agent.⁵⁴ And though the attorney, who acts without authority, but in the name of the principal, be not personally bound by the instrument he executes, if it contain no covenant or promise on his part, yet there is a remedy against him by a special action upon the case, for assuming the act when he had no power.⁵⁵

When goods have been sold by a factor, the owner is entitled to call upon the buyer for payment, before the money is paid even to the factor; and a payment to the factor, after notice from the owner not to pay, would be a payment by the buyer in his own wrong, and it would not prejudice the rights of the principal.⁵⁶ If, however, the factor should sell in his own name as owner, and not disclose his principal, and act ostensibly as the real and sole owner, though the principal may afterwards bring his action upon the contract against the purchaser,⁵⁷ the latter, if he bona fide dealt with the factor as owner, will be entitled to set off any claim he may have against the factor, in answer to the demand of the principal.

There is a distinction in the books between public and private agents on the point of personal responsibility. If an agent, on behalf of government, makes a contract, and describes himself as such, he is not personally bound, even though the terms of the contract be such as might, in a case of a private nature, involve him in a personal obligation.⁵⁸ The reason of the distinction is, that it is not to be presumed that a public agent meant to bind himself individually for the government, and the party who deals with him in that character is justly supposed to rely upon the good faith and undoubted ability of the government. But the agent in behalf of the public may still bind himself by an express engagement, and the distinction terminates in a question of evidence. The inquiry in all the cases is, to whom was the credit, in the contemplation of the parties, intended to be given. This is the general inference to be drawn frorn all the cases, and it is expressly declared in some of them.⁵⁹

An agent, ordinarily, and without express authority, has not power to employ a sub-agent to do the business, without the knowledge or consent of his principal. The maxim is, that delegatus non potest delegare, and the agency is generally a personal trust and confidence which cannot be delegated; for the principal employs the agent from the opinion which he has of his personal skill and integrity, and the latter has no right to turn his principal over to another of whom he knows nothing.⁶⁰ And if the authority, in a matter of mere private concern, be confided to more than one agent, it is requisite that all join in the execution of the power; though the cases admit the rule to be different in a matter of public trust, or of power conferred for public purposes, and if all meet in the latter case, the act of the majority will bind.⁶¹

(3.) Of the agent’s right of lien.

The lien here referred to is the right of an agent to retain possession of property until some demand of his be satisfied. It is created either by common law, or by the usage of trade, or by the express agreement or particular usage of the parties.⁶²

A general lien is the right to retain the property of another for a general balance of accounts; but a particular lien is a right to retain it only for a charge on account of labor employed, or expenses bestowed upon the identical property detained. The one is taken strictly, but the other is favored in law.⁶³ The right rests on principles of natural equity and commercial necessity, and it prevents circuity of action, and gives security and confidence to agents.

Where a person, from the nature of his occupation, is under obligation, according to his means, to receive, and be at trouble and expense about the personal property of another, he has a particular lien upon it; and the law has given this privilege to persons concerned in certain trades and occupations, which are necessary for the accommodation of the public. Upon this ground, common carriers, innkeepers, and farriers, had a particular lien by the common law;⁶⁴ for they were bound, as Lord Holt said,⁶⁵ to serve the public to the utmost extent and ability of their employment, and an action lies against them if they refuse without adequate reason. But though the right of lien probably originated in those cases in which there was an obligation arising out of the public employment to receive the goods, it is not now confined to that class of persons, but in a variety of cases a person has a right to detain goods delivered to him to have labor bestowed on them, who would not be obliged to receive the goods in the first instance contrary to his inclination. A tailor or dyer is not bound to accept an employment from any one that offers it, and yet they have a particular lien, by the common law, upon the cloth placed in their hands to be dyed, or worked up into a garment.⁶⁶ The same right applies to a miller, printer, tailor, wharfinger, or whoever takes property in the way of his trade or occupation to bestow labor or expense upon it; and it extends to the whole of one entire work upon one single subject, in like manner as a carrier has a lien on the entire cargo for his whole freight.

The lien exists equally whether there be an agreement to pay a stipulated price, or only an implied contract to pay a reasonable price. The old authorities, which went to establish the proposition, that the lien did not exist in cases of a special agreement for the price, have been overruled as contrary to reason, and the principles of law; and it is now settled to exist equally, whether there be, or be not, an agreement for the price, unless there be a future time of payment fixed, and then the special agreement would be inconsistent with the right of lien, and would destroy it.⁶⁷

If goods come to the possession of a person by finding, and he has been at trouble and expense about them, he has a lien upon the goods for a compensation in one case only, and that is the case of goods lost at sea, and it is a lien for salvage.⁶⁸ This lien is dictated by principles of commercial necessity, and is thought to stand upon peculiar grounds of maritime policy.⁶⁹ It does not apply to cases of finding upon land; and though the taking care of property found for the owner, be a meritorious act, and one which may entitle the party to a reasonable recompense, to be recovered in an action of assumpsit, it has been adjudged,⁷⁰ not to give a lien in favor of the finder, and he is bound to deliver up the chattel upon demand, and may then recur to his action for a compensation. If the rule was otherwise, says Ch. J. Eyre, ill designing persons might turn floats and vessels adrift, in order that they might be paid for finding them; and it is best to put them to the burden of making out the quantum of their recompense to the satisfaction of a jury. The statute of this state⁷¹ gives to the person who takes up strayed cattle the right to demand a reasonable charge for keeping them; and, independent of that provision, there is no lien upon goods found.

A general lien for a balance of accounts is founded on custom, and is not favored; and it requires strong evidence of a settled and uniform wage, or of a particular mode of dealing between the parties, to establish it. General liens are looked at with jealousy, because they encroach upon the common law, and destroy the equal distribution of the debtor’s estate among his creditors.⁷² But by the custom of the trade an agent may have a lien upon the property of his employer entrusted to him in the course of that trade, not only in respect to the management of that property, but for his general balance of accounts. The usage of any trade sufficient to establish a general lien, must, however, have been so uniform and notorious, as to warrant the inference, that the party against whom the right is claimed had knowledge of it.⁷³ This general lien, may also be created by express agreement; as where one or more persons give notice that they will not receive any property for the purposes of their trade or business, except on condition that they shall have a lien upon it, not only in respect to the charges arising on the particular goods, but for the general balance of their account. All persons who afterwards deal with them with the knowledge of such notice, will be deemed to have acceded to that agreement.

This was the rule laid down by the Court of K. B. in Kirkham v. Shawcross;⁷⁴ but the judges in that case declared, that the notice would not avail in the case of persons who, like common carriers and innkeepers, were under a legal obligation to accept employment in the business they assume, for a reasonable price to be tendered to them, and who had no right to impose any unreasonable terms and conditions upon their employers, or refuse to serve them. The same intimation that a common carrier could not create any general lien as against the person who employed him, by means of notice, was given by the judges in Oppenheim v. Russell,⁷⁵ but a contrary doctrine was strongly implied in the subsequent case of Rushforth v. Hadnell,⁷⁶ and the court in that case, while they condemned the justice and policy of these general liens, seemed to admit, that a common carrier might establish such a right against his employer, by showing a clear and notorious usage or a positive agreement. It was again stated as a questionable point, in Wright v. Snell,⁷⁷ whether such a general lien could exist as between the owner of the goods and the carrier, and the claim was intimated to be unjust. It must, therefore, be considered as a point still remaining to be settled by judicial decision.

Possession of the goods is necessary to create the lien; and the right does not extend to debts which accrued betore the character of factor commenced;⁷⁸ nor where the goods of the principal do not, in fact, come to the factor’s hands, even though he may have accepted bills upon the faith of the consignment, and paid part of the freight.⁷⁹ And though there be possession, a lien cannot be acquired, where the party came to that possession wrongfully.⁸⁰ This would be as repugnant to justice and policy, as it would be to allow one tort to be set off against another.

The right of lien is also to be deemed waived, when the party enters into a special agreement, inconsistent with the existence of the lien, or from which a waiver of it may fairly be inferred, as when he gives credit by extending the time of payment, or takes distinct and independent security for the payment. The party shows, by such acts, that he relies, in the one case, on the personal credit of his employer; and, in the other, that he intends the security to be a substitution for the lien; and it would be inconvenient that the lien should be extended to the period to which the security had to run.

This was the doctrine sustained in Gillman v. Brown,⁸¹ in respect to the vendor’s right of lien as against the vendee, and the principle equally applies to other cases; and it was also explicitly declared by Lord Eldon, in Cowell v. Simpson.⁸² The lien is also destroyed, when a factor makes an express stipulation, on receiving the goods, to pay over the proceeds.⁸³ So, if the party comes to the possession of goods without due authority, he cannot set up a lien against the true owner; as, if a servant delivers a chattel to a tradesman without authority, or a factor, having authority to sell, pledges the goods of his principal.⁸⁴

Possession is not only essential to the creation, but also to the continuance of the lien; and where the party voluntarily parts with the possession of the property upon which the lien has attached, he is divested of his lien. If the lien was to follow the goods after they had been sold or delivered, the encumbrance would become excessively inconvenient to the freedom of trade, and the safety of purchasers.⁸⁵ But if the delivery to a third person be merely for the benefit of the factor, and as a servant to the factor, and with notice of the lien, it is in effect a continuance of the factor’s possession, and the lien is retained.⁸⁶ Nor is it universally true, that the actual delivery of part of the goods sold on an entire contract, is equivalent to an actual delivery of the whole. It will depend upon the terms of the contract and the intention of the parties; and whenever the property in the part of the goods not delivered does not pass to the vendee, the vendor’s right of lien for the price is, of course, preserved on the part retained.⁸⁷

A factor has not only a particular lien upon the goods of his principal in his possession, for the charges arising on account of them, but he has a general lien for the balance of his general account, arising in the course of dealings between him and his principal; and this lien extends to all the goods of the principal in his hands in the character of factor.⁸⁸ The factor has a lien also on the price of the goods which he has sold as factor, though he has parted with the possession of the goods; and he may enforce payment from the buyer to himself, in opposition to his principal. This rule applies, when he becomes surety for his principal, or sells under a del credere commission, or is in advance for the goods by actual payment.⁸⁹

Attorneys and solicitors, as well as factors, have a general lien upon the papers of their clients, for the balance of their professional accounts; but the lien is liable to be waived or divested, as to papers received under a special agreement or trust, or where they take security from their clients.⁹⁰ The solicitor or attorney has two kinds of liens for his costs; one on the funds recovered, and the other on the papers in his hands. The client cannot get back the papers, without paying what is due, (whatever becomes of the suit,) not only in respect of that business for which the papers were used, but for other business done by him in his professional character.⁹¹ The attorney’s lien for costs extends to judgments recovered by him; and yet a bona fide settlement or payment by the debtor, before notice of the lien, will prevail against it, and the attorney’s lien upon a judgment yields to the debtor’s equitable right of set-off.⁹² We follow in this state the rule of the English Court of Chancery, and of the Court of C. B.; and consider the lien as subject to all the equities that may attach on the fund, and as extending only to the clear balance resulting from the equity between the parties.⁹³ Dyers have likewise a lien on the goods sent to them to dye, for the balance of a general account.⁹⁴ A banker, like an attorney, has also a lien on all the paper securities which come to his hands for the general balance of his account, subject equally to be controlled by special circumstances.⁹⁵ The same thing may be said of an insurance broker, and his lien exists even though the consignor should assign the interest covered by the policy, for the assignee would take subject to the lien.⁹⁶ If, however, the insurance broker be employed by an agent of the principal, and with knowledge that he acted as agent, the broker has no lien upon the policy, for any general balance that may be due to him from the agent.⁹⁷

But it would be inconsistent with my general purpose, to pursue more minutely the distinctions that abound in this doctrine of lien; and I will conclude by observing, that a lien is, in many cases, like a distress at common law, and gives the party detaining the chattel the right to hold it as a pledge or security for the debt, but not to sell it. It was once said by Popham, Ch. J., in the Hostler’s case,⁹⁸ that an innkeeper might have the horse of his guest appraised and sold, after he had eaten as much as he was worth. But this was a mere extra-judicial dictum, and it was contrary to the law, as it had been previously, and as it has been subsequently adjudged.⁹⁹ The right to sell, in such a case, is allowed by the custom of London, but not by the general custom of the realm. I presume that satisfaction from a lien may be enforced by a bill in chancery; and a factor, having a power to sell, has the means of payment within his control; and a right to sell may, in special cases, be implied from the contract between the parties. It would be very convenient to allow an innkeeper to sell the chattel without suit, in like manner as a pawnee may do, in a case of palpable default, and on reasonable notice to redeem; for the expense of a suit in equity by an innkeeper would, in most instances, more than exhaust the value of the pledge.

(4.) Of the termination of agency.

The authority of the agent may terminate in various ways. It may terminate by the death of the agent; by the limitation of the power to a particular period of time; by the execution of the business which the agent was constituted to perform; by a change in the state or condition of the principal; by his express revocation of the power; and by his death.

1. The agent’s trust is not transferable either by the act of the party, or by operation of law. It terminates by his death, and this results, of course, from the personal nature of the trust.¹⁰⁰ According to the civil law, if the agent had entered upon the execution of the trust in his lifetime, and left it partially executed, but incomplete at his death, his legal representatives would be bound to go on and complete it.¹⁰¹ Pothier adopts this principle as just and reasonable, and there can be no doubt, that the principal will be bound to complete a contract partly performed by him by the act of his agent, by a suit at law, or in equity, according to the nature of the case, but the representatives of the agent will have nothing to do with it unless the business be in such a situation, that it cannot be performed without their intervention. The cases stated in the civil law, and by Pothier, were between the principal and the agent, and not between a third person and the representatives of the agent dealing in the character of agent. Nor can an authority given for private purposes to two persons, be executed by the survivor, unless it be so expressly provided, or it be an authority coupled with an interest.¹⁰²

2. A power of attorney is, in general, from the nature of it, revocable at the pleasure of the party who gave it.¹⁰³ But where it constitutes part of a security for money, or is necessary to give effect to such security, or where it is given for a valuable consideration, it is not revocable.¹⁰⁴ In the case of a lawful revocation of the power by the act of the principal, it is requisite that notice be given to the attorney, and all acts bona fide done by him under the power, prior to the notice of the revocation, are binding upon the principal.¹⁰⁵ This rule is necessary to prevent imposition, and for the safety of the party dealing with the agent; and it was equally a rule in the civil law.¹⁰⁶ Even if the notice had reached the agent, and he concealed the knowledge of the revocation from the public, and the circumstances attending the revocation were such, that the public had no just ground to presume a revocation, his acts done under his former power would still be binding upon his principal.¹⁰⁷ He can, likewise, according to Pothier, conclude a transaction which was not entire, but partly executed under the power when the notice of the revocation was received, and bind the principal by those acts which were required to consummate the business. The principal may, no doubt, be compelled to act in such a case; but it seems difficult to sustain the act of the agent after his power has been revoked, for he becomes a stranger after the revocation is duly announced.

3. The agent’s power is determined likewise by the bankruptcy of his principal;¹⁰⁸ but this does not extend to an authority to do a mere formal act which passes no interest, and which the bankrupt himself might have been compelled to execute notwithstanding his bankruptcy.¹⁰⁹ Nor will the bankruptcy of the principal affect the personal rights of the agent, or his lien upon the proceeds of a remittance made to him under the orders of his principal before his bankruptcy, but received afterwards.¹¹⁰ If the principal was a feme sole when the power was given, it is determined likewise by her marriage; for the agent, after the marriage, cannot bind the husband without his authority, nor a feme covert without her husband.¹¹¹ Her warrant of attorney to confess judgment is countermanded by her marriage before the judgment be entered up.¹¹²

The authority of an agent may be revoked by the lunacy of the principal; but the better opinion would seem to be, that the fact of the existence of lunacy must have been previously established by inquisition before it could control the operation of the power. Neither the agent nor third persons dealing with him under the power, have any certain evidence short of a finding by inquisition of the state of the mind of the principal; and, in case of partnerships, it would at least require a decree in chancery to dissolve the partnership on the ground of lunacy.¹¹³

4. The authority of an agent determines by the death of his principal; and a joint authority to two terminates by the death of one. This is the general and a settled doctrine.¹¹⁴ By the civil law, and the law of those countries which have adopted the civil law, the acts of an agent done bona fide after the death of the principal, and before notice of his death, are valid and binding.¹¹⁵ But this equitable principle does not prevail in the English law; and the death of the principal is an instantaneous and absolute revocation of the authority of the agent, unless the power be coupled with an interest.¹¹⁶ Even a warrant of attorney to confess judgment, though it be not revocable by the act of the party, is, nevertheless, revoked by his death; and all that the courts can do is to permit the creditor to enter up judgment as of the preceding term, if it was prior to the party’s death. Such a power is not, in the sense of the law, a power coupled with an interest.¹¹⁷