determined what accommodations are proper, how much is to be allowed for meals, etc.?

7. Is it proper under the present circumstances of your position to use house stationery, stenographer, etc., for your personal correspondence?

8. In buying for your house, is it proper to give your personal friends the preference, or to pay off personal scores with house patronage, assuming, of course, that prices and qualities are the same?

(a)

PRACTICE PROBLEMS

Plaintiff was employed by the defendant, as agent, to sell two lots of land. Lot number one was to be sold at a certain minimum price; lot number two was also to be sold at a certain minimum price, it being, however, further agreed with respect to this lot that the agent was to have as commission all that he could obtain above that price. Plaintiff now wishes to buy both of these lots for himself at the stated minimum prices. State the rules of law applicable to the situation.

(b) S employed A to sell his estate for $20,000. A had previously been authorized by B to buy the estate of S for $20,000, but this fact was unknown to S. After informing B that S had authorized him to act as agent to sell the estate for $20,000, A negotiated a contract between S and B for the sale of the land for $20,000. Is A entitled to a broker's commission from either or both S and B?

$385

RANDALL v. PEERLESS MOTOR CAR CO. Supreme Judicial Court of Massachusetts, 1912. [212 Mass. 352.] RUGG, C. J.: But the further instruction was given that the mere making of the agreement by the plaintiff on January 17 to act as agent for the Stevens-Duryea car (if found to be a competing car) would not be such a violation of his contract as to warrant rescission by the defendant on January 21 unless he did something in the meantime to interfere with the devotion of his best energies to the interests of the defendant. To determine the correctness of this ruling involves some analysis of the contract. It was in one respect merely a contract for purchase and sale of automobiles. As has been pointed out in discussing the "best energies" clause, the plaintiff was not strictly an employee of the defendant, but an independent dealer. In other respects, it created the relation of principal and agent. The words "agent" and "agency" occur several times in the contract. In a broad sense these words were used accurately in view of what both parties contemplated. The plaintiff had no right to undertake any obliga

tion inconsistent with his duty to the defendant vigorously and intelligently to push the sale of the defendant's product in New England. All sales of those products were to be made by the terms of the contract exclusively by the plaintiff in the territory described. There is no inconsistency in the establishment of this double relation of an agreement for sales and for agency. They may co-exist and impose binding duties if this is the intention of the parties. That is what this contract did in express terms. In this regard the case is similar to John Hetherington & Sons v. William Firth Co., 210 Mass. 8, 22, 25. It is firmly established that the agent is bound to exercise at all times the utmost good faith toward his principal. This is not a "technical or arbitrary rule. It is a rule founded upon the highest and truest principles of morality." Parker v. McKenna, L. R. 10 Ch. 96, 118. Agents are not permitted to put themselves in a position antagonistic to the interests of those whom they represent. They cannot serve two masters. It is not a question whether in fact the principal has suffered actual injury. The policy of the law is contravened by the creation of the temptation for wrongdoing by entering into the adverse relation, and it is not necessary to go to the extent of showing that the opportunity was embraced. The mere act of signing a contract of agency which created legal obligations inconsistent with those assumed under the pre-existing contract with the defendant was an act which by itself alone justified the termination of the contract by the defendant. Little v. Phipps, 208 Mass. 331, 333. Quinn v. Burton, 195 Mass. 277. Erskine, Oxenford & Co. v. Sachs [1901], 2 K. B. 504. Cotton v. Rand, 93 Texas, 7, 23. Nor was it necessary that the defendant should have known of the making of the antagonistic contract with the competing company when it is said to have terminated the contract involved in this action on January 21. Nevertheless, it may serve as a sound ground for termination of the contract, if it be found to have existed. The defendant no longer was bound to continue an agency agreement with one so unmindful of his duty in that regard as to enter into an adversary contract, even though he had not commenced its performance. Boston Deep Sea Fishing & Ice Co. v. Ansell, 39 Ch. D. 339, 357. The defendant excepted to this paragraph of the charge expressly. It was erroneous in law. As it is conceivable that the jury may have believed the evidence to the effect that the Stevens-Duryea car was a competitor of the Peerless in 1903, it cannot be said that this erroneous instruction was not prejudicial to the defendant. It may have been decisive in causing the jury to reach the general finding in favor of the plaintiff.

§386 WALKER v. JOHN HANCOCK MUTUAL

LIFE INS. CO.

New Jersey Court of Errors and Appeals, 1910. [80 N. J. L. 342.]

SWAYZE, J., delivered the opinion of the Court:

The plaintiff was employed by the defendant in 1885 as an agent to solicit policies of life insurance. His own account of the contract, which was an oral one, is that he agreed to go to work for the company upon the condition that he was allowed to retain his "debit" as long as he could collect it, and as long as he was healthy and able to work. The debit was the amount of premiums on policies which the plaintiff was entitled to collect. His compensation was to be 20 per cent. on collections, and nine times the first premium for writing the policies. Since the plaintiff was non-suited, we must accept his statement of the contract as true. He continued to work under the contract for nineteen years, and wrote many policies, so that his debit increased to a considerable sum per week, on which he was entitled to 20 per cent. on collection of the premiums. In 1904 the defendant undertook to make an inspection of his work. This consisted in the inspector going with the plaintiff on his rounds to collect premiums, and checking up the books that the policy holders held, in which their receipts were entered, with the accounts rendered by the plaintiff. The plaintiff now claims that he was informed that the only object was to ascertain the addresses of the policy holders, but he admits that he knew from his own experience that in fact an inspection was in progress. The inspection continued for about two weeks without objection on plaintiff's part, and was about nine-tenths completed when a controversy arose. The inspector insisted on going over some of the ground again, and the plaintiff refused to permit it, and was thereupon discharged. He admitted in his testimony that to make an ideal inspection it was necessary to do as the inspector wished. At the trial the defendant alleged, as an additional justification for the discharge, the fact that the plaintiff had received premiums by mail from policy holders, contrary to a rule of the company adopted after the contract between the plaintiff and defendant had been entered upon. The fact is conceded, and the claim of the plaintiff is that the defendant had no right to adopt such a rule, since it altered the contract.

It is elementary that a principal has the power to revoke his agent's authority at any time, except where it is expressly made irrevocable, or where it is coupled with an interest or given for a valuable consideration or as part of a security. A

distinction must be made, however, between the principal's power to terminate the authority of the agent to act for him and bind him to third persons, and the right of the principal to terminate the relation without liability to the agent. As between the principal and the agent, the right depends on the terms of the contract, and, if the agent is discharged in violation of those terms, he has a right of action for the wrongful discharge. In this respect the contract and the rights thereunder are analogous to the ordinary contract between master and servant. In every contract of service, certain terms are implied. Illustration of terms implied in a contract of agency are to be found in the notes in 31 Cyc. Law & Proc. pp. 1301, 1302. In every contract of service, it is implied that the employee shall obey the lawful orders of the master, at least so far as they are reasonable, and not merely arbitrary or capricious. Larkin v. Hecksher, 51 N. J. L. 133, 3 L. R. A. 137, 16 Atl. 703. In Lehigh Valley R. Co. v. Snyder, 56 N. J. L. 326, 28 Atl. 376, the obligation to obey reasonable regulations was an express term of the contract. The question usually arises in cases between master and servant, because the nature of that relation more frequently gives occasion for specific commands of the master; but the obligation of the agent to pursue his authority is essentially of the same character, and is coupled with the duty to obey instructions. Evans, Principal and Agent, §253. Another well-recognized duty of an agent is the duty to account for money of his principal received by him. This involves the right of the principal to assure himself that the accounts are proper and correct. Measures taken in good faith by the principal, to secure a proper accounting and to assure himself of its propriety, are therefore not in violation of the contract, although they may not be within its express terms. We see no reason to doubt that what the defendant required in this case was required in good faith, and was reasonably necessary to the proper conduct of its business. The amount of the plaintiff's debit for which he was accountable was $261. This represented the total of premiums on some 2,500 policies, which it required two weeks to collect. The plaintiff admits that, to make an ideal inspection, it would be necessary to do just what the defendant's inspector asked to do. The plaintiff did not object to an inspection, for he permitted it without objection for two weeks. He drew the line, however, at an ideal inspection. We think it was for the company to determine how thorough an inspection it should make. It was entitled, in behalf of its policy holders, to be thoroughly satisfied of the correctness of the plaintiff's accounts. When the plaintiff refused

to permit a thorough or ideal inspection, the defendant was justified in discharging him.

He concedes, also, that he violated the rule of the company forbidding him to collect premiums by mail. We think the method of collection also was a matter to be determined by the company in the exercise of its right to control the conduct of its own business. Since this rule was adopted after he entered the company's employ, he was entitled to notice of it, but that he had. His violation of this rule also justified his discharge.

The fact that his discharge was justified does not, however, determine his right to maintain this suit. That depends upon the proper construction of the contract. Wilcox & G. Sewing Mach. Co. v. Ewing, 141 U. S. 627, 35 L. Ed. 882, 12 Sup. Ct. Rep. 94. If his right to receive 20 per cent. on the collections was a part of his compensation for securing the business and writing the policy, the company, could not deprive him of that compensation which he had already earned, by preventing him from collecting the future premiums. Since, upon this writ of error, there can be no dispute about the terms of the contract, the construction is for the court. He says he was to get 20 per cent. on collections, and nine times the first premium for writing it. A natural construction is that the payment for securing the business-"for writing it" was to be nine times the first premium, and that the 20 per cent. was for services in collecting future premiums. In view of the small size of the premiums, this is not unreasonable. For a policy on which the premium was 10 cents, he would receive 90 cents for writing it, and 2 cents for the collection of each premium after the first. We find nothing in the contract to lead us to believe that the 20 per cent. commission was a part of the compensation for writing the policy. The plaintiff did not, in fact, collect the premiums that became due after his discharge, and the only remaining question is whether he is entitled to damages because he was deprived of the chance to earn his commission. Since that was pay for future services, the plaintiff's right depends on whether his discharge was rightful or wrongful. The authorities SO hold. .

The great weight of authority is against the right of the agent to commissions on renewal premiums paid after he has been rightly discharged. The cases where there was an express right to terminate the agency are in point, since such an express right can be no stronger than the legal right arising out of the legal relations of the parties implied by the law. The result is in accordance with sound principles, since, if the discharge is