CHAPTER XXI PRINCIPLES OF AGENCY §119. Introductory In the complex commercial life of today much of the world's business is of necessity transacted by proxy. The amount of business that one man can do is limited. Hence, to conduct the great activities of the world, those with executive ability empower others to act for them. At the present time the larger proportion of business men are not doing business for themselves, but are acting as agents for others. On this account the subject of agency is of primary importance. Many men are principals, yet more are agents; and all have to do with agents and should know what agents' powers are and just how far they represent their principals. The matter of agency enters into all departments of business and will come up again and again in the treatment of other subjects in this work. The subject of agency is of vital importance in insurance, partnership, and corporation law. $120. Definitions An agent is one who represents, or is authorized to represent, another person in a business transaction or transactions with third parties. The person represented is known as the "principal." The person appointed may be known as "agent," "factor," "broker," "attorney," "proxy," "delegate," or "representative.” The relation between the principal and the agent is termed "agency." S121. The Principal Anyone capable of transacting his own business may appoint an agent to act for him in the same matters. A standard text-book expresses it thus: It may be stated as the general rule, by the common law every person who is competent to act in his own right, and in his own behalf, may appoint an agent.1 In the California Code it is expressed as follows: Any person having capacity to contract, may appoint an agent. The legal doctrine of agency is based on the principle that whatever a person may do for himself, he may do by another person. The person who appoints an agent must be, therefore, capable of transacting his own business; that is, when he appoints an agent, he must be sane, sober, and capable of acting for himself, and also, he must be of full age-hence a minor cannot appoint an agent. The following are legally qualified to be principals: 1. Corporations may appoint agents to accomplish their corporate purposes-in fact, a corporation can act only by its agents. 2. Partnerships may appoint agents, and apart from this each partner is held to be an agent for the firm. 3. Married women may appoint agents. 4. Notes: I. Unincorporated clubs and societies may appoint agents. The principal must be competent to act, and in his sane mind. 1 Mechem on Agency, 129; Cyc. 31, p. 1175. 2. Infants are not competent to act for themselves, and hence cannot appoint agents. 3. Partnerships, clubs, and societies may be principals. 4. Corporations can operate only through agents. § 122. The Agent Any person who is qualified to perform a particular act may do it as the agent of another. Anyone who has capacity to act for himself is ordinarily capable of acting as agent for another . . . . it is generally thought he may be capable of acting as agent for another, although he is not capable of acting for himself." The point to be noted in this statement is that a person may be legally incompetent to act for himself, but yet may lawfully act as agent for someone else. For instance, a minor, i.e., anyone under age, cannot contract for himself, but he may act as agent for an older person and what he does will bind the older person.3 A child may be the agent of his parent. But it must be because the child has been appointed an agent, not simply because he is the child of, or is living in the house with, the parents. In such cases, to be an agent, the child must have been directly authorized by the parent to act along certain lines, or else it must be shown that the child had been in the habit of so acting with the approval of his father or mother. In a New Hampshire case the judge said: A son has no authority, as such, to lend his father's property, and there is no presumption that such authority has been given the son.* 2 31 Cyc. 1212; Lyon & Co. v. Kent, 45 Ala. 56. Sheldon v. Newton, 3 Ohio State 494. Johnson v. Stone, 40 N. H. 197. |