AGENCY.

Hawera Star, Volume XLV, 23 July 1925, Page 10

AGENCY.

T.KCIURE BY MR. H. G. BRODIE

TO' ACCOU NT ANT STUDENTS

The Law a-s it affects the agent the person who in so many transactions in the commercial world comet* between the .principal and the third party- was comprehensively dealt with by Mr. H. G. Brodie- lust evening, when he delivered the first lecture of the Hawera Accountant. Students’ Society s 19-o season. . y| ]- Brodie, at the outset, said that people to-day were so familiar with the word “agency ’ that they might he inclined to think that the idea was one i-hieh must have been in the minds at the earliest people that lived. Ihe ,-sai-ly Roman master was responsible ‘‘or the - acts of his slaves much in the mine way as he was responsible for the doings of his cattle, and some jurists ■onsider that, this Roman idea was the foundation of the present law wh.ic-n •made a principal liable tor the acts of Ids agent. It is generally agreed, however, that though this may bo so hi torts, it is nob so in contract law, ■he idea of agency being entirely English .

Proceeding, Mr. Brodi© said he proposed to deal with agency in contract law and not in torts. The relation of agent arose when one person, called u. principal, gave another person authority to act on his behalf, the agent consenting so to act. The agent-, however , was distinct from the positions of -servant and independent contractor, but, in the exercise of his authority ho was bound to' conform to his instructions. The agent was there to bring his principal into legal relationship with a third party, and as mono m.s a contract was completed the agent dropped out of the picture. This was (.he normal, or typical type of agency, but there were variations.

A person under 21 could sign a contract as agent on behalf of a principal. Authority for agency could be given in writing or by T word of mouth, but in certain cases the relation arose tot by any expressed words, or writing, but by implication of law. There vas one case peculiar to English law vhere agency c-annot be created by writing unless it is by deed. He referred to power of attorney—an old rule established hundreds of years ago, but owing to conservatism had not been amended. A WIFE’S CREDIT.

The lecturer also referred to the audio ri tv of a wife to pledge a. husband’s credit. He said that the law looked upon the matter from the view-, point of a couple living together or living apart. ,l.n the case of a husband and wife living together, the law presumed that the wife had the right ‘.o pledge the husband’s credit for the necessaries of life. However, like all iGgall presumptions it could be rebutted, and Mr. Brodie instanced the case of a husband who notified «, perron not to give his wife credit. In the case of a couple living apart, the presumption was in favour of the husband.

Mr. Brodie took the case of a man who, assuming to act a*s agent for .another' party, and without that party’s knowledge, signed a contract.. 'Hie position was that the other nary could coine along later and ratify what the agent had done. The law deemed the other party who had come along to have been the principal in the contract right- through. PRI NOJ PADS AND AG ENT'S.

Continuing, Mr, Brodie dealt with the rights of principals and agents as between themselves. He said that the two had the ordinary relationship of employer and employee —the principal must pay hi.s commiscion or reward and must, indemnify the agent against all loss that arose in the lawful exercise of his authority. The agent had to account for all property entrusted to him, and he had to display any special skill or knowledge i.h,at ho might .posse ms, An agent- was not allowed to take in seciet profit, in any transaction unless the principal knew about it, as it was laid down ihat an -agent in whom the principal ■■e posed certain confidence had no right to place himself in such a position that he could not- do justice to the interests of the principal. Once a principal found out that anything in the nature of bribery' had taken pia-ce he could repudiate the whole transaction. QUESTION of authority. The lecturer dealt with raises where the question of general authority arose. An agent could not act without authority or in excess of authority. Also, there had been cases where a principal restricted the power of an agent without the knowledge of the genera! public. He might in such case be, bound by the acts of his ostensible agent. OTHER. AGENCIES. in the case of an auctioneer, such a person was an agent for the seller, but a« soon as the goods were knocked down to the .buyer he became the agent for the buyer. The activities of a broker were a typical type of agency, because the broker’s duty was to establish privity of cont-t act between two people, and he dropped right out of the picture as soon as the contract. was completed. The commission agent was, strictly speaking, not an agent at all. He was employed to buy and sell and hand over goods at the actual price that he paid lor them. A mercantile agent was there to buy and sell and take goods on consignment. IN CASE OF FRAUD. Where an agent was fraudulent in thecourse of hi.s employment, the third party had recourse against the principal whether the agent’s fraud had benefited the principal or not. In conclusion. Mr. Brodie said that just ms the relationship of agency was created by agreement, so it might be terminated by agreement, insanity, bankruptcy, or death of the party. On behalf of the society, the president (Mr. C. H. Suisted) thanked Mr. Brodie for his very able and instructive address. T HE T OOEKY STREET AG ENT, ilr. G. 11. Duncan asked what steps a third party' should take to see that an .agent, had power to contract, Mr. Brodie replied that if the third party was a shrewd business man he would naturally see when he signed the contract that the agent had authority. “if he does not do so he runs the risk of the agent not having authority,' ’ said the lectin er. However, even if the agent had no authority the third party could come on I the agent.

M,;\ Duncan said he had had in mind riie agents of the Tooley Street house-s who did so much business in Taranaki. He isaid that company directors never asked the Ton-ley Street agent to produce his authority, and yet that agent bought millions of pounds worth of produce. 1