Insured, since the latter cannot be held to anticipate that

such restrictions will a])pcar in the policy when delivered.*

An agent to receive applications and premiums, and counter-

sign and deliver policies, has no implied authority to receive

notice of loss or to adjust losses.^ The questions connected

with insurance are, however, so numerous, and the authori-

ties so conflicting, that the student must be referred to

special works upon that subject .^

(5) Agent authorized to colled. An agent may be ex-

pressly authorized to collect money for his principal, and

such authority may be implied from circumstances. Such

authority is not necessarily implied from the mere fact that

1 Union :\Iut. Ins. Co. v. Wilkinson, 1;J W:ill. (U. S ) 222; Commer-

cial, &c. Ins. Co. v. State, 113 Ind. 331 ; Ilaitford ins. Co. v. Farrish, 73

111. 166.

2 Baines v. Ewing, L. R. 1 Ex. 320; 4 II. & C. 511 ; Armstrong w.

State Ins. Co., 61 Iowa, 212; Fleming v. Hartford F. Ins. Co., 42 Wis.

616.

8 Quinlan v. Providence, &c. Co., 133 N. Y. 356; Ilankins r. Rockford

Ins. Co., 70 Wis. 1 ; Burlington Ins. Co. v. Gibbons, 43 Kans. l-').

* Continental Ins. Co. v. Ruckman, 127 111. 364; Tubbs v. Dwelling

House Ins. Co., 84 INIich. 646 ; Kausal v. ]\Iinnesota, &c. Ins. Co , 31 Minn.

17; Mutual B. L. Ins. Co. v. Robison, 58 Fed. Rep. 723. See, for au-

thorities pro and con, Joyce on Ins. §§ 434-439.

6 Ermentrout v. Girard, &c. Ins. Co., 63 Minn. 305. But see Joyce

on Ins. В§ 575 et seq.

« May on Ins. §§ 118-155; 1 Joyce on Ins. §§ 386-603.

CONTKACT FOR DISCLOSED rUINCirAL. 145

the agent is authorized to present the bill or claim to the

third party/ but it may be implied from such fact and its

surroundiug circumstances.''^ Nor is such authority to be

implied from the mere fact that the agent negotiated the con-

tract out of which the claim arose ;'^ but where (he agent

sells and delivers property there is an implied authority to

collect payment.* Authority to collect may be implied from

the conduct of the principal in holding out his agent as

having such authority .В° Where the agent is entrusted with

securities received by him upon the negotiation of a loan,

it is imphed that he is authorized to receive the payments

due upon such securities.^ But if the agent has not pos-

session of the securities, no authority to receive payment

upon them can be implied.'' Authority to receive interest

does not necessarily carry wdth it authority to receive the

principal sum.^

An agent authorized to receive payment is not impliedly

authorized to receive anything but money. ^ He cannot

bind his principal by accepting a promissory note,^*^ check,^^

1 Hirshfield v. Waldron, 54 Mich. 649.

2 Luckie v. Johnston, 89 Ga. 321. As to effect of a notice printed on

the bill that it is "payable at the office," or "not payable to agent," see

Luckie v. Johnston, supra ; Law v. Stokes, 32 N. J. L. 249 ; McKindly

V. Dunham, 55 Wis. 515; Putnam v. French, 53 Yt. 402; Trainer v. Mori-

son, 78 Me. 160.

В» Butler V. Dorman, 68 Mo. 298; Higgins v. Moore, 34 N. Y. 417;

Crosby v. Hill, 39 Oh. St. 100; McKindly v. Dunham, 55 Wis. 515;

Brown v. Lally, 79 Minn. 38.

* Butler V. Dorman, supi-a; Meyer v. Stone, 46 Ark. 210; Cross v.

Haskins, 13 Vt. 536 ; Barrett v. Deere, M. & M. 200.

5 Law V. Stokes, 32 N. J. L. 249 ; Brooks v, Jameson, 55 Mo. 505 ;

Home Machine Co. v. Ballweg, 89 111. 318; Harris v. Simmerman, 81 111.

413.

6 Williams i\ Walker, 2 Sandf. Ch. (N. Y.) 225; Haines v. Pohlmann,

25 N. J. Eq. 179 ; Crane v. Gruenewald, 120 N. Y. 274.

^ Crane v. Gruenewald, supra ; U. S. Bank v. Burson, 90 Iowa, 191.

8 Doubleday v. Kress, 50 N. Y. 410.

9 Ward V. Evans, 2 Salk. 442; Thorold r. Smith, 11 Mod. 71, 87;

Ward V. Smith, 7 Wall. (U. S.) 447.

" Jackson v. Mutual Benefit Life Ins. Co., 79 Minn. 43.

^^ Broughton v. Silloway, 114 Mass. 71.

10

146 PRINCIPAL AND THIRD PARTY.

druit,' ur luercluindise.- lie cannot cunipromise a claim

and accept less than the I'tdl umonnt due," or snbstitute

himself as the debtor.'* Nor can he extend the time for

jiavment.^ Nor can he receive payment before it is duc.*^

Th(-' j)o\ver to collect may carry with it the power to cmjjloy

the means necessary to that end, including the (в– mitloyment

of counsel and tiie bringing of actions at law."

(tj) A(jent authorized to execute or indorse bills, notes, and

chc<'k.s. The j)ower to make or indorse negotiable instruments

must ordinarily be sought in an express authority from the

principal.^ And such autliority is strictly construed and must

be exercised within its express limitations.'-* If the authority

is to make a negotiable instrument for a siiecilied amount, an

instrument for a larger amount is not binding upon the

princii)al.i'^ If the authority is to make a negotiable instru-

ment for a specified time, an instrument for a different time

is not binding.^i Authority to make notes for commercial

purposes carries with it no authority to make accommoda-

tion notes.^2

1 Drain i;. Doggelt, 41 Iowa, 082.

2 Mudgett V. Day, 12 Cal. 13!); Williams v. Jolinston, 92 N. C.

532.

8 Mallory v. Mariner, 15 Wis. 172; l\Ieh-in v. Lamar Ins. Co., 80 111.

44G; Whipple >: Whitman, 13 11. I. 512. But an dgent may receive and

credit a part payment. Whelan v. lleilly, (31 Mo. 565.

* Jackson v. Mut. Ben. L. Ins. Co., 79 Minn. 43; Aiiltman r. Lee, 43

Iowa, 404.

6 Ilutchings V. Manger, 41 N. Y. 155; Mallory v. Mariner, supra.

В« Smith V. Kidd, 68 N. Y. 130.

' Ryan v. Tudor, 31 Kans. 306 ; Merrick v. Wagner, 44 111. 206.

8 Robertson v. Levy, 19 La. An. 327; Temple v. Pomroy, 4 Cray

(Mass.), 128; Jackson v. Bank, 02 Tenn. 154.

9 Camden Safe Dep. & T. Co. v. Abbott, 44 N. J. L. 2."i7 ; Batty r,

Carswell, 2 Johns. (N. Y.) 48; Nixon v. Palmer, 8 N. Y. 398 ; Farming-

ton Sav. Bank v. Buzzell, 61 X. H. 612.

10 Blackwell r. Ketcham, 53 Ind. 1S4; King v. Sparks, 77 Ga. 285.

11 Batty V. Carswell, 2 Johns. (N. Y.) 48; New York Iron Mine v.

Citizens' Bank, 44 Mich. 344; King v. Sparks, 77 Ga. 285. A slight

variation may not be fatal. Adams v. Flanagan, 36 Vt. 400.

1- AVullace v. Bank, 1 Ala. 505; .Etna N. B. r. Ins. Co., 50 Coim.

167.

CONTRACT FOR DISCLOSED PRINCIPAL. 147

The power to make or indorse negotiable instruments may

be implied as a necessary incident of powers expressly con-

ferred.i But the mere fact tliat the agent is authorized to

manage a business docs not of itself show a power to make

such instruments.^

В§ 108. Contracts unauthorized.

. If the agent has neither actual nor apparent authority for

his act, the principal is not bound, for (1) he never authorized

the contract, and (2) he never led a reasonably prudent man

to believe that he authorized it. The third party must there-

fore look to the agent alone for redress.^ If an agent be

appointed by words in prwsenti, but it is agreed that the

agency shall not begin until the happening of some condition,

the principal is not liable for contracts entered into by the

agent in the interim unless the third party has been misled

by the exhibition by the agent of an unconditional power, or

by other conduct equivalent to a "holding out" on the part

of the principal."* A third person has no riglit to rely upon

the representations of the agent as to his authority,^

To this rule there are two exceptions, one based upon

doctrines peculiar to negotiable instruments, and one upon

statutory modifications. If the principal entrusts to the

agent negotiable paper, and the agent sells or pledges it for

a valuable consideration to a purchaser or pledgee without

notice of its diversion, the latter gets a good title as against

the principal, as fully as if the principal had authorized the

transfer.^ Under the Factors Acts a principal who entrusts

1 Edmunds v. Bushell, L. R. 1 Q. B. 97; Odiorne v. Maxcy, 13 Mass.

178; Yale v. Earaes, 1 Met. (Mass.) 486.

2 New York Iron Mine v. Bank, 39 Mich. 644 ; Temple v. Poraroy,

4 Gray (Mass.), 128; Perkins v. Boothby, 71 Me. 91.

8 Baines v. Ewing, L. R. 1 Ex. 320 ; Re Cunningham, 36 Ch. Div.

532; Jackson v. Bank, 92 Tenn. 154; Rice v. Peninsular Club, 52

Mich. 87.

4 Rathbun v. Snow, 123 N. Y. 343.

8 Ibid.

* Goodwin v. Robarts, 1 App. Cas. 476; Simmons v. London Joint

Stock Bank, 1892, App. Cas. 201 ; Cheever v. Pittsburgh, &c. R., 150

N. Y. 59.

148 PRINCIPAL AND TIIIliD I'AIiTY.

liis goods to a factor for sale is bound by any sale, plcdu'c, or

other disposition of the goods, to a purchaser for value and

without notice of the diversion, as fully as if such transfer

had been authorized.^

J; 109. Contracts voidable.

A principal is not bound by contracts made within the

scope of the authority where they are brought about by fiaud

or collusion between the agent and the third i)arty. Thus if

the third party promise the agent a commission or reward

for bringing about a contract between the one promising and

the principal of the agent, the contract so induced will be