Voidable at the election of the principal. "' Any agreement or

understanding between one principal and the agent of another,

by which such agent is to receive a commission or reward if

he will use his influence with his principal to induce a con-

tract, or enter into a contract for his principal, is pernicious

and corrupt, and cannot be enforced at law. . . . Such agree-

ments are a fraud upon the principal, which entitle him to

avoid a contract made through such agency." ^ But tlie

principal may elect to take the benefit of the contract not-

withstanding the fraud, and in such case the third party will

be bound. And this is so even if the princi})al be a public

corporation, as a city, since the contract is neither malum

in se nor malum prohibitum, but one which the city might

have made.^ And after such election it may sue the third

party for fraud, and the agent for money had and received to

its use.*

2. In rarticular Agencies.

В§ 110. Introductory.

Little lias been said heretofore as to the scope of particular

agencies bearing distinctive names, nor will the purpose of

til is work admit of any extended discussion of the subject.

1 Po^t, В§ 171.

2 City of Findlay v. Pertz, 66 Fed. Rep. 427; Smith r. Sorby, 3 Q. B.

D. 5.j2 n.

' City of Findlay ?'. Pertz. supra.

* Ibid. ; Mayor i;. Lever, 1891, 1 Q. B. 168.

CONTRACT FOR DISCLOSED PRINCirAL. 149

It will be useful, however, to call attention at this point to

the fact that some agents have by custom a wider apparent

authority than others, and that for the most part these are

agents who are regularly engaged in transacting a special

kind of business for the public generally. They are not, like

common carriers and innkeepers, obliged to serve everybody

who applies, and yet it is largely the custom to do so ; and

because of this, and the settled nature of their business, they

are governed by well understood mercantile customs, in the

light of which the principal on the one hand and the third

person on the other are always presumed to deal. Another

class of agents are those who serve but one principal, but

from the nature of the principal's business are representing

him in dealings with the public generally. These also, not

because of their own business, as in the first class, but

because of their principal's business, are governed by well

understood mercantile customs. The first class is illus-

trated by the agencies of factors, brokers, auctioneers, and

attorneys at law. The second class is illustrated by the

agencies of cashiers of banks, insurance agents, and ship-

masters.

В§ 111. Factors.

(1) Definition. A factor is an agent whose regular busi-

ness it is to receive consignments of goods and sell them for

a commission. He may sell for the ordinary commission for

the services of such an agent, or he may sell for an increased

commission and guarantee his principal in the collection of

the price. In the first case, he is called simply a factor or

commission merchant ; in the second, he is called a del

credere factor or commission merchant, and is said to sell on

a del credere commission. ^ If he accompanies a vessel and

represents shippers at the ports where the vessel may touch,

he is termed a supercargo.

(2) Scope of authority. As between the principal and the

factor, the latter is bound to obey the instructions, and is

liable like any other agent for any damages suffered from