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Innocent principal liable in deceit for the wilful frauds of his

agent; (2) is a principal liable in any form for the frauds of

an agent not committed for the principal's benefit ?

В§ 152. Fraud in relation to agency : deceit.

Deceit, considered as a tort for which an action for damages

will lie, consists of a false representation of a material fact,

made with knowledge of its falsity or with a reckless disre-

gard of whether it is true or false, and made with intent that

it should be acted upon by another, who, reasonably relying

upon the representation, does act upon it to his damage.'-^

A principal is liable in deceit for such a false representation

made by his agent when the agent has actual authority to

1 Huffcut's Anson on Cont. pp. 174-183.

- Bigelow on Torts (7th ed.), В§ 110; Pollock on Torts (5th ed.), pp.

269, 270.

198 PRINCIPAL AND THIRD PAKTY.

make the representation, when the principal ratifies the deceit,

or wlien the pi'incipal is estopped to deny that the agent has

authority to make the representation.^

The chief difficulty in proceeding against a principal for the

deceit of his agent arises in connection with the rule that one

in order to be liable for deceit must have made the represen-

tation with knowledge of its falsity or with reckless ignorance

of its truth or falsity. The question arises, is a personally

innocent principal liable for the fraud of his agent ? These

possible cases may be put : вЂ

(1) The principal knows the representation to be false and

authorizes the agent to make it. In such a case the principal

is liable, and the knowledge or want of knowledge of the

agent is immaterial, although it would become material in an

action against the agent for deceit.'"^

(2) The principal knows the contrary of the representation

to be true, but does not expressly authorize the agent to make

any representation concerning the matter, (a) If the agent

knows the representation to be false, or makes it recklessly in

ignorance of its truth or falsity, the principal is liable provided

the agent has such ostensible authority to make a representa-

tion concerning the matter as to lead third persons to give it

credit and act upon it.^ (i) Even if the agent believes the

representation to be true, it is thought that the principal

should be liable, provided the agent has ostensible authority

to make such a representation, since the princij)al holds out

the agent as authorized to make a representation in his

])ehalf and should not be permitted, as against an innocent

party, to plead that he did not give his agent all necessary in-

formation within his own knowledge.* The leading case on

this is Corrifoot v. Fowke^ in which an agent represented that

1 Hern r. Nichols, 1 Salk. 289; Grammar v. Nixon, 1 Stra. 653.

2 Pollock on Torts (5th ed.), pp. 290-291.

8 Taylor v. Green, 8 C. & P. 316; Parke, B., in Cornfoot v. Fowke, 6

M. & W. 358, 373.

* Pollock on Torts (5th ed.), p. 291; Ludgater i\ Love, 41 L. T. K.

694; Mayer r. Dean, 115 N. Y. 556.

' 6 M. & W. 358.

TORTS AND FRAUDS OF AGENT. 199

there was no objection to a house he was authorized to let,

whereas, unknown to him but i<no\vn to his princij)al, there

was a brothel next door. In an action for rent the hirer

pleaded this fraud as a defence. It was held that the plea

was bad, although it would have been good if the principal

were shown to have intentionally concealed the circumstance

from his agent. ^ In Fuller v. Wihon^^ an agent employed to

sell a house represented it to be free from taxes, whereas,

known to his principal but unknown to him, it was sub-

ject to taxes. It was held that the principal was liable in

deceit.

(3) The principal has no knowledge or true belief concern-

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