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Restore Other Property Secured from the Agent


RESTORE OTHER PROPERTY SECURED FROM THE AGENT. It may become necessary for third persons to restore to the principal property secured from the agent, since, as a rule, if the agent has no authority, express or implied, to transfer title, he can confer none upon third parties.

This rule, which protects a principal from having his property sold without his consent or authority, is subject to certain limitations, founded upon the duty of acting in good faith to others so that they shall suffer no loss through his act. Thus, while it is the general rule that no person can be divested of his property without his consent or voluntary act, yet, if the prin cipal permits the agent to assume an apparent author ity over his property, he will be estopped from denying that the agent had such authority when the rights of third persons have intervened and would be preju diced by such denial.

"Two things must concur to create an estoppel by which an owner may be deprived of his property, by the act of a third person, without his assent: t, The owner must clothe the person assuming to dispose of the property with the apparent title to, or authority to, dis pose of it; and, 2, The person alleging the estoppel must have acted and parted with value, upon the faith of such apparent ownership or authority, so that he will be the loser if the appearances to which he trusted are not real." The mere possession of the principal's goods by the agent is not, as a rule, sufficient evidence of his author ity to sell the same, as the agent may have possession for many other purposes besides that of selling. (Mc Mahon v. Sloan, 12 Pa. St. 229.) The exceptions to this rule, as stated by Professor Mechem, are: 1. Where the property in the agent's possession consists of money or negotiable paper. 2. Where the principal entrusts the possession of his goods to one whose business it is to sell similar prop erty as the agent of the owners. (Agency, Sec. 786.) The first exception is said to depend upon the princi pies of public policy and the necessities of commerce. The second exception being based on the principles of equitable estoppel. (Burnham v. Holt, 14 N. H. 367; Pickering v. Busk, 15 East, 39.) And where the principal permits the agent to assume the ownership of his property, with such evidences of title and authority as to lead innocent third parties, in good faith, to rely upon his title or authority to sell the same, as against the equities of such parties, he cannot deny that the agent had such authority. (Pickering v. Busk, supra; McNeil v. Tenth Natl. Bank, 46 N. Y.

The principal can recover money or property from third persons which they have secured from the agent, as a payment of a debt due them from the agent, when the agent had possession for the principal. (Thompson v. Barnum, 49 Ia. 392.) Also, if it has been taken by attachment for the agent's debts. (Loomis v. Barker, 68 Ill. 297.) So the principal may sue upon securities which have been released by an agent acting without authority. (Whittemore v. Hamilton, 51 Conn. 153; Robinson v. Anderson, 106 Ind. 252.) And all property wrongfully sold or disposed of by the agent, as by selling to him self directly or indirectly, may be recovered by the principal, if he acts before the rights of innocent third parties have intervened. (Mechem, Agency, Sec. 791; Hughes v. Washington, 72 III. 84.) Sec. 623. FOR TORTS. The principal may recover against third persons for their \vrongful acts in respect to the property or busi ness which he has entrusted to his agents the same as though he were in personal charge of the undertaking. And for fraud, negligence, trespass and the like, of third persons in dealing with his agents in connection with his interests, his rights are the same as if he had dealt in person. (Perkins v. Evans, 61 Ia. 35; White v. Dolliver, 113 Mass. 400.) Thus, the principal has an action for the wrongful enticing away of his agent by. a third person, as for in ducing the agent to leave his emplOyment. (Haskins v. Royster, 7o N. C. 6o1; Bixby v. Dunlap, 56 N. H. 456.) And the principal has a right of action against a third person for a personal injury- to the agent, which incapacitates the ag-ent to the damage of the principal. (Ames v. Union Ry. Co., it7 Mass. 741.) WITH THE AGENT. A third person is not liable for a fraud committed, by- the agent upon the principal in the course of the transaction, unless such person becomes a party to it. When a third person does collude with the agent to defraud the principal, it voids the transaction, and the principal can recover his propeity unless the rig-hts of innocent parties have in tervened before he acts. And so, where the agent se cretly represents the other party, Ile commits a fraud upon the principal, for which the principal may rescind the contract and recover the property transferred upon tendering back the consideration received. (Mechem on Agency, Sec. 798; New York Central Ins. Co. v. National Ins. Co., 14 N. Y. 85.)

principal, third, person, authority and possession