Brook v. Hook, L. R. On this last ground it has been found that a forged 6 Exch. 89. signature cannot be ratified, but ratification is not here in question. For one who forges the signature of another is not an agent, actually or in contemplation. The forger does not act for another, he personates the man whose signature he forges.1 And the principal who accepts the contract made on his behalf by one whom he thereby undertakes to regard as his agent, may, as in the acceptance of any other simple contract, signify his assent by words or by conduct. He may avow his responsibility for the act of his agent, or he may take the benefit of it, or otherwise by acquiescence in what is done create a presumption of authority given. Where conduct is relied upon as constituting ratification the relations of the parties and their ordinary course of dealing may create a greater or less presumption that the principal is liable. 1 Accord: Henry v. Heeb, 114 Ind. 275; Workman v. Wright, 33 Oh. St. 405. Contra: Greenfield Bank v. Crafts, 4 Allen (Mass.), 447 ; Hefner v. Vandolah, 62 Ill. 483. CHAPTER II. Effect of the Relation of Principal and Agent. THE effects of the relation of principal and agent when created as described above may be thus arranged. 1. The rights and liabilities of principal and agent inter se. 2. The rights and liabilities of the parties where an agent contracts as agent for a named principal. 3. The rights and liabilities of the parties where an agent contracts for a principal whose name, or whose existence, he does not disclose. 1. THE RIGHTS AND LIABILITIES OF PRINCIPAL AND AGENT inter se. (1) Principal and agent. pal and The relations of principal and agent inter se are made Relations up of the ordinary relations of employer and employed, of princiand of those which spring from the special business of an agent. agent to bring two parties together for the purpose of making a contract to establish privity of contract between his employer and third parties. - to indemnify or The principal must pay the agent such commission, or (i) Duty of reward for the employment, as may be agreed upon be- principal: tween them. He must also indemnify the agent for acts lawfully done and liabilities incurred in the execution of reward. his authority.1 The agent is bound, like every person who enters into a contract of employment, to account for such property of 1 Bibb v. Allen, 149 U. S. 481. (ii) Duty of agent: (a) ac- Jenkins v. 15 C. B. 168. Bad faith: his employer as comes into his hands in the course of the employment; to use ordinary diligence in the discharge of his duties; to display any special skill or capacity which he may profess for the work in hand.1 [*338] *The agent must make no profit out of transactions into which he may enter on behalf of his principal in the course of the employment beyond the commission agreed upon between them. Where an agent is promised a reward which might by taking induce him to act disloyally to his employer, he cannot recover the money promised to him. reward from others; Harrington v. Victoria Graving Dock Co., 3 Q. B. D. 549. L. R. 9 Q. B. 480. An engineer in the employ of a railway company was promised by the defendant company a commission the consideration for which was, partly the superintendence of their work, partly the use of his influence with the railway company to obtain an acceptance by them of a tender made by his new employers. He did not appear in fact to have advised his first employers to their prejudice, but it was held that he could not recover in an action brought for this commission. It needs no authority to show that, even though the employers are not actually injured and the bribe fails to have the intended effect, a contract such as this is a corrupt one and cannot be enforced.' The agent, if he obtains money by a transaction of this nature, is bound to account for it to his principal, or pay it over to him. If he does not do so the money can be recovered by the principal as a debt due to him.2 In Morison v. Thompson the defendant was employed as broker by the plaintiff to purchase a ship from X. X had promised his broker that he would allow him to keep any excess of the purchase money over £8500. The defendant bought the ship for his employer for £9250, and 1 Page v. Wells, 37 Mich. 415; Laverty v. Snethen, 68 N. Y. 522; Kiewert v. Rindskopf, 46 Wis. 481. 2 Boston v. Simmons, 150 Mass. 461. received by arrangement with the broker of the sum of £225, a portion of the excess price. The plaintiff discovered this and sued his agent for £225 as money received to his use, and it was held that he could recover the money. But the agent is his principal's debtor, not his trustee for money so received. If the money is invested in land or securities these cannot be claimed by the principal, any more than he can claim profits made out of the sums thus *received. They constitute a debt due to him, and this he can recover. [*339] Lister & Co. v. Stubbs, 45 Ch. D. 15. The agent may not depart from his character as agent by becoming princiand become a principal party to the transaction even pal as though this change of attitude do not result in injury against his to his employer. If a man is employed to buy or sell on behalf of another he may not sell to his employer or buy of him.1 Nor if he is employed to bring his principal into contractual relations with others may he assume the position of the other contracting party. employer. See Story on Agency, §§ 210, 211. In illustrating these propositions we may usefully distin- Compare: guish employment to buy upon commission, from employment to represent a buyer or seller: the one is commission agency, which is not agency in the strict sense of the word, the other is genuine agency. (1) A may agree with X to purchase goods of X at a sale, price fixed upon. This is a simple contract of sale and each party makes the best bargain for himself that he can. (2) Or A may agree with X that X shall endeavour to comprocure certain goods and when procured sell them to A, receiving not only the price at which the goods were purchased but a commission or reward for his exertions in procuring them. 1 Davis v. Hamlin, 108 Ill. 39; Gardner v. Ogden, 22 N. Y. 327; Geisinger v. Beyl, 80 Wis. 443. mission agency, Here we have a contract of sale with a contract of employment added to it, such as is usually entered into by a commission agent or merchant, who supplies goods to a foreign correspondent. In such a case the seller procures and sells the goods not at the highest but at the lowest price at which they are obtainable: what he gains by the the transaction is not a profit on the price of the goods but a payment by way of commission, which binds him to supLivingston, ply them according to the terms of the order or as cheaply Ireland v. L. R. 5 H. L. 407. as he can. If a seller of goods warranted them to be of a certain quality he would be liable to the buyer, on the non-fulfilment of the warranty, for the difference in value between the goods promised and those actually supplied. If a commission agent undertakes to procure goods of a certain quality and fails to do so the measure of damages is the loss which his employer has actually sustained, not the profit which he might have made. A seller of goods with a warranty promises that they shall possess Cassaboglou a certain quality. A commission agent only undertakes to use his best efforts to obtain goods of such a quality for his employer. v. Gibbs, 9 Q. B. D. 220. Rothschild v. Brook [*340] And here the person employed has no authority to pledge his employer's credit to other parties, but undertakes simply to obtain and supply the goods ordered on the best terms. Yet it would seem that he might not, man, 2 Dow without his employer's assent, supply the goods himself, even though they were the best obtainable and supplied at the lowest market price. This is an implied term in his contract of employment. & Cl. 188. brokerage. (3) Or thirdly, A may agree with X that in consideration of a commission paid to X he shall make a bargain for A with some third party. X is then an agent in the true sense of the word, a medium of communication to establish privity of contract between two parties. Under these circumstances it is imperative upon X that |