PRINCIPAL AND AGENT 195 



act of an agent, * or the appropriation, with an under- 

 standing of the facts, of funds that have come into the hands 

 of an agent without authority will bind the a principal. 2 



However, acts of an agent that are not in the regular 

 course of employment and not such as may fairly be pre- 

 sumed to have been authorized by the principal will not 

 bind the latter 3 and one is not bound simply because some 

 person believed a third party to be his agent. It is the duty 

 of the one dealing with a supposed agent to ascertain the 

 extent of the agency and, unless the grounds upon which his 

 belief in the agency rests are such as would satisfy a man 

 of ordinary prudence, he will deal with the supposed agent 

 at his own risk. 4 It has been held that an agent in charge 

 of a retail lumber yard was not authorized to sign a bond 

 as security for the performance of work by a contractor 

 though it was clear that the purpose of such action was to 

 effect a sale of materials to the contractor 5 and that state- 

 ments of an agent for a corporation that the company for 

 which he was buying was a partnership, did not bind the 

 members of the corporation as partners, 6 the decision 

 resting on the ground that the only principal the agent had 

 was a corporation and not individuals. 



The interest of an agent in lumber received for sale on 

 commission has been held not to be subject to attachment by 

 a creditor; 7 and, in a suit against an insurance broker for 

 failure to use due diligence in placing insurance upon 

 lumber, it has been held that the burden of proving negli- 

 gence rested upon the owner of the lumber but that evidence 

 as to the hazardous nature of lumber insurance was ad- 

 missible as having a bearing upon the question of a reason- 

 able time for the placing of the risk. 8 



1. Hunter v Cobe, (Minn.) <S7 X. \V. 612. 



2. Payne v Hackney, (Minn.) S7 X. \V. tiOS. 



3. Ayer & Lord Tie Co. v Davenport, (Ky.1 S2 S. "VV. 177, 26 Ky. L. Rep. 115. 



4. Kosendorf v Poling, (\V. Va.) 37 S. K. 555; 



5. JJulliird v DeOrofr, (Nob.) S2 N. W. 4. 



6. McDonald v Colo, (\V. Va.) 32 S. K. 1033. 



7. Hampton & Uranehville 11. H. & Lbr. Co. v Si/.er, 64 N. Y. Suppl. 553. 



S. liuckus v. Ames, (Minn.) SI N.W. 766; See Hartford Fire Ins. Co. v. Post (Tex.) 

 62 S. \V. 140. 



