576 LKGAI< DEPARTMENT. 



to drive the engine or handle the brake ? Thus we see how each busi- 

 ness and every enterprise needs its controlling, its guiding mind, which 

 works through others. 



How Bstablislied. An agency may be established by a person 

 permittmg another to hold himself out to the world as his agent, by a 

 verbal agreement or by written contract; as little form is necessary to 

 employ an agent, as to hire a common day laborer. But when the agent 

 is to have authority to execute a sealed instrument, as for the convey- 

 ance of real estate, his authority must be given under seal. An agency 

 is also often implied from the course of business; as for instance, a son 

 who sells goods in his father's store, or receives payment of bills due 

 him with his knowledge and without objection, is the agent of the 

 father, and may bind him in subsequent transactions of the same nature. 



Principal. The principai, is the person for whom the business is 

 to be transacted. Generally every person of legal age and competent to 

 contract, may act as principal. The principal and not the AGENT is 

 bound by the agent's acts, so long as the agent does not EXCEED the 

 authority given him. 



I/iability of Principal to Third Parties. When an agent acts 

 within the limits of his authority, the principal is liable to third persons, 

 the same as though he transacted the business himself. If the agent 

 violates the instructions given by the principal, the person with whom 

 he is dealing being ignorant of the fact, or if the agent makes a fraudu- 

 lent representation, the principal will be held liable. The principle of 

 the law is that "when one or two innocent persons must suffer, the one 

 should sustain the loss who has put it in the power of the wrong-doer to 

 commit the wrong, ' ' but in cases of special agency the agent could not 

 bind his principal to exceed his special authority. 



If an agent is pursuing the business of his agency, and by his negli- 

 gence or unskillfulness injures another, the principal and not the agent 

 is liable; for instance, suppose you are riding on an express train from 

 Albany to New York, you are rushing along with speed that rivals the 

 wind; a careless engineer has his engine standing upon the track of your 

 train, when it ought to have been somewhere else; you go crashing into 

 it, there is a wreck, and you are pulled from the debris only to find your- 

 self a cripple for life. What do you do ? Bring action for damages 

 against the engineer, who is the agent of the railroad company, or do 

 you say to the company itself, I have been injured through the careless- 

 ness of your agent, and to you I look for damages. 



