the certificates of the selling owner were constantly surrendered on his sale, and new certificates under the company's seal and ordinary attestation, delivered to the new purchaser or his broker. No purchaser ever thought of looking to see, when he received his certificate, whether it was an exact replacement of former stock, and whether the stock in the market could be all traced up with regularity, to the first issues of the company, when the exact charter number were sent forth. There was no ground to suspect over issues of this stock, more than to suspect over issues in any other corporation. Such an inquiry would undoubtedly have been vain; and an investigation, with any prospect of success, impossible, for the stock was daily and hourly transferred; masses of it being constantly disintegrated; small parcels of it being as constantly aggregated, and the whole body having been in a state of circulation, so active as to approach to fusion. The certificate, sealed and attested, was the only evidence to which any person either thought of looking or practically could look. In this condition of things, Schuyler, the transfer agent, then standing forth and recognized to the world in this capacity, fraudulently issued certificates for a number of shares, these shares being over and above the charter number. This spurious stock was sold and transferred exactly like the genuine. The fraud was finally discovered, and the question of the company's liability for this stock came before the court. In the special case of the Mechanics' Bank against the company above cited, the decision was encumbered with some particular circumstances, which are a good deal spoken of by Comstock, J., in delivering the opinion of the Court of Appeals (which was unanimous); but still the court seem to have really considered the broad question, whether the company was, in any form responsible to the bona fide holders for full value of such stock as was clearly spurious, and decides that it was not. "Schuyler, as the agent of the *com[*572 pany," says Comstock, J., "had no power to issue a certificate for shares of stock, except upon the conditions precedent of a transfer on the books by some previous owner, and the surrender of that owner's certificate. He was the transfer agent merely, and his powers were expressly limited to that department of the business of the corporation. He had no general certifying power, nor any power at all to certify, except as incidental, to a transfer of stock by its owner to some one else, and as an incidental power it could only be exercised upon the conditions named." "The distinction," he continues, "is not always attended to between the apparent powers of an agent and his acts apparently but not really within the power. An agent's apparent powers are those which are conferred by the terms of his appointment, notwithstanding secret instructions, or those with which he is clothed by the character in which he is held out to the world, although not strictly within his commission. Whatever is done under an authority thus

manifested is actually within the authority, and the principle is bound for that reason. But it is obvious that an agent may clothe his act with all the indicia of authority, and yet the act itself may not be within the real or apparent power. The appearance of the power is one thing, and for that the principal is responsible. The appearance of the act is another, and for that, if false, I think the remedy is against the agent only."

This reasoning is obviously very technical, for it was clear that, as to the particular act of the transfer of stock, all the powers which the company itself had were delegated to Schuyler; and if it were possible for the company to appoint a general agent, with complete powers, for the particular business of the transfer of stock, he was such agent. The decision reversed that of a respectable court below, and if approved by later cases in the State of New York, is so at variance with views lately laid down by the Supreme Court of the United States, in the great case of Merchants' Bank v. State Bank, 10 Wallace, 605 (hereafter spoken of), that its authority must perhaps be regarded as in some degree local. A case similar in many respects to that of the Schuyler Frauds arose (A. D. 1846), at Philadelphia, in The Bank of Kentucky v. The Schuyl kill Bank (1 Parsons, 180), before the Common Pleas (affirmed afterwards in the Supreme Court). The reader will find in this case a clear and logical opinion given by KING, J., at that time the able president of that court. There were, indeed, distinguishing circumstances between the Philadelphia case and the New York one, above mentioned, for in the former the suit was brought by the corporation against its own fraudulent agent, after it had recognized the spurious issue under an enabling act of the Legislature. Still many of the questions argued were in a considerable degree alike; and Comstock, J., rightly remarks that "it is certainly true that in the opinion delivered on pronouncing that judg ment some principles were stated scarcely reconcilable with the conclusion to which we have come."

In the Philadelphia case, the court declares that the obligation to surrender the old certificate is not a limitation on the power of permitting transfers, so far as respects the bank; but a provision introduced for the security of the bank, in order to prevent its being embarrassed between legal and equitable titles to its stock; that as a general rule, every principal is held liable to third persons in a civil suit for the frauds, deceits, concealments, misrepresentations, torts, negligences, or other misfeasances and omissions of duty of his agents in the course of his employment; although the principals did not authorize or justify, or participate in, or know of such misconduct, or even if he forbade or disapproved of the same: that in all such cases the principal holds out his agent as competent and fit to be trusted, and thereby, in effect, war(1) 4 Duer, 591.

rants his fidelity and *good conduct in all matters of the agency; [*573 and the Schuylkill Bank having been shown to have been the transfer agent of the Bank of Kentucky, was, therefore, considered to be responsible for every malversation committed by its organic functionaries, in the execution of such agency to the prejudice of its principal. This decision will probably be regarded by the profession at large of the more satisfactory and practical of the two.]

With regard to the limits of the general agency which is created by a series of acts or a course of dealing, the language of Lord Eldon in Davison v. Robertson and others, 3 Dow, 219, 229, has generally been considered as defining the principle with accuracy. In that case, the position had been stated, that an endorsement per procuration required a special mandate; but Lord Eldon's "opinion was that no such thing was absolutely necessary; for if from the general nature of the acts permitted to be done, the law would infer an authority, the law would say that such an authority might exist without a special mandate," &c.; [and this doctrine was distinctly recognized and strikingly illustrated, A. D. 1870, in the very ably argued case of the Merchants' Bank v. State Bank (10 Wallace, 605), in the Supreme Court of the United States; in which after its being declared that evidence of powers habitually exercised by the cashier of a bank with its knowledge and acqu escence, defined and established as to the public those powers, it was held, that if in the case of a bank having power by its charter to buy and sell exchange, coin and bullion, its cashier have habitually, with the knowledge of the bank, dealt with the public as authorized to buy and sell exchange, then the power to buy and sell coin also (both being conferred by the same clause of the charter), might be inferred. And also, that if a cashier was shown to have frequently pledged in writing the credit of his bank for large amounts in the usual course of business, with the knowledge of the bank-borrowing and lending its money and buying and selling exchange-doing all this usually by cashier's checks, though sometimes by certificates of deposite, and sometimes by memoranda-the transactions being uniformly made in faith of the implied powers of the cashier without inquiry as to special authorization, and such was shown to be the usage of other banks-it might be inferred that the cashier was authorized to pledge the bank's credit by certifying a check to be "good;" this last method being one not distinct from the others named, but similar to them. And these principles were decided to be true, even though no cashier of any bank in the place where the transaction, which was the subject of the suit, arose, ever used his powers to purchase coin, or ever certified a check to be good.] This same general principle was illustrated in Com. Bank of Lake Erie v. Norton, 1 Hill's N. Y. 502; there by the articles of copartnership, one H. N. was created agent of a firm, but his authority as thereby defined, did not extend to

accommodation acceptance; it was proved, however, that he was the general agent of firm, and with their knowledge and assent was in the habit of drawing bills, and making notes and endorsements for them; the specific act of acceptance was not mentioned in the evidence, as one that had been usually done; but the court decided that his general power, and the usage of putting the firm name to commercial paper in all other shapes, "was the same thing, and calculated to raise an inference in the public mind, that he had such a power as this." "It is not necessary," they said, "in order to constitute a general agent, that he should have done before, an act the same in specie with that in question. If he have usually done things of the same general character and effect, with the assent of his principals, that is enough."-But beyond the regular course of his business employment, and the general nature of the acts done, the implied power of a general agent will not extend.(1) "When the agency is to be inferred from the conduct of the principal,” said the court in Cox v. Hoffman, 4 Devereux & Battle, 180, "that conduct furnishes the only evidence of its extent, as well as of its existence; and in solving all questions on this subject, the general rule is, that the extent of the agent's authority is (as between his principal and third persons) to be measured by the extent of the usual employment of that person." So the powers of one who is invested with any kind of official or professional character, do not extend beyond the legal and customary limits of his duty. An overseer on a plantation, as such, has not authority to bind his employer for provisions for the slaves, where the employer has made arrangements to have them supplied from other quarters; and the fact that the provisions come to the use of the employer, by being appropriated to the support of his slaves, without his knowledge, will not render him liable to pay for them.(2) Where the proprietor of a tailor's shop had gone out of the country, and had appointed an attorney to represent him in regard to contracts, it was deci*574] ded that the person left in the shop as cutter and foreman," had no authority to purchase cloths for the use of the shop, on credit, unless it were specially proved that by the usage and general understanding of the community, his agency, extended so far; and the fact that the cloths come to the use of the principal by being worked up in his business and for his benefit, would not, without evidence of assent, express or implied, amount to a ratification of the foreman's purchases.(3) In Kerns v. Piper, 4 Watts, 222, it was held to be no part of the

66

(1) See Jacques v. Todd; Jones v. Warner, 11 Connecticut, 41; Pourie and Dawson v. Fraser, 2 Bay, 269; Washington Bank v. Lewis, 22 Pickering, 24, 30; Wilkins. The Commercial Bank of Natchez, 6 Howard's Mississippi, 217, 231; Odiorne v. Maxcy et al.; Johnson v. Wingate, 29 Maine, 404, 407.

(2) Fisher and Johnson v. Campbell, 9 Porter, 211.

(3) Topham v. Roche, 2 Hill's So. Car. 307.

ordinary business of a clerk in a store to borrow money or draw bills and notes in the name of his principals, and such acts did not bind them, when there was no evidence of authority, or sanction.(1)

It has been said, in some cases, that where no legal authority exists, and a party dealing with a supposed agent, relies on a previous recognition of authority in the agent to bind the principal, he must show that he contracted with him on the faith of such previous recognition.(2) But Williams et al. v. Mitchell, 17 Massachusetts, 98, appears to be an authority to the contrary.

Another class of cases, in which the principal may be bound beyond the extent to which he intended to be bound, proceeds upon the distinction between a power vested in the agent, and instructions given to him as to its exercise, the instructions not entering into and abridging the power, but designed to direct the agent in the use of it. In these cases, a power is actually and legally vested in the agent; he is not merely held out to the world as authorized to the extent of the entire power, but he is in fact and in law empowered to that extent, and the instructions are not in diminution of the power, but are personal directions in guidance of its exercise. In instances of this kind, a person claiming under a regular execution of the power, is not to be affected by private advices from the principal to the agent, of which such third person had no notice. The application of this distinction is often extremely difficult. Where the authority of the agent is created by writing, it is clear that one dealing with the agent is bound to look only at his power of attorney or letter of credit, and is not required to call for his letter of instructions, as that is a confidential matter between the principal and agent, and that acts done in accordance with and on the faith of the power will be good.(3) But the distinction exists also in verbal agencies. It is illustrated by the case put in Jaques v. Todd; that if one is constituted agent of another, with power to buy and sell for him, but it is directed not to buy on credit while he has funds, here a general power is vested, and if, in disregard of his instructions, the agent pledged the credit of his principal, while he had funds, the principal would still have been bound; for in such cases, the power to purchase on credit, would have existed in the agent, but its exercise would have been controlled by instructions, and dependent on circumstances not presumed to be generally known: but if the principal, in constituting the agent, had withheld from him under all circumstances, the authority to buy on the principal's responsibility, or even to buy at all for him, unless fur

(1) See also Hampton et al. v. Matthews & Shaw, 14 Penna. State, 105, 108,

(2) St. John v. Redmond, 9 Porter, 428, 433.

(3) Withington v. Herring, 5 Bingham, 442, 456, per Best, C. J.