nished with funds for immediate payment, this would have been a restriction and limitation of the agent's power. *So in the recent

*575] case of Butler v. Waples,(1) in the Supreme Court of the United States, an authority to buy cotton in a particular region and its vicinity, from whomsoever the agent might determine-an authority having in view a class of purchases, and a department of business-was held to confer a power to buy at a price above that to which the agent was limited by instructions not meant to be communicated to vendors. And in Hatch v. Taylor, 10 New Hampshire, 538, 549, it was determined that in case of special and verbal agencies, the test (or one test) of the distinction is, whether either by express injunction or from the nature of the case, the advice was to be kept secret; and that where instructions are given to a special agent, respecting the mode of executing his agency, intended not to be communicated to those with whom he may deal, they are not to be regarded as limitations upon his authority; and notwithstanding he disregards them, his act, if otherwise within the scope of his agency, will be valid, and bind his employer. And it was there held, that if one person employs another to sell a horse, and instructs him to sell for a hundred dollars, if no more can be obtained, but to get the best price he can, and not to sell for less than that sum, or if one be employed to purchase at the best possible price, with instructions to give a certain sum but no more; here the instructions being obviously intended to be kept secret, are not limitations on the power; but that if the principal direct his agent to offer his horse for sale at the sum of a hundred dollars, and to take no less, or to purchase ten bales of cotton, if to be had at a certain sum, and to give no more, the direction might well be regarded as part and parcel of, and a limitation on, the authority itself.(2) But this suggestion must undergo the test of frequent practical application, before its soundness can be ascertained.

Upon a similar principle, if the title or apparent title of property, is put into the name of another, for a special purpose, he may dispose of the property to bonâ fide purchasers. The case is the same, where power to create a valid title in others, is put into the hands of a party: thus if one in trust to another, endorsed notes or acceptances, to be used in a certain way and for the benefit of the principal, and he transfer them to a bonâ fide holder for his own private advantage, the principal is bound, for the possession of negotiable paper of that kind, is in law a power to create in any bonâ fide holder of it, a title upon the instrument.(3) So a note signed in blank, and delivered, is an authority in law to fill it up to any amount; it is an unlimited letter of credit; and the intention

(1) 9 Wallace, 767.

(2) See also Bryant v. Moore, 26 Maine, 84, 86.

(3) Putnam et al. v. Sullivan et al., 4 Massachusetts, 45; Clement v. Leverett, 12 New Hampshire, 317.

of the principal as to the amount to be inserted, could not control the act of the agent in dealing bonâ fide with third parties;(1) if, however, the note be taken with a knowledge that it has been filled in violation of the limitation imposed by the principal, the holder will be in no better situation than the agent.(2) So, possession of a note by a commercial agent is an authority to receive payment of it according to its terms;(3) but of other property than negotiable instruments, possession is not a power of disposition.

Another case, somewhat similar in principle is, where a general power is vested in an agent, where, as the power is in all cases to be executed for the *benefit of the principal, the legality of its exercise may [*576 in some instances depend on circumstances not known to the person dealing with the agent. If the execution of the power was lawful up to the time of the transaction with the third party, the latter will not be affected by a subsequent misappropriation by the agent, as where the agent, having authority, discounted a note of his principal, and embezzled the proceeds;(4) but if the transaction is, from the beginning, not in accordance with the power given, as if notes are drawn and negotiated for the benefit of third persons, the principal is not bound: See North River Bank v. Aymar, 3 Hill's N. Y. 263, in which the law is correctly stated in the opinion of Nelson, C. J. And this is especially so, where the third party has notice, express or implied, from want of due diligence in making inquiry.(5)

(1) Bank of Limestone v. Penick, 5 Monroe, 25, 29; Bank Com'th v. Curry, 2 Dana, 142; Hall et al. v. Com'th's Bank, 5 Id. 258; Decatur Bank v. Spence, 9 Alabama, 800; Goodwin v. McCoy, 13 Id. 271, 276; Hoyt v. Seeley, 18 Connecticut, 353, 358; Aiken v. Cathcart, 3 Richardson, 133; Ferguson v. Childress, 9 Humphreys, 382.

(2) Johnson, use, &c., v. Blasdale & Grubbs, 1 Smedes & Marshall, 17, 20; Hemphill v. The Bank of Alabama, 6 Id. 44, 49; Goad v. Hart's Adm'rs, 8 Id. 787.

(3) Stewart v. Donelly, 4 Yerger, 177; Wilkinson v. Candlish, 5 Exchequer, 90, and see American note.

(4) Newland v. Oakley, 6 Yerger, 489.

(5) Stainer v. Tysen, Id. 279; Longworth v. Conwell, 2 Blackford, 469.

OF THE TERMINATION OF THE POWERS OF AN AGENT.

HUNT v. ROUSMANIER'S ADMINISTRATORS.

In the Supreme Court of the United States.

FEBRUARY TERM, 1823.

[REPORTED, 8 WHEATON, 174-217.]

A letter of attorney may, in general, be revoked by the party making it, and is revoked by his death.

Where it forms a part of a contract, and is a security for the performance of any act, it is usually made irrevocable in terms, or if not so made, is deemed irrevocable in law.

But a power of attorney, though irrevocable during the life of the party, becomes (at law) extinct by his death.

But if the power be coupled with an interest, it survives the person giving it, and may be executed after his death.

To constitute a power coupled with an interest, there must be an interest in the thing itself, and not merely in the execution of the power.

How far a court of equity will compel the specific execution of a contract, intended to be secured by an irrevocable power of attorney, which was revoked by operation of law on the death of the party.

APPEAL from the Circuit Court of Rhode Island. (1)

The original bill, filed by the appellant, Hunt, stated, that Lewis Rousmanier, the intestate of the defendants, applied *577] to the plaintiff, in January, 1820, for the loan of $1,450, offering to give in addition to his notes, a bill of sale, or a mortgage of his interest in the brig Nereus, then at sea, as collateral security for the repayment of the money. The sum requested was lent; and, on the 11th of January, the said Rousmanier executed two notes for the amount; and, on the 15th of the same month, he executed a power of attorney, authorizing the plaintiff to make and execute a bill of sale of three-fourths of the said vessel to himself, or to any other person; and, in the event of the said

(1) See this case, 2 Mason, 342; and 1 Peters, 3.

vessel, or her freight, being lost, to collect the money which should become due on a policy by which the vessel and freight were insured. This instrument contained, also, a proviso, reciting, that the power was given for collateral security for the payment of the notes already mentioned, and was to be void on their payment; on the failure to do which, the plaintiff was to pay the amount thereof, and all expenses, out of the proceeds of the said property, and to return the residue to the said Rousmanier.

The bill further stated, that on the 21st of March, 1820, the plaintiff lent to the said Rousmanier the additional sum of $700, taking his note for payment, and a similar power to dispose of his interest in the schooner Industry, then also at sea. The bill then charged, that on the 6th of May, 1820, the said Rousmanier died insolvent, having paid only $200 on the said notes. The plaintiff gave notice of his claim: and, on the return of the Nereus and Industry, took possession of them, and offered the intestate's interest in them for sale. The defendants forbid the sale; and this bill was brought to compel them to join in it.

The defendants demurred generally, and the court sustained the demurrer; but gave the plaintiff leave to amend his bill.

The amended bill stated that it was expressly agreed between the parties, that Rousmanier was to give specific security on the Nereus and Industry; and that he offered to execute a mortgage on them. The counsel was consulted on the subject, who advised, that a power of attorney, such as was actually executed, should be taken in preference to a mortgage, because it was equally valid and effectual as a security, and would prevent the necessity of changing the papers of the vessels, or of taking possession of them on their arrival in port. The powers were, accordingly, executed, with the full belief that they would, and with the intention that they should, give the plaintiff as full and perfect security as would be given by a deed of mortgage. The bill prayed, that the defendants might be decreed to join in the sale of the interest of their intestate in the Nereus and Industry, or to sell the same themselves, and *pay out of the proceeds the debt due to the plaintiff. To this amended bill, also, the defendants de[*578 murred, and on argument the demurrer was sustained, and the bill dismissed. From this decree, the plaintiff appealed to this

court.

[The arguments of the counsel have been omitted.]

Mr. Chief Justice MARSHALL delivered the opinion of the

court.

The counsel for the appellant objects to the decree of the Circuit Court on two grounds. He contends,

1. That this power of attorney does, by its own operation, entitle the plaintiff, for the satisfaction of his debt, to the interest of Rousmanier in the Nereus and the Industry.

2, Or, if this be not so, that a court of chancery will, the conveyance being defective, lend its aid to carry the contract into execution, according to the intention of the parties.

We will consider 1. The effect of the power of attorney.

This instrument contains no words of conveyance or of assignment, but is a simple power to sell and convey. As the power of one man to act for another depends on the will and license of that other, the power ceases when the will, or this permission, is withdrawn. The general rule, therefore, is, that a letter of attorney may, at any time, be revoked by the party who makes it; and is revoked by his death. But this general rule, which results from the nature of the act, has sustained some modification. Where a letter of attorney forms a part of a contract, and is a security for money, or for the performance of any act which is deemed valua ble, it is generally made irrevocable in terms, or if not so, is deemed irrevocable in law. (1) Although a letter of attorney depends, from its nature, on the will of the person making it, and may, in general, be recalled at his will, yet, if he binds himself for a consideration, in terms, or by the nature of his contract, not to change his will, the law will not permit him to change it. Rousmanier, therefore, could not, during his life, by any act of his own, have revoked this letter of attorney. But does it retain its efficacy after his death? We think it does not. We think it well settled, that a power of attorney, though irrevocable during the life of the party, becomes extinct by his death.

This principle is asserted in Littleton (sec. 66), by Lord Coke in his commentary on that section (52 b.), and in Wile's Reports (105, note, and 565). The legal reason of the rule is a plain one. It seems *founded on the presumption, that the substitute *579] acts by virtue of the authority of his principal existing at the time the act is performed; and on the manner in which he must execute his authority, as stated in Combe's Case. (2) In that case it was resolved, that "when any one has authority as (2) 9 Coke, 766.

(1) Walsh v. Whitcomb, 2 Espinasse, 565.