Story Case

John Hamilton informed Simon Brown that Joseph Barr owned a horse which was an exact match for another horse belonging to Brown. The latter thereupon said to Hamilton: "See if yon can buy him for me for $300." Following this conversation, Hamilton saw Barr and offered him $275 for his horse, which offer Barr accepted. Hamilton then told Brown that he had made a contract for him to buy the horse. Brown refused to abide by the alleged contract, saying Hamilton had no authority to act as agent, and he (Brown) didn't want the horse. Barr brought suit on the contract alleging that Hamilton was the express agent of Brown. Can he recover?

Note : In answering this question it is not material, as will be explained later, that the negotiations are not in writing, and it is not material whether Brown's name was mentioned when the offer was made by Hamilton. The question is whether or not an agency was created by Brown's statement to Hamilton.

Ruling Court Case. Long Vs. Colburn, Volume 11 Massachusetts Reports, Page 97

This was an action upon a promissory note made in the following form:

No. 273. Boston, March 17,1812.

$301.

For value received, I promise to pay Mr. Edward J. Long, or order, on demand, three hundred and one dollars, with interest, after four months.

(Signed) Pro William Gill - J. S. Colburn.

As the note indicates, it was made by Colburn for Gill.

Justice Gorham gave the opinion. The Court said: "He signed his name Pro William Gill, and the plaintiff's remedy is against Gill, if Colburn had the authority to make the promise for him. The authority may be by parol, by letter, by verbal directions, or may even be implied from certain relations proved to exist between the actual maker of the note and him for whom he undertakes to act; and it may sometimes be inferred from the subsequent assent or ratification of the party who is charged by the writing." The evidence showed that an agency existed by express verbal directions and therefore action on the note is not good against Colburn, but must be brought against his principal. Judgment was given for the defendant.

Ruling Law. Story Case Answer

Classes OF Agents: Agents may be classified in a variety of ways, depending upon the angle from which the relation is considered.

In respect to the mode in which an agent receives his power to bind the principal, they are classified as: (1) Actual Agents. (2) Agents by Estoppel. (3) Agents by Law.

An Actual Agent is one who acts with the full consent of the person whom he represents. His authority may be expressly conferred by writing or by word of mouth or it may be implied from previous dealings between them.

Agent by Estoppel. If a person allows another to act for him, or leads third persons to believe that such person is acting for him, he may be bound by the acts of such person, even though it was never his intention that he should be bound. Such a person is called an agent by estoppel.

An Agent by Law is one who has power to bind another, not by virtue of any consent of the one bound, but because the power is conferred upon the agent by law. This is typified in the case of a married woman pledging the credit of her husband for necessaries, when he refuses to support her. The wife is given this power by law, regardless of the consent of her husband.

In the Story Case, Brown expressly authorized Hamilton to act as his agent when he said: "See if you can buy him, etc." Brown is liable as principal on the contract. The authorization intended was to limit Hamilton to the purchase price of $300 for the horse, but if Hamilton could get it for less he was completely empowered to do so.