Sec 271

A statement by an agent may be either non-contractual or contractual. It is non-contractual when it is made by the agent casually, and not as part of a negotiation, but as narrating an incident, or as explaining an alleged right. In such cases, it is put in evidence, not as part of a contract, but as explanatory of the transaction to which it relates, in the same way and under the same limitations as are admissions of the party himself as to the nature of the transaction in question. To render admissible an agent's admissions of this class, the agent must be either the principal's general representative, or must be specially delegated to speak as to the particular matter.1 When the statement is offered as contractual (i. e., as made as one of the inducements to a contract), it must be shown to have been made during the negotiations. Otherwise, it cannot be received as determining the principal's liability.2 The same limitation excludes representations made to third persons, in different transactions, or even to the other contracting party, when not made as part of the particular negotiation. Even prior statements by a general agent are not contractually imputable to the principal unless they be shown to have been inducements to the contract forming the basis of the suit against the principal.3

Statements if contractual, must be coincident with transaction ground, and says: 'A person defrauded by the directors, if the subsequent acts and dealings of the parties have been such as to leave him no remedy but an action for the fraud, must seek his remedy against the directors personally.' "

1 Wh. onEv. sec 1177.

2 Hern v. Nichols, 1 Salk. 289; Fair-lie v. Hastings, 10 Ves. 125; Kirkstall Co. v. R. R., L. R. 9 Q. B. 468; Stiles v. R. R., 8 Met. 44; Lowell Bk. v. Winchester, 8 Allen, 109; Clark v. Baker, 2 Whart. 340; Penn. R. R. v. Books, 57 Penn. St. 339; McCracken V. West, 17 Ohio, 16; Chic. B. & Q. R. R. v. Riddle, 60 111. 534; Bowen v. School Dist., 36 Mich. 149; Williams v. Williamson, 6 Ired. L. 281; Mc-Comb v. R. R., 70 N. C. 178.

3 In Western Bk. of Scotland v. Addie, L. R. 1 Sc. & D. 145, as stated by Mr. Pollock, "the directors of the bank had made a series of nourishing, but untrue reports on the condition of its affairs, in which bad debts were counted as good assets. The shareholder who sought relief in the action, had taken additional shares on the faith, as he said, of these reports. But it was not shown that they were issued or circulated for the purpose of inducing existing shareholders to take more shares, or that the local agent of the bank who effected this particular sale of shares, used them, or was autho-.

Sec 272

An agent's statement made while representing his principal in a business negotiation binds, as has been seen, his principal; and in torts his declarations coincident with the act charged as tortious are imputable to the principal as defining the principal's liability.1 But such statements, to be admissible against the alleged principal, must be made by a general agent, or, if by a special agent, must be shown to have been within the range of such agent's authority, or as part of the res gestae, or to have been ratified by the principal.2