Insanity has been judicially declared, the decree of the court

will be regarded as notice, and the revocation will operate

upon all persons, whether or not they have actual knowledge

of the insanity. But if the princii)al has not been formally

adjudged insane, persons who, in ignorance of the insanity,

deal with the agent, are protected. This, upon the theory

that while both principal and tliird person are innocent and

free from blame, the principal, by conferring the original

authority, had made the wrong possible, and he must there-

fore bear the loss." In accordance with the general rule, if

1 Lacy )'. Getraan, HON. Y. 100.

2 Farmers', &c. Co. v. Wilson, 139 N. Y. 284; Long v. Thayer, l.oO

U.S. 520; In re Succession of Lanaux, 46 La. Ann. 10:56; Harper v.

Little, 2 Me. 14; Blades v. Free, 9 B. & C. 167. Post, В§ 200.

^ McNaughton v. Moore, 1 Haywood (N. C), 189; Rowe v. Kand,

111 Ind. 206 ; Tasker v. Shepherd, 6 H. & X. 575.

в– * limit V. Rousmanier. 8 Wheat. (U. S.) 174, 203; Grapel v. Hodges,

112 X.Y. 41 0; jujsi, В§ 72.

^ Johnson r. Jolinson's Adni'r, Wright (Ohio), 594.

6 Davis V. Lane, 10 N. H. l.')(); Motley v. Head, 43 Vt. 633; MatHiie-

sen, &c. Co. v McMahon, 38 N. .J. L. 536 ; Drew v. Xuun, L. R. \ il. B. D.

661.

' Ante, В§ 16. But the burden is upon tlio third party to show that he

в– was ignorant of the principal's insanity. !Merritt v. Merritt, 43 W. Y.

App. Div. 68.

BY OPERATION OF LAW. 85

tlie agent's authority is coupled with an interest, the princi-

pal's insanity does not terminate the agency.^

(3) Illness. The illness of the principal would have no

effect uj)on the agency. Ihit the illness of the agent which

incapacitated him from performing the duties of the agency

would warrant him in renouncing the contract.- And it is

immaterial that his illness is due to his own fault, since an

inquiry as to the cause of the illness is treated as an inquiry

into a remote cause.^ If, however, before renunciation or

notice of the termination of the agency, the agent should act

for the principal, his acts would, of course, be binding.

(4) Marriage. The marriage of a principal does not, as a

general rule, operate as a termination of the agency. It may,

liowever, revoke an authority the exercise of which would

impair rights growing out of the marriage. For instance it is

lield that a power of attorney to sell land, the home of a single

man, is revoked by his marriage* The principal's wife, by

the marriage, acquires an interest in the land which can only

be divested by her joining in the conveyance, or in the power

to convey. Under the common law, a woman was deprived

by marriage of all control over her property, and the authority

of her agent was consequently revoked.^ But under the

modern statutes giving to married women the right to hold

and control separate property, this rule, of course, does not

apply. The marriage of a woman who is under contract of

service does not of itself afford ground for a revocation of the

contract by the master.^ And, as we have seen, married

women may act as agents.'

(5) Constraint of Law. Where the law puts a constraint on

one of the parties which renders it impossible for him to con-

tinue the relation, the agency is revoked. Thus the arrest

1 PoM, В§ 72.

2 Spalding v. Rosa, 71 N. Y. 40 ; Robinson v. Davison, L. R. 6 Ex.

2G9.

8 Hughes V. Wamsiitta ^lills, 11 Allen (Mass.), 201 (semble).

* Henderson v. Ford, 4G Texas, 627.

6 Wambole v. Foote, 2 Dak. 1.

6 Edgecombe v. Buckhout, 146 N. Y. 332. ? Ante, В§ 23.

86 TERMINATIOX OF AGENCY

and imprisonment of an atront terminates tlie agency, and it is

immaterial that the arrest is due to the fault of the offender.^

So if a corporation be dissolved by judicial proceedings, the

agency is revoked.^ The dissolution of a partnership, whether

voluntary or involuntary, terminates an agency in which the

firm was either principal or agent.^

(G) BanJcruptcij. The mere insolvency of the principal has

no effect upon the agency, but if the principal becomes legally

bankrupt, and voluntarily or involuntarily surrenders the con-

trol of his property and affairs, the authority of the agent,

unless coupled with an interest, is regarded as terminated.*

It seems, however, that even after bankruptcy, the agent may

act for his principal in regard to all matters except those

touching the rights and property of which he is divested by

the bankruptcy.^ And it is also held that although the adju-

dication of the court relates back to the act of bankruptcy,

persons who, subsequent to the act of bankruptcy but prior

to the adjudication, deal with the agent in good faith, will

be protected.^ The bankruptcy of the agent revokes his

authority to deal with the principal's property rights, although

he might still perform a purely formal act.'

(7) War. Although there are several cases to the contrary,

it seems to be the law in America, that the existence of war

between the country or State of a principal, and that of his

agent, terminates the agency. This is in accord with the

general rule that all trading or commercial intercourse be-

tween two countries at war is prohibited.^ The exception is

^ Hughes V. "Wamsutta Mills, 11 Allen (Mass.), 201; Leopold v.

Salkev, 89 111. 412.

2 People V. Globe Ins. Co., 91 X. Y. 174.

8 Griggs V. Swift, 82 Ga. 392.

* Story on Agency, В§ 482; ]\Iinctt v. Forrester, 4 Taunt. 511; Pear.son

V. Graham. A. & E. 899; Parker v. Smith, IG East, 382; Ex parte

Snowluall, L. R. 7 Ch. App. 548.

6 Dixon V. Ewart, Buck, 9 1 ; 3 Mer. 322.

8 Ex parte Snowball, L. II. 7 Ch. App. 543; Elliott v. Turquand,

L. R. 7 App. Cases, 79.

в– ^ Audenried v. Betteley, 8 Allen (iMass.), 302. As to the agent's

right to compensation after bankruptcy, see post, В§ 80.

• * Kershaw v. Kelsey, 100 Mass. 5G1 ; United States v. Grossmayer,

8 Wall. (U. S.) 72. See ante, В§ 22.

hY IRUEVOCABLE AGENCIES. 87

recognized, however, that debts may be paid to the agent of

an alien enemy, wlien such agent resides in tlie same State

"with the debtor. But it must hr with the mutual assent of

princi{>al and agent, and it must not be done with the view of

transmitting the funds to the principal during the continuance

of the war.^

4. Irrevocable Agencies.

В§ 72. Doctrine of irrevocable agencies.

To the general rule that an authority vested in an agent

may be revoked by the principal, and that it is revoked by

the death, lunacy, or bankruptcy of the principal, there are

some exceptions, and these exceptions constitute what are

known as irrevocable agencies. The reason for holding cer-

tain powers vested in an agent irrevocable, is that a revoca-

tion would cause to the agent a loss or damage other than,

and different from, a mere loss of employment or profit. Thus

if, for a valuable consideration, an authority is vested in an

agent for the purpose of fortifying a security held by him

against the principal, or of protecting or securing an interest

of his, the authority is irrevocable because its revocation

would subject the agent to damage by the loss of such secu-

rity, or the means of realizing upon it.^ So also if the agent

is employed to do an act which involves him in personal

liability to a third person, and he has incurred such liability,

the power cannot be revoked, because its revocation would

subject the agent to an action by the third person.^ In the

first case the agent is said to have " a power coupled with an

interest." In the second case he may be said to have " a

power coupled with an obligation." There are, then, two

exceptions to the general rule that an agency is revocable,

^ Insurance Co. v, Davis, 95 U. S. 425; N. Y. Life Ins. Co. v. Statham,

93 U. S. 24 ; Ward v. Smith, 7 Wall. (U. S.) 447 ; Howell v. Gordon, 40

Ga. 302. See ante, В§ 21.

2 Walsh i: Whitcorab, 2 Esp. 565; Gaussen i'. IVIoiton, 10 B. & C. 731 ;

Raleigh v. Atkinson, 6 M. & W. G70; Smart v. Sandars, 5 C. B. 895;

Dickinson v. Bank, 129 Mass. 279 ; Carter r. Slocomb, 122 X. C. 475.

8 Read r. Anderson, 13 Q. B. D. 779; Tbacker v. Hardy, 4 Q. B. D.

685 ; Crowfoot v. Gurney, 9 Bing. 372 ; Hess v. Ran, 95 N. Y. 359.

88 TERMINATION OF AGENCY

namely, (1) where the aixent has '' a power coupled with an

interest," and (2) when the agent has "a power coupled with

an obligation."

V (1) A "power coupled with an interest" is dil'licult to

define accurately. The word "interest" must not l)e taken

in a broad but in a narrow sense. It means an interest in

tlie thing itself which constitutes the subject-matter of the

agency as distinguished from an interest in tlie execution of

the power. " In other words, the power nnist be engrafted

on an estate in the thing." ^ There must be first an interest

or title in the thing constituting the subject-matter of the

agency and then, coupled with this, a power to dispose of or

otherwise control the thing for the purpose of protecting the

interest. Thus, if a factor makes advances to liis principal

in consideration of authority to sell goods consigned to him

and reimburse himself for the advances, the authority is irre-

vocable ; but if he is authorized to sell the goods and pay

himself from the proceeds a sum not advanced in considera-

tion of the power, the authority is revocable.^ If one have an

interest in lands or goods, coupled with a power of sale, the

power is irrevocable.^ But if one be authorized to sell lands

or goods in which he has no interest and apply the proceeds

to a debt due the agent from the principal, the power is revo-

cable because the agent, while having an interest in the

execution of the power, has none in the subject-matter of the

agency.*

The American rule seems to be that an interest in the sub-

ject-matter of tlie agency by way of security or indenmity,

coupled with a power to sell or otherwise dispose of the

property, renders the power irrevocable;^ but an interest by

^ Hunt V. Rousmaiiier, 8 Wheat. (U. S.) 174.

2 Raleigh v. Atkinson, 6 IM. & W. 670; Smart v. Sandars, 5 C. B. 895;

Taplin V. Florence, 10 C B. 744.

8 Roland v. Coleman, 76 Ga. 052; Knapp i'. Alvord, 10 Paige (X. Y.),

205.

* Hunt V. Rousinanier, 8 Wheat. (U. S.) 174; Friuk c. Koe, 70 Cal.

296; Farmers', &c. Co. r. Wilson, 139 N. Y. 284.

6 Knapp V. Alvord, 10 Paige (N. Y.), 205.

BY lEREVOCABLE AGENCIES. 89

way of compensation in the proceeds of such sale is not such

an interest as will render the power irrevocable.^

The English rale is somewhat broader and is to the effect

that where an agreement is entered into on a sufficient con-

sideration, whereby an authority is given for the purpose of

securing some benefit to the donee of the authority (as in the

proceeds by way of payment of a debt), such an authority is

irrevocable.^ This rule does not positively require that the

agent should have an " interest in the subject-matter," in

the sense in which that term is employed in most of the

American cases, but is satisfied if the agent has an interest in

the execution of the power, provided such interest rests upon

a sufficient consideration.

A leading American case took a distinction between revo-

cation by the voluntary act of the principal, and revocation by

death, and, while arguing that where the agent had acquired

upon consideration an interest in the execution of the power,

the principal could not have revoked such power during his

life, held that the power was revoked by the principal's

death.3 It is believed, however, that such a distinction is not

generally recognized, and that where a power is irrevocable

by the voluntary act of the principal, it is not revoked by his

bankruptcy,* insanity, or death.^

Y (2) ^ power coupled with an obligation means a power in

the execution of which an agent has come under some obliga-

tion to a third person. Where the revocation would involve

the agent in liability to a third person, the principal cannot

revoke, nor will the law revoke, the agency. Thus if an

agent is authorized to make a contract for the principal and

^ Blackstone v. Buttermore, 53 Pa. St. 2G6 ; Chambers v. Seay, 73

Ala. 372 ; Stier v. Ins. Co., 58 Fed. Rep. 843.

2 Gaussen i^. Morton, 10 B. & C 731 ; Clerk v. Laurie, 2 H. & N. 199 ;

In re Hannan's, &c. Co., 1896, 2 Ch. 643, affirming 74 L. T. Rep. n. s. 550.

3 Hunt V. Rousmanier, 8 "Wheat. (U. S.) 174. See also ^Vatson i-.

King, 4 Camp. 272.

* Dickinson v. Bank, 129 Mass. 279; Renshaw i'. Creditors, 40 La.

Ann. 37.

5 Knapp V. Alvord, 10 Paige (X. Y.), 205; Hess v. Rau, 95 N. Y.

359; Carter v. Slocomb, 122 N. C. 475.

90 TERMINATION OF AGENCY.

the agent has so far involved himself in the execution of the

power as that he would suffer loss or damage if the affair

were not carried through, the power to consummate it is irre-

vocable.^ So also if the agent is authorized to pay money on

behalf of the principal to a third person, and has come under

a personal liability to such third person for the sum in ques-

tion, the principal cannot revoke the authority .^ These cases

are sometimes treated as if they were those of a " power

coupled with an interest,'"'^ but they are distinguishable from

that class of cases which really have a more dcliuitely limited

scope.*