Incidental to the transaction, as, to fix the terms, and, if

authorized to purchase on credit, to make the necessary

representations as to the solvency of the principal.^

(3) Agent authorized to manage a business. Where an

entire business is placed under the management of an agent,

the authority of the agent may be presumed to be com-

mensurate with the necessities of his situation.^ He is to

conduct the business as it is, buying and selling, hiring

workmen or agents, and otherwise acting as a prudent man

would in the conduct of a like enterprise. He has implied

authority to do whatever is ordinarily incidental to the con-

duct of such a bnsiness, whatever is necessary to the effec-

tive execution of his duties, or whatever is customary in

a particular traded For all contracts made within these

limits the principal is liable ; but not for contracts outside

of these limits. Thus the manager of a hotel may bind his

principal for the necessary supplies of the house,В® but not

1 Komorowski ;;. Krumdick, 56 Wis. 23; AVheeler v. McGuire, 80 Ala.

398; Berry v. Barnes, 23 Ark. 411.

2 Si)rague v. Gillett, 9 Met. (Mass.) 91.

3 Olyphaiit r. .McNair, 41 Barb. (N.Y.) 446.

4 Butler V. Maples, 9 Wall. (U. S.) 7G6.

6 Bay ley c. Wilkins, 7 C. B. 886; Wishard v. McXeill, 85 Towa, 474;

Watteau v. Fenwick, 1893, 1 Q. B. 346; Hubbard v. Teiibrook, 121 Pa.

St. 291.

^ Quoted with approval in Lowenstein v. Lombard, 164 N. Y. 324, 329.

7 Edmunds v. Bushell, L. R. 1 Q. B. 97; Jones v. Phipps, L. R. 3 Q. B.

567; Collins v. Cooper, 65 Tex. 460; German Fire Ins. Co. v. Grunett,

112 111. G8.

* Beecher v. Venn, 35 Mich. 4GG.

CONTRACT FOR DISCLOSED PRINCIPAL. 143

for those tliat are not shown to be necessary.^ A manager

of a shop has authority to buy the goods necessary to keep

it in running order.^ But there is ordinarily no implied

authority to make negotiable paper ;^ nor to borrow money

except where the power is absolutely indispensable;* nor to

sell the entire business,^ nor to pledge or mortgage it,^ nor

to use his principal's goods for payment of his own debts."

(4) Insurance agents. An insurance agent, whether called

"general" or "local," — that is, whether his authority is

exercised over a wide or a, narrow territory, — is, within such

prescribed territory, the general representative of his com-

pany, and the law applicable to him is, broadly speaking,

the same as that applicable to a general agent.^ If author-

ized to solicit and accept risks, or issue and renew policies,

he is a general agent, and has ostensibly all the powers

incidental to such an agency or customary in it.^ Within

the scope of such ostensible authority, the agent may bind

his principal, although he acts contrary to special instruc-

tions.i^ Third persons are not affected in their dealings

1 Wallis Tobacco Co. v. Jackson, 99 Ala. 460 ; Brockway v. Mullin,

46 "N. J. L. 448; cf. Cummings v. Sargent, 9 Met. (Mass.) 172.

2 Wattean v. Fenwick, supra ; Hubbard v. Tenbrook, supra ; Banner

Tobacco Co. v. Jenison, 48 Mich. 459.

3 McCullough V. Moss, 5 Denio (N. Y.), .567; New York Iron Mine

V. First N. Bank, 39 Mich. 644; Temple v. Pomroy, 4 Gray (Mass.), 128;

cf. Edmunds v. Bushell, L. R. 1 Q. B. 97.

4 Hawtayne v. Bourne, 7 M. & W. 595; Bickford v. Menier, 107

N. Y. 490; Perkins v. Boothby, 71 Me. 91.

5 Vescelius v. Martin, 11 Colo. 391; Claflin v. Cont. Jersey Works,

85 Ga. 27.

6 Despatch Line v. Mfg. Co., 12 N. H. 205.

1 Stewart v. Woodward, 50 Vt. 78.

8 Millville, &c. Ins. Co. v. Mechanics', &c. Ass'n, 43 N. J. L. 652;

Mentz V. Lancaster F. Ins. Co., 79 Pa. St. 475.

9 Pitney v. Glen's Falls Ins. Co., 65 N. Y. 6; Continental Ins. Co. v.

Ruckman, 127 111. 364; Miller v. Phoenix Ins. Co., 27 Iowa, 203; South

Bend, &c. Co v. Dakota, &c. Ins. Co., 2 S. Dak. 17; Phoenix Ins. Co. v.

Munger, 49 Kans. 178.

1В° Ruggles V. American Central Ins. Co., 114 N. Y. 415; Forward t).

Cont. Ins. Co., 142 N". Y. 382; Machine Co. v. Insurance Co., 50 Oh. St.

549 ; Viele v. Germania Ins. Co., 26 Iowa, 9.

144 PRINCIPAL AND THIRD PARTY.

witli an insurance agent within his ostensible authority by

secret or private instructions not brought to their atten-

tion.i ]jiit if the third party knows of the limitations set

by the princii)al upon the agent's authority, a contract be-

yond those limits would not be binding upon the principal.^

Wliethcr restrictions contained in a policy operate as notice

to the insured of the limitations upon the agent's authority,

there is a conflict of judicial decisions. As to acts by the

agent subsequent to the issuing of the policy, the restrictions

in the policy are clearly binding and effective notice.^ But

as to acts prior to or contemporaneous with the issuing of

the policy, it has been held that the restrictions in the policy

are not binding and effective unless actually known to the