If that is clear, and can be given effect consistently

with the terms of the instrument, it will usually con-

trol.

See Whitney v. Wyman, 101 U. S. 392, 2 Myer's Fed. Dec. 170, Cas.

Ag. 452; Brown v. Bradlee, 156 Mass. 28, 32 Am. St. Rep. 430,* 15

L. R. A. 509, Cas. Ag. 454.

§164. Parol evidence to explain. — In attempting

to determine the liability of the parties to an instru-

ment in writing executed by an agent, the question

constantly arises whether parol evidence may be re-

ceived to show who was intended to be the party bound.

Upon tli is question the cases seem to be in hopeless con-

flict. Something depends upon the nature of the con-

В§ 164. j EXECUTION OF THE AUTHORITY. SO

tract. In the case of instruments under seal, the rule

is that only those appearing on the face of the instru-

ment as the parties to it can be bound, or can enforce

the contract.

See Briggs v. Partridge, 64 N. Y. 357, 21 Am. Rep. 617, Cas. Ag.

436.

In the case of negotiable instruments also strict rules

are usually applied. If the promise is clearly the prom-

ise of the principal or of the agent, it cannot be altered.

Parol evidence is admissible only when the paper is

ambiguous — when, for example, some portions of it look

like the promise of the principal and other portions of

it look like the promise of the agent — and when the

action, is between the original parties, or those who,

from the ambiguity or otherwise, are charged with

actual or constructive notice of the true intention.

See Liebscher v. Kraus, 74 Wis. 387, 17 Am. St. Rep. 171, 5 L. R.

A. 496; Keidan v. Winegar, 95 Mich. 430, 54 N. W. Rep. 901, 20 L. R.

A. 705; Sparks v. Despatch Transfer Co., 104 Mo. 531, 15 S. W. Rep.

417, 12 L. R. A. 714; Society of Shakers v. Watson, 68 Fed. Rep. 730,

15 C. C. A. 632; McCandless v. Belle Plaine Canning Co., 78 Iowa

161, 42 N. W. Rep. 635, 16 Am. St. Rep. 429, 4 L. R. A. 396; Peterson

v. Homan, 44 Minn. 166, 46 N. W. Rep. 303, 20 Am. St. Rep. 564;

Heffron v. Pollard, 73 Tex. 96, 15 Am. St. Rep. 764.

In the case of other written contracts, the rule goes

further and it may not only be shown in a doubtful cas,'

who was the person intended to be bound; but even

where the promise on its face is clearly that of the

agent, parol evidence is admissible to charge an un-

named principal — that is, to show that he also is liable

— though, not to discharge the agent. In such a case

the other party may hold either the principal or the

agent at his option.

See Higgins v. Senior, 8 Mees. & Wels. 834, Cas. Ag. 456; Hunt-

ington v. Knox, 7 Cush. 371, Cas. Ag. 587; Jones v. Williams, 139

Mo. 1, 39 S. W. Rep. 486, 61 Am. St. Rep. 436; Bulwinkle v. Cramer,

27 S. Car. 376, 13 Am. St. Rep. 645.

90

DUTIES OF AGENT TO PRINCIPAL. [§§165-166.

CHAPTEK XI.

OF THE DUTIES OF THE AGENT TO THE PRINCIPAL,

5. In general.

1. To Be Loyal to His

Trust.

166. In general.

167.* Incapacity resulting — Can-

not be agent of both,

parties.

168. — Cannot deal with him-

self.

169. Voidability of transac-

tions.

170. Further limitations.

171. Usage does not alter rule.

2. To Obey Instructions.

172. Agent must obey instruc-

tions.

173. Good faith, etc.— no ex-

cuse.

174. In what form of action

liable.

175. Sudden emergency as ex-

cuse.

176. Ambiguous instructions.

177. Effect of custom.

3. To Exercise Care.

В§ 178. Duty to exercise care.

179. Special skill required in

some cases.

180. How when services gratu-

itous.

181. Negligence in loaning

money.

182. Negligence in insuring.

183. Negligence in collecting.

184. Liability for defaults of

cprrespondents.

4. To Account for Money

and Property.

185. Duty to accounts.

186. Cannot deny principal's

title, etc.

187. Duty to give notice of col-

lection.

188. Agent must not mix prin-

cipal's funds with his

own.

5. To Give Notice to His

Principal.

189. Duty to give notice.

§ 165. In general. — It is not possible to consider

here every possible duty which the agent may owe to his

principal, but the most important duties may be briefly

dealt with, and the principles given will suggest the

rules which will govern other cases.

1. To he Loyal to his Trust.

§ 1G6. In general. — It is the duty of the agent to

conduct himself with the utmost loyalty and fidelity to

the interests of his principal, and not to place himself

в–  _

В§5166-167.] DUTIES OF AGENT TO PRINCIPAL. 01

or permit himself to be placed in a position where hii

own interests may conflict with the interests of his

principal.

When the principal employs an agent, the law pre-

sumes that he does so in order to secure to himself the

benefits of the agent's skill, experience or discretion and

to reap the fruits of the performance of the undertak-

ing. The law presumes that he expects — and it gives

him the right to expect — that the agent so employed

will endeavor to further the principal's interests and

will use his powers for the principal's benefit. If, then,

instead of serving the principal, the agent is seeking

to serve himself, or some other person — if, instead

of promoting his principal's interests, the agent is en-

deavoring to promote his own or some other person's

interest at the expense of the principal's — the funda-

mental considerations underlying the existence of the

relation will be defeated. This the law constantly aims

to prevent

The rule, however, is one based upon the presumed

intention of the principal and is designed to protect

his interests. The principal may therefore waive the

benefit of the rule if he does so with full knowledge of

the facts. In the absence of such a waiver, the rule is

absolute.

See Levy v. Spencer, 18 Colo. 532, 36 Am. St. Rep. 303; Hofflin v.

Moss, 67 Fed. Rep. 440, 32 U. S. App. 200, 14 C. C. A. 459; Ramspeck

v. Pattillo, 104 Ga. 772, 30 S. E. Rep. 962. 69 Am. St. Rep. 197; Wild-

berger v. Hartford Fire Ins. Co., 72 Mias. 338, 17 So. Rep. 282, 48

Am. St. Rep. 558.

§167. Incapacity resulting — Cannot be agent

of both parties. — In order to secure the perform-

ance of this duty of the agent and to remove as far as

possible all temptation and opportunity to violate it,

the law positively forbids the agent's doing many act*

92 DUTIES OF AGENT TO PRINCIPAL. [В§167.

which might otherwise he harmless. Thus, as has been

already seen, the law does not ordinarily permit a per-

son to assume to become an agent where he already

has in the same transaction such an interest, either of

his own or as agent for some other person, as may pre-

vent his acting fairly toward his principal. The law

recognizes that "no man can serve two masters" and

give to each of them his undivided allegiance and sup-

port.

Where, however, the principal is fully advised of the

adverse interest, and is given an opportunity to protect

himself and to refuse to be represented by an agent

who can not give him undivided attention, and he still

is willing to employ the agent, he may do so ; and if he

does, the law holds that he has waived the benefit of the

rule.

Except with the full knowledge and consent of both

principals, therefore, a person who is already agent

of one party cannot undertake to act as agent of the

other also. If he does do so, it is not only a breach of

his duty, for which he is liable, but any transactions

entered into by the agent may be repudiated by the

principal who was ignorant of his dual agency. As has

been already seen, it is not necessary to prove actual

fraud: the undertaking to represent both parties is in