20 SEP 1961 LIBRARY Entered according to Act of Congress, in the year 1882, by REVIEW PUBLISHING COMPANY, In the office of the Librarian of Congress, at Washington. SOUTHERN LAW REVIEW VOL. VII., N. S.] ST. LOUIS, APRIL, 1881. [NUMBER I. THE POWER OF USAGE AND CUSTOM TO CONTROL OR ALTER RULES OF LAW. II. In a former paper,' the power of usage and custom to affect legal rules and liability was considered in three cases, viz.: I. In the Case of Common Carriers. II. In the Law of Insurance. III. In the Relation of Landlord and Tenant. In this paper, the discussion there commenced will be extended to the following, viz. : IV. In the Relation of Principal and Agent. V. In the Law of Corporations. VI. In the Law of Sales. VII. In the Law of Banks and Banking, and Negotiable and Assignable Paper. The attention of the reader is directed to the language of courts and judges to the effect that a custom or usage which is contrary to an "established rule of law" is never admissible in evidence for the purpose of varying or altering those rules, which was cited at some length in the former paper, and which it is not necessary to repeat. But it may be well to repeat in this place the three divisions into which, as appears to the writer, these "established rules of law," and the cases in which usage and custom have been set 2 Id. 845, 846. 2 16 South. L. Rev. 845. up to affect them, properly resolve themselves. They are: First, those in which usage has been so powerful as not only to obtain recognition where proved, but to entirely alter the legal doctrine, and to become itself the "estab lished rule of law" for subsequent cases; second, those i which the old rule of law still prevails, except where appears that the usage of the parties has been different, an evidence of such a contrary custom is admissible to contr the effect of the legal doctrine; and, third, those in whic usage or custom is not permitted to affect the legal do trine. Bearing these in mind, we will proceed to a cons eration of the different relations in which usage has be controlling or ineffectual, as the case may be. IV. In the Relation of Principal and Agent. As already stated,' not every one of the many legal governing the rights and liabilities of principal and a can be discussed, in connection with our subject, withi limited space. It will be sufficient for the purpose of. essay to note only the principal rules as to which a co custom has grown up among the parties; and in th of agency these are eleven, as follows: (1.) An authority to do an act cannot be delegat another-Delegata potestas non potest delegari. (2.) 4 tor has no implied authority to sell except for cash. (3 factor has no implied authority to pledge the goods o principal as security for his own debt. (4.) A payme an authorized agent will discharge the debt, but (5 agent employed to sell for a known principal has no img authority to receive payment. (6.) A factor has no imp authority to set off his own private debt against the of the vendee. (7.) Profits made by an agent out of principal's business belong to the principal. (8.) An a of the owner to sell property cannot be also a the purchaser as well, and receive compensation (9.) An agent cannot legally disregard his princip 16 South. L. Rev. 849. ions. (10.) An agent, contracting as such, is not personally iable on a contract so made.. (II.) An agent contracting 1 his own name will be personally liable on his contract. hese rules will be discussed in the above order. (1.) Delegata potestas non potest delegari. This maxim xpresses an important principle in the law of agency. his principle may be thus stated: One who has authority m another to do an act must execute it himself, and cant delegate his authority to another; for, being a confidence trust reposed in him personally, it cannot be assigned to tranger, whose ability and integrity might not be known the principal, or, if known, might not be selected by him such a purpose. Although to this general rule there me exceptions,' they are not material to this discusas it is important here to note only that usage may nge a case which otherwise would be governed by the legim as first stated in this paragraph. In one case it was ancarked by Lord Eldon that "the doctrine is very danwitus indeed, that if an auctioneer is authorized to sell, ses clerks when he goes out of town are, in consequence Cusage in that business, agents for the person who trized them," 3 but in Moon v. Guardians of the Poor,4 tom, in the case of an architect, to employ a surveyor gaike out the quantities of a building proposed to be )ted, was held valid so as to render the employers of builder liable to the surveyor for his work. "The jury is ad," said Tindal, C. J., "that there was a usage in the me for architects or builders to have their quantities made : by surveyors. It appeared that the custom is ju! he * * * in Johnson v. Cunningham, 1 Ala. 249; Alexander v. Alexander, 2 Ves. Burial Board v. Thompson, L. R. 6 C. P. 457; Baker v. Cave, 1 Hurl. 678; Warner v. Martin, 11 How. 209: Hawley v. James, 5 Paige, 326; ke's Appeal, 72 Pa. St. 491; Lyon v. Jerome, 26 Wend. 485; Ex parte Il sor, 3 tory, 411; Bocock v. Pavey, 8 Ohio St. 270. ward v. Bailee, 2 H. Black. 618; Quebec, etc., R. Co. v. Quinn, C. 265; Howard's Case, L. R. 1 Ch. 561; Bodine v. Insurance 117; Buckland v. Conway, 16 Mass. 396; Commercial Bank v. 11, 501. 43 Bing. N. C. 814. then been both criticised and expressly overruled.' Had such a usage been shown in Graham v. Dyster, decided by Lord Ellenborough in 1816, the liability of the factor might have been different, though such a conclusion is not certain, the opinion being far from clear upon this point. The case of Newbold v. Wright,3 which in 1833 came before the Supreme Court of Pennsylvania. is often cited as an instance of a usage of trade changing the law as to a factor's power to pledge. The opinions in that case are very lengthy, but the syllabus to the report reads thus: "A usage cannot be set up in opposition to a general rule of law; therefore a usage for factors to pledge the goods of their principals is bad." And Rogers, J., who delivered the opinion of the court, said of the custom set up at the trial: "It would be of pernicious consequence to the commercial world to recognize such a custom, so proved, made for the benefit of a few, opposed as it is to the general mercantile law. It is an attempt to set up a custom in opposition to a general principle of law, which cannot be permitted." It may be observed, however, that one judge dissented from the rest of the court, and apparently favored the admission of the custom. But in Laussatt v. Lippincott, where one to whom goods were delivered by his principal to sell, deliver, and receive payment, deposited them with a commission merchant connected in business with a licensed auctioneer, who advanced his notes thereon, it was held that this transaction bound the principal, the jury having found that this was in accordance with the usage of the trade. Tilghman, C. J., admitted the general rule of law to be against the defendant, saying: "That a factor cannot pledge the goods of his principal for his own debt, seems to be too well settled to admit of a doubt." 5 But he added: "Now the jury have found that, 1 See Solly v. Rathbone, 2 Moo. & S. 298; Cochran v. Tatum, 2 Moo. & S. 301, note; Shipley v. Keymer, 1 Moo. & S. 484; Martini v. Coles, I Moo. & S. 140; Queiroz v. Trueman, 3 Barn. & Cress. 342; Boyson v. Coles, 6 Moo. & S. 14. 2 2 Stark. N. P. 21. 3 4 Rawle, 195. 4 6 Serg. & R. 386. 5 Citing Paterson v. Tash, 2 Stra. 1178; Wright v. Campbell, 4 Burr. 2046; Pickering v. Burk, 15 East, 43. |