5l8 HARVARD LAW REVIEW. without special inquiry, and both the principal and the person dealing with these agents, and the agents themselves, may be said to incorporate in their transactions these elements of custom. Consequently, to appoint an agent to one of these positions is in fact to hold him out to the world as having certain powers, although their exercise under certain conditions may constitute a breach of the relation between the agent and the principal. The public are, in fact, informed that the agent may make statements as to the existence of the goods named in the bill of lading, or of the stock purporting to be contained in a stock certificate, or as to the amount on deposit to the credit of a drawer; and yet, as between the agent and the corporation in these cases, it is clearly a breach of duty for the agent to make any representation except in strict accordance with the fact. This is a case, therefore, in which the representation to the third person of the agent's author- ity may exceed in purview the instructions to the agent. In the case just considered, the New York Court of Appeals has grasped the situation with a finer sense of justice than the courts of some other jurisdictions. It has embodied its rule in such cases in this phraseology, to quote the language of Judge Finch ^ : —
- ' It is a settled doctrine of the law of agency in tliis State that where
the principal has clothed his agent with power to do an act upon the existence of some extrinsic fact necessarily and peculiarly within the knowledge of the agent, and of the existence of which the act of execut- ing the power is itself a representation, a third person dealing with such agent in entire good faith, pursuant to the apparent power, may rely upon the representation, and the principal is estopped from denying its truth to his prejudice. ... A discussion of that doctrine is no longer needed or permissible in this court, since it has survived an inquiry of the most exhaustive character, and an assault remarkable for its persist- ence and vigor. If there be any exception to the rule within our juris- diction it arises in the case of municipal corporations whose structure and functions are sometimes claimed to justify a more restricted liability." The New York rule has not been adopted in the other leading jurisdictions.^ The courts of England, Massachusetts, and the United States Supreme Court have confined themselves to a limited definition of the word " authority," that is, iu effect, they 1 Bank of Batavia v. N. Y. &c. R. R. Co., io6 N. Y. 195, 199 (1887). 2 Grant v. Norway, 10 C. B. 665 (1851); Pollard v. Vinton, 105 U. S. 7 (1881); Friedlander v. Texas &c. R. R., 130 U. S. 416 (1889) ; M-ssey v. Eagle Bank, 9 Met. 306 (1845).
