¹ , Halsbury, Laws of England, 3rd ed., Vol. I, p. 164Google Scholar; Bowstead, Digest of the Law of Agency, 12th ed., Article 37 and see also Articles 38–40.

² (1812) 15 East 38.

³ In such a situation nowadays, instead of resorting to common law principles of “holding out,” it would be sufficient to refer to the express provisions of the Factors Act, 1889, s. 2. See also Willes J. in Fuentes v. Montes (1869) L.R. 3 C.P. 268, 277.

⁴ At p. 43. The other judges, however, took the point that on the evidence the plaintiff had not expressly forbidden Swallow to sell so that he must be taken as having impliedly consented to Swallow's having authority to sell; i.e., in their opinion there was actual (implied) authority; cf. Cole v. North Western Bank, L.R. 10 C.P. 354, 364–365.

⁵ It will be noted that Watteau v. Fenwick was a case of an undisclosed principal. The question, whether a principal can be liable in contract for the acts of an agent exceeding the latter's actual and apparent authority but coming within the scope of his usual authority, will normally only arise in the case of an undisclosed principal, because where the existence of the principal is disclosed the agent's usual authority will normally be important in ascertaining the extent of the agent's apparent authority. In exceptional circumstances, however, the question may arise in a case where the principal's existence is disclosed. Montrose, “Liability of Principal for Acts Exceeding Actual and Apparent Authority” (1939) 17 Can.Bar Rev. 693, 710–711 suggests a hypothetical example: P appoints A as his general manager for the purchase of houses in Leeds, instructing A, however, not to disclose the existence of the agency, and not to purchase except on a surveyor's report. A discloses his position to T, withholding, however, the requirement of a surveyor's report and purchases houses in Leeds from T as agent for P without a surveyor's report. Here A has exceeded not merely his actual authority but also his apparent authority because P has not “held out” A to T. If P is to be liable to T it can only be on the basis of a “usual” authority as distinct from actual and apparent authority. See also Article 161 of the American Law Institute's Agency Restatement (2nd ed., 1958).

⁶ [1893] 1 Q.B. 346. Nowadays a person in the position of the principal in this case would have to comply with the Registration of Business Names Act 1916.

⁷ Fridman, The Law of Agency (1960), pp. 82–83, 86–90, mistakenly classifies such cases of usual authority as Watteau v. Fenwick as cases of actual authority. The principal's express prohibition, however, clearly negatived actual authority.

⁸ Montrose, “Liability of Principal for Acts Exceeding Actual and Apparent Authority” (1939) Can.Bar Rev. 693.

⁹ Powell, The Law of Agency (2nd ed.), p. 73. See also Fridman, op. cit., pp. 86–90.

¹⁰ Gower, The Principles of Modern Company Law (2nd ed.) pp. 146–152; Rice, “Power of a Director to Bind the Company” (1959) Journal of Business Law 332, 336–337. On the other hand, Thompson rejects it in his “Company Law Doctrines and Authority to Contract” (1956) 11 Univ. of Toronto L.J. 248, 251.

¹¹ (1812) 15 East 400.

¹² (1858) 3 H. & N. 554. He also refers to Fenn v. Harrison (1790) 3 Term Rep. 757, 760; Beaufort (Duke) v. Neeld (1845) 12 Cl. & Fin. 248; Coles v. Bristow (1868) 4 Ch.App. 3, 14, but these are only illustrations of “apparent” authority.

¹³ See particularly Lord Ellenborough C.J. at pp. 408–410 and Le Blanc J. at p. 411.

¹⁴ See at pp. 408, 410 and 411.

¹⁵ My italics.

¹⁶ Pollock C.B. states the relevant principle thus: “Has the party who is charged with liability under the instrument or contract authorised and permitted the person, who has professed to act as his agent, to act in such a manner and to such an extent that, from what has occurred publicly, the public in general would have a right to reasonably conclude, and persons dealing with him would naturally draw the inference, that he was a general agent? If so, in my judgment, the principal is bound, although, as between him and the agent, he takes care on every occasion to give special instructions; and I think it makes no difference whatever whether the agent acts as if he were the principal or professes to act as agent, as by signing ‘A.B., agent for CD.’ ” Powell merely cites the words italicised, but these relate only to the form of signature and do not detract from the necessity of an appearance of authority (which is required by the earlier part of the passage).

¹⁷ [1893] 1 Q.B. 346.

¹⁸ (1865) L.R. 1 Q.B. 97.

¹⁹ [1893] 1 Q.B. at pp. 348–349.

²⁰ At p. 349 Lord Coleridge C.J. concurred in his judgment.

²¹ Powell, op. cit., p. 77, admits this.

²² Thus Cockburn C.J. (at p. 99): “Bushell was therefore the agent of the defendant Jones, and Jones was the principal, but he held out Bushell as the principal and owner of the business. That being so, the case falls within the well-established principle, that if a person employs another as an agent in a character which involves a particular authority, he cannot by a secret reservation divest him of that authority.… Bushell cannot be divested of the apparent authority as against third persons by a secret reservation”; Mellor J. (at p. 100): “Here Jones puts forward Bushell as a principal.… It would be very dangerous to hold that a person who allows an agent to act as a principal in carrying on a business, and invests him with an apparent authority, to enter into contracts incidental to it, could limit that authority by a secret reservation”; Shee J. (at p. 100): “the natural inference when a person allows an agent to carry on a particular business as an ostensible principal, is that he clothes him with every authority incidental to a principal in the business.” (My italics.)

²³ (1865) L.R. 1 Q.B. 97.

²⁴ (1879) 41 L.T. 783.

²⁵ The comment of Fridman, op. cit., pp. 89–90, that Daun v. Simmins shows what happens where there is notice of a limitation of usual authority receives no support from the judgments. In fact there was no usual authority to order from any dealer and therefore no holding out of the agent as having usual authority. Montrose, op. cit., pp. 709–710, states that Daun v. Simmins may be distinguished from Watteau v. Fenwick not only on the ground that the existence of the principal was disclosed but also on the ground that the agent's act was not within the usual authority of the manager of a public-house, but it would seem that the C.A. only went into the question of the manager's usual authority for the purpose of deciding the extent of his apparent authority.

²⁶ [1910] 2 K.B. 389. Reversed on a different view of the facts [1911] 1 K.B. 459, the C.A. holding that there was no evidence that the spirits were supplied for the use of the hotel and not to the manager personally.

²⁷ [1910] 2 K.B. at p. 894. (My italics.)

²⁸ Goodhart and Hamson, “Undisclosed Principals in Contract,” 4 Camb.L.J. 310, 336–337, say that Watteau v. Fenwick is an example of pure estoppel by conduct and speak of the principal's “external notorious act” of putting Humble in charge of the beer-house. Montrose, op. cit., p. 696, comments that the external notorious act was surely that the agent was in charge of the beer-house, not that he had been put in charge by the principal, and says that it is difficult on the facts to see that there was any representation at all made by the defendants. However, in both Watteau v. Fenwick and Kinahan & Co. Ltd. v. Parry the owner had put the agent's name as a licensee over the door (or had allowed it to remain). The defendants had thus made a representation that the agent was the licensee and this seems to have been treated as a representation that he was the owner. Quaere, whether nowadays a representation that a person was licensee would be construed as one that he was the principal. Similarly, in Edmunds v. Bushell & Jones, putting up the name “Bushell & Co.” seems to have been regarded as a representation that Bushell was a principal.

²⁹ Cf. Mechem, Outlines of the Law of Agency (4th ed. 1952) pp. 114–116. See also Article 195 of the American Law Institute's Agency Restatement.

³⁰ [1893] 1 Q.B. 346.

³¹ In Jerome v. Bentley & Co. [1952] 2 All E.R. 114, Donovan, J. did not have to consider its validity, for he distinguished Watteau v. Fenwick. On the other hand, the American Law Institute's Agency Restatement (Articles 161, 194 and 195) makes the principal liable for acts exceeding the agent's actual and apparent authority, if there is a usual authority. A notable American supporter of the concept of liability based on usual authority independently of actual and apparent authority is Prof. W. A. Seavey, See particularly his article, “Agency Powers” (1948), Oklahoma L.Rev. 3 and his notes to Article 161 of the Agency Restatement (2nd ed. 1958).

³² Gower, op. cit., pp. 146–152, and Rice, op. cit., pp. 336–339, seem to infer that managing directors have such an authority. Gower cites Sargant L.J., who said in Houghtond & Co. v. Nothard, Lowe & Wills [1927] 1 K.B. 246, 267: “the act done was one within the ordinary ambit of the powers of a managing director in the transaction of the company's affairs”; but it should be noted that Sargant L.J. spoke of “the company's affairs,” not of “a company's affairs.” A similar comment may be made on Rice's citation of Atkin L.J. in Kreditbank Cassel v. Schenkers [1927] 1 K.B. 826, 844: “If you are dealing with a director in a matter in which normally a director would have power to act for the company you are not obliged to inquire whether or not the formalities required by the articles have been complied with before he exercises that power.”

³³ [1925] 1 Ch. 407, 426.

³⁴ As in Harold Holdsworth & Co. (Wakefield) Ltd. v. Caddies [1955] 1 W.L.R. 352, where a managing director of a holding company was directed to confine his attentions to a subsidiary company.

³⁵ Stoljar in his Law of Agency (1961), which was published too late to be considered in the text, approves Watteau v. Fenwick, but his arguments seem no more persuasive than those of Powell. Petty v. Anderson (1825) 3 Bing. 170, Davison v. Donaldson (1882) 9 Q.B.D. 623 and Robinson v. Read (1829) 9 B. & C. 449 (all cited by Stoljar) are cases of actual authority.