and entered into a contract for $ 20,000 less than the price mentioned by the plaintiff. The Court finds as a fact that plaintiff was the procuring cause of the sale involved in this action.
We now come to the question as to the liability for payment of the commission. The Court finds that while the defendant Murray hired the plaintiff as broker, Murray in fact had no authority to do so and had not been empowered by Parkwood to engage the plaintiff or anyone else for this purpose. It is well established that an agent -- and there is no doubt, and the Court so finds that Murray was an agent of Parkwood for some purposes -- may not hire a subagent without authority to do so. Thus it is stated in Restatement of the Law of Agency, 2d Ed. sec. 458:
'The authorized employment of a subservant or other subagent does not thereby subject the principal to contractual liability to the subagent * * *.'
It was held by the Court of Appeals for this Circuit in Rutledge v. United Services Life Ins. Co., 84 U.S.App.D.C. 61, 62, 171 F.2d 27, 28, that,
'A principal is commonly under no obligation to compensate his agent's agents unless his agent has, and also exercises, authority not merely to use their services in discharging his obligations to his principal but also to make them agents of his principal.'
Numerous authorities hold the same way. McKnight v. Peoples-Pittsburgh Trust Co., 360 Pa. 290, 61 A.2d 820; Southack v. Ireland, 109 App.Div. 45, 95 N.Y.S. 621.
An agent who purports to act pursuant to authority said to be conferred on him by his principal, but actually exceeds his power, impliedly warrants that the requisite authority on his part exists, and is liable for damages on the implied warranty. Thus the Restatement of the Law of Agency, 2d Ed., sec. 329; states:
'A person who purports to make a contract * * * on behalf of another who has full capacity but whom he has no power to bind, thereby becomes subject to liability to the other party thereto upon an implied warranty of authority, unless he has manifested that he does not make such warranty or the other party knows that the agent is not so authorized.'
There are numerous decisions holding and applying this principle, dating back to the English case of Collen v. Wright, 8 Ellis & Blackburn 647, 657; 120 English Reports 241, 245. In that case it was stated by Willes, J.:
'I am of opinion that a person, who induces another to contract with him as the agent of a third party by an unqualified assertion of his being authorized to act as such agent, is answerable to the person who so contracts for any damages which he may sustain by reason of the assertion of authority being untrue.'
In an early Maryland case, Keener v. Harrod, 2 Md. 63, 69-70, decided in 1852, it was held that a person employed to sell property had no authority to employ in the name of the owner any person to assist him, or to procure a purchaser, and that if he did so he must meet the consequences. The court stated:
'To bind the principal, the act must be done in the exercise, and within the limits of, the power delegated; and whenever a party undertakes to do an act, as the agent of another, if he does not possess any authority therefor from the principal, or exceeds his powers, he will be personally responsible to the person with whom he is dealing.'
In Williams v. De Soto Oil Company, 213 F. 194, 197, it was said by the Court of Appeals for the Eighth Circuit that:
'An agent is undoubtedly personally liable in case of a fraudulent misrepresentation of authority. He is also personally liable if he has no authority and knows it, but nevertheless makes the contract as having such authority * * *. And the courts have also held that, when a party making a contract bona fide believes that such authority is vested in him, but as a matter of fact has no such authority, he is still personally liable upon the contract.'
In Lustig v. Hutchinson, 349 Ill.App. 120, 110 N.E.2d 278, 280, it was said:
'We think that the law is well settled in this State, as in other jurisdictions, that an agent, representing an owner of property to offer the same for sale, has no implied authority to employ a broker to procure a purchaser; that the burden is upon the agent who employs the broker to establish such authority, and that in the absence of proof of such authority, the agent becomes personally liable for the broker's commission, where the broker has procured a purchaser, ready, able and willing to buy upon the terms submitted by the agent.'
In the light of its findings of fact and the applicable principles of law, the Court concludes that the plaintiff has earned a commission on the sale of this property, but that the defendant Parkwood is not liable therefor, since it did not hire the plaintiff or authorize defendant Murray or anyone else to do so; and that defendant Murray is, however, liable on the implied warranty of authority. Accordingly the Court will render judgment for the plaintiff against the defendant Murray for $ 20,000, and will dismiss the complaint as against Parkwood.
A transcript of this oral decision will constitute the findings of fact and conclusions of law. Counsel will please submit a proposed judgment.
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