LUMBER Co. v. RAILROAD.

and of unusual size, much larger than would be thrown by an engine with a proper spark-arrester. Within fifteen or twenty minutes after this locomotive passed, fire was first seen, and it was burning among the shavings. It is not shown that either the plaintiff or the defendant had actual knowledge that the shavings were under the shed, but “any one passing along the road could have seen them."

The liability of railroads for setting out fire is summed up under three heads in Williams v. Railroad, 140 N. C., 624; but, indeed, it may be stated under two, to-wit:

1. When the fire is set out by sparks from a defective engine, or one not having a proper spark-arrester, or because operated in a careless manner, the company is liable for the negligence, whether the fire originates on or off the right-ofway.

2. Where the engine is properly operated, is not defective, and has a proper spark-arrester, but fire originates on the right-of-way because it is in a foul or neglected condition, the company is liable.

In the present case the Judge charged that if the state of facts, stated under the first head, occurred, to-wit, that the sparks were emitted by a defective spark-arrester, the jury should find the first issue "Yes." The jury so found. We do not see that the defendant has any cause to complain that the second head, the alleged negligence from allowing the accumulation of shavings on the right-of-way, was not also presented. The plaintiff alone could complain of that. If the fire was set by reason of a defective spark-arrester, it was immaterial whether or not the defendant allowed an accumulation of inflammable material on the right-of-way. Under the charge of the Court on the second issue, the jury found that the plaintiff was not responsible for the accumulation of shavings, or, if it was, that the proximate cause was the defective spark-arrester.

BANK v. HAY.

The Court properly charged that if the fire was set out by the locomotive, the burden was on the defendant to show that it was equipped with a proper spark-arrester—a matter peculiarly within its knowledge. 13 A. and E. (2 Ed.), 498, which cites the English, Federal and State cases. No Error.

BANK v. HAY.

(Filed December 11, 1906).

Principal and Agent-Contracts by Agent-Liability of Principal-Estoppel-Negotiable Instruments—Authority to Draw-Acceptance-Correspondence.

1. When one deals with an agent, it behooves him to ascertain correctly the scope and extent of his authority to contract for and in behalf of his alleged principal.

2. The principal is liable upon a contract duly made by his agent with a third person: (1) When the agent acts within the scope of his actual authority; (2) when the contract, although unauthorized, has been ratified; (3) when the agent acts within the scope of his apparent authority, unless the third person has notice that the agent is exceeding his authority.

3. The principal may also, in certain cases, be estopped to deny that a person is his agent and clothed with competent authority or that his agent has acted within the scope of the authority which the nature of the particular transaction makes it necessary for him to have.

4. The authority to draw, accept or endorse bills, notes and checks will not readily be implied as an incident to the express authority of an agent. It must ordinarily be conferred expressly, but it may be implied if the execution of the paper is a necessary incident to the business, that is, if the purpose of the agency cannot otherwise be accomplished.

5. A letter written within a reasonable time before or after the date of a bill of exchange, describing it in terms not to be mistaken, and promising to accept it, is, if shown to the person who afterwards

BANK . HAY.

takes the bill on the credit of the letter, a virtual acceptance, binding the person who makes the promise.

6. Where the letters, upon which the plaintiff bank relied as authority to an agent to make the draft which it cashed, show that the alleged authority to draw was nothing more than private instructions by the principal to his agent as to how he should conduct this part of the business, and were not to be used as a basis of credit to the agent, the Court properly nonsuited the plaintiff.

ACTION by Bank of Morganton against T. T. Hay, heard by Judge O. H. Allen and a jury, at the June Term, 1906, of the Superior Court of BURKE.

The plaintiff brought this action to recover sixty dollars, the amount of a draft which was drawn on 16 March, 1905, by H. L. Hinson on the defendant, payable to its order five days after sight. The defendant refused to accept and pay the draft upon the ground that Hinson had no authority to draw it. The plaintiff alleged that he did have authority to draw the draft as agent of T. T. Hay & Bro., of Raleigh, N. C., of which firm the defendant is a member. To show that such authority existed, the plaintiff introduced in evidence three letters written by T. T. Hay & Bro. to Hinson, as follows:

RALEIGH, N. C., January 24, 1905.

H. L. HINSON, Morganton, N. C.

DEAR SIR: I am just in receipt of your letter, and will say that we are not at all discouraged, for we know you are coming to the point with some good applications soon. I had entirely overlooked your check, and now beg to enclose same to you. I think it will be well for you to draw on us at stated times or write a few days in advance and remind us of it in order that you may not be embarrassed. I will send you supplies asked for in your letter by to-morrow's Yours very truly, (Signed)

mail.

T. T. HAY & BRO.

BANK v. HAY.

RALEIGH, N. C., February 1, 1905.

MR. H. L. HINSON, Morganton, N. C.

DEAR SIR-It appears to us that you have been in Morganton long enough to find out whether or not you can do any work there or not, and we therefore write to know what are, really, your prospects. It is no use, in my opinion, for an agent to stay in a town indefinitely unless there is something in sight, for you have been there about three weeks and we have not had the pleasure of seeing a single application. Write me fully by return mail on this point, and let me know what we may expect from Morganton, and if the chances appear to be against you we want you to try some other place, for we must count on results and not what prospects may be in sight. Yours very truly,

T. T. HAY & BRO.,
General Agents.

RALEIGH, N. C., March 7, 1905.

MR. H. L. HINSON, Morganton, N. C.

DEAR SIR:-Your draft for $20 was received this morning and will be paid, but I would like very much for you to write what the prospects are in Morganton, for unless you do something pretty soon the advance account will be so large that you will be unable to make it up in the way of commissions. We do not mind spending money for the business if we get anything in return, but it does not appear to me a good proposition for you to spend several months in one place with no prospect of sufficient business to cover the outlay; therefore, I am writing you again this morning to let me hear from you in regard to this matter, and to move to another point unless you have some good business absolutely in sight.

BANK v. HAY.

The three letters were the only ones selected by the plaintiff from all the letters in the correspondence between Hay & Bro. and Hinson which were produced by the defendant upon notice from the plaintiff, and were the only letters seen by the plaintiff or its cashier prior to the drawing of the draft.

W. E. Walker, a witness for the plaintiff, testified: “I am cashier of the Bank of Morganton, and was on 16 March, 1905. I knew H. L. Hinson, who was an insurance agent representing the Phoenix Life Insurance Company. He was here about three months. On 16 March, 1905, I cashed a draft for him, which was drawn on T. T. Hay & Bro., of Raleigh, of which firm the defendant was a member. The draft was for sixty dollars. [The witness produced the draft in suit.] I cashed this draft on the faith of a letter written by T. T. Hay & Bro. to H. L. Hinson, which Mr. Hinson showed me. This letter was dated 24 January, 1905. On the faith of the statements contained in this letter I cashed this draft, and T. T. Hay & Bro. refused to pay same. Hinson while in Morganton showed me two other letters from T. T. Hay & Bro. [Letters of 1 February, 1905, and 7 March, 1905.] I saw these three letters from Messrs. T. T. Hay & Bro. to Mr. Hinson before I cashed his draft."

Here plaintiff proposed to show that at the time-said draft was drawn by Hinson and cashed by the bank, that Hinson stated to witness that he needed the sixty dollars for his expenses as agent for the defendant.

Plaintiff also proposed to prove by the witness that prior to this time he had cashed several drafts drawn by said Hinson on T. T. Hay & Bro., and that said drafts had always been paid.

Plaintiff also proposed to prove that the said Hinson stated to witness at the time the sixty-dollar draft was cashed that he needed the money to pay his expenses to Asheville and while at that point as agent. Plaintiff also proposed to prove