12. Agency

Agency is undoubtedly one of the most significant areas of progress in the field of Roman business law.⁹⁴ As a matter of principle Roman law was averse to the idea that one person’s action could engage another’s liability, although there was no problem in benefiting from it.

Slaves’ wrongdoing did, however, give rise to noxal liability on the part of their master.⁹⁵This somewhat contradictory position precluded the concept of agency, so important in economic life — even more so given the negative attitude of the Roman elite towards trade and commerce.⁹⁶ The patriarchal nature of Roman society offered a way to overcome this obstacle: persons in power (in potestate, alieni iuris), such as sons, daughters, other descendants, and especially slaves, had no legal capacity of their own. The praetor, aware of this asymmetrical state of affairs, had only to extend the liability of the principal to contracts made by his agent.⁹⁷ To that effect a set of six remedies was created over the course of time, presumably between the late third and early first centuries BC: the title in the edict ‘On the dealings of the ship’s captain, business manager, and person in power’ contains one of the boldest and most ingenious creations of praetorian law,⁹⁸ the early history of which is unfortunately blurred, but can be reconstructed on the basis of a few classical - and therefore much later - legal texts.

Ulpian records that the praetor attended first to remedies given for the full amount (in solidum) on the basis of contracts concluded with persons in power.⁹⁹ Remedies giving rise to a liability limited to the amount of the peculium or the extent of enrichment (dumtaxat de peculio aut de in rem verso) and those based on the contracts of non-dependent persons should therefore be regarded as later additions or extensions.

Gaius expressly says that the praetor started with the grant of a remedy in relation to authorized transactions carried out by a dependant (the actio quod iussu) and added by analogy two further remedies for transactions concluded by dependent ship’s captains (actio exercitoria) or business managers (actio institoria) .^I00 The liability of the father or master was based on his willingness to allow contracts to be made with his dependant. This willingness was expressed through the appointment (praepositio) of the ship’s captain (magister navis) to a ship or the business manager (institor) to a business. It is possible (although not certain) that originally the actio institoria was available only in the context of the management of a shop (taberna).^IO1 Alternatively, a rural context, such as the Catonian villa, may have provided the original Sitz im Leben of the actio institoria, since nonlegal sources refer to institores under the titles of vilici and actores in this context.¹⁰² The extension to other types of business - such as workshops, credit institutions, and so forth - would only be natural.

Whether ships should be regarded as a later extension is a controversial question. Gaius’ Digest and Justinian’s Code each present the actio exercitoria before the actio institoria.¹⁰³ This suggests that by the time of the composition of the Edictum Perpetuum the order reflected the prominence - not necessarily the priority - of the actio exercitoria over the actio institoria. On the other hand, both Gaius and Ulpian stress the particularity of the conditions in which a ship’s captain works in comparison with a business manager:¹⁰⁴ the distance separating agent and principal from one another in the context of trade by sea makes it more difficult for third parties to check the agent’s legal status and scope of authority. Sub-appointments are more readily acceptable in the case of a ship’s captain than a business manager ‘for practical reasons’.¹⁰⁵ It also seems that, by contrast with business managers, ship’s captains are presented as not being dependants.

I believe this to be the result of a later development: third parties could elect whether to sue the ship’s operator (exercitor) or the ship’s captain. The operator had no remedy against third parties contracting with his captain, supposedly because he did not need one since he could sue the captain on the contract of employment or mandate which defined the relationship between principal and agent. Ulpian notes, however, that in practice the prefects in charge of the corn supply (annona) and provincial governors assisted informally.¹⁰⁶ The peculiarities of agency in the context of trade by sea explain why two distinct but related remedies were necessary and may suggest that the actio exercitoria developed from a more general actio institoria into a ground-breaking legal instrument, both remedies eventually applying to the contracts of independent agents.¹⁰⁷

The main legal issue discussed by the jurists in connection with both remedies is the scope of the appointment (praepositio). In order to give rise to the principal’s full liability, the contract concluded by the agent must pertain to the business of which he or she (women and children could be appointed¹⁰⁸) is in charge. Republican and Augustan jurists such as Servius and Labeo and their successors list various types of activity in connection with which specific transactions may give rise to an actio institoria or exercitoria, thus contributing to the definition of business and enterprise in the Roman world.¹⁰⁹ The scope of the appointment was implicitly conditioned by the nature of the business and could be expressly spelled out in a charter (lex praepositionis) used as ajob description.¹¹⁰ Any extension (iussum) or limitation (proscriptio) had to be publicly posted and advertised. Appointments combining two (or more) types of activities under the responsibility of the same manager are attested.¹¹¹

Ulpian also discusses cases of sub-appointment, joint managers working for a single operator, and joint operators appointing a single manager either within a partnership (societas) or as joint owners.¹¹² The last configuration has been identified as the possible ancestor of company law, so prominent in modern commercial law.11³ The Roman law of indirect agency also applied to collectivities, both private and public, such as companies of publicans, professional and religious associations (collegia), and towns (municipia and coloniae).11⁴

The second part of the praetorian edict on indirect agency deals with those remedies that strictly apply to transactions carried out by dependants.

The edictum triplex¹¹⁵ includes the actio quod iussu (D. 15.4), mentioned above as the likely original remedy for full liability of the principal, and two further remedies, eventually intertwined as the actio de peculio aut de in rem verso (D. 15.1-3), which imposed limited liability on the part of the principal on account of contracts concluded with his dependant. 11⁶Connected with the actio de peculio was a sixth remedy (actio tributoria, D. 14.4), whereby the principal was treated like any ordinary creditor when the agent’s insolvency gave rise to an action on his peculium.11⁷ The order in which the various remedies appear in the Digest and presumably in the edict (§§ 101—5) cannot reflect the chronology of their respective creation. The transfer of the actio quod iussu to the very end of the series (D. 15.4) suggests that the order reflects the relative importance of each remedy in comparison with the others, the actio quod iussu being at best subsidiary in the classical period. It is therefore telling that the actiones exercitoria and institoria applying to contracts concluded by both dependent and independent appointees had taken precedence over all the others by the time of redaction of the Edictum Perpetuum in the second century AD. Accessorily, the reconstructed relative chronology of the creation of the so-called actiones adiecticiae qualitatis (with the addition of the actio tributoria) and their respective order in the edict indicate that the praetor favoured the interests of third parties who contracted with dependent agents rather than those of the principals whose liability was engaged.

Gaius reports that provincial governors (proconsules) ensured that those who contracted with persons in power obtained their due: if the actio exercitoria, institoria, or tributoria did not apply, the governor would grant the actio quod iussu for full liability provided authorization for the transaction existed; or the actio de in rem verso for the enrichment obtained from the transaction; or, in the last resort, the action based on the peculium.118 The order of preference is altogether clear, and reflects the sense of equity (ex bono et aequo) of the political or judicial authority in relation to the third party.

In one case, the owner of a runaway slave who had been appointed to lend money and to accept security (pignus) fought off a suit from barley traders who had been promised payment on behalf of customers. Interestingly, the prefect of the corn supply stepped in on behalf of the traders and decided to hold the master liable in full, pointing out that the slave was notoriously in the habit of being involved in various businesses, such as renting warehouses (horrea). The early third-century jurist Paul, who reports the advice he gave in the emperor’lang=EN-US>s consilium, argued for considering the slave’s payment as a type of guarantee (fideius- sio), presumably as opposed to a receptum argentarii. On appeal, the prefect’s decision was upheld by the emperor.¹¹⁹

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Source: Johnson David (ed). The Cambridge companion to Roman Law. Cambridge University Press,2015. — 554 p.. 2015

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12. Agency

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