The fish-selling agent suddenly falls ill on the way; how will he make a choice at this critical moment?
[2] Compiled from: Shandong High Court
Case review
Xiao Zhang, a professional fish farmer, caught 1,000 jin of fish from his pond and was preparing to sell them at the market. Just as he was about to set off, he received a phone call from a friend’s home, saying that there was an urgent matter and he needed help. Therefore, Xiao Zhang entrusted Wang with selling the fish on his behalf at the city market, and orally agreed with Wang that after the fish were sold, Xiao Zhang would pay Wang a 5% commission. On the way to the city, Wang suffered unbearable abdominal pain. After stopping the car, he went to a roadside hospital and was diagnosed with acute appendicitis, requiring immediate surgery. Because Xiao Zhang’s mobile phone was turned off, Wang could not get in touch with Xiao Zhang. Worried that the fish would spoil in the hot weather, Wang entrusted A to sell them on his behalf at market prices.
A brought the fish to the market, but the fish were no longer fresh. If sold at the original price, they might not sell, and transporting them back would result in even greater losses. Therefore, A reduced the price by one-fourth and sold 1,000 jin of fish. After returning, A handed the payment for the fish to Wang, who deducted 5% as a commission. Wang then gave the payment to Xiao Zhang. Xiao Zhang discovered that the price reduction had caused a loss of nearly 1,000 yuan, and therefore refused to pay the 200 yuan commission.
Civil Code of the People's Republic of China
[4] Article 169
[5] If an agent needs to sub-entrust a third party to act as agent, the agent shall obtain the consent or ratification of the principal.
If a sub-agency is consented to or ratified by the principal, the principal may directly instruct the third party in the sub-agency regarding the agency matters, and the agent shall only be liable for the selection of and instructions to the third party.
If a sub-agency is not consented to or ratified by the principal, the agent shall be liable for the acts of the third party in the sub-agency; except where the agent needs to delegate to a third party in an emergency to protect the principal's interests.
[1] The author's perspective
First, in this case, Xiao Zhang entrusted Wang with selling fish on his behalf. Xiao Zhang is the principal, and Wang is the agent. Because Wang suffered a sudden illness and entrusted A to sell the fish, A became a sub-agent. The author reminds that there are several points to note regarding sub-agency by delegation:
First, the original agency relationship must be lawful and valid. That is, Xiao Zhang's entrustment to Wang must be lawful and valid, which is a necessary prerequisite for the subsequent sub-agency.
Second, generally, sub-agency requires the principal's prior consent or subsequent ratification, but exceptions may exist in emergencies. If the principal does not give prior consent or subsequent ratification to the sub-agent's actions, the sub-agent's agency actions may constitute unauthorized agency, rendering them in a state of pending validity. Only after the principal consents or ratifies does the sub-agency become effective.
Third, the sub-agent's authority remains within the scope of the original agency authority. The sub-agent exercises agency authority within the original scope and is also bound by the scope of the agent's instructions. Sub-agency actions beyond these two scopes constitute unauthorized agency.
Fourth, when a sub-agent performs legal acts in the name of the principal with a third party, the legal consequences are borne by the principal. That is, to protect the principal's interests, the agent selects a sub-agent in their own name to carry out all or part of the acts within the scope of authority, and the legal effects of such agency directly belong to the principal.
In this case, when Wang suddenly fell ill, there were two possible courses of action. First, as in this case, he could promptly entrust A to sell the fish, in which case A would become a sub-agent. Second, Wang could immediately seek treatment and leave Xiao Zhang’s fish unattended, which would result in the fish spoiling and rotting, undoubtedly causing the greatest loss to Xiao Zhang. Obviously, the first approach is more reasonable than the second. However, the most important issue is that the principal, Xiao Zhang, neither consented in advance to A becoming a sub-agent nor ratified it afterward. In that case, who should bear the legal consequences caused by A?
The author believes that Wang's act of temporary subagency is valid, and the legal effects of the juridical act performed by subagent A should be borne by the principal, Xiao Zhang. There are two reasons for this. First, under urgent circumstances, Wang acted to protect Xiao Zhang's interests and prevent Xiao Zhang from suffering a total loss. From the perspective of good faith, Wang's conduct was reasonable and lawful and should be upheld. Second, although subagent A's sale of the fish at a low price caused certain losses to Xiao Zhang, it did not exceed the scope of authority granted by Xiao Zhang to Wang, and adjusting to market conditions is consistent with a market economy. In summary, the 200 yuan remuneration promised by Xiao Zhang to Wang should also be paid.
