A principal is bound by acts of his agent under ostensible authority, to those persons only who have in good faith, and without negligence, incurred a liability or parted with value upon the faith thereof.

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Source: CivC 1877, § 1370; CL 1887, § 3993; RCivC 1903, § 1689; RC 1919, § 1271; SDC 1939, § 3.0303.

See Cal Civ Code, § 2334.