rule as to deed of agent. resident abroad, it is held on the ground of mercantile. usage and convenience that without evidence of express authority to that effect the commission agent cannot pledge his foreign constituent's credit, and therefore conTechnical tracts in person (a). When a deed is executed by an agent as such but purports to be the deed of the agent and not of the principal, then the principal cannot sue or be sued upon it at law, by reason of the technical rule that those persons only can sue or be sued upon an indenture who are named or described in it as parties (b). And it is also held in equity that a party who takes a deed under seal from an agent in the agent's own name elects to charge the agent alone (c). A similar rule has been supposed to exist as to negotiable instruments: but modern decisions seem to show that when an agent is in a position to accept bills so as to bind his principal, the principal is liable though the agent signs not in the principal's name but in his own, or, it would appear, in any other name. It is the same as if the principal had signed a wrong name with his own hand (d). Evidence of contrary Again, an agent who would otherwise be liable on the contract made by him may exempt himself from liability by contracting in such a form as makes it appear on the face of the contract that he is contracting as agent only and not for himself as principal (e): but even then he (a) Armstrong v. Stokes, L. R. 7 Q. B. 598, 605. Acc. Elbinger ActienGesellschaft v. Claye, L. R. 8 Q. B. 313, showing that the foreign principal cannot sue on the contract: Hutton v. Bulloch, ib. 331, affirmed in Ex. Ch. 9 Q. B. 572, that he cannot be sued. (b) Lord Southampton v. Brown, 6 B. & C. 718; Beckham v. Drake, 9 M. & W. at p. 95. (c) Pickering's claim, 6 Ch. 525. (d) Lindus v. Bradwell, 5 C. B. 583, 17 L. J. C. P. 123. Cp. Edmunds v. Bushell, L. R. 1 Q. B. 97. (e) Words in the body of a document which amount to a personal contract by the agent are not deprived of their effect by a qualified signature: Lennard v. Robinson, 5 E. & B. 125, 24 L. J. Q. B. 275; and the description of him as agent in the body of the document may under special circumstances not be enough to make him safe, Paice v. Walker, L. R. 5 Ex. 173; see the remarks on that case in Gadd v. Houghton (C. A.) 1 Ex. D. 357, which decides that a contract "on account of" a named principal conclusively discharges the agent. Paice v. Walker is nearly but not quite overruled see Hough v. Manzanos, 4 Ex. D. 104. may be treated as a contracting party and personally bound as well as his principal by the custom of the particular trade in which he is dealing (a). Or he may limit his liability by special stipulations, e.g. when a charter-party is executed by an agent for an unnamed freighter, and the agent's signature is unqualified, but the charter-party contains a clause providing that the agent's responsibility shall cease as soon as the cargo is shipped (b). It is also a rule that an agent for a government is not personally a party to a contract made by him on behalf of such government by reason merely of having made the contract in his own name (c). In some cases the agent, though prima facie not a party to the contract as agent, can yet sue or be sued as principal on a contract which he has made as agent. These will be mentioned under another head of this subject (d). Where an undertaking is given in general terms, no promisee being named, to a person who obviously cannot be a principal in the matter, it may be inferred as a fact from the circumstances that some other person interested is the real unnamed principal, and that person may recover on the contract (e). not known B. When a party contracts with an agent whom he does B. Agent not know to be an agent, the undisclosed principal is to be an generally bound by the contract and entitled to enforce it, agent. as well as the agent with whom the contract is made in there is a the first instance (f). (a) Humfrey v. Dale, 7 E. & B. 266, E. B. & E. 1004, 26 L. J. Q. B. 137; Fleet v. Murton, L. R. 7 Q. B. 126, 129; Hutchinson v. Tatham, L. R. 8 C. P. 482. On the general question of the construction of contracts made by brokers for their principals see Southwell v. Bowditch (C. A.), 1 C. P. D. 374. (b) Oglesby v. Yglesias, E. B. & E. 930, 27 L. J. Q. B. 356 ; Carr v. Jackson, 7 Ex. 382. (c) Macbeath v. Haldimand, 1 T. (d) Infra, pp. 118, 120. (e) Weidner v. Hoggett, 1 C. P. D. 533. (f) The rule is not excluded by the contract being in writing (not under seal) and signed by the agent in his own name: Beckham V. Drake, 9 M. & W. at p. 91. Generally contract with the undis closed Excep tions. But the limitations of this rule are important. In the first place, it does not apply where an agent for an principal. undisclosed principal contracts in such terms as import that he is the real and only principal. There the principal cannot afterwards sue on the contract (a). Much less, of course, could he do so if the nature of the contract itself (for instance, partnership) were inconsistent with a principal unknown at the time taking the place of the apparent contracting party. Likewise, "if the principal represents the agent as principal he is bound by that representation. So if he stands by and allows a third person innocently to treat with the agent as principal he cannot afterwards turn round and sue him in his own name " (b). Limitations of the rule when it applies. As to rights of principal. Again, in the cases to which the rule does apply, the rights of both the undisclosed principal and the other contracting party are qualified as follows: The principal "must take the contract subject to all equities in the same way as if the agent were the sole principal" (c). Accordingly if the principal sues on the contract the other party may avail himself of any defence which would have been good against the agent (d): thus a purchaser of goods through a factor may set off a claim against the factor in an action by the factor's principal for the price of the goods (e). "Where a contract is made by an agent for an undisclosed principal, the principal may enforce performance of it, subject to this qualification, that the person who deals with the agent shall be put in (a) Humble v. Hunter, 12 Q. B. 310, 17 L. J. Q. B. 350. (b) Ferrand v. Bischoffsheim, 4 C. B. N. S. 710, 716, 27 L. J. C. P. 302. (c) Story on Agency, § 420; per Parke, B. Beckham v. Drake, 9 M. & W. at p. 98. (d) If the agent sues in his own name the other party cannot set off a debt due from the principal whom he has in the meantime discovered, there being no mutual debt within the statute of set-off: Isberg v. Bow den, 8 Ex. 852. Under the Judicature Acts, however, he can make the principal a party to the action by counter-claim and have the whole matter disposed of. (e) Rabone v. Williams, 7 T. R. 360, n.; Sims v. Bond, 5 B. & Ad. 393. Per Cur., Isberg v. Bowden, 8 Ex. at p. 859. It does not matter whether the factor is or is not actually authorized by his principal to sell in his own name without disclosing the agency: Ex parte Dixon, 4 Ch. D. 133. the same position as if he had been dealing with the real principal, and consequently he is to have the same right of set-off which he would have had against the agent" (a). And his claim to be allowed such set-off is not effectually met by the reply that when he dealt with the agent he had the means of knowing that he was only an agent. The existence of means of knowledge is not material except as evidence of actual knowledge (b). rights of It has been said that conversely the right of the other As to contracting party to hold the principal liable is subject to the other the qualification that the state of the account between party. the principal and the agent must not be altered to the prejudice of the principal. But this doctrine has been disapproved by the Court of Appeal as going too far. The principal is discharged as against the other party by payment to his own agent only if that party has by his conduct led the principal to believe that he has settled with the agent, or, perhaps, if the principal has in good faith paid the agent at a time when the other party still gave credit to the agent alone, and would naturally, from some peculiar character of the business or otherwise, be supposed by the principal to do so (c). Again, the other party may choose to give credit to the agent exclusively after discovering the principal, and in that case he cannot afterwards hold the principal liable; and statements or conduct of the party which lead the principal to believe that the agent only will be held liable, and on the faith of which the principal acts, will have the same result (d). And though the party may elect to sue (a) Per Willes, J. Dresser v. Norwood, 14 C. B. N. S. 574, 589, 32 L. J. C. P. 201, 205. The reversal of this case in the Ex. Ch. 17 C. B. N. S. 466, 34 L. J. C. P. 48, does not affect this statement of the general law. (b) Borries v. Imperial Ottoman Bank, L. R. 9 C. P. 38. (c) Irvine v. Watson (C. A.), 5 Q. B. D. 414, which seems to reduce the authority of Armstrong v. Stokes, L. R. 7 Q. B. 598, to that of a decision on peculiar facts. (d) Story on Agency, $$ 279, 288, 291; Horsfall v. Fauntleroy, 10 B. & C. 755; but the principal is not discharged unless he has I 2. Professed agent not having authority A. Principal named. the principal, yet he must make such election within a reasonable time after discovering him (a). When it is said that he has a right of election, this means that he may sue either the principal or the agent, or may commence proceedings against both, but may only sue one of them to judgment; and a judgment obtained against one, though unsatisfied, is a bar to an action against the other. It was decided in Priestly v. Fernie (b) that such is the rule as to principal and agent in general, and that there is no exception in the case of a shipowner and freighter, which was the case before the Court. The mere commencement of proceedings against the agent or his estate after the principal is discovered, although it may possibly be evidence of an election to charge the agent only, does not amount to an election in point of law (c). 2. We have now to point out the results which follow when a man professes to make a contract as agent, but is in truth not an agent, that is, has no responsible principal. We may put out of consideration all cases in which the professed agent is on the face of the contract personally bound as well as his pretended principal: for his own contract cannot be the less valid because the contract he professed at the same time to make for another has no effect. But when the contract is not by its form or otherwise such as would of itself make the professed agent a party to it, there are several distinctions to be observed. A. First, let us take the cases where a principal is named. The other party prima facie enters into the contract on the faith of that principal's credit. But credit actually dealt with the agent on the (a) Smethurst v. Mitchell, 1 E. & E. 622, 28 L. J. Q. B. 241. (b) 3 H. & C. 977, 983, 34 L. J. Ex. 173; cp. L. R. 6 C. P. 499. (c) Curtis v. Williamson, L. R. 10 Q. B. 57. |