indicated; that to permit other terms to be imposed on the shareholders behind the terms of incorporation, would lead to injury to the shareholders, and often to a fraud, or at least a surprise on the legislature; and that, to render special terms as to particular cases or persons binding on the company, they ought to be the subject of special clauses in the act, whereby the whole truth could be disclosed, and neither the legislature nor any person taking shares could complain. Again, in the case of Preston v. The Liverpool, Manchester and Newcastle-upon-Tyne Junction Railway Co.,(2) Lords Cranworth and Brougham expressed similar views of the doctrine, although the ground on which they dismissed the plaintiff's appeal was that the contract was in itself conditional on the construction of the railway. And Kindersley, V. C., in a case already referred to (r) expressed himself adversely to Lord Cottenham's view.

§ 235. In this state of the authorities, it is difficult to speak with certainty as to how far the doctrine in question is to be considered as law; on the one hand, it has been repeatedly acted on by Lord Cottenham, and appears to have been adopted by Lords Campbell and St. Leonards; on the other hand, the principles upon which it rests have been criticised by Lord Hatherley (when V. C.), and have been distinctly disapproved of by Lords Brougham and Cranworth and Kindersley, V. C., upon reasonings, to say the least, of the greatest weight and cogency. In the judgment of Kindersley, V. C., in the case last referred to (r) will be found a very careful statement of the reasoning for and against this doctrine of Lord Cottenham. It is difficult to refuse assent to the learned judge's conclusion that "it would be most consonant with legal principle, most just, and most for the public benefit, to hold that contracts of the promoters with landowners are not binding on the company, unless sanctioned by the act constituting the company."(s)

(q) 5 H. L., 605, affirming the decision of Lord Romilly, M. R., 17 Beav., 115. See the same case before Lord Cranworth as V. C., 1 Sim. (N. S.), 586, as to which see the case before the House of Lords.

(r) Earl of Shrewsbury v. North Staffordshire Railway Co., L. R. 1 Eq., 593. (8) L. R. 1 Eq., 615-6.

CHAPTER VI.

OF AGENCY.

§ 236. The cases which arise where the contract is made by an agent require consideration, as sometimes affording an apparent exception to the rule that parties to the contract only can be parties to the action.

§ 237. Where agents contract ostensibly as such, and in the names of their principals, little difficulty can occur. The principals here are the proper parties to sue and be sued, and it is, in the absence of special circumstances, improper to make such an agent a party to the action. (a) In one case, where an agent having no interest whatever was made a co-plaintiff, the bill was held to be demurrable. (b)

§ 238. Where, on the other hand, agents appear on the face of the contract as principals, the case is different. The principle by which these cases are regulated, is laid down with great clearness by Lord Wensleydale in Higgins v. Senior. (c) "There is no doubt," said his lordship, "that where such an agreement is made, it is competent to show that one or both of the contracting parties were agents for other persons, and acted as such agents in making the contract, so as to give the benefit of the contract on the one hand to, (d) and charge with liability on the other, (e) the unnamed principals-and this, whether the agreement be or be not required to be in writing by the Statute of Frauds; and this evidence in no way contradicts the written agreement. It does not deny that it is binding on those whom, on the face of it, it purports to bind; but shows that it also binds another, by reason that the act of the agent, in signing the agreement in pursuance of his authority, is, in law,

(a) Johnson v. Ogilby, 3 P.Wms., 277; Smith v. Clarke, 12 Ves., 477, 484; Lisset v. Reave, 2 Atk., 394; Ex parte Hartop, 12 Ves., 349, 352; Clark v. Lord Rivers, L. R. 5 Eq., 91. As to the second ground of demurrer in the last mentioned case, see now Ord. XVI, r. 3. (b) King of Spain v. De Machado, 4 Russ., 225, 241; cf. Glasbrook v. Richardson, 23 W.

R., 51 (agent sole plaintiff); and see, as to misjoinder, 15 and 16 Vic., ch. 86, § 49, and Ord. XVI, r. 13.

(c) 8 M. & W., 844. Cf. per Knight Bruce, V. C., in Nelthorpe v. Holgate, 1 Coll., 220.

(d) See Garrett v. Handley, 4 B. & C., 664; Bateman v. Phillips, 15 East, 272.

(e) See Paterson v. Gandasequi, 15 East, 62.

the act of the principal. But, on the other hand, to allow evidence to be given that the party who appears on the face of the instrument to be personally a contracting party, is not such, would be to allow parol evidence to contradict the written agreement, which cannot be done." The Statute of Frauds, as we shall subsequently see, (ƒ) does not require that the authority of the agent should be in writing where the contract is required to be so.'

(f) Part III, ch. 11, § 508.

1 In reference to the case of Higgins v. Senior, and the rule which it goes to establish, it was said by Mason, J., in Fenly v. Stewart, 5 Sandf. Sup. Ct., 105, after quoting the decision of Mr. Baron Parke, as given in the text, "Now it requires very nice powers of discrimination, we think, to perceive how the introduction of a new party into the contract is not a contradiction of the written instrument, as well as the striking out of a party already in. According to this mode of interpreting the statute, Otis & Co. are liable on the contract before us, because they subscribed it as parties and as principals; they cannot, therefore, be discharged by parol. To discharge them would be to contradict the written instrument and violate the statute; but it is no contradiction of the written instrument, and no violation of the statute, to admit parol proof to show that the defendants, although not named in the contract, are, nevertheless, parties to it, and are to be charged with its performance. They are to be charged as principals, not on their own signature, but on parol proof of the relation in which they stood to Otis & Co., who themselves subscribed the contract as principals. "It is to be observed that the remarks of Baron Parke, which we have quoted, were not necessary to the decision of the question then before the court. The question was not whether the unknown principals should be charged, but whether the defendents, who signed the contract in their own names, could be discharged by parol proof that they were agents merely. His remarks, therefore, although entitled to the highest respect, as coming from a profound and learned jurist, yet have not the weight of an authority, and would not be regarded as such in his own court. The doctrine which he has thus advanced, however, is adopted by Mr. Justice Story, in his work on agency. He says that written contract, made by a factor in his own name, for the purchase or sale of goods for his principal, will bind the principal, and he may be sued thereon exactly as if he were named in it, for it is treated as the contract of the principal as well as the agent.' (Story on Agency, § 161.) We were not on the argument referred to, and on investigations have not discovered any case, decided in England, supporting the position thus laid down by Baron Park and Judge Story. The cases which come nearest to it are Wilson v. Hart (7 Taunt., 295), decided in 1817, and Truman v. Loder (11 Ad. & Ellis, 589), decided in 1840; but upon examination it will be found that they do not bear out the doctrine. In Wilson v. Hart, although the defendant was made liable for goods where the bought note was signed by one Reed, in his own name, as principal, yet it was distinctly put to the jury to say whether it was a sale to Reed or to the defendant, who had obtained possession of the goods; and whether the mode of the purchase was not a fraudulent device between Reed and the defendant, to enable the latter, by means of it, to get possession of the plaintiff's goods, in order to apply them to the payment of a debt which was due from Reed to the defendant. Baron Parke, in Higgins v. Senior, admits that the case turned altogether on the fraud, and says that if it had not, it would have been an authority for the admission of parol evidence to charge the defendant, and not to discharge Reed. In Truman v. Loder, the defendant was made liable on an executory contract, in which one Higginbotham appeared as principal, and the defendant's name was not mentioned; but the decision was placed expressly on the ground that the defendant, who resided abroad, traded in England under the name of Higginbotham; and that

§ 239. The proposition at which we have thus arrived, that a person appearing as principal may yet have contracted as agent for another, who may, when disclosed, sue or be sued as principal, is to be qualified by all those con

all business done by Higginbotham was his, the defendant's business, and done with his capital and credit. Besides these two cases we have found no express decisions in England apparently sustaining the doctrine of Baron Parke, in Higgins v. Senior, that upon a contract which the statute requires to be in writing, signed by the parties to be charged, a third party, whose name does not appear in the writing, may be charged by parol evidence, that the party signing in his own name acted as an agent for such third party. There are numerous cases in the English books, where a party has been charged on a contract signed by a broker or other person in his own name, without adding to his signature the word agent, or expressing in the mode of signing that he was acting for such party; but in all such cases the name of the party charged is in the body of the memorandum, and it appears from its whole tenor that the party signing acts simply as a broker or agent.' The learned judge then continues to say that he considered the question had been settled in the cases of Stackpole v. Arnold (11 Mass., 27), Pentry v. Stanton (10 Wend., 271) and Newcomb v. Clarke (1 Denio, 226). And after a brief review of these cases he states the rule to be, that "where a contract is reduced to writing, whether in compliance with the requisitions of the statute of frauds or not, and it is necessary to sue upon the writing itself, there you cannot go out of the writing, or contradict or alter it by parol proof, and consequently cannot recover against a party not named in the writing; but where the contract of sale has been executed, so that an action may be maintained for the price of the goods, irrespective of the writing, there the party who has had the benefit of the sale may be held liable, unless the vendor, knowing who the principal is, has elected to consider the agent his debtor." See, also, United States v. Parmelee, 1 Paines's C. C., 252; Minard v. Mead, 7 Wend., 68, is an authority in support of this rule It was there held that authority by a husband to his wife to give notes, will not subject the husband to the payment of a note given by the wife, in her own name, without reference in the body of the note, or in the signature, to the name of the husband. A note to be binding in such a case must purport on its face to have been given by the wife, as the agent, or on behalf of the husband. The case of Spencer v. Field, 10 Wend., 88, carried the principle much farther than Minard v. Mean, and probably to a greater length than would be warranted by the more recent cases. It was there held that a contract, to be obligatory upon a principal, when made by an agent, must be made in the name of the principal. If the agent contract in his own name, describing himself as agent or attorney, for his principal, the contract is the contract of the attorney, and not of the principal. Thus A. being principal, and B. his agent, if B. sign a contract, B. for A.," this is the contract of the agent B. In Newcomb v. Clarke, 1 Denio, 226, it was held that an action upon an express contract must, except in cases of negotiable paper, be brought in the name of the party to whom it was made; and it is not competent to show by parol that the promisee was the agent of another person, for the purpose of enabling such person to sue in his name on the agreement. And the decision, as we have seen, was upheld in Fenly v. Stewart, 5 Sandf., 101. Williams v. Crislee, 4 Duer, 29, is an additional and decisive authority on this point. Bosworth, J., in delivering the opinion of the court, said, "We consider the doctrine well settled, that every written contract made by an agent, in order to be binding upon his principal, must purport on its face to be made by the principal, and must be executed in his name, and not in the name of the agent.' "It cannot be shown by parol that the alleged agent, in signing his own name to the contract, in fact signed his name as agent, and thus subvert a contract, which, on its face, is his own, into a contract of his alleged principal, and make it enforceable as such. This would be altering the plain meaning and clear legal import of written contracts, by unwritten evidence, which is inadmissible.' See Evans v. Wells, 22 Wend., 337; Stephens v. Cooper, 1 John. Ch,, 429. In Massachusetts the rule has not been uniform. The case of Huntingdon v.

siderations as to the reliance of one party on the personal qualities of the other, which have been referred to in considering how far the benefit of a contract is assignable in equity.(g) Thus, it appears clear that, if A. contract with

(g) See supra, § 203 et seq.

Knox, 7 Cush., 371, rather inclines to the admission of parol evidence to charge the undisclosed principal, although the case seems to have been decided in favor of the plaintiff, upon the ground that the action was not brought upon the written contract itself, but for the price of the goods. A contract was made by one George B. Huntingdon for the sale and delivery of bark. Held, that the bark being the property of Mehitable Hunt, parol evidence was admissible to show that the contract was made for her benefit, and that she was entitled to recover upon it, although the first payment had been made to George B. Huntingdon. See Long v. Colburn, 11 Mass., 97; Emerson v. Providence Man. Co., 12 id., 237; Ballou v. Talbot, 16 id., 461, and Man v. Chandler, 9 id., 335; Contra, Tucker v. Bass, 5 id, 164. In Stackpole v. Arnold, 11 Mass., 27, Chief-Justice Parker, in cases of this nature, accepts only the actual signers of the contract as parties to the suit. But in a later decision-the New England Mar. Ins. Co. v. De Wolfe, 8 Pick., 56-he restricts the rule to instruments under seal. In the case of the Bank of British North America, 5 Gray (Mass.), 567, it was held that a bill of exchange drawn by an agent in his own name, does not bind his principal, though made for his benefit, and containing a direction to the drawee to charge the amount thereof to his account. The law of Kentucky is illustrated in the case of Violett v. Powell, 10 B. Monr., 347. It was there held, that in parol contracts, the principal is bound by any of them made by the agent within the scope of his authority, given, or subsequently recognized, although the contracts are made in the name of the agent, appearing, at the time, to act for himself, so that, in fact, the principal could not have been made responsible. It was further decided, that if an agent take a bond to himself instead of his principal, the parol contract is so far merged in the written agreement that the principal cannot maintain an action on the contract in his own name, but it must be in the name of his agent in the written agreement. But the contract made by the agent is the contract of the principal, in case he is defendant. And if the agency is disclosed at the time of the contract, although it be by deed in writing, if the agent contracts as such, the principal may be sued in an action at law. And if the principal is not known at the time of the contract, and is subsequently discovered, the other party may sue either principal or agent, at his opinion. In Georgia, an instrument executed by an agent will be held binding upon the principal, only where it is evident that the credit was not given to the agent, and the name of the principal was disclosed at the time of the transaction. Merchants' Bank v. Central Bank, 1 Kelly, 418. In Michigan it is said, that where it distinctly appears in the body of a parol agreement, signed by an agent in his own name, without the addition of the name of the principal, that the principal is the contracting party, the agreement will be construed to be that of the principal, and not of an agent. City of Detroit v. Jackson, 1 Doug., 106. In Alabama the same rule is followed as in the State of New York. Clealand v. Walker, 1 Ala., 1058; McTyer v. Steele, 26 id., 487. And see Dawson v. Cotton, 26 Ala., 591, a case of a promissory note under seal. In Mississippi, it was decided in Edwards v. Simmons, 27 Miss. (5 Cush.), 302, that where A. borrowed money of B. and gave his note for it, and C. signed his name as security, trusting alone to A., who did not disclose that he acted as agent for D. or any body, and B. sued D., alleging that A. acted as his agent, D. could not be made liable to B. unless proved to be the party trusted. In California, it was held in Ruiz v. Norton, 4 Cal., 355, that the principal may sue on a written contract, made and signed by his agent, without disclosing him as principal; but in order to maintain the action, he must show the agency and the power of the agent to bind him at the time; and the same defenses would be available against the newly discovered principal, as against the agent with whom he dealt as principal.