A. Known to be an agent: con was really given (a). And the general rules laid down on the subject furnish only provisional answers, which may be displaced (subject to the rules as to admissibility of evidence) by proof of a contrary intention. A. When the agent is known to be an agent, a contract is made, and knowingly made, by the other party with the princitract with pal, on which the principal is the proper person to sue and be principal sued. ab initio. a. Princi agent And when the principal is named at the time, then there is pal named: prima facie no contract with the agent: but when the principal prima facie is not named, then prima facie the agent, though known to be an agent, does bind himself personally, since the other party is not presumed to give credit exclusively to an unknown principal (b). does not contract in person. B. Principal not named: agent prima facie does contract in person. But when the agent would not prima facie be a contracting party in person he may become so in various ways. Thus he is personally liable if he expressly undertakes to be so (c): such an undertaking may be inferred from the general construction of a Evidence contract in writing, and is always inferred when the agent signs of contrary in his own name without qualification (d), though the principal is intention (a). not the less also liable, whether named at the time or not (e), or if he himself has an interest in the subject-matter of the contract, as in the case of an auctioneer (ƒ). And where the agent is (a) Story on Agency, §§ 279, sqq. 288. Thompson v. Davenport, 2 Sm. L. C. 327, 333; Calder v. Dobell, L. R. 6 C. P. 486. (b) But one who deals with an agent known to be such cannot set off against the principal's claim a debt due to him from the agent. If he has employed an agent on his own part, that agent's knowledge is for this purpose treated as the employer's own and this even though the knowledge was not acquired in the course of the particular employment: Dresser v. Norwood, Ex. Ch., 17 C. B. N. S. 466, 34 L. J. C. P. 48, revg. s. c. 14 C. B. N. S. 574, 32 L. J. C. P. 201. The Indian Contract Act has followed the view of the C. P. in preference to that of the Ex. Ch. See s. 229. And perhaps the question may deserve to be reconsidered if it ever comes before a court of last resort. (c) Story on Agency, § 269. Smith, Merc. Law, 158. (d) See Fairlie v. Fenton, L. R. 5 Ex. 169, Paice v. Walker, ib. 173. (e) Higgins v. Senior, 8 M. & W. 834 the law there laid down goes to superadd the liability of the agent, not to take away that of the principal, Calder v. Dobell, L. R. 6 C. P. 486. As to when directors of companies are personally liable on documents signed by them, see Lindley, 1. 364, and in addition to authorities there collected, Dutton v. Marsh, L. R. 6 Q. B. 361. (f) 2 Sm. L. C. 357. rule as to deed of dealing in goods for a merchant 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 contracts in person (a). And when a deed is executed by an agent Technical 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 agent. 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 other name. any It is the same as if the principal had signed a wrong name with his own hand (d). Again, an agent who would otherwise be liable on the contract Evidence made by him may exempt himself from liability by contracting intention of contrary in such a form as makes it appear on the face of the contract (8). that he is contracting as agent only and not for himself as principal (e) but even then he 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 (ƒ). Or he may limit his liability by special stipulations, e.g. when a (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) To prevent an unqualified signature by the agent in his own name from ir aking him liable, clear evidence of a contrary intention is (f) Humfrey v. Dale, 7 E. & B. B. Agent not known to be an agent. Generally there is a contract with the undisclosed principal. Exceptions. Limita tions of the rule when it applies. As to rights of principal. 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 (a). 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 (b). 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 (c). B. When a party contracts with an agent whom he does not know to be an agent, the undisclosed principal is generally bound by the contract and entitled to enforce it, as well as the agent with whom the contract is made in the first instance (). But the limitations of this rule are important. In the first place, it does not apply where an agent for an 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 (e). 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" (ƒ). 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 (a) Oglesby v. Yglesias, E. B. & (b) Macbeath v. Haldimand, 1 T. (d) 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. (e) Humble v. Hunter, 12 Q. B. 310, 17 L. J. Q. B. 350. (f) Ferrand v. Bischofsheim, 4 C. B. N. S. 710, 716, 27 L. J. C. P. 302. in the same way as if the agent were the sole principal” (a). 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 (b): 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 (c). "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 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 " (d). 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 (e). the other And conversely the right of the other contracting party to As to hold the principal liable is subject to the qualification that the rights of state of the account between the principal and the agent must party. not be altered to the prejudice of the principal. This doctrine, originally laid down in a dictum of Lord Tenterden (f), has been adhered to by a late decision of the Court of Queen's Bench, who held that the principal is not liable if he has in good faith paid the agent at a time when the other party still gave credit to the agent and knew of no one else (g). (a) Story on Agency, § 420; per Parke, B. Beckham v. Drake, 9 M. & W. at p. 98. (b) 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. Bowden, 8 Ex. 852. Under the new practice, however, he can make the principal a party to the action by counter-claim and have the whole matter disposed of. See the Judicature Act, 1873, s. 24, sub-s. 3, and the Rules of 1875, Order XIX., r. 3, and Order XXII., rr. 5-10. (c) Rabone v. Williams, 7 T. R. 360, n.; Sims v. Bond, 5 B. & Ad. 393. Per Cur., Isberg v. Bowden, (d) Per Willes, J. Dresser v. Nor- (e) Borries v. Imperial Ottoman Bank, L. R. 9 C. P. 38. (f) Thompson v. Davenport, 2 Sm. L. C. at p. 333. (g) Armstrong v. Stokes, L. R. 7 Q. B. 598, dissenting from the opinion (though perhaps not from the actual decision) of the judges of the Court of Exchequer in Heald v. Kenworthy, 10 Ex. 739. F F 2. Professed agent not having authority. A. Principal named. 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 (a). And though the party may elect to sue the principal, yet he must make such election within a reasonable time after discovering him (b). 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 (c) that such is the rule as to principal and agent in general, and that there is no exception in the case of 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 (d). 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 (a) Story on Agency, §§ 279, 288, 291; Horsfall v. Fauntleroy, 10 B. & C. 755; but the principal is not discharged unless he has actually dealt with the agent on the faith of the other party's conduct so as to change his position: Wyatt v. Hertford, 3 East 147. (b) Smethurst v. Mitchell, 1 E. & E. 622, 28 L. J. Q. B. 241. (c) 3 H. & C. 977, 983, 34 L. J. Ex. 173; cp. L. R. 6 C. P. 499. (d) Curtis v. Williamson, I.. R. 10 Q. B. 57. |