nothing whatever, because, although there is something printed upon them as to agency, that is so written over with ink as to prevent anybody from noticing it." An attempt was made, on behalf of the principal, to limit the definition of the term factor to persons intrusted with goods from abroad. The attempt, it need scarcely be remarked, was unsuccessful.

The right of the principal to sue is paramount to that of the agent, and in cases where either may bring an action, the former, by giving notice to the other contracting party, puts an end to the agent's right of action, except in cases where the agent has a lien upon the subject-matter of the action equal to the claim of the principal. Thus, where a factor sold goods, and the principal took steps to recover the debt himself, Lord Ellenborough ruled that after the intervention of the principal the right of the factor to sue was gone, and that the debt was due to the principal in the same manner as if the sale had been made personally by him in the first instance (j). An instance of the exception to the rule is furnished by Hudson v. Granger (k), which was decided in 1821. There the owner of goods, being indebted to a factor in an amount exceeding their value, consigned them to him for sale. The factor, who was also similarly indebted to the defendant, sold the goods to him. The factor afterwards became bankrupt, and on a settlement of accounts between the defendant and the assignees, the defendant allowed credit to them for the price of the goods, and proved for the residue of his claim against the estate. The plaintiffs, the original owners of the goods, brought an [401*] action against the vendee *for the price; but the court held that, as the factor had a lien on the whole price of the goods, the settlement of accounts between the vendee and the assignees afforded a good answer to the action.

Mr. Justice Holroyd summarized the law thus: "In Drinkwater v. Goodwin (1) it was expressly decided that a factor who becomes surety for a principal has a lien on the price of the goods sold by him for his principal in the amount of the sum for which he becomes surety; and Mr. Justice Chambre, in Houghton v. Mat

'See Taintor v. Prendergast, 3 Hill, 72; post, p. 404.

(j) Sadler v. Leigh, 4 Camp. 195. (k) 5 B. & Ald. 27.

(1) Cowp. 251.

See Daniel v. Swift, 54 Ga. 113; ante, p. 368, note.

thews (m), considers that settled law. Clark (the factor), having a lien on the proceeds, had a right to receive the price from the buyer, and, when he had so received it, to retain it against Hallowell (the consignor). The bankruptcy of Clark could not operate to destroy his right of lien, though it would operate as a revocation of his authority to receive any money on behalf of his principal. His assignees, after the bankruptcy, had the same rights as the bankrupt had before. Assignment made to Clark before his bankruptcy, even against the will of Hallowell, would have operated as a valid payment as against Hallowell, and a payment to his assignees afterwards must have the same effect."

By the law of England an undisclosed principal may sue and be sued upon mercantile contracts made by his agent in his own name, subject to any defenses or equities which, without notice, may exist against the agent (n). If the owner of goods allows the broker through whom he sells them to sell them as a principal, the buyer of goods so sold is discharged by payment to the broker in any way which would have been sufficient had he been the real owner (o). "A broker," remarked Lord Ellenborough, "after having made the contract of sale, cannot vary the terms of it; but in this case the person employed to sell, himself acted as a principal, and the plaintiff, knowing this, authorized his mode of dealing, and all its consequences" (p). To a similar effect it has been said that a broker, with an undisclosed principal, may vary the terms of payment after the sale is completed. The principal may interfere at any time before payment, but not to rescind what has been before done. But if a man sells goods, acting as a broker, the moment the sale is completed [402*] he is functus officio. The terms of the contract cannot then be altered except by the authority of the principal (9).3

It is a well-established rule of law that where a contract not under seal is made with an agent in his own name for an undisclosed principal, either the agent or principal may sue upon it.1 If the principal sues, then the defendant is entitled to be placed in the same position at the time of the disclosure of the real principal as if the agent had been the contracting party.1 This rule is most frequently acted upon in sales by factors, agents or partners, in which cases either the nominal or real contractor may sue; but it may be equally applied to other cases (r), but not to the case of a broker who had neither the documents of title to the goods nor the possession of the goods (8). Hence where a broker sells goods without disclosing the name of his principal, and in so doing exceeds his authority, the buyer cannot set off a debt due from the broker to him against the demand for the goods made by the principal (t). The real ground upon which this and similar decisions rests is, that where a principal permits an agent to sell as apparent principal, and afterwards intervenes, the buyer is entitled to be placed in the same situation at the time of the disclosure of the real principal as if the agent had been the real contracting party, and is entitled to the same defence, whether it be by common law or statute, payment or set off, as he was entitled to at that time against the agent, the apparent principal (u).

The rule that a principal may sue upon a contract entered into on his behalf by an agent, although his name was concealed at the time of the contract, is not affected by the rules of the Stock Exchange, the effect of which is to make all stockbrokers principals as between themselves, but not to take away the right of a principal to sue in respect of his own right in his own name (e), or to free an undisclosed principal from liability (x).

The mere fact that persons have notice that a party contracting with them in his own name is a factor, is not enough to deprive them of the rights they have derived from his actually

1 See ante, pp. 379, 396, 401.

(r) Per Curiam, Sims v. Bond, 5 B. & Ad. 389.

(s) Baring v. Corrie, 2 B. & Ald. 137.

(t) Ibid.

12; Miller v. Lea, ante, p. 397, note.

(u) Per Curiam, Osberg v. Bowden, 8 Ex. 852.

(v) Langton v. Waite, L. R., 6 Eq. 165.

(x) Mortimer v. McCallan, 6 M. &

See Graham v. Duckwall, 8 Bush, W. 58.

selling goods as a principal. A man who is in the habit

of selling the goods of others may likewise sell goods as [403*] his own; and where he sells goods as a principal with the sanction of the real owner, the purchaser who is thus led to give him credit will not be deprived of his set-off by the intervention of any third person. This rule, however, does not apply where the purchaser has express notice, before the completion of the contract, that the seller acted only as factor (y). But a person who contracts as agent cannot afterwards sue as principal, without giving notice to the other contracting party that he is the real principal (2).2

The rule that an undisclosed principal may take advantage of the contract entered into by his agent applies to policies of marine insurance, even when no assignment clause is inserted (a).

When a written contract has been entered into by an agent in his own name, the undisclosed principal is entitled to sue upon it, although it sets out that the agent agrees to pay a sum of money by cheque upon his own bankers (b).

The proposition that the right of a principal to sue upon contracts entered into by his agent may be modified by the declarations, misrepresentations, concealment and fraud generally of the agent, is sometimes said to be qualified in its turn by the decision

1 See ante, p. 397, note.

(y) Moore v. Clementson, 2 Camp. 22. (z) Bickerton v. Burrell, 5 M. & S. 383.

2 See ante, p. 384, and note.

(a) Browning v. Provincial Insurance Company of Canada, L. R., 5 P. C. 263. (b) Phelps v. Prothero, 16 C. B. 370. 2 See ante, p. 396, and note.

See ante, p. 396, and note; post, p. 465.

If an agent effects a sale of land of his principal by false representations or other fraud, without authority or knowledge of the principal, the latter is chargeable with such fraud in the same manner as if he had known or authorized it. Law v. Grant, 37 Wis. 548; Bennett v. Judson, 21 N. Y. 238; Elwell v. Chamberlin, 31 id. 611, 619.

The rule is the same in the case of a

purchase. Graves v. Spier, 58 Barb. 349.

If the vendor knows when he effects the sale, that the purchaser has been induced to buy by the false and fraudulent representations of a third person, he is responsible for the fraud, though such person was not his agent. Law v. Grant,

supra.

An innocent principal cannot take an advantage resulting from the fraud of an agent, without rendering himself civilly liable to the injured party. National Life Ins. Co. v. Minch, 5 Thomp. & C. 545; Elwell v. Chamberlin, 31 N. Y. 611, 619; Bowers v. Johnson, 18 Miss. 169; Lawrence v. Hand, 23 id. 103; Mundorff v. Wickersham, 63 Penn. St. 87; Haskit v. Elliott, 58 Ind. 493. See ante, Ratification, p. 65.

Accordingly, where a husband as

of the Court of Exchequer in Cornfoot v. Fowke (c), which has been thought to limit the proposition to cases other than those where the principal is free from moral fraud. That decision, however, when carefully examined, it will be found, may be supported by the principle that oral evidence cannot be given to vary the terms of a written contract. The contract in that case was in writing; the representation upon which the defendant relied as an answer to the action was not embodied in the contract. Baron Rolfe admitted that if the plaintiff, knowing of the nuisance, expressly authorized the agent to state that it did not exist, or to make any statement of similar import; or if he purposely employed an agent ignorant of the truth, in order that such agent might innocently make a false statement, believing it to be true, and might so deceive the party with whom he was dealing, in either of these cases he would be guilty of a fraud, and the truth of the plea would then be established. This admission proceeds upon the principle, that a principal was not liable for the [404*] agent's fraud, unless the fraud was brought *home to him. Baron Alderson laid stress upon what is conceived to be the true ratio decidendi, namely, that above stated - a view which Baron Parke also adopted. If the decision itself is thought to support the general proposition that a person who has been induced to enter into a contract by the fraud of the agent cannot set up such fraud as an answer to an action by the principal, provided the latter is innocent, it can no longer be considered as an authority (d).

The following propositions may be inferred from the authorities with respect to the right of a principal to sue upon the contraets of an agent:

agent of his wife, by fraud procured an insurance upon her life, it was held, that money paid upon the policy by the insurance company to the personal representative of the wife after her death, could be recovered back, notwithstanding the wife was innocent of the fraud. Nat. Life Ins. Co. v. Minch, supra.

(c) 6 M. & W. 358.

The case of Cornfoot v. Fowke was denied by Redfield, J., in Fitzsimmons v. Joslin, 21 Vt. 140. See, also, Fuller v. Wilson, 3 Q. B. 58; S. C., id. 68, 1009;

National Exchange Co. v. Drew, 2 Macq. 103, 144; S. C., 32 Eng. L. & Eq. 1; Collins v. Evans, 5 Q. B. 820; Benj. on Sales, §§ 455, 462; Story on Agency, § 139, note; 2 Kent Com. (12 ed.) 621, notes c. and 1; post, p. 467. See, also, Mr. Bigelow's comments on the case in his Leading Cases on Torts, p. 21; 3 Am. Law Rev. 430; Coddington v. Goddard, 16 Gray, 436, 442.

(d) See Wilson v. Fuller, 3 Q. B. €8, and per Willes, J., in Barwick v. English Joint Stock Bank, L. R., 2 Ex. 282.