Indian Disability party was incompetent to manage his own affairs in the matter in hand (a). The Indian Contract Act treats these cases somewhat differently, making the agreement void (s. 12): "A person is said to be of sound mind for the purpose of making a contract if, at the time when he makes it, he is capable of understanding it, and of forming a rational judgment as to its effect upon his interests. A person who is usually of unsound mind, but occasionally of sound mind, may make a contract when he is of sound mind. A person who is usually of sound mind, but occasionally of unsound mind, may not make a contract when he is of unsound mind. Illustrations. (a) A patient in a lunatic asylum, who is at intervals of sound mind, may contract during those intervals. (b) A sane man who is delirious from fever, or who is so drunk that he cannot understand the terms of a contract or form a rational judgment as to its effect on his interests, cannot contract whilst such delirium or drunkenness lasts." This however must be read in connexion with s. 65: "When an agreement is discovered to be void, or when a contract becomes void, any person who has received any advantage under such agreement or contract is bound to restore it or to make compensation for it to the person from whom he received it." The possibility of hardship to persons who have dealt in good faith with a lunatic who was apparently sane is, it would seem, disregarded by the Indian Act as being in practice exceedingly small: and the liability of a lunatic to pay for necessaries is laid down in the chapter " Of certain Relations resembling those created by Contract," s. 68. IV. CONVICTS, ETC. At common law convicted felons (as also outlaws) could of con- not sue, but remained liable to be sued, on contracts made victs. (a) Jenkins v. Morris (C. A.), 14 Ch. D. 674; compare remark of Bramwell, L. J. in Drew v. Nunn, 4 Q. B. D. at p. 669. by them during outlawry or conviction (b). Since the Act to abolish forfeitures for treason and felony, convicts are incapable of suing or making any contract, except while they are lawfully at large under any licence (c). enemies. Alien enemies, as we have seen above, are disabled from Alien suing in an English Court, but not from binding themselves by contract during war between their country and England, nor from enforcing such a contract after the war has ceased (d), unless meanwhile the right of action has been barred by the Statute of Limitation. We now come to the extensions by special institutions Extension of powers. of the ordinary power of making contracts. And first of agency. 1. Agency. We have not here to do with the relations created Agency. between principal and agent by agency regarded as a species of contract, but only with the manner in which rights and duties accrue to the principal through the dealings of the agent. We must also distinguish cases of real agency from those where the agency is apparent only, and we shall further notice, for the sake of completeness, the position of the true or apparent agent as regards third persons. A person who contracts or professes to contract on behalf of a principal may be in any one of the following positions: 1. Agent having authority (whether at the time or by subsequent ratification) to bind his principal. (A) known to be an agent (a) for a principal named; (b) Dicey on Parties, 4. (c) 33 & 34 Vict. c. 23, ss. 8, 30. (d) De Wahl v. Braune, 1 H. & N. 178, 25 L. J. Ex. 343: note (b), ante, p. 81. (e) Since the cases of Calder v. Dobell, Fleet v.Murton, and Hutchinson v. Tatham (see following notes), Authority of agent, termina tion. 2. Holding himself out as agent, but not having authority to bind his principal. (A) where a principal is named (a) who might be bound, but does not in fact authorize or ratify the contract; (B) who in law cannot be bound. (B) where the alleged principal is not named. 1. We shall not here dwell on the creation or determiits consti- nation of an agent's authority. As a rule an agent may tution and be appointed without any special formality; though an agent to execute a deed must himself be appointed by deed, and in certain cases the appointment is required by the Statute of Frauds to be in writing. Revocation of an agent's authority takes place either by the principal's actual withdrawal of his will to be represented by the agent (which may be known either by express declaration or by conduct manifesting the same intention) or by his dying or ceasing to be sui iuris, and thus becoming incapable of continuing it (ƒ). In these last cases the authority is said to be revoked by the act of the law. "The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them" (g). It is held in England, but anomalously, that this rule does not apply to revocation by the death of the principal (h). It does apply in the case of the principal becoming insane, and it may perhaps yet be decided that in the case of death the principal's estate is liable to the other party for the actual loss incurred by the principal's representation-which, as re it may perhaps be considered that (f) On the whole subject see at (g) I. C. A. 208, cp. Story on Agency, § 470; Trueman v. Loder, 11 A. & E. 589. (h) Blades v. Free, 9 B. & C. 167. Contra, I. C. A. s. 208 (Illust. c.), Code Nap. 2008, 2009, and German Commercial Code, s. 54; and see Kent, Comm. 2. 646. gards him, was a continuing one at the date of the contract-that the agent was authorized (¿). for exist In all cases where there is an authorized agent dealing 1. Agent on behalf of a real principal, the intention of the parties ing prindetermines whether the agent, or the principal, or both, cipal. are to be liable on the contract and entitled to enforce it. The question is to whom credit was really given (). 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. agent: A. When the agent is known to be an agent, a contract A. Known is made, and knowingly made, by the other party with the to be an principal, on which the principal is the proper person to contract with prinsue and be sued. cipal ab initio. a. Prin then cipal named: agent but n the prima facie does And when the principal is named at the time, there is prima facie no contract with the agent: when the principal is not named, then prima facie agent, though known to be an agent, does bind himself not conpersonally, the other party not being presumed to give tract in credit exclusively to an unknown principal (1). person. named: But when the agent would not prima facie be a con- agent prima tracting party in person he may become so in various facie does ways. Thus he is personally liable if he expressly under- contract (i) Drew v. Nunn (C. A.), 5 Q. B. D. 661 see per Brett, L.J. at p. 668. (k) Story on Agency, §§ 279, sqq. 288. Thomson v. Davenport, in 2 Sm. L. C.; Calder v. Dobell, L. R. 6 C. P. 486. (1) 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 em P. in person. Evidence ployer's own: and this even though of con- H takes to be so (m): such an undertaking may be inferred from the general construction of a contract in writing, and is always inferred when the agent contracts in his own name without qualification (n), though the principal is not the less also liable, whether named at the time or not (o), or if he himself has an interest in the subjectmatter of the contract, as in the case of an auctioneer (p). And when the agent is 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 conTechnical tracts in person (2). 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 (r). And it is also held that a party who takes a deed under seal from an agent in the agent's own name elects to charge the agent alone (s). A similar rule has been supposed to exist as to negotiable instruments: but modern decisions seem rule as to deed of agent. (m) Story on Agency, § 269. Smith, Merc. Law, 158. (n) See Fairlie v. Fenton, L. R. 5 Ex. 169, Paice v. Walker, ib. 173. The latter case, however, goes too far; see note u, next page. (0) 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. 346-352, and in addition to authorities there collected, Dutton v. Marsh, L. R. 6 Q.B. 361. (p) 2 Sm. L. C. 399. As to an auctioneer's personal liability for non-delivery to a purchaser of goods bought at the auction, Woolfe v. Horne, 2 Q. B. D. 355. (q) 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: New Zealand Land Co. v. Watson, 7 Q. B. D. 374. In Maspons y Hermano v. Mildred, 9 Q. B. D. 530, the Court of Appeal refused to extend this doctrine to a case where the commission agent as well as the principal was foreign; the decision was affirmed in H. L., 8 App. Ca. 874, but this point not discussed. (r) Lord Southampton v. Brown, 6 B. & C. 718; Beckham v. Drake, 9 M. & W. at p. 95. (s) Pickering's claim, 6 Ch. 525. |