an authority which he did not possess, could not be personally liable on contracts made on behalf of the Crown.

(b) If the professed agent knew that he had not the authority which he assumed to possess, he may be sued by the injured party in the action of deceit.1

The case of Polhill v. Walter a is an illustration of this. The defendant accepted a bill as agent for another who had not given him authority to do so. He knew that he had not the authority, but expected that his act would be ratified. It was not ratified, the bill was dishonored, and the defendant was held liable to an indorsee of the bill as having made a representation of authority false to his knowledge, and falling under the definition of fraud given in a previous chapter.

The reason why the alleged agent should not be made personally liable on such a contract is plain. The man whom he induced to enter into the contract did not contemplate him as the other party of it, or look to any one but the alleged principal. His remedy should be, as it is, for misrepresentation, innocent or fraudulent.

III. RIGHTS AND LIABILITIES OF THE PARTIES WHERE THE PRINCIPAL IS UNDISCLOSED

Where the name of the principal is not disclosed

443. General rule. A man "has a right to the benefit which he contemplates from the character, credit and substance of the person with whom he contracts"; if therefore he enters into a contract with an agent who does not give his principal's name, the presumption is that he is invited to give credit to the agent. Still more if the agent do not disclose his principal's existence. In the last case invariably, in the former · case within certain limits, the party who contracts with an agent on these terms gets the benefit of an alternative liability and may elect to sue agent or principal upon the contract.2

An agent who contracts as agent but does not disclose the name of his principal, is said to render himself personally liable if the other party to the contract choose to treat him Denman, C. J., in Humble v. Hunter, 12 Q. B. 317.

a 3 B. & A. 114.

1 Noyes v. Loring, 55 Me. 408.

2 Byington v. Simpson, 134 Mass. 169; Ford v. Williams, 21 How. (U. S.) 287; Kayton v. Barnett, 116 N. Y. 625; Hubbard v. Tenbrook, 124 Pa. St. 291.

so, but this must depend on the construction of terms. The exceptions to the general rule are wide, and its application in reported cases is not as frequent as might be expected." We may state two propositions, which must be taken subject to exceptions to be hereafter mentioned:

444. Contract as agent for unnamed principal. (1) An agent who contracts for an unnamed principal as agent will not be personally liable.1

The agent who describes himself as such in the contract, and signs himself as such, if the contract be in writing, protects himself against liability.

"There is no doubt at all in principle," said Blackburn, J., in Fleet v. Murton, "that a broker as such, merely dealing as broker and not as purchaser, makes a contract, from the very nature of things, between the buyer and seller, and is not himself either buyer or seller, and that consequently where the contract says 'sold to AB' or 'sold to my principals' and the broker signs himself simply as broker he does not make himself by that either the purchaser or seller of the goods."

445. Contract not expressly as agent. (2) An agent who contracts for an unnamed principal, without expressly contracting as agent, will be personally liable."

In the absence of words indicating agency, the word "broker" attached to a signature is merely descriptive and does not limit liability, so that if the agent do not by words exclude himself from liability, it may be assumed that one who deals with an agent for an unnamed principal expects and is entitled to the alternative liability of the principal and the agent.c

e

Even where the agent is distinctly described as such, the usage of a trade, as in Fleet v. Murton, may make him liable: " so too may the general rule that an agent acting for a foreign principal has no authority to pledge his credit.

a Thomson v. Davenport, 9 B. & C. 78.

L. R. 7 Q. B. 126. And see Southwell v. Bowditch, 1 C. P. D. (C. A.) 374. e Hutcheson v. Eaton, 13 Q. B. D. 861; Thomson v. Davenport, 9 B. & C. 78. d L. R. 7 Q. B. 126.

e Barrow v. Dyster (13 Q. B. D. 635) is an instance of conflict between the terms of a contract and the custom of a trade. Hides were purchased through brokers who did not disclose the name of their principals. The selling brokers were to arbitrate in case of difference under the contract. Evidence of a custom of the hide trade which would make them personally liable, was rejected, as inconsistent with the arbitration clause, which would thus have made them judges in their own cause. Armstrong v. Stokes, L. R. 7 Q. B. 605.

1 Johnson v. Armstrong, 83 Tex. 325. Cp. Byington v. Simpson, supra. 2 Horan v. Hughes, 129 Fed. Rep. 248; De Remer v. Brown, 165 N. Y. 410; Amans v. Campbell, 70 Minn. 493.

Where a man has under these circumstances contracted as agent, he may declare himself to be the real principal. The other party to the contract does, no doubt, lose the alternative liability of the agent or the unnamed principal. Yet, if he was willing to take the liability of an unknown person it is hard to suppose that the agent was the one man in the world with whom he was unwilling to contract; and at any rate the character or solvency of the unnamed principal could not have induced the contract.

Thus in Schmaltz v. Avery," Schmaltz sued on a contract of charter-party into which he had entered "on behalf of another party" with Avery. He had named no principal, and it was held that he might repudiate the character of agent and adopt that of principal.1

Where the existence of the principal is undisclosed

446. Alternative liability where principal is undisclosed. If the agent acts on behalf of a principal whose existence he does not disclose, the other contracting party is entitled to elect whether he will treat principal or agent as the party with whom he dealt. The reason of this rule is plain. If A enters into a contract with X he is entitled at all events to the liability of the party with whom he supposes himself to be contracting. If he subsequently discovers that X is in fact the representative of M he is entitled to choose whether he will accept the actual state of things, and sue M as principal, or whether he will adhere to the supposed state of things upon which he entered into the contract, and continue to treat X as the principal party to it." 2

I have stated the rule of evidence by which a man who has contracted as principal may be shown to be an agent.3 Where a contract is ostensibly made between A and X, A may prove that X is agent for M with a view of fixing M

a 16 Q. B. 655.

If the other party elect to treat the agent as agent the principal will be bound by all acts which fall within the authority usually conferred upon an agent of the character in question. He cannot set up any special instructions limiting the ostensible character of the agency. Watteau v. Fenwick, [1892] 1 Q. B. 346.

1 See Huffman v. Long, 40 Minn. 473; Paine v. Loeb, 96 Fed. Rep. 164.

2 Hubbard v. Tenbrook, 124 Pa. St. 291; City Trust Co. v. Am. Brewing Co., 174 N. Y. 486.

3 See sec. 341, ante.

a

with the liabilities of the contract. 1 But X cannot, by proving that M is his principal, escape the liabilities of a contract into which he induced A to enter under the supposition that he (X) was the real contracting party. Neither party may escape any liability which he assumed under the contract, but A may show that his rights are wider than the words of the contract would indicate.

d2

The real principal M may intervene and sue upon the contract; but A may set up against him any defense which would have been good against X the agent, and which accrued while A still supposed that he was dealing with X as principal. Any set-off which A may have against X, and which accrued while A still regarded X as principal, may be used against a demand made by M the real principal.

c 3

447. Alternative liability, how concluded. But the right of the other contracting party to sue agent or principal to avail himself of an alternative liability - may, in various ways, be so determined, that he is limited to one of the two and has no longer the choice of either liability.

(a) The agent may contract in such terms that the idea of agency is incompatible with the construction of the con

tract.

Thus, where an agent in making a charter-party described himself therein as owner of the ship, it was held that he could not be regarded as agent, that his principal could not intervene, nor could, by parity of reasoning, be sued.a

(b) If the other party to the contract, after having discovered the existence of the undisclosed principal, do anything which unequivocally indicates the adoption of either principal or agent as the party liable to him, his election is determined, and he cannot afterwards sue the other.5

a Higgins v. Senior, 8 M. & W. 834.

Trueman v. Loder, 11 Ad. & E. 589.

c Montagu v. Forwood, [1893] 2 Q. B. 350. d Humble v. Hunter, 12 Q. B. 310.

1 Ford v. Williams, 21 How. (U. S.) 287; Huntington v. Knox, 7 Cush. (Mass.) 371; Darrow v. Horne Produce Co., 57 Fed. Rep. 463; Wm. Lindeke Land Co. v. Levy. 76 Minn. 364.

2 Cream City Glass Co. v. Friedlander, 84 Wis. 53; Babbett v. Young, 51 N. Y. 238; Bryan v. Brazil, 52 Iowa, 350.

3 Taintor v. Prendergast, 3 Hill (N. Y.) 72; Peel v. Shepherd, 58 Ga. 365; Stebbins v. Walker, 46 Mich. 5; Gardner v. Allen, 6 Ala. 187.

4 Winchester v. Howard, 97 Mass. 303; Harner v. Fisher, 58 Pa. St. 453. 5 Barrell v. Newby, 127 Fed. Rep. 656; Ranger v. Thalmann, 65 N. Y. App. Div. 5, 84 ib. 341, aff'd 178 N. Y. 574.

(c) If, before he ascertain the fact of agency, he sue the agent and obtain judgment, he cannot afterwards recover against the principal. But merely to bring an action under these circumstances would not determine his rights. "For it may be that an action against one might be discontinued and fresh proceedings be well taken against the other.” 1

(d) Again, if, while exclusive credit is given to the agent, the undisclosed principal pays the agent for the price of goods sold to him, he cannot be sued when he is discovered to be the purchaser."

с

In Armstrong v. Stokes the defendants employed Messrs. Ryder, a firm of commission agents, to buy goods for them. Messrs. Ryder bought the goods in their own names from Armstrong, who gave credit to them and to no one else. The defendants paid their agents for the goods in the ordinary course of business, and a fortnight later the Messrs. Ryder stopped payment, not having paid Armstrong. When it appeared from their books that they had been acting as agents for the defendants, Armstrong claimed to demand payment from the undisclosed principal. It was held that the demand could not be made from "those who were only discovered to be principals after they had fairly paid the price to those whom the vendor believed to be principals, and to whom alone the vendor gave credit."

It is important to note the difference between such a case as this and one in which the existence of the principal is known, though his name is not disclosed. There the other contracting party presumably looks beyond the agent to the credit of the principal. "The essence of such a transaction," said Bowen, J., in Irvine v. Watson, "is that the seller as an a Per Lord Cairns, Hamilton v. Kendall, 4 App. Ca. 514. Priestly v. Fernie, 3 H. & C. 984.

e L. R. 7 Q. B. 508.

d 5 Q. B. D. 107. (C. A.) 414.

The problem is whether there is a final election between the agent and the principal. Bringing and maintaining an action against one with full knowledge of all the facts may be an election. Barrell v. Newby, 127 Fed. Rep. 656. A fortiori, going to judgment against one with full knowledge of all the facts. Kingsley v. Davis, 104 Mass. 178; Codd Co. v. Parker, 97 Md. 319. Contra: Beymer v. Bonsall, 79 Pa. St. 298. But going to judgment against the agent in ignorance of the agency is not an election. Greenburg v. Palmieri, 71 N. J L. 83; Lindquist v. Dickson, (Minn.) 107 N. W. 958; Brown v. Reiman, 48 N. Y. App. Div. 295.

2 Fradley v. Hyland, 37 Fed. Rep. 49; Thomas v. Atkinson, 38 Ind. 248; Laing v. Butler, 37 Hun (N. Y.) 144.