own name on a contract signed by him as agent for another. So in general whenever an agent is bound on a contract personally he has the reciprocal right of enforcing in his own name the contract against the third person. An agent who has a special interest in the subject-matter of the agency may sue in his own name. Where a principal is undisclosed the agent may enforce the contract with a third person unless the principal asserts his rights. In this latter case, the third person may set up every defense that could have been invoked against the agent at the time the third party was first notified of the agency. Where an agent pays money to third person on behalf of his principal under a mistake of fact or in pursuance of an illegal contract whose illegality was unknown to the agent at the time, he may recover the money through an action brought in his own name. If a third person commits a tort against an agent, he may recover whatever damages he may suffer though the main injury be inflicted upon his principal. An agent discharged by his employer through the malicious and unjustifiable procurement of a third person may bring an action for the damages he may suffer even though the principal in discharging him breaks his contract. EXAMPLES 345. A enters into a written contract with X signed by A as agent for P. A explains at the time the contract is made that he is using P's name without his permission in order to induce Y to take an assignment of the contract. X later refuses to perform. A may sue in his own name. 346. A makes a contract with P whereby he is to receive as compensation for procuring a contract with X to purchase the latter's yield of apples, one-fourth of all the apples delivered under the contract. A procures the contract, subsequently X refuses to deliver the apples. A has a right of action against X for he has a special interest in the subject matter of the contract. 347. A signs a contract under seal in his own name with X, the benefit of the contract to go to P. A, and not P, may sue on this contract, it being a general rule that the parties named in a sealed instrument, and they only, may sue and be sued on it. 348. A offers to buy from X a team of horses, delivery to be made at the end of the regular pasture season. Later A informs X that he would like an earlier delivery and X gives him another team for gratuitous use, till the purchased team is delivered. A absconds with the horses and later, P, his undisclosed principal, demands the delivery of the purchased team, producing at the time of the demand a receipt from X to A. In an action by P for the money given X for the team X may counterclaim for the value of the horses already delivered to A. 349. P gives A, his agent, money to pay to X. A pays Y by mistake. He may sue for the return of the money in his own name. If, however, Y was a creditor of P he would be justified in retaining the money unless he knew of the mistake at the time he accepted it. 350. X prints a libel in reference to the subject-matter of A's agency. A may bring an action in his own name for loss of commission, and his principal may also bring an action for whatever loss he himself may have suffered. 351. A is hired by P for an indefinite time to solicit insurance. X procures A's discharge. A may sue X for the damages sustained. 359. Liability of third persons to principal.-The liability of a third party ordinarily is in favor of the principal only. An undisclosed principal, as we have seen, may step in and assert his rights. However, every person has a right to choose those with whom he will contract and where exclusive credit is given to the agent or where personal trust or confidence is reposed in the agent or special reliance is placed on the agent's skill or knowledge, the undisclosed principal cannot substitute himself for his agent. This, of course, does not apply to ordinary contracts of sale. The fact that an agent for an undisclosed principal has made his contract in writing or has affixed an unnecessary seal will not deprive the principal of any of his rights under the contract. But a principal has no right against a third person on a contract procured by the fraud of an agent acting within the scope of his authority, even though the principal does not authorize the agent to act fraudulently. Money paid to the agent of the undisclosed principal is a good defense in an action by a principal, but one also paying money to an agent after the fact of his agency is disclosed does so at his peril. A principal has a right of action against anybody who interferes with his agent wrongfully causing the principal to lose his agent's services wholly or in part. EXAMPLES 352. X maliciously and without just cause obtains the arrest of an engineer on the P. R. R., thus causing the stoppage of trains and damage to the railroad. X is liable to the railroad for the damages suffered. 353. X and A enter into a written contract for the sale and purchase of ten shares of stock at $50 each and each places his seal on the contract. X refuses to deliver and the market value of the stock goes up to $60. Under the statute no seal was necessary to the contract. P, the undisclosed principal of A, has a right of action for $100 damages against X, for the seal was mere surplusage. 354. X gives his promissory note to A in performance of a contract in which P is the undisclosed principal. Only A may sue on the note; except in practice the note may be endorsed to P who may sue as the holder. 360. Agent's obligations to his principal. An agent ordinarily owes five duties to his principal. He must obey the principal's instruction; he must exercise skill, judgment and care in the prudent performance of his duties; he must act with the highest good faith in the management of his principal's business; he must account duly for the profits and proceeds of the agency; and he must act in person unless by the principal's authority or by custom he is permitted to act through a sub-agent. 361. Agent's duty to obey.-When a principal maps out one course for his agent, the agent will pursue another at his own risk. Reasonable care and diligence in selecting or pursuing another course is no defense. An agent, of course, will incur no liability for failure. to do an illegal act and his deviation from a prescribed course may be excused by the principal through ratification expressed or implied. Where an agent has a lien on goods which he is to sell at a minimum price named by the principal he may sell at a fair market price though below that fixed by the principal, if after due notice the principal refuses to pay his indebtedness to the agent. 362. Agent's duty to be prudent.-An agent must use the care, skill and diligence ordinarily observed by prudent men engaged in similar undertakings under similar circumstances. The agent warrants his ability unless the principal has notice or knowledge of his deficiency. EXAMPLE 855. P hires A as a painter. A, while about his work, ruins some valuable marble through ignorance. A will be liable, for in accepting the job he held himself out as a qualified painter. 363. Agent's duty to use good faith.-An agent stands in a position of trust to his principal and must act for the principal alone. He is bound to give his principal due notice of all facts that may affect his interest. For example, an agent cannot buy what he is delegated to sell. A third person who deals with an agent, knowing of the agent's breach of good faith, does so at his peril. It has been held that a principal may enjoin his agent from using trade secrets learned while in the employment of the principal. 364. Agent's duty to account.-An agent is not entitled to secret profits, but must account for all moneys received in the transaction of his principal's business. Even in the case of illegal transactions, he is bound to keep and render accounts. An agent who mixes the property of his principal with his own property will be absolutely liable for any loss that may result. 365. Agent's duty to act in person.-An agent is bound to act in person wherever his business requires the exercise of discretion or judgment, but he may delegate such powers and duties as are merely ministerial or mechanical in their nature. EXAMPLES 356. P empowers A to accept by way of accommodation certain bills of exchange drawn on him. A may not delegate to X the power to select on behalf of P the bills of exchange which are to be accepted, but after having made the selection himself, he may delegate to X the authority to write the acceptance on the selected bills. Where an agent is empowered by his principal to select sub-agents, his duties require that he exercise due |