beyond the scope of his authority, he will be liable for a breach of warranty under the rule already mentioned that an agent warrants that he is acting within the scope of his authority. Where an agent makes a willful misrepresentation and thereby induces a third person to change his position to his detriment, the agent may be sued in tort for deceit. An agent alone is bound where he knowingly represents an incompetent or fictitious principal or where the third person extends credit exclusively to the agent. If the principal is an alien, most states will regard that fact as presumptive evidence of the third person's intention to give credit to the agent only. If an agent makes a contract under seal in his own name, and the seal is not superfluous, he alone will be liable. EXAMPLES 337. A, B, C and D, with certain others form a temperance club which is not incorporated and, therefore, under the laws of the state in which meetings are held, is not recognized as a legal being. A, B, C and D make a contract with X and sign it, "Exec. Com. O. T. R. Club, A, B, C, D." X perfoms his part of the contract, but the club fails to perform and X sues A, B, C and D. It was held that inasmuch as the agents had no principal they were personally liable, not on the contract, but for breach of warranty of authority. 338. A, the agent of P, a promoter, represents to X that certain shares of stock have been sold to Y for $100 each and that the company has valuable coal mines. X purchases through A $500 worth of the capital stock of the company. It transpires that Y had not bought any of the stock and that the company merely had an option to buy some land of speculative value. If A made the false representations without authority from P, X may sue A for the damages he has sustained. 339. A, the agent of P, who resides in England, buys goods for P on credit from X. P refuses to pay for the goods. If an action were brought by X in England A alone would be liable. The same result would be reached in some of our states, including perhaps Maine, Pennsylvania, and Louisiana. In New York and most states, however, the fact that P is a foreigner would not affect X's rights against P except as a matter of evidence and the question of whether X had given exclusive credit to A would be a fact to be determined by the jury. 356. Where both principal and agent are bound.— Where an agent acts for an undisclosed principal the third person on discovering the truth may elect to hold either the agent or the principal, but the liability will be located when an absolute election is made. There are certain exceptions to this rule. A principal whose name or existence is not disclosed will not be held liable on a negotiable instrument or a contract under seal. If a principal settles the amount of his indebtedness to a third person with his agent before his existence becomes known to the third person, he will be freed from further liability. Where an agent discloses the existence of a principal, but does not give his name, the alternative liability of the principal or the agent will be assumed to have been accepted by the third party unless the agent uses terms in making the contract that clearly show that he intends the principal only to be bound. Where a disclosed principal settles with an agent the third person may elect to sue either the principal or the agent. EXAMPLES 340. A purchases from X a quantity of silk in his own name, but as a matter of fact for the benefit of P, who receives the goods. X upon discovering the truth may hold either A or P. If, before X is apprised of A's relations to P, the latter pays to his agent the price of the silk, X will have a right of action against A only. 341. A signs a promissory note with his own name and gives it to X for goods bought on behalf of P. X negotiates the note to Y, who sues P on it as the undisclosed principal of A. P will win, for an agent who signs negotiable paper in his own name is personally liable thereon. 342. A, as agent for P, buys goods for X, having first been paid by P. X may sue either A or P. 357. Where neither agent nor principal is bound.Where a principal dies and an agent in ignorance of his death makes a contract with a third person, neither the agent nor the estate of the deceased principal will be liable on the contract. If an agent signs a contract as agent for a person not his principal and explains the facts, neither the agent nor the principal will be liable, the former because he has not warranted his authority and the latter because he has not given the authority to contract. EXAMPLES 343. A tells X that P is desirous of having a rare book which X owns, but adds that he has no authority to buy it though he believes P will ratify the purchase. X gives the book to A for P, but the latter refuses to take it. X can hold neither P nor A. 344. A is appointed by P his agent and given a power of attorney to sell his country home. A makes a contract with X not knowing that at the time it is signed P had died. P's executor refuses to execute a deed. X has no rights against the estate of P nor against A individually. If A knew of P's death he would be liable for the damages X might sustain on the ground that he acted for a fictitious person. 358. Third person's liabilities to agent.-Where an agent is the real principal and the third party knows and deals with him as such, the agent may sue in his 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 a 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 a definite 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 |