Contracts with Agents. such a case, the principal be induced by the conduct of the seller CH. IX. s. 1. to pay the money to the agent, on the faith that the seller and the agent have come to a settlement in the matter; or if any representation to that effect be made by the seller, either by principalwords or conduct, he cannot afterwards sue the principal (g). So, if the seller intend to proceed against the principal, he must make his election to do so within a reasonable time after the latter is discovered (h). And if, after the principal is discovered, the seller allow the day of payment to go by without calling on the principal; and in the meantime the latter pays his agent the price of the goods in terms of the contract; this may deprive the seller of his right to charge the principal-inasmuch as the latter may have been led, by the seller's conduct, to suppose that he intended to rely solely on the agent for payment (i). And where the agent, having made a contract in his own name, has been sued thereon to judgment, a second action is not maintainable against the principal on the same contract (j). (d) The Right of Action of the Principal. Discharge of contd. As the contract of the agent is in law the contract of the General rule. principal, the latter may come forward and sue thereon, although, at the time the contract was made, the agent acted as and appeared to be the principal (k). And the power of the agent to claim and enforce performance of the contract, is subservient to this right of the principal; so that, if the principal has interfered, and has required or obtained completion of the contract with himself personally, the agent's right of action thereon ceases (l). Nor is the right of the principal in this behalf interfered with by the fact, that the contract was made between two brokers, members of the same stock exchange, one of the rules of which was, that a contract made by a broker for an undisclosed principal should be regarded as the contract of the broker only-even although the principal was cognizant of such rule (m). (1849), 7 C. B. 21, 34, were disapproved, and Armstrong v. Stokes (1872), L. R., 7 Q. B. 598, was doubted. (g) See note (e), p. 238. (h) Smethurst v. Mitchell (1859), 1 E. & F. 629. (i) Kymer v. Suwercropp (1807), 1 Camp. 109; 10 R. R. 646. Priestley v. Fernie (1865), 3 H. & C. 977. (k) Phelps v. Protheroe (1855), 16 C. B. 370; Duke of Norfolk v. Worthy (1808), 1 Camp. 337; 10 R. R. 748; per Abbott, J., Bickerton v. Burrell (1816), (1) See per Lord Ellenborough, C.J., (m) Humphrey v. Lucas (1845), 2 C. & K. 152. CH. IX. s. 1. Contracts with Agents. When principal cannot sue. When defence against agent may be insisted on as against principal. So, if goods are entrusted to an agent for sale, but before the sale the principal dies intestate, and the goods are afterwards sold; a person who subsequently takes out letters of administration to the intestate may sue the vendee for goods sold and delivered (n). But the right of the principal to interfere and sue in his own name does not exist where the agent has contracted personally for him under seal, or by bill of exchange or promissory note. In these cases, the only remedy is in the name of the agent with whom the contract was entered into (o). Where a principal permits one who is not known to be an agent (p), 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 actual principal, as if the agent had been the real contracting party; and he is entitled to the same defence against the principal—whether by common law or by statute— as he was entitled to at that time against the agent, the apparent principal (q). Accordingly if, in such a case, where the agent has been permitted by the principal to hold himself out as the principal, and that person dealing with the agent has believed that the agent was principal and acted on that belief, the defendant has acquired a set-off against the agent before the principal has interposed, the latter will be bound by such set-off (r). And so, where an agent has been allowed to sell in his own name; and payment is made to the agent, as such, according to the terms of the contract, and in the usual course of business; the principal, if he has not previously required payment to himself, is bound thereby (s). But this doctrine does not apply where the agent is a mere broker, and has not the possession of, or is not entrusted with, the indicia of property in the goods (t). And in like manner it is held that, where a party who has purchased goods from a factor, knowing that they were sold by him as factor only, is sued by the principal for the price, he is not entitled to set off in that action a debt due to him from the factor (u). (n) Foster v. Bates (1843), 12 M. &W.226. (0) See per Blackburn, J., Spurr v. Cass (1870), L. R., 5 Q. B. 656; Sims v. Bond (1838), 5 B. & Ad. 389; Berkeley v. Hardy (1826), 5 B. & C. 355; Schack v. Anthony (1813), 1 M. & S. 573. (p) See Semenza v. Brinsley (1865), 18 C. B., N. S. 467; Borries v. Imperial Ottoman Bank (1873), L. R., 9 C. P. 38. (7) Per Cur., Isberg v. Bowden (1853), 8 Exch. 852; Sims v. Bond (1838), 5 B. & Ad. 339; George v. Claggett (1797), 7 T. R. 359; 4 R. R. 462; Montagu v. Forwood, [1893] 2 Q. B. 350. (r) Cooke v. Eshelby (1887), 12 App. Cas. 271. But the person who dealt with an agent before his bankruptcy cannot set up, in an action against him by the principal, the defence of “mutual credit" as between the agent and the defendant; Turner v. Thomas (1871), L. R., 6 C. P. 610; and see Mildred v. Maspons (1883), 8 App. Cas. 874. (8) Drinkwater v. Goodwin (1775), Cowp. 251; and see the Factors Act, 1889, ante, p. 236. (t) Baring v. Corrie (1818), 2 B. & Al. 137. (u) Fish v. Kempton (1849), 7 C. B. 687; Semenza v. Brinsley (1865), 18 C. B., N. S. 467; New Zealand Co. v. Ruston (1880), 5 Q. B. D. 474. When prin And although a party who is described on the face of a contract CH. IX. s. 1. Contracts as an agent, but who is, in fact, the principal, cannot in general with Agents. sue thereon in that capacity (x): yet it has been held, that if such a contract had been in part performed, and that part performance cipal who has been accepted by the other contracting party with full know- contracts as agent may ledge that the party who was described as agent in the contract sue. was the real principal, the latter may, after that, sue in his own name for the completion of the contract (y). And so, although a man cannot in strictness be said to be agent to himself, yet, with regard to contracts of charter-party, it has been held that he may fill both characters; that is, that he may contract as agent for the freighter, whoever that freighter may turn out to be, and may afterwards himself adopt the character of freighter, and sue as principal on the charter-party (z). (e) When Agent personally Liable. Upon the principle that the contract of an agent is the contract General rule. of the principal, an agent is not liable upon any agreement, into which he enters merely in his representative capacity (a). But wherever an agent enters personally into a contract, or pledges his own credit, by concealing his principal or otherwise, this gives the other party a right of action against him (b); and a person contracting professedly as agent without there being, in fact, any principal in existence, will be personally liable (c). And where an agent enters in his own name into an agreement in writing, he cannot relieve himself from his liability thereon, even by showing that, at the time such agreement was made and signed, the other contracting party knew that he was only an agent in the transaction (d). So, there is no doubt that a person who enters into a contract which is expressed to be made by him for and on behalf of another, may still contract thereby in such terms as to bind himself personally. And, accordingly, the question in such cases is whether, looking at the contract as a whole, it appears to have been intended that he should be personally liable thereon (e). (x) Bickerton v. Burrell (1816), 5 M. & S. 383. (y) Rayner v. Grote (1846), 15 M. & W. 359. (z) Schmalz v. Avery (1851), 16 Q. B. 655. (a) Ex parte Hartop (1806), 12 Ves. jun. 349; Thomas v. Edwards (1836), 2 M. & W. 215, 217; Spittle v. Lavender (1821), 2 B. & B. 452. As to non-liability of shipbrokers signing a charter-party by telegraphic authority of charterer, see Lilly v. Smales, [1892] 1 Q. B. 456, per Denman, J. (b) Franklyn v. Lamond (1847), 4 C.C. C. B. 637; Seaber v. Hawkes (1831), 5 Mere bearer of money not liable; Coles (c) Kelner v. Baxter (1866), L. R., 2 C. P. 174. (d) Higgins v. Senior (1841), 8 M. & W. (e) See Deslandes v. Gregory (1860), 2 Agent may liable, albe personally though con tract ex pressed to be made by him on behalf of another. CH. IX. s. 1. Contracts with Agents. Personal liability of agent-contd. Directors of company. Solicitors. Auctioneer. Thus, if an agent, by deed under his own hand and seal, covenant "for himself, his heirs, &c." for the act of another, he is personally liable upon his covenant, although he describes himself in the deed as covenanting "for and on the behalf" of another person (f). So, where the defendant by a written agreement expressed to be made by himself, on "behalf of A. B. of the one part," and the plaintiff of the other part, stipulated that “he, the defendant, would execute to E., the plaintiff, a lease of certain premises," which, as it was proved, belonged to A. B.; Best, C.J., held that the defendant was personally liable (g), and the mere addition of "brokers" to the signature being only a description will not relieve the agent so signing from personal liability (h). Where the defendants, who were directors of a newspaper company, gave a promissory note in the following form:-" On demand we jointly and severally promise to pay to Mr. L. H., or order, the sum of 250l., value received for and on behalf of the Wesleyan Newspaper Association," and this note was signed by them as "Directors; "Directors; " it was held, that the words "we severally promise" were equivalent to "we personally promise," and that the defendants were, therefore, personally liable on the note (i); but a note expressed to be on behalf of a society does not personally bind directors signing it (k), nor does the note of a secretary signed by him as such personally bind the secretary (1). A solicitor who "personally" undertakes, in writing, that a record shall be withdrawn and costs paid, in a cause which he is conducting, is personally liable (m), and so are solicitors undertaking as such to pay a distraining landlord his rent (n). An auctioneer who sells goods by auction for a named principal, under the ordinary conditions of sale, may be sued by a purchaser for the non-delivery of goods sold to him at such auction (0); and directors of a company described as such in the body of a promissory note have been held personally liable upon it, notwithstanding that the seal of the company was affixed in one corner of the note (p). E. & E. 602, 610, Exch.; Parker v. Winlow (1857), 7 E. & B. 942; Reid v. Dreaper (1861), 6 H. & N. 813; Tanner v. Christian (1855), 4 E. & B. 591; Lennard v. Robinson (1855), 5 E. & B. 125; Mare v. Charles (1856), id. 978; Wilson v. Zulueta (1849), 14 Q. B. 405; Paice v. Walker (1870), L. R., 5 Ex. 173; Hough v. Manzanos (1879), 4 Ex. D. 104. (f) Appleton v. Binks (1804), 5 East, 148; 7 R. R. 672. (g) Norton v. Herron (1825), 1 R. & M. 229. (h) Hutcheson v. Eaton (1884), 13 Q. B. D. 861, C. A. (i) Healey. v. Storey (1848), 3 Exch. 3; and see Dutton v. Marsh (1871), L. R., 6 Q. B. 361. (k) Aggs v. Nicholson (1856), 1 H. & N. 156; Lindus v. Melrose (1858), 3 H. & N. 177, Ex. Ch. (1) Alexander v. Sizer (1869), L. R., 4 Ex. 102. (m) Iveson v. Conington (1823), 1 B. & C. 160. (n) Burrell v. Jones (1819), 3 B. & Al. 47; 22 R. R. 296; and see Harper v. Williams (1843), 4 Q. B. 219; Watson v. Murrell (1824), 1 C. & P. 307. (0) Woolfe v. Horne (1877), 2 Q. B. D. 355. (p) Dutton v. Marsh (1871), L. R., 6 Q. B. 361. But a broker describing himself as having sold goods by order CH. IX. s. 1. is not personally liable on his signature (q). The Bills of Exchange Act, 1882, 45 & 46 Vict. c. 61 (see Ch. XVI., post), provides by sect. 25, that— "A signature by procuration operates as notice that the agent has but a limited authority to sign, and the principal is only bound by such signature if the agent in so signing was acting within the actual limits of his authority." And by sect. 26 that— "(1) Where a person signs a bill as drawer, indorser, or acceptor, and adds words to his signature, indicating that he signs for or on behalf of a principal or in a representative character, he is not personally liable thereon; but the mere addition to his signature of words describing him as an agent, or as filling a representative character, does not exempt him from personal liability. "(2) In determining whether a signature on a bill is that of the principal or that of the agent by whose hand it is written, the construction most favourable to the validity of the instrument shall be adopted." So, if the instrument show an intention that the agent should not be liable, he will be held not to be so, even although words are used which per se might render him liable. Where, therefore, A., an auctioneer, being employed by B. to sell an estate belonging to him, entered into and signed an agreement with C., for the purchase, in his own name, as agent of B.: and B. shortly afterwards signed it, and added, "I hereby sanction this agreement, and approve of A.'s having signed the same on my behalf;" it was held that A. was not personally responsible, because the agreement of A. and the ratification thereof by B. formed but one transaction; and-independently of the instrument signed by A., being of itself open to such construction-this manifested an understanding by all parties, that A. was not to be personally liable thereon (r); and so if by the terms of the written contract the brokers are made arbitrators they cannot be sued as principals, notwithstanding the custom of the trade to that effect (s). So an agent may expressly stipulate on the face of the agreement that, after a certain time, his liability thereunder shall cease (t). Contracts with Agents. When agent not personally liable. Signature per proc." 66 Liability of agent of bill of exchange. Agent will not be held liable against the evident the instru intention of ment; evidence of And even where, by the terms of a written agreement made by or against an agent, he might, at law, be held liable thereon as principal; he intention, may show, by way of equitable defence to an action against him on such agreement, that the real intention of the plaintiff and (q) Southwell v. Bowditch (1876), ] C. P. D. 374, C. A.; Cadd v. Houghton (1876), 1 Ex. D. 357, C. A. (r) Spittle v. Lavender (1821), 2 B. & B. 452; 23 R. R. 508; and see Hurley v. Baker (1846), 16 M. & W. 26. As to the liability of inspectors acting under a deed of inspectorship, see Redpath v. Wigg (1866), L. R., Î Ex. 335, Ex. Ch. ; dehors the instrument. |