Forms of bought and sold notes. Fairlie v. L. R. 5'Ex. 169. Southwell v. Bowditch, 1 C. P. D. (C. A.) 374. Fleet v. Murton, 126. has he authority to sue in his own name on contracts made by him. [*345] *The forms of a broker's notes of sale may be useful as illustrating what has hereafter to be said with reference to the liabilities of parties where an agent contracts for a principal whose name or whose existence he does not disclose. When a broker makes a contract he puts the terms into writing and delivers to each party a copy signed by him. The copy delivered to the seller is called the sold note, that delivered to the buyer is called the bought note. The sold note begins Sold for A to X' and is signed M broker,' the bought note begins 'Bought for X of A' and is signed M broker.' But the forms may vary and with them the broker's liability. We will follow these in the sold note. (i) 6 6 6 Sold for A to X' (signed) ‘M broker.' Here the broker cannot be made liable or acquire rights upon the contract: he acts as agent for a named principal. (ii) Sold for you to our principals' (signed) M broker.' Here the broker acts as agent, but for a prin L. R. 7Q. B. cipal whom he does not name. He can only be made liable by the usage of the trade if such can be proved to exist. Higgins v. Senior, S M. & W. 834. Commis sion agent. (iii) Sold by you to me' (signed) M. Here we suppose that the broker has a principal, though his existence is not disclosed, nor does the broker sign as agent. He is personally liable, though the seller may prefer to take and may take the liability of the principal when disclosed; and the principal may intervene and take the benefit of the contract.1 (d) A commission agent is, as was described above, a person employed, not to establish privity of contract. 1 Darrow v. Horne Produce Co., 57 Fed. Rep. 463. between his employer and other parties, but to buy or ante, p. 340. sell goods for him on the best possible terms, receiving a commission as the reward of his exertions. Ireland v. Livingston, 407. dere agent. (e) A del credere agent is an agent for the purpose Del creof sale, and gives, besides, an undertaking to his employer that the parties with whom he is brought into contractual relations will perform the engagements into which they enter. [346] *He does not guarantee the solvency of these parties, or promise to answer for their default: his undertaking does not fall under 29 Car. II. c. 3. § 4, but is rather a promise of indemnity to his employer against his own inadvertence or ill-fortune in making contracts for him with persons who cannot or will not perform them.1 cannot sue or be sued. I have said that the agent contracting within his (b) Agent authority for a named principal drops out of the transaction. As a rule he acquires neither rights nor liabilities on a contract so made. Plainly he cannot sue; for the party with whom he contracted has been induced by him to look to the named principal, and cannot, unless he so choose, be made liable to one with whom he dealt merely as the mouthpiece of Bickerton another. v. Burrell, 5 M. & S. 883. And this is so though the professed agent be the real principal. If John Styles agrees to sell his goods to John Doe describing himself as the agent and the goods as the property of Richard Roe, he cannot enforce the contract, Lewis v. for it was not made with him.2 With a few exceptions he cannot be sued.a Nicholson, 18 Q. B. 503. Exceptions. Lennard v. a Parol contracts have been framed so as to leave it uncertain whether the agent meant to make himself personally liable. But these do not affect the Robinson, rule. 5 E. & B. 125. 1 Lewis v. Brehme, 33 Md. 412; Wolff v. Koppel, 5 Hill (N. Y.), 458. 2 Dicey on Parties (Am. ed. 1879), 165. Deed. Beckham v. Drake, 9 M. & W. 95. Foreign principal. An agent who makes himself a party to a deed is bound thereby, though he is described as agent. This arises from the formal character of the contract, and the technical rule that those only can sue or be sued upon an indenture who are named or described in it as parties.'1 An agent who contracts on behalf of a foreign principal has, by the usage of merchants, no authority to pledge his employer's credit, and becomes personally liable on the L. R. 7 Q. B. contract.2 Armstrong v. Stokes, 605. Non existent principal. L. R. 2 C. P. 175. (ii) Un authorized contract. Remedies against agent. If an agent contracts on behalf of a principal who does not exist or cannot contract, he is liable on a contract so made.3 *The case of Kelner v. Baxter was cited above to [*347] show that a company cannot ratify contracts made on its behalf before it was incorporated: the same case establishes the rule that the agent so contracting incurs the liabilities which the company cannot by ratification assume. Both upon principle and upon authority,' said Willes, J., 'it seems to me that the company never could be liable upon this contract, and construing this document ut res magis valeat quam pereat, we must assume that the parties contemplated that the persons signing it would be personally liable.' If a man contracts as agent, but without authority for a principal whom he names, he cannot bind his alleged principal or himself by the contract: but the party whom he induced to contract with him has one of two remedies. (a) If the alleged agent honestly believed that he had 1 Briggs v. Partridge, 64 N. Y. 357; Borcherling v. Katz, 37 N. J. Eq. 150. 2 The presumption is otherwise in the United States. Kirkpatrick v. Stainer, 22 Wend. (N. Y.) 244; Oelricks v. Ford, 23 How. (U. S.) 49. 3 Patrick v. Bowman, 149 U. S. 411; Lewis v. Tilton, 64 Iowa, 220. an authority which he did not possess he may be sued upon (a) Wara warranty of authority.1 This is an implied promise to the other party that in consideration of his making the contract the professed agent undertakes that he is acting with the authority of a principal. ranty of authority. Directors of a building society borrowed money on its behalf, which the society had no power to borrow, and the lender, being unable to recover the loan from the society, sued the directors. They were held liable ex contractu as Richardson having impliedly undertaken that they had an authority to bind the society. 'Persons who induce others to act on the supposition that they have authority to enter into a binding contract on behalf of third persons, on it turning out that they have no such authority, may be sued for damages for the breach of an implied warranty of authority. This was decided in Collen v. Wright and other cases.' v. Wil liamson, L. R. 6 Q. B. 276. 8 E. & B. 647. C.J., in Collen v. Wright. It would be satisfactory to find a better ground for the agent's liability in such cases than the creation of a warranty or promise which is never contemplated by the parties at the time when it is supposed to be made. Indeed the doctrine of the warranty of authority was only admitted in the leading *case on the subject under Cockburn, [*348] protest from a very high authority. The difficulty is occasioned by the common law rule that no action lies for damages caused by innocent misrepresentation. But the Court of Appeal has lately placed the liability of the professed agent on this very ground, describing it as an exception to the general rule of law that an action for damages will not lie against a person who honestly makes Exors. v. a misrepresentation which misleads another.' If this be accepted as the true ground of action we are well rid 18 Q. B. D. of a grotesque legal fiction. may 1 Kroeger v. Pitcairn, 101 Pa. St. 311; Baltzen v. Nicolay, 53 N. Y. Firbank's Humphreys, (C. A.) 62. (b) Action of deceit. 3 B. & A. 114. (3) Undisclosed principal. Denman, 12 Q. B. 317. (i) Where principal's name is undisclosed. (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 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 dishonoured, 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 to 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 name of the principal is not disclosed. [*349] 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 1 Noyes v. Loring, 55 Me. 408. 2 Byington v. Simpson, 134 Mass. 169; Cream City Glass Co. v. Friedlander, 84 Wis. 53. |