If read with the signature and its descriptive words, would

leave a reasonable doubt as to which party is intended to be

charged.

(3) An ambiguity is created by merely descriptive words

following an indorsement.

(4) Parol evidence is always admissible to show that the

principal does business under the name of the agent.

3. Where both Principal and Agent are hound.

В§ 196. (I) Undisclosed principal.

Where an agent contracts in his own name, whether by

parol or in writing (other than sealed or negotiable instru-

ments), for an undisclosed principal, both the agent and the

principal are liable, and the third party may elect which he

will hold.^ Even W'here a negotiable instrument is given by

the agent in his own name, the payee by disregarding the

instrument may proceed against the principal upon the origi-

nal consideration.'-^ But a pi'incipal is not undisclosed merely

because he is not named ; if the third person knows the agent

is acting for a particular principal, and there is no specific

contract binding the agent personally, the sole remedy will be

1 Simon v. Motives, 3 Burr. 1921 ; Royce v. Allen, 28 Vt. 234 ; Arger^

singer V. Macnaughton, 114 N. Y. 535; Pierce v. Johnson, 34 Conn. 274.

As to what constitutes an election, see ante, В§ 126.

2 Pentz V. Stanton, 10 Wend. (N. Y.) 271.

250 AGENT AND THIRD PARTY.

against the principal.^ It is not enougli, however, to exon-

erate the agent that the third person discovers the existence

and identity of the principal before the contract is jjcrfornied

if the princijjal was unknown when the contract was niade.^

Of course the third person might then make an election to

hold the principal, but the evidence of such election must be

convincing.^

If the third person knows that the agent is acting for some

principal, but does not know who the principal is, the agent is

liable as well as the principal,* unless he contracts in such

form as to rebut the presumption of personal liability.^ Even

where he contracts " as agent for my principals," or " as agent

for owners," it may be shown that by custom the agent un-

dertakes a person liability.^

В§ 197. (II) Simple contract so executed as to render agent liable.

If an agent contracts personally in a simple written con-

tract, he is personally liable even though his principal is

disclosed and may, at the option of the other contracting

party, also be held liable. Whether the agent has contracted

personally depends upon the intention of the parties as dis-

closed by the terms of the contract and the attendant circum-

stances. A written contract may be that of the principal

alone, that of the agent alone, or that of both principal and

agent. In the first case only the principal is bound ;''' in tlie

second case only the agent is bound by the terms of the

written instrument, but parol evidence is admissible to show

that the principal is also bound, but not to show that the

agent is not bound ; ^ in the third case both are bound by the

1 Chase v. Debolt, 7 111. 371 ; Boston, &c. R. v. Wliitcher, 1 Allen

(Mass.), 497; Johnson v. Armstrong, 83 Tex. 325.

2 Forney v. Shipp, 4 Jones' L. (N. C.) 527.

^ Hutchinson i'. Wheeler, 3 Allen (Mass.), 577.

* Ilobhouse v. Hamilton, 1 Hog. 401; Cobb v. Knapp, 71 N. Y. 348.

6 Southwell V. Bovvditch, 1 C. P. D. 374.

В« Hutchinson v. Tatham, L. R. 8 C. P. 482; Piko r. Oni,rlcy, IS Q. B.

D. 708; Fleet v. Murton, L. R. 7 Q. B. 126 ; cf. Waddell v. ' Mordecai,

3 Hill (S. C), 22.

7 Ante, В§ 182. 8 ^^te, В§ 123.

LIABILITY IN CONTRACT. 251

very terms of the instrument,^ but only according to the

terms. 2

The rule as concerns parol evidence is that it may be intro-

duced to fix liability upon an unnamed principal, but not to

exonerate an agent who has made himself liable by the terms

of tlie contract. This rests upon the consideration that such

evidence, introduced for the first purpose, does not contradict

the written agreement, but merely shows that it also binds

another, whereas, if offered for the second purpose, it does con-

tradict the written agreement by seeking to establish that the

agreement does not bind liim whom it purports to bind.^

" A principal may be charged upon a written parol execu-

tory contract entered into by an agent in his own name,

within his authority, although the name of the principal does

not appear in the instrument, and was not disclosed, and the

party dealing with the agent supposed that he was acting

for himself, and this doctrine obtains as well in respect to

contracts which are required to be in writing, as to tliose

where a writing is not essential to their validity. It is, doubt-

less, somewhat difficult to reconcile the doctrine here stated

with the rule that parol evidence is inadmissible to change, en-

large, or vary a written contract, and the argument upon which