In the second case he may sue because there was at least

no intention manifested to give credit to any other person.^

It is admitted, however, that even in the first case the agent

may sue if the contract has been performed by him with the

acquiescence of the third party ,''^ and it has been suggested

that the same result would follow if the agent, before bring-

Ing the action, gives due notice of the actual state of the

facts.^

В§ 208. (II) Where either agent or principal may sue.

The agent or the principal may sue on contracts made by

the agent on behalf of his principal, — (1) where, the agent

contracts personally," or (2) where the agent has a special

property in the subject-matter of the contract or a bene-

ficial interest in it.^

(1) Where the agent and principal are both bound on the

contract,^ the primary right to maintain an action against

the third party is in the principal, but, subject to his

assent express or tacit,^*^ the agent may maintain an action

1 Ilollman v. Pullin, 1 C. & E. 254.

2 Dicey on Parties (Am. ed.), Rules 18 and 10, pp. 164-1G8; Mccham

on Agency, В§ 7G0.

^ Compare Boulton v. Jones, 2 II. & N. 56-1; Boston Ice Co. v. Potter,

123 Mass. 28.

^ Schmaltz v. Avery, supra.

6 Rayner v. Grote, supra.

6 Bickerton v. Burrell, 5 M. & S. 383 ; Foster v. Smith, 2 Cold. (Tenn.)

474.

' J n^e, §§196-198.

8 Ante, В§ 109.

• Ante, § 196 et seq.

" Sadler v. Leigh, 4 Camp. 194.

LIABILITY IN CONTRACT. 261

wherever an action could be maintained against the agent.^

" It is a well-established rule of law that when a contract

not under seal, is made with an agent in his own name

for an undisclosed principal, either the agent or the prin-

cipal may sue. If the agent sues, it is no ground of defence

that the beneficial interest is in another, or that the plain-

tiff, when he recovers, will be bound to account to another.

. . . The agent's right is, of course, subordinate to and

liable to the control of the principal, to the extent of his

Interest. He may supersede it by suing in his own name,

or otherwise suspend or extinguish it, subject only to the

special right or lien which the agent may have acquired." ^

The right of the agent to sue ceases with the termination

of the agency, whether the agency is terminated by the act

of the parties or by operation of law.-^

These cases are those in which the agent contracts in his

own name, but in behalf of his principal, the contract not

being under seal, or a negotiable instrument, or expressly

restricted to the agent,*

In these cases the right of the agent to sue ceases upon

the intervention of the principal, and a settlement with the

principal is a good defence to an action by the agent.^

The right of the agent to sue does not pass to his assignee

in bankruptcy where the agent has no beneficial interest in

the contract.^

The third party may avail himself of any defence or set-

1 Joseph V. Knox, 3 Camp. 320; Gardiner v. Davis, 2 C. & P. 49;

Cooke V. Wilson, 1 C B. n. s. 153; U. S. Tel. Co. i-. Gildersleeve, 29

Md. 232; Ludwig v. Gillespie, 105 N. Y. 653. This right is not

taken away by code provisions requiring actions to be brought in the

name of the real party in interest. Albany, &c. Co. i'. Lundberg, 121

U. S. 451 ; Harrigan v. Welch, 49 Mo. App. 496 ; Rowe v. Rand, 111 Ind.

206.

2 Rhoades v. Blackiston, 106 Mass. 334.

8 Miller v. State Bank of Duluth, 57 Minn. 319.

4 Ante, §§ 123, 196-199.

6 Sadler v. Leigh, 4 Camp. 195; Atkinson v. Cotesworth, 3 B. & C. 647;

Dickenson v. Naul, 4 B. & A. 638.

6 Rhoades v. Blackiston, 106 Mass. 334.

262 AGENT AND THIRD PARTY.

off good against the agent, as well as any good against his

{)rineij)al.^

§ 209. (Ill) Same. — "Where principal cannot control the suit.

(2) Where the agent has a special property in or lien

upon the subject-matter of the contract,'^ he may maintain

an action in his own name free from the control of the

princiiial,'' at least to the extent of his interest. But such

an interest must exist in order to give the agent a right

of action;* though this will be presumed where the agent

is one who usually has such an interest, as an auctioneer ^

or factor.^ The measure of damages is the same whether

the suit be brought in the name of the agent or in that

of the principal." A settlement with the principal cannot

be ])leaded as a defence to the agent's action ^ unless the

agent has led the third person to believe that he acquiesces

in such settlement.^

В§ 210. Liability in quasi-contract.

Where the agent has paid money by mistake to the third

party, he may maintain an action for its recovery. It seems

either the principal or the agent may sue,^*^ and as the agent

is liable to the principal for negligence in the conduct of

the business, this may be the only way in which the agent

can protect himself against loss.^^

1 Smith V. Lyon, 3 Camp. 465 ; Gibson v. Winter, 5 B. & A. 96.

2 Ante, В§ i;i9.

* Chitty on Pleading, p. 8; Driiikwater v. Goodwin, Cowp. 251; Rowe

V. Rand, 111 Ind. 206; Thompson v. Kelly, 101 Mass. 291.

* Fairlie v. Fenton, L. R. 5 Ex. 109. (Brokers do not usually have

such interest.)

6 Williams v. Millington, 1 H. Bl. 81 ; Minturn v. Main, 7 N. Y. 220.

В« Drinkwater v. Goodwin, Cowp. 251 ; Groover v. Warfield, 50 Ga. 614.

' Evrit I'. Bancroft, 22 Oh. St. 172.

В« Atkyns v. Amber, 2 Esp. 49:5; Robinson v. Rutter, 4 El. & Bl. 954.

e Grice r. Kenrick, L. R. 5 Q. B. 340.

" Stevenson v. Mortimer, Cowp. 805; Oora v. Bruce, 12 East, 225;

Holt r. Ely, 1 El. & Bl. 795.

" Kent V. Bernstein, 12 Allen (xMass.), 342.

LIABILITY IN TOUT. 263

CHAPTER XVI.

TORTS BETWEEN AGENT AND THIRD PARTY.

В§ 211. Agent liable for misfeasance.

An agent is personally liable to third persons for loss or

damage occasioned to them by his misfeasance when acting

on behalf of his principal, whether the act or omission

constituting the misfeasance was authorized or not.^ It is

no defence to allege his principal's orders, or that he acted in

good faith believing his principal had directed only what

might lawfully be done.^ " The warrant of no man, not even

the king himself, can excuse the doing of an illegal act, for

although the commanders are trespassers, so are also the

persons who did the fact." ^ It is immaterial that the agent

derives no personal benefit from the wrong.

.4

В§ 212. "Whether agent liable for non-feasance.

An agent is not liable to a third person for a mere non-

feasance, or not doing at all that which he has agreed with

his principal to do. This is merely another way of stating

that no one can sue for a breach of duty except the one to

whom the duty is owing.^ The first problem in such cases is

1 Cullen V. Thomson, 4 Macq. 424; Swift v. Jewsbury, L. R. 9 Q. B.

301; Campbell r. Hillman, 15 B. Mon. (Ky.) 508; Weber v, Weber, 47

Mich. 569; Hamlin v. Abell, 120 Mo. 188.

2 Bates V. Pilling, 6 B. & C. 38; Mill v Hawker, L. R. 10 Ex. 92; Lee

V. Mathews, 10 Ala. 682; Williams v. Merle, 11 Wend. (N. Y.) 80.

3 Sands V. Child, 3 Lev. 352. See also Whitfield v. Lord Le Despencer,

2 Cowp. 754. The command of the State is, however, a defence in an

action by a subject of a foreign State. Bnron v. Denman, 2 Ex. 167 ;

Pollock on Torts (5th ed.), pp. 104-109; post, В§ 294.

* Weber v. Weber, supra.

5 Dicey on Parties (Am. ed.), p. 489 ; Story on Agency, В§ 309 ; Lane

V. Cotton, 12 Mod. 472; Delaney v. Rochereau, 34 La. An. 1123.

264 AGENT AND THIRD PARTY.

to ascertain whether any duty is owing to any other pcrs(ni

than the principal, or specifically to the third person injured

by the non-feasance.

Whether an act or omission resulting in injury to a tliird

person is a mere non-feasance, or whether it is a misfeasance

or breach of duty toward a third person, involves distinctions

of a subtle character.^ This matter will be more fully treated

in a subsequent section.^

В§ 213. Special instances of misfeasance.

(1) Fraud. An agent is personally liable for his own

frauds committed in the course of the agency, although com-

mitted for the ])rinci pal's benefit.^ " A person cannot avoid

responsibility merely because he gets no personal advantage

from his fraud. All persons who are active in defrauding others

are liable for what they do, whether they act in one capacity

or another. . . . While it may be true that the j)rincipal is

often liable for the fraud of his agent though himself honest,

his own fraud will not exonerate his fraudulent agent." ^ It