124 Duties of principal to third person. [в§в§236-238.

contracts made by the agent not within the scope of

the authority and not subsequently ratified.

See Huntley v. Mathias, 90 N. C. 101, 47 Am. Rep. 516,

Cas. Ag. 408; Pickert v. Marston, 68 Wis. 465, 60 Am. Rep. 876,

Cas. Ag. 411; Komorowski v. Krumdick, 56 Wis. 23, Cas. Ag. 413;

Jackson v. National Bank, 92 Tenn. 154, 20 S. W. Rep. 802, IS L. R.

A. 663, Cas. Ag. 415; Brockway v. Mullin, 46 N. J. L. 448, 50 Am.

Rep. 442, Cas. Ag. 419; Vescelius v. Martin, 11 Colo. 391, Cas. Ag.

422; New York Iron Mine V. First Nat. Bank, 39 Mich. 644, Cas. Ag.

423.

В§ 237. By the term "scope of the authority" is

meant the extent of the powers expressly or impliedly

conferred upon the agent. It includes not only those

actually given but those apparently conferred. It em-

braces those which custom may confer. It includes,

also, in a given case, those powers whose existence, as

against the party interested, the principal is estopped

to deny. It embraces, finally, all those powders whose

exercise, though not originally authorized, has been

subsequently ratified with a full knowledge of the facts.

See ante В§ 132 et seq.

h. The Liability of the Undisclosed Principal.

§ 238. In general. — What has thus far been said in

this subdivision has had to do with the liability of the

principal who was known to be such at the time of the

transaction; but, as has been already intimated, it is

not always the fact that the existence and name of the

principal are thus known. The principal, for some rea-

son, may prefer to keep in the background, or the agent,

without the knowledge or authority of the principal,

may fail to disclose that he is an agent and deal as

though he were himself the real party in interest.

What then is the liability of such a principal?

It must be observed that, by the hypothesis, there is

a competent principal in existence who has authorized,

and is entitled to the benefits of the act of the agent;

§§ 228-239.] DUTIES OF PRINCIPAL TO THIRD PERSON. 125

he has simply not been disclosed. The ease, therefore,

Is radically unlike that presented in the domain of rati-

fication where, by the hypothesis, then? was, at the time

of the act, no principal who had authorized it. This

distinction is not infrequently lost sight of, and the

two cases treated as substantially identical.

§ 239. Real principal liable when discovered. — It

Is the general rule that the real principal in the trans-

action, though undisclosed at the time of making the

contract, may be held liable, when discovered, upon all

simple contracts made in his behalf by his agent, even

though at the time of making the contract the party

dealing with the agent did not know that he was an

agent or did not know who his principal was, and gave

credit to the agent supposing him to be the principal.

See Kayton v. Barnett, 116 N. Y. 625, Cas. Ag. 553; Maxcy Mfg.

Co. t. Burnham, 89 Me. 538, 36 Atl. Rep. 1003, 56 Am. St. Rep. 436.

In such a case the principal is bound by the apparent

authority given to the agent, and he can not escape lia-

bility by showing that he had instructed the agent not

to do acts which are within the scope of his apparent

authoritv.

See Watteau v. Fenwick, L. R., [1893] 1 Q. B. Div. 346, Cas. Ag.

369; Hubbard v. Tenbrook, 124 Pa. 291, 16 Atl. Rep. 817, 10 Am. St.

Rep. 585, 2 L. R. A. 823, Cas. Ag. 367.

The case, however, presupposes that the principal at

the time of the contract was really undisclosed. For if

he were known at the time of the transaction and the

other party nevertheless elected to give credit to the

agent only, he cannot afterwards charge the principal.

Whether exclusive credit was given to the agent or not

is usually a question of fact.

See Paterson v. Gandasequi, 15 East 62, Cas. Ag. 545; Addison v.

Gandasequi, 4 Taunt. 573, Cas. Ag. 547; Thompson v. Davenport,

126 DUTIES OF PRINCIPAL TO THIRD PERSON. [§§ 239-240.

9 B. & Cr. 78, Cas. Ag. 547; Raymond v. Crown, etc., Mills, 2 Mete.

(Mass.) 319; James v. Bixby, 11 Mass. 34; Stehn v. Fasnacht, 20

La. Ann. S3; Brown v. Rundlett, 15 N. H. 360; Ferguson v. McBean

91 Cal. 63, 14 L. R. A. 65; Heffron v. Pollard, 73 Tex. 96, 15 Am. St.

Rep. 764.

The exemption of the principal, in such a case, is

strengthened by the fact that he has settled with the

agent supposing that the third party looked to the

agent only.

See Cleveland v. Pearl, 63 Vt. 127, 25 Am. St. Rep. 748, Cas. Ag.

556; James v. Bixby, supra.

§ 240. Exceptions. — To the general rule thus

giving the other party the right to hold the undis-

closed principal when discovered, there are two excep-

tions: —

1. The principal can not be held where, although he

was not disclosed at the time of the transaction, he has

since been disclosed and the other party has then, with

full knowledge as to the principal and with power of

choice, deliberately elected to give credit to the agent

alone.

Knowledge not only of the existence but of the name

of the principal is necessary, and what the other party

may have done before he received such knowledge can-

not bind him as an election. And even with such

knowledge, the mere presentation of a claim against

the agent or even the commencement of a suit against

him, will not, it has been held, be conclusive evidence

of an election to hold the agent only.

See Beymer v. Bonsall, 79 Pa. St. 298, Cas. Ag. 554; Curtis v.

Williamson, L. R. 10 Q. B. 57.