Sullivan v. Shailor

Hall, J. The contract of an agent within the scope of his authority and for the benefit of his principal, is generally enforceable by the latter only, and in the same manner as if made by him in person. But a third party, though dealing with an agent who is acting within the limits of his power and for the benefit of his principal, is not compelled against his own wishes to contract with either a known or unknown principal. He may in such cases contract with the agent in his personal capacity, to the exclusion of the principal, and when it is clearly shown, either from the terms of the agreement or by the attendant circumstances, that the contract was exclusively with the agent personally, the principal does not become a party to the contract and cannot sue upon it in his own name. Story on Agency, §423; Mechem on Agency, § 771; Humble v. Hunter, 12 Q. B. 310; Winchester v. Howard, 97 Mass. 303. When an agent, within the limits of his authority and for the benefit of his principal, enters into a contract not under seal, with a third person, either without disclosing the fact of his agency, or, if that fact be disclosed, without disclosing the name of his principal, as a general rule suit may be instituted by either the agent or the principal for the enforcement of such contract. But as the reason of the rule which •permits the principal to sue in such cases in his own name, is that he is entitled to the ultimate benefit of the contract made by his agent, so in seeking to recover that benefit he must assume the position of the agent whose contract he is enforcing, and the action so instituted by him is open to the defenses which might have been interposed to a suit commenced by the agent at the time the principal first sought to enforce the contract. Story on Agency, § 340; Mechem on Agency, §§ 769-773; Sims v. Bond, 5 B. & Ad. 389; Ford v. Williams, 21 How. U. S. 287; Ilsley v. Merriam, 7 Cush. 242; Huntington v. Knox, ibid. 371; National Life Ins. Co. v. Allen, 116 Mass. 398; Ludwig v. Gillespie, 105 N. Y. 653. [737] In Foster v. Graham, 166 Mass. 202, Chief Justice Field, in giving the opinion of the court, says: “ In Barry v. Page, 10 Gray, 398, it is said: ‘As the contract of an agent is in law the contract of the principal, the latter may come forward and sue thereon, although at the time the contract was made the agent acted as and appeared to he the principal. There is a qualification of the rule, by which it is held that when a contract has been made for an undisclosed principal, who permits his agent to act as apparent principal in the transaction, the right of the former to intervene and bring suit in his own name is not allowed in any way to affect or impair the right of the other contracting party, but he will in such case be let in to all the equities, sefc-offs and other defenses to which he would have been entitled, if the action had been brought in the name of the agent.’ ” The right of the principal to sue upon a contract made by an agent without disclosing his principal, was recognized by this court in Sutton v. Mansfield, 47 Conn. 388. The law will not, however, extend to an undisclosed principal the right to perform himself the executory contract of his agent which involves a personal trust or confidence imposed in the latter by the other contracting party. But if a contract so made by a third party in consideration of the-personal character, ability or skill of the agent, has been fully-performed by the latter, or if performance by the principal has been accepted, there would seem to be no reason why the undisclosed principal should not be entitled to enforce-by an action against the third party, a performance by him, of his part of the contract. Mechem on Agency, § 770; Boston Ice Co. v. Potter, 123 Mass. 28; King v. Batterson, 13 R. I. 117; Eggleston v. Boardman, 37 Mich. 14. From the finding of facts in the case at bar, it appears-, that McKenna, as an agent of the plaintiff, but without having disclosed either the name of his principal or the fact of his agency, contracted as an apparent principal with the defendant to furnish materials and render services in the construction of certain buildings. The undertaking of Mc-Kenna has been fully performed, but the sum due from the [738] defendant has not been fully paid. This action is to recover the balance due. As the answer is a general denial, there was apparently no claim by the defendant of payment to McKenna, or a right of set-off against him, and there is no fact found indicating that it would work an injustice to the defendant if he should be required to pay to the plaintiff the full amount of his claim. The contract was not by its terms made solely with the agent personally, to the exclusion of any principal, nor are the facts surrounding the making of the contract such as to show a desire on the part of the defendant to deal with McKenna personally and exclusively. The ease presented is simply that of a principal claiming the right to sue in his own name upon a contract made for his benefit by his authorized agent with a third party, who had no knowledge of the agency, and who dealt with the agent as an apparent principal. The plaintiff is in law a party to the contract which was so made by his agent, and may maintain an action upon it upon the facts before us. There was error in the ruling of the court that the plaintiff was not a party to the contract made by McKenna with the defendant, and a new trial is granted. In this opinion the other judges concurred.