Instruments, adding words descriptive of their office, and

several cases have distinctly decided that such officers are

entitled to the usual presumption.* But the doctrine is over-

looked or questioned in other cases.^

^ome cases make a further distinction to the effect that

the presumption docs not extend in any case to the officers

of a muuicipality or town which is capable of making con-

tracts for itself and is liable to be sued thereon.^

A public agent is not liable for breach of implied warranty

of authority, since no warranty will be implied in such cases.'

6. Liability of Agent in Quasi-cojitract

В§ 204. Money paid to agent by mistake or fraud.

An agent is liable to a third party in quasi-contract under

the following circumstances : —

1 Hodgson V. Dexter, 1 Cranch (U. S.), 343; Knight v. Clark, 48

N. J. L. 22.

2 Macbeath v. Haldimand, 1 T. R. 172; Walker r. Swartwout, 12

Johns. (N. Y.) 443; Savage v. Gibbs, 4 Gray (Mass.), 601; Parks v.

Ross, 11 How. (U. S.) 362.

8 Clutterbuck v. Coffin, 3 M. & G. 842; Auty v. Hutchinson, 6 C. B.

266; Simonds v. Heard, 23 Pick. (Mass.) 120; Brown v. Bradlee, 156

Mass. 28.

* Monticello v. Kendall, 72 Tnd. 91; Sanborn v. Neal, 4 Minn. 126;

IklcClellan v. Reynolds, 49 Mo. 312.

5 Cahokia v. Rautenberg, 88 111. 219 ; Wing v. Glick, 56 Iowa, 473.

6 Providence v. Miller, 11 R. I. 272; Brown v. Bradlee, supra.

7 Dunn V. Macdonald, 1897, 1 Q. B. 401.

256 AGENT AND THIRD PAKTY.

(1) Where tlic third party has paid money to the agent,

as agent, from a mistake of fact, or upon a consideration

which fails, and notice is given the agent before he pays the

money over to his principal, or otherwise changes his legal

position on the strength of such payment, the agent is liable

to the tliird person.^ But if the agent has i)aid the money

over to his principal, or has changed his legal position to his

detriment upon the strength of the payment, he is not liable.^

If the agent has not acted as agent, but for an undisclosed

principal, the case escapes the doctrines of agency and is

treated like any case of payment of money by mistake/^

(2) Where the third party is induced by the fraud of the

agent to pay him money, he may recover the money from the

agent, whether the latter has paid it over to his pi-incipal or

not."* The same result follows if an agent receives for his

principal money which the law forbids him to receive, as from

an insolvent debtor.^ If the duress or fraud is that of the

principal and not the agent, the latter would be protected by

a payment in good faith to the former.*^

(3) Where the third party pays the money to the agent

through compulsion or extortion, even though no notice has

been given and the agent has paid the money to the principal,

an action may be brought against the agent for its recovery.''

But where the third party pays the money voluntarily, or

1 Duller i: Ilarnson, Cowp. 565; Cox r. Prentice, 3 M. & Sel. 344-, La

Farge r. Kiieeland, 7 Cow. (-N. Y.) 450; Caljot v. Shaw, 148 Mass. 459;

Shepard v. Slierin. 43 Minn. 382; O'Connor r. Clopton, GO Miss. 349;

Smith V. Binder, 75 111. 492.

2 Holland V. Russell, 4 B. & S. 14; Ellis v. Goulton, 1.S93. 1 Q. B.

350 ; r. S. V. Pinover, 3 Fed. Rep. 305 ; Fry v. Lockwood, 4 Cow. (N. Y.)

454.

В» Newall r. Tonilinson, L. R. G C. P. 405; Smith v. Kelly, 43 Mich.

390.

* Snowdf.n v. Davis, 1 Taunt. 359; Smith v. Sjeap, 12 M. & W. 585;

Moore n. Shield.s, 121 Ind. 267; Larkin v. Ilapgood, 56 Vt. 597.

6 Larkin v. Hajjgood, 56 Vt. 597; Ex parte Edwards, 13 Q. B. D.

747.

6 Owen V. Cronk, 1895, 1 Q. B. 265.

В» Elliott V. Swartwout, 10 Pet. (U. S.) 137.

LIABILITY IN CONTRACT. 257

where a personally innocent agent has before notice paid the

money over to the principal, the agent is not liable.^

В§ 205. Money received to the use of the third party.

(4) Where the ngent has received money from his prin-

cipal to be paid to the third party, and undertakes with such

party so to pay it, but instead converts it to his own use, tlie

third party may, at his election, proceed against the agent

as for money had and received to his use.^ But he is not

liable in such case unless he has agreed expressly or impliedly

to pay the third person.^ An election to hold the agent is

final and discharges the principal from further liability.'* If

the agent after receiving the money promises to pay the third

party, he is liable upon his promise, and " No consideration

need pass as between the agent and the creditor. The funds

in his hands are a sufficient consideration for his agreement." ^

And it has been held that if the third party requests the agent

to pay to X the money which the principal directed the agent

to pay to the third party, and the agent agrees to do so, X

may maintain an action against the agent. " An action for

* money had and received ' is a most liberal action, and may

be as comprehensive as a bill in equity."^ This falls under

the doctrine of a " promise for the benefit of a third person,"

and escapes the general doctrine as to privity of contract.^

7. Liahility of Tliird Person to Agent.

В§ 206, Introduction.

Since the agent may be liable, either solely, or in common

with the principal, on contracts entered into in behalf of the

1 Owen V. Cronk, 1895, 1 Q. B. 265.

2 Crowfoot V. Gurney, 9 Bing. 37-2; Walker r. Eostron, 9 M. & W.

411; Keene v. Sage, 75 Me. 138; Beach v. Ficke, 94 Iowa, 283.

3 Howell V. Batt, 5 B. & A. 504; Malcolm v. Scott, 5 Ex. 601 ; Baron

V. Husband, 4 B. & A. 611.

* Beach v. Ficke, supra.

5 Goodwin v. Bowden, 54 Me. 424.

^ Keene v. Sage, supra.

T Ante, В§ 118.

17

258 AGENT AND THIRD rARTT.

latter, it should follow that the contractual obligation is

recipi'ocal and that the third person is also liable to the agent.

Such is found to be the case. The right of the agent to

sue the third person may be treated under the following

classes : —

1. Where the agent alone may sue.

2. Where tlie agent or principal may sue, but the princi-

pal may control the suit.

3. Where the agent or principal may sue, but the princi-

pal cannot control the suit.

В§ 207. (I) Where the agent alone may sue.

1. Sealed instruments. Where an agent contracts in his

own name in a sealed instrument, he alone can sue upon

it.^ But it seems that any defence good against his prin-

cipal may be set up in such suit, since the action, though in

the name of the agent, is for the benefit of the princi])al.2

So also any defence good against the agent may be set up,

even if it would not be good against the principal in case

he could sue in his own namc.^ It follows that the third

party may avail himself of any defence or set-off that would

be good against either principal or agent, for he is entitled

to defend against the party of record, and he is equally en-

titled to defend against the one for whose use the action is

brought.

2. Negotiable instruments. It is also a technical rule of

the law merchant that if the agent is named as the payee

of a negotiable instrument, he alone can sue upon it.'* As

already pointed out, this technical rule has very generally

been ignored in cases where there is any indication by the

addition of the word " agent," or its equivalent, that the

1 Ante, §§ 134, 188; Shack v. Anthony, 1 M. & S. 573; Berkeley v.

Hardy, 5 B. & C. 355; Clarke v. Courtney, 5 Pet. (U. S.) 319.

^ Bliss V. Sneath, 10:5 Cal. 43; cf. Isberg v. Bowden, 8 Ex. 852, which

must be regarded as inapplicable where equitable defences are permitted.

8 Gibson v. Winter, 5 B. & A. 9G.

* §§ 1.35, 194; United States Bank v. Lyman, 20 Vt. 666; Fuller v.

Hooper, 3 Gray (Mass.), 334; Grist v. Backhouse, 4 Dev. & B. (N. C.)

362; Cocke v. Dickens, 4 Yerg. (Tenu.) 29.

LIABILITY IN CONTKACT. 259

payee is a representative of an unnamed principal.^ This

is especially true of instruments payable to one described

as " cashier." 2 The technical rule itself can give little real

difficulty, since the payee may by indorsement confer an

unquestioned right upon the principal to maintain the

action.

3. Right restricted to agent. Where the right to sue on

a contract is by its express terms restricted to the agent, he

alone can sue.^

4. Ostensible agent really principal. Where one contracts

as an agent, but is in reality the principal, he may sue upon

the contract, provided after knowledge of the fact that he

is the I'eal principal the third party recognizes him as prin-

cipal,* or in case the identity of the principal is not a con-

trolling consideration in the contract,^ and due notice of the

facts has been given to the third party before action is

brought.^ It has been held, however, that where a memo-

randum is signed by brokers as agents for an unnamed

principal, and they afterward declare themselves as princi-

pals, the memorandum so signed does not satisfy the Statute

of FraudsJ But where the agent James represented that

he was the principal John, and made and executed a contract

in the name of John, it was held in an action by John that

the Statute of Frauds was satisfied.^ If the agent intends

and professes to contract for a principal and not for him-

1 Ante, В§ 135.

2 First N. B. v. Hall, 44 N. Y. 395.

3 Ante, В§ 133; Humble v. Hunter, 12 Q. B. 310; Lucas v. De la Cour,

1 M. & S. 249.

4 Rayner v. Grote, 15 M. & W. 359.

5 Schmaltz v. Avery, 16 Q. B. 655, where plaintiff contracted in hia

own name "as agent for the freighter," ami the court held that as the

supposed freighter was not named, the defendants could not have con-

tracted with reference to his solvency or credit.

6 Bickerton v. Burrell, 5 M. & S. 383.

' Sharman v. Brandt, L. R. 6 Q. B. 720. There are some expressions

in this case indicating that the ostensible agent could not sue because the

contract was not made with hira.

8 Hunter v. Giddiugs, 97 Mass. 41.

2G0 AGENT AND THIRD PARTY.

self, the fact that the principal is non-cxistciit or under

disability docs not make the agent a contracting party.^

A distinction has been stated between cases where the

ostensible agent names a principal, and where he asserts

his agency but does not name his principal.^ In the first

case it is said the ostensible agent cannot sue because

clearly there was no intention to give credit to him,^ while