In order to make clear the outlines of a difficult branch of

the law we will discuss: (1) the doctrine of the privity of

contract in the English law and its general application to the

subject of the undisclosed principal ; (2) the rules applicable

to the liability of an undisclosed principal ; (3) the rules ap-

plicable to the rights of an undisclosed principal.

1. The Doctrine of Privity of Contract.

В§ 118. General statement of the doctrine.

A fundamental notion of the common law is that a contract

creates strictly personal obligations between the contracting

parties. " A person has a right to select and determine with

whom he will contract, and cannot have another person thrust

upon him without his consent." ^ It was this notion that lay

at the basis of the common law rules as to the non-assignability

1 Post, В§ 196 e< seq.

2 Boston Ice Co. I'. Potter, 123 Mass. 28 ; Boultou V. Jones, 2 II. & n.

564.

CONTRACT FOR UNDISCLOSED PRINCIPAL. 159

of contracts ; ^ it has even yet yielded only to the extent of

allowing an assignee to enforce rights owing to his assignor

where the assignor has fully performed his obligations and it

can make no difference to the defendant to whom he pays

money or delivers goods, or where the assignee can fairly be

deputized to discharge the assignor's duties, the latter remain-

ing liable for any breach.^ It is still a question of much diffi-

culty as to how far executors or administrators succeed to the

rights and obligations of their decedents under operation of

law.3 The doctrine is very comjirehensive that "you have a

right to the benefit you contemplate from the character,

credit, and substance of the party with whom you contract."*

Even if B makes a promise to C, upon a consideration

moving from the latter, expressly for the benefit of D, D can-

not in England maintain an action upon the promise.^ In the

United States, however, such actions are generally allowed, at

least where at the time of the promise there is a duty or ob-

ligation owing from C to D which C seeks to dischai-ge or

provide for by giving to D the benefit of the contract with B.

This has been put upon the doctrine of agency and subsequent

ratification;^ upon the doctrine of a kind of common law

" trust " enforceable as for money or other thing had and re-

ceived to the benefit of C ; ' upon the doctrine " that the law,

1 Pollock on Cent. (6th ed.) 204, 701; Ames, 3 Harv. Law Rev. 338-

339.

2 Arkansas, &c. Co. v. Belden Co., 127 U. S. 379 ; Rochester Lantern

Co. V. Stiles, &c. Co., 135 K Y. 209; La Rue v. Groezinger, 84 Cal. 281;

Robson V. Drummond, 2 B. & Ad. 303; British Waggon Co. v. Lea, L. R.

5 Q B. D. 149.

3 Dickinson v. Calahan's Adni'rs, 19 Pa. St. 227; Lacy y. Getnian, 119

N. Y. 109; Drummond u. Crane, 159 Mass. 577.

* Humble v. Hunter, 12 Q. B. 310, 317; Boston Ice Co. v. Potter,

supra ; Arkansas, &c. Co. v Belden Co., svpra.

6 Tweddle v. Atkinson, 1 B. & S. 393. Accord Exchange Bank v.

Rice, 107 Mass. 37; Borden v. Boardman, 157 Mass. 410; Linneman v.

Moross, 98 Mich. 178.

^ See opinion of Johnson, C. J., and Denio, J., in Lawrence v. Fox,

20N. Y. 268.

' See Vrooman i;. Turner, 69 N. Y. 280; Jefferson v. Asch, 53 Minn.

446.

160 ITJ-NCIPAL AND TllIKD TARTY.

o{)eratin<r upon tlie act of the jturties, creates tlic duty, cstal*-

lislies the privity, and implies the promise and oblig"ation on

which the action is founded;"^ and upon a doctrine of con-