York County Bank v. Stein

Weisel, J., delivered the opinion of this Court. The appeal in this case is from a judgment of the Court of Common Pleas for Baltimore City, and the questions raised by the record and briefs are : First. Whether the action can be maintained betAveen the parties; Secondly. If so, whether the defendants were entitled to a certain credit for five hundred dollars claimed by them under their plea of payment, which was resisted by the plaintiff.

The facts set out in the exception, as proved in the cause, and Avhich were to be found by the jury, show that the contract sued on was made by the agents of the respective parties ; the plaintiff being made known to the defendants at the time of the contract, but the defendants not being disclosed until some time afterwards, but before the day of payment arrived ; it being known however to the plaintiff at the time of the contract that McGfinn, a broker, was acting as an agent in the premises for one of his customers. As to the liability of the defendants to the plaintiff in such a case this Court entertains no doubt or difficulty. The laAV is avcII settled that the principal is personally responsible in all .cases of contracts made by an agent, within the scope of his authority, and this is not varied by the fact that the agent contracts in his own name, whether he discloses his agency or not, provided the circumstances of the case do not shoAV that an exclusive credit was given to the agent. The circumstance that the name of the principal was not disclosed at the time of the contract, does not determine the election of the plaintiff to look to the agent alone for the fulfillment of the contract.

The principal is, ⁴⁶⁴ notwithstanding, answerable when discovered. Story on Agency, sec. 446 and notes. Thomson vs. Davenport, 9 Barn. & Cres., 73. And such is the law with regard to a plaintiff, principal, who contracts by an agent.

If the agent contracts in his own name without disclosing the principal, either the agent or the principal may sue upon the contract; the defendant in the latter case being entitled to be placed in the same situation, at the time of the disclosure of the principal as if the agent had been the contracting party. Sims vs. Bond, 5 Barn. & Adol., 389. New Jersey Steam Nav. Co., vs. Merchants' Bank of Boston, 6 How. 380, 381 .

In all cases of contracts by agents, without disclosing their principals, the Courts in affording' remedies, will look to the substantial parties in interest, in order to avoid circuity of actions, saving however to the defendant any rights which he may justly acquire as against the plaintiff by the course of dealing anterior to the disclosure, either with the agent of the plaintiff, or his own agent. The liability of the defendants in this case, under the law as herein stated, was not disputed by their counsel in the argument, but it was insisted, and that is the main point of inquiry, that their responsibility must be taken with this qualification, that if in the meantime, before their names were disclosed, they had settled with their agent they could not be held bound, and that the payment by them of both the margins called for the plaintiff to their agent before their names were made known, enured to their benefit and should be credited on the plaintiff’s claim in suit, whether paid over by their agent to the plaintiff or his agent, or not. That the rule of the defendant’s liability is subject to a qualification, arising from his transactions in relation to the contract with his agent in the interval, which will discharge it under certain circumstances, is true. This qualification is stated by Judge ⁴⁶⁵ Story (Agency, Sec. 449,) thus : “That the principal will not be made personally liable, if, in the intermediate time, he has settled with his agent, without any suspicion of his own personal liability, or if he would otherwise, without any default on his own part, be prejudiced by being made personally liable.” Examples are given and the authorities cited both in the text, and in the notes, to illustrate and explain the extent and bearing of this qualification, and the section concludes with the author’s view of it, as derived from the later decisions.

In all the cases he declares it essential that the plaintiff should in some way have either deceived the principal, or induced him to alter his position and account towards his agent, before he is deprived of his remedy against the principal; and that it is how settled that the simple