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Undisclosed Principal


UNDISCLOSED PRINCIPAL. For acts done in his own name with out disclosing his principal the agent is primarily lia ble, but his action having been in fact for a principal, the latter, when discovered, may, at the option of the party with whom the agent has dealt, if exercised with in a reasonable time, be held liable on all simple con tracts made in his behalf by the agent, though the credit was given to the agent under a misapprehension as to his true character. (Mechem. on Agency, Sec. 699; Merrill v. Kenyon, 48 Conn. 314.) The application of this rule is subject to the follow ing exceptions: i. Where the status of the account existing between the principal and the agent has been altered to the prejudice of the principal, before the other party has elected to hold the principal, he will not be liable. That is, where the principal has paid, the agent, or settled with him in good faith, believing from the facts or circumstances that the agent has settled with the other party, he will not be liable. (Thomson v. Davenport, 9 D. & C. 78; Knapp v. Simon, 96 N. Y. 284.) 2. Where the person with whom the agent has dealt, after learning who was the principal, voluntarily elects to treat the agent as the party liable, he cannot then look to the principal, and must abide by his choice. He cannot hold both liable. (Paterson v. Grandasequi, 15 East, 62; Silver v. Jordan, 136 Mass. 319.) When a party will be deemed to have elected to hold the agent liable depends upon the circumstances. Such election may be manifested by an express or unequivo cal act; or be implied where the conduct of the party- is such as to lead a prudent man to the conclusion that he intended to look to the agent only. Whether the con duct of the party is such as to warrant the principal in settling with the agent on the presumption that the other party has been paid, is a question of fact for the jury, with reference to the facts and circumstances of the particular case. (Schepflin v. Dessar, 20 Mo. App. 569.) But such party- cannot be held to have made an election before he has knowledge of his choice in the matter, and is told of the existence of the agency- and who was the principal. (Merrill v. Kenyon, 48 Conn. 314.) When the princiPal is discovered the party must exercise the right of choice within a reasonable time, or be deemed to have waived it. Reasonable time de pending upon the circumstances. (Mechem., Agency, Sec. 7oo.) The rule extends to all simple contracts, whether oral or written, but not to contracts under seal, as sealed instruments bind only those who are parties to them. (Huntington v. Knox, 7 Cush. 374; Byington v. Simpson, 134 Mass. 169; Briggs v. Par tridge, 64 N. Y. 357.)

agent, party, liable and circumstances