When an agent acts entirely within the scope of the authority conferred on him, discloses to the third person the name of the principal for whom he is acting as agent, the principal alone will be bound on the contracts the agent so makes with the third person, and the agent himself, will not be personally liable therefor so far as third persons are concerned. The authority to act may be implied in the agent from a course of dealing with the agent, where his acts have had the sanction of the principal.2 It is, however, the duty of the third person to ascertain the agent's authority,3 and if it is a written authority, to see the writing itself, the third person must use due care and caution in dealing with an agent and may then act on appearances, but should, if possible, seek confirmation of the authority, and the principal can not limit such authority, by secretly instructing the agent contrary to the way the agency is broadly represented. An undisclosed principal is, when subsequently discovered, liable at the election of the third party if the third person acts within reasonable time.4

1 Baxter vs. Lemon, 60 I11., 237;

Strawn vs. O'Hara, 86 I11., 53.

2 Bryan vs. Jackson, 4 Conn., 291.

3 Baxter vs. Lemont, 60 I11., 237.

4 Irvine vs. Watson, 5 Q. B. Div.,

102; 29 Eng. Reports, 186.

The undisclosed principal, is liable to the third person on the contract made by his agent. The agent having acted in his own name, of course, is primarily liable, but this does not in any way interfere with the third person's right to elect to hold the real principal as soon as he is discovered.5

The third person must proceed, however, within a reasonable time to make his election to hold the principal, and if he delays until after the principal has settled with the agent, relying on the inaction of the third person, on his implied representation that he expects to hold only the agent, then the third person would be estopped from holding the principal.6

The third person also having the right to elect to hold either the principal or agent where the undisclosed principal is discovered must be bound by the election he makes. He can hold either, but he cannot hold both.7