This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
In many of the cases some emphasis is laid on the fact that the principal was not disclosed when the agent entered into the contract with the adversary party. The importance of this fact is
1See Sec. 695, 976.
2 Nash v. Towne, 5 Wall. (U. S.) 689; Merrill v. Kenyon, 48 Conn. 314; 40 Am. Rep. 174; Daugherty v. Heckard, 189 Ill. 239; 59 N. E. 569; affirming 89 Ill. App. 544; By-ington v. Simpson, 134 Mass. 169; 45 Am. Rep. 314; Jones v. Williams, 139 Mo. 1; 61 Am. St. Rep. 436; 37 L. R. A. 682; 39 S. W. 486; 40 S. W. 353; Kayton v. Barnett, 116 N. Y. 625; 23 N. E. 24; Patrick v. Mercantile Co., - N. D. -; 99 N. W. 55; Aetna Ins. Co. v. Church, 21 0. S. 492; Anderson v. Flouring Mills, 37 Or. 483; 82 Am. St. Rep. 771; 50 L. R. A. 235; 60 Pac.
839; Barbre v. Goodale, 28 Or. 465; 38 Pac. 67; 43 Pac. 378; Hubbard v. Tenbrook, 124 Pa. St. 291; 10 Am. St. Rep. 585; 2 L. R. A. 823; 16 Atl. 817; Landers v. Foster, - Wash. -; 76 Pac. 274.
3 Hanson v. Heard, 69 N. H. 190; 38 Atl. 788; (citing Van Leuven v. First Nat. Bank, 54 N. Y. 671; Pier-son v. Atlantic Nat. Bank, 77 N. Y. 304).
4 Anderson v. Flouring Mills Co., 37 Or. 483; 82 Am. St. Rep. 771; 50 L. R. A. 235: 60 Pac. 839.
5 Stockton, etc., Society v. Gid-dings, 96 Cal. 84; 31 Am. St. Rep. 181; 21 L. R. A. 406; 30 Pac. 1016the same in written and unwritten contracts and may be briefly stated as follows. If the parties agree orally that the agent is acting on behalf of his principal, there is no question then in oral contracts as to the right of the adversary party to enforce the contract against the principal.1 In written contracts not required to be in writing or to be proved in writing the only question raised by attempting to enforce the contract against the real principal is that of the effect of the parol evidence rule. But if identity and existence of the principal are alike undisclosed, the additional question has been raised, whether the adversary party can properly be said to have contractual relations with this unknown principal. As this is the most extreme case, most stress has been laid upon it. The courts have held that whether the contract is oral or written, as long as it is not of the class of contracts which must be in writing the real principal may be shown and held liable on the contract.2 Some courts, however, have misunderstood the reason for emphasizing the fact that the principal is unknown, and have said that the rule allowing the real principal to be held on a written contract by which he is not in terms made liable, is limited to cases where the real principal is unknown to the adversary party at the time of making the contract ; and that if the real principal is known, and the adversary party accepts a written contract which by terms and legal effect binds the agent, this is an election to hold the agent and not the principal.3 An examination of the authorities cited in Chandler v. Coe,4 will show that those sustaining the proposition are cases of negotiable instruments, that is, of contracts which must be in writing. They come therefore under the operation of a different principle from that here discussed. In cases involving contracts not required to be in writing, many fail to indicate whether the principal was known or unknown to the adversary party when the contract was entered into, and, by fair inference, treat such fact as immaterial. Where the courts have discussed the effect of the adversary party's knowing who the real principal is when he accepts a contract signed by the agent alone, the weight of authority is that he can hold the real principal.5
1 See Sec. 964.
2 Merchants' Bank v. Bank, 1 Ga. 418: 44 Am. Dec. 665; Williams v. Robbins, 16 Gray (Mass.) 77; 77 Am. Dee. 396; Boreherling v. Katz, 37 N. J. Eq. 150; Brewster v.
Baxter, 2 Wash. Ter. 135; 3 Pac. 844.
3 Chandler v. Coe, 54 N. H. 561; Obiter to the same effect in Heffron v. Pollard, 73 Tex. 96; 15 Am. St. Rep. 764; 11 S. W. 165.
4 54 N. H. 561.