One who contracted under seal as agent for a fictitious principal was himself held liable; Schenkberg v. Treadwell, 94 N. Y.
Supp. 418; this is true as to a contract not under seal; L. R. 2 C. P. 174; but the New York case is a per euriam one with a dis senting opinion by MacLean, J., which is Very brief, but well reasoned, and is sub stantially repeated in a criticism of the in 19 Harv. L. Rev. 59. Case is the proper action against an agent who has exceeded his authority in a contract under seal ; Roberts v. Button, 14 Vt. 195 ; or an action in the nature of case against one who, with out authority, signs as agent a contract for and in the name of another; Sheffield v. Ladue, 16 Minn. 388 (Gil. 346), 10 Am. Rep. 145.
In an interesting discussion of the rights and liabilities of the undisclosed principal, Prof. Ames (Lect. on Leg. Hist. 453), as suming that the doctrine of his liability to the other party is "so firmly established in the law of England and of this country that it would be quixotic to attack it in the courts," contends that it is an anomaly to be reckoned with but not treated as an analogy. It has been so treated by Lords Davey and Lindley, and Smith, L. J., and by text writ ers ; [1901] A. C. MO, 256, 261; [1901] 1 Q. B. 629, 635; Tiffany, Ag. 232; Huffcut, Ag. 166; 9 Colum. L. Rev. 116, 130 ; 3 L. Q. R. 359 ; 14 id. 5; though by others the rule has been treated as of self-evident soundness ; Lord Cairns, in 4 App. Cas. 504,. 514 ; Anson, Cont. 2d ed. 346. The article concludes with three objections to the rule as admitted and established: 1. It violates fundamental prin ciples of contract. 2. The third person has no relief against the principal upon his agent's sealed or negotiable contracts, or his liability as' a shareholder. 3. It frequently works Unjustly in the case of simple contracts, and, while it is too late to apply it to the last class, it is suggested that to cases within the second there may be applied the doctrine of equitable execution on the debtor's right of exoneration, which has the merits of accord with legal principle, uniform application to all forms of contract and the production of just results. See notes on undisclosed prin cipal in 16 L. Ed. 36, and 27 L. Ed. 903.
A more detailed reference to cases is im practicable here, but it may be noted that the right of action in cases involving the ques tion of an undisclosed principal has resulted in many cases, where not only is the exist ence of an agency a question, but, where forgery is resorted to to create the appear ance of an agency, there has been a question whether obtaining the money under a forged paper by an alleged agent creates a liability in tort or upon an implied warrant of au thority only. A very few of the cases involv
ing this question, which has been much dis missed in the English courts, may be noted.
A stockbroker acting in good faith under a forged power of attorney, purporting to be signed by Oliver, effected a transfer of stock standing in the Bank of England, in the name of Oliver. He was held liable on an implied warrant of authority in a suit by the bank which had made good the loss to Oliver, although the bank had equally good means of knowing of the forgery ; Oliver v. Bank of England, 17 T. L. R. 286, [1902] 1 Ch. 610. It is suggested in 15 Harv. L. Rev. 71, that there being no contract, the action should be in tort theoretically, but there being no such action for innocent misrepresentation, courts have implied a warranty of authority; 18 Q. B. D. 54. In Collen v. Wright, 8 E. & B. 647, it was first authoritatively held that an agent acting without authority and inducing the plaintiff to enter into a contract, an ex isting principal impliedly warrants his agency. The propriety of applying this case to the facts in Oliver v. Bank of England is objected to in 18 L. Q. R. 364, but its crit icism is dissented from in 16 Harv. L. -Rev. 312, which cites as authority supporting a warranty in consideration of the detriment incurred by the bank from the reason that the result of the transfer might be contrary to its interests ; Callisher v. Bischoffscheim, L. R. 59 B. 449; Seward v. Mitchell; 1 Cold. (Tenn.) 87. In Derry v. Peek, L. R. 14 App. Cas. 337, it was held that one who suffers by acting in reliance on a merely negligent misrepresentation cannot recover, and a writer in 16 Harv. L. Rev. 312, is of opinion that Collen v. Wright must be recognized in England as an exception to Derry v. Peek. Where the agent acquainted the person with whom he dealt of the doubt as to his au thority, he was held not liable; [1892] 1 Q. B. 456; Newman v. Sylvester, 42 Ind. 106; but Oliver v. Bank of England, supra, does not come within this exception. On similar facts, the doctrine of implied warranty has been held to apply ; Boston & A. R. Co. v. Richardson, 135 Mass. 473. The writer above cited suggests that the principle es tablished is practical and in accordance with sound business principles, though, in fact, it is but a veiled exception to a settled prin ciple in the law of torts ; Farmers' Co-op. Trust Co. v. Floyd, 47 Ohio St. 525, 26 N. E. 110, 12 L. R. A. 346, 21 Am. St. Rep. 846. There are notes on this line of cases in 15 Harv. L. Rev. 221, and 16 id. 311.