*The plaintiff charged the defendants individually on his books for the machinery. His draft [on the defendants] was protested. * * *

The machinery was delivered at Grand Haven, and the freight was paid by Edward P. Ferry as the treasurer of the corporation. The draft of Baxter was protested, because it was addressed to the drawees individually. They claimed that he had no right so to draw on them.

* * *

The court instructed the jury, in substance, that the letter of the prudential committee of February 1, 1870, bound the corporation and not the defendants, if there was then a corporation and the defendants were authorized by it to give the order. * * The plaintiff excepted to these instructions. * The jury found for the de

fendants.

*

*

Where the question of agency in making a contract arises, there is a broad line of distinction between instruments under seal and stipulations in writing not under seal, or by parol. In the former case the contract must be in the name of the principal, must be under seal, and must purport to be his deed and not the deed of the agent covenanting for him. * * *

In the latter case the question is always one of intent; and the court, being untrammeled by any other consideration, is bound to give it effect. As the meaning of the law-maker is the law, so the meaning of the contracting parties is the agreement. Words are merely the symbols they employ to manifest their purpose that it may be carried into execution. If the contract be unsealed and the meaning clear, it matters not how it is phrased nor how it is signed, whether by the agent for the principal or with the name of the principal by the agent or otherwise.

The intent developed is alone material, and when that is ascertained it is conclusive. Where the principal is disclosed, and the agent is known to be acting as such, the latter cannot be made personally liable unless he agreed to be so.

Looking at the letter of the defendants of the first of February, 1869, and the answer of the plaintiff of the 10th of that month, we cannot doubt as to the understanding and meaning of both parties with respect to the point in question.

The former advised the latter of the progress made in organizing the corporation; that the order was given by the direction of its officers, and the letter is signed by the writers as the "Prudential Committee of the Grand Haven Fruit Basket Co.," which was the name in full of the corporation. The plaintiff addressed his reply to the "Grand Haven Fruit Basket Co.," thus using the name of the corporation as the party with whom he knew he was dealing, and omitting the names of the defendants, and their designation as a committee, according to the style they gave themselves in their letter.

* *

It seems to us entirely clear that both parties understood and meant that the contract was to be and, in fact, was with the corporation, and not with the defendants individually. * The record shows clearly that the plaintiff was not entitled to recover, and that the verdict and judgment are right.

* * *

The judgment of the Circuit Court is affirmed.

SMITH et al. v. ALEXANDER.

(Supreme Court of Missouri, 1860. 31 Mo. 193.)

EWING, J. This was an action on the following instrument: "$500. St. Louis, Mo., July 22, 1855. Ninety days after date, I promise to pay to the order of Messrs. Smith & Co. five hundred dollars, for value received, negotiable and payable without defalcation or discount. [Signed] J. H. Alexander, Treas'r Ohio & Miss. R. R. Co."

On the trial, the plaintiff having read the note in evidence, the defendant introduced testimony showing that he was the treasurer of the Ohio & Mississippi Railroad, and tending to prove that the note sued on was given by him in liquidation of an indebtedness due to the plaintiffs from that company, and that defendant received no consideration for the giving of said note. The ruling of the court was excepted to by the plaintiff in admitting this evidence, as also in giving and refusing instructions.

The general rule usually laid down respecting sealed contract is not applicable in its full extent to written contracts not under seal. In reference to these, it is said to be clear from the authorities that it is not indispensable, in order to bind the principal, that such a contract should be executed in the name and as the act of the principal. It will be sufficient if upon the whole instrument it can be gathered, from the terms thereof, that the party describes himself and acts as agent and intends thereby to bind the principal and not to bind himself. Story, Ag. § 160.

And in reference to corporations (as to which the tendency of modern decisions, it would seem, is to relax somewhat the strict rules on this subject) it is said that if, from the contract itself, or from this coupled with the conduct of the parties thereto, it appears that credit was given, not to the agent, but to the corporation, and it appears to have been the intent of the parties that the corporation should be bound, the corporation is alone liable, irrespective of the particular form of the contract.

Owing to the great diversity in the form of the instruments involving questions of this character, the adjudged cases furnish no general rule more definite than that referred to; and many of them have little applicability to other cases except in their general principles. In some of the authorities cited, the execution of the instrument in the form of that before us has been held the individual obligation of the person signing it, and not that of the individual or company indicated by the addition to the signature, such addition being regarded merely as descriptio personarum, while in others it has been held sufficient on its face to avoid personal liability. Although it would appear to be by no means settled that such a mode of execution-the mere addition of the official character to the name-is tantamount to a disclaimer of personal responsibility, it is deemed such an indication of the representative character as to warrant a resort to parol evidence, not of course to contradict or vary the writing, but to explain it. The purpose of introducing parol evidence in such cases is to prove extrinsic circumstances, by which the respective liability of the principal and agent may be determined, such as to which the consideration passed and credit was given, the agent's authority, etc. When the names of both principal and agent appear on the instrument, and the contract,

though in the name of the agent, discloses a reference to the business of the principal, so that the instrument as it stands is consistent with either view of its being the engagement of the principal or of the agent, parol evidence is admissible in a suit against the agent to charge him by showing either that credit was given to him or that he had not authority to bind the principal, or to discharge him by proving that the consideration passed directly to his principal, etc. 1 Amer. Lead. Case, 453, and authorities there cited.

Justice Johnson, in Mechanics' Bank v. Bank of Columbia, 5 Wheat. 336, 5 L. Ed. 100, says it is enough for the purpose of the defendant to establish that there existed on the face of the paper circumstances from which it might reasonably be inferred that the transaction was either an individual or a corporate one, in which case it becomes indispensable to resort to extrinsic evidence to remove the doubt. In that case parol evidence was admitted to prove that character or capacity in which the check was drawn; and the only evidence on its face of its being a corporate transaction was the corporate name in the caption. A mere addition to the name of the party signing a contract cannot be regarded as a certain indicium that it was made on behalf of another. Where, however, it is doubtful from the face of the contract whether it was intended to operate as a personal engagement of the party signing it, or to impose an obligation on some third person as his principal, parol evidence is admissible to show the true character of the transaction.

* * *

In this view of the case, we see no error in giving the instruction asked by the defendant and refusing those asked by the plaintiff. Judgment affirmed.

* *

HALL & BROWN WOODWORKING MACHINE CO. v. HALEY FURNITURE & MFG. CO. et al.

(Supreme Court of Alabama, 1911. 174 Ala. 190, 56 South. 726, L. R. A. 1918B, 924.)

SOMERVILLE, J. This is an action of detinue by the appellant against the Haley Furniture & Manufacturing Company, and W. T. Archer, assignee. The appellee duly intervened as claimant of the property sued for, filing his affidavit of claim, and the appropriate issue was made up, and the trial proceeded thereon. The affidavit did not state the nature of the right of the claimant as required by Code, § 6043.

* * *

The subject-matter of the suit is a lot of machinery sold by the plaintiff to said Haley Company in February, 1906, and delivered in April following, except one item which reached the consignee as late as about June 12th. Only about one-third of the purchase money was to be paid on delivery, and to secure the payment of the balance the vendor retained the title and possessory right in itself until the price of the machinery was fully paid, as shown by the written contract and notes in evidence. This written contract was filed for record on August 3, 1906, and in the meantime, on June 18, 1906, the claimant Sheffield Company (now appellee) loaned to the defendant Haley Company $6,000, the latter executing to the former as security therefor a mortgage deed conveying certain property in the city of Sheffield described as "all of block numbered four hundred and forty-eight (448) together with all buildings and improvements thereon, and all

machinery and appliances thereat, together with the appurtenances." It does not appear that this mortgage has ever been foreclosed.

The tendency of the testimony of the two witnesses, C. L. Haley and J. J. Challen, introduced by the plaintiff, was to show that in the loan transaction of June 18th, in which the Haley Company secured the loan of $6,000 from the Sheffield Trust Company, the Trust Company was represented by one J. W. Worthington, who was a director and stockholder, but not an officer, in said Trust Company; that said Worthington was at the same time president of the Sheffield National Bank; that said witnesses, who were respectively president and sec-retary and treasurer of the Haley Company, negotiated with said Worthington in the months of January, February, March, and April, 1906, for the purpose of getting a loan for the Haley Company; that Worthington promised to get such a loan for them, and stated that he would secure it from a trust company about to be organized; that during these negotiations in January and February it was explained to Worthington that the loan was to be used in the purchase of the machinery in controversy; that the contract of sale between the plaintiff and said Haley Company, one of the terms of which provided for the reservation of the title and right of possession until the purchase money was paid, was exhibited to Worthington and its terms gone over with him, and then left with him for several days for his inspection; that the Sheffield Trust Company was not organized and had no existence until May 26, 1906; and that no conversations with Worthington, nor information to him as to the status of the title to the machinery occurred on or after May 26, nor any later than March, 1906. For the claimant, all of the testimony as to information given him concerning plaintiff's claim to the machinery is vigorously denied by Worthington, as well as any knowledge whatever on his part of such a claim, either before or during his agency. * * *

On motion of the claimant, the trial court excluded all the testimony of the two witnesses Haley and Challen as to conversations and transactions between them and J. W. Worthington relative to the property sued for, and relative to their negotiations with him for a loan from the claimant company; the ground of objection being, substantially, that any notice to Worthington of plaintiff's claim, before the organization of the claimant company, and hence before his agency for it began, was not notice to the claimant, nor binding on it. The question presented by this ruling is the vital question in the case. By a long line of decisions, this court is thoroughly committed to the rule that knowledge acquired by an agent prior to his agency, or in regard to matters outside the line of his duty, or while pursuing his own or some other person's business, is not notice to his principal of such fact or facts, and is not binding upon him. * * *

The fundamental requirement is that such knowledge on the part of an agent to bind his principal "must be limited to such knowledge or information as comes to the agent in transacting the business of his principal." Central of Ga. Ry. Co. v. Joseph, 125 Ala. 319, 28 South. 37. This is a simple rule, easy of application, and just in its results.

Where the agent's knowledge is of this character, it is constructive notice to the principal entirely regardless of the principal's actual knowledge. *** This is usually explained by saying that the law conclusively presumes that the agent has in fact communicated

his knowledge to his principal. We think, however, that the better and more logical explanation is that with respect to the given transaction; the agent is in law identified with his principal; that knowledge that comes to the agent, while acting in such matter for his principal, would have come to the principal had he been acting for himself; and that, as a rule of policy and justice, he must be equally charged therewith.

* * *

But on either theory, the rule is not a rule of evidence merely, as is sometimes declared, but a rule of substantive law. The Alabama. rule, as above defined, is not in accord with the weight of authority in other jurisdictions, as pointed out by Mr. Freeman in his valuable note to Trentor v. Pothen, 46 Minn. 298, 49 N. W. 129, 24 Am. St. Rep. 228-233, where the cases on both sides are collected and discussed; and as shown by Mr. Pomeroy in his third edition of Equity Jurisprudence (volume 2, § 672, and notes). It appears from these authorities that the more generally accepted rule is that the agent's knowledge, though acquired previously to his agency, if retained by him and carried with him into the subsequent business which he transacts for his new principal, is notice to the latter whether communicated to him or not.

This rule we regard as both illogical and unjust-a criticism which is fully vindicated by a consideration of the numerous and unpractical qualifications and exceptions which courts expounding the rule have been compelled to adopt. In this connection we note Mr. Pomeroy's observation that "several of the ablest English judges have, in recent cases, expressed a decided opinion against the rule itself, and while considering themselves bound by it, as far as it is settled, have wished that it should be abrogated by the Legislature." 2 Pom. Eq. Jur. (3d Ed.) § 672, note 1. We adhere to the rule as settled by our own cases cited above. *

*

Constructive notice to the principal through the actual knowledge of the agent is not a rule of evidence, but one of substantive law. Given notice to or knowledge of the agent, received while so acting, and the principal is conclusively bound by it; not because he ever knows it in fact, because his actual knowledge is utterly immaterial, but because as to the thing the agent is doing the agent is in law the principal, and the principal is in law the agent. Their legal identity is complete. Nor can it matter, in this aspect of the rule, whether the agent has, or has not, private reasons or interests which make it likely or even certain that he will not inform his principal, as correctly ruled in First Nat. Bank v. Allen, 100 Ala. 476, 14 South. 335, 27 L. R. A. 426, 46 Am. St. Rep. 80.

On the other hand, the actual knowledge of the principal, when material, may be proved like any other fact. It is the duty of an agent to inform his principal of every material fact within his knowledge, no matter when acquired, bearing upon the subject-matter of his agency, which may affect the interests of his principal with respect thereto; and it will be presumed that he has discharged this duty. * *Here we have a true rule of evidence-a presumption of law that a duty has been discharged, from which follows the further presumption that the principal has acquired the knowledge of his agent. But this presumption like others of a similar nature, is disputable, and not conclusive. Unless rebutted, it is sufficient to fasten upon the . principal, not an unreal constructive notice which is incontestable, but