ferent. Thus it has been decided, that where a party dealing with an agent takes his promissory note with a knowledge of his agency, and of the liability of the principal for the debt on which the note is given, he thereby discharges the principal. Such a contract can not be afterwards rescinded and a new one made so as to bind the principal without his knowledge and assent: Chit. Con. 224, note 2. The rights of a principal to sue for and recover in his own name upon contracts made with the agent by others, and the liabilities of the principal incurred by acts of his agent, rest on different principles. Where a buyer has been led to contract under an impression that his contract is made with one person, the intervention of a third person who was unknown to him at the time of the contract can not be permitted to deprive him of any set-off or other equitable or legal defense which he may have against the person with whom he made the contract. It would be wrong and fraudulent for the principal to keep himself concealed, permit his agent to make contracts in his own name, and then by disclosing himself reap all the advantages and profits of the contract, to the disadvantage of the other who had traded with the agent as the only person interested in the transaction: Paley on Agency, 326-328.

If an agent take a bond to himself instead of his principal, the parol contract is so far merged in the written that the principal can not maintain an action on the contract in his own name, but it must be in the name of his agent in the written agreement. The principal is unknown, and the person with whom the agent has contracted in his own name has a right to regard him only as the contracting party. The action must be in the name of him in whom the legal title in such written contract is vested, although the exclusive interest or benefit to be derived from the contract or subject-matter of litigation be in another: 1 Chit. Con. 3. But the rule as to defendants is different. A contract made by an agent is the contract of the principal. If the agency is disclosed at the time of the contract, although it be by deed in writing, if the agent contracts as such, the principal may be sued in an action at law: Id. 37, 38. If the principal be not known at the time of the purchase made by the agent, it seems that when discovered, the principal or agent may be sued at the election of the seller: Id. 41, note 1.

Suppose a man purchase (as in this case) the property of another on credit, the day of payment being fixed in a written con

tract beyond the day when the property is to be delivered. The nominal purchaser becomes insolvent, but the seller is afterwards informed that the contract was in fact made by his vendee as agent for another. Shall the seller in such case be compelled to part with his property? Shall the principal be perwitted to reap all the profits, convert the property to his own use, refuse to pay for it, and require the seller to look for redress to an insolvent? In equity and good conscience the principal ought to be compelled to perform the agent's contract, whether that contract be by parol or in a writing having the effect of a bond. In this case there are facts proved which place the moral duty of the principals beyond doubt. They requested the agent not to disclose his agency. They afterwards recognized and approved the contract. Powell, the active principal, died. His administrators recognized the contract as binding on them, and they, after his death, as well as Powell before his death, in conversations on this subject, spoke of and recognized the written contract made and executed by Stratton, as having been made for his principals for their benefit and as obligatory on them. To permit them to escape responsibility would be manifestly unjust. Assumpsit is an equitable action. The defendants are in justice liable to the plaintiff for the injury he has sustained by their refusal to carry out the contract. It seems to this court that the plaintiff was authorized to bring and maintain this action, and that the writing by Stratton can be used only to show the terms of the contract, the acts which each contracting party was to perform, and ought not to defeat the plaintiff in his action against the principal. If these views are correct, it follows that the circuit court erred in the instructions given to the jury, and should have granted a new trial to the plaintiff.

The judgment of the circuit court is therefore reversed, and the cause remanded, with directions to set aside the verdict and judgment, and grant the plaintiff a new trial without payment of costs.

CREDIT TO AGENT DOES NOT EXONERATE PRINCIPAL unknown at the time: Henderson v. Mayhew, 41 Am. Dec. 434; and an undiscovered principal, on becoming known, may be sued by one selling goods to his agent, or the agent, may be sued, at his option: Smith v. Plummer, 34 Id. 530; Taintor v. Prendergast, 38 Id. 618, and note 619.

WHEN PRINCIPAL MAY SUE ON CONTRACT MADE BY HIS AGENT: See Pitts v. Mower, 36 Am. Dec. 727, and note 728, where other cases in this series are collected; Bayley et al. v. Onondaga County Mut. Ins. Co., 41 Id. 759, and note 761; Taintor v. Prendergast, 38 Id. 618, and note 619.

CLARK'S HEIRS v. FARROW, ETC.

[10 B. MONROE, 446.]

PURCHASER OF PROPERTY IN LITIGATION AFTER FINAL DECREE is a purchaser pendente lite; he is not a necessary party to a bill of review, but is bound by the decision upon any bill of review or writ of error.

PURCHASER AT SALE MADE UNDER FINAL DECREE generally takes a good title, though the decree be afterwards reversed.

FRROR to the McCracken circuit. The opinion states the facts. J. and W. L. Harlan, for the appellants.

Husbands, for the appellees.

By Court, MARSHALL, C. J. In October, 1842, William Farrow obtained a decree against the heirs of William Clark, which was made final in April, 1843, for the specific performance of a contract for the sale of a lot in Paducah by Clark to Farrow, on the payment of a designated balance of the purchase money then unpaid. In July and August, 1843, the balance of the money having been paid to the commissioner appointed to make the conveyance, was by him paid to and received by the agent or attorney of Clark's heirs, who were non-residents of this state; and on the tenth day of August, 1843, the commissioner made the conveyance, which was reported to the court in October following, and then approved. In January, 1843, Farrow conveyed the lot to Joseph Wright, the father of his wife, for an alleged debt of two thousand dollars, recited as being the balance of a debt of six thousand dollars, formerly due between the same parties, and for which Farrow had mortgaged the lot to Wright in 1837, but the mortgage had been released in July, 1839, ten days after the filing of Farrow's bill against Clark's heirs, and more than three years before the first decree. On the second day of August, 1843, Wright, by his attorney, acting under a power containing specific directions, and dated in February, 1843, conveyed the lot to Mrs. Eliza Farrow, the daughter of Wright and wife of the complainant Farrow. This conveyance was made to the separate use of Mrs. Farrow, etc., and in consideration of natural love and affection. This deed acknowledged the subjection of the lot for the security of two small sums due from Farrow, to which it had been made subject by his deed to Wright.

In January, 1845, a writ of error was prosecuted by Clark's heirs for the reversal of the decree for specific execution, and by the opinion and mandate of this court, which was entered of record in the circuit court in September, 1845, that decree was

reversed, and the opinion expressed that as Clark's heirs asked for a rescission on the same grounds on which a specific execution was refused, the contract should be rescinded on equitable terms, etc., in regard to which it was said the value of improvements, etc., should be ascertained. After the cause was redocketed in the circuit court, Eliza Farrow filed her petition praying that she and her father, Joseph Wright, might be made parties to her husband's bill, which, upon the order of the court, was accordingly done; and she filed her answer setting forth, as she had done in her petition, the facts nearly as they have been already stated, and making it a cross-bill against Clark's heirs, prayed in effect that her title might be confirmed on the ground that her father was a purchaser for a valuable consideration after the decree, and without notice of the equity of Clark's heirs, to have a rescission of the original contract, or of their intention to prosecute a writ of error to the decree, and which, as she contends, they were equitably estopped from prosecuting by having received through their agent a part of the purchase money under the decree.

Clark's heirs, who had answered the original bill, opposing the filing and the prayer of the petition, and afterwards moved to reject it and the answer and cross-bill, to which, however, they never appeared, but rested upon the traverse put in for them as non-residents. The court, without further proof than is furnished by the exhibits above referred to, decreed that Clark's heirs be perpetually enjoined from asserting any claim to the lot in question, and that Eliza Farrow be quieted in the enjoyment of her title and possession, and that Clark's representatives have the benefit of their remedy at law upon the contract against William Farrow, etc.

The mandate of this court reversed the former decree, and remanded the cause for further proceedings, and decree in conformity with the opinion then rendered; a part of which was that there was ground for a rescission as prayed for by the defendants, and that the contract should be rescinded. The further proceedings were directed, not for ascertaining the right to a rescission which was decided, but for ascertaining the equitable terms which were to accompany it. From the statement of the facts already made, it is manifest that all proper parties. were before the court when the reversed decree was rendered; and all parties to the decree were before this court upon the writ of error, and were bound by the mandate by which the decree for specific execution of the contract was actually an

nulled and a decree for a rescission directed. It is certain that if the complainant Farrow had retained his interest, as the only party claiming the benefit of the contract, the decision and mandate of this court must have been conclusive upon his rights, unless he had set up some new intervening equity against Clark's heirs, or some new matter affecting the original case, which was not and could not have been presented in the prior litigation. By the reversal of the decree, the commissioner's deed made under it would have been, ipso facto, annulled, and would have become wholly inoperative, and in the absence of some new ground of litigation the contract must have been rescinded.

Could any person, deriving an interest from Farrow, after the rendition of the reversed decree, and before the emanation of the writ of error, occupy a better condition than his? In the case of Debell v. Foxworthy's Heirs, 9 B. Mon. 228, this court decided that the purchaser from the successful party, after a final decree, was not a necessary party to a bill of review afterwards brought by the unsuccessful party, and was bound by the decree of reversal upon the bill of review, though not a party to that bill. And the opinion (page 233) contains the following language, which seems to furnish a direct answer in the negative to the question just stated. The court there said: "So far as a voluntary purchaser is concerned, the litigation is regarded as still continuing, notwithstanding the final decree in the court of original jurisdiction, where a writ of error is subsequently prosecuted, or where a bill of review is filed to correct errors apparent in the record; and he is concluded by the decree which may be finally rendered, founded merely on the same matter originally in issue between the parties." A reference to the opinion will show that this position is stated in relation to a person not a party to the original suit, who becomes interested in the subject after the decree, and that it expresses the ground on which the case was decided. We refer to that opinion for the reasons and authority on which the position rests. And we barely remark, in addition, that a title passed by commissioner's deed under a decree for specific performance and other similar cases, stands upon a different ground from that of a title derived under a decree of sale, and an actual sale; because, in the former case, the conveyance of title rests wholly on the decree, and is the same as if it existed in the decree alone, there being no meritorious act done under the authority of the decree which might give additional efficacy to the conveyance.

But in other cases, as of a sale under a decree, the purchase