An agent, who is employed to perform personal services, cannot transfer his responsibility or agency to another.
One who agrees to act as agent for another without compensation, cannot be forced to fulfil his agency. He is not liable in damages to his principal for failure to act, but if he chooses to act without compensation, he is liable if he acts with great negligence. If A requests B to drive his horse home and B drives the horse and leaves him without tying him, and the horse runs away and destroys the carriage and ruins himself, B is liable for gross negligence.
49. Rights and Liabilities of Agent to Third Persons. An agent acting within the scope of his authority, in making contracts with third persons, binds his principal by the contract, but does not bind himself. A is authorized by B to purchase a horse. A purchases a horse from C, notifying C that he is purchasing as agent for B. C must look to B for the purchase price, since A acted solely as agent and is not personally liable under the contract.
If an agent, intending to act as agent, makes a contract in his own name, without informing the third party with whom he is dealing, of the agency, he binds himself. Under these circumstances, he usually binds his principal also. This question is discussed more at length under the title "Undisclosed Principal." If A is employed by B to purchase a horse, and A purchases a horse from C for two hundred dollars ($200.00), without telling C of the agency, the purchase price to be paid the following day, A binds himself personally to pay C the two hundred dollars ($200.00) and C is not obliged to look to B for payment.
If an agent, honestly believing he has authority to act as agent when he has not, makes a contract as agent for his supposed principal, he binds himself personally and not his principal. A writes to B, "Purchase for me C's bay team, if same can be secured for two hundred and fifty dollars ($250.00), half payable in six months." B reads the letter and purchases the team in the name of A for two hundred and fifty dollars cash ($250.00), overlooking the condition in A's letter that half was to be paid in six months. B binds himself to C and does not bind A.
When an agent falsely or fraudulently represents himself as agent, he binds himself and not his alleged principal.
If an agent, honestly believing he has authority to act, does not have such authority, but discloses all the facts connected with his authority, to the third person with whom he is dealing, he is not personally bound. A, having previously acted as agent for B, in purchasing onions by the crate, receives the following wire from B, "Purchase one hundred crates, ship at once." A, supposing this refers to the purchase of onions, shows the telegram to C, and tells him that in the only other transaction in which he acted for B he purchased onions, and that he supposes this wire refers to onions. He purchases one hundred crates of onions from C, and later discovers that B intended turnips, instead of onions. A is not bound personally. He has acted honestly and revealed all the facts in his possession to C, who must act at his risk as to A's actual authority.
50. Undisclosed Principal. A principal, whose agent deals with a third person for his benefit, without disclosing the name of his principal, or perhaps without disclosing the fact of agency, is said to be an undisclosed principal. For example, A employs B to purchase one hundred crates of oranges. B purchases the oranges from C for A in his own name, not telling C that the purchase is made for A. In this case, A is an undisclosed principal.
As a general rule an undisclosed principal, when discovered, is liable upon the contract of his agent.
In case of an undisclosed principal, the agent is liable personally as well as the undisclosed principal. If A instructs B to purchase for him five cars of coal, and B purchases the coal of C in his own name, without disclosing the fact of his agency, B is personally liable to C for the purchase price.