- ` FRADLEY v. nytrmn. 51
the action brought by the seller, where he has looked to the responsibility
ofthe agent." The principal must respond to and may avail himself of a
contract made with another by an undisclosed agent. When he seeks
to enforce a bargain or purchase made by his agent the rule of law is
that, if theagent contracted as for himself, the principal can only claim
subject to all equities of the seller againsttbe agent. In the language of
PARKE, B.: “ He must take the contract subject to all equities, in the same
way as if the agent were the sole principal/’ (Beckham v. Drake, 9 Mees.
& W. 98,) and accordingly subject to any right of set-off on the part of
the seller, (Borrws v. Bank, 29 L. T. N. S. 689.) Thus the rights of the
principal to enforce, and his liability upon, a contract of sale or purchase
made by his agent, without disclosing the fact of the agency, are pre-
cisely co-extensive, as regards the other contracting party, if the limita-
tion of his liability is accurately stated in the earlier cases. The qualitica- -
tion of the “principal’s liability to respond to his agent’s contract, as stated
in the earlier authorities mentioned, was narrowed by the interpretation
adopted in .Heu.ld v. Kcnworthy, 10 Exch. 739, to the effect that the prin-
cipal is not discharged from lull responsibility unless he has been led by
the conduct of the seller to make payment to or settle with the agent;
and the doctrine of this case hasrbeen reiterated in many subsequent
, cases, both in England and in this country, where the agent did not con-
tract as fort himself, but as a broker, or otherwise as representing an un-
disclosed principal. One of the more recent English cases of this class
is Davison v. Donaldson, 9 Q. B. Div. 623. But, as is shown in Arm- “
strong v. Swkcs, L. R.7 Q. B. 599, the version of Heald v. Kenworthy, while a
correct interpretation ofthe rule of the principal’s liability, when applied
to cases in which the seller deals with the agent relying upon the exist-
ence of an undisclosed principal, is not to be applied in those in which
the seller has given credit solely to the agent, supposing him to be the
principal. · This case decides that the principal is not liable when the
seller hasdealt with the agent supposing him to be the principal, if he
has in good faith paid the agent at a time when the seller still gave credit
to the agent, and knew of no one else. See, also, Irvine v. Watson, 5 Q. B.
Div. 102. »Under such circumstances it is immaterial that the principal
has not been misled by the seller’s conduct or laches into paying or set-
tling with his agent. It is enough to absolve him from liability that he
has in good faith paid or settled with his agent. In that case the court
wasdealing with a contract made by an agent which was within the scope
of the authority conferred on him, but whichwas nevertheless made by
the agent as though he were acting for himself as principal. In the
present case Gibson had no authority at all to make a purchase upon the
credit ofthe appellant. ~ But as it appears that appellant, in the monthly
settlements of account with Gibson, allowed him out of the earnings '
charges for supplies for which the latter had not actually paid, he must
be deemed to have authorized Gibson to purchase supplies for him upon
Gibson’s own credit. ‘ Under the circumstances, if Gibson hadpurchased
' supplies,. purporting toact as an agent of appellant in doing so, appel-
lant, by consenting to their being used for his benefit, and by allowing