The plaintiff had made a loan to a partnership consisting of Wilson and McLay in order to finance certain shipments. Unknown to the plaintiff, the shipments were in fact for the joint benefit of Wilson, McLay and one Hamilton, who had authorised Wilson and McLay to handle all financial arrangements. Unaware of the existence of Hamilton, the plaintiff obtained judgment against Wilson and McLay but they were insolvent and the judgment remained unsatisfied. The plaintiff then discovered the involvement of Hamilton and sought to sue him.
Lord Cairns, analysed the situation as one of agent and undisclosed principal on the basis that Wilson and McLay were in reality agents authorised to borrow on behalf of Wilson, McLay and Hamilton as undisclosed principals. In his view it was clear that: ‘where an agent contracts in his own name for an undisclosed principal, the person with whom he contracts may sue the agent, or he may sue the principal, but if he sues the agent and recovers judgment, he cannot afterwards sue the principal, even although the judgment does not result in satisfaction of the debt. If any authority for this proposition is needed, the case of Priestley v Fernie may be mentioned . . In the present case I think that when the Appellants sued Wilson and McLay, and obtained judgment against them, they adopted a course which was clearly within their power, and to which Wilson and McLay could have made no opposition, and that, having taken this course, they exhausted their right of action, not necessarily by reason of any election between two courses open to them, which would imply that, in order to [make] an election, the fact of both courses being open was known, but because the right of action which they pursued could not, after judgment obtained, coexist with a right of action on the same facts against another person. If Wilson and McLay had been the agents, and Hamilton alone the undisclosed principal, the case could hardly have admitted of a doubt; and I think it makes no difference that Wilson and McLay were the agents and the undisclosed principals were Wilson, McLay, and Hamilton.’
Judges:
Lord Blackburn, Lord Cairns LC, Lord O’Hagan
Citations:
(1879) 4 App Cas 504, (1879) 4 AC 504, 48 LJQB 705, 41 LT 418
Jurisdiction:
England and Wales
Citing:
Cited – King and Another v Hoare 25-Nov-1844
A judgment (without satisfaction) recovered against one of two joint debtors is a bar to an action against the other: – Secus where the debt is joint and several. – And it is pleadable in bar, and not in abatement. – Such a plea need not contain a . .
Cited by:
Cited – Taylor v Van Dutch Marine Holding Ltd and Others ChD 22-Jul-2019
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Lists of cited by and citing cases may be incomplete.
Contract
Updated: 26 July 2022; Ref: scu.640902