Story Case

The following contract, under seal, was made between Pratt Ross and Rainey Johnson: "Pratt Ross, vice president of the Harper Fuel Company, party of the first part, and Rainey Johnson, party of the second part, herein agree with each other, as follows:" (Then followed the terms of the contract.) The contract was then signed: "Pratt Ross, agent for, and vice president of, the Harper Fuel Company", and "Rainey Johnson", with the word "seal" at the end of each signature. Later, the Harper Fuel Company failed to fulfill the contract, and a lawsuit was begun against Ross personally. The latter put in defense, that he was merely acting as agent. Is this a good defense?

Ruling Court Case. Buggs Vs. Partridge, Volume 64 New York, Page 357

One Hulburt, purporting to act for Partridge, agreed to purchase land from Buggs on behalf of Partridge. They drew up a contract, under seal, by which Buggs agreed to convey, and Hulburt to accept, title, for which conveyance, Hulburt further agreed to pay a certain sum. The name of Partridge did not appear in the contract.

This was an action brought by the plaintiff against the defendant for the recovery of the purchase money. To this demand, the defendant replied that, whatever may have been the understanding of all the parties concerned, he is not bound by the contract, for it was a sealed contract, and his name nowhere appeared in it as a party thereto.

Justice Andrews delivered the opinion.

The defendant was not bound by this contract. It is a well settled, but technical rule, that no one is bound by a sealed contract unless his name appears in it as a party thereto.

Ruling Law. Story Case Answer

A contract under seal by an agent, is not binding upon the principal unless his name appears in the instrument. In such a case, the instrument binds the agent alone. If the document is under seal, only those parties named therein are bound. This is true, even though the agent describes himself as agent. He must name his principal as the party contracting, in order to free himself. Hence, in the Story Case above, Ross is bound and liable on the contract, because he named himself, personally, as a party, although the instrument did also show that he was acting as agent. Had he written in the contract, and signed it, "Harper Fuel Company, by Pratt Ross, vice president", it would then have been the contract of the company, and not his own.