point because upon a new trial it may appear that the agency was fully known to plaintiff. That the principal is not liable in such a case if the circumstances, or the terins of the contract, or the two combined, show an intent by the other party to take the agent as his debtor or obligor, in preference to the principal, is, as we have said, well established, and it is manifestly in accordance with reason and justice. In such a case the election takes place at the time of the making of the contract. But where no such election or intent appears, and there is nothing more than a contract made in the name of the agent, knowing him to be such and with knowledge of the identity of his principal, the case is, and should be, governed by the well-known principle that he who acts by another acts by himself, that the contract of the agent, within the scope of his authority, is in legal effect the contract of the principal. The Civil Code states that "an agent represents his principal for all purposes within the scope of his actual or ostensible authority, and all the rights and liabilities which would accrue to the agent within such limit, if they had been entered on his own account, accrue to the principal." (Sec. 2330.) Here Rolph was engaged by Morrow to register Morrow's stock in his, Rolph's, own name, and hold it for the use of MorIt was a necessary incident of such agency that Rolph should assume in his own name the obligation to pay up, on call, the balance of the stock subscription. He was, therefore, authorized by Morrow to assume such obligation. If Rolph had entered into this relation on his own account the liability for the calls would, of course, have "accrued" to Rolph. Consequently, under the rule of section 2330, the liability to respond to such calls "accrued to the principal," Morrow.

row.

The authorities fully support this conclusion. Mr. Story says: "The liability of the principal to third persons upon contracts made by his agent, within the scope of his authority, is not varied by the mere fact, that the agent contracts in his own name, whether he discloses his agency or not, provided the circumstances of the case do not show that an exclusive credit is given to the agent." And he extends this doctrine to written contracts. (Secs. 446, 446a.) And as to the exceptions, he says: "The exceptions to this liability of the principal may easily be gathered from what

has been already stated. If the principal and agent are both known, and exclusive credit is given to the latter, the principal will not be liable, although the agent should subsequently fail; for it is competent to the parties to agree to charge one, exonerating the other; and an election, when once made, is conclusive and irrevocable." (Sec. 447.) "Sometimes a subscription for stock is made by one person in his own name, but really he is acting as the agent of another, and the stock is entered on the corporate books in the name of the agent. In such a case it is the rule that corporate creditors may hold either the principal or the agent responsible on the stock." (1 Cook on Corporations, sec. 249.) "In America the relation of the real owner to the 'dummy' is held to be that of principal and agent, and the principal is held liable, on the ground that an undisclosed principal is liable on the contracts of his agent." (1 Cook on Corporations, sec. 253.) In Clark & Skyles on Agency, it is said that the doctrine stated might seem to be "opposed to the general principle of the law of contracts, that a contract cannot impose a liability upon a person who is not a party to it, but this principle is held inapplicable because of the doctrine of the identity of principal and agent. The principal, although not named in the contract or disclosed at all, is regarded as having become a party thereto through the agent. The minds of the parties meet because, as was said in substance in a New York case, the agent's mind is his undisclosed principal's mind." The reference is to Kayton v. Barnett, 116 N. Y. 627 [23 N. E. 24].

An examination of the decisions of the subject show that the idea that the principal cannot be held liable in cases where the third person, at the time of contracting, knew the principal and his relation to the transaction, arises from the unfounded assumption that, since the decisions holding the principal liable when the contract does not disclose his name or interest, refer to him as the "undisclosed principal," the doctrine does not prevail when he is known. But this language is used because the principal was insisting, not that he is not liable when he is known, but that he is not liable when the contract does not on its face purport to bind him, or to be for his behoof or benefit. It is this circumstance that is referred to by the word "undisclosed."

The principal would have no standing in court to say he is not liable when his authorized agent makes a contract purporting to be for him and the party taking it had full knowledge of the fact that it was for him. The liability when he is undisclosed does not arise from his not being known, although sometimes fraud from that fact is also involved, but from the fact that the contract of his authorized agent, though not in his name, is really for his benefit and in his business. Thus Mr. Mechem says: "The principal is also liable on all informal contracts entered into on his account and by his authority and not expressly made on the agent's responsibility rather than the principal's. . . . Where a person is known to be acting as the agent of a disclosed principal, the presumption is that the principal and not the agent is to be bound." (2 Mechem on Agency, sec. 1710; see, also, sec. 1717.)

[4] It is not necessary to the enforcement of this liability that the insolvency of the plaintiff corporation or its inability to pay its debts should appear, for the liability exists under the general principles of law. In this case, however, the insolvency does not appear and these liabilities for calls are not only part of the corporate assets, but they constitute the whole thereof. It is the duty of the corporation to resort to them for the payment of its debts, and if it fails in that respect, its creditors may do so. (Sanger v. Upton, 91 U. S. 60 [23 L. Ed. 220, see, also, Rose's U. S. Notes]; Baines v. Babcock, 95 Cal. 581 [29 Am. St. Rep. 158, 27 Pac. 674, 30 Pac. 776]; Rhode v. Dock Hop Co., 184 Cal. 378, 379 [12 A. L. R. 437, 194 Pac. 11].) There are many cases holding that where the corporation is insolvent, the creditors have the benefit of the liability of the real owner of stock held on the books of the corporation in the name of an agent, disclosed or undisclosed, but really for the benefit of the real owner. Among them are the following: Brown v. Artman, 166 Fed. 485; Brown v. Huey, 166 Fed. 483; Kurtz v. Brown, 152 Fed. 374 [11 Ann. Cas. 576, 81 C. C. A. 498]; American etc. Co. v. Kurtz, 134 Fed. 665; White v. Marquardt, 105 Iowa, 147 [74 N. W. 930]; Fell v. Securities Co., 11 Del. Ch. 234 [100 Atl. 788]; Gordon v. Cummings, 78 Wash. 519 [139 Pac. 493]; State ex rel. v. Superior Court, 44 Wash. 108 [87 Pac. 40]; Cole v. Satsop, 9 Wash. 487 [43 Am. St. Rep. 858, 37 Pac. 700]; Ohio

V. N. Bank v. Hulitt, 204 U. S. 162 [51 L. Ed. 423, 27 Sup. Ct. Rep. 179, see, also, Rose's U. S. Notes].

In opposition to this conclusion, the defendants rely on section 324 of the Civil Code and on the decisions of this court in People's Home Sav. Bank v. Stadtmuller, 150 Cal. 106 [88 Pac. 280], Geary Street etc. Co. v. Bradbury, 179 Cal. 46 [175 Pac. 457], and Visalia etc. Co. v. Hyde, 110 Cal. 632 [52 Am. St. Rep. 136, 43 Pac. 10], which, they claim, prevent the application of such rule in this state.

The provisions of section 324 relating to the question are as follows:

"Whenever the capital stock of any corporation is divided into shares, and certificates therefor are issued, such shares of stock,... are personal property, and may be transferred by indorsement by signature of the proprietor. . . the delivery of the certificate; but such transfer is not valid, except as to the parties thereto, until the same is so entered on the books of the corporation as to show the names of the parties by whom and to whom transferred, the number of the certificate, the number or designation of the shares, and the date of the transfer."

It is claimed by the defendants that this provision forbids and prevents the existence of any liability for calls upon unpaid stock in favor of the corporation against anyone except the registered owner. It will be seen from the language of the section that it does not purport to declare anything concerning the liability of a stockholder for the unpaid part of the subscription price. It relates exclusively to transfers of shares of stock and to the things necessary to make such transfers valid as to other persons than the transferor and the transferee. We are not here concerned with the validity of the transfer of the stock to James. Rolph, trustee, as between him and the person who transferred it to him. The record does not show how or from whom Rolph received the stock. The theory upon which the plaintiff here is allowed to choose to resort to the liability of the principal for the obligations of his agent is not based upon the proposition that the transfer of this stock to Rolph as trustee for Morrow was invalid. [5] On the contrary, it assumes the validity thereof, and places the liability of Morrow upon the doctrine already stated, that the principal is liable to such third person on any valid obligation

incurred by the agent to such person in carrying out the business of the agency. There is nothing in the provisions of section 324, or in any other provision of the code, that in any manner relates to or affects the right which the corporation would have, under the general principles of law, to enforce against the principal the obligation incurred by the agent. Such right depends on the relation of principal and agent existing between Morrow and Rolph with respect to the stock. [6] That relation is perfectly lawful and its lawfulness is not affected by the fact that Morrow could not maintain any right as a stockholder to participate in the management of the corporate affairs at stockholders' meetings, or to inspect its books, except through the medium of Rolph as his agent and trustee. The right of the corporation to pursue Morrow for Rolph's liability is not at all inconsistent with the absence of any right in Morrow to personally act in or control the corporate business. The provisions of section 324, therefore, do not constitute a defense to this action.

[7] We find nothing in the decisions cited by the defendants which gives to section 324 the effect claimed for it, or which impairs or destroys the plaintiff's right to pursue Morrow for the amount of the call formally and technically made upon Rolph as holder of this stock.

People's Home Sav. Bank v. Stadtmuller, supra, is the leading case in this state on the subject. In that case the plaintiff attempted to enforce an unpaid call by action against Anna Stadtmuller. The stock had been subscribed for and had been issued to F. D. Stadtmuller, her husband, in his lifetime, and he died the owner thereof. Upon the settlement of his estate the certificates and title thereto were distributed to said widow. She accepted the certificates and retained the same, but never caused the transfer thereof to her to be entered on the books of the corporation, nor otherwise assumed the relation of a stockholder with the plaintiff. The corporation about that time became insolvent and shortly afterward duly made a call for the unpaid portion of the subscription price of the stock. The court said that where stock had been transferred from the record holder to another who does not cause the transfer to be registered, "or in some way equivalent in the eye of the law, establishes the relationship of stockholder between