## Facts

- Crown Controls, Inc., a Washington corporation, agreed to supply gas chlorination equipment after negotiations with Jim Smiley.
- Smiley conducted the transaction using the trade name “Industrial Associates” and did not disclose to Crown Controls that he was acting for a corporate principal.
- Smiley had transferred ownership of the “Industrial Associates” trade name to North American Drill Supply, Inc., an Oregon corporation, and served as its president and majority shareholder.
- Crown Controls delivered the equipment to a shipping agent in Portland, Oregon, and billed “Industrial Associates” $9,136.03.
- Crown Controls first sued Drill Supply in Oregon and obtained a default judgment but could not collect.
- Crown Controls then sued Smiley personally in Washington, asserting personal liability based on Smiley’s failure to adequately disclose the principal.
- Smiley argued that Crown Controls’ prior judgment against Drill Supply barred suit against him under Washington’s election-of-remedies rule for undisclosed-principal cases.

## Issues

1. Whether the election-of-remedies doctrine applies when an agent fails to adequately disclose the principal’s identity, such that a judgment against the principal discharges the agent (or vice versa) once the creditor learns the principal’s identity.
2. Whether a creditor may pursue both an agent and an undisclosed (or inadequately disclosed) principal for the same obligation under joint and several liability.

## Decision

- The Washington Supreme Court affirmed judgment against Smiley.
- The court held that the election-of-remedies doctrine in undisclosed-principal cases would no longer be applied.
- The prior default judgment against Drill Supply did not bar Crown Controls from pursuing Smiley personally.
- Agents and undisclosed principals are subject to joint and several liability for contracts made without adequate disclosure of the principal.

## Legal Principles

- When an agent contracts without adequately disclosing the principal, both the agent and the undisclosed (or partially disclosed) principal are liable on the contract.
- A creditor is not required to elect between pursuing the agent or the undisclosed principal; obtaining a judgment against one does not, by itself, discharge the other.
- Joint and several liability applies in this setting, permitting enforcement against either or both obligors until the debt is satisfied.
- The risk created by non-disclosure of the principal’s identity or corporate status is allocated to the agent and principal who caused the ambiguity, not the contracting creditor.

## Conclusion

Washington rejected the election-of-remedies bar in undisclosed-principal disputes and held that a creditor may obtain and enforce judgments against both an agent who failed to disclose the principal and the undisclosed principal, with joint and several liability until the obligation is paid.


Crown Controls, Inc. v. Smiley, 756 P.2d 717 (Wash. 1988)