UNIVERSITY OF CALIFORNIA LOS ANGELES SCHOOL OF LAW LIBRARY A_. Cr- ^)6 ^mau Sato §ttkm — 1889-90. THE LAW or AGENCY IN BRITISH INDIA. BY T. A. PEARSON, OK THE INNER TEMPLE, BARKISTER-AT-LAW. C u Ic u 1 1 a : THACKER, SPINK & CO. ^Jubltsljfvs ta lilt (fnkulta tllnibtrsitB. Bombay: TIIACKER & CO., LiMitKn. Madras: IlIGGINBOTIIAM vV CO. London: W. TIlACKEll & CO. 1890. T mo CALCUTTA : FRIXTKP AT TIIF RAPTIST MISSION' PRESS. CONTENTS. Of the Contract and the Authority. LECTURE I. Parti. The different Classes of Agents ... ... ... ... 1—17 Part II. Appointment of Agents ... ... ... ... ... 17 — 27 LECTURE II. Part I. Appointment by Joint Principals ; Appointment of Sub-Agents, Stibstitutes, and Joint Agents ... ... ... ... ... ... 28—39 Part II. Delegation of the Authority ... ... ... ... 39 — 56 LECTURE III. Ratification of the Authority ... ... ... ... ... 57 — 81 LECTURE IV. Revocation of the Authority ... ... ... ... ,„ 82 — 10-4 LECTURE V. Nature and Extent of the Authority... ... ... ... ... 105 — 131 LECTURE VI. P.art I. The Exercise of the Authority ... ... ... ... l.lo— 101 Part II. The Construction of the Authority ... ... ... ... lyi— 203 Of the Riohts, Duties and Liabilities arising from the Contract. LECTURE VIT. Rights of Agent agr.inst Principal. Part I. Right to Conimiasiou ... ... ,,, ... ._, 2(U 218 Part II. Right of Lien ... ... ... ,,. ... ,., 218—241 LECTURE Vin. Rights of Agent against I'rincipal. Part L Riglit to stop in Trjinsit ... ... ... .., ,,_ 212 — 2 noto 5 115 note 9 127 note 2 130 lino 31 139 noto 2 203 notp 1 371 lino 13 442 lino 7 For Act VII CORRIGENDA. Head. Act VI. Fittcrhert v. Mathcxo Dc Boitchet Erid Broione Grant Cowp. 280 Taylor per ij'c. Add. lud. Contr. Act S. 208. Fihherhert v. Mathei De Bouchout, on Evid : Bourne. Gaunt. Cowp. 479. WaUer. per se. $:^\' >\ c:v' '^/ CA'.Ar. \ U N I V L. TABLE OF CASES. Abadi Begum r. Inam Begum Abbott V Freeman Abbott V. Strattea Abd V. Sine Abdoola bin Shaik Ally v. Stephens 59, 71, 403, Abdool Gnnnee v. Gour Monee Debia ... Abdul Sabhau Chowdbry v. Shibkristo Uaw Abraham v. Reynolds Acatos v. Burns ... 132, Acey V. Feniie ... Adams v. Bankarfc Adams V. Hall ... Adainson r. Jarvig ... 272, Addison r. Gandoseque Aggs V. Nicholson A kerman r. Humphrey Albert Crosley, Proceeds of Alder i\ Boyle ... Alexander, the ... ... 113, Alexander r. Alexander Alexander v. Gibson Alexander i'. Simins Alexander v. Sizer ... loO, Allan (,'. G ripper Allan V. Sundius ... 13, Allen V. Hayward Allen I'. Smith ... Alley V. Ilotson ... Alliance Bank c. Kearslcy . . AUkins r. Jnpo ... Al.sop V. Silvester Ancona v. Marks Andansonia Fibre Co 5S, in re Miles claim 411, Anderson r. Clark Anderson r. Wallace Andrews v. Andrews Angus V. McLacldan Aiinoda Churn Jioy r. Kally Coomar Hoy Annoda Pcrsad iloy i'. Dwarka Natli Gangojjadliya ... 298, Anonymous Ciiso Anonymous Case ... 2S(!, Anonymous Caso Aiitrobas r. Wickcns Anuiidchuiider Bo.se r. Broiighton Aiiundo Lall Dass r. Boycaunt llam Hoy Anunt Dass r. Kelly Appleton r. Biuils Arlapa Nayak r. Nar&i Keshavji & Co. ioO. Page 152 4:U 84 346 412 153 153 453 297 152 112 178 274 418 162 257 144 217 145 157 111 147 415 251 119 444 2-Mj 98 140 2(;8 3;i2 6G 416 344 44 4 237 30 299 153 2.S7 137 2(16 62 3.-8 4110 360 201 Arlington v. Merricke Armory r. Delamire ... 3Jl, Armstrong v. Stokes 338, 367, 4l0, 411, 412, Artaza i'. Smallpiece Arthur V. Barton ... 14, Ashbury Ry. and Carriage Co. Riche 76, A.spdin V. Aspdin Asiiinall v. London & N. W. Ry. Co. ... Atkyns i'. Pearce Atterbury v. Wallis Attorney or Proctor i)i the matter of ... Attorney-General v. Ail'ord Attorney-General r. Briggs Attorney-General v. Chesterfield Attorney-General v. Scott ... Attwood V. JInnnings ... 112, 191, Austin 1'. Chambers Australian Royal Mail St. Nav. Co. v. Marzetii Anstrahisian Steam Navigation Co. ?'. Morse ... ... 132, 133, Avul Khadar v. Andhu Set... Ayre's case B. Back V. Sliippam Backhouse c. Cluudton Backiionse r. Taylor Baddeley v. Earl Granville ... Bagiiall r. Carlton Bailiffs of llomuey Marsh c. Trinity House Baines v. Ewing Baker v. Cave ... Balfc r. West ... Balfour !■. Ernest Baniford c. Shnttleworth, .. . . BaiH'V i\Iadhnb fthaw i;t re... B.uiti'll V. Leigh... Bank of .Australia v. Breillat B.mk of Bengal v. E. 1. Ry. Co. Bank of Bengal v. Fagau 111; 194, 195, I9i!, 199, Bank of Bengal r. Macleod 195, Bank of New South Wales r. Owestoii 458, Bank of Van Dicmcn's Land v. Bank of Victoria Baring r. Corrio 113, 147, 148, liaring v. Stanton Barriet i\ Skinner Ban let! r. Purnell Burnuisotli v- Bowring Page 196 344 413 234 14:J 77 88 137 151 434 291 30 1 469 30 '> 52 201 3U9 21 145 154 469 235 138 142 462 317 464 157 45 2.S2 15 387 478 312 139 466 200 200 459 293 152 316 llli 147 105 TAIII.E OK f'AsES. r Hnrkor f. firoonwood ... 11", Burnrtt f. South lidiuloii TnmnMiy ('<>. Itiiri|Uu Anni', wi llm matter of liurron c. Fit/^i'mld Itiirrow, tx-pitilf, in re Wordsell 21'.', Jim TOW V. Cdlt'f) Hurry v. CroHkoy ... Hurry r. Lon^'iiioir ... Burtlftt V. IViitland ... 121, liurtlott r. Sulmoii Barwick v. Kii^'UhIi Joint Stock Co. 330, :mi, it?!*, 470, 171, 172, 473, Datonmn r. I'liillipn Uuttoa i". Wt'dgwoud Coal uiid Iron Co. 22t3, Bnttoy r. Trcvilliou Uutllt-y f. Li'wig ... Hatlyc r. (Iri-.sk'y Buyloy v. Cluulwick Bayley r. Tarukiiiiih Poromnnic 132, Buyloy V. Wilkins ... 110, 112, Baylilio v. Uuttorfield Bi'ulo r. Ariibin ... Hi-ali- c. Cuddick ... Boiir !•. Sti'Vi'iisou Hcnttiu V. Kbiiry liruumont r. lioultbco ... 212, Bi'uran, in re Bri'k «'. Kantorowicz Beckham r. Drake 137, 138, IfiO, 346, 303, 305, 414, Beer Chnnder Manickya r. llurro Chuu- der Hurniou ... Beer Kislioro Sahoy v. Government of Bengal Bcetson i-. Beetson Belaney r. Ffrcnch Belcliicr, ex-parte ... 52, Bell r. Auldjo ... Bell V. Janson ... Bclshaw V. Hnsh Beniait i*. lluflord Bcinola Dosseo c. Mohnn Dossco BenarcH, Uajah of v. Debi Dyal Noma... Benhum r. Hatty Honin^tield r. Kynaston Beiitley r. Craven ...4, 300, 309, Berkeley r. Chittur Kooar ... Berkeley r. Uardy Berndtiton f. Strang ... 247, Bomina, the Hertrani r. Godfrey Berwick r. llonsfall HetI.ell V. Clark & Co. ... 218, 21'J, Hetteley v. Uoad Hotts V. Arbitthnot & Co. ... 201, Hells r. Gibbins ... 272, 273, Bcvan v. Waters ... 230, Beverley v. Lincoln Gas Light Co. Bt'vins c. Ilulnie Hoxwell r Christie Hha^bftt Taudu c. Bamdcb Tanda Bhagvcruth r Mobua A(;k lie. 117 241 38 2.'.0 2r>7 270 233 122 470 470 304 323 158 27 45 208 144 203 120 151 140 30 384 302 143 317 410 308 4'25 331 220 14'.t 118 «i7 240 50 141 191 59 200 317 J 53 340 2W 401 2u2 111 251 335 293 274 231 19 142 2.S4 332 03 Hharntchnndor Hoy c. Kally DaHH Doy Hhavitn .Miilji r. KavuHJi JuHuwalu Hhogohun Chuiid" r Son r. liadgu Ally ... Hholii .Nath V. Haij Nath ... 245, Hliolanatli Sundyal v. Goureo Perahad Muiiro Hliuobiin Chnnder Sen v. Ram Soonder Surtria MozuTiidar Hhnj.iMund ilytec r. Iladha Cham Mytcc Hickerton v. Hurrell ... 340, Hiddlc V. Bond ... ... 335, IJiddonioyu Dabee v. Sittaram 152, Bigg r. Strong ... Bird r. Brown ... Hirniinghani Banking Co. in re Hisho]) r. Countess of Jersey Blacki>urn v. Sclioles Hlackbnrn Low & Co. v. Vigors 430, 439, Blackburn v. Uaslam Black well & Co. v. Jones ... Blair v. Brownley Blake r. Nicholson Blakcy r. Di.xon Bligh V. Davies ... 234, Blyth V. Birmingham Water Works Co. 130, Boardman r. Sill Bock r. Gonrisscn ... 219, Boddington v. Castclli Boden f. French Bodcn, ex-parte, in re Wood Bohtliuk f. Inglis ... 2iG, 2l8, Boidjonauth v. Paterson Boidonath Dey v. Ram Kishore Dey ... Bolton I'. Ilillcrgden Bolton r. Lancashire and Yorkshire Ry Co. 250, 75, Mirza Bolton Partners v. Lambert Bombay, Burraah Trading Co. r Mahomed Ally Bombay Saw Mills Co. in re 219, Bombay Tramway Co. i*. Khairaj Tej- pall ... ... 443, Bombay United Merchants Co. f. Doola- bram Sakulchand Bommee Chettv Ramiah r. Visvanada Pillay "... ... 345, 300, Bonaparte, the ... Bonbouus, ex-parte ... Bond r. Gibson ... Boorman v. Brown ... 282, Booth 1-. llodgsou Bostock f. Jardinc Boston Deep Sea Fishing and Ice Co. r. Ansell Bottomley v. Fishes Bottomley r. Forbes Bgaghton v. Boughton Bousot r. Savage Bourdillon r. Roche Bourne r. Gatcliffe Bowcher r. Noidstrom ... 393, 454, Bower f. Peatc ... Paoe 30 1113 392 240 113 3 112 313 330 353 03 245 55 478 91 441 441 208 478 2oU 220 235 443 230 222 103 285 1(»2 200 10 04 100 S52 216 400 230 450 379 415 135 138 139 284 332 283 316 160 47 226 431 143 47 456 445 TADLK OF CASES. vu Bowos, in re Strailimoro r. Yane Bradford Banking Co. r. Briggs Bradley v. Riches Brady v. Cnrran Brady v. Todd ... Brandao v. Barnett ... 221, 222, Bray v. Chandler Brettcll 1'. William ... 15, 137, Bridgcr v. Savage ... 297, Bridges v. Garrett Bristow V. Taylor ... 83, 84, Bristowe v. VVhitomoro ... 210, British llutnal Hanking Co. v. Charn- wood Forest lly. Co. ... 4-72, Brittain v. Lloyd ... Britton v. Cook... Broad r. Thomas Brodie v. Hastie ... 32, Bromley v. Coswell Bromley v. Holland Brook r. Hook ... Brooks, ex-parte, in re Forbes Brotherton v. Hatt Brown v. Andrew ... 38, Brown i\ Litton Bruce v. Wait ... Brnnsdon v. Allard Bryans v. Nix ... Brydon v. Stuart Bryson v. Wylio ... ... Buchanan v. Findlay Buck, ex-parte, in re Fawcng Buckle V. Knoop Buckle V. Roach Buckley, ex-parte, in re Clarke Budh Singh Dndhuria v. Devendranath Sancul ... ... 115, Bulakec Lall i'. Indurputcc Kowar 82, Bull V. Price BulKu- ('. Harrison Buuwaree Lall Saboo v. Mohesb Cbnn- 64, 304, 307, dor Sing Burdick i\ Garrick Burgess V. Gray Burgon c. Sharpe Burls V. Smith . . Burucs ('. Pennell Burodachurn Bose v. Ajodbyo Ram Khan Burou V. Denman Burrell v. Jones Burroll v. Mossop Burton v. English Burton v. Wookey Burrough v. Skinner Bush r. SLoinman Buskin r. Itainkisscn Seal Bntchard v. Dresser Butler c. Knight C. Page 222 221 430 142 119 233 207 139 331 347 ]37 268 473 2fi3 14G 14 148 50 84 71 102 433 156 303 3U 224 344 276 13 238 10> 119 142 IGO 192 86 217 386 105 308 444 146 377 15 74, 3G0, 418, Cahler r. Dobell C aider c. llalket 364, 305, 417, 44 75 375 31 !• 1 4.-) 306 3S7 419 2U3 138 143 418 405 Cally Churn Mnllick v. Bbuggobutty Churn Mullick Campbell in re ... Campbell r. Campbell Campbell v. Richards ... 295, Cambridge v. Anderson Capo Breton Co. in re ...4, 310, 329, Capel I'. Thornton Capital Firo Insurance Association in re 226, Capp V. Topham Cargill V. Bower Carpenter r. ]\Iarnell ... Carrisou i-. Rodriges Carter v Misreo Lai Cartmell's Case Cassaboglou i'. Gibbs 243, 322, 323, 331, Callender v. Olcricli Catlin V. Bell ... 40, 282, 288, Catherine, the ... Catterall v. Hiudlo Cavendish Bentrick r. Fenn 319, Cefu Mining Co in re Cella, the Chambers i'. Goldwin Chapleo V. Brunswick Benefit Building Society ... ... 381, Chapman v. De Tastet Chapman v. Morton Chapman r. Shepherd Chapman v. Walton 201, 290, 291, 295, Chappan Nayar v. Asseu Kutti Chappell r. Bray ... 32, Charles v. Altin... Charles w. Taylor Chartered Bank of India, Australia, Ld. r;. Uenderson ... Chase v. Westmoro ... 221, Chedworth, Ld. r. Edwards Cherry v. Colonial Bank of Ansti'alasia 380, Chesterfield ;•. Boythorpc Colliery Co.... Child V. Morley Childers r. Wooler 455, 456, 457, Childs !•. Monins Chiuuaya Nayudu i'. Gurrunathan Chctti 116 Chippendale, ex-parte, in re German Mining Co. ... ... 78, 111, 137 Chooneo Sookul r. Hnr Pcrsiiad ... 159 Chowne r. Parrott ... ... 11-2 Cliristie r. Row... ... ... 136 Chuckun Lall Singh v. Poranchundra Singh ... ... ... 15 Chunder Churn Dutt v. Eduljoo Cowas- jco Bijnco ... ... 87, 93 Chunder Coomar Deb r. Sndaknt Maho- med Khan ... ... ... 153 Chunder Sircar Chowdhry v. Nohin Chunder Biswas ... ... 4-li Clmrcli V. Imperial Gas Co. 10, 20, 25 Churchward v. The l^iieeii ... ... 83 Clark ('. RatUuavuloo Chutti ... 332 Page 5 101 275 296 146 330 147 227 266 397 103 153 159 41 379 296 289 116 147 328 78 239 300 46C» 204 136 21 ;3 296 45 148 321 450 254 230 3.12 384 320 2()6 474 160 Mil I A III I ip|. 1 AHK3. I 'm:k (Uiirk r. WixhI ... •J 17 ,•. . .. .-.. i.i,.ia ... 21 , 25, '.it; 1 -: ... .ncM', 304, 3(u; Cinriun r 11, i2t;, ibc. IbH, isn rhv r 11 2(U c 1 Allien ... ... 47s ' liiioiiMtdn ... ... 3i.m; ( 1. 1 i iHliwick ... •.M) t'lilTnril c. lliuton ... ... 420 Clifliiiil r. l.iitxii ... ... 151 Cliiinn !'. Cooko... ... ... 112 dough r. Hoiiil ... ... ... 109 Con ton r. Kail ton ... ... 219 Coiitii r. Biiinbridgo ... 427 (\>Uh V. Hoi-ko ... ... 37", 3'JO <'..l(f.mi«l Murine Insurance Co. r. Bur- tfanx 146 CiK-kn-ll r. Ancomptc 1 34 Ci)ckn»n r. Irlnni .. 40, 50, 147, 148 Ci>tftf» f. Bornsird ... ... 2s 2 Cohi-n r. Kittoll ... 146, 207, 3:U Colion r. I'neot ... 204 Colburn r. I'litniore 275 Ci.li'innn v. Hiehoa ... 201, 1 12, 143 Colog r. Trocothick ... 40 CoUoftor «if Mii.inl ij)atam v. Cav.ily Vciicata Nnrrainapuh ... 151, ■125, 408 College r. Horn... ... l.-,3 Collen r. dardncr 113 Colion r. Wright '.'.'. 380, 381, 381 Collins V. Er:in9 274 Collyor r. Dudley 2"J8 Colonial Bank r. Exchange Ban k of Yarmouth 313 Comber r. Anderson 287 Commonwealth Land Estate Co. in re Hollington ... ... ... 143 Concordia Chcmiecho Fabrik an Actien V. S(|uire ..• ... ... 201 Cooke, ex-partc, in re Strnchan 352 Cooko r. Eahelby ... 374, 423 Cooko r. Wilson ... 359,177, 337 Coomhea'8 Case 18, 92, 155, 200, 289, 290 Coomha !•. Bristol and Exeter lly. Co. 23 1 CoojHj r. Eyre ... ... ... 32 Coo|)or, cr-fHtrte, in re McLaren ... 251 CiM>|>t>r r. Hill ... ... 233 Cooperr. Neil .. ... 270. 271 Cojx> f Rowlands ... ... 212 < ;•! md r. Stein ... ... 223 ( I. in r. Wiilke ... 341, 343 • Cordon ... 282, 323 I ' Fowke ... .1.7.1 1 1 Wilson ... ... 200 ' 11 c.f Calcutta r. Anderson ... 4."i3 < ' . SauTiders ... ... 1(;8 t'«.»t'i.iiy r. Cilndstone ... ... 251 Cownnji Bcniniji Lilaoovnla, in re ... 6 Cowio r. Dhurmseo Poonjabhoy ... 373 Cowip r. Remfry 11, lb4,' 185, 188. I,s9 Cuwell r. Simpson ... 223, L'37 Coirper r. Urven ... ,,, 235 1 'AfiK 1.30 102 332 144 no ... 291 251 332 449, 455 13 334 idcr 478 ... 376 253 Simpson's 117, 200 47 246 207, 210, 211 ... 420 122 Cox r. Hickman Cr.'icrow V. Salter ('rawfonl v. FiHher Crawford v. Hunter Crawford v. Stirling Crawley v. Maling f^rawHliay r. Kades ("rawsliay r. Tliornton Croft V. Ali.son Cross V. l'a^liano Crossley r. Mills Crown Prosecutor r. Shamsu Cnllen v. Queensbury Cnriiining v. Brown Cuiiiiinj^ham & Co., in re claim Cunninf^ham v. Faublanqae Currie r. Jlissa... Curtis V. Nixon Curtis V. Williamson Cuthbert v. Cummings D Dadswcll V. Jacobs ... ... 297 Dale & Co., ex-parte ... 352, 353 Dale V. Hnmplirey ... ... 339 Dale V. Sollet ... ... ... 332 Dalton V. Angus ... 415, -147 Dalton V. Irvin ... ... 212 Danby v. Coutts & Co. ... ... 195 Dancer r. Hastings ... ... 340 Daniel r. Adams ... ... 156 Daniels r. Boalger ... ... 341 Darke v. JIartyn ... ... 305 Darlington Joint Stock Banking Co., ex-parte ... .. ... 139 Davey v. London & S. W. By. Co. ... 461 Davidson 1'. Stanley ... .. 116 Davies v. Lonndes ... ... 224 Davies v. Vernon ... ... 224 Davis, ex-partc, in re Sadler ... 336 Davis V. Bonrner ... ... 221 Davis V. Garrett ... ... 2S2 Dawson v. Lawley ... ... 143 Dean v. Branthwaite ... ... 449 Dobenhnm v Mellon ... ... 149 Deb.iarain Bose v. Laisk ... 219, 230 De Boncliont t' Goldsmid ... 115, 194 De Bnsacl.e v. Alt 37, 38, 46, 60, 61, 315 De Comas v. Prost ... ... 85 Do Gaillon r. LAigle ... 338, 367 Depamber Mozunular v. Kallynath Roy 299 Dei:g r Midland Ry. Co. ... ... 450 De llavillaiid 1: Bowerbank ... 303 Del.iunev 1. Strickland ... ... 36 Denew v. Daverell ... 212, 213 Denobundhoo Shaw v. Kally Doss Roy 408 Denton v. Rodic ... ... 133 Derry r. Peek 393, 396, 397, 474 Descharms r. Ilorwood ... ... 29 Desl.indes v. Gregory 128, 174, 181, 363 Devkabai v. Jefferson ... ... 224 TABLE OF CASES. IX Devrav Krishna v. Ealambhai Dickenson v. Naul Dickenson v. V.ilpy Dickinson v. Dodrls Dickinson v. Lilwall Dickson v. Ewarfc Dickson v. Reutcr's Telegraph Co. 92, 118, Dingle v. Hare Diplock V. Blackburn Dirks V. Richards Dixon V. Baldwin Dixon V. Fancus ... Dixon V. TIamond Dixon V Yates ... ... 252, Dods V. Stewart Doe-dem-Ash v. Snmmersett Doe-dem Graham v. Hawkins Doe-dem-Rhodes v. Robinson Doe V. INIartin ... Doorga Charn v. Koonjbeharee Pandoy lOB, Doorga Churn Shaha v. Ram Nai-aian Doss Doorga Narain Sen v. Baney Madhub Mozoomdar ... ... 435, 430, Dorab Ally Khan v. Khajah Moheo- oddeen Dossee 7^. Pitambur Pandah 153, Doubleday v. Muskett Douglas V. Patrick ... Downman v. Jones Drake v. Lewin ... Dresser v. Hoaro Dresser v. Norwood ... 317, Drew V. Nunn ... Drinkwater v. Goodwin Droege v. Suart ... 14 1, Dudgeon v O'Connol Dudgeon v. Pcnibrcjko Dull V. East Indian Co. Dufresne v. Hutchinson Dngdale v. Levering Duncan v. Benson Duncan v. Hill ... ... 122, 264, Duncan v. Lowndes ... 130, 140, Dundonald i). Masterman ... Dunn V. Sayles . Dunne v. English Dntton V. Marsh Dystcr, ex-parte 312, IGl, 162, 167, Page 420 147 15 83 11!) 98 474 148 303 236 251 274 333 253 144 30 427 41 200 116 64 475 274 428 339 137 182 143 263 431 95 222 145 139 12 137 284 274 297 265 143 477 88 317 415 309 E. Eaglesfiold ;'. Marquis of Londonderry 385 Eastern Counties IJv. Co. v. Broom ... 458 Eastland v. Burchcll ... 150, 151 Eaton V. Baskor... ... .. 23 Eaton V. Bell ... ... 3.30, 376 Eden ?). Ridsdale Ry. Laniji ai\d Liglit- ing Co. ... ... ... 31 l Edgington v. Fitzmanrico ... ... 395 Edmiston v. Wriglit .. 266 Edmunds ?;. Bnshell ... 100, 421 Eduiuuston i;. Tliompsou ... ... 27 Page Edwards, ex-parte, in re Chapman ... 386 Edwards v. London and N. W. Ry. Co. 458 Edwards v. Southgate ... ... 234 Eicke V. Meyer ... ... 204, 205 Elbinger Actiengesselschaft v. Clave ... 338, 367 Elizabeth, the ... ... ... 136 Elliot V. Turquand ... ... 98 Ellis V. Sheffield Gas Consumer Co. ... 444 Elsee V. Gatward ... 91, 282 Eltham V. Kingsman ... ... 86 Emery v. Emery ... ... 151 Emery v. Wace ... ... .. 44 Emma Silver Mining Co. v. Grant ... 309 Emma Silver i"\Iining Co. v. Lewis 317, 318 Emmens v. Elderton ... ... 88 Emmerson v. Heelis ... 8, 147 Empress Engineering Co in re ... 68 England v. Curling ... ... 306 English and Scottish Marine Insurance Co. in re ... ... 88, 216 Entwistlo V. Dent ... ... 284 Erlangcr v. New Sombrero Phosphate Co. 309, 317 Ernest v. Nicholls ... ... 15 Esanchunder Singh v. Samachurn Bhutto 112, 201 Espin V. Pemborton ... ... 437 Essaji Adamji v. Bhimji Purshotam ... 3S7 Esssry v. Cobb ... ... ... 424 Etherington v. Parrot ... ... ]50 Etna Insurance Co., in re Owens ... 212 European Bank, in re ... ... 221 Evans t;. Nichol ... ... 3 ]-4 Eyre ex-parte ... ... ... 478 F. Fagan v. Chnnder Kant Bannerjeo 300, 302 Fairlie v. Fenton ... 148, 180, 181 Fairlic v. Hastie ... ... 42Q Faithful, Brighton and S. C. Ry. Co., in re 225 Faizulla v. Rainkamal Mictcr .. 10 Falk !;. Fletcher... ... ... 214 Fanny, the ... ... ... j.KJ Farebrother v. Ansley ... ... 273 Farmer t^, Rnssell ... ... 332 Farrer v. Lacy ... ... ... 1.17 Farrer v. Lady Hartland ... ... J.j.7 Patch ^ruhammod i>. Gopal Dass ... 428 Faviel v. Eastern Counties Ry. ... 14.2 Favvkes v. Lambo ... ... 47 Featherstonhaugh v. Fenwick ... 306 Feiso ?^ Wray ... 152,243,244, 2 15 Fcltham )'. I'higlaiul ... ... 450 Fenn v. H.arrisou ... ... jjq Fenwick v. Reed ... ,. 142 Fergusson v. C.arrington ... ... (53 Fergusson v. Wilson ... ..18 Feronia, tho ... ... 230 210 Finch V. Shaw ... ... . _ 43^ Findon i>. McLaren ... ... 3,33 Firl)ank's Exors v. Humphreys ... 380 Fisher v. Drcwett ... ... 206 TAIiI.F, OF CASRS. FiHhor 1-. Millor... ... ^ ^^h Fitch ii. .loiuH ... FilZK'Tiil'l •'• I'n'HHor Fitzlifrhcrt'H C'iiho Fit/,liiTl)crt II. Miillwr ... 100, 312, Fitziniiiirii;o i;. lJayl<"7 Floot i;. Murlon 127, 128, 17G, 182, 370, 372, FloinytiR II. Hector ... 33,31, Flftciicr I'. Wiilkcr Foley I'. Hill ... Foriltiiim I', nri^'hton Ry. Co, Forciimn v. (it. W. Ky. Co. Fomiii I'. (Xswell Forth r. Simpson Forward i'. Tittard Foster v. Bates ... Ft)ster I'. Maekreth Foster I'. Pearson •.. Fowler n. Down... Fowler i'. Loek ... 270, 277, 443, Fowler v. Holliiis ... 10, 11, Fowler v. Scottish Equitable Land As- surance Co. ... Foxeroft v. Devonshire Foxcroft V. Wood Foxon r. Gascoiffne Franipton vr-parte Franklin i'. Hosier Franklyn v. Lamond Frascr i'. Witt ... Fray v. Blackhurn Fray v. Voules ... Frazer v. Cnthbortson Freeman v. Cooke Freeman v. West French v. Baekhonse ... 50, Gl, Frizione v. Tagliaferro Frontin v. Small ... ... Fry II. Lano ... ••■ ... Fry i;. Tapson ... Fuller et-parte, in re Long ... Fuller «. Benett ... 432,133, Fuller I'. Jocelyn Fuller V. Wilson ... 469, Furlong v Bhugwan Furlong v. How:\rd Furtado v. Lnmley Fusseelum Becbee v. Oradah Beebee ... Fyczooddcen v. Puduieo G. Gabay v. Lloyd ... Gabriel i-. F.vill ... Gadd V. Uouglilou 130, 175, 17G, 170, 302, 303, Gallard ih re Gambles i' Ocean Marine Insurance Co. of Bombay ... Gardiner i'. Childs Gardner v. McCutchcm Garnetl v. Fcrraud I'AOK PAf;l. 271 GarraU v. Cnlliim ... ... 222 230 (Jarrctt v. Handley ... ... 304 270 (iaudet v. Brown ... ... 130 70 (iauHHen /;. Jlorton ... 84, bo 40 (iavridovamma v. llamandora ... 10 439 Geary v. Physic ... ... 190 59 Geo V. Lano ... ... ... 93 General Steam Navigation Co. v. British 375 and CoIr>nial .St. Nav. Co. ... 454 35 Geort^o v. Cbiggott ... 347 305 Gentle v. Bank of Hindoostan ... 222 30.S German Mining Co. in re ... 78, 111, 137 .l.(;i Ciibbos, ex-parte .. ... ... 219 423 Gibbon v. Bnkktar Tcwareo ... 305 292 Gibbs v. Trnsteca of Liverpool Docks .,. 453 21 Gih.sou V. Carruthcrs ... ... 2J3 403 Gibson v. Crick ... ... ... 128 70 Gibson v. Lupton ... ... 31 142 Gilwon v. Minet... ... 83, 272, 273 10 Giles V. Perkins... ... ... 222 344 (iilkison v. Middlcton ... ... 14t 450 Girish Clinnder Dass v. Gillandcrs Ar- 3U8 buthnot ... ... ... 71 Gladstone v. Had wan ... ... 103 152 Gbadstono v. King ... ... 439 223 Glascott v. Gopal Slieik ... ... 337 230 Glaser f. Cowie ... ... ... 283 434 Glasier v. Rolls ... ... ... .397 111 Gleadon v. Tinkler ... ... 109 2.30 Gledstannes v. Allen ... ... 234 308 Glentanner, the... ... ... 240 248 Glnbb v. Campbell ... ... 348 403 Gobindchunder Sein v. Administrator 142 Gencr.al ... ... ... 152 32 Gobindchundcr Seiu v. Ryan 10, 354 107 Godcfrey v. Jay " ... ... 291 158 Godfrey j;. Saunders ... 3S, 94 148 Godiu V. London Assurance Co. ... 222 202 Goff V. Gt. Northern Ry. Co. ... 457 159 Gokool Pershad v. Etwaree Mahto ... 29 205 Golabjan v. Sloshiatoolah ... ... 30 149 Golanice Gopee Ghose v. Jnggessnr 220 Ghose ... .. ... 53 437 Golding Davis and Co. in re Knight 253, 200 93 Golshcde v. Cottrell ... ... 247 470 Golnck Chundcr Chowdhry v. Kanto 59 Pershad Hazaree ... 115, " 224 Golncktnonee Dabea v. Assimooddeen ... 387 Goodson v. Brooks ... 112, 314 Goodwin v. Francis 159 Goodwin i'. Robarts ... 47, Gool Mahomed Sait v. Pestowjee Nes- scrwanjee 121 Goon V. Aflalo ... 27 Gopalnarain Mozomdar v. Muddomatty Gupta 370 Gordon t). Ellis ... 226 Gordon v. James ... 100, Gore I'. Gibson ... 12 Goslin r. Agricultural Hall Co. 140 Go.«sain Dowlnt Goer v. Bissessur Geer 317 Goupy I'. Harden 404 Gouree Suukur v. Bholee Pei'sliad TABLE OF CASES. XI Page Gonr Pershad Doss v. Sookdcb Ram Dob Govindan v. Kannaram Govindath Roy v. Galab Cliand Goviiid Hari Walekar v. Bank of India Grande Do Sal Co. in re Grant V. Norway ... 144, Grant Smith v. Juggobundo Shaw 9, 108, 111, Grant v. United Kingdom Switchback Ry. Co. ... ... 80, Gratitudine, the Graves v. Legge Gray v. Gutheridge Gray v. Haig ... ... 212, Gray v Fallen ... ... 445, Great I. P. Ry. Co. v. Hanmandas Ram- kisson ... 245, 251, 257, Great Western Insurance Co.' v. Cunliffe Great Western Ry. Co. v. Willis Green v. Bartlett ... 206, Green v. Briggs ... 32, Green v. Frampton Green v. Kopke Green v. Lucas ... Green v. Reed ... Greender Chunder Ghoso v. Mackintosh Grevillo v. Chapman Griffin v. Eyles ... Griffitli V. Owen Grindley v. Barker ... 38, Grishchandra Das v. Gillanders Arbuth- not Grisscl V. Bristowe Gris.son v. Commercial National Bank... Grizowood v. Blane ... 270, Gubboy v. Avetoom ... 3G9, Guerncy v. Behrend Guerreiro v. Pcile ... 152, Gundo Mahadcv v. Rambhat bin Bhan- bhat Gunga Gobind Singh v. Pecroo Manjeo Gungapershad v. Ajoodhia Purshad Gnui Mahomed v. Moi'an ... Gnrm v. Bolckow Gunii V. London and Lancashii'C Fire In- snr.'inco Co. ... Guim V. Rolxu'ts Gurniani v. Bennett Guthrie v. Arni.strong ...38, 39, 156, Guy Mannoriiig, the n. Ilagodorn v. Olivcrson llaillo i;. Smith ... Haines v. Busk ... llakceuioonuissa v. Buldco... Hall and Co. in re Hall V. Guerncy Hall I). Smith ... Hall V. Warren ... llallott's Kstate, in re Hainor u. Sharp, ., 59, 103, 153 86 5 147 240 384 422 81 144 122 359 213 447 2G0 315 427 211 147 338 3G3 205 216 308 296 225 24G 39 73 122 138 271 373 254 349 141 455 18 30 257 08 143 424 158 454 G7 344 212 151. 437 204 139 7 352 201 Hamilton v. Barker, The Sara Hamraack v. White Hamond v. Holiday ... 14, 205, Hammonds v. Barclay Hancock v. Reid Hanover, the Hanson v. Robdean Hardman v. AVillcock Harender Kishore Singh v. Administra- tor General, Bengal Hargreaves v. Rothwell Hari Bhanji v. Secretary of State Harihar Dat v. Sheo Prasad Hari Mohnn Bysak v. Krishna Mohun Bysak Harington v. Hoggart Harman v. Johnson Harmer v. Bell ... Harper v. Godsell Harrington v. Binns Harrington v. Victoria Gx-aving Docks Co. ... ... 214, Harris ex-parte, in re Pulling Harris v. Petherick Harris v. Trueman Harrison v. Delhi and London Bank ... Harrison v. Jackson Hari-ison's Case • .. Harsaut v. Blaine Hart V. Frame ... Hartas ?;. Ribbons ... ... Hartford v. Jones Hasam Kasam v. Goma Jadavji Hasonbhoy Visx'am v. Clapham 141, 17G, 372, Hassanbhoy Visaram v. B. I. S. Nav. Co. Hatton V. Royle II awes V. Foster llawken v. Bonrno Hawkes v. Dunn Hawkshaw v. Parkins Hawtayne v. Bourne ... Hay's Case Haynes v. Foster Hazard v. Treadwell Hazari Mnl Nahatta v. Sobagh Duddha Head %'. P. M. Mutukarappen Chetty ... Uoald V. Kc-nworthy 347, 411, 413, Hcarspy v. Girdharec Lall ... Ueinrich, the Hclyear ?;. Hawko ... Ill, Heiiiayetoolah Chowdry v. Nil Kauih Mullick ... ... 29, Henderson v. Australian Royal Mail St. Nav. Co. Henderson v. Barnewell Henderson v. Wild llenkcl V. Papo .. Henley v. Sopor llennings v. Pauchard Herald v. Cuunuh 11: 130, 313, 87, Mull Page 239 464 212 218 111 454 368 333 307 433 4G5 153 374 303 478 239 196 143 312 102 211 102 140 18 87 303 293 266 230 400 381 461 140 190 137 245 137 137 319 10 105 341> 420 414. 5 228 427 141 21 147 137 423 110 158 172 xii TAIlI.r; OF CASES. llrri-f..r>l iind Sontli Wiilog Wftf^gon und Kii^iiH'criiig Ci).i i» I'u Ili'i-tiiiiiiii liooff, *n re liotviNiiii I', (iiitliiii) ... 23'>, IlfywiKiil I'. Wiiriii^ Il<. Ititrtoii UiKuiiiH I'. Senior ... 3G0, 3G2, II ill I'. FoutlKTHtonnnph llillx I'. Slii>kli<-i< Mont'o Dossoo lliiulo V. Wliit(t|ioii80 lliort V. Bort IliHftix V. (Jroenwooil Hiiuro V. DrpHsiT liotl^kiiiRot) IV Flotclicr IIimI^noii v. Aiulorsuii HtHJ^son V. Uiivica lloii^soii r. Ltiy Ho^iirth I'. I/itli.im llolo I' 8ittiii^lii)uruo Rv. Co. 415, liolluml I. Hull... ' ... Ilulliiiid V. Hiiasell llolliiiB f. Hixilli llolliiis f. F..\vli>r ... 397, llollis t>. Clari'i^o llolliiiaii I'. Pulliii II olio way in rr ... Ilohnan v. Johnson Uolnics V. Mather liolmos I'. North Eastern Ry. Co, Uolinos I'. Tiittoii Ilol.st i;. I'ownal lloltscomb V. Rivers ... 04, Hood i;. Stuliybrass Hooper V. Lnsley Hope, tho Hope I'. Cast Uoriiiarain (ihose v. Administrator Gcnc- rnl of Hin^ul ... Homiasji Temulji v. Mankurnrbai Horn t'. linker ... Hornby exparfe, m re Tailcton Uornbv V. Lacy Uor.-iley r. Hell ... HiisM.'iin I.'. Lloyd ll"iiu'li I'. Manzanos II uirhton I-. .Mathews 152, 218, 223, lloiudsworth V. City of Glaseow Bank 472, 473, Houscliold Fire Insurance Co. i . Grant Hovil i>. I'nck ... ... 59, How V. Kirehner Uownrd I-. Bailee Howard v. Fntent Ivory Manufacturin Hiibliil Siikul ij. Riimgoti Dey Roy 115, ll>i 2J3 llntltoii K. (irangisr ... 313, 'H7 -37 Miii^hes I). Uraomo ... ... 3S.'J 231 lliinible v. Hnnter ... ... 317 IKG Iliiniphrcy v. Dale 127, 128, 182, 375 7 lIiiinplireyH v. Lucas ... ... 339 355 lIiim|>hrfVH v. Pratt ... . 274 310 Hunt i;. Wimbledon Local Board 22, 24, 26 3r.3 Hunter .;. Parker ... 18,130, 146 212 Hur Dy.il Sin^'h w. Hcera Lall ... 428 307 llureo .Mohuu Bysack v. Krishno ilohun H BvHack ... ... 171, 172, 415 397 II\iree Ram v Jcetnn Ram ... ... 72 231 Ilurrinath Rai v. Krishna Kumar Bakshi 2 17 299, 300, 307 151 Ilurrish Chander Telapattur «;. O'Brien 367 85 Unrronath Roy v. Krishna Coomar 190 Bakrfhi ... ... ... 303 2t'.l Ilnny Kisto Koy v. Motee Lall Nundee 114 139 Hursarun Siiii^h v. Farsbuu Singh ... 159 417 llur-st V. Holding ... ... 212 212 Hurst «;. Watson ... 83,81, 86 386 Hussey v. Christie ... ... 233 142 Hussey v. Field... ... ... 455 398 Hntchcson i;. Eaton ... ... 196 224 Ilutchins t;. Xuncs ... ... 245 OS Hutchinson v. Norwood ... ... 226 149 Hutcliinson r. Tathara 127,176,182, 372 288 Hutchinson v. York, Newcastle and Ber- 464 wick Rv. Co. ... ... ... 280 450 Button r.* Bragg ... 231, 231 147 Hutton i;. Bulloch ... 338, 367 247 I. 307 Ida, the ... ... ... 115 2(>3 Idle V. Roval Exchange Assurance Co. 146 139 Imniedy Kanuntra Ramaya Gaundau v. 225 Ramasami .\mbalam ... ... 65 138 Imperial Bank of London v. London and St. Kathcriues Dock Co ... 245 307 Imperial Mercantile Credit Association 436 V. Coleman ... ... ... 313 13 Inchbald v. Western Neilgerry Coffee 238 Co. ... /.. ... 216 152 Indermaur v. Dames ... '162 376 Inder Pershad Singh v. Campbell ... 2SS 116 Indur Chandr.i Dngar w. Lachmi Bibi . 127 176 ludromonee Barmonee v. Surroopchuu- 232 dcr Paul ... ... ... 30 Ingratn v. Ingram ... ... 40 476 Ireland i;. Livingston 202, 243, 241, 87 215, 286, 331, 379 74 Ireland v. Thompson ... ... 37 219 Irvine v. Union Bank of Australia 78. 79, 80 192 Irvine i'. Watson ... ... 411 Ishan Chnnder Mozumdar v. Sreekanth 69 Nath ... ... ... 64 111 Ishen C bunder Singh v. Shama Churn 2i;,6 74, 318 118 Ishwardaa Gulabchand v. G. I. P. Rv. 27 Co. ... ... ".. 460 4oO Iswarchundra Das v. Jugal Kishore 151 Chuckrabutty ... ... 44 TABLE OP CASES. Xlll Page Ivy v. Gilbert ... ... ... 156 Jackson v. Clarke ... ... 3G Jackson v. Cummins ... 221, 231 Jackson v. Nicliol ... 249, 250 Jacobs V. Latonr ... ... 235 Jadu llai v. Bhnbotarnn Nundy 188, 189 Jaganatli Das Gurubaksdas v. Ramdas (Turubakshdas ... ... 142 Jaggers (;. Bennings ... ... 429 James v. Griffin ... 250, 251 James v. Williams ... ... 246 Jajmnese Curtain and Patent Fabric Co., in re Scliolbred ... ... 474 Jardino Skinner v. Nathoram 111, 112, 148 Jarmain v. Hooper ... 45G, 457 Jcliangir Rustomji Mody v. Shamji Ludlia ... ... ... 77 Jellicoe v. British India St. Nav. Co. ... 4G0 Jenkyns w. Usborne .. ... 213 Jessopp V. Lutwyclie ... ... 270 Joel V. Blorrison... ... ... 443 Johnson V. Lindsay ... ... 452 Johnson v. Sumner ... 18, 150 Johnston v. Kershaw ... ... 284 Joluiston 1). Usborne ... 47, 119, 272 Johnree Bibi v. Sree Gopal Afisser ... 141 Jones ?;. Bright ... ... ... 59 Jones V. Cliff ... ... ... 230 Jones u. Corporation of Liverpool ... 413 Jones V. Downman ... ... 182 Jones V. Jones ... ... ... 252 Jones ?;. Littledalo ... 359,303, 36 1 Jones V. Nanney ... ... 117 Jones V. Pearlc ... ... 233, 239 Jones V. Smith ... ... ... 31 Jones V. Thnrloo ... 239 Jonmenjoy Coondoo v. Watson ... 192 Jordaine v. Lefcvi'o ... ... 221 Jorden v. Money ... ... 05 Joykrisfeo Cowar ;;. Nittiyaniind Xundy 141 Jolly V. Uees ... ' ... "... 149 Josephs V. Knox ... ... 338 Josephs I'. Pebrer ... 212, 26S Joseph V. Solano ... ... 297 Jndali V. Addi Haja Queen Bibi ... 115, ]91 Jiigal Kishore v. Girdliar Lai ... 2'.»9 Juggenatli v. Beck ... ... 159 Jnggernath Sew Bnx v. Ram Dyal ... 126 .Inggc.sur Blmttobyal v. Roodro Narain lioy ... ... ... 59 Juggessur Cliuckerbutty u. Panchchowri Chuckerlmtty ' ... ... 212 Juggcwundas Keeka Shall i>. Ram Hrij- tiookun JJiis ... ... ... 1 lo .TuggobiuKllioo Shaw y. Grant f'-niilli ... 9 Jn^'goniohun Ghost; v jVlanick Chiind ., 47 .luggnrnatli Roy Chowdliry v. Mnnorakha Dasseo ... ... ... 3iil .lurnnii. Dass v. Eckford ... ... 193 Jumna Doss c. 6rcenath Roy 11, 187, I8'j, 360 Jushoda Koonwar v. Go\Yrce Byjnath Pershad K Kalee Churn Ra^Yanee v. Bengal Coal Co. Kalee Coomar Dass v. Anees Kalee Mohnn Sircar v. llumann Kader Mahomed AH Mirza Kaleekanund Bhuttacharjee v. Giree- bala Debia ... ... 153, Kalichandra Singh v. Raj Kishore Bhuddro Kallychurn Shaw v. Dakhee Bibi Kallymohun Raichowdliry v. Ramjoy Mnndal ... ... 71, 73, Kattenbach ?■. Lewis ... 354, Kanay Lai v. Chagmal Battia Karnac, the ... ... 144, Kearslake v. Slorgan Keay v. Feu wick ... Kebal Kristo Doss v. Ram Coomar Sh ih 59, Kelner v. Baxter 67, 68, 70, 339, Kemp V. Falk ... ... 252, 253, Kennedy v. Gonvcia ... 177, Kennedy w. Green ... 430,431, Kendall n Marshall ... 247, 249, Kendal v. Wood ... 31, Kenny v. Mookta Soonderee Dabee Kernot v. Walton ... 77, Kerr v. Deslandes Keshar Bapuji v. Narayan Shamr.iv 115, Kettlewell v. Watson Key V. Cotesworth Khairabnath Khcttri v. Jumaram Dhan- daria Khajah Abdool Gannee v. Gour Monee Dabia Kherodenioney Dossee v. Doorgamouey Dossee ... ... Khoda Bux Khan, in re ... 16, Kilgour V. FinIy.--ou Kim her );. Barber Kindersley v Hughes King V. Sparr ... Kingsford v. Merry Kingsman v. Kingsman Kinloch v. Craig 223, 231, 231, 211, Kirchener v. Vonna ... 119, Kirion d. Braithwaite Kisclioruhand Champalal v. iladhowji Yisr.im Kishen Ch.and v. Secretary of State ... KisluMi Kinker Ghoso n. Borodakuntli Pags 153 KmV 352, Knaic!ii)ull i . Ilallctt Knight I . Camber Knight I'. Fox Knight )■. Lord IMymouth ... Ivuml)i ". Lakshmi Konnja Beliary Roy c Puorno Cliundcr ChuUerjoo ' ... " ... 118, 427 114 353 428 30 307 113 356 130 145 216 33 72 377 260 359 435 253 139 114, 79 234. 192 435 247 130 428 308 lot 201 313 30 450 355 336 246 120 112 333 405 59 309 270 415 2st> 153 159 TAiir.K or cAsrs. r Ktioni i>. Roliiiipon ... 27, Kotta K:i?niiHami Olu'tti i). Baiij^'ari Sivsliamii Niiyaiiivani ... 15, Kiiwcr Naniin K Kni!,vT ... Will-ox ... 222, Kimiai-asunii XaiUm i'. Pala Nagai)i)a Cliftti ... ... 110, Kuimiri)(iil(loon Saikh v. llhadoo Kuvfiji Tulsitlas v. G. I. I*, lly. Co. 1, Kyiiar v. Laurie li. La Hauqnc Jacques Cartior v. La Banqiio D'Kpaixiie do la cite du Moutrcal Lacoy v. Hill ... ... 122, Ladleo Porsliad i'. Gnnga Pcrsliad Lady well Mining Co. v. Brookes Lak.slmiihai Koin Sanshoppa i'. lliidrappa Lala Manoliur Doss v. Kislieu Dyal Lillian Jlonee Dossee v. Nobiu Mohun Singh Lamb n. Bunco ... Lambert i>. lleath Lambert's Case ... ... Lane t-. Cotton ... ... 391, Lane i'. Williams ... 138, Langhorn v. Alhmt Lara v. Hill Latch I'. Wedlako Langbcr v. Pointer Lawless v. Calc. Landing and Shipping Co. ... ... 9J,, Laws V. Rand Leadbittcr t;. Fai'ow ... 161, Leask v. Scott ... Leeds Banking Co., iyi re ... Leeds, Duke of, v. Amherst Leeds v. Wright Lee in re, ex-parte Neville ... Lcese t;. Martin Lefevre v. Lloyd ,., 301, Lomaitrc v. Davis Lo Neve v. Lo Neve Lennard v. Robinson ... 17G, 180, Lepard v. Vernon Levy V. Barnard ... 229, Levy V. Richardson ... 107, Lewis ". ilarshall Lewis II. Ramsdalc ... I'JG, Lewis V Read ... Lickbarrow v. ilason 233, 234, 2U, 217, Lily V. Hays Liiidford v. Provincial In-tsurance Co. ... Lindford /■. Provincial Horse &c. Insur- ance Linilsey v. Gibbs Liudus I'. Brad well Lindas i-. Melrose Lingwood i'. Eade Litt I'. Cowley ... Little r. Newtou 161, 102, 163, 168, III 428 85 233 112 01 4.j9 138 74 272 ]l59 330 43 159 212 131 283 138 393 139 427 210 429 418 307 i:?8 414, 256 41 60 249 302 221 359 446 430 362 92 235 421 47 107 73 259 387 152 110 147 414 340 44 260 44 122, TjiUledalc v. Lonsdale LlangcTinccli Cojil Co., in r Lloyd II. Gnibert Ll(>\'d's ;;. Harper Lockwuod V. |j(;vick Locke V. Prcscott Loklieo Narain Roy Chowdhry v. Kally- jiuddo Bandopadhy.a London Chartered Bank of Aaatralia v. White London Dock Co. v. Sinnott Long V. Millar ... Looiiie V. Oldfield Loolfulhuck V. Gopeechauder Mozom- tlar Lord V. Kellctt ... Loring v. Davis Lovegrovo v. White Lovell V. Howell Lowthcr V. Lowther Lucas I'. Dorricn Lucas t>. Groning Luccna v. Crawford Luchman Chnnd, in re Lnchmeo Buksh Roy v Panday Lnckhce Kant Bonik v Bysack Ludgater v. Love Ludlow, Mayor of v. Charlton 20, Lumley v. Nicholson ... 83, Lnpton V. White Lydney and Wigpool Iron Ore Co. v. Bird ... 300,317,318,317, Lynch v. Dunsford M. Maanss v. Henderson ... 229, Macfarlane v. Carr Macfarlen (;. Lister Macbeath v. Haldinand Mackay v. Commercial Bank of New Brunswick ... 331, 469, 472, Mackenzie Lyall v. Moses ... 106, Mackillican v. Corapaguie des Messa- geries Maritime de France Mackiuuon «'. Shibchunder Seal 11, 185, Mackinnon ^lackenzie i;. Lang Moir 175, 176, 361, 363, 370, 372, Paoe 4iH 221 1 10 14S 2o5 221, 2Ul, Rnnjeet Ram 114, Ram C builder Maclae v. Sntherlaud Macle.an v. Dunn Macuee v. Gorst Macqueeu v. Fnzzul ilahomcd Madden v. Ketnpster ]Madho Singh v. Ganeshee Lall ^ladhub Chnndcr Poramanick cooniar Doss ... Madrid Bank v. Pelly Maester v. Atkins Magee v. Atkinson Mahabe r Pershad v. Raniyad Sing Mahomed Ally Ebrahim Pirkhan r Schiller Dosogne and Co. 331.. 3o8, 139, 59, 74, Raj- 3^9 221 21 3r,9 212 30 143 86 143 450 4 257 2(13 67 159 4 28 478 476 25 210 304 318 441 233 127 227 378 476 4l2 4«)0 189 373 140 130 221 241 231 114 219 318 205 304 141 378 TABLE OF CASES. xv 223, 208, 239, Mahomed Faiz Ali Khan n. Gnnpra Ram Mahomed Noor Klian v. Hur Dyal Mainwaring v Brandon Mallough V. Barber Manak Ham v. Mabir Lall ... Mangles v. Dixon Manisliankar Hargovan, ex-parte Manji Ram v. Tara Singh ... Mauley «;■ Scott... ... Mann v. Forrester Maim V. Shiffuer Mansell v. Clements Mare v. Charles Markwick v. Hardingham ... Marquand v. Banner Marshall, in re ... Martin v. Blythman Mary Ann, the ... Mary Anne Varnor v. S. P. and D. Ry. Co. Mason v. Clifton Mason and Taylor, in re Mason v. Whitehouse Massey v. Banner Massey v. Davies Mather, ex-'parte ... .,. Mathews v. Baxter Mathews v. Haj'don Mathews v. Mnnster Ma Wine v. Burn Maydew v. Forrester Mayor of Liadlow v. Charlton 20, McCollin V. Gilpin ... 102, McCombie v. Davies ... 231, McCorkindale, in re 219, 220, 225, McDonnell ex-parte McEntire v. Potter and Co, . ... McEwan v. Snn'th SlcCiavin v Wilson McKay's Case ... McLaughlin v. Pryor JlcLean v. Flemming I\Iclntyre v. Belcher Meaian Khan v. Akally Mec'r Sut'dur Ali v. Woolfnt Ali Melhado v. Porto Alegrc Ry. Co. Mcllish ?;. Rawdon Mellors v. Shaw... Mombory v. Gt. W. Ry. Co. 279, Mercantile & Exchange Bank v. Glad- stone JMcrcer v. Graves Meredith v. Foster IMorry weather v. Nixan ... 273, 27 1, ^Messenger in re, ex-parte Calvert IMows V. Carr Midland Ry. Co. v. Gt. Western Ry. Co. ]\Iid(lleton v. Fowler Miles' claim Miles ex-parte, in re Isaacs .. Miles V. New Zealand Alford Estate Co. Miles V. l{oMgh ... Miligau V. Wedge 318, 89, Page 29 331 36 292 85 257 43 71 151 229 229 209 173 3 144 101 275 210 450 37 227 142 305 4 288 7 36 153 • 261 291 25 380 233 239 97 398 257 368 324 444 144 90 114 309 08 293 277 462 216 228 429 276 226 8 50 443 109 219 221 41 141 114, 410, Mill V. Hawker ... Miller v. Aris ... Miller v Chartered Mercantile Bank of India Miller v. Nasmyth's Patent Press Co. 223, Miller v. Runga Nath Monlick Mills V. Ball Minnett v. Forrester Mirtunjoy Chnckerbutty v. Cockrauc 13, Mi.sram v. Gopal Lai Doss ... Missouri Steam Ship Co. Mitchell V. Craswcller Mitchell V. Oldfield Mizen v. Pick ... Modhoo Soodun v. Moran ... Moens v. Heyworth Moffat V. Parsons Mohan Kooer v. Ajoodhya Doss Mohcndronath Mookerjee, in re Moheshwar Das v. Carter ... Mohima Runjun Roy Chowdhry v. Nobo Coomar Misser Mohun Doss v. Goknl Doss... Mohur V. Jaffer Hossein Mokha Hurrucki-aj Joshee v. Bissesur Doss Mollett V. Robinson Mollwo Maich & Co. v. Court of Wards Molton V. Caroux Montague, ex-parte, in re O'Brien Moon V. Guardians of Whitney Union... Mooney v. Mussorie Savings Bank Mooradeo Beebee v. Syeffoolah Moore v. Mourgue ... 202, Moothora Kant Shaw v. India General St. Nav. Co. ... 1, 2, 416, 459, Moran v. Mitta Bibec IMorgan, in re ... Morgan v. Elford Morgan v. Powell Morgan v. Vale of Neath Ry. Co. Morison v. Thompson Morris v. Cleasby Morris v. Panchanda Pillay Morris v. Sal berg Morrison, ex-partc Morrison v. Gray ••• Moss, in re Most V. Pickering Mostyn v. Mostyn Mozeley v. Cowio Muhammad Yusnf u. Nav. Co. ]\[ukbool Buksh v. Snhccdnn Mulchand Chutunnil c. Sundarji Naranji Mulchand Joharimal v. Suganchand Sliivdas Mullens I), sillier Miillick I. lladaki.S Paradine v. Jones ... ... 464 Park V. Hammond ... ... 202 Parker »;. James ... ... 2s3 Parker v. Kctt ... ... ... 156 Parker v. ^VfcKenna ... 4, 313 Parker v. Smith ... ... 97 Parker v. Winlow ... 177, 362 Parnham v. Hurst ... ... 103 Parrott ?;. Eyre ... ... ... 377 Pater v. Gordon ... 369, 370 Paterson v. Gandaseqni ... 361, 418 Patcrson v Wallace ... ... 276 Patorni v. Campbell ... ... 3S8 Peachej' i;. Rowland ... ... 445 Pearcc v. Green... ... ... 2S»8 Pearson 1;. Skelton ... ... 273 Pease v. Gloahee ... ... 254 Peek V. Derry ... .., 393, 394 Peek I'. Gnerney ... ... 307 Peero r. Snevd ... ... ... 119 Pelly V. Watiien ... ... 224 Peninsular and Oriental Steam Nav. Co. V. Secretary of State 377. 421, 404, 465, 466, 467, 408 Percival v. llntrhes ... ... 445 Perkins V. Smith ... ... 392 Perring v. Hone ... ... ... 139 Perrv r. Barnett 124,125 126. 269 Perry v. H.ill ... ... ... 191 Pestonjee Nessarwanjee Bottlewallah V. tiool Mahomed Sahib ... 59, 74, 115 Peto V. Hague ... ... ... 427 Pet t man r, Keble ... ... 266 Phosphate of Lime Co. v. Green 72, 76, 78 Phosphate Sewage Co. i'. Uartmout214, 311 TABLE OF CARES. xrii Pickai'cT v. Smith Pickering v. Bnsk Pickering v. Stephenson Pickernell v. Janberry Pickford v. Ewijigton Piercy v. Fynney Pin-on V. Earn Kishen Pike ;;. Dickinson Pike V. Ongley ... Pilot V. Craze ... Pinnock v. Harrison Pitts V. Beckett Plimsley v. Westby Phimb V. Fluitt... Pole V. Gordon ... Pole V. Leask Pollock V. Stables Pope V. Armstrong Page 446, 417 105, 107 ... 117 ... 141 ... 110 ... 137 171, 172, 375, 415 301 370, 375 424 221, 237 112, 148 ... 246 .. 430 ... 99 4, 18 ... 264 ... 224 Poorna Chnnder Sen v. Prosnnno Coomar Doss ... :.. 113, llo, 195 Portngal, i?i the matter of the ship 240, 241 Postmaster of Barrielly v. Earle ... 460 Potter V. Faulkner ... ... 450 Potts V. Plnnkct ... ... 278 Poulton V. Loudon and S. W. Ey. Co. . , 458 Tow V. Davis ... ... " ... 383 Power V. Butcher ... ... 12 Powell V. Edmunds ... ... 147 Powell V. Little... ... ... 142 Powles V. Hidcr ... 413, 450 Pragi Lai ?;. Maxwell ... ... 332 Pran Xath Chnckerbutty v. Sherriff .. 209 Premnbhai Hemabhai v. Brown 139, 157 Premji Ludha v. Dossa Doongasey ... 116 Preraji Trinkamdas v. Madhowji Mnnji ■ 847, 409 Prem Sookh v. Pirthee Ram ... 154 Prestwich v. Poley ... ... 142 Price r. Groom ... ... ... 27 Price «;. Tavlor ... ... 160, 161 Prickett c. Badger ... ... 216 Pridmorc ;,'. Harrison ... ... 8 Priestly j;. Fcrnie ... 419,420, 421 Prie.stly v. Fowler ... ... 280 Prince v. Clark ... ... ,63, 284 Pritchard v Draper ... 110, 429 Proctor r. Williams ... ... 44 Proof ;;. Hinos ... ... ... 4 Prondfoot ». Montefioro ... 312, 439 Provincial Insurance Co. of Canada /;. Leduc ... ... ... 312 Pnckford V. ]\[a.\woll ... ... 246 Punclianum Bose v. Peary Molinn Deb... 113 Punchum Singh v. Jrnngle Singh ... 62 Pnrmandass Jivandass v. Cormack 366, 373, 409, 416, 419, 420 Pnrmcssur Ojhna v Goolbee ... 61 Pusi V. Mahadeo Prasad ... .,. 151 Q- Quarman v Burnett ... ... 419 Quebec and lUchmond Ey. Co. v. Qiiinn 36, 51, 36 Page Queen of Spain v. Par ... 314, 315 E. Radley v. London and N. W. Ry. Co. ... 461 Raghnnath Shaw v. Eajkrishna Deb ... 44 Eai Kishen Chand v. Shoobaran Rai 71, 469 Rai Moraree Debee v. Bucha Sing ... 113 Rainy v. Vernon ... ... 8 Rajchxinder Mozoomdar v. Rajaram Gope ... ... ... 30 Rajender Chnnder Newgi v. Mahomed Ayiiooddeen ... ... Ill Rajender Narain Rae v. Bijaigobind Sing ... ... 153, 428 Rajendronarain Biswas v. Mohendrolall Mitter ... ... ... 30 Rajnarain Deb Chowdhry v. Kashee- ch under Chowdhry ... ... 64 Ramam v. Yairaram ... ... 421 Ram Buksh Lall v. Kishore Mohnn Shaha ... ... ... 105 Ramchandra Chintaman v. Kaln Eaju ... 153 Eainchunder Poddar v. Hari Das Sen 59, 64 Ram Coomar Km- v. Jakur Ali . 428 Ram Coomar Roy v. Collector of Beor- bhoom ... ... ... 154 Ram Dliun Dey v. Rammonee Dey . . 41 Ramhit Rai ^."Satgnr Rai ... ... 428 Ramjoy Mundal v. Kallymohnn Ray Cliowdhry ... .... ... 64 Ramkant Chowdhry v. Brindabun Chnn- der Doss ... ... ... 153 Ramlal Thakursidas v. Lachmichand Mnniram ... ... 15, 111 Ramuarain Poddar v. Ramnauth Shaha 193 Ramnath Dntt v. Matnnginee Dossee ... 225 Ramjjershad Tewarry v. Sheo Chnnder Doss ... ... ... 302 Ramsebak v. Ramlall Koondoo ... "29 Randell v. Trimmer ... ... 383 Rani Shamasuudari Dabi v. Dukhu , Mandal ... ... 71, 402, 442 Ranger v. Gt. Western Ry. Co. ... 472 Rapson v. Cnbitt ... ... 441 Rashbehari Makerjee v, Sakhi Suudari Dasi ... ... ... 30 Eatanbai v. G. I. P. Ry. Co. ... 280 Ratnam v. Gobindarajulu ... ... 141 Eav Saheb V. N. Mandlik'w. Kamaljabai Saheb Xinibalkar ... 115, 197 Rawlins v. Wickliani ... ... 475 Rawlyns v. Vandyke ... ... 151 Rayner v. Groto ... ... 340 Rayner w. Mitchell ... 348, -113 Read v. Anderson 12G, 116, 268, 269 Read v, Dupper... ... .., 225 Read v. Rann .. ... ... 14 Redgrave v. Hnrd ,., ... 475 Reece i'. Higby ... ... ... 291 Reed V. Norris ... ... ... 309 Reevo v. Conynham ... ... 151 Reeves v. Cooper ... ... 232 Reg. V, Bccston... ... ... 38 T.\l!l,l': OK CASKS. \lr^. r. nurilll ... Itt'f?. V. Corporation of Bedford IjOvcI ... Jt"^,'. (• Foivst ... Iti'Vf. V. .liiiiki I'rJisnd lii'lj. I'. .Iiisticos of Koiifc l!>'j.f. r. K!i/.im Mimdlo ... 153, Iki'^. r. Niiildiar Cliimd Sliaw J!>'^. r. Kama (iopal l!c-i,r. ,.. St;mlov . Jii'id I'. Jlolliiisliond IJcily V. Iliircliiiink'r ClliotjC... ]!cii|)or, tho licynolds (' Uowloy ]{hodos II. Fort'wood ]!icliaid,«()ii n. Anderson ... 112, iJiclianlson v. Go.ss IJicliardtfon v. Williamson ... 380, 381, liitra, tlio Kii^by, ex-itnrte ... Kimmer v. Knowles Kingdove, the ... ... 239, Kivcr Wear Commissioners v. Adamson Robert and Cliariol v, Isaac Roberts v. Jaeksou ... 204, Roberts v. Ogilby ... Roberts v. Smith Robertson i . Clarke Robbins v. Fennell ... ... Robins v- Goldingham Robinson v. Gleadow ... 61, Robinson t;. Mollett -IG, 48, 122, 124, 125, Robinson v Rntter ... 147, Robson V. Kemp Rodger v. Comptoir D'Escomptc do Paris ... 254, 255, 256, 257, Rodoconachi v. Milbarn Bros. Roc V. Raslileigh Rogers v. Boebm Rogers ;•. Rajcndro Dntt ... Raghoobardyal Mnudar r. Christian ... Rohilkund and Kumaun Bank v. Row ... Rolland v. Hart Rose i^ Hart ... ... Rose ('. Sims Rosevear China Clay Co. ex-parte 247, -248, Rosewarne v. Billing ... 13'^, Ross I'. Buxton ... Rossiter v. Trafalgar Life Assurance Association ... ... 46, 152, Roteakant Bose v. Nobin Chuuder Bose Rothschild v. Brookman ... 309, Rotliwell V. nmni)hreys Ronrke v. AVhite Moss Colliery Co. Rous I'. Salvador Routh V. Thompson ... 67. Rowo I. Wood .. Rowles »'. Senior Roxburghe v. Cox Rundlo V. SecretaTy of State 112, 154, Rush forth r. Hadrteld Russell r. Austwiek Russell '. llankey Vm.k 42 1)2 45 191 1.'9 428 478 71 227 "ill 30 14G 102 88 148 223 384 143 52 211 240 464 325 205 334 278 146 37 235 148 148 340 98 286 144 158 303 392 408 6 434 238 238 251 270 225 28p 64 310 138 451 297 348 305 456 222 425 218 306 Russell II. Pulnicr T.\r;K 2»3 H. SadhoojunniHBa v. Ranihurry Mundiil ... Sadler v. Ilenlock Sadler v. Leo Sadler »;. Leigh ... Sadodin v. S[)eir.s Salig Ham v. .Tuggnn Nath Salomons v. Nissen Samacliand Dos.s v. Cox Samalbliai Nathubai v. Someslivar JIangal Sammcll v. Wright ... ... Sandcman 7;. Scurr Sanderson v. Bell Sandilands v. Marsh Sangajjpa Chanbasappa v. Sahcbana bin Kangedappa ... Saravana Tevan v. Muttayi Ammal iSargent v. Morris Sai'oda Pershad Chattopodhya v. Brojo- nath Bhuttacharjee Savarkal Karsandas v. Xizamuddin Karim Savery v. King ... Scarfe v. Morgan ... 230, Schmaltz ;;. Avery Schiller v. Finlay ... 178, Schotsmans v. Lancashire and York- shire Ry. Co.... ... 247, Schumack v. Lock Scmaling v. Thonilinson ... 40, Scott ?;. Lord Ebury Scott V. Newington ... 233, Scott V. Pettit ... ... 249, Scott I'. Shepherd Scott I'. Surman Seagram v. Tuck Secretary of State Hari Bhanji 378, 424, 465, Secretaiy of State i\ Kamachee Bovee *oS, Seedee Nazeer AH Khan v. Ojoodhya Ram Khan Scknnder Moudal v. Nocouri Biswas ... Scntance'?'. Hawloy Seignior v. AValmer Seller 1: W^ork ... Seth Uhnnraj .v Secretary of State Seth Samnr Mull v. Choga Lall 59, 119, Seymour v. Bridge ... 126, 268, Shack V. Anthony Shackell v. Rosier ... 275, Shadhoo Singh 1. Ramanoograha Lall .. Shahebzada Shahunsha Begum i-. Fer- gusson Sham Narain Singh i'. Rnghoobar Dyal Sharp r. Milligau Sharpe v. Foy ... Shaw t'. Arden ... Shaw V. Neale . . Shoe I'. Clarkson Shellield r. Edeu 475 411 478 3t3 97 360 2.53 88 15 419 144 231 139 141 140 337 308 65 72 236 339 321 248 426 41 67 236 251 412 152 308 466 59 433 37 266 345 325 425 263 269 340 276 44 -103 111 140 435 212 231 14« 227 TABLE OF CAhiES. Page Slielbiiry v. Scotsford ... ... 335 Slieo Chiu-n Sahoo v. Curtis 415, 3G6 Sheoratan Kuar v. Mahipal Knar ... 191 Sheo Sunkur Lall v. Dhurm Joy Pooree 113 Shibessuree Debia v. Mootlioorauath Achai-jo ... .. ... 113 Shiddheshvar v. Eamchandrai'av 5, G(i Sliiells V. Blackburn ... ... 283 Shillibeer v. Glyn ... ... 282 Shivram Hari v. Arjnn ... ... 153 Sliugan Chand v. The Government ... 387 Shustei V. McKellar ... ... 254 Shuts V. Robins ... ... 293 Sickens v. Irving ... ... 156 Sidlingapa v. 8idava Kom Sidlingapa ... 152 Sims V. Bond ... ... ... 339 Simon v. Motives ... ... 8 Simons v. Patchett ... ... 383 Simpson v. Jjamb ... ... 215 Sinclair v. Broughton ... ... 405 Sirdar Begum v. Izutoolnissa ... 154 Sital Pershad v. Slouohur Doss 303 Sivewright v. Archibald 11, 186, 117, 188, 189, 190 Slater v. Mayor of Sunderland ... 224 Sly V. Edgley ... ... 448, 449 Small V. Moates ... ... 234 Smart v. Guardians of West Ham Union 25 Smart v. Sandars 84, 85, 239, 284 Smcthurst v. Mitchell ... 418, 420 Smith V. Bank of New South Wales ... 145 Smith V. Cologau ... 73, 288 Smith V. Goss ... ... 246, 249 Smith V. Hodson ... 348, 63, 74 Smith V. Keal ... ... ... 456 Smith V. Lascelles ... 282, 289 Smith V. McGnire ... ... 109 Smith V. Sleap ... ... ... S^S Smith V. Sorby ... ... ... 312 Smith V. Steele ... ... ... 455 Smith's Case ... ... ... 475 Smout V. Ubury ... ... 382 Suee V. Prescott ... ... 259 Snell, i«re ... ... 143, 227 Snowball, ex-parte, in re Douglas ... 98 Snowdcn v. Davis ... ... 388 Snook V. Davidson ... ... 37 Soamcs n. Spciiccr ... 59, 74 Solly V. llathbouG ... 36, 40 Solomons v. Dawes ... ... 75 Sooiuler Dey v. Shoshi Mohan Pal ... 97 Soopromonian Setty v. Uoilgcrs 174', 175, 176, 361, 363, 366, 367, 370, 372, 373 Sophie, the ... ... ... 143 South PjSsox Estuary and Reclamation Co., in re, ex-parte Paine and Layton 227 South Indian Ry. Co. v. Ramkrishna ... 459 South Ireland Colliery Co. v. Waddle 20, 21 Southwell V. Bowditch 175, 182, 370, 375 Sowcrbv V. Butcher ... 173, 364 Spalding n. Ruding ... 258, 259, 260 Spears i>. Ual'tly ... ... 223 Spedding v. NuvcU ... ... 382 Page Speight V. Gaunt ... 52, 109, 119 Spence's Hotel Co. v. Anderson ... 318 Spiller V. Paris Skating Rink Co. ... 69 Spink V. Moran ... 262, 423 Si:)ui'i-ier v. Elderton ... ... 262 Sreenath Roy v. Ross ... ... 377 St. Anbin v. Smart ... ... 478 Stackpole v. Earle ... ... 212 Stannard v. Ulithorne ... ... 291 Stapylton v. Clough ... ... 429 Stead V. Salt ... ... 15, 112, 140 Steadman v. Gooch ... ... 247 Steeds v. Steeds ... ... 33 Steel V. Lester ... ... ... 454 Steele v. Gourley ... 34, 35 Stephen v. Elwall ... ... 71 Stephens v. Wilkinson ... ... 261 Stevans v. Biller ... ... 223 Stevans v. Woodward ... ... 442 Stevenson v. Blakelock ... 220, 224, 237 Stevenson v. McLean ... ... 83 Stevenson v. Mortimer ... ... 350 Stewart v. Aberdeen ... ... 122 Stewart v. Delhi and London Bank Li- mited ... ... ... 237 Stewart v. Scinde Punjab and Delhi Ry. Co. ... ... 22, 53 Stirling v. Maitland ... ... 90 Stone V. Cartwright ... 448, 449 Stone V Ling wood ... ..231 Storey v. Ashton ... ... 443 Story V. Richardson ... ... 292 Stray v. Russell ... ... 122 Stribley v. Imi^erial Marine Insurance Co. ... ... ... 312, 4.39 Stumore Weston & Co. v. Brcen ... 148 Subitrnmonee v. Mudhoo Soodhn Sing .. 153 Sudhist Lai v. Sheobai-at Kocr 114, 193 Suffer Ally Khan v. Golam Hyder Khan 479 Sulivan v. Pearson ... ... 225 Summers v. Solomon ... .,. 421 Sunderland Marino Insurance Co. v. Keaoney ... ... ... 343 Supramyan Sethy v. Harry Froo Mug .. 228 Surubjeet Narain Singh /;. Goui'eo Per- shad Narain Singh ... ... 44 Snrutram Bliaya r. B. I. S. X. Co. ... 460 Sutherland i\ Shaw ... ... 454 Sutton ?j. Buck ... ... ... 3|,i Sutton V. Tatham 105, 120, 121, 122 Suttya Ghosal v. Suttyanund Ghosal ... 5 Swainson v. N. E. Ry. Co. ... ... 452 Swann v. Steele ... ... 130 Sweet V. Pym ... 232, 234, 24G Sweeting v. Pearco ... 116, 122 Swinbanks ex-partp, in re Shanks ... 143 Swington v. Lord Chelmsford ... 15;J Swiro V. Francis ... ... 3;{i. Syeds v. Uaj'S ... ... ... 223 S.yfoollah Khan u Jhapa Thakoor ... 299 Sykcs V. Giles ... ... ... i.j7 Syud Ali v. Gopal Doss ... ... 415 Syud Sbuh Aluialiuuid v, Nusibnu ... 299 XX TAIll.K (>y fASI'S. I'Af.V. TiilibooniHsa Hibcc^ v. Slititn Kiwhoro Koy 'raiiiviico ti, Skiniirr ... 11, IbJ, 'rdiiiiiT V. CliriHtian 'ramii>r v Kin'opoim Hiiiik ... Tiirry »■. .Ashtoii I alf I'. WilliaiiiKon ... SOit, 'i'aiiriiio Co., I" I" ... TayltT r. AKlinictlh Koonwar Taj lor 1-. IJn-wer ... 2Ul, 'I'aylor r. l)avis Taylor r. Lcinlloy ... ... Taylor I'. I'lmncr 'i'aylor r. Si ray... Tri'il I'. Hci-ro ... Ti'iiant v. Elliot... Tharker r. Hardy ... 2(1], Tliakoor Pcrsliail ". Kalktv Pcrsbad 115, Tliamca Conservators v. Hull Tiictis, the ... ••• 'I'lioinns t>. Bishop Tiioiuas V. Lewis Tlioiiias I'. Qiiartormain Tlioiiipsnii (.'. Davoiiport 171, 170, ."^8, 3GI, 3G3, 3(;(i, 3G7, 410, 111, 112, 413, Thomson v. Gardiner Tiinnip.son V. (iiles 'riiorno c. Tilljury 'I'liornton v. Xleux Thorwood v. lirvan Tigress, the '.. ... 213,210, lini-ouri IJebi r. Satyadayal Baucrjee ... Titley v. Wolstcnholme Todal Singh v. Thompson .. Todd V. Enily ... ... 33, 31, Todd T'. Ucid ... Tolenian and England, in re, ex-parte Bramble Tooke I'. Uollingworth Tojilis i;. GraTie ... 272, Tojil)ing I'. Healey ... !53, Toi>li;Mn V. Braddich Torce Mahomed i;. Jlahonied Mabood ... Tottordell v. Fareham Blue Brick Co. ... Troutell v. Barandon Tribe r. Taylor ... Tribhuvandas Jagjivandas i'. Motilal lianidas ... ... 116, Trinibath Annnt i;. Gopalshet Mahaden Trueman v. Loder ... 4-7, 87, Troiison V. IJent Tiu'ker r. Hunifrey TufT V. Warniaii ... 2S0, Tui^nian v. Hopkins Tunney v. Midland Ry. Co. TurnbuU i. (larden Turner v. Bnrkinshaw Turner v. Robinson Turner v. Trustees of Liverpool Dock ... Tu^oti f. Baruwall Twidale's I'etiti.'M ■■ ■■■ ... 9, Two EUeus, th*. 113 18!) 3(il 3.i2 •145 310 5r> 347 205 305 80 351 122 308 332 270 192 454 454 414 14 402 418 147 1.33 335 I'JO 4(51 200 301 52 400 36 148 227 13 274 215 208 428 55 340 209 209 141 3«5 130 213 401 387 4.10 314 3u3 212 217 40 17 239 Page Tyebunnissa v. Kaniz Fatima ... 1J3 'J'yen v. Ram Lai ... ... 40.5 1'yi"ell V. Bank of London ... ... 318 Twycroaa v. IJreyfus ... ... 377 U. Ubilack Rai v. Dalial Ilai ... ... 28 Udell V. Athcrton ... 41^9, 474 Ullman v. Justices of the Peace of Cal- cutta ... ... ... 414 Union Cement and Brick Co. in re, ex- parte Pulbrnoko ... ... 228 United Kingdom Mutual Steam Ship Co. Assurance Assoc, v. Nevill 3, 409 Unjoor Singh v. Fuzbookessa ... 30 Unnoda Pershad Bannerjec v. Chander Seekur Deb ... ... ... 113 Unnoda Perslad Roy v. Erskino ... 30 Usparleha f. Noble ... ... 214 V. Vagliano Bros. 7>. Bank of England- Van Castccl V. Booker Vanderzee v. Willis Vane v. Yane Van Wart v. Woolcy Varden v. Parker Vanglian v. Daviea Vaughan v. Moffat Venables v. Smith ... 4(3, Vencataramanna w. Chavcla Atcbiyamma Vernon v. Vernon Vertue v. Jewell ... 245, Vinayak Ragbunath i;. G. I. P. Ry. Co. Vinor's Case Vishnncharva v. Ramchandra 3, 90. 83, Virasvanii Chotti v. Uppasnnii Chetti ... Vlierboora v. Chapman W. Wagstoff V. Anderson Wajibun v. Kadir Buksh Wake V. Harrnp Wakefield v. Newfcon Wakelin v. Loud, and 144, 171, 170, S. W. Rv. Waldy r. Gray ... AValker V. Birch... Walnit^ley v. Walmsley Wallace v. Woodgate Wallis V Biddick Walsh »'. Wbitcomb Walton V Fotbergill W.irburton v. Cit. W. Ry. Co. Ward r. Evans ... Warde v. Stnart . ... Ware i'. Egniont Ware, cx-parte, in re Courton Warr v. Praed ... Warrell v. Johnson Warrick v. Warrick Watcrlow v Sbnrpe Watliug I . O.istler Watts I'. Christie Co. 280, 451, 223, 232. si! 451 ! 431, 300 247 222 430 327 332 225 357 450 426 300 257 280 83 80 151 297 372 116 174 224 401 452 231 306 235 150 85 14 452 27 218 437 lo2 2 (',2 226 4:<3 78 TABLE OF CASES. XXI Page Watson, ex-parte, in re Love ... 251 Watson V. Aga Mehedee Sherajee ... 301 Watson V. Jonmenjoy Coondoo 115, 198 Watson V. Swann ... ... 66 Watson V. Threlkeld ... ... 149 Wayland's Case... .. "... 106 Waziri Mai v. Enllia ... ... 212 Weblin v. Ballard ... ... 461 Webster v. Seekamp ... ... 143 Webster v. De Tastet ... ... i88 Weeks v Goode... ... ... 236 Weidner v. Hoggett ... ... 179 WeikersLeini's Case, in re Land Credit Co. of Ireland ... ... 138 Weir V. Bell ... ... 395, 471 Weller v. London and Brighton Ey., &c., Co. ... ... ... 461 Welsh V. Hole ... ... ... 225 Wells V. Kingston npon Hull ... 20 Wells V. Masterman ... ... 139 Wells V. Eons ... ... ... 94 Western Bank of Scotland v. A die 395 471, 472, 4:3 West of England Back, ex-parte Booker 117 Westwocd V. Bell 229, 233, 235, 347 Westrnp v. Great Yaimouth Steam Co. 241 Westzinthns, in re ... 258, 260 Weymouth v. Eoyer ... 223, 233 Whaley Bridge Calico Printing Co. v. Green ... ... 317, 318 Whatman v. Pearson ... ... 443 Wheatcroft, in rt ... ... 227 Wheelton v. Hardisty ... ... 476 White, ex-parte, in re Kevill ... 13 White V. Bartlett .. ... 333 White V. Lincoln, Lady of ... 212, 302 Whitehead v. Anderson ... 250, 252, 260 Whitehead v. Izod ... ... 263 Whitehead v. Tuckett ... ... 1C6 Whitehead v. Vaughan ... 229, 235 Whitmore v. Smith ... . ■ 44 Whitney Partners, in re ... ... 159 Wickham v. Wickham ... ... 429 Wiggett V. Fox ... ... ... 453 Wilde V. Gibson... ... 431, 474 Wilksv. Back ... ... ... 139 Wilks V. Ellis ... ... ... 8 Wilkinson v. Alston ... ... 207 Wilkinson V. Coverdalo ... ... 282 Pagh Wilkinson v. Wilson ... ... 135 Williams v. Evans ... ... 147 Williams v. Everett ... ... 91 Williams v. Clough ... ... 278 Williams v. Willington ... 8, 147, 340, 341 Williams v. Sykes ... ... 147 Williamson v. Barbour ... 297, 301 Williamson V. Barton 178,183,361, 367 Willis v. Palmer ... ... 112 Wilmot V. Smith ... ... 142 Wilshire r. Sims ... 118, 286, 287 Wilson V. Balfour ... ... 231 Wilson V. Kymer ... ... 235 Wilson V. Mayor of Halifax ... 4f3 Wilson V. Merry ... ... 276 Wilson Milner ... ... 273, 297 Wilson V. Swann ... ... 68 Wilson V. Thorpe ... ... 45 Wilson V. Tumman ... 57, 59, 66, 105 Winch V. Keeley ... ... 103 Wise V. Burn ... ... ... 392 Withington t;. Herring ... ... 110 Withington V. Tate ... ... 143 Withnell v. Clerk ... ... 39 Wood V. Braddick ... ... 4i9 Wood V. Finch ... ... 34, 35 Wood V. Jones ... ... ... 245 Wood V. Ec-ncliff ... ... 354 Wocdley v. Metropolitan District Ey. Co. ... ... ... 462 Woomanath Eoy Chowdhry r. Sreenath Singh ... ... ... 2f8 Worsley t;. Scarborough ... ... 431 Wylde V. Eadford ... ... 222 Wylie V. Pollen... ... 483, 424 Wynne v. Wynne ... ... 4 Wright V. Castle ... 142, 143 X. Xenos V. Wickham ... ... 148 Y. Yates V. Hall ... ... ... 146 Youl V. Harbottle ... ... 287 Young 11. Davis ... ... 453 Young V. Leamington Spa, Corporation of ... ... 18, 19, 23 Z. Zinck V. Walker ... ... 223 Znilchenbart v. Alexander ... ... 292 Zwinger v. Samndii ... ... 257 THE LAW OF AGENCY. LECTURE I. How fai' the Contract Act contains law of agency — Definition of agent and principal — The contract of agency — Its effect— Consideration for contract — Who may be agents — Different classes of agents — Appointment of agents — how made — Seal — by formal power — by in- formal letter— what appointments must be in writing — oral appointment— appointment of Partners. ^^^ How far the ContracJ/can be taken as a guide to the law of Agency in British India.— The subject chosen by the Senate of the University of Cal- cutta for the Tagore Lectures of 1889, is the " Law of Agency in British India." The Indian Statute book throws little or no light on this subject, save so far as the few sections touching on a portion of the subject are dealt "with in the Contract Act of 1872. That Act, however, is, and purports to be, only a partial measure. It's preamble recites that " it is expedient to define and amend certain parts of the law relating to contracts." It's first section repeals certain enact- ments specified in the Schedule, but provides that nothing contained in the Act " shall effect the provisions of any Statute, Act, or Regulation not hereby ex- pressly I'epealed, nor any usage or custom of trade, nor any incident of any contract not inconsistent Avith the provisions of this Act."^ The Act therefore lays down certain general rules, which in the absence of any special contract or usage to the contraiy, are binding on contracting parties, but which do not restrain free libei'ty of contract as between man and man, or invalidate usages or customs which may prevail in any particular trade or business. These customs and nsages have only the effect of introducing special terms into all contracts or dealings in any particular trade ; their very object being generally to modify or control the general law ; the Contract Act, therefore, is not intended to invalidate all customs or usages which are not in accordance with the general lules which it enacts, or to prevent private persons fi'om entering into contracts which arc inconsistent with these rules. It appears that the meaning to be placed upon the words '' inconsistent with tlic provisions of this Act," have been considered by Garth C. J. to mean no more than that no general usage or custom of trade, that is, no usage or custom pervading all trades, * As to the effect of thcso words sec. Kuverji Tulsidati v. G. I. P. Ray. Co., I. L. R. 3, Bom. (113) and Moothora Kant Shaio v. India General St. Nav. Co., I. L. R. 10 Calc, (185). A V 2 rnK r,Aw op" aoencv. inrOTiHisfcMif wifli ib»ollce, L. R. 2 App. Cas., 284. ' Qamhles v. Ocean Marine Insurance Co. of Bombay, L. K. 1 Ex. D , 8. » Power V. Butcher, 10 B. & C, (340), per Bayley, J. ' Baring v. Co)-rie, 2 B. & Aid , 143. Ind. Contr. Act, s. 230, par. 2. »• Ind. Contr. Act, ss. 171, 221, Bar>ng v. Cwie, 2 B. & Aid., 148. Per Holyrood, J. DIFFERENT CLASSES OF AGENTS. 13 on sales effected by him.^ His character differs from a broker in that he may buy and sell in his own name or that of his principal, and in that he has pos- session and conti^ol of the goods which he buys or sells for his principal.'* The character of factor and broker is frequently combined, the broker having posses- sion of what he is employed to sell, or being empowered to obtain possession of what he is employed to purchase ; but properly speaking in these cases he is a factor.^ As a general rule a factor's possession and powers of disposal will not create reputed ownership.* The reason assigned is that as factors must by the usage of trade have the stock of other people in their possession, it does not therefore hold out a false credit to the world, ^ nor carry to the under- standing of the world the reputation of ownership.^ He has in the absence of a contract to the contrary a right to retain security for a general balance of account any goods bailed to him.''' The powers and duties of factors in making consignments of their principals' goods were formerly determined by the general mercantile law,^ and since the Indian Factor's Act has been repealed, will, it is submitted, be governed by the general mercantile law, so far as it is not inconsistent with the Indian Contract Act. A del-credere agent like any other agent is to sell according to the instruc- tions of his principal and to make such contracts as he is authorized to make for his principal ; and he is distinguished from other agents simply in this — that he guarantees that the persons to whom he sells shall peiform the contracts Avhich he makes with them, and, therefore, if he sells at the price at which he is ordered to sell by the principal, then no doubt he guarantees to pay him at that time and he is bound, like any other agent, as soon as he receives the money to hand it over to his principal ; but if, according to the contract between him and his principal, he is at liberty to sell at any price he likes, but is to be bound to pay over to his principal at a fixed price and at a fixed time, that is not the relationship of principal and agent. ^ A ship broker is an agent or middleman between the mercantile and shipping communities for the pm'po.se of procuring freight, and of negociating the sale and purchase of ships^'' and effecting chartei'parties.ii His authority, unless it • Add. on Contr. 701. » Baring v. Corrlc, 2 H. & Aid., 143, 35 L. J. Ex., 194. •' Bell's Gomm., Bk. Ill, Part I, Cli. Ill, p. 508. "• Tooke V. Hollingiuorth, 5 T. R., 226. * Bryson v. Wylie, 2 B. & P. 83. « Sont V. Baker, 9 East, 245, Bells Comm. Bk. Ill, PL. I, Cli. Ill, p. 507. ' Iiid. Contr. Act, s. 171. " Miftunjoy Ghackerhutty v. Cockrane, 4 W. K. P. C, 1. " Ex-parte WJiite, re Nevill, L. R., 9, Ch. 397 ; 6 Mad .Inr , 275. '** Maclachlan on Meixhant Shipping, 188. " Cross V. Pagliano, L. R. 1 Ex. G ; Allan v. Sundius, 1 11. & C, 123. The Niy llie whole. ^ iJy this is meant that the possession of each i.s in- divisible, and that each has an equal right, so that no one can claim the exclusive possession of any particular part of the property, though each is entitled to his proportion of rents.'' A notice to quit signed by one of several joint tenants on behalf of the others is suflBcient to determine a tenancy from year to year as to all. Lord Tenterden C. J., has said as to this : — " Upon a joint demise by joint tenants njiou a tenancy from year to year, the true character of the tenancy is this, not that the tenant holds of each the share of each so long as he and each shall please, but that he holds the whole of all so long as he and all shall i)lease. And as soon as any one of the joint tenants gives a notice to quit, he effectually puts an end to the tenancy ; the tenant has a right upon such a notice to give up the whole, and unless he comes to a new aiTangement with the other joint tenants as to theii" shai'es, he is compellable so to do."^ The appointment of an agent, however, by one of them will bind only that one unless the others subsequently assent thereto. ' Unjooor Singh v. Fiizboonessa, 2 Hay, 155. ' OQlabJaii V. Mos)iiatoolah, 1 C. L. R. 537. Meili/ V. Hurchunder Ghose, 1. L. R. 9 Calc, 722 ; 12 C. L. R., 398. • Unnoda Pershad Roy y. Erskine, li B. L. R., F. B. 370 : 21 W. R., 68, Annodachurn Roy V. Kalhj Coomar Roy, I. L. R. 4 Calc, 89; 2 C. L. R, 'iQ-i, Indroiitonee Barmonee v. Surroopchunder Paid, 12 B. L. R. 29, (note) ; 15 W. R., 395. • Lootfulhuck V. Gopeechnnder Mozoomdar, I. L. R. 5 Calc, 941 ; 6 C. L. R. 402, Gun t Malwmvd v. Morat), I. L. R. 4 Calc, 96 ; 2 C L. R., 371. • Guni Mahomed v. Moran, supra. Rajchunder Mozoomdar v. Rajaram Gope, 22 W. R. 385. Rajendronarain Bifuas v. Mohendyolall Mitter, 3 C. L. R. 21. Bharutchunder Roy v Kally Dass Dey, I. L. R. 5 Calc, 574. Kalichandra Siit'jh v. Rajkis/iore Bhuddrc I. L. R. 11 Calc 015, but see Raslibehavi Mukerji v. Sakhi Sundari Da^i, I. L. R. 11, Calc. 644. • Litt., 288. ' Will. Real Property, 134. • Doe d. Ash v. Summersett, I B. & A., 135, see also Ktudersley v. Hught^, 7 M. i W., 139. JOINT PRINCIPALS. 31 Partners. — A partner is a joint tenant with his fellow partners of the property of the firm ; and in respect that there is a joint tenancy of the property of the firm, partners are obliged to be joined in suing ; and for the purpose of being sued> Partners, being also the general agents of one another, will, of com\se, each be liable for the acts of the others of them, the act of one of them within the scope of the partnership business being binding upon the others ; one partner may therefore within such limits employ an agent and his appointment will bind the firm. Co-owners. — But co-owners are not similarly always agents of one another, although the border line between co-owners and partners is narrow. Examples of this difference are given by Mr. Lindley in his work on partnership,^ he says, " If several persons jointly purchase goods for resale with a view to divide the profits arising from the transaction, a partnership is thereby created y> but persons who join in the purchase of goods not for the purpose of selling them again and dividing the profit, but for the purpose of dividing the goods themselves, are not partners, and are not liable to third parties as if they were." Persons concurring in giving a joint order for one parcel of goods.— Two persons who are not partners but who concur in giving an order for one undivided parcel of goods, are not jointly liable to the seller, if upon the whole transaction the intention of the parties appears to have been that the buyers should be severally responsible for the amount of their respective interests in the goods. Thus in Gibson v. Lupton'^ the defendant Lupton, beiuo- an oil mer- chant, and the defendant Wood a corn miller, gave the followino- order to the plaintiff's agent. " Ordered of the house of John Fisher and Co., a small loadino- of wheat, say 7.50 or 800 qaarters Payment for the same to be drawn upon each of us in the usual manner." The plaintiffs in pursuance of this order jiurchased wheat, and wrote to Wood and Lupton as follows : " We have made a puirlijise for your joint account of 7.S6 quarters fine red wheat. The plaintiffs drew l)ills on Lupton and Wood. The wheat turned out of bad quality and in conse- quence the bills were dishonoui-ed but were renewed, the renewed bill on Lupton was duly paid, but Wood's was dishonoured and he became a bankrupt. The ])laiii- tiffs sued both defendants to recover that part of the price of the wheat whidi remained unpaid in consequence of Wood's failui-e to pay. Tindal C. J. '• There is no question in the case as to any partnership, inter se, between the defendants • ... but the question is whether the wheat was sold to the defendants upon a joint contract ; that is, whether upon the correspondence mid other facts set out ' Joyief! V. Smith, 9 B. &. C, 0.32, cited in Kendal v. Wood, L. R. 6 Ex., (254). » Lindley, p. 53. « Reid V. nolIir,.^hnud, 4, B. & C. 8fi7. ♦ 9 Bing., 297. :]2 riii; iwwv oh- aokncv. in tlu' oasi*, (lu! (Icroiuliuit.s ^^avc <1h' ]tlaiiitill"s I'cason (o undfrfttand and believe flmt they had the joint security of both defendants for tlio whole cargo, or wlu-nicr tli(« fiiii- inference to bo drawn by any reasonable men — and if so, the ))lainlilTs must Ijc taken to have drawn such inference themselves — was not that each of the defendants contracted separately for his moiety of the joint cargo. And upon lookinti: ai the whole correspondence, and other circumstances of the case, the laft(M* a]ipcar to us to be the proper conclusion." Judgment for the defendants. Thus again where the defendants Eyre and partners, Hatherley for himself and Stephens, and Pugh for himself and son agreed to purcha.se jointly as nuich oil as they could procure on the prospect that the price of oil would rise. Eyre and Co. being the ostensible purchasers through a broker, but the others were to share in his purchase at tlie price at which he bought, Hatherley and Co.", and Pugh and Co. taking one half, and the defendants, Eyre and Co., the other moiety. Large quantities of oil were bought, Hatherley and Co. occasionally com- ing forward and giving directions as to its delivery, and making declarations that they were all jointly interested in the purchases. The price of oil fell ; and Eyre and Co. having failed, the defendants contended that they were not liable, the contract having been made Avith Eyre and Co. only, and that the agi'eement which the defendants entered into between themselves was only a sub-contract and did not constitute a partnership. The Court held that the defendants were not jointly liable. "^ Such persons are not therefore joint principals. Part-owners of ships. — A part-owner of a ship is a tenant in common.* The law relating to the position and liabilities of registered 0A\-ners of ships is tolerably clear. Shipowners to begin with are not necessarily partners. An owner's liability or non-liability for necessaries supplied to a ship depends on the question Avhether the person who gave the order has his authority to give it.^ But a part-owner, whether registered or not, has no power to bind the other owners without their assent. The question in each case is a question of fact, whether he has had such an authority committed to him, or if this is not in fact the case, whether he has been allowed to hold himself armed with such apparent authority.* And this right to appoint agents follows his liability. Joint Creditors. — So it has been held that in respect of a bond given by C to A and B where accord and satisfaction by delivering of stock and goods by C to A Avas pleaded, that accord and satisfaction must be taken to be an answer » Coope V. Eyre, 1 IT. Bl.. 37. * Qreen v, Briggs, 6 Hare, 395. » Fraser y. Cuthbert:, 3 Wils., 73, 74, 94. * Co. Litt., 181, b. Com. Dig. " Attorney," C. 15. * The Kufj V. Bt'eston, 3 T. R., 592. ^ 1 B. & P. 234. PBLECJATTON OP TITR AUTHORITT, 39 private confidence, but in some respects of a general nature, and all of them are regularly assembled, the majority will conclude the minority, and their act will be the act of the whole. The cases of Corporations go further : there it is not necessary that the whole number should meet ; it is enough if notice be given, and a majority, or a lesser number, according as the charter be, may meet, and when they have met, they become just as competent to decide as if the whole had met." It may be therefore taken that where in private agencies a power is given to joint agents to act, the presumption is that it is conferred upon all from considerations of a personal nature, and with the object of making use of their combined experience and discretion ; and that therefore such power can be only carried ou^t by su.ch agents jointly, unless indeed it appears from a proper con- struction of the power, that it is, or might be well intended that it should be, exercised otherwise, as in the cases of Guthrie v. Armstrong} Withnell v. Glerh,^ Grindley v. Barker?' On the other hand in the case of public agencies, or rather, agencies of a public nature, the rule appears to be that all the joint agents must meet to consult, but that the majority will conclude the minority, and their act will be the act of them all ; and that in the case of Corporations it is not even necessary that the whole number should meet, it being enough if notice be given, and a majority or lesser number be present, and when they have met, those present may act for the whole number. PART II. DELEGATIOIsr OF THE AUTHORITY. The authority is personal to the ag-ent himself— A principal usually appoints as his agent some person in whom he has confidence, and whom he sup- poses to have ability and fitness for the work to be performed. The work of the agency may even require skill and learning, and in nearly all cases judgment and care. There is every reason, therefore, for the principal being desirous that the work should be carried through by the person whom he has chosen for the purpose. And it is accordingly the duty of the agent personally to act in the business of the agency, unless indeed, as will be seen hereafter, the principal expi'esses his willingness that a substitute should be employed, or unless from necessity or usage of trade there is an implied authority for delegation. General rule.— The general rule is, therefore, that the authority of the agent is personal to himself ■} for as it is said by the old authorities " trust and ' 5 B. & Aid. 628. * 6 T. R., 388. * 1 B. & P., 229. * Bells Comm. Bk. Ill, Pt. I, Ch. 3. Rolls Abr. " Authority C." 40 'riiK '-AW OK AdKsry. ronfidonco aro roposod in him bj fho prinfipal, and ho onnnof, oxr-opt with the principal's knowlpdp;e, asaipn thorn to a stranger."! Tliis doctrine is stated by Lord Oliicf Haroii Comyns, in lajnng down in what cases there shall not he an attornoy, as follows : — " So a man who acts only as an attorney or deputy to iinotlior cannot make an attorney to do it for him. So a man who has but a l):irc uiitliorif V or power, cannot act hy attorney ; an executor who has an authoi-ity to soil cannot sell by attorney ; so he who has power to make leases cannot make them by attoi-ney.''^ So again it is said in Fitzherhort's cai^e^ " a man cannot do homage or fealty by attorney for it is personal ; the lord may beat his villein and if it be without cause ho cannot have a remedy, but the lord cannot authorize another to beat him without cause." This general rule is enacted in the Indian Contract Act which lays down* that an ao-ent cannot lawfully employ another to perform acts which he has expressly or impliedly undertaken to perform personally, unless by the ordinary custom of trade, a sub-agent may, or from the nature of the agency a sub- ao-ent must be employed. And this is the maxim of Common law " Dele- o-ata potestas non potest delegari." Illustrations of this well-established doc- trine are numerous, thus where a person entrusted goods to a master of a ship for sale at the "West Indies, and there being no market for the goods there, the master sent off the goods to another person at Caraccas for sale, and there they were destroyed by an earthquake, held that there being a special confidence reposed in the master he had no right to hand the goods over to another, and was therefore liable.^ In the same way it was held that a husband had no power to delegate a power given him under a settlement to dispose of a reversionary interest in an estate-^ Nor has an auctioneer, as a general role, power to delegate his power to his clerk,' though perhaps he may employ the clerk to use the hammer and make the outcry, provided this be done under his own direction and supervision.^ Nor can a broker on becoming unable though want of funds to carry out the subject matter of the agency, delegate, secretly, and without the knowledge of his principal, the business to another on half terms as to commission.^ In Cochran v. Irhvi^ Lord Elleuborough said " a princi- pal employs a broker from the opinion he entertains of his personal skill and ' Bacon's Abr. " Authority D." Scmaling v. Thojnlinson, 6 Taunt, 147. « Com. Dig. " Attorney C. 8." 9 Co , 76 (a). • 5 Co., 80. • lad. Contr. Act, s. 190. » Catlin V. Bell, 4 Camp., 183. • Ingram v. Ingrain, 2 Atk., 188. '' Coles V. Trecothick, 9 Ves., 251. See also Tuson v. Barnwall, 1 Y. & J., 387. ' Bateman on Auct., 156. • Solly V. Rathbonf, 2 M. A S. 298. Cochran v. Irlam, 2 M. & S. 301, (note). DELEGATION OF THE AUTHORITY. 41-. iutegritj ; and a brokei' has no riglit to tui'n his principal over to another of whom he knows nothing." Similarly when a person is employed to transport goods to a foreign market, he has no right to delegate the woi"k to another. i So a notice to quit given by an agent of an agent is not sufficient without recog- nition by the principal.* IS^or when the power of allotting shares is vested in the Directors of a Company by their deed of settlement, have they a right to delegate such a power.^ Similarly in CartmelVs^ case,''' when Directors of a Com- pany, having under the articles of Association power to buy shares in the Com- pany and to appoint a manager, appointed a manager who purchased shares on behalf of the Company, it was held that the Directors had no right to delegate to the manager the power to buy shares. On the same principle where an Act of Parliament provided that where any notice was to be given by the trustee, such notice should be in writing, or in print, signed by three or more of the trustees, or their clerk or clerks for the time being, by their order, it was held to be insufficient that the notice should be signed by some person whom the clerks to the trustees, in their character of attorneys, had iu their service.^ Doctrine attempted to be applied to a legislative authority.— The doctrine of delegation has been attempted, by a Full Bench of the Calcutta High Court, to be applied to the action of the Government of India in passing an Act determining to remove certain districts out of the jurisdiction of the High Court and therein entrusting to the Lieutenant-Governor of Bengal the right to determine the date at which such removal should ac- tually take place. By the 9th section of Act XXII of 1869 passed by the Governor- General of India in Council, the Lieutenant-Governor of Bengal was empowered from time to time, to extend vititatis T^iutandts to the Jaintia, Naga, and Khasia hills, the provisions contained in other sections of the Act, whereby the administration of civil and criminal justice within the district called the Garo hills was, from a date to be fixed by the Lieutenant-Governor, to be withdrawn from the jurisdiction of the Courts of civil and criminal jurisdiction constituted by the Regulations of the Bengal Code and the Acts of the Legislature of British India, and to be vested in such officers as the Lieutenant-Governor might appoint. It was argued before the Full Bench that the jurisdiction of the High Court as established by Parliament, could not be wholly abolished by any authority in this country whatsoever, and that if there was any authority to abolish the jurisdiction of the High Court, it was only the Governoi-- General in Council exercising legislative powers who could do so, and that the assumed abolition was not by his authority, but by the Lieutenant-Governor of Bengal acting ander the powers given to him by Act XXII of 1869, which powers, ' SchmaliiKj v. Thomlinson, 6 Taunt, 147. * L. R. 9 Ch., 691. " Doe d. Bkodes v. Rohinson, 3 Birig. N. C, 677, * Miles v. Rough, 3 Q. B., 846. * In re Leeds Banking Co,, L. K. 1 Ch., 5G1, F .].•_) Tin: LAW (iV \i;r.NTY. it was r()iitftitlc(|, were not viilidly confinncd. A majority of tliu Full ikiich lu'Ul that wliich iii;\y coii viiicc the others."* Similarly where certain matters arising out of a suit Hied in the Moonsiff's Court of Sewan were referred by the Moonsiff to the decision of four arbitrators, two of whom, for some reason or another, were not present at the meeting convened for the purposes of arbitration, and the two arbitrators present, on their own authority, nominated two other persons who were not named in the order of reference to act for the absent members ; of this alteration the parties interested in the litigation were unaware. The award Avas eventually prepared and signed by one arbitrator, and, in due course, made an order of Court ; Morgan C. J. hold that the arbitrators had no power to delegate their authority and he set aside the award. ^ A distinction, however, appears to be made between an arbiti'ator delegating his authority to another, and an arbitrator making use of the judgment of another on whom he can depend, and adopting that conclu- sion or advice and making it his OAvn if he choses so to do.* As to this Mr. Russell in his work on Arbitration, p. 205, 2nd ed. says : — " although an arljitrator may not delegate his aut4iority " the cases are numerous to show that an arbitrator may submit a material question affecting the merits of the case to another and, after hearing his opinion, adopt it as his own, upon the credit which he gives to the judgment and skill of the person to whom he refers." Delegation to Ameens. — A Civil Court is not warranted in deputing its functions to an Amecu.^ Phear J., in a case^ where this was done, said, "This Couit has very many times, in reference to proceedings of this kind (deputing the decision of a case to an Ameen) expressed its opinion that s. 180 of the Civil Procedure Code (1859), does not warrant a Civil Court in deputing its func- tions to an Ameen, whom it sends to the locality for the purpose of making a local investigation. All that it can charge the Ameen. with, is, to obtain such • Little V. Iseicton, 2 Scott. N. R., 509. • Ihid, p. 469. See also on this snbject TF7ii7?More v. Smith, 7 H. (t N. per Blackbnrn, J., 513. Lingivood v. Eade, 2 Atk., 501. Froctor v. Williams, 8 C. B. N. S., 386. • Suruhjeet Narai» Singh v. Qouree Pershad Narain Singh, 7 W. R., 269. • Anderson v. Wallace 3 CI. & F. 26. Emery v. Wace, 5 Ves , 846. Wliitmore v. Smith, 7 H. & N., 509. » Ram Dhnn Bey y. Ram. Monee Dcij, 21 W. R. 280. • Iswarchnndra Das v. Jngal Kishore Chuckrabutty, 4 B. L. R. Ap., 33. See also Chvnder Sircar Choicdhry v. Nobinchunder Biswas, 17 W. R. 282. Shadhoo Singh v. Rarnanoo- graha Lull, 9 W. R. 83. Rajhunath Shaxo v. Rajkrishna Deb, 1 B. L. R. S. N., 2 Burodachurn Bose v. Ajodhya Ram Khan, 23 W. R., 286. DELEGATION OP THE AUTHORITY. 45 information with regard to the physical featui'es of the place in dispute, the identification of land, depicted in maps, with the parcels which are the subject of the suit, the identification of maps with one another by the aid of objects to be found on the land, and other matters of this kind, which may be of use in, and auxiliary to, the proper trial of the suit by the Court before which it is pending." Similarly, in England it has been held that the sheriff under the writ of Trial Act has no power to delegate his power to an arbitrator.^ Delegation of powers of a Karnavan. — A Karnavanship of a Malabar tarwad as recognized in Malabar is a birthright inherent in the status of the senior male member of a tarwad, and is a jiersonal right, and as such it cannot be delegated to a stranger. Where therefore a Karnavar under a document styled as a muktiarnamah, authorized his son to manage in the Karnavar's name all the affairs of his tarwad, and gave him full powers relating to such tarwad ; held, that if the document was an assignment of the right of Karnavanship, it was void, though for a time only, on the gi^ound that the delegate was not a member of the tarwad ; if on the other hand it was a power of attorney limited to management of specific property as an agent subject to the general control of the Karnavan it might be valid on the ground that the Karnavanship was not the interest assigned or delegated ; but as the document did not purport to limit the agency to special matters, or to the management of property only, but purported to put the delegate in the Karnavan's place in regard to all the affairs of the tarwad, and the apparent intention was to impose upon the tarwad the management and authority of the Karnavan's son, no effect could be given to it without contravening the special usage of the district.^ Distinction between delegation of judicial and ministerial acts.— There, however, is a distinction drawn between the delegation of judicial and ministerial acts.^ The general rule,does not require that the agent shall perform in person merely mechanical or ministerial parts of the work of the agency, for the performance of such duties may well be left to others, and will not affect the rule ; for, as says Sir John Romilly. " It is undoubtedly true, that an agent cannot delegate his authority to another ; but I apprehend it to be equally clear, that an agent is entitled to perform, and must necessarily pei-form, a great number of his acts and functions through the aid of persons to whom he dele- gates his authority. Thus for instance when a merchant receives goods from abroad for sale, and he deputes his foreman to go to the proper place for selling such goods, and the foreman sells them accordingly ; in that case, it would be impossible for the consignor to say, that the sale was void, because the merchant ^ Wilson V. Thorpe, 6 M. & W., 721. * Ghappan Nayar v. Assen Kutti, I. L. R. 12 Mad., 219. 8 Baker v. Gave, 1 H. & N., 674 (G78). Bafti/e v. Gredey, 8 East., 318. The King v. Forest, 3 T. R., 38 (40). And cases collected in May on Insor. para. 154. 'U\ Tin: LAW f)i' Af;rNCY. (lid iidl |t(is()ii:illv «<•'! •liciii liimscir, but cmployerl anotlior person for that ixirnosc, l>y w liom llic sale was cllcctcd. 'I'Ih; morehant would no doubt be j,,is\v('riil)lc fill" all I lie acis of liis rofciiiaii, bill provided the acts done were pi-oniT and williiii tlio scope of his autlioi'ity, they wouhl be the acts of tlic liu'i'cliaid liiniscll .""' Application of the maxim delegatus non potest delegari— But al- thou"-]! as a geiuial nilr tlie maxim ''^delegatus non potest delegari" applies so as to prevent an a<,'ent from establishing the relationship of principal and agent between his own principal and a third person, yet this maxim when analyzed mei'cly imports that an agent cannot without authority from his principal de- volve upon another obligations to the principal which he has himself undertaken to ])orsonally fulfil ; and that, inasmuch as confidence in the particular person employed is at the root of the contract of agency, such authority cannot be implied as an ordinary incident in the contract. But the exigencies of business do, from time to time, render necessary the carrying out of the instructions of a principal by a person other than the agent originally instructed for the pur- iiose, and where that is the case, the reason of the thing requires that the rule should be relaxed ; so as to enable the agent to appoint a delegate.^ The gene- ral rule is further relaxed in the following cases : — 1. Where the agent has express authority to employ a sub-agent ; or where authority to delegate is given by enactment of law. 2. AVhere by the ordinaiy custom of trade a sub-agent may be employed.* 3. Where from the nature of the business of the agency, a sub-agent must be employed.'* The first of these exceptions requires no comment, save that of setting out the different Acts under which delegation may be made, and these "will be found at the end of the chapter on this subject. Before, however, giving examples of the second exception, viz., when by the ordinary custom of trade a sub-agent may be employed ; I purpose to give some explanation of the term " custom of trade." Custom of trade. — The term " custom of ti'ade " needs perhaps some few observations — It is not a " custom " in the technical sense of the word ■,^ that is to say, it is not a custom foi'ming paii; of the law^ of the realm as do general, particular, and personal customs, which latter is more commonly known as the '• custom of merchants." But it is a custom merely modifying a contract entered into by private pei'sons. Customs which modify contracts entered into between * Rossiter v. Trafalgar Life Assurance Associatiott, 27 Beav., 377. * Dc Bttssche v. AJt, L. R. 8 Ch. D., 287, (310). » Ind. Contr. Act, s. 190. * Ind. Contr. Act, s. 190. » 6ee Robinson v. MoUett, L. K. 7 H. L. per Cloasby, J., 82G. CUSTOM OF TRADE. 47 private persons are those which have prevailed so long and so uniformly in transactions between persons engaged in a particular occupation, that when two of such persons enter into a contract relating to their occupation, and not containing anything inconsistent with the custom, they are presumed to have contracted with reference to it, and it then forms part of the contract so far as it is applicable. Such customs are of two kinds, customs of usage of trade, and customs relating to agriculture and the tenure of lands for agricultural pur- poses prevailing within a certain district. It will only be necessary to refer to the first of these — Customs or usages of trade are customs prevailing in a particular trade or business.' Such customs or usages may not only annex terms to a contract which is not inconsistent with them, but may also control the interpretation of a contract which is complete in itself but which contains terms used in a technical sense.^ Evidence as to customs of trade. — And in order to constitute such a usage or custom as will be admissible in evidence, to explain the terms of a v^antten instrument, it is not necessary that it should have been immemorial, or even established for a considerable period, or uniform or notorious as " custom " (in its technical sense), or capable of being defined with precision and accuracy. The usage or custom may be still in course of growth, it may require evidence for its support in each case, but in the result it is enough, if it appears to be so well known and acquiesced in, that it may be reasonably presumed to have been an ingredient tacitly imported by the parties into their contract.^ It should also be remembered that it is the fact of a general custom or usage pre- vailing in the particular trade or business, and not the mere judgment and opinion of the witnesses, which is admissible in evidence ;* and unless the witnesses can state instances of the usage or custom having occurred within their own knowledge, their testimony is seldom entitled to weight.^ And as a defence to such a custom when set up, may be pleaded, non-existence of the custom, its illegality or unreasonableness, or that it formed no pai't of the agreement between the parties.^ The habit of admitting evidence of custom or usage to explain a writ- ten contract, although upheld, has been by learned Judges considered both as unwise and unjust,'' and there will be found in Mr. Pitt Taylor's work ^ Goodivin v. Rohart.^, 10 Ex., 7G, 337. * Sweet's Law Lex. tit. " custom." ^ Juggomofiun Ghose v. Manick Chxind, 4 W. R., 8, 10. * See Cunningham v. Fanhlanque, 6 C. & P., 44. * Taylor on Evid., para 1077. Leuns v. Mamhall, 7 M. & Gr., 744, 745, per Tindal C. J. ^ Bourne v. Gateliffe, 3 M. & Gr., 684, per Alderson, B. Bottomlcy v. Forbea, 5 Bing. N. C, 127, 128, per Tindal C. J. Faioke^ v. Lambe, 31 L. J. Q. B., i)8. '' Johnston v. Vsborne, 11 A. & E., 557, Trucman v. Loder, 11 A. & E., 597. 4.8 TlIK r.AW OK AOKNC'V. on l']vi(loncP, p. 1011^ (8tli ed.) set out at lorif^th a judj^'inont of Mr. Jus- tit!o .Story roportud in 2 Summ. 5G7, which points out the harm whicli in done by tho iiidisci-iminato liabit of setting up usages and custoras in almost every kind of trade to control written contracts, and tho danger atttendaut on tho admission of evidence therefor ; His Lordship thei'o says " the true and appro- priate ollice of a usage or custom is, to interpret tho otherwise indeterminate in- tentions of parties, and to ascertain the nature and extent of their contracts, aris- ing, not from express stipulations, but from mere implications and presumptions and acts of a doubtful or equivocal character. It may also be admitted to ascertain the true meaning of a particular word or of particular words in a given instru- ment, when the words have various senses, some common, some qualified and some ttx-hnical according to the subject matter to which they are applied. How far custom may control a contract.— On the subject of what is the proper measure or limit of the control of mercantile customs by the Law, Mr. Justice Brett in Robinson v. Mollett,^ " that the course of mer- cantile business should be left to be as free as possible, seems to me beyond doubt, that it is to be subject to some control is equally undoubted. It is when merchants dispute about their own rules that they invoke the law. The Courts therefore being appealed to, have been obliged to apply some rule. When merchants have disputed as to what the governing rule should be, the Courts have applied to the mercantile business brought before them what have been called le^-al principles, which have almost always been the fundamental ethical rules of right and wrong. They have decided in favour of that course of business which was in accordance with such principles or rules, and against that course which was inconsistent with them. Thus, for example, when ship-owners and underwi'iters disputed upon the effect of concealment of certain facts, the Courts, finding tliat the contract of maritime insurance must be one of confi- dence, because the knowledge of many material facts must of necessity be confined to the shipowner, applied the principle of ''^ uberriina Jides" and l-Aid down the rule that if a material fact kuown to the assured and unknown to the underwriter be not communicated to the latter at the time of making of the conti'act it shall be ineffective. But when once rules are laid down, they must at some time become irksome to some individual or to some body of men. And there must from time to time be some contention raised, or some coui'se of business invented, which is alleged to be an attempt to break through them. The Courts ai'e then again appealed to. Customs of trade, as distinguished from other customs, are generally courses of business invented or relied upon in order to modify or evade some application, which has been laid down by the Courts, of some rule of law to business, and which application has seemed irk- • G L. R. 7 H. L. (817}. CUSTOM OF TRADE. 49 some to some merchants. And wlien some such course of business is proved to exist in fact, and the binding effect of it is disputed, the question of law seems to be, whether it is in accordance with fundamental px'inciples of right and wrong. A mercantile custom is hardly ever invoked but when one of the parties to the dispute has not, in fact, had his attention called to the course of business to be enforced by it ; for if his attention had in fact been called to such course of business, his contract would be specifically made in accordance with it, and no proof of it as a custom would be necessary. A stranger to a locality, or trade, or market, is not held to be bound by the custom of such locality, trade, or market because he knows the custom, but because he has elected to enter into transactions in a locality, trade, or market wherein all who are not strangers do know and act upon such custom. When considerable numbers of men of business carry on one side of a particular business, they are apt to set up a custom which acts very much in favour of their side of the business. So long as they do not infringe some fundamental principle of right and wrong, they may establish such a custom ; bat if, on dispute before a legal forum, it is found that they are endeavouring to enforce some rule of conduct which is so entirely in favour of their side that it is fundamentally unjust to the other side, the Courts have always determined that such a custom, if sought to be enforced against a person in fact ignorant of it, is unreasonable, contrary to law, and void. If the custom, which exists in fact is not unjust, as against princi- pals ignorant of it, your Lordships will uphold it, however much it de- parts frorii the rules hitherto recognized by the Courts as applicable to the contract of employment between principals and brokers, but if it so far breaks from those rules as to be unjust to such principals in such con- tract, your Lordships will pronounce it to be a void as a custom. One form of stating this proposition of injustice is to say, as Willes J., said in the Court of Common Pleas in this case, ' It is an elementary proposition that a custom of trade may control the mode of performance of a contract, but cannot change its intrinsic character.' This is true, I apprehend, because it would be manifestly unjust to allow one party to a contract to change, without the consent of the other, the very substance of the contract, or any essential part of it, to which they had actually specifically agreed. And thus Blackburn J., in the Exchequer Chamber says, in what I venture to think are equivalent terms. ' To some extent I agree with this — that is, with the proposition enunciated by Willes J., if the terms are such as to be inconsistent with the nature of the employment, so that if they prevailed they world change its nature altogether, I think they should be rejected.' The question therefore may be thus stated ; — Is the custom relied on so inconsistent with the nature of the contract to which it is sought to be a})plied as that it would change its nature altogether, or as to change its in- trinsic character. If it would, it is unjust and therefore void ; if it would not, G ^>0 ■I'liM t,.\\v OK .\<;r.\*'Y. it slinuld 1)0 allowed to pjvvail." Having rofercd to tlic term " cnstom of trade," wo will now return to tlic Keoond exception to the general rule, viz., that a sub-agent may be ;i|ipnin(((| whom by the ordinary custom of trade a sub-agent may be employed. Illustrations of the 2ncl exception, whereby the ordinary custom of trade a sub-agent may be employed. As wheie ceriaiu giundians of a Union emploj-cd one Kempthorne to pjepare a specification for a workhouse, and Kemplliorne employed one Moon an architect to make calculations, the Court decided that ^loon, having proved that Kempthorne in employing him had acted in accordance willi tlic eiisfoni of his trade of an architect, might sue the guai'dians for compensation.^ So a master of a ship has power by custom of trade, ■when seeking freight to employ freight-brokers for that purpose.^ But where a certain firm (Campbell and Orr) consigned goods to one McComley upon a del credere commission for sale, and drew bills on bim in advance, whicb McComley accepted, but never paid, and afterwards without the knowledge of Campbell and Orr placed the goods with Hutchinson, another broker, upon a del credere commission, and upon an agi^eement to divide the commission with him, and obtained his acceptances for the amount. Lord Ellenborough said, " there certainly was not any express privity between Campbell and Orr and Hutchin- son, neither can any be implied unless the case had found that the usage of trade Avas such as to authorize one broker to put the goods of his employer into the hands of a sub-broker to sell and to divide the commission with."^ But where a print-seller entrusted a mate of an East Indiaman with certain goods to be disposed of by him in India, agreeing to take back from the mate whatever he should not be able to sell, and allowing him what he should obtain beyond a certain price, with libcrt}- to sell them for what he could get if he could not obtain that price ; and the mate not being able to sell the goods in India himself, left them with an agent to be disposed of by him, directing the agent to remit the money to himself in England, it was held that the delivery to the agent was within the terms of his agivement.* Instances of the 3rd exception. Where, from the nature of the agency, a sub-agent must be employed.— There are many cases which, from the nature of the duty, or from the circumstances under which it is to be per- formed, make it imperatively necessary that a sub-agent should be made use of. Thus, an agent employed to collect a debt by suit would be entitled to employ an attorney ; or to sell goods by public auction, it would be necessary to employ an auctioneer ; or where the power given by one party to another by an instru- ' Moon V. Guardians Whitney Union, 3 Biiig. N. C, 817. " Story on Ag., 14. ^ CocJcran v. Irlam, 2 M. & S., 301, (308) note. • Bromhu v. Coxaell, 2 B. & P., 438. CUSTOM OF TRADE. . 61 ment in writing is of sucli a nature as to require its execution by a deputy, the party originally authorized as the agent may appoint a deputy. This was so decided by the Priyy Council on appeal from Lower Canada in the case of the Quebee and Richmond By. Co. v. Quinn^ there, by an Act of the Canadian Legislature, 13 and 14 Vic, c. 116, a Company was incorporated for the purpose of making a railway, either by agreeing with the owners of the land for the price of and compensation to be given, or if the matter could not be settled, by referring to arbitration. A contract was afterwards entered into between contractors for completion of the railroad, by this contract it was agreed that the contractors were to complete the railroad at their own expense, and pay any claim which might be made against the Company, including the piu'- chase of lands required, and the Company were to exercise or permit the con- tractors to exercise, as the case might be, any of the powers vested in them by the Act of Incorporation as fully as if the Company itself had exercised such powers and performed the works ; and in the exercise of such powers the con- tractors were to use the name of the Company, if deemed necessary. The contractors who resided in England, afterwards by a power of attorney which recited the above contract, deputed one Reekie as their agent, with full power on theii' behalf to construct the railroad, and to enter into contracts for the purchase of land, and to settle any claim for land or other damages. The Com- pany i-equired part of some lands belonging to one Quinn, and, previously to the contract for the completion of the railroad, had been in treaty with him for the taking such land, but could not agree upon the terms. Quinn had, in consideration of the Company's compulsory powei's of purchase under the Act, put them in possession. Subsequently Reekie and Quinn referred to arbitration the compen- sation to be given for these lands. A certain sum was awarded and Quinn applied to the Company for payment, who referred him to the contractors, who refused payment. On a suit by Quinn against the Company, the Company pleaded that the contractors were alone liable, that Reekie had no authority either from them or the contractors to refer the matter to arbitration. Their Lordships of the Privy Council found that the contractors under the contract liad power to delegate to an agent powers similar to those vested in them by the Company, and that under the power of attorney executed by the contractors Reekie possessed tlie same powers of acting and rendering the Company liable, as the contractors themselves had under the contract. Similarly a Corporation must act by agent, for being an artificial boJy, it cannot act on its own behalf .2 And again where a layman has authority from his principal to manage a suit on his principal's behalf, he would bo at liberty to delegate his authority to an attorney as from the nature of the business * 12 Moo. P. C, 232. * Co. Litt., 60, h. 52 TnK LAW OF UIFNC'Y. cou'iiitiitiii^ the fluency, the hiislncHB could only Itc iluiic tlii-ougli a sub-agent wlio is an attoj-noy.^ In ronnoc-tion witli the foT-ogoing cxocption reference should be made to casoa where an agent holds an express or implied authority to name another to act for the principal in the business of the agency ; for in those cases such a substitution is not in truth a delegation at all, inasmuch as the person named and appointed to act by the agent in the business is in reality an agent of the principal, and not a sub-agent ; the relation existing between him and the principal creating direct privity of contract between them. Delegation by Trustees, whether under the Indian Trusts Act, or not. — 'riie otlicc of trustee is one of personal confidence and ought so far as possible to be performed by the person appointed to that post. But it has been always perfectly legal and in fact customary for a power to be inserted in the trust deed enabling the trustee or trustees to appoint some other persons to perform certain acts for them.^ Amongst such, acts as may be delegated are those entailing mere formalities ; and it lias been further held that where the delegation of any of the trustees' duties arises from moral necessity or where the delegation is conformable to the common usage of mankind, delegation may be made.^ The Indian Trust Act of 1882 which, at present is only applicable to the Madras Presidency, the North- Western Provinces, the Punjaub, Oudh, the Central Provinces, Coorg and Assam ; and does not affect the rules of ^laho- medan law as to waqf, or the mutual relations of the members of an ujidivided family as determined by any customary or personal law, or apply to public or private, religious or charitable endowments, or to trusts to tnbute prizes taken is in war among the captors, and saves trusts from the Act which were created before the 1st of March 1882, lays do^vn that a trustee cannot delegate his office or any of his duties either to a co-trustee or a stranger unless (a) the instrument of trust so provides or (b) the delegation is in the regular course of business, or (c) the delegation is necessary or {d) the beneficiary being competent to con^ tract, consents to the delegation; and the Act declai'es fui'ther that the appoint- ment of an attorney or proxy to do an act merely ministerial and involving no independent discretion is not a delegation within the meaning of the section.* The Act therefore merely enacts the law as administei-ed in England on the subject as far as is stated above. But the case of Speight v. Gaunfi has, ' See Bells Comm., Bk. Ill, Ft. I, Ch. iii, 4. ■' Titley v. Wolstenlxolme, 7 Beav., 424. *■ Ex-parte Belchier, 1 Arab., 218, Attorneij General v. Scott, 1 Yes. Sen. 41S, Ex-parte Right/, 19 Ves., 463. ^ Ind. Trust. Act of 1SS2, s. 47. » L. R. 9 App. Cas., 1. DELEGATION OF THE AUTHORITY. 53 however, fiirfclier broken in upon the maxim delegatus nan potest delegari, by laying down that a trustee is justified in employing brokers to invest the trust funds, if he follows the usual and regular coui'se of business adopted by an ordinary prudent man in making an investment ; this is possibly a slight enlarge- ment of the powers given under the Indian Trusts Act, and this case would, in all probability be followed in this country in cases which do not fall under the Act. In England a trustee's powers has been enlarged under certain statutes,'- which, however, are not applicable to this country. Oases in which delegation may, or may not, be presumed.— Notwith- standing the fact that by Hindu Law, no one but the father while he is alive, can give his daughter in marriage, yet it has been presumed that the father delegated his authority to another from the fact that the father having given his daughter, when an infant, to another, and had left her with him till the proper time when a husband ought to have been provided for her, and then allowed the plaintiff to marry her, and had taken no steps to impeach the validity of the marriage for the space of four years.^ But if will not be assumed that directors of a Company have either expressly or impliedly delegated to their agent in India a power to enter into contracts which they could have done themselves without his intervention, and with advantages which he in India would not possess, the execution of which they might have superintended, and the performance of which they might have watched and enforced.^ Delegation under Statute— Under the Indian Insolvent Act. — Under the Insolvent Act II and 12 Vic, c. 21, s. 28, the assignee or assignees have power under certain conditions with the consent of the creditors to submit disputes to arbitration. Under the Succession Act, and Probate and Administration Act. — Under Section 212 of Act X of 1865, and section 28 of the Probate and Administration Act, Act V of 1881, a Court may, where an executor is absent from the province in which an application is made, and there is no executor within the province willing to act, grant letters of administration with the will annexed to the attorney of the absent executor for the use and benefit of his principal.''' Under Act XXXII of 1867, S. 1.— Under the Chief Commissioner's Powers Act of 1867, the Grovernor- General in Council is empowered to dele- gate to the Chief Commissioners of Oudh, the Centi'al Provinces and British Burmah all or any of the powers, theretofore or thereafter conferred by • 44 & 45 Vic. c. 41, s. 56, and the Trustees Act of 1888, s. 4. " Golamee Gopee Ghose v. Juggessur Ghose, 3 W. R. 193. " Stewart v. Scinde Punjab and Delhi Ri/. Co., 2 B. L. R., (214), * See cases noted iu Henderson on Intost und Test Succ, p. 231. oi- I UK \.\\\ III- \cii:\iV. any Art of (lie (lovoinoi'-ficiio-iil in Council on tlie Covcrnor-GoncrHl of (%)niicil, lis I In- Lociil ( iovoninuMit of the torritorics under tlie administration of such ('hid' ( 'oimiiissionci's ; iiiul iill acts done l)y the Chief Commissioner to wlioiii such power has i)een deh'^^ated sliall be as viilid as if tliey had been done l)v the (iovernor-Cienei-al in Couiicih Under Reg. I of 1877, S. 10. — Under tlic Ajmccr Courts RcgTilation 1877, the Cliief Commissioner may delegate to a Subordinate Judge of the first class, powers conferred on a principal Civil Court of Original jurisdic- tion. Act XVII of 1877, SS. 19, 48.— Under the Punjab Courts Act of 1S77, 8. 19 the Chief Court may delegate to any one or more of the Judges of the Court any powers conferred on it under that Act. And under s. 48 of the same Act the Local Government may, with the sanction of the Governor- General in Council, appoint a single Judge of the Chief Court to exei'cise the powers of supcrintcndonco confori-ed on such Coui't by s. 25. Act XV of 1830, SS. 39, 40, 58.— Under the N.-W. P. and Oudh Muni- cipalities Act a Municipal Board may delegate to one or more of its mem- bers the power of entering into contracts under 200 Rs. and of executing the same. And the ]3oavd may, at a special meeting, delegate to one or more of its Committees of its members any of the powers vested in the Board under SS. 5(> iind 57. Under Act VII of 1880.— Under the Merchant Shipping Act of 1880, s. 53 the Local Government may delegate to the Port Commissioners all the functions of a Local Government save the powers given by ss. 14 and 15 of the Act. Under the District Delegates Act, VI of 1881. — Under this Act power is o-iveu to the High Court to appoint certain judicial officers to act for District Judges as delegates to grant probate and letters of administration in non-contentious cases. Under Act IV of 1882, Transfer of office.— Under s. 6 of Act IV of 1882, Transfer of Property Act. neither a public office, nor the salary of the officer can be transferied. Under the Companies Act. — Section 179 of Act VI of 1882, the Indian Companies Act euipower.s a Company which is about to be wound up volun- tarily by an exti-aordiuary resolution, to delegate to its creditors, or to any Committee of its creditoi's, the power of appointing liquidators or any of them, and supplying any vacancies in the appointment of liquidators ; acts done in pur- suance of such delegated power having the same effect as if done by the Com- pany. The directors of a Company have likewise authority to delegate any of their powers to Committees consisting of such member or membei's of their body as they think fit ; any Committee so formed must, however, in the DELEGATION OF THE AUTHOKITY. o5 exercise of the powers so delegated,! conform to any regulations that may be imposed on it by the directors.^ With [reference to this power it has been held that one director if appointed by the Board with all the powers of the Board, validly constitutes a Committee. ^ • By Liquidators under the Companies Act. — A case* raising questions under ss. 18 and 95 of the English Companies Act of 1862, (which sections are similar to sections 177 and 144 respectively of Act VI of 1882 of the Governor- General' of India in Council), as to the powers of liquidators to delegate their powers to others, came before Sir W. Page Wood in 1888. There, four liquidators of a Company passed a resolution that one of them should have power to accept bills of exchange, and they subsequently resolved that certain bills to the amount of £7500, which had been accepted to the credit of a certain fii-m, should be renewed ; fresh bills were accordingly drawn and accepted by one liqui- dator. Sir W. Page Wood said " I am not at all inclined to dispute the proposi- tion (laid down by Counsel), that the authority of two does not necessarily mean that you should find the names of the two liquidators on the piece of paj^er which forms the bill. But though the liquidators might well meet (the four liquidators are said to have done so) and give authority to some one, yet that must be as to the acceptance of a specific bill, or other specific thing which is to be done ; and they may then say that their clerk or agent, whoever it may be, shall sign for them. That may be a good acceptance under s. 95, but at least you must have the judgment of the two liquidators upon the particular bill which they authorize to be so signed. The grant of a sweeping authority to issue bills to the extent £16,500 without any judgment exercised as to the date on which they are to be issued, the proportions in which they are to be issued, the amounts of the bills does not appear to us to be an act which it was com- petent to the four liquidators to do in the manner proposed by their resolution," and the learned Judge held that the acceptances were invalid. The case came up on appeal^ and their Lordships affirmed the judgment of the Court below ; The case is, however, only an authoi'ity for the proposition that liquidators are unable to delegate their discretion, but that if they determine that certain specific bills should be accepted, they might delegate to one of their number the power of actually signing his name for them ; but it is left a matter of doubt whether under any circumstances liquidators can authorize one of their number to sign a bill in their name. ' Tnfftirdell v. Fareham Blue Brick, Co., L. R. I C. P. 671. ^ /// re Taurine Co., L. R. 25 Ch. U., 511. 3 hid. Cotr. Act Table A., 68, (3). In re Taurine Co., L. R. 25, Ch. D., 511. * In re Birmingham Bankinri Co., L. R. 3 Ch. 651. * L. R. 6 Ch., 206. r)6 TMK LAW ()\- A(II:NCY. A transaction involving a general delegation of statutory powers by one Company to another is not within the powers of a Company.* As to a delega- tion of a statutory power by an agent to his sub-agent see (Quebec and Eichmond Uy. Co. V. Quinii.^ Under Act X of 1882— Under tlio Criminal Procedure Code of 1882, ss. 13, 14, the Loc-iil (Jovornmeut may delegate to a District Magistrate its powers of placing any Magistrate of the first or second class in charge of a sub-division. And with the px'cvious sanction of tlie Governor- General in Council the Local Government may delegate to any officer under its control the powers conferred on Special Magistrates. Under Act XV of 1882.— Under s. 33 of the Presidency Town Small Cause Courts Act that Court has power to delegate non-judicial duties to its Hegistrar. Act XIII of 1884. — Under the Punjab Municipality Act, s. 33, the Committee of a first class Municipality may, subject to the provisions of that Act, delegate to one or more of its members the power of entering into any l)arlicular contract under the value of Rs. 500. * See Beman v. Bufford, 1 Sim N. S., 550, and Midlaiid Ry. Oo. v. G. Western iJy. Co., L. R. 8 Ch., 841. * 12 Moo. P. C, 233. 57 LECTURE III. RATIFICATION". Where there may be ratification — Meaning of ratification — It is express or implied — Instances of express ratification — Evidence of ratification or implied ratification — By acquiescence — Different meanings of acquiescence — Instances of implied ratification — Qualified ac- quiescence is not sufficient — By silence — Ratification by long inaction — By minor on attaining full age — Standing by — Implied ratification by Judge — Essentials of ratification — Act must be done for or on account of person electing to ratify — Extension of principle in insurance cases — Must be by a person in existence at the time the act is done — Dis- tinction between decisions of Common Law Courts and Courts of Equity — Act of agent ratified by administrator — No ratification of illegal and void acts — Not applicable to criminal cases— Distinction between ratification of void and voidable acts — Full knowledge of material facts necessary — No ratification of part of a transaction — Effect of ratifica- tion — Of unauthorized acts of directors — Evidence of ratification by shareholders — Acquiescence by directors — Instances — Ratification of particular acts done by directors in excess of their general authority — Ratification of alteration of articles of Association. Where there may be ratification. — Wliere acts are done by one person on behalf of another but without his knowledge or authority, he may elect to ratify or to disown such acts. If he ratify them, the same effects will follow as if they had been previously performed by his authority.^ The power to ratify an act done on behalf of another, therefore, implies or presupposes in that other the power to do that act himself. It may be that the person who has taken upon himself to represent that other is in reality the agent of that other, but has exceeded the authority given him ; but on the other hand, he may have no connection at all with the person he has assumed to represent. Meaning of ratification. — What is meant by ratification is the adoption and confirmation by one person of an act done by another who has assumed to act for the former, after full knowledge of that which was done on his behalf. It may be express or implied. — Such ratification may be, as will be seen hereafter, exjorcss, that is to sa}^, it may be confirmed by writing or by word of mouth, or it may be imjilied from the conduct or action of the person for wliom the act was done'^, and that in a variety of ways. This doctrine is stated by Tindal C. J., in Wilson v. Timiman^ as follows : — " That an act done for another, by a person not assuming to act for himself, but for such other person, though without any precedent authority whatever, becomes the act of the principal, if ' lad. Contr. Act, s. 196. ^ Iiid, Contr. Act, s. 1%. * 6 M. & G., 236. H 58 niK LAW f)F AflKN-CV. Hultspqiiiiitly niliiiiMl \\y liim, is the known and well-established rule of laAV. In Hint ciisc the principal is bound by the act, whether it be for his detriment or his lulvantago, and whether it be founded on a tort or a contract, to the same extent as by and uitli all fl:c consequences which follow from the same act done by his previous authority." The case last cited is one of the leading cases in England on the subject of ratification, and, as will be presently seen, has been expressly followed in this country. That the doctrine of ratification was in force in this country previously to the Contz*act Act, may be seen from the case of the Secretary of State for India hi Council v. Kamachee Boyee^ which was a case brought by the widow of the Rajah of Tanjore for a declaration that she was entitled to inherit as heiress of the late Rajah ; and in which the Privy Council held that the Govci'nment had ratified and adopted the acts of its agent, the Collector, in seizing the property of the Rajah. Instances of express ratification. — With reference to express ratification, it is unnecessary to do more than to give a few instances of such ratification, and to generally refer to the numerous cases which there are upon the subject. The most marked case which can be chosen for an example is, I think, that of Ancona v. Marks^ there it appeared that the defendant a tradesman had delivered and endorsed to one Wright, an attorney and money-lender, certain promissory notes and bills of exchange, upon his discounting them for the defendant. Wright stated in his evidence that he came to London and saw one Tucker a member of the firm of Greville and Tucker, attornies in London, who had occa- sionally acted as his agents. He had with him the promissory notes and bills before referred to, and he asked Tucker to find a client who would lend his name in an action upon them. Tucker said there was no difiiculty as he had the authority of Ancoua (the plaintiif). Wright then said "I wish you to receive these bills for Ancona and to bring an action upon them in his name ;" and Wright then endoi'sed and delivered them to Tucker. On a previous occa- sion Wright had a bill of the defendant's, and asked Tucker if he could find a client who would allow his name to be used in an action upon it, when Tucker mentioned, Ancona, the plaintiff, and the action was brought in his name, and the money i-ecovered. Tucker informed Ancona that the action had been brought in his name, and he adopted it, and stated that Greville and Tucker had used his name before. He had, however, no knowledge that his name was used in this action, until after it was brought, but when told of it he was willing that it should go on. The Court held that the plaintiff's ratification of the acts of Greville and Tucker, was tantamount to a previous command, and made the acts done by them as his agents the same as if he had done them himself. So where A entered into a contract for the sale of a quantity of oil without > 7 Moo. I. A., 476. » 7 H. & N., 686. RATIFICATION. 59 the authority or knowledge of B, and B on receiving information of the cir- cumstance, refused to be bound, but afterwards, assented by parol, and samples of the oil were accordingly delivered to the vendees, it was held that B's ratifica- tion of the contract rendered it binding upon him.i Instances of express ratification. — Further instances may be foand in the cases of Fitzviaurice v, Bayley,^ Benhani v. Batty,^ WiJso7i v. Tumman^'^ Seth Sami(,r Mtdl v. Choga Lall,^ Pestonjee Nesserwanjee v. Gool Mahomed Sahib,^ Jones V. Bright,'^ Maclean v. BvAin,^ Soames v. Spencer,'^ Hagedorn v. Oliverson^^ and in Ahdoola bin Sliaik Ally v. Stephens,^^ which was a case of ratification of the act of a public servant by his superior oSicer, and the Secretary of State v. Kamachee Boyee Sahaba.^^ See also Kishen Kinher Ghose v. Borodaktinth E-oy,^^ in which jurisdiction was affected by the act of ratification, and Furlong v. Bhugwan ;1* and see also Gool Mahomed Sait v. Pestonjee Nesserivarijee,^^ Bain Chunder Poddar v.' Haridas Sen,^^ Juggesur Bhuttobyal v. Boodro Narain Boy}'' Evidence of ratification, or implied ratification. — As regards the evi- dence necessary for ratification proof of an express ratification is not indispens- able, for inferences of ratification may be drawn from the conduct of the person for whose benefit the act was originally intended. If he means to I'epudiate the benefit it is his duty to express his dissent'^* within a reasonable time of his being informed of the act done on his behalf ; and if he fail to do so, his adop- tion of the act will, generally speaking, be inferred from his silence ■}'^ and it apj)ears raoreover that slight evidence of ratification will be sufiicient to bind the principal, as where a broker, who signed the broker's note upon a sale of corn, was the seller's agent, but the buyer acted upon the note by sending a servant to examine the bulk of the corn ; on the authority of such note Lord Ellen- borough held that that was such an adoption of the broker's agency as to make his note sufiicient within the Statute of Frauds. 2<> And in considering whether any given facts are sufficient evidence of ratification it is important to consider whether the relation of principal and agent already exists, or whether the person who has done the unauthorized act is a mere volunteer. The distinction inferred from this difference is, that in the former case, although in the particular trans- ' Soaynes v. Spenser, 1 Dow. & Ry , 32. " 2 Ind. Jur. 0. S. 17. ■' 6 El. & Bl , 868. '2 7 Moo. I. A., 476. " 12 L. T. N. S., 266. '» 2 Hay, 656. * 6 M. & G., 236. " 2 Hay, 1. » I. L. R. 5 Calc, 421 " 9 Mad. Jar., 450. « 7 Mad. H. C, 369 « I. L. R. 9 Calc, 463. ' 5 Bing., 533. " 12 W. R. 299. [\V. R., 571. ' 4 Bing., 722. '* Kebal Kristo Dass v. Kam Coomar Shah, 9 * 1 Dowl. & Ry., 32. '* French v. Backhouse, 5 Burr., 2227. '» 2 M. & S., 485. •"' Hovil v. Faufc, 7 East., 164, (166;. 60 TIFK LAW OK AflKNCY. action tlic njji'ciil liiis oxcccdccl liis iuitlioiity, an int(!ntio)i to ratify will always 1)0 prcHunied from tlio Hilenco of the principal who lias received a letter in- forming^ him of what has been done, whereas in the latter case there exists no ohlipation to answer such letter, noi- will silence be construed as ratification.^ Ratification may be implied by the act and proceedings of the j)rincij»al ■when he is fnlly aware of the act professed to have been done on his behalf, by weak expostulation without direct repudiation, by long acquiescence without objection, or by silence. These matters are questions of fact, and the sufficiency of evidence warranting a finding of implied ratification, is a question therefore to be determined by the Judge. The evidence from which ratification may be implied, should, as will seen from the following observations of Thesiger L. J., in De Bussche v. Alf,^ be clear and cogent. His Lordship said, " It is competent no doubt to a principal to ratify or adopt the act of his agent in purchasing that which such agent has been employed to sell, and to give up the right which he would otherwise be entitled to exercise of either setting aside the ti-ansaction or recovering from the agent the profits derived by him from it ; and the non-repudiation for a considerable length of time of what has been done Avould, at least, be evidence of I'atification or adoption, or might possibly by analogy to the Statute of Limitation constitute a defence : but before the principal can properly be said to have ratified or adopted the act of his agent, or waived his right of complaint in respect of such acts, it should be shewn that he has had full knowledge of its nature and circumstances, in other words, that he has had presented to his mind proper materials upon which to exercise his power of election, and it by no means follows, that because in a case like the present he does not repudiate the whole transaction after it has been completed, he has lost a right actually vested in him to the profits derived "by his agent from it. It appears to us also that, looking to the dangers which would arise from any relaxation of the rules by which, in agency matters, the interests of principals are protected, the evidence by which in a particular case it is sought to prove that the principal has waived the protection afforded by these rules, should be clear and coy-cnt." Different meanings of the word " acquiescence."— The term "acquies- cence," is one which was said by Lord Cottenham in Duke of Leed^ v. Amherst,^ ought not to be used ; in other words, it does not accurately express any known legal defence, but if used at all it must have attached to it a very different signi- fication, according to whether the acquiescence alleged occiu-s while the act acquiesced in is in progress or only after it has been completed. If a person having a right, and seeing another person about to commit, or in the course of committing an act infringing upon that right, stands by in such a manner as ' Evaus on Pr. & Ag., 79. " L. R. 8 Ch. D., (312). » 2 Ph , 117. RATIFICATION. 61 really to induce the person committing the act, and who might otherwise have abstained from it, to believe that he assents to its being committed, he cannot afterwards be heard to complain of the act. This, as Lord Cottenham said in the case already cited, is the proper sense of the term " acquiescence," and in that sense may be defined as acquiescence under such circumstance as that assent may be reasonably inferred from it, and is no more than an instance of the law of estoppel by words or conduct. But when once the act is completed without any knowledge or assent upon the part of the person whose right is infringed, the matter is to be determined on very different legal considerations. A right of action is then vested in him which, at all events as a general rule, cannot be divested without accord and satisfaction, or release under seal. Mere submission to an injury for any time short of the period limited by statute for the enfoi-cement of the right of action cannot take away such right, although under the name of laches it may afford a ground for r-efusing relief under some particular circumstance ; and it is clear that even an express promise by the person injured that he would not take any legal proceedings to redress the in- jury done to him could not by itself constitute a bar to such proceedings, for the promise would be without consideration, and therefore not binding."'- Instances of implied ratification.— The following are a few instances of implied i-atification. Where part owners of a vessel, one of whom had affected an insurance of the vessel and had informed all his co-partowners that he had insured for all, and they stood by and did not object to what he had done, this was held sufficient evidence of ratification -^ again where an entry of the payment of praemia had been made in a praemia book belonging to part owners of a vessel, which book was open to the inspection of the other co-partowners, who had actually inspected an extract from such book, and had made no objec- tion to the insurance, it was held that the part owner had insured with the authority of his co-owners. ^ So where a Mrs. Adams a lady residing in England, who had given authority under powers of attorney from time to time in 1847, 1861, 1862, and 1868 to various persons for the purpose of managing her estate in India, gave such a power to one Shaw, who in 1862 granted a mocurari lease to the naib of the estate ; and it appeared that he had done so after full enquiry ; and subsequently one Steer was sent out to India to manage this estate (either jointly with Shaw or alone, was not clear) and he after enquiries into the matter of the lease, and as to the state of the land granted thereunder, appeared to have recognized, and by i-ecognition confirmed the lease, and further confirming it by receipt of rents. And in 1870 the administrator of the estate of Mrs. Adams > Be Bussche v. Alt, L. E. 8 Ch. D., (314) per Lord Cottenhaiu. ^ French v. Baclchouse, 5 Burr., 2727. ^ Uobinsoii v. Gleadow, 3 Bing. N. 0., 156. 62 THE l,\W OF AGENCY. sued to liavt! tho leaso set aside on the ground that it had been granted collu- .sively at a low rate ; the charf»'o of collusion was, however, withdrawn ; .Sir Ricliard Couch wlio (h'livored the judgment of the Court hehl tliat Shaw had authority to i^raut the k-asc ; that Steer liail liiid sufficient authoi-ity to enrjuire into the pro- |>rioty of the poLtah heinji^ granted, and, after making enquiries, to ratify what had heou done, that even su])posing tlie original transaction liaVjle to be set aside, the ratification of it by a person having authority from Mrs. Adams to make iMi(|uiries and ratify what had been done would have rendered it valid ; and tiuding that Steer had gone so far as to make enfjuiries regarding the pottah and also the state of the lands covered by it, and could find nothing improper, but on the contrary, had granted a lease of a similar nature in 1866, held that under these circumstances Mrs. Adams could not be presumed to have remained in ignor- ance of such acts on the part of her managers, and added : " We concur with the Snb-ordinate Judge in thinking that the owner in England must be presumed to know what was being done on her behalf by her agents. The owner got the benefit of those acts, and it is a fair presumption that she took pains to ascertain what the agent was doing, and to keep herself acquainted with the way in which the estate was being managed."^ This judgment Avas subsequently aflfirmed by their Lordships of the Privy Council,^ who with reference to the point of ratifica- tion, said : — " Their Lordships are unable to say that the remarks made by the High Court on that subject, are open to any substantial objection." So whci-e a mortgage was made by a lumbadar of his own share, and the shares of his co-sharers of certain property, as agent on their part, in order to raise money to pay Government revenue ; it was held that the co-sharers being aware of the fact of the mortgage, and not having at the time repudiated it, and moreover having acquiesced in the decree of first instance which awarded them their shares on payment of their quota of the mortgage debt and interest, must be taken to have thereby consented to the act of the lumbabars which Avas done on their behalf.^ Qualified acquiescence is not sufficient. — There must, however, be more than qualified acquiescence, as where one Toolseram a proprietor of a cer- tain mchal which was, however, in the actual possession of his nephew Doorga-Pershad, who in the year 1854, in the capacity of mortgagee of Toolseram's mehal executed on Toolseram's behalf a wajiboolui'z, and at the time of execution not feeling himself in all probability fully authorized to act for Toolseram, sent for Toolsei'am to sign for himself, but not finding him, signed for him. .Toolseram died in 1857. and his heii-s mortgaged, it is pre- ' Anundchunder Base V. Broughton, 17 W. K., 301. « 21 W. R., 4,25. ' Punchum Singh v. Mu7igle Singh, 2 Agra H. C, 207. RATIFICATION. 63 sumed, the same mehal to some one else, (the report is very meagre, the. nature of the suit not being even shewn). It was contended, that there had been an acquiescence in Doorga Pershad's acts, and that the heirs of Toolseram were prevented from repudiating the competency of Doorga Pershad to bind him by the wajiboolurz ; held that the original proprietor Toolseram was not bound, as Doorga Pershad had signed as mortgagee and not as agent ; that even assuming Toolseram and his heirs to have been fully acquainted with Doorga Pershad's acts the most that could be inferred was that this subsequent acquiescence, supposing it to be established, was only an acquiescence in Doorga Pershad's act to the extent and in the qualified manner in which his consent was given. 1 Ratification may be implied from silence ; neglect or failure to re- pudiate. — Thus where a father and son, J. S. and T. J. S. respectively, as mortgagees with power of sale, agreed to sell to the plaintiff all their estate and interest in a certain peice of land. This agreement was signed by the plaintiff and by T. J. S. for himself and his father ; the son had no antecedent authority to sign for his father, but the father was aware that the agreement had been entered into five days after it had been entered to, (if not before), as was proved by the father's letter to his solicitor in which he referred to his son having been so foolish as to enter into that agreement. J. S. and T. J. S. afterwards sold the land to another party. The plaintiff then brought his suit for specific perform- ance of the agreement. Stuart V. C. held that the knowledge and acquiescence of J. S. raised a presumption of ratification and said, " It could not be considered that any express act on his (the father's) part, such as attaching his signature to the agreement or any other solemnity by him, after he became privy to the act done by his son on behalf of both, was essentially necessary. Subject to his right to a reasonable opportunity of expressing his dissent, every additional day and hour of silence after he became privy to the contract operated as tacit acquies- cence and raised the assumption of assent Although he, the father, had' sworn in his answer that he never recognised the agreement and had always refused to adopt it, he did not venture to state, nor was there any evidence to prove that at any specified time, or by any specified word or deed, he in any manner expressed his refusal or even acted in any manner so as to induce a belief of any such refusal or dissent before the commencement of the suit.2 So where a husband allowed his wife to have control over certain property, and to mortgage it ; it was held that he Avas not to be allowed to come forward some time afterwards, and defraud the mortgagee by disputing his wife's title. ^ ^ Bhageeruth v. Mohun, 2 Agra H. C, 129. * Bigg v. Strong, 4 Jur. N. S., 108 ; afflrmed on appeal, p. 982. See also Prince v. Clark, 1 B. & C, 186. Smith v. Hodson, 4 T. R., 211. Fergusson v. Carrington, 9 B. & C. 59. ^ Mooradee Beebee v. Syeffoollah, W. R., (1864), 318. <". I Till' I, AW III" AGENCY. Kill lilt It" siliiKi' is not always sutlicieiil' ; Yet where a person wIkj was a goiicnil aLifciif hoirowcti money for hi.s jjriucipal in his principal's name ; the money boinuf caiTicil from tho batik from which it was bon-owed to the Treasury of tiie jn-iiicipal, ami expcudod foi' his use; entries having been made in the principal's liooks as to the loan, and also as to the mode by which it was dis- itursed ; portions of the loau having been paid off by ticcadars of the principal under orders or assignments. Peacock C. J. and Levinge J. held that there was a sullieiont y)r('»!«/ac/'tf case made out to show that the principal was liable for tlie money advanced to his agent, as the principal if he had looked into his affairs at all must have been aware of these facts, and as he did not in any way repudiate thcm.^ So also where a principal receives the proceeds of a distress made without authority by his gomasta, he thereby tacitly ratifies the act of his gomasta.3 Ratification by inaction— of act of Guardians. — Long inaction unac- counted for will be taken as ratiiicatiou.* As to ratitication by a person who has attained majority, of acts done by his guardian dur-ing his minority see Tagore Lectures for 1887, p. 382, and the cases there collected ; and also the case of Rofcalianf Bose v. Kuhiu Cliunder Bose.^ Ratification of a deed by being witness thereto. — The question how far a pei'son can be said to ratify a deed by being a witness thereto, was discussed in the case of liam Chuntler Poddar v. Hari Das Sen,^ there during the lifetime of a Hindu Avidow, her son, the then presumptive heir to certain property of which she was in possession, conveyed it to purchasers by deeds to which she was not a party. Subsequently she by separate deed ratified the conveyance. Tliis deed was witnessed by a more remote reversioner. The son died dui'ing the lifetime of his mother, and the witness to the deed became the next reversionary heu' ; in a suit by him after the widow's death to recover possession, it was contended that he being a subscribing witness to the deed by his mother, must be taken to have consented to and have known the effect of it and was bound by it. Garth C. J. said : " 1 think that as a proposition of law that doctrine cannot be maintained. No doubt if parties subscribe a deed as witnesses, and there is evidence, or the circumstances of the case induce the Judge to believe that they knew what the contents of the deed were, the Judge is at liberty to infer that ' Rajnai-rein Deh Clwiodhry v. Kasheechunder Ghoivdhrij, 18 W. R., 404. ** Bunwaree Lall Sahoo v. Alohesh Singh, 2 Uay, 644. ' Ramjoy Mundul v. Kallymohun Roy Choudhry, Mai'sh. 282 ; 1 Hay. 289. * Ishan Chunder Mozumdar v. Sreekant Nath, 9 W. R., 110. Kumurooddeen Saikh v. Bhudoo, 11 W. R., 134. Purmegsur Ojhna v. Goolbee, 11 W. R., 446. Boidonath Dey v. Ram Kishore Dey, 13 W. R., 166. Doorga Churn Shaha v. Ram yaraian Doss, 13 W. E., 172. » 2 Hay., 620. • 1. L. R., y Calc, 403. RATIFICATION OF THE AUTHORITY. ■ 65 tliey were consenting parties to it it constantly happens that persons subscribe deeds as witnesses without having the least notion what they contain ; and if jDeople were to be held bound by any instrument which they so subscribe, it might be a dangerous thing to Avitness any other man's signatui-e." Standing" by. — Standing by and taking no steps to repudiate may under certain circumstances amount to ratification.* But where the o^vner of certain land was not aware of its having been sold by his father to a third person, but having heard of such sale subsequently, stood by and allowed the purchaser to build upon this land, the owner was held not to be able to recover the land without compensating the purchaser, although it could not be said that he knew and acquiesced in the sale,^ And when the proprietors of an estate on being in- formed by their agent of a proj)osal to obtain a lease of the property, refused their consent, and the agent notwithstanding gave the proposer a wi'itten order to take possession as lessee, but gave no notice at the time to the proprietors, but subsequently informed them of it, held that the proprietors were not under obli- gation to take early steps to disavow the act of their agent. ^ Implied ratification by a Judge. — Where a Judge made an order express- ed to be by consent of the parties concerned, and in exercise of his discretionary powers under Act XX of 1863, s. 16, referring certain matters in difference between the parties to three arbitrators for final determination " to make their award in writing and submit the same " within a certain period. Each arbitra- tor delivered a sepai-ate award, two of whom found for the plaintiff. The Judge made a decree in accordance with the award of the majority of the arbitrators. • The defendant objected on the ground that there was no provision in the order of reference to the effect that the finding of a majority should prevail. Holloway and Kindersley JJ., held that there could be no doubt that the Judge might when he made the order of reference have inserted as a provision that the decision of the majority should be that of the body of arbitrators and that thei'e was no reason why his ratification of that mode of decision, wholly within his discretion, should not be equivalent to a previous command.* ESSENTIALS OF RATIFICATION'. I. The Act done must have been done for or on account of the person electing to ratify. — The act sought to be ratified must be one done avowed- ly for, or on account of the person electing to ratify, and not one done for, or on account of the agent himself. Thus where two ladies, the adoptive mothers of ^ Jorden v. Money, 5 H. L. Cas., (213). ^ Savarhal Karsandas v. Nizmunddin Kariiii, 8 Bom. H. C. (0. C. J.), 77. ^ MiiUool Buksh v. Suheedun, 14 W. R., 378. * liiimedy Kanxuja Raniaya Gaundan v. Rainaaami Ambalam, 7 Mad. H. C, 173. I 66 Tin: i,.\\v ok agency. OIK' Hiuiicliiiiiilrii, tnort.pagcd propei'ties whidi liad vested in Rnindinndra as llu' adojjtivu son ol' the ladies; Raniohaiidra at tliat time beinf^ of full age; it was sought to show in a suit bi-ought on these mortgages by the mortgiigeo against (he ladies and the adopted son, tliat the mortgages had become elTeetual through the subse<|U(Mit eondnet of Jlamehandra who it was proved had pi-omised to tlu; ladies that he would ivdeem the mortgiiges, and had stood by and allowi.'d the mortgagee to eany out the provisions of the mortgage deeds to his own detriment by paying maintenauee to the ladies and by paying off certain mort- gages created by the ladies previously to Ramehandra's adoption. Melville J., held that the mortgagee was not entitled to succeed ; stating " It is in evidence that llamcliandra promised the two first defendants (the ladies) that he would redeem the mortgages; but lie made no promise to the mortgagee, nor was there any consideration for such promise as he made. Nor can the promise have the effect of a ratification ; for a ratification of the unauthorized contract of an agent can only be effectual wlien the contract has been made by the agent avowedly for, or on account of tlie pz'incipal, and not wlien it has been made, as in the present case, on account of the agent himself.*- So also where an insurance broker being instructed to effect an open policy for £5,000 for the plaintiff against jettison only " subject to declaration there- after," and the broker being unable to effect the insurance, declared certain deck cargo shipped for Ostend on board one of the plaintiff's vessels on the back of a genei^al policy which he had previously effected for himself " upon any kinds of goods and merchandize as interest might appear," and got this policy initialed by the underwriters ; a loss by jettison having happened, it was held that it was not competent to the plaintiff to maintain an action against the underwriters upon the policy, the contract not having been made with him, nor on his behalf at the time.'^ In that case it was moreover clear that the plaintiff never in- tended to ratify the bi'oker's contract in toto, but only so much thereof as was sought to be appi-opriated to him by the broker. Erie J., in his judgment in that case says, " it is clear law that no one can sue upon a contract unless it has been made by him or by an agent professing to act on his behalf, and whose act has been ratified by him." See also on this point^ Wilson v. Tumman and Ancoiia V. 3/rtr^"s.* Extension of the principle in insurance cases. — A A^de extension has been given to this principle in respect of policies of insurance, viz., that persons who could not be named or ascertained at the time of the policy are allowed to come in and take the benefit of the insurance ; but then they must be persons contemplated at the time the policy was made. Thus in M'illiaim v. Xurth China ' Shiddhesvar v. Bam Chundra, I. L. R., G Boiu., 4G3. » G C B. N. S., 89-1. ' Watson V. Sivann, 11 C B. A. S., 756. ♦ 7 U. i N., GaG. RATIFICATION OF THE AUTHORITY, 67 Insurance Co.,^ where a policy of marine insurance is made by one person on be- half of another without authority, it was held that it might be ratified after the loss of the thing- insured, by the party on whose behalf it was made, even though ho knew of the loss at the time of such ratification. Cockburn C. J., said : " The existing authorities certainly shew that when an insurance is effected without authority by one person on another's behalf, the principal may ratify the insurance even after the loss is known. Mr. Benjamim asked us, as a Court of appeal, to re- view those authorities. His contention was that there could be only a ratification when the principal could himself make the same contract as that ratified. Ad- mitting that for general pui'poses this rule may be good, the authorities which we are asked to overrule are much too strong and of two long standing to be got over. When a rule has been accepted as the law with regard to marine insurance for nearly a century, I do not think we ought to overrule it lightly, because insurances have probably been effected on the basis of the law that has so become settled. and mischief might arise from the disturbance of it. Moreover, I think that this is a legitimate exception from the general rule, because the case is not within the principle of that rule. Where an agent effects an insurance subject to ratification, the loss insured against is very likely to happen before ratifica- tion, and it must be taken that the insurance so effected involves that possibility as the basis of the contract. It seems to me that, both according to axithority and the principles of justice, a ratification may be made in such a case." Nor in such case is it necessary that the i-atification should take place during the time of the risk.2 II. Ratification must be by a person in existence at the time the act is done. — Ratification can only be by a person ascertained at the time of the act done by a person in existence either actually or in contemplation of law ; as in the case of assignees of bankrupts and administrators, whose title, for the protection of the estate vest by relation. The case of an executor requires no such ratification, inasmuch as he takes from the will.^ The case of Reiner v. Baxter^ is an example of the rule that wdiere an agent contracts for a non-existent principal no subsequent ratification by the principal afterwards coming into existence will avail. There the plaintiff sold goods to the defendants, addressing them on behalf of the proposed Gravesend Royal Alexandra Hotel Company, the defendants accepted the goods on behalf of the Company, and made use of them, the Company was not at that time incorporated and did not become so ' L. R. 1 C. P. D., 757. * Luceiia v. Crawford, 2 B. & P. N. R., 269, Routh v. Thompson, 13 East, 274, Eagedorn v, Oliversnn, 2 M. & S., 485, bat see Bell v. Janxon, 1 M. & S., 200. 8 Per Willes J., Kelne'r v. Baxter, L. R. 2 C. P., 184, Scott v. Lord Ehury, L. R. 2 C. P., 255. G8 rrti': i,\\v r,v AdRVcr. until ,snii\i' tiiiie aflorwards. 'I'lio incorpoiiitod (!()m])any on coming" into cxistenfc, raliiiod tlu' jtui-cliiiso made on itsbpluilf. Hiit tlio Court held that the defendants wero piMsonnlly liable as there could lj(; no i-atifieation by a principal who was nut in existence at the date of the contract and there being no principal for whom the defendants could be agents, they themselves were liable. On this latti-r point of the personal liability of the agent, the case has been questioned as is stated in Benjamin on Sales. ^ So again Williams J., in Clunn v. Loudon and Lancasliire Fire Insurance Company,^ says : — " to make a contract valid, there must be parties existing at the time who arc capable of contracting ;" There it was held that a contract made between the projectors and the direc- tors of a joint stock Company provisionally registered, but not in terms made conditional on the completion of the Company, is not binding upon the sub- sequently completely registered Company, although ratified and confirmed by the deed of settlement. So in Wilson v. Swann,^ it is said " the law obviously requires that a person for whom the agent professes to act must be a person capable of being ascertained at the time. It is not necessary that he should be named, but there must be such a description of him as shall amount to a reasonable description of the person intended to be bound by the contract." The case of Kelner v. Baxter^ has been followed in Melhado v. Torto Alegre By. Co.^ where Lord Coleridge J., said : — " The doctrine of ratification is inapplicable, for the reasons given in the judgments in Kelner v. Baxter. For supposing that there was a contract between the plaintiffs and certain persons before the exist- ence of the Company which the directors had authority to ratify on behalf of the Company, the case of Kelner v. Baxter is a distinct authority to shew that the Company could not ratify such a contract, because they were not in existence at the time the contract was made." It has also been followed in the Empress Engineering Company^ where a contract was entered into by A and B with C acting on behalf of a Company intended to be formed, that the former should sell to the Company a certain business, part of the terms of the agreement being that sixty guineas should be paid to J. and P. solicitors ; and the me- morandum of association adojDted this agreement and the Directors subsequent- ly ratified it ; an order having been passed to wind up the Company, J. and P. claimed to prove for the 60 guineas, the Coui't held that the contract having been entered into before the Company was in existence, could not by mere ratification become binding on the Company, and that a contract between * See per Williams J., in. Hollman v. PuUin, Catabe & EUes, 251. Beujamin on Sales, 221. » 12 C. B. N. S., 694. " 11 C. B. N. S., 765. ♦ L. R. 2 r. P., 171. • L. R. 9 C. P., 503. • L. R. 10 Ch. D., 125. RATIFICATION OF THE AUTHORITY. 69 A and B to wliicli J and P were no parties, would not entitle J and P to proceed against the Company. In delivering- judgment in tliis case James L. J., said, " Notwithstanding wliat was said by Malins V. C, in Spiller v. Paris Skating Bink Company} it appears to me, tliat it is settled, both in the Courts of law, and by us in the Court of Appeal in the case of in re Hereford and South Wales Waggon and Engineering Company,'^ that a Company cannot ratify a contract made on its behalf before it came into existence, cannot ratify a nullity. The only thing that results from what is called a ratification or adoption of such a contract is not the ratification or adoption of a contract qua contract, but the creation of an equitable liability depending upon equitable grounds." So again in re the Northumberland Avenue Company,^ a wi'itten contract was on the 2-4th July 1882, entered into between Wallis as trustee for an intended Company, to the effect that that "Wallis who was entitled to an agreement for a lease from the Metropolitan Board of Works, should grant an under lease to the Company and that the Company should erect the buildings. The Company was incor- porated on the 2oth July 1882, its memorandum of association did not, how- ever, mention the agreement, but the articles adopted it, and provided that the Company should carry it into effect. No fresh agreement with Wallis was signed or sealed on behalf of the Company, but the Company took pos- session of the land, expended money in building and acted on the agree- ment which they considered to be binding on them. The Comj^any failed to complete the buildings and the Meti'opolitan Board re-entered. The Company being in course of winding up, the trustee in bankruptcy of Wallis took out a summons to be allowed to prove for damages againt the Company for their breach of the agreement, which form of action amounted to an assent for damages for breach of agreement. Chitty J., decided that as the Company was not at the time of the making of the contract in existence, according to Kelner v. Baxter the contract could not be ratified. And on appeal this point was not dispiited. The case of Hoioard v. The Patent Ivory Manufacturing Company,'^ however, is one showing the view the Courts of equity take on this subject. There one Jordan entered into an agreement with one Wyber who purported to act on behalf of a Company about to be formed, to sell certain property to the Com- pany. The Company was formed shortly afterwards with a memorandum and articles of association containing provisions for the adoption of the agTeement by the directors on behalf of the Company, Avith, or without modifications ; at meetings of the directors at which Jordan was present, resolutions were j^assed adopting the agreement, and accepting an offer by Jordan to take payment of part of the parchasc-mouoy in debentures in lieu of cash, and directing the seal ' L. R. 7 Ch. D., 368. « L. R. 33 Ch. D., IG. ^ L. R. 2 Ch. D., G21. * L. R. 38 Ch. D., 15(3. 70 TIIK I, AW MI." AnnNTT. of lli(> Compnny to \m uiWxvd to jiu assij^nment by JonLin lo flic Company «)1' till' jiropcrly conipriscMl in tho acjrcomcnt, and to dobentiircs to bo issued to Jordan. IJotli of which acts wcro duly performed; and tlie Company took possession of tlio jiropcrty. The Com])any Avas subsequently -wound up, and tlie licpiidator took fi'om Jordan an assignment of other property compi-ised in the agreement ; certain of the holders of the debentures allotted to Jordan brought an action to establisli and cnfoi'cc their securities but were met by the liquidator contending that there was no conti'act l)etween the Company and Jordan. It was urged tlnit the contract between Jordan and the Company could not be ratified . by the Comjiany on tlie authority of cases proceeding on the decisions in Kelner V. Tiaxter, and i» re the Northumberland Avemie Hotel Company y But the Court held that there was evidence that a contract was entered into by the Company under Jordan, to the eifect of the previous agreement as subsequently modified by the acceptance of debentures instead of cash, and that there was, there- fore, at tho time when the debentures were issued an existing debt due to the Company : in other words the case was decided on the doctrine of novation. Distinction between decisions of the Common Law Courts and those in Court of Equity. — It appears from the cases above cited that the Courts of law in I'higlaud strictly <"ipply this doctrine ; and that the Court of Equity although recognizing and applying it, endeavour where it is possible and equity demands, to avoid its consequences by inferring or searching for facts creating a liability depending upon equitable grounds for the piu-pose of granting relief to the suitor. Act of agent ratified by Administrator. — An in.stance of one of the class of cases i^eferred to by "VYilles J., in Kelner v. Baxter, as to ratification by a person in existence in contemplation of law is that of Faster v. Bates'^ where goods belonging to an intestate's estate were sold after the death of the intestate and before the grant of letters of administration, by one who had been the agent of the deceased in Africa; the goods having been avowedly sold for, and on account of the estate ; the administxMtor sued the purchaser from the agent for the price of the goods ; it was held that as the act of the agent had been ratified by the plaintiff after he had become administrator, the title relating back to the time of the death of the intestate, it was no valid objection that the intended principal was unknown at the time to the person who intended to be agent. III. No ratification of void and illegal and acts.— There can bo no ratification of a void and illegal act.^ For if a contract be void on the ground that the party who made it, in the name of another, had no authority to make it, this is the very thing which a I'atitication w;ll cure ; but if it is void on the ground of its being of itself,, and in its own nature, illegal and void, no ' L. R. 33 Ch. D , 16. • Com. Dig. "Confirmation, (D. 1). Co. Litt., 295 (h). » 12'Sl ic \Y., 226. RATIFICATION OP THE AUTHORITY. 71 i\atification of it by tlie party in whose name it was made by another will render it a valid contract. Thus a minor cannot on coming of age ratify a mortgage of his immoveable property made by his guardian under Act XL of 1858 with- out the sanction of the Court, such a mortgage being void ab initio under the Act.l Thus, where the defendant's name was forged by one Richard Jones to a joint and several promissory note for £20, dated the 7th November 1869 and purporting to be made in f avoui^ of one Brook by the defendant and Jones. Whilst this note was current the defendant signed the following memorandum in order to prevent the prosecution of the forger, at the same time denying that the signature to the note was his or written by his authority, " I hold myself responsible for a bill dated the 7th November 18G9 for £20 bearing my signature and Richard Jones in favour of Mr. Brook (the plaintiff)." Kelly C. B., Channel and Pigott B. B., held that this memorandum could not be construed as a ratification, that it was in fact, an agreement by the defendant to treat the note as his own. in consideration that the j^laintilf would forbear to prosecute Jones, and was therefore void as founded on illegal consideration.^ Doctrine not applicable to Criminal cases. — The doctrine of ratification does not apply in a criminal case. Thus where the question was whether, a prisoner who had been tried for murder, convicted, and sentenced to death, had been tried convicted and sentenced legally, inasmuch as the appointment of the Judge who tried him, had not then been sanctioned by the Government of India as required by Act XXIX of 1845, Sausse C. J., said : — " it was suggested, rather than attempted to be argued seriously, that the well-known legal maxim otnnis ratihahitio retrotrahitur et mandato priuri acquiparatwr applied to the present case, and that the subsequent ratification of the Act of the Governor in Council of Bombay, by the Governor- General of India in Council, validated all intei'vening judicial acts. No case was cited in which such a doctinne was upheld in a criminal case. There is neither principle nor authority to support the pro- position, and it would be a misapprehension and misapplication of the principle involved in the above maxim, which is founded upon the relation of principal and agent, to apply it to a case like the present. "^ Torts may be ratified.— An unauthorzed act founded on tort may be the subject of ratification, but a ratification of a tort will not free the agent from responsibility to third parties.* 1 Mauji Ram v. Tara Singh, I. L. II. 3 All , 852. * Brook V. HooJc, L. R. 6 Ex., 89. * Beg. V. Rama Gopal, 1 Bom. H. C, 107. * Rai Kishenchand v. 'Sheobaran, 7 All., H. C. 121. Eallijmohun Baichotvdhry v. Ranijoy Mundul, 2 Kaj, 289. Stepheii v. Ehvall, 4iM. & S., 259. Abdoola bin Shaik Ally v. Stphens, 2 Ind. Jur. O. S., 17. Rani Shamasundari Dehi v. Dukhu Mandal, 2 B. L. R., (A. C. J.), 227. Girish Chiinder Dass v- Oillenders ArbiUhnott ^' Co., 2 B. L R., (A. C. J.), 14,0. 72 TIIK LAW OF AOKNCY. Ratification of void and voidable acts, distinction— There is a distinc- tion InitwL't'ii Jiu ciKlcavour to i-jitily u void iiiid a voidiible act, the former cannot, as we liave seen, be ratiiied, but tlie hitter may be ; as where a nsufnic- tiiary mortgage was granted by the agent of a minor to one Jeetun iiam, as was aUeged, witliout authority, and subsequently the riglit, title and intoiest of the j)i-opcrty mortgaged was put up for sale in execution of a decree obtained against the minor ; upon the auction-purchaser at the execution sale endeavouring to take possession, Jeetun Ram set up his title under the usufructuary mortgage which liud then two years to run ; the Court held that the act of the agent was the act of the minor which, until avoided by a distinct act on the part of the minor een boiTowed by its manager for its own purposes : — held that the doctz'iue of acquiesenee and rati- ^ Grishchandra Das v Gillander, Arhathnot ^ Co., 2 B. L. R. O. C, 14.0. * Leiois V. Read, 13 M. & W., 834. See also Smifh v. Calo.j.m, 2 T. R , IbS, (note) and KaUiimohan Roy Choicdhnj v, Rimjoy Miuidul, 2 H:iy, '2ii'.). K 7']» Tlin LAW OK AOENCY. ficatiuii by the luiuidating- aiithoritieH would not aviiil to i«iulci' the bank liable to pay a dcht wliidi it. uevcr owcd.^ V. No ratification of part of a transaction- TlKrc can be no ratifi- cation of a part of a ti-ansaction. Where a person has ratified any unautlior- izod act ilono on his lichalf lie thereby ratifies the whole of the transaction, of which such act forms part. 2 So if a principal adopts the act of an aji^ent in respect of a purchase of property, he must take the property subject to the conditions which the a^'ent has incumbered it with, notwithstanding any secret arrana'emcnt between the agent and himself unknown to thii-d parties.^ Effect of ratification. — The effect of ratification is that the principal thereby becomes responsible for the acts done on his behalf, in the same manner as though such acts had been originally performed by his previous authority* As against the principal the ratification is retroactive and is equivalent to a prior command. Its effect as between the principal and agent is that imme- diately a ti'ansaction is ratified by the principal, the agent is relieved from all responsibility in the matter ; its effect on him is therefore to absolve him from all loss or damage arising out of his previous unauthorized act. Its effect as between the third party and the agent, is that it will relieve the latter from all responsibility, save in the case of a ratification of a tort committed by the agent ; for in such case both the principal and agent will be liable to such third person. Its effect as between the third party and the principal, is that as soon as the ratification has taken place, the former is in a position to demand from the principal full performance of the contract or other transaction entered into by his agent. As between the principal and third parties, although ratifi- cation Avill in general bind the principal and render him liable to be sued by such third party, yet this rule is not universally applicable ; where the act is beneficial to the principal and does not create an immediate right to have some act or duty performed by a third party, but amounts simply to the asser- tion of a right on the part of the principal, there the rule seems generally applicable. But where the unauthorized act done by the agent, would, if authorized, have the effect of subjecting the third person to damages, or of terminating any right or intei'est of the third person, it cannot, by rati- * La Banque Jacques Oartier v. La Banque B'Epargne de la cite dii Montreal, L. E. 13 App. Cas., 111. » Ind. Contr. Act, a. 199. Horil v. Pack, 7 East, 163. Smith v. Eodxon, 4 T. E., 217. Wilson V. Foulter, 2 Str., 858, Bristotoe v. Whitmore, 9 H. L. Cas., 391. * Ishenchunder Singh v. Shama Churn, W. E., (18G-4), 3. * lud. Contr. Act, s. 19(5. Soames v. Spenser, ] D. & E., 32. Maclean v. Dunn, 4 Bing., 722, 727. Festo7ijee Kessericanjee V. Gool Mahomed Suhib, 7 Mad. H. C, 369. Baron T. Denman, 2 Ex., 167, (188). RATIFICATION OF THE AUTHORITY. 75 fication, be made to have such effect. i Thus if A holds a lease from B, ter- minable on three months' notice ; C, an unauthorized person gives notice of termination to A. Such notice cannot be ratified by B, so as to bind A.^ This illustration appears to have been taken from a case put by Parke B., in delivering judgment in Buron v. Dennian,^ there it is said that notice to quit given by an unautliorized agent to a tenant is not good and cannot be ratified ; and tlje ground of this is, that it is a notice to quit an estate, and the tenant is entitled to such notice as he can act upon with certainty at the time when he receives it, so that he may deliver u.p possession at the end of the period of notice without being liable to further claims in respect to the remainder of the term.* So a demand of goods made by an unauthorized agent on behalf of the owner will not by subsequent ratification by the owner support an action of trover.^ It will be noticed that the unauthorized act of the agent cannot be ratified by the principal if it would have effect of sub- jecting a third person to damages, or of terminating any right or interest of a third person ; the word " damages " must, I think, be considered as meaning legal damages ; and it is therefore uncertain whether the section would cover a case when the third person is put to the expense and consequent loss in costs of a successful suit for specific performance brought against him by the person for whom an unauthorized agent is acting. If this view is correct, then an act by an unauthorized agent which merely makes a third person liable to a suit for specific performances, as distingushed from a suit for damages, might fall Avithin the principle of Bolton Partners v. Lambert^ and admit of the act being ratified by principal. That case was, however, decided in 1889, long after the Contract Act was passed, and is an extension of the principle of the relation back of ratification to the original act done by an unauthorized agent. But whether the case can be said to be within s. 200 or whether it falls without it, the case should not be passed over. In the case referred to, an offer of purchase was made by the defendant to Scratchley, who was the agent of Bolton Partners (the plaintiffs), but was not authorized to make any contract for sale ; the offer was accepted by Scratchley on behalf of the plaintiffs. The defendant withdrew his offer, and after the withdrawal, the plaintiffs ratified the acceptance of the offer by Scratchley. In an action by the plaintiffs for specific performance, it was held that the ratification of the plaintiffs related back to the acceptance by Scratchley, and therefore the withdrawal by the defendant was inoperative, and the plaintiffs wevc entitled to specific performance. It will be noticed that the question under the Contract ' Ind. Contr. Act, s. 200. ' Story, 2-16. a Ind. Coutr. Act s. 200 ill ('') * Solnmoin^ v. DaH-p.s, 1 Ksp., 83. « 2 Ex,, 167, (188). « L. R. ll Cli D., 205. 76 Tin: r,A\v of ahkncy. Act would bo vvlu'ilier (he mcI of Scrutclily in acccptiiifj the offer, wauld Aare tlio effect of siibjectiiit,^ 1 lie di ItiKlaiit /o daviacjcs, it might have «lorie ko, if he had merely accepted the ofler and failed to caiTj it tlirough ; but it would not ncccssar-ily lia\c done so, foi- lie iiiiirlit liav(; sold. Doctrine applied to acts done by Directors. Ratification of irregular transaction by assent of shareholders.-- There is, however, yet another class of cases which shoukl be referred to, and that is the class of cases in which the doctrine of ratification has been applied to acts done by directors of a Compaiiy when actinj^ in excess of their powers. Such transactions in the conduct of a Company's affairs though in their inception invalid, may never- theless be nmdc binding, as between the Company and it's shareholders, by tjie subsequent ratification or assent of all the shareholders even though siu'li assent be informal and shown only by acquiescence. It must how- ever, be remembered that transactions of a Company which are ultra vires in tlie strict sense of the word, are no more capable of being ratified than are transactions which are void for illegality. This may be seen from the words of Lord Chelmsford in the Ashhury liailivay ^' Carriage Company v. Riche} " The contract entered into by Mr. lliche Avas not a voidable contract merely, bnt being in violation of the prohibition contained in the Company's Act, was absolutely void. It is exactly in the same condition, as if no contract at all had been made, and therefore a ratification of it is impossible. If there had been an actual ratification, it could not have given life to a contract which had no existence in itself, but at the utmost it would have amounted to a sanction by the share- holders, to the act of the Directors, -which if given before the contract was entered, into, would not have been valid, as it does not relate to an object within the scope of the memorandum of association." Transactions, however, which are not ultra vires in the strict sense of the word, that is, which ai-e not outside the powers of the Company, but are outside the power of any majoiity, however numerous, not amounting to the entire body of the shareholders, can be ratified. It is of such transactions, I now propose to refer to. As to whether in such cases the acquiescence has been made out, is a question for the Judge, and to establish it, it has been said, that there mxist be something more than pro- bability, or even stronger than probability, there must be facts from which the inference of authority may legitimately be drawn.2 Axid again in PJionphate of Lime Co. v. Green^ it has been pointed out the direction which such facts should take, namely that, " in establishing such ratification it is enough to show circumstances which are reasonably calculated to satisfy the Court that the thing to be ratified came to the knowledge of all the shareholders who chose to ' L. R. 7 H. L., G53, (679). - Per Williams J., in Fitz,je,ald v. Dresstr, 7 C. B. N. S., 37i. » L. R. 7 C. P , 43. RATIFICATION OF THE AUTHORITY. 77 enquire, all having tlie oppoi^tanity and means of enquiry." And in Jehanglr Bustomji Mody v. Shamji Ltidha,^ Sarjent C. J., has said that " there can be no acquiescence without knowledge of the circumstances, but a knowledge of so much of the circumstances as would put a reasonable man to further enquiry is sufficient, and the fact that he makes no further enqu.iry, is the strongest proof that he acquiesces. Acquiescence by Directors. — Instances of irregular transactions by Direc- tors being ratified or not, have arisen most frequently in cases turning on the question, whether directors have borrowed money in excess of their powers. And on this question, the judgment of Wilson J., in Kernot v. Walton,^ is most instructive, as laying down the principles of law, when such transactions are sought to be valid on the ground of subsequent ratification. In the particular case refei'red to, under the articles of Association of a limited Company the directors had power, from time to time, without any previous consent of the shareholders to borrow any sum of money not exceeding Rs. 50,000, on the bill, bond, note, or other secui'ity of the Company upon such tei'ms as they might think proper, and had power \At\i the sanction of a special resolution of the Company previously obtained at a general meeting, to borrow any sum of money not exceeding in the whole, together with Rs. 50,000, the sum of Rs. 1,00,000 : one Kernot advanced in 1879 to the Company a siim of Rs. 60,000 ; no previous sanction was given to any of these advances, although a general meeting of share- holders was called on the 18th April 1879, at which a resolution was passed empowering the directors in addition to the sum of Rs. 50,000 mentioned in the Articles of Association, to borrow a further sum of Rs. 50,000. This resolution was, however, never confirmed. On the 4th October 1879, an extraordinary general meeting of the shareholders was held, at which meeting a resolution was passed sanctioning a mortgage to Kernot of the whole of the Company's property with the exception of a garden, to secure the payment of a sum not exceeding Rs. 1,00,000 for advances already made and to be made, with interest at 7°/^. This resolution was confirmed and the mortgage was executed in December 1879. Subsequently the Company was ordered to be wound up, and Kei-not advanced a claim against the Company for Rs. 1,20,787. A shareholder named Campbell had, however, objected at all those meetings to the borrowing of money for the use of the Company and to the mortgage, but his objections had been overruled. Wilson J., held that the transaction of the Company, if valid were valid on the ground of being within the scope of the authority of the directors, or on the ground of subsequent ratification. That the principles of law appli- cable to this latter ground, showed (1) that any act in excess of the Memoran- dum of Association is wholly invalid and cannot be ratified ^ls/i6?t/-)/ Txij.Co.\. ^ 4 Bora. n. C. (0, C. J ), 185. » I, L. K. C'alc, 1-4. 78 rni- t,A\v nv AfiRNCY. liichr,^ (2) tliat an acf of tho dircctoi's tdlra vires of the directors under the articles of ABsociatioii, biii not iHTj'Oiid tlic poworH of a majority as restricted by the arti- cles of Association, stands o>i a diCFeront footinjr, and that such an act can be rati- fied by a meeting of shareholders duly called Irvine v. The Union Bank of Auslralvi* (.'}) that if the articles of Association restrict the powers not only of the directors but of the majority of the sliai^cholders, and those restrictions have not been observed, so that the act done is outside the articles of Association altogether, nnd »//;-a rjres not only of the directors, but of the meeting which has done or sanctioned it, the act, provided it be within the scope of the Memorandum, may be i-atilied, but the ratification must be that of the whole body of share- holdings Phosphate Co. v. Cr-reen.^ That it was under the last head that the case then befoio him fell, and as the acts of the directors Avero beyond the powers of the directors, and beyond the powers of a majority, (because dealing with the question of borrowing, article 13 of the articles of association imposed re- strictions on borrowing, viz., that it must be with the sanction of a special resolution previously given at a general meeting, and this expressly exclud- ed a subsequent ratification by any majority of shareholders,) therefore in so far as the borrowing was in excess, it could only be ratified by the whole body of shareholders, which in the case of the Phosphate Com- pany V. Green, was held to have been given by the tacit acquiescence of the shareholders, who hatl full knowledge and opportunity to object. That at the end of 1878 the Company had borrowed in excess of its borrowing powers Rs. 13,000, and that the resolution of 13th Api-il not being a special reso- lution, the validity of the borrowing under it must depend on ratification. That although in March 1880 the report and accounts were circulated to the shareholders, -which in April wei-e adopted, yet there was clear evidence that Campbell one of the sharcholdei-s had dissented throughout from the whole of these transactions, that it could not be assumed that he had ever intended to ratify any of the transactions, which were done irregularly, and that the absence of assent by him was as sufficient as the objection of all. The learned Judge therefore found that the excess of borowing beyond the powers ileliued in the articles of Association, was not good in the first instance, and had never been effectually ratifietl as to all sums borrowed within the Rs. 50,000 limit, but that as to all sums borrowed under tlic mortgage within the 100,000 limit, with all interests, the loan was valid. On appeal from this judgment, the Court without demurring to the principles of the law laid down by the learned Judge held following In re Cefu Mining Company^ Waferlotr v. Sharped and in re German Mining Co.^ that there was a distinction between loans which a ' L. R. 7 H. L., 053. * L. R. 7 liq , 83. » I. L. R, 3 Calc, -280. ' I- R. 8 Fq., 50J. » L. R. 7 C. P., 43. • i DcG. M. & G., 19. RATIFICATION OF THE AUTHORITY. 79 Company is empowered to raise under its borrowing- powers, and debts which in meeting its cuirent liabilities and in the actual carrying on of its affairs, the Company or its agents, on its behalf, have contracted, and that the advance by Kernot did not amount to a borrowing within the ar-ticles of Association. The decree of Mr. Justice Wilson was therefore amended as far as it disallowed that portion of the debt due to Kernot previously to October 1879 in excess of Rs. 50,000.1 Ratification of particular acts done by directors in ex;cess of their general authority given by the Articles of Association, does not extend the power of the directors so as to give validity to acts of a similar character done subsequently. — This is exemplified by the case of Irvine v. Union Banh of Australia.'^ In that case on the k!3rd December 1867, the directors obtained a letter of credit No. 150 for £10,000, and on the 11th September 1868, a letter No. 141 for £50,000, and stated to that effect in their report of the 29th October 1868, which was ratified at the half yearly meeting of that date. Letter No. 150 expired on the 29th March 1869, but was renewed. On the 9th Septem- ber 1869, the directors obtained another letter of credit No. 153 for £50,000, but this act was never assented to or ratified by the shareholders. In a suit by the Union Bank against the assignee of the right, title, and interest of the Oriental Rice Company to enforce an equitable mortgage which had been granted by the Company to secure advances made by the Bank, which with interest amounted to £15,296, it appeared that the then actually paid up capital was never more than £17,000 ; and that at the end of 1870 the balance due to the bank was £8 ; and that the sums claimed in the suit had been advanced in February 1871, viz. £10,000, under letter No. 150 and £50,000, under letter No. 153. It was con- tended by the Bank that the limitation of the power of borrowing was merely a limitation of the authority of the directors, and that it was not a limitation of the general power of the Company, or of the whole body of shareholders and that the acts of the directox'S in excess of their authority might be ratified by the Company and rendered binding. Their Lordships considered that this con- tention was correct, that it would be competent for a majority of the share- holders present at an extraordinary meeting convened for that object, and of which object due notice had been given, to ratify an act previously done by the directors in excess of their authority ; and that they would not have been pre- pared to say that if a report had been circulated before a half yearly meeting distinctly giving notice that the directors had done an act in excess of their authority and asking the meeting to confirm the report and ratify the act, this might not be sufficient notice to bring the ratification within the competency of the majority of the shareholders present at the half ycai'ly meeting; but that if * Ketnot V. Walton, I. L. R. 9 Calc, 14, * L. R. 2 App. Cas., 36G; I. L. R. 3 Culc, 280. go I 111: I. AW r)i' AfiKNCV. Ml,. ,,l)i(.(t \v:is to give (lir iliivctois in future an oxtciicLid autliority beyund t.lu'ir l)()iT()\viii<4 powers, their Lordships cousidcrcd that it would be an alteration of the provisions contained in the articles which under those articles could be made l)y h vote of one-lialf of the shiii-eholders. Their Lordships, however, were of opinion that there was no eviih-nec to show that any sufficient notice of the effect of the report, which was intended to be presented at the half yearly meeting, was given to the shareholders so as to lead the absent shareholders to iman-ine that the directors intended to repoH that they had exceeded their authority, or that, by the adoption of the report to be laid before the meeting, an act of the directors in excess of their autliority could be rendered binding upon the whole body of shareholders. Their Lordships, therefore, held that the ratification of the report of the 29th October 1868, did not authorize the direc- tors to obtain the letter of credit. No. 153 in September 1869, or to borrow £5 000 thereon in February 1871, and that the ratification of the letter of credit No. 150 for £10,000 did not authorize the renewal of it, or the acting upon it, after the term originally limited had expired ; and that the ratification at a half yearly meeting of a particular act of the directors in excess of their powers would not extend the authority of the directors so as to do similar acts in future.^ With reference to two apparently divergent passages in the case at pages 374, 375 of th.e report. Cotton L. J. in Grant v. United Kingdom Stvitchback Ii)j.^ expressed his opinion that being in the same judgment they must be taken to- gether and that they appeared to express, " that power to do futui-e acts can- not be o-iven to directors without altering the articles, but that a ratification of an unauthorized act of the dii-ectors only requires the sanction of an ordinai7 resolution of or general meeting if the act is within the power of the Company." Ratification of alteration in Articles of Association. — But the ratifica- tion of an unauthorized contract by a Company is entirely different from the ratification of a contract which is prohibited by the Articles of Association. Thus where the articles of a Company known as Thomson's Patent Graseby Switchback Railway Company authorized the sale of part of its undertaking to any other Company, and contained a proviso prohibiting any director from voting in respect of any contract in which he was interested. The dii-ectors of the Thompson Company on the I3th September 1888 entered on behalf on the Company into a contract for sale of part of its undertaking to the United Kino-dom Switchback Railway Company, of which all the directors of Thomp- son's Company except one, were directors. Article 152 enabled the Com- pany to alter their articles by special resolution. On the 28th October 1888 an extraordinary meeting of the shareholders of the Thompson's Company, ' Irvine v. Union Bank of Australia, L. R. 2 App. Cas., 30t.;. I. L. R. 3 Calc. 2S0. » L. R. ■to Ch. D., 139. KATIFICATION OF THE AUTHORITY. 81 was held, at whicli a resolution was proposed " that the agreement of the 13th September 1888 between the Companies be and the same is hereby ap- proved and adopted, and that the directors be and are hereby authorized to carry into effect the same agreement." The notice summoning the meeting, stated that the resolution would be proposed, but did not suggest any reason why the contract could not be carried into effect without the sanction of a general meeting. The resolution was passed, but not in such a way as to make it a special resolution. A suit was then brought by one Grant against the two Companies to restrain them from carrying out this agreement and an injunction was moved for on the ground that the directors of Thompson's Com- pany had no authority to enter into the contract as the articles prohibited a director from voting upon a contract: in which he was interested. Mr. Justice Chitty refused an injunction, and on appeal it was urged for the appellant that the directors could not, being interested, make a contract which would bind their Company, and that a general meeting could not by a mere ordinary resolution affirm that contract, for that to do so would be an alteration of the articles, which could only be affected by special resolution. Lord Justice Cotton on this last point said ; " The ratifying a particular contract which had been entered into by the directors without authority, and so making it an act of the Company, was quite a different thing from altering the articles. To give the directors power to do things in futiire which the articles did not authorize them to do, would be an alteration of the articles but it is no alteration of the articles to ratify a contract which has been made without authority." On the question as to whether the contract was a nullity, his Lordship said, " There was a contract entered into on behalf of the Company, though it was one which could not be enforced against the Company, article 100 prevented the directors from binding the Company by contract, but there was nothing in it to prevent the Company from entering into such a contract." Lord Justice Bowen held that the Company did not purport to alter the limits of the authority given generally by the articles to the directors ; that although the articles did limit that authority, yet there was nothing in them to prevent the Company from giving special power to the directors in a particular case as to a particular contract ; the Company having adopted the contract at a general meeting made it their own, which was a ratification of an unauthorized act, not an alteration of the articles.- » Grant y. United Kingdom SwifchhacJc Ry. Co , L. R. 40 Ch. D., 135 : 58 L. J. Ch. D., 211. LECTURE IV. REVOCATION OF THE AUTHORITT. How authinity may be revoked — May be express or implied — Examples of express and implied revocation — General rnle applicable to all cases where authority has not been exorcised at all — Exception where authority is coupled with an interest — If exercised must be revoked on reasonable notice — What is reasonable notice — No effect on agent and third parties until notice — Revocation of agency for a fixed period — Compensation for revocation of Buch agency — Renunciation by agent — By completion of agency business — By the death of the principal — Exception to this rnle — Agent's duty on termination of agency by death of principal — By death of agent — By unsoundness of mind of Principal — Knowledge of nusoandnesa of mind — By unsoundness of mind of agent — By insolvency of Principal — Notice of insolvency — Agent's insolvency— Effect of insolvency of agent on principal's rights — Termination of authority of sub-agents— Resume — Revocation of Trusts. How the authority may be revoked. — The first and most obvious mode by wliich revocation can be made, is by a revocation on the part of the principal. For inasmuch as the authority in the first place is of the will of the principal and for his benefit, it follows that it can be exercised only so long as the principal desires. The general rule therefore is, that an agency may be terminated by the principal revoking his authority.^ Express or implied. — Such revocation may be either express, or implied by cuuduLt.2 Express revocation may be given either in writing by formal or informal instrument, or verbally, but it should be clear and unmistakable. It may be implied either by infei'ence from the contents of the contract of agency, or from, as has been stated, the conduct of the principal. Express. — It is hai'dly necessary to give instances of express revocation, but one ma}- be found in Hurst v. Watson where one Watson requested a man named Hurst to sell for him a plot of laud on the esplanade in Bombay at any rate exceeding the price at which he Watson had himself bought it, agi'eeing to give Hurst the agent, half the net profits of the sale as remuneration ; and Watson shortly after giving these directions wi-ote to Hurst a letter revoking the authority given, which letter was duly received by Hurst. Subsequently to this revocation. Hurst who had secured a purchaser for the land, com- municated this offer to Watson but it was not accepted by him. On a suit brought on the agreement by Hui"st against Watson, it was held that Hui'st could not recover on the agreement, which had not been performed on his part, '■ Jnd. Contr. Act, b. 201. Vinor's Case 8 Co. 81 b. Bullakee LaU v. Indxirputee Ktncar 3 W. K. 41. • Ind. Contr. Act, s. 207. REVOCATION OF THE AUTHORITY. 83 the obtaining the offer after revocation not having the effect of putting him in the same position as if the agreement had been performed.^ A fui'ther instance of an express revocation is found in Toppin v. Healey,^ there the defeudant employed the plaintiff to negotiate a loan on some of the defendant's property, the plaintiff to be paid oommission if he procured the loan, but none if he did not ; before the plaintiff had done anything in the matter the defendant wrote to him, varying the terms on which he would accept the loan. The plaintiff endeavoured to obtain it on the latter terms, but failing to do so obtained an offer for a loan on the terms of the first authority, which the defendant refused to accept. The plaintiff sued the defendant for commission ujoon work and sei'vices rendered. Erie J., held that it was clear law that where an agent is employed, that employment may be revoked before performance, and that the plaintiff was not entitled to recover. Implied. — Instances from which implied revocation may be inferred pre- sent more difficulty, and no general rules can be well laid down, but there are cir- cumstances under which it can be inferred. For instance a power containing a provision for the donor to be at liberty to appoint another agent in the place and stead of the agent originally appointed, has been held, if exercised, to be an implied revocation of the authority.^ And again as where a man employs an- other to sell a house for him and before that other sells the house, he sells it himself ; or as where I appoint an agent to sell my house and I subsequently appoint another person to sell the same house for me, this would amount to an implied revocation. Decisions on this point are, however, few and indirect; the authority most in point is the case of Dic/bw- son V. Dodds.^ There the owner of property signed on a Wednesday a document which purported to be an agreement to sell it to one Dickinson at a fixed price. But a postscript was added which he also signed that " the offer was to be left over until Friday 9 A. m." The owner sold it to another person before Friday. Subsequently, before 9 A. M. on Friday, Dickinson accepted the offer : held tliat the offer to sell to Dickenson could be withdrawn before acceptance, and that a sale to a third party which came to the knowledge of the person to whom the off'er- was made was an effectual withdrawal. General rule when applicable. — The general rule, however, that an agency may be determined by the principal revoking his authority, is strictly applicable to all cases whei'e the authority has not been exercised at all.'' Tt * Hurst V. Watson, 2 Bom. H. C, 400. See also Liimley v. Nkholso7i, W. N., (ISSG). 12U, =* 11 W. 11. (Eng.), 46(5. ^ See Vishmicharya v. Ramchandra, I. L. 11. 5 Bom., 253. Sec also Bri^^tcii- v. T.iylor, 2 Stark, 50. " L. K. 2 Ch. D., 463. Sec also Stevansun v. McLean, L. R. 5 Q. B. D., 351. * Ind, Coiitr. Act, s, 203. Gibson v. Minet, 9 Moo ,31. 84 TiiK r.wv or ackscy. will III)), liowevor, !i|>|>ly wIkti! (he fif^ent hiis himself an intereBt in th(3 BuLjecfc matter of the }iV AdKNCY. it is assmnod, pofiRo, but ii doos not follow that tlio work of tlip ny-f-Ticy has boon ciin-iiMl out to an end ; tluTO may be still sometliinj^ to bo done, although the period lixrtl iiiioM may liave come to an end. Instances may arise in cases where one; has ;i|)|niintod another his a<^ent durinpf such time as he may be away from India, and siKrli an agency would, irrespective of the work being carried out, be terminated by the return of the principal ; or where there is a particular usage in the particular trade in which the agent is employed, to the effect that an authority to buy or sell shall continue for a limited time only, the mere lapse of time has been held to operate as a revocation of the authority.' And as no man can become agent of another, without that other's will, where the will expressly declares that the one man is to become the agent of that other for a fixed jjcriod oidy, it appears to be clear that upon the expiry of that period, the ageuev must expire. By the death Ot the principal. — The death of the principal is also another nuans by wliiL-h tlie agency is put an end to.2 In such case there is no one for the agent to represent. Again an authority executed by another presupposes the giver, at the time of the execution of the authority, to be able to do himself the act delegated to his agent ; for the agent is put into the place and stead of the principal, and is to act in his name.^ Therefore unless there is something in the nature of the authority to keep it alive, it will naturally cease. But nevertheless although the general rule is that the death of the principal termi- nates the agency, it will not do so, as against the agent until such death is known to him, nor as against third parties until it is known to them.* But where, as has been above stated, there is something in the nature of the authority to keep it alive, it will not nevertheless terminate by the principal's death, as for instance, where the authority given to the agent is coupled with an interest in the subject of the business of the agency.^ This is in accordance with the law of Eno-land,^ and although it has been said by a learned text-writer'' that s. 202 only applies to voluntary revocations, yet it appears that it was not the intention of the framers of the Act to make this distinction. Section 201, the marginal note of which is "termination of the agency " deals with revocation, remunera- tion and other terminations of the agency, and gives the genei'al rule on the ' Dicl-eniion v. Liltcall, 4 Camp., 279. •' [nd. Contr. Act, s. 201. " Combe's case, 9 Co. 76, 77, Comyn's Digest, " Aatl)i>riry E." * lud. Coutr. Act, s. 208. Act VII of 1SS2, s. 3. » Ind. Contr. Act, s. 202. • The KiiKj v. Corporation of Bedford Level, 6 Enst, 35i> and Story on Ag., 489, see also 2 Kent's Comm., Lect. 41, 645-G16, see however the distinction drawn in Lepard v. Venf^n,2 Ves. & B., 51. ' Macrae on Contr., p. 157. KEVOrATTOX OP THE AUTHORTTT. 93 subject, subject to the exceptions laid down in the sections which follow it referring to the " termination of the agency." Section 203 no doubt deals with the revocation of an agency, and contains a direct reference to s. 202 ; and in support of Mr. Macrae's view, there is the fact that s. 202 does not run, " cannot in the absence of an express contract be terminated, either by the principaVs voluntary power to revoTce^ or by his death, or insanity, to the prejudice of such interest." But on the other hand both sections 201 and 202 deal with the "termination of the agency;" and therefore the words of s. 202 are broad enquD-h to include a termination of the agency by death. It appears more- over- from the illustrations to section 202, that it was intended that the section should deal with the case of a termination by death ; and it would there- fore ajDpear that the words italicized above were carelessly omitted from s. 202. It is therefore submitted that the law in this country is the same as it is in England on this point ; moreover where the agent has an interest in the author- ity, he is no longer an agent as to such interest, but a principal acting in his own name in pursuance of a power limiting his interest ; and the reason on which the general rule is founded, therefore ceases. The words " has an interest in the subject matter of the agency," make it, I think, clear that there must be an interest in the subject matter itself, and not merely in the execution of the power. A warrant of attorney to confess judgment has been held in England not to be in the sense of the law, a power coupled with an interest, '^ and though when it has been given by two persons, it is revoked by the death of one of them -^ yet when given to two persons, it is not revoked by the death of one of them.^ Partnership terminated by death. — The rule of law with regard to the death of a partner, is that such death terminates the partnership,^ but this also would be, where one partner is acting as the agent of the firm, subject to the rule as to notice laid down by s. 208 of the Contract Act, or at least as far as old customers of the firm are concerned ;^ where however the agency is terminated by the death of the principal, the agent is nevertheless to take on behalf of the representatives of his late principal, all reasonable steps for the protection and preservation of the interests entrusted to him.^ Thus where the subject of the agency between the agent and his late principal, is the sale by the latter of horses entrusted to him for the purpose, the agent on notice of the death of his principal would be bound to feed and stable such horses until, ' Oades v. Woodward, 1 Salk., 87. FuJlor v. Joceh/n, 2 Str., 882. ^ Gee V. Lane, 15 East, 592. 8 Todd V. Todd, 1 Wils., 312. * Ind. Contr. Act, s. 253, (cl. 10). * Chunder Churn Dutt v. Eduljee Co)va.fjee Bijnee, I. L. R. 8 Calc, 678, See alno Ind. Contr. Act, s. 264. « lud. Contr. Act, s. 209. 94 Tl?i: t.AW fiF A Reynolds v. Boivley, L. R. 2 Q. B., 479. * In the matter of Morgan, I. L. R. 6 Calc , 633. "807. ^ Ec-parte Boden, re Wood, 28 L. T. N. S., 174. Ex-parte Buck, re Faw<:u>>, 34 L T. X S , * See ex-parte Harris, in re Pulling, L. R. 8 Ch., 48; cx-parte Ware, in re Courton, L. R. 8 Ch., 144 ; ex-parte Montague, in re O'Brien, L. R. 1 Cli D., 554. » Ex-parte Brooks, in re Forhes, L. R. 23 Ch. D.. 261. Cracrou: v. Salter, L. R. 18 Ch. D., 30. See, however, Harris v. Trueman, L. R. 9 Q. B. D., 264; L. R. 7 Q. B. U., 34u. REVOCATION OF THE AUTHORITY. 103 It is also in England excluded from applying wliere the property in the hands of the agent is trust property ; and this was one of the grounds of the decision in Harris v. Trtieman. There is, however, in England now statutory authority for this proposition.! Whereas the Indian Insolvent Act is silent on the subject. There are no reported decisions on the applicability of this rule to this country ; but the question was raised, I think, in the insolvency of Messrs. Cowie and Company, although the decision does not deal with the point. There is, however, little doubt, but that this rule would be observed in the case of an agent who acting as trustee, is at the same time carrying on for others a general or special agency business.^ The cases on this point, de- cided before the English Bankruptcy Act came into force, are numerous.^ It has, however, been held in this country that the principle that a person who is imder an obligation to convey property to another is, in a Court of Equity, a trustee of such property for the latter, does not apply in cases where the reputed owner- ship clause of the Insolvent Act is in question.* Termination of authority of sub-agents. — Lastly with regard to the termination of the authority granted to a sub-agent, who, it must be remembered, is a pei-son employed by, and acting under the control of, the original agent ; such an authority terminates by the termination of the authority of the agent. For as the agent cannot after determination of his own power do any act per- sonally so as to bind his principal, so neither can the sub-agent, acting in his stead, inasmuch as the source of his authority has ceased to exist. And for the purpose of deciding whether his authority is terminated the same rules, as have been referred to above when dealing with the termination of an agent's power, are applicable to the case of the termination of the powers of the sub- agent.^ Summary.— It has therefore been seen that an agency may be terminated by the act of the principal or agent, or by operation of law, in one or other of the following modes — 1. By the principal revoking his authority. 2. By the agent renouncing the business of the agency. 3. By the business of the agency being completed. 4. By either the principal or agent dying. 5. By either the principal or agent becoming of unsound mind. 6. By the principal being adjudicated an insolvent. ' Bankruptcy Act of 1869, s. 3, sub-s. 5. '■' See In re Hallett's E.'^tate, L. R. 13 Ch. D., (707). ■■' Boddington v. Castelli, 1 EI. & Bl., 879 ; 17 Jur., 781, Winch v. Keeley, 1 T. R., 619. Garpenter v. Marnell, 3 B. & P. 40. Gladston v. Haduum, 1 M. & S,, 526, Parnham v. Hurst, 8 M. & W., 743. * Bhavan Mulji v. Kavasji Jasatcala, I. L. R. 2 Bom., 542. ' Ind. Contr. Act, s. 210. 10|. Tlir. t.AW or AflRN'^Y. 'IMic iihovc arc tlic onK niodcs laid down In' the lj(!<^isliituro in this country. 'J'hcrc arc, however, (jLlicr ways in wliich .an agency can be terminated under English and American hiw, to wliicli it may bo well thai attention Bhould be drawn. I allude, firstly, to the termination of the agency by the insolvency of the " agent (to which subject I have in previous pages drawn attention), and secondly, to termination by the extinction of the subject matter of the agency. Now " extinction of the subject matter " may take place by an act of God or by inevitable accident such as by fire, storm or flood, or by the Queen's enemies, or even by a foreseen event such as the coming of age of a ward who is under the charge of a guardian liaving power to deal with tlie ward's property, and whose power would therefore cease on the Avard's attaining full age. These matters are not as I have said expressly provided for by the Legislature with regard to agency, but in cases where an act of God or inevitable accident has made the carrying out of the agency business impracticable, the contract of agency Avould itself become void under s. 56 of the Contract Act. Revocation of Trusts. — The Indian Trusts Act^ of 1882 by s. 78 declares that a trust created by will may be revoked at the pleasure of a testator ; that a trust otherwise created can be revoked only — (a) where all the beneficiaries are competent to contract — by their con- sent ; (h) wliere the trust has been declai-ed by a non-testamentary instrument or by word of mouth — in exercise of a power of revocation expressly reserved to the author of the trust, or (c) where the trust is for the payment of the debts of the author of the trust, and has not been communicated to the creditors — at the pleasure of the author of the trust. But no trust can be revoked by the author of the trust so as to defeat or prejudice what the trustees may have duly done in execution of the trust. * As to the places in India in which this Act is enforced, see s. 1 of Act II of 1882 ; and page 52 supra. LECTURE V. NATURE AND EXTENT OF THE AUTHORITY. Nature of authority — Exjjress or imiDlied — Extent of — Special, General, and Universal — Secret limitations — Apparent authority — Powers incidental to all authorities — I. Everything necessary to eiiect it — Rule of construction — Powers necessary, examples of — Land Agents. Naibs and Gomastas— Mookteahs — Other agents — Acknowledgment of debts — Directors — Statutory authority of certain agents — II. Everything justified by usage — Powers not incidental to those in written contract not introduced by custom — Knowledge of usage — Exception in cases of maritime insurance — Robinson v. Mollett rules deduced from — When oral evidence of usage admissible — Usage how proved— Time bargains — III. Powers in an emergency — Examples — Ground on which masters of ships powers iu necessity are based — Duty to communicate with employers on emergencies — Examples — ■ Authorities incident to certain classes of agents— Partners — Bankers — Commercial partners — Kurta of joint family — Attorneys — Masters of ships — Commission Agents — Auctioneers — Brokers — Insurance brokers — Ships brokers — Part owners — Trustees — Hus= band and wife — Hindu wife — Karnavans — Agents of pre-emptor — Counsel — Pleaders — Factors — Insurance Agents — Government Agents. The nature of the authority. — The authority is in it's nature either express or implied ; It is said to be express, when it is spoken or wi'itten ;'■ It is said to be implied when it is to be inferred from the circumstances of the case ; and things spoken or written, or the ordinary course of dealing,^ may be accounted as circumstances of the case.^ It may be inferred from the acts and conduct of the principal, as from previous employment in similar acts ;* from adoption of acts of a like kind ;^ from tacit consent or acquiescence ;^ or from the nature and circumstances of a particular act done by the principal.'' In Pickering v. Busk, a principal having put goods into a broker's hands, was held bound by a sale made by the broker without authority, because the Cou.rt said, the agent could have them for no purpose but sale. The nature and extent of the powers vested in an agent are not so much a matter of law as a matter of fact to be decided in each case in which a question of agency arises.^ » Ind. Contr. Act, s. 186. 2 (Sutton- V. Tatham, 10 Ad. & EL, 27. » Ind. Contr. Act, s. 187. * Bunivai-ee Lall Sahoo v. Mohesh Clmnder Sing, Marsh. 541, Narainea Koonoaree v. JoogiU Eishore Boy, 6 W. R., 309, Macdonnel on Master and Servant, p. 246. * Multani M. Ghutumal v. Thaker S. Neranji, 7 Bom. H. C, 39. « Wilson V. Tumman, 6 M. & G., 242 ; Piclcard V. Sears, 6 Ad. & El. 469, (474). ' Pickering v. Busk, 15 East, 38. Uazardy. Treadivell, 1 Str. 506, Barnazotti r, BoiOiH^, 7 C. B. (N. S.) 851. Bimel v. Sampayo, IG. & P., 254. * B.am BvMh Lall v. Kishore Mohun Shaha, 12 W. R,, 130. ion TriF LAW OF AfJKNCY. The extent of the authority. — In extent the authority Ih cither special, general or universal. It is said to he special when it is limited to a particular act, such as to buy a house, execute or register a conveyance ; it is said to bo general when it is given to do all acts connected with a particular trade, busi- ness, or employment ; and universal when it is given to do every act of every description that can by any possibility be done by the donor ;^ this latter power seldom occurs in pi'actice and requires no comment. Lord Ellcnborough has defined a general authority as, not importing an unqualified authority, but, as being one derived from a multitude of instances.^ Secret Limitations. — But whether the authority be special or general, as between the pi-iucipal and the agent, the former is only bound by such acts of the latter as ai-e within the authority given ; but as between the principal and third parties Avhere the power given is a general power, the principal will be bound by all acts of his agent within the scope of the authority which he holds him out to the world to possess ;2 and no secret instruction, unknown to third persons dealing with the agent qualifying in any way the apparent authority will be of any avail to save him from such liability : But as between the prin- cipal and third parties where the authority given to the agent is a special one, if the agent exceeds the special authority given, the principal is not bound by his acts, unless he has held him out as having a larger authority ; I have had some doubts, whether section 237 of the Contract Act, would warrant this exception last mentioned, but I think the proposition is fully borne out by the case of Mackenzie, Lyall v. Moses,"^ which is a direct decision on that section. This case will be found fully set out later on when dealing with the liability of the principal to third parties. It is true that the judgment of the Judge of the Small Cause Court referring that case to the High Court, appears, from the passages in Story and Kent which he has cited, to consider that even though the pi-incipal held out the special agent as having a larger authority, he would not be bound, yet the decision of the High Coui't does not go that length, and warrants, as, I have said this exception to the rule. The principle upon which this rule is based, being that where one of two innocent pai'ties must suffer, by the fraud or negligence of a third pax-ty, it is he who enabled that person by giving him credit to commit the fraud who should be the sufferer.^ It follows therefoi-e from this that if the principal has not by acts or conduct * Doorga Churn v. Koonj Beharee Fande;/, 3 Agra H. C. 23, Levi's Com. Law, Cb. Yl, s. 1. » Wliitehead v. Tuckett, 15 East 400, (408). • Ind. Contr. Act, b. 237. ♦ Maclienzie, Lyall ^ Co. v. Moses, 22 W. E., 156. Ind. Contr. Act., s. 237. » Fitzcrbert v. Mathew, 1 T. R., 12 (16) per Bnllcr J. Gordon v. James, L. R., 30 Ch. D., 249, Sir Robert Wai/land's Case, 3 Salk., 233, Bolton v. Hillersden, 1 Lord Kay, 225, Vdiitehead v. Tacliett, 15 East., 400. NATURE AND EXTENT OF THE AUTHORITY. 107 induced third persons dealing* witli his agent to believe that the agent, whether siaecial or general, has any authority other than that contained in or incidental to the power itself, or if the extent of the power is known to such third persons, then any person dealing with such agent would do so at his risk, if it should turn out that the agent has exceeded his power. And if such third person makes no enquiry into the extent of the agency whilst being aware that the person he is dealing with is an agent, he will be taken to know the limits of the agency.i Thus it is said that where an agent is clothed with ostensible authority, no private instructions prevent his acts within the scope of that authority from binding his principal. Where his authority depends, and is known, to those who deal with the agent, to depend, on a written mandate, it may be necessary to produce or account for the non-production of, that writing, in order to prove what was the scope of the agent's authority.^ The principle on which a person, having clothed an agent with apparent autho- rity, but restricted it by secret instructions, is bound (if the other party choses to hold him so) to one who, in ignorance of the restrictions, contracts through the agent on the faith of the agent having the authority he seems to have, is explained in Freeman v. Gooke,^ there it is said, " The principal does not actually contract, but the person, who thought he did, has the option to preclude him from denying that he contracted, if the case be brought within the very accurate statement of the law made by Parke, B., namely, " if the person means his representation to be acted upon, and it is acted upon accordingly ; and if, whatever a man's real intention may be, he so conducts himself that a reasonable man would take the representation to be true, and believe that it was meant that he shou.ld act upon it, and did act upon it as true, the party making the representation would be equally precluded from contesting the truth ; and conduct by negligence or omission, where there is a duty east upon a person by usage of trade or otherwise to disclose the truth, may often have the same effect." Again as Lord Ellenborough points out in Pickering v. Busk,^ " Strangers can only look to the acts of the parties and to the external indicia of property, and not to the private communications which may pass between a principal and his agents ; and if a person authorize another to assume the apparent right of disposing of property in the ordinary coui-se of trade, it must be presumed that the apparent authority is the real authority ; I cannot subscribe to the doctrine that a broker's engagements are necessarily, and in all cases limited to his actual authority ; it is clear that he may bind the principal within the limits of the authority with which he has been apparently clothed with respect to the » Levy V. Richardson, W. N. (Eng.), (1889), 25. * National Bolivian Navigation Company v, Wilfion, L. R., 5 App. Cas., 209. ■ 2 Ex., 654, (663). ♦ 15 East, 38, (43). 108 Tril' LAW OP AGENCY, fiubjeci matter, and there would he no safety in mercantile transactions if he could not." Instances of apparent authorities. — In Ncdd v. Bmuford} ono Wedge, the Uuke of Beauford's agent, had a general authority to conduct the business of an Inclosnrc, to attend the meetings, and to represent the Duke upon those occasions. The Duke gave him particular instructions, limiting his authority as to one part of the business, which restricted him from exchanging a certain wood except for woodland ; but he did not communicate his instructions or those limits to his authority either to the Inclosui'c Commissioner or to the other party, although he did so to the agent of the other party. The Commissioner allotted lands, which were not woodlands, for the Duke's wood, and the Lord Chancellor said, that if " the agent had acted inconsistently with the instruc- tions which he received in that particular, being a general agent for the pui'poses of the Inclosm-e, he considered, so far as his acts went, they were binding upon the Duke." Lord Campbell said the Duke's agent was a general agent for the exchange " the secret limitation imposed by him on the authority of the agent uncommunicated to the other side goes for nothing." Lord Cottenham also said " Having given this general authointy can he (the Duke) be heard to say that this authority was limited by private instruction of which those who dealt with the agent knew nothing." Similarly where a Eui'opean fii'm employed an agent to make purchases of jute for them in the bazaar, upon orders which wei-e in force for two days, and they imposed restrictions on their agent's authority to pledge their credit, which restinctions were not made known to those with whom the agent dealt. The agent paid for jute purchased by his own cheques, but gave receipts for the jute in the name of his principals. One of the vendors sued the Eui'opean firm for jute supplied, held that the arrangement between the principal and agent as to credit not being known to the jute dealers generally or to the parti- cular dealer suing, the firm could not cut down or prescribe the apparent general authority by secret limitations and restrictions of which the dealers had no knowledge. 2 So where A employed B to manage his business and to carry it on in the name of B and Company, the di"awing and accepting bills of exchange be- ing incidental to the carrying on of such business, but it was stipulated between them that B should not di-aw or accept bills. B accepted a bill in the name of B and Company, held that A was liable on the bill in the hands of an indox'see who took it without any knowledge of A and B or the business. Cockbum C. J., said, " The case falls within the well established principle that if a person employs another as an agent in a character which involves a particular author- ' 5 Jnr., 1123 ; 9 Jnr., 813, on appeal ; 12 CI. & F., 248, (273). * Gratit Smith v. Juggobando Shan; 2 Hyde, 301. NATURE AND EXTENT OF THE AUTHORITY. 109 if J, lie caunot by a secret reservation divest him of that authority " and Mellor J., said, " It would be very dangerous to hold that a person who allows an agent to act as principal in carrying on a business and invests him with apparent authority to enter into contracts incidental to it, could limit that authority by a secret limitation."'^ Further illustrations of this rule may be found in the cases of Spink v. Moran,^ Smith v. McGuire.'^ And the rule has equal ap- plication to the case of partners.* Extent of every authority. — Before entering into the subject of the powers which are incidental to every authority, it will be advisable to draw attention to the particular words of section 188 of the Indian Contract Act, which section deals with the extent of the authority of agents. It will be noted that although the section makes no express mention of the terms, " general " or " special " authority, the first paragraph of that section purports to define the extent of the authority of a special agent, and the second paragraph, the extent of the authority of a general agent. The authority given to a special agent, is said to include an authority, to do every lawful thing which is necessary in order to carry the special authority into effect. Whereas the authority given to a general agent is said to include not only the last mentioned authority, but also one to act in accordance with the usage of trade. From the first paragraph therefore, it might be inferred that a special agent is not entitled to act accord- ing to the usages of trade ; but this section must be read with s. 1 which enacts that nothing in the Act shall affect any usage or custom of trade or inci- dent of any contract not inconsistent with the provisions of the Act. Moreover, irrespective of this section, it is submitted that the words of section 188 are sufficient to include a custom of trade. For if the words " to do everything necessary " in the first paragraph of section 188 are construed to include amongst other necessities a right to act according to the usage of trade, no difficulty will arise. This construction has already in England been put upon the word " necessity " in Clough v. Bond^ by Lord Cottenham who in speaking of the nature of a loss incarred by a trustee, and remarking that a trustee is not liable for loss occasioned by an authorized investment, goes on to say " So when the loss arises from dishonesty or failure of any one to whom the posses- sion of part of the estate has been entrusted, necessity, which includes the regular course of business in administering the property, will in equity exonei'ate the personal representative." As to this remark, Jessel M. R., in Speight v. Gaiinf,^ ' Edmunds v. Bushell, L. R., 1 Q. B., 97. * 21 W. R., 161, 178. * 3 H. & N., 554. * Gleadon v. Tinkler, Holt N. P. Cas., 586. Liudley ou Piirfcuersliip, pp. 168, 169 (5th ed.). » 3 My. & Cr., 490, (497). <• L. R., 22 Ch. D., 797, (751), 745 110 • 'Mil' LAW OF AGRNOY. Bays "The value of that HtateiiK'nt of the law is that he (Lord Cottonharn) says, ' necessity which inehuloB the regular course of business in administering the property,* interpreting the word as being nothing more and nothing less than the regular course of business" Having pointed out the ])eculiar wording of wcction 188, and taking it that no departure from the law of England on this point has been intended, it follows, that whatever be the nature or extent of the iuitliority, it is always, where there is no intention to the contrary expressed, construed to include an authority to do : — I. Every lawful thing necessary for the purpose of carrying it into effect.i II. Every lawful thing justified by the various usages of trade. '^ III. In an emergency, all such acts for the purpose of protecting the prin- cipal from loss, as would be done by a person of oi-dinary prudence, in his own case, under similar circumstaijccs.2 Id "Stances of powers incidental to the authority. I. Everything necessary to effect the authority.— Thus a merchant residing in India empowered by a person residing in England to recover in India a debt due to the latter, may adopt any legal process necessary for the purpose of recovering the debt, and may give a valid discharge for the same ;* and when so authorized he may receive payment in any way he may think fit.* So an authority given by endorsees to procure the discount of a note or bill includes an authoi-ity to warrant the bill.^ So a power to enter into, transact, com- plete, and execute all such negotiations, contracts or agreements, which might be deemed expedient to enter into for the purpose of obtaining a grant, demise, or lease of any mine or land, for the purchase of ore or the right to open, dig or work any mine, has been held to include a power to raise money on bills for the purpose of such transactions.^ And an authority to buy rail- way shares includes an authority to do all that is needful to complete the bar- gain.''' So where a partner gave his son power to act on his behalf in dissohnng the partnership, with authority to appoint any other person as he might see fit, and the son submitted the accounts of the firm to arbitration, held that he was authorized so to do.^ So a power to an assignee of a business to take proceed- ino-s to enforce existing conti-acts, and otherwise to deal in respect thereof as he » Ind. Contr. Act, s. 188. =* Iiid. Contr. Act, s. 189 ■ Pickford V Eivington, 4 Dowl., 453, see illustration to s. 188. • Barker v. Oreenwood, 2 Y. & C, 414. » Fenn v. Harrison, 4 T. & R , 177. • Withington v. Heiting, 3 Moo. & P., 36. » Bayley v. TTi/kni-s 7 C. B., 886. • Henley v. Soper, 8 B. & C, 16, (21). NATURE AND EXTENT OP THE AUTHORITY! Ill should think proper, will authorize him to refer to arbitration all matters arising out of the contracts. ^ So an authority to act for another generally during absence, empowers the donee of the authority to instruct a solicitor to appear on behalf of the donor of the power to show cause against an adjudica- tion of bankruptcy against him.^ So a power to manage a mine authorizes the holder to incur debts for wages and goods necessary for carrying on the mining operations, but not to borrow money. ^ So when I constitute another to carry on my business of a shipbuilder, I thereby authorize that other to purchase materials and hire workmen for the purpose of carrying on my business. So also a general power to buy jute if the agent is not supplied with funds includes a power to buy on credit.'* So also a power to manage a tea estate includes a power to order doors for the house of the manager of such estate.^ So an agent empowered to carry on all suits on behalf of his principal and to do all necessary acts to that end, is authorized to agree to be bound by the opinion (i. e., statement without oath) of a respectable person as to the genuineness of certain receipts filed by a defendant in a suit brought by the agent's principal.^ Similarly a power to negotiate Government Securities authorizes the negotiation of such Securities by way of pledge.''' So a power to take charge of the principal's interest in a particular place, and act as his representative, has been held to authorize the attorney to dismiss the Captain of one of the principal's ships. ^ So a gomasta of a mercantile firm has power to do all necessary acts for carrying on the business of the firm, and to authorize brokers to make contracts.^ So where an agent employed to keep in repair houses belonging to his principal, and who was not supplied with funds for the pui-chase of the necessary materials, but who was accustomed, as was his predecessor, to purchase chunam from a certain person in the name and on the credit of the principal, purchased chunam on such credit, held that he had power so to do. 10 So in a partnership one partner has power to bind his co-partnei'S for all acts necessary to, or usually done in the business of the partnership ; except where it has been agreed between the partners that a restriction shall be placed on the power of any one of them, when no act done in contravention of such ^ Hancock v. Beid, 2 L. M. & P., 584. * Frampton Ex-parte, I DeG., F. & J., 263. ' Ex-parte Chippendale, in re German Mining Company, 4 DeG., M. & G., 19, (40). * Grant Smith v. Jugcjobundo Shaw, 2 Hyde., 30], 129. * Koora v. Robinson, 2 Agra, H. C, Misc., 2. * Rajender Chunder Newgie v. Mahomed Aynooddeen, W. R,, (1864), 143. ' Hank of Bengal v. Fagan, 5 Moo., I. A., 27. Alexander v. Gibsoyi, 2 Camp., 555. Helliipa V. Hawke, 5 Bsp., 72. Howard v. Stewart, L. R., 2 C. P., 148. ^ Berwick v. Horsfall, 4 Jnr., N. S., 615. ' Jardine Skinner v. Nathoram Bourke, (O. 0.), 43. "° Narainee Koomvaree v. Joogul Krishna Boy, 6 W.R., 309. 112 TIIF. t.AW OK AOENfV. af,M-ceinL'nt shall Itind the I'mmii with rospect to pcrsous hHviii<.' notice of the rohtric- tiou.^ 80 a power to sell, transfer or mortgage a ship, includes a power to mortgage the freight and passage money, Erie J., said, " It is evident that the need of the ship may be such, that the voyage would be lost, unless au advance could be obtained on tlic freight, and there is therefore ground to presume that the owner, giving a power to mortgage in ample words, would intend to authorize a form of mortgage well-known to be often needed. "^ Again an agent with authority to subscribe a policy has an implied authority to do everything necessai'y for procuring the adjustment* and even to submit a dispute to arbitrations.* So an authority to buy railway shares implies a power to do all that is needful to complete the bargain.^ It must, however, be noted that as a rule of construction (which will be dealt Avith hereafter) all formal powers, e. r/., powers of attorney will be construed with strictness, and that the authority is never extended beyond that which is given in terms, or which is necessary and proper for carrying the authority so given into full effect ; and, further, that in the case of powers given in an informal or less formal manner or by implication, such powers are never construed so as to authorize acts not obviously within the scope of the particular matters to which they refer.^ Therefore a broker authorized to sign a particular contract is not authorized to sign one omitting a stipulation ;? nor has he any right to sign one containing a stipulation not authorized by liis employers.^ Land Agents &C.. — Bearing in mind this rule of Construction, it will follow that an agent specially employed to sell an estate cannot sell it in a manner unauthorized by his authority, the extent of the authority being known to the pui-chaser.^ So an agent for pui-chase, is not an agent to re- convey.^'^ So an agent empowered to make a lease for lives or for years is not empowered to make an agreement in which the term of the proposed lease is not mentioned. "^ Nor will a power to grant ticca izarah leases, and when advis- able to sell, mortgage, and make gift of the whole or portion of a zemindary, » Ind. Contr. Act, s. 251. * Willis V. Talmer, 7 C. B. N. S., 340, (359). " Richardson v. Anderson, 1 Camp., 44, (note). • Goodson V. Broo'ks,4! Camp., 163, but see Sfead v. Salt, 3 Bing , 101 Adam.^ v, Bankari, 1 C. M. & R., 678. Hatton v. Royle, 3 H. &. N., 500. » Bayleij v. Wilkins, 7 C. B., 886. * Story on Agency, paras. 68, 69, 87. Atwood v. Miinniiigs, 7 B. & C. 278. ' Pitts V. Beckett, 13 M. & W., 743. ® Jardine Skinner v. Nathoram, Boui-ke's Rep., 43. E^anchunder Sing v. Samachurn Bhutto, 6 W. R. 57. • Bundle v. Secretary of State, 2 Hyde, 25, 36, 44. '" Bhiijanund Mytee v. Radha Chin-n iJt/tee, 7 W._R., 335. " Clinan \. Ccolce, 1 Seb. & Lcf., 32. NATURE AND EXTENT OF THE AUTHORITY, ] 13 authorize the creation of a permanent tenure, the donor of the power exercising no disposing power.^ Nor will a power to manage as a land agent include a power to grant leases for a term of years.^ Nor can a land agent whose powers to lease were confined to do so after consultation with his principal, enter into an agreement with a farmer to grant him a lease for 12 years, but without communi- cating to him the fact his power was specially limited. ^ Nor can an agent of an inamda7- to whom the management of a certain village is entrusted, grant leases on suH or on other permanent tenures mtliout an express authority so to do ;* nor has the ordinary agent of a zemindar who has no power to lease, an authority to sanc- tion the gitas i-transfer of a lease by a tenant to some third party. ^ Nor is an- agent to receive rents authorized to receive notices on behalf of the lessor.^ Nor is a manager on behalf of a body of mohunts empowei-ed to grant mocurari leases.''^ But a shebait has been held to be empowered to alienate a reasonable portion of the property belonging to an idol, if such alienation is absolutely requix'ed by the necessities of the management, e. g., for the restoration of an image or tenantable repairs of a temple.^ And it appears also to have been held that there may be cases in which the grant of a putni tenure by a shebait would be valid. ^ But a power to execute leases will not include a power to insert therein a covenant binding the principal to pay any costs of suits regarding possession of the property demised. ^^ Nor will a manager of an estate under a safaenamah have power without a special authority to represent his principal in suits, or charge him ^vith the costs of defending a suit bought against him.^^- Naibs, Gomastas. — Nor will a general power given to a naib authorize him to gi^ant pottahs for fixed rents ;^2 nor can a naib with such a power grant mocui'ari leases, ^^ nor indeed does he usually have power to grant leases unless specially authorized •}^ nor can he distrain unless specially authorized!^ and it is so ' Tyehunnissa v. Kafiz Fatima, 13 C. L. R., 24.7. 2 Collen V. Gardnev, 21 Beav., 540, (542), ^ Collen V. Gardner, 21 Beav., 540. ^ Narsarvanji Hormasji v. Narayan Trimhak Fatil, 4 Bom. H. C. (A. C. .1.), 12. * Rai Moraree Debee v. Bucha Singr'i'N. W. P. H. C, 122. « Bariiet v. Skinner, 2 W. R., 209 ; bnt now under Act VIII of 1885, see s. 147. ^ Sheo Shunkar Lull v. Dhurm Joy Pooree, 8 W. R. 360. ^ Tahboonissa Bibee v. Sham Kishore Roy, 15 W. R., 228. * Shibessuree Debia v. Moothooranath Acharjo, 13 W. R. (P. C), 18. ^° 'Boornachunder Sen v. Prosunno Coomar Doss, I. L. R. 7 Calc, 253. " Bholanaath Sandy al v. Gouree Pershad Moitro, 16 W. R., 310. ''^ Goluckmonee Dabea v. Assiinooddeen, 1 W. R., 56. But under Act VIII of 1885, see s. 187. ^" Unnoda Pershad Banner jee v. Chunder Seekur Deb, 7 W. R., 394. Pnnchanum Bone v. Peary Mohun Deb, 2 W. R., 225. 1* Ooma Tara Debia v. Puna Bibee, 2 W. R., 155. " Act VIII of 1885, s. 141, (1), no order has as yet been made by the Local Government Tinder this section. KaUy Mohan Roy v. Ramjoy Mnndal, 2 Hay, 289, Marsh, 282. 114 THE r,AW OF AOENOY. with a ^'omasta ; nor Imn a pcoiiiasta with a power tocollcnt rents only, any power to (liKtraiu.^ Jiut it has boon bohl under the old rent law that a suit for rent may be instituted by a gomasta employed in the collection of rents or the management of laud on behalf of his pi'incipal without being specially empowered by warrant of attorney.** So also a tehsildar under the same act, had a similar power.^ But as regards these two last cases, they are no longer law in Bengal as far as the gomasta or tehsildar's powers to sue arc concerned, as such an agent cannot under Act YTTI of 1885, s. 145, unless speciall}- authorized, bring suits. Mooktahs. — Nor can a moktar under a moktarnamah giving to him authority to defend a suit on behalf of a mortgagee, acknowledge the mort- gagoi-'s title, and that is so irrespective of the Limitation Act of 1859.* And it clearly would not be within the scope of his authority so to do under the Limitation Act of 1877 unless he is specially authorized.^ Nor can a mooktah holding a power of attorney authorizing him to let and set and to deposit money in Court, and to apply for documents, grant a lease on behalf of his principal with a stipulation that the lessor shall pay all expenses Avhich the tenant might incur in any litigation which might take place between him and third parties.^ And where a mortgagee signed a moktarnamah in which he stated that he would abide by atiy arguments which might be urged, and any documents which might be filed by the mooktah thei'eby appointed, and tlie mooktah subsequently filed a written statement signed by himself alone in which he admitted the mortgagor's title, held that the written statement coiild not be incorporated with the moktanamah so as to make it part of the document signed by the mort- o-ao'ee.''^ But where a areneral mooktah acting on behalf of co-sharers does formal C3 O o -c acts to enforce the rights of his zemindar's principals, it is not necessary to trace back his authority in such case to the explicit sanction of every single member of the family.^ Nor can a mooktah under a moktarnamah given by a purdana- shin lady declaring that " all acts done by her mooktah, such as giving and taking of loans to and from others, getting executed deeds of sale ", bind the lady on an accouut stated for a debt without proof that the money had been borrowed on the lady's account.^ Nor has a mooktar any implied authority to bind his principal by executing conveyances.^'^ Nor -will a mooktar empowered to ' Kalee Coomar Dass v. Anees, 3 W. R., (Act X), 1. Sec Act Vlll of 18S5, s. 141. " Meajan Khan v. Akalli/, Marsh 334; Madho Singh y. Guneshep. Lnll, 2 Agra H. C, 275. * Modhoosoodun Singh v. Moran and Oo., 11 W. R., 43. * Lutchmee Buksh Roy v. Fanday Runjeet Ram, 12 W. R., 443. * Limitation Act, XV of 1877, s. 19. * Kenny v. Mookta Soonderee Dabee, 7 W. R., 419. ' Lutchmee Buksh Roy v. Runjeet Ram Pandey, 13 B L. R , 177 : 20 W. R., 375 ; 12 W. R., 443. * Hurry Kisto Roy v. Motee Loll Nundee, 14 W. R., 36. 9 Sudishf Lull V. Sheoiarat Koer, I. L. R., 7 Cal., 245 ; L. R , 8 I. A , 39. Mohan Kooer v. Ajoodhya Doss, 20 W. R., 119. NATURE AND EXTENT OP THE AUTHORITY. 115 execute bonds in lieu of former debts authorize the execution of a bond to secure a debt already barred by limitation. ^ But a power to watch saits, to appoint pleaders or mooktars, to receive after giving receipts any money deposited and due in any Court, to act in dakhil karij, to purchase villages with such money due under decrees, to file receipts, acquittances, razinamahs and other documents, will not authorize a reference to arbitration.^ Nor does a power to sue authorize the agent to employ a vakeel on other than a reasonable remuneration. s Nor does a power to appear and sue in or defend any suit, and to act in all such pi'oceedings as the principal himself could do, authorize the agent to enter into a special arrangement with a vakil agreeing to remunerate him according to the amount recovered.* Other Agents. — Nor does a power to raise money upon bonds on, behalf of three persons, authorize the entering into a bond on behalf of one or more to the exclusion of the rest.^ Nor does a power to execute a bond in lieii of former debts authorize a power to secure a debt barred by limitation.^ So a power to raise upon ship's papers such monies as the master should deem necessary for the repairs of a ship does not authorize the master to sell or mortgage the ship.''' Nor does a power to sell or mortgage for payment of debts authorize the execution of a simple money bond for the same purpose.^ Nor under a general power to sell, assign and transfer can an agent pledge for his own debt.^ Nor does a power to purchase, include a power to sell.^*^ Nor does a power to negociate, make, sale, dispose of, assign and transfer Govena- ment Securities authorize a pledge of such Securities and the execution of a promissory note for the amount advanced. ^1 Nor can a mercantile agent, with- out a power so to do, draw or endorse bills and notes, though the power may be implied from circumstances. ^2 j^or will a general authority to transact business and to receive and discharge debts, confer upon an agent the power of accepting or endorsing bills of exchange so as to bind his principal. Nor will an autho- rity to draw a bill of exchange of itself impai-t an authority to endorse it.^^ So ■ Hurlal Sukul v. Ram Goti Dey Roy, 11 C L. R., 581. ^ Thakoor Pershad v. Kalka Fershad, 6 N. W. P. H. C, 210. * Keshav Bapuji v. Narayan Shanirav, I. L. R., 10 Bom., 18. " Rao Saheb, V iY. Mandlik v. Kamaljabai Saheb Nimhalkar, 10 Bom., H. C, 26. * Btidh Singh Budhuria v. Bevendra Nath Saniul, 11 C. L. R., 323. « Ruhlal Sukul v. Ram Goti Bey Roy, 11 C. L. R., 581. ' Judah V. Addi Raja Queen Bibi, 2 Mad. H. C, 177. ® Foorna Chundor Sen v. Prosunno Coomar Bo8s, I. L. R.. 7 Cal., 253. " Be Bonchet v. Goldsmid, 5 Ves., 211. '° Goluck Chunder Choivdhry v. Kanto Fershad Hazaree, 15 W. R., 317. " Watson V. Jonmenjoy Cvotidoo, I. L. R., 8 Cal., 93-1 ; I. L. R., 10 Cal., 901. '* Testonjee Nessaricanjee Bottleiuallah v. Gool Mahomed Sahib, 7 Mad., II. C, 36'J j but see now Act XXVI of 1881, s. 27. " Act XXYI of 1881, B. 27. 116 TItK LAW OH- AfiKNCY. tho manager of a farm who coiifl nets all its business has no implied authority to issuo bills in tho namo of tho ])rincipal.l Nor does a power to advance to a certain person sums of money to provide for payment of Government revenue and for tho cuiTcnt expenses of an estate, authorize the lending to that person of large sums on bonds.'* So an agent employed to receive a debt, must receive it in money, and it is not sufficient that the debt should Ijc written off against a debt due from such agent. ^ Nor will an agcut who holds a general power to manage a business, have power, in the name of his principal, to enter into an unusual contract not strictly relating to the conduct of that business.* So a general agent employed to carry on a trading business has no authority to deal with immovL'a])le property.^ Acknowledgement of debts. — Nor can an agent not specially authorized for that purpose acknowledge by his signature the liability of his pi'incipal in respect of any property or right.^ Nor can an agent authorized by a widow and guardian of her minor children acknowledge a debt so as to bind the minors ; nor can the mother and guardian in the absence of any special authority so bind them.''^ Nor can the managing member of a Hindu joint family bind his coparceners by acknowledging a debt which would otherwise have become barred by limitation.^ Nor has a partner told off to wind up the pai'tnership any authority to acknowledge debts, as the presumption of agency which arises in active partnership's, no longer exists.^ Insurance agents. — Nor is an ordinary local agent of an Insurance Com- pany without special authority, authorized to bind the Company by a contract to gi-ant a policy ;!•' In this case the Company admitted the agency, but said the agent's duties were to canvass for insurance and obtain proposals, and to receive a deposit of one-fourth of the i)robable praemium, to get the cattle inspected by the Company's Teteriuary surgeon, and his declaration signed, and that on the receipt of the proposal by the Company, it was accepted or declined. ' Davidaon v Stanley, 2 M. & G., 7-1. » Misram v. Gopal Lai Doss, 10 W. 11 37tJ. 8 Biirkcr V. Oreemvood, 2 Y. & C, 414. Sweefin,j v. Pea)xe, 7 C. M. N. S., 441), (,484 A- 485). * Mundaree Lall v. Gilmore, 3 Agra H. C, 196. * Doorga Chum v. Koonjbeharee Pandey, 3 Agra H. C, 23. * Act XV of 1877, 8. 19. ' Wajibiin v. Kadir Buksh, I. L. K., 13, Calc, 292 ; 13 C. L R., 292 ; Hossam v. Llot/d, I. L. R., 7 Bom., 515. * Kumarasmi Nadan V. Pala Nagappa Cnetti, I. L. 11., 1 Mad., 385. Chinnaya Kayudu V. Gurrunathan Chetfi, I. L. R., 5 Mad., 169. * Fremji Ludha v. Dossa Doongersey, I. L. R., 10 Bom., 358. '' LinJ'ord v. Provincial Home and Cattle Insurance Company, 34 Beav., 291. NATURE AND EXTENT OP THE AUTHORITY. Il7 Secretary of a Company. — ISTor has a Secretary of a Tramway Company any autliority to make representations with regard to the financial situation and relation of the Company where no evidence is given of the existence of such an autliority. •• Nor has the managing agent of a trading Company abroad authority to sign on behalf of the Company a pi-omissory note, whicb was not necessaiy for the Company's trading and not directly authorized by the Company.^ Extent of authority of Directors.— The extent of the authority of directors as agents to bind a Company, is stated by Lord Romilly in Spade- man V. Evans^ to be, that the Company are not bound by any acts done by them for objects whicli the Comj^any has no power to entertain, and that these are the only acts which, if the directors do, are ipso facto void. But that not only do the acts of the directors bind the Company when done withiii the scope of their authority, but also that Avhere the acts of the directors, however irregular, belongs to a class of acts which class is authorized by deed of settlement, in these cases, the Company is absolutely bound when the acts are done with strangers who act hond fide with the Company ; and when these acts are done with, the shareholders of the Company then that these acts are voidable only ; and that the other shareholders must take active steps to set aside the tiuusac- tion, and that when there is no dishonesty time bars the remedy. Their general authority therefore extends to all acts reasonably necessary for management ;* but not to acts which are ultra vires.^ Statutory authorities of certain agents. — A recognized agent may make any appearance, application, or act, in or to any Court required or authorized by law to be made or done by a party in such Court, excejDt when othex'wise ex- pressly provided by any law for the time being in force ; provided that any such appearance shall be made by the party in person if the Coui-t so dii^ect.^ A naib or gomasta of a landlord when empowered by writing, is, for the purposes of the institution of suits and the making of applications, under the Beugal Tenancy Act 1885, such a recognized agent as is last mentioned, and this notwithstanding that the landlord may reside within the jmisdiction of the Court in which the suit or application is instituted or made.'' Such an authority requires to be stamped under Act 50, Sch. II of Act I of 1879. But such naib or gomasta ^ Barnett v. South London Tramway Companij, L. 11., 18, Q. B. D., 815. ^ In re Gunningliam S(' Co. Ld. Simpson'ti claim, L. K., 36 Ch, D., 533. » L. R., 2 H. L., (534). * West of England Bank, exparte Booker, L. K., 14 Ch. D., 317. * Pickering v. Stephenson, L. R., 14 Eq., 322. » Act XIV of 1882, ss. 30, 37. ^ Act VIll of 1885, s. 145. 118 THE r,AW OK AORNOY. must sue in the name of his employer ;i althonj^h he may Hiprn and verify the plaint oithri- in his own name or that of his employer.* An agent of a land- lord also has power lor the pui'poses of the Bengal Rent Aet to act on his eiuployei-'s behalf in Court, if expressly authorized so to do in writing, and to o-ive and accept all notices on his employer's behalf ; and may if authorized in ■writiu"- certify every document required by the Act, except an instrument authorizing an agent.^ And whci-e he is acting for joint landlords, he must bo authorized by both of tlieni.'' II. Every lawful thing justified by the various usages of trade.— The following cases are examples of powers incidental to the authority, arising from custom of trade. In Wihhire v. Siins,^ an agent was employed to sell out 500£ of stock ; he shortly after this order agi'ced to sell it to one Wilshire ; but as the transfer could not be made for 14 days for cei-tain reasons relating to the meetings of the trustees of the Company, Wilshire paid for the stock by a promissory note at 14 days ; the agent paid in this note to his own bank to his own account, where it was attached for a debt of his own ; at the expiration of the 14 days the principal refused to make the transfer, as he had received no part of the purchase-money. Lord Ellenborough said, " When the defendant (the principal) employed the broker to sell the stock, be em- ployed him to sell it in the usual manner. He made him his agent for com- mon purposes in a transaction of this sort. But did any one ever hear of stock beino- absolutely exchanged for a bill at 14 days ? Has a broker in common cases power to give credit for the price of the stock which he agrees to sell ? The broker here sold the stock in an unusual manner ; and unless he was expressly authorized so to do, his principal is not bound." In Dingle V Hare^ an ao'ent selling guano was held authorized to wan^ant it to contain 30°/ of phosphate of best quality, Byles J., said, "It is clear. law that an agent to sell has authority to do all that is necessai-y and usual in the course of the business of selling, and if it was usual in the trade for the seller to wan'ant, the a^ent had authority to warrant. So the appointment of a general agent for the sale of "-oods implies an authority to sell according to the ordinary usage of trade.'' So where a general authority was given to a broker employed in the » Modkoo Soudun v. Moran ^y Co., 11 W. R., 43. Mokha Hurruckhraj Joshee v. Bissesur Doss 13 W. R., 344 Koonjo Behary Joy v. Poomo Ghunder Chatterjee, I. L. E., 9 Calc, 450; 12 C. L. R., 55. ^ Act VII of 18S2, s. 1. « Act VIII of 1885, s. 187. * Act VIII of 1885, s. 188. * 1 Camp., 257. « 7 C. B. N. S., 145. * Eowell Es-paite, 12 L. T., 785. NATTTRE AND EXTENT OP THE AUTHORITY. 119 Irish Market to sell a quantity of bntter, it was held that evidence was ad- missible to prove that by the usage of that market, that such an authority expii-ed with the day on which it was given. ^ So also where a corn merchant in Ireland sent instructions to a factor in London to sell oats of a certain quality at a certain price on the corn merchant's account, it was held that evidence was admissible to show that by the usage of the London corn trade, a broker might sell in his own name.^ So an agent authorized to collect hundis and who, after acceptance by the drawee gives credit to his principal for the amount, by the usage of shroffs is entitled on the hundi being dishonoured by the drawee to treat himself as a holder for value. ^ So the power to sell a horse, and to receive the price would in the case of a horse-dealer include a power to warrant.''' So also where the usage was that an agent should guarantee the purchasers of his prin- cipal it was held that the former had acted rightly in paying a debt incurred by his principal under the shelter of this guarantee.^ So a power to a land agent to manage and superintend estates, authorizes him on behalf of his prin- cipal to enter into an agreement for the usual and customary leases, according to the nature and locality of the property.^ But nevertheless terms not incidental to those in the written contract cannot be introduced by custom.' Is knowledge of the usage necessary. — The question whether, in order to affect a person with a usage of trade, the usage should be known to the party to be charged presents some difficulties. Lord Kingsdown when deliver- ing the judgment of their Lordships of the Privy Council in Kirchener v. Veuus^ says : — " When evidence of the usage of a particular place is admitted to add to or in any manner to affect the construction of a written contract, it is ad- mitted only on the ground that the parties toho viade the contract are both cognizant of the usage, and must be presumed to have made their agreement with reference to it. But no such presumption can arise when one of the parties is ignorant of it." With regard to this case Kelly 0. B., in Buckle v. Knoop,'^ says : — " it only proves that people in Liverpool may well be supposed to be ignorant of rules in existence on the other side of the world, at Sydney ; they are not in such a case required to know them. But liere the contract is eutei-cd into betwecMi merchants of London and Liverpool, cognizant of the Bombay trade, and it ' Dic'cinson v. Lilwall, i Camp , 279. ^ Johnston v. Usborne, 11 A. & E., 549. * Mulchand Joharimal v. Sugnnchund Shirda-'^, I. L. U., I Honi.. 2:?. " Brady v. Todd, 7 C. B. N. S., 415. * Seth Samur Midi v. Cho.ja hall, I. L. U., 5 Calc , 121. ' 'Peers v. Siieyd, 17 lieav., 151. ' Allan V. Sundias, 1 H. 10 A. & E., 27. * 1 Exch., 425. NATURE AND BXTEJiT OP THE -AUTHORITY. 121' it were necessary to shew that the defendant knew of th e particular usage the point shoald have been made at the trial ; and in the present case there was evidence for the jiiiy to find that the defendant did know of it, and that he was responsible. It is not noio necessary to decide the point, whether the defendant would be hound if he did not know of such a usage. It appears to me, however, that a person who authorizes another to contract for him, authorizes him to make that contract in the usual way. There are some cases which look the other way, which have not been noticed. There is the case of Bartlett v. Pentland;^ that, however, was not with respect to the usage of the Stock Exchange but of insurance brokers that, however, is a different question from the present, which is one of contract. In the case of a contract which a person orders another to make for him, he is bound by that contract, if it is made in the usual way. There is another case of Gahay v. Lloyd,^ which was an action on a policy of insurance ; it was found in the special verdict, that a certain usage with respect to such policies prevailed amongst the under- writers subscribing policies at Lloyd's Coffee house, and that the policy in ques- tion was affected there ; but it was not found that the plaintiff was in the habit of effecting policies at that place. The Court held that this usage was not sufficient to bind the plaintiff. But that case differs from the present, the question here being as to the authority which the plaintiff received, I have said this in order to show my concurrence in the opinions expressed by Lord Denman and Mr. Justice Littledale in the case of Stitton v. Tatham, although it is not necessary to determine the same point here, as there was sufficient evidence to show that the defendant knew the usage of the Stock Exchange at Liverpool, if it were requisite to prove it in order to make him liable." Alder- son, B., said shortly and generally, "A person who deals in a particular market must be taken to deal according to the custom of that market, and he who directs another to make a contract at a parti e alar place, must be taken as intend- ing that the contract may be made according to the usage of that place." Rolf B., said : — " The dealing here was at a particular place — the coui'se of dealing was known. It may be, indeed, that it is not r}iaterial lohether the course of dealing was known to the parties. In Sutton v. Tatham, the defendants did know of the usage. I express my concurrence with the dicta of Lord Denman and Mr. Justice Little- dale." Mr. Taylor in his work on Evidence, 3rd ed., p. 165, says ; " It may be taken as clear law that if a man deals in a particular market, he will be presumed to act according to the custom of that market, and if ho directs another to make a contract at a particular place, he will be presumed to intend that the contract should be made according to the usage of that place but whether the doctrine would be held to apply in its full force in cases of maritime insurance »10B. &C., 760. '3B. &C.,793. 122 . THE LAW OK ArjRNCV. may admit of somo doubt, as autlioritics arc not wantinc^ to the contrary." The class of cases referred to by Mr. Taylor appear to show that the usage of a particular locality or of a particular class of brokers (insurance brokers at Lloyd's) will not bo binding upon persons unless those persons are acquainted with the usage and adopt it, as will be seen from tlie cases of Barllelt v. Pent- land,^ already referred to and Sweeting v. Pearce^ and Stetvart v. Aberdeen,^ which latter case has, however, been commented upon by a learned writer as being un- satisfactory.* The cases referred to by Mr. Taylor, do not, however, appear to have been judicially impugned ; but they appear principally to deal with in- .surance cases and to have been decided, on the ground that " Lloyds" is a mere private place of business, and not a general market, so as to come within the rule of Sutton v. Tatham. The mile laid down in Sutton v. Tatham, was, however, approved by Bovill C. J., in Grissel v. Bristoive,^ and appears to have been followed or adopted in numerous cases. ^ But in the year 1875, the ca.se of Robinson v. Mollet,'' came before the House of Lords, which dealt with the parti- cular usage of the London tallow market ; and in this the rule above referred to appears to have undergone modification. The question before the Court there was, whether the appellant -was bound, by a custom as to bi^okers existing in the London tallow market of which he was ignorant, merely by the employ- ment of the Respondents as his brokers to buy for him and their purchase in the London market of the quantity of tallow ordered ? It will be sufficient to give short extracts from the opinion of Mr. Justice Brett and Mr. Justice Grove (who were amongst other Judges called before the House) as showing the rule which runs through the decision. Mr. Justice Brett said : — " If the custom which exists in fact is not unjust as against principals ignorant of it, your Lord- ships vnW uphold it, however much it departs from the rule hitherto recognized by the Courts as applicable to the contract of employment between principals and brokers, but, if it so far breaks from those rules as to be unjust to such principals in such contract, your Lordships will pronounce it to be a void custom The question therefore may be stated thus ; Is the custom relied on so inconsistent Avith the nature of the contract to which it is sought to be ' 10 B. & C, 760. "^ 7 C. B. N. S., 449. » 4M. & W., 211. * See Campbell oit Sale of Goods ayid Agency, p. 441. » L. R., 3 C. P., 127 ; L. R., 4 C. P.. 36. • Taylor v. Stray, 2 C. B. N. S., 175. Stray v. Russell, 1 El. & El., 888. Groves v. Legge, 2 H. & N., 210, 216. Lloyd v. Guibert, 35 L J. Q. B. Duncan v. Hill, L. R., 8 Ex., 242. Cuthbert v. Gumming, 10 Exch., 809; 11 Exch., 405. Lacey v. Hill, L. R., 8 Ch., 921. Lacey v. Hill (Gratvley's Claim), L. R., 18 Eq., 182. » L. R., 7 H. L., 802. NATURE AND EXTENT OF THE AUTHORITY, 123 applied as that it would change its nature altogether, or as to change its intrinsic character ? if it would, it is unjust and therefore void, if it would not, it should be allowed to prevail, " Mr. Justice Grove said : — " The question in this case is, can the ordinary duty (of a broker) be varied by the custom of a market of which the employer is ignorant in fact, and, fx"om the circumstances of the case, cannot reasonably be presumed to know ? This custom (of the tallow market) appears to me not merely to exchange modes or incidents of the sale, e. g., mode of delivery, time and manner of payment, degi-ee of credit, rate of discount &c., but to change substantially the nature of the employment and the relations of the parties to the contract. I do not think a person dealing in a market of the customs of which he is ignorant, though he may be bound to inquire as to usages such as those I have referred to, or if he do not inquire into them may faii^ly be deemed bound by them, is bound to inquire into a usage by which a broker is in fact not a broker, or is bound by the acts of a sup- posed broker when he has not all the correlative advantage resulting from the performance of a broker's duties for vhich he pays commission If the short terms of a mercantile contract, because they do not expressly exclude other than the ordinary accompaniments, are to be taken to admit of such being incorporated with them when they vary the ordinary legal relations of the parties to them, if such variance of relation be a cusjtom of a market known only to one of the parties, and advantageous or possibly advantageous to such party, it seems to me that elements of great uncertainty would be introduced into such supposed con- tracts, business transactions would be much hampered, and the parties be not really ad idem.'' Lord Chelmsford in delivering the judgment of the House of Lords said : " Assuming, however, that the custom would have been applied in the present case if it had been known to the appellant at the time of employing the re- spondents (as to which his Lordship had expi-essed a doubt previously that it did apply) the question arises whether it is of such a nature as to be binding on a person who is ignorant of its existence, by merely employing a broker to buy for him in the market Avhere the custom prevails. The effect of the custom is, to cliange the character of a broker who is an agent to buy for his employer, into that of a principal to sell for him. No doubt a person employing a broker may engage his sexwices upon any terms he pleases ; and if a person employs a broker to transact for him upon a market with the usages of which the pi'in- cipal is unacquainted, he gives authority to the broker to make contracts upon the footing of such usages provided they are such as regulate the mode of forming the contracts, and do not change their intrinsic character. It was not contended in the present case that if the respondents were employed in the ordinary character of brokers, they had performed their duty to their employers. Of course, if the appellant knew of the existence of the usage, and chose to employ the respondents without any restriction upon them, he might 12i! TIIK T,A\V OK AGENCY. bo taken to havo authorized them to act for him in conformity to snch usage. As.suniiiig that the usage of the London tallow market applies to tho case of an ordinary transaction between broker and principal, I hewitato to say that it would not apply to the case of persons knowing of its existence, and employing a broker to act for them in the market where it prevails. But the usage is of such a peculiar character, and is completely at variance with the I'elation between the parties, converting a broker employed to buy, into a principal selling for himself, and thereby giving him an interest wholly opposed to his duty, that I think no person who is ignorant of such a usage can be held to havo agreed to submit to its conditions, merely by employing the services of a broker, to whom the usage is known, to perform the ordinary and accustomed duties belonging to such employment." With this judgment Lord Cairns, Lord Hatherley, and Lord O'Hagan agreed. From this decision, there- fore, may be deduced the following rules : — 1. That if a principal employs a broker to act for him on a market with the usages of which he is unacquainted, he authorizes the broker to make con- tracts upon the footing of such usages, provided they are such as to regulate the mode of performing the contract and do not change its intrinsic character. 2. That if the principal is aware of such usages, and choses to employ a broker to act for him without restricting him, he will be bound by such usages. 3. But, that where the usage is of a peculiar character, and is so incon- sistent with the nature of the contract to which it is sought to be applied, as to change its nature altogether, or as to change its intrinsic character, it will not be binding upon a principal ignorant of such usage. Principal ignorant of usage not bound where it is unreasonable.— It appears, however, that the rules laid down in Bobinson v. Mollett comprise the rule that a principal ignorant of a usage of a market \r\\\ not be bound, if the usage is an unreasonable one. In Perry v. Barnett,^ a case next to be referred to for another purpose ; the Master of the Rolls, Avhen speaking of the conten- tion raised that a principal (who iu that case was found to be ignorant of the usage of the London Stock Exchange) was nevertheless bound by the usage as he had employed the broker to deal for him on the London Stock Exchage, as being assumed to knoAV such usages, said : — " Now the proposition that a person who directs another to deal upon a particular market is to be treated as if he knew the rules of that market, has been adopted in the law to some extent, but certainly not to this extent, that, however unreasonable or illegal they may be, he is still to be treated as if he knew them. There is a line of demarcation between rules by which such person is bound, and rules by which he is not ' L. E., 15 Q. B. D., 388, 393, 394, 395. NATURE AND EXTENT OF THE AUTHORITY. 125 bound, and the rules of the Stock Exchange applicable upon this occasion would seem to come within the latter of these." His Lordship further on added " therefore, adopting the rule I laid down in Robinson v. Mollett, and which seems to comprise the rule in Neilson v. James, ^ I am of opinion that even though it be proved as a matter of fact that there exists such a rule on the London Stock Exchange as that to which I have alluded (t-i^., the usage set up in the case), it would be wi^ong to say that the defendant who was ig-norant of it, ought to be treated as if he knew it, merely because he instructed the plaintiifs to deal upon the London Stock Exchange." And Baggallay L. J., also in that case said ; " Then it was urged next that if the defendant gave the plaintiffs authority to purchase on the London Stock Exchange he was bound by the rules of the Stock Exchange as to such purchase. But in my opinion, the defendant was only bound by such rules as were reasonable and proper rules. That point was distinctly recog- nized in Neilson v. James." But where the usage is one which treats as a valid legal contract for one purpose that which is no legal contract at all, and which could not be enforced in law against the other contracting party, it has been held that know- ledge of the alleged usage is essential. In Perry v. Baruett,'^ where the question was whether a person, not a member of the Stock Exchange, or acquainted with its cus- toms, but an outsider, Avas bound by such a custom without knowledge : Grove J. said : " I am of opinion that he is not. I think that if a jDerson, to use the lan- guage of Lord Chelmsford in Bohinson v. Mollett,^ employs a broker to transact for him upon a market with the usages of which the princijjal is unacquainted, he gives authority to the broker to make contracts upon the footing of such usages, pro- vided they are such as regulate the mode of performing the contracts, and do not change their intrinsic character. It seems to me impossible to say that in this case the alleged usage does not change the intrinsic character of the contract. The usage appears to me to be one Avhich treats as a valid contract for one purpose that which is no legal contract at all, and one which the defendant could not enforce in law against the other contracting party. The authoi-ity given to the bi-oker is to buy so many shares in the Oriental Bank. The broker instructs his agent on the Stock Exchange, who forwards a note which would, to any one unacquainted with the practice of the Stock Exchange, appear to be a note of a legal contract which the buyer could himself enforce against a seller, but it appears that in fact, in consequence of non-compliance with the provisions of Leeman's Act, no valid contract has been effected at all, and therefore the buyer could not, if the shares had risen in value, and the seller had repudiated, have enforced this contract against him at law. It seems to me, under these cir- cumstances that he does not get what he bargained for. But then it is said that there is a usage on the Stock Exchange, not by wliicli the invalid contract can ' L. R., 9 Q. B. D., £46. ' L. R., 14 Q. B. D., 467. « L. R., 7 H. L., 802, (836). 126 THK r.AW OF AflEN'CT. viitujilly be made valid, but l)v wliicli tlie broker employed by the purchaser may bo made personally rcsponsi])le on the Stock Exohanpfc upon such contract. If the purchaser knew of that, and if he contracted with his agent on that basis, he may be held to be liable, as was done in the case of Bead v. Anderson,^ because he has knowingly changed the position of the agent and made him subject to certain liabilities in consequence of his carrying out an order in the manner in which the person giving the order knew that it would be carried out. But if the purchaser is ignorant of the usage, and thinks when he authorizes the broker to effect a contract, that a contract means a contract enforceable at law, can it be said that he is to be affected by that which is not a contract and is not enforceable at law ? It seems to me that on this ground there is a broad distinction this case and Bead V. Anderson In the case of Bead v. Anderson, Bowen L. J., in delivering the judgment of the majority of the Court of Appeal, expressly bases his judgment on the fact that by the usage known to both parties the betting agent became liable ; and in that case not only was the usage taken to be known to both parties, but the plaintiff had actually effected that which he was authorized to effect. He was not commissioned to make a contract but a bet, and I do not think in that case, it would be far-fetched to assume that the person employing the ao-ent did know that a bet was void at law, because that is common knowledo-e." In Seymour v. Bridge,^ where the selfsame usage was in question, but where it was assumed throughout as the basis of the judgment that the principal did hnow, or was to be talcen to have knoivn, of the usage ; Mathew J., held on the authority of Bead v. Anderson, that the broker was entitled to re- cover. But in all cases, it must be remembered that a custom if um-easonable is not binding, and that the knowledge of the person to be bound may be an important clement in deciding whether a custom is reasonable or not.^ Oral evidence of usage when admissable.— Next as to when oral evidence of a usage by which incidents not expressly mentioned in any written contract may be given. The general rule is, that when the terms of a contract, have been reduced to the form of a document, or any matter required by law to be reduced to the form of a document, have been duly proved, no evidence of any oral agi-eement or statement shall be admitted as between the parties to any such instrument or their representatives in interest, for the pm-pose of of contradicting," varying, adding to, or subtracting from its terras.^ This rule ' L. K., 13 Q. B. D., 779. =* L. K.. 14 Q. B. D., 460. • Pernj v. Burnett, L. R., 15 Q. B. D., 397. * Maoris v. Paiichanada Pillni,, 5 Mad., H. C, 135. Moran v. Mitta Bibee, I. L. R., 2 Calc, (89). Jugijernath Sew Bus v. Ram Dyal, I. L. R., 9 Calc, 791. Clarion v. Shaiv, 9 B. L. R , 245, (252). » Act I of 1872, 8. 91, 92. NATTTRE AND EXTENT OP THE AUTHORITY. 127 is subject to certain exceptions, one of which is, that, any usage or custom by which incidents, not expi'essly mentioned in any contract, are usually annexed to contracts of that description, may be proved, provided that the annexing of such incident would not be repugnant to,' or inconsistent with'^ the express terms of the contract.* A very strong instance of parol evidence being ad- mitted for the purpose of qualifying the contract, is to be found in the case of Hut- chinson V. Tathamf^ decided in the year 1878, there the defendants acting as agents for one Lyons, chartered a ship for the conveyance of a cargo of currants from the Ionian Islands. The charterparty was expressed to be made and was signed by the defendants " as agents to merchants," the name of the principal not being- disclosed and the Court held, that evidence was admissible, in an action by the shipowners against the defendants upon the charterparty, of a trade usage, by which, if the name of the principal is not disclosed within a reasonable time, the agents themselves are personally liable. Bovill C. J., in delivering judgment said : — " The question arises whether evidence is admissible to add a term not expressed in the contract, to the effect that if the principal be not disclosed within a reasonable time from the signing of the contract, then the agent is to be personally liable. It is the general rule that evidence is admissible for the purpose of explaining the terms of a contract with reference to the usao-e of a particular trade, and of showing that a term which, prima facie, would have one meaning, may have in such trade another well understood meaning. The ques- tion sometimes arises as to the meaning of a particular expression, but it also arises as to whether, on a contract which purjoorts to be made by a party as agent, he can be charged as principal. Within my experience the question has arisen whether such a custom exists in many of the trades in London. In Humphrey v. Bale^ the contract was, as it seems to me, substantially the same as this There is nothing unreasonable in such a custom, and I have kncwn it applied by the findings of juries to many branches of trade. There is good reason for such a custom after the cases of Humphrey v. Dale, and Fleet v. Murton,^ it seems to me impossible to contend that this evidence is inadmissible. Brett J., said : — " The question here is as to the meaning of a written document, and as to whether pai'ol evidence was admissible for the purpose of qualifying it. I have had very considerable doubt as to what is the effect of tliis document with respect to the admissibility of the pai'ol evidence. In the body of the contract ' Macfarlane v. Can; 8 B. L. R., 459. * Act I of 1872, s. 92, prov^. (5) and also a case in 2 Snnim,, 507, an American report cited in Taylor v. Erid, p. 103 (8tli ed.) adopted by this section. * Indur Chandra Dugar v. Lachmi Bibi, 7. B. L. R., 682, (687). -• L. R., 8 C. P., 482. * 7 E. & B., 266. * L. R., 7 Q. B., 126. 128 THE LAW OP AGENCY. it is flfcatod that it is mado by tlic dofnnflantn as agents to mcrchantR, and tho signaturo is to the same effect. Tliis appears to mo a much stronger case than Humphri'ij V. Dale and Fleet v. Murton. It does seem a strong thing, when a person exjiressly says to another in a written document, that he is not contract- ing with liira as principal, and in signing that writing states the same thing again, (() hold that it can by any evidence afterwards be established that he is liable not as agent but principal. On the authority of what was said by Cockburn C. J., in Fleet v. Murton, and Hill J., in Deslundes v. Gregory,^ it is clear that without evidence of custom the defendants would not be liable as principals. So strong do I consider the terms of this contract in this respect, taking tho terms in the body and the signature together, that were evidence offered to show that from the beginning the defendants were liable as principals, I should be prepared not to admit it ; but the cases have lately gone very far as to the admissibility of evidence of custom. It is clear, however, that no such evidence can. be admitted to contradict the plain terms of a document. If evidence were tendered to prove a custom that the defendants should be liable as principals under all circumstances that would contradict the document ; but it has been decided that though you cannot contradict a wi^itten document by evidence of custom, you may add a term not inconsistent with any term of the contract." Grove J., said : — " It is not easy to define exactly the limits within which evidence of mercantile custom is admissible to vary the meaning of a written contract. It is clear that evidence is not admissible to contradict the writing : but in one sense the contract must always be varied by the admission of the evidence of custom, inasmuch as the effect of the contract would not be the same without the parol evidence, or else the parol evidence would itself be unnecessary. The evidence of custom that is admissible must be, it appears to me, evidence of something inconsistent and irreconcileable with the written con- tract. The evidence here can only be admissible if the import of the words " as agents " is such as to exclude a collateral provision for liability as principals in a certain contingency, it is not attempted to show that the defendants' principals would not prima facie and in most cases be liable as principals, and not the defendants, but that in a certain particular contingency _ the defendants might themselves be personally liable. This does not seem to me so inconsistent and irreconcileable with the contract as to amount to a contradiction or variation beyond what is admissible." Usage how proved. — And where it is necessary to prove a custom, the party seeking to establish it must begin by shewing the existence of the custom, not by asking what tho custom is.* Custom as to Tazi Mandi Chittis. — The defendants dii-ected the plaintiffs' • 2 El. & El., G02, (007). » Gihson v. Crick, 1 H. & C, 142. NATURE AND EXTENT OF THE AUTHORITY. 129 brokers to make purchases of opium on their behalf, and to pay money on his account in respect of what are commonly known as tazi mandi chiftis, and the plaintilf subsequently sued the defendant to recover monies paid by them in respect of such tazi mandi chittis issued by them on defendant's account and for brokerage and commission. The question arising in the suit was whether or no the right to recover was affected by the Wagering Act, Act XXI of 1848, Avhich was then in force but which has since been repealed by Act IX of 1872 ; sections 23 and 30 of the latter Act would, however, raise the same question. The usage and course of dealing with reference to these chittis as proved in the particular case cited, was that persons wishing to speculate upon the rise or fall of opium apply to shroifs in the bazaar to issue to them documents which are known in the bazaar as tazi and mandi chittis ; a tazi chitti being an agreement by the shroff issuing the same, to deliver to the holder of such chitti a certi- ficate of purchase for one lot or five chests of opium from the Government sale at a certain price mentioned, or at the option of the holdei", in lieu of delivering such certificate, to pay to him the difference between the actual market price thereof, and the price named in the said tazi chitti : a mandi chitti is an ao-ree- ment by a shroff issuing the same to accept and pay for the price named in such chitti upon demand being made by the holder of such chitti, Sb certificate for one lot of opium of the Grovernment sale mentioned in such chitti. Such chittis being issued by shroff's to their customers at a rate of commission, varying from two to four rupees for each chitti, it being usual for the customers to deposit with the shroffs a sum of money to cover any loss which the shz'offs mio-ht sus- tain by reason of having to carry out the agreement contained in the said chittis. Where, however, the customer is well-known to the shroff, he is given by the shroff credit for the price of the chittis, the latter undertaking the liability without requiring a deposit, upon the undertaking that the customers would in the case of tazi chittis, either provide him with such certificates as might be required in order to meet such chittis, or pay the difference between the actual market price of such certificates and the price mentioned therein, and would in like manner mutatis mutandis provide for any loss Avhich might accrue upon the mandi chittis; that if the shroff should himself purchase or sell certificates for the purpose of meeting his liabilities, he should be entitled to charge the customers brokerage at the rate of one rupee per lot of five chests ; Tazi and Mandi chittis when so issued are sold by the persons to whom they are issued by the shroff's, and are, by the usage of the bazaar, transferable by endorsement, and at midnight of the day of the Government sale mentioned in such chittis, if the price of the opium in case of tasi chittis be higher, and in case of mandi chittis lower, in the market than the price mentioned in such tazi or mandi chittis, the holders of such tazi or mandi chittis respectively present the same to such shroffs for acceptance, and the shroffs, upon accepting the said chittis become liable to R 1.10 Ttir. r,AW OF AOENfT. the holders according to the teuoi- thereof, looking' to their customers on account of whom such chittis are issued to indemnify them ; such chUtis as are not presented for acceptance before midnight of the day of the sale, become void according to bazaar usage, and in some instances are retained or destroyed by the holders, and. in others returned to the shrofl's who are in the habit of paying 4 or 8 annas for each of such chittis as are delivered up to them. The Court held that the plaintiff was entitled to recover.' The judgment in the above case gives no grounds for decision, but the case was evidently decided on the m'ounds of the case cited in the note thereto^ and on the same principle as the English cases on an analogous subject.^ III. Agent's duty in an emergency — The rule that an agent has power in an emergency to du all such acts, for protecting his principal from loss, as would be done by a person of ordinary prudence, in his own case, under similar cir- cumstances, is a power given by statute.* And although, such power does not appear to be fully recognized in England, 3-et in particular cases the right is allowed as is pointed out by Mr. Macrae in this work on the Indian Contract Act.^ Instances of such an authority may arise out of cases in which an ao-ent is entrusted with the sale of goods of a perishable nature, where, if proper measures are not taken to get rid of the goods, loss would be occasioned to the principal. Thus where A consigns provisions to B at Calcutta with direc- tion to send them to C at Cuttack, B will have authority to sell the provisions at Calcutta if they will not bear the journey to Cuttack without spoiling. " Goods may become worse the longer they are kept, and at all events, there is the risk of the price becoming lower " per Best C. J., in Maclean v. Lunn,^ which was a case of a re-sale of goods sold originally through a broker, but of which the purchasers would not take delivery, but whether the goods were re- sold by the broker of the owner it does not clearly appear from the report. It also appears that an agent for sale may repair goods previous to sale when necessai'y.''^ It has been stated previously that the rule does not appear to be fully recognized in England ; and this will be seen from the case of Haivtayne v. Brownt^ which is an authority for saying that a power to do what what is usual, does not include a power to do what is unusual, however urgent it may be to act. Maule J., in that case told the jury that they might infer » Kanaylal v. Chagmal Battia, 8 B. L. R., 412. • Khairdbnath Khettri v. Jumanram Dhandaria, 8 13. L. R., 415, (note). • Rosewaryie v. Billing, 15 C. B. N. S., 316. Read v. Anderson, L. R., 10 Q. B. D., 100. • Ind. Contr. Act, s. 189. » Macrae on Contr., p. 149. • 4 Birg. 722, (729). ' Ind. Contr. Act, s. 189, ill. (a). • 7 M. & W., 595. NATURE AND EXTENT OF THE AUTIIORITT. \^\ an atitliority in the agent, not only to conduct the genei-al business of the mine, but also, in cases of necessity to liaise money for that purpose. As to this, Parke B., said : — " I am not aware that any authority is to be found in our law to support this proposition. No such power exists, except in the cases alluded to in the argument, of the master of a ship, and of the acceptor of a bill of exchange for the honour of the drawer. The latter derives its existence from the law of merchants ; and in the former case the law, which generally provides for ordinary events, and not for cases which are of rare occurrence,' considers how likely and fi'equent are accidents at sea, when it may be necessary, in order to' have the vessel repaired, or to provide the means of continuing the voyage, to pledge the credit of her owners, and therefore, it is, that the law invests the master with, power to raise money, and, by an instrument of hypothecation, to pledge the ship itself if necessary. If that case be analogous to this, it follows that the agent had power not only to borrow money, but, in the event of secui'ity being required, to mortgage the mine itself ; the authority of a master of a ship rests upon the peculiar character of his office, and alfords no analogy to the case of an ordinary agent. I am therefore of opinion that the agent of this mine had not the authority contended for." Baron Alderson, said, " There is no rule of law that an agent may, in a case of emergency suddenly arising, raise money, and pledge the credit of his principals for its repayment ; and even if it were so, in this instance there was ample time and opportunity for him to have applied to his principals. Several cases have been cited as analogous to the present, but they have been satisfactorily dis- tinguished by my Brother Parke. Lamb v. Bunce^ may appear to be a case similar to the present, but it is very distinguishable, for there is an orio-iual liability in parish officers to support the poor in their parish ; and it appears, moreover, that the parish officers in that case were aware of the surgeon beino- in attendance on the pauper, and made no objection." It is to be noticed from this judgment that the case of master of a ship providing the means of con- tinuing a voyage, or the repairs of the ship, and the case of an acceptor of a bill of exchange for honor of the drawer-, do not under English law fall within this ruling last mentioned, and that such acts will, under English law, be implied from the authority of such agents, for other reasons than those of emergency, affording no analogy to the case of an ordinary agent. But although such analogy has been expressly repudiated in England it appears that having regard to the words of section 189 of the Contract Act, the case of a master of a ship acting on an emergency, and that of any other class of agent acting on an emergency, stand, in this country, directly on the same footing. It is, however, true that the ground on which such an au.thority is implied » -IM. i' S., 275. l;j2 '(HK LAW OK .UiCVi'V. in the niasl('i''s cfiHO, is, in Eiipfland, necessity, arisinfjf by viituc of his purticiilar employment ; and that tlie same implication has been marie in his favour on similar groiiiids in Ihis country, pi'ovioiisly to the passing of the Indian Con- tract Act.l But whether or no the express authority given by the Contract Act to all agents to act on an emergency, was intended by the legislature to override the implied authority given otherwise to the master of a ship, it is unnecessary to discuss ; as whether it does so or not, his case appears to afford, in this country, an illustration to the section in question inasmuch as his case could be brought within the terms of the section. Moreover such cases may be usually referred to for the purpose of pointing out the duty imposed upon agents of communicating with their principals, when it is possible to do so. Before referring to cases on this subject, it may be well to point out more fully the grounds on which a master of a ship has under English law an implied authority to sell the goods of an absent owner. This authority is only to be imjilied from the situation in which he is placed, and consequently to justify his thus dealing with the goods he must establish, Jirst, a necessity for the sale ; and secondly, inability to communicate with the owner and obtain his instruc- tions. " It is under these circumstances, and by force of them, that the master becomes the agent of the owner, not only with the power, but under the obliga- tion within certain limits, of acting for him ; but he is not entitled, in any case, to substitute his own judgment for the will of the owner, in the strong act of selling the goods where it is possible to communicate with the owner and ascertain his will."^ As to this, at least so far as regards other classes of agents, it appears that the strict rule of communicating with the principal before sale, would in India be modified by s. 189 of the Contract Act. There may be an urgent necessity for a sale arising from the fact that if the goods are not sold they will perish, or that they will have to be kept in warehouses at a great expense, so that as a matter of business it would be wrong to warehouse them ; but in England it must be shewn that the ruaster had no means of communi- cating with the owner and taking his directions whether he shall sell them or not. But, whether the goods are of a perishable nature or not, if the master has an opportunity of communicating with the owner before they actually perish, he cannot (according to English law) sell without communicating with the owuer and obtaining his directions ; and if the master obtains directions, and the owner of the goods refuses his consent to a sale, the master cannot sell, although the goods are of a perishable nature. Indeed the law is that prima facie the master has no authority to sell.^ With reference to this duty to communicate, ' Bayley v. Tai-iilcnath Poramani ■, Bonrke, (0. C), 263. =■ Australasian Steam Navigation Co7npany v. Morse, L. R., 4, P. C, 222, (22S). " Acatos V. Bums, L. R., 3 Ex. D., 282, (290). NATURE AND EXTENT OF THE AUTHORITY. 183 the law iu this country is that it is the duty of agents in all cases of difficulty to use all reasonable diligence in communicating with their principals, and in seeking to obtain instructions from them> If therefore time will admit of it, it is the duty of an agent, before acting in the business of the agency in an unusual manner, to seek instractions from his principal ; if, however, the emer- gency is pressing, and there be no time for such communication, he will be fully justified in taking such steps as a prudent man would take in endeavouring to mitigate or avoid any loss which may result to the subject matter of the agency. The extent of this duty is well illustrated in the case of The Australasian Steam Navigation Company v. Morse,^ by their Lordships of the Privy Council, when speaking of the duty of a master to communicate with the owners before making a sale of cargo, and may be made use of as a general example of the duty of all agents in this countiy. In that case which was decided in 1872, the plaintiffs, sheep farmers, sent to their agent at Rockhampton 19 bales of wool to be shipped on board the defendant's ship Boomerang for conveyance from Rockhampton to Sydney. These 19 bales formed portion of a cargo comprising 260 bales of wool consigned to nineteen separate consignees in Sydney. The Boomerang struck on a rock and filled, and the whole of her cargo became sub- merged, and more or less damaged by salt water. The cargo was taken out, transhipped into another vessel, and taken back to Rockhampton. In the course of transhipment from the Boomerang many of the bales of wool unavoidably burst open, and the wool belonging to different consignees became mixed, aod the wool on its return to Rockhampton, to which place it was conveyed with reasonable despatch, was dirty, and stank and was heated and in danger of ignition. The weather was rainy and there were no stores in the town of Rockhampton in which the wool could have been unpacked and dried, and the wool was in immediate peril of increased and serious damage. Under these circumstances, at the instance of the master, assisted by the agents of the shipper, the wool brought back was sur- veyed, and a report drawn up which recommended it should be sold immediately. Whereupon, owing to the urgency of the case, the cargo was by direction of the master of the Boomerang sold at public auction. At the trial the Judge sub- mitted to the jury, amongst other matters ; did the defendants the owners of the vessel, time and circumstances considered, act for the best, and as wise and prudent men, for the interest of the plaintiffs ? had the defendants, considering all the circumstances of the case, time and opportunity to obtain instructions from the owners ? the jury found the 1st of these questions in the negative, and the latter in the affirmative. The case eventually came up before their Lordships of the Privy Council. Their Lordships, after laying down the general principles of law as to the authority of a master under certain circumstances to ' Ind. Cont. Act, s. 214. "" L. R., 4 P. C, 222. ini TUF. I, AW OK A(;F.V('r. ei'U the goocl.s of an al)Heiit owner, to wliicli pn'nciploH I liav(; befoi-e rcfciTcd ; Bfiid, " tlio .stunniiiig up of the Chief JuHtice of the Siipreine CouH of New .South Wales is inn)U<^iied on the ground that it waH misleading in two, amongst other, points, //r.f/ by the exphuiation of tlie word " necessity" as being eipiiva- lent to " a high degree of expediency " " highly expedient," &c. and secondly by the question whether the defendants had acted as " wise and prudent men ; " and said, of the word, " necessity,^' " it has undoubtedly been employed in cases of this kind to express the urgency of the occasion which must exist to justify the act of the master, but the word " necessity " when applied to mercantile affairs, where judgment must, in the nature of things be exercised, cannot of course mean an irresistible compelling power, what is meant by it in such cases is, the force of circumstances which determine the course a man ought to take. Thus, when by force of circumstances a man has the duty cast upon him of taking pome action for another, and under that obligation, adopts the course which, to the judgment of a wise and prudent man, is apparently the best for the interest of the persons for whom he acts in a given emergency, it may properly be said of the course so taken that it was in a mercantile sense necessary to take it" and after upholding the manner the question had been left to the jury, their Lordships said " A sale of cargo by the master may obviously be necessary in the above sense of the word, although another coujrse might have been taken in dealing with it ; for instance, if in this case, the wool, Avhich had no value but as an article of commerce, could have been dried and repacked, and then stored or sent but at a cost to the owner clearly exceeding any possible value of it to him when so treated, it would plainly be the duty of the master to sell, as a better course for the interest of the owner of the property than to save it by incurring on his behalf a wasteful expenditure. It was further objected," said their Lordships, " that the attention of the jury was not sufficiently directed to the condition of the specific bales of wool belonging to the plaintiff, it is plain that the ship was a general ship, that the wool belonged to numerous owners, that all of it was more or less damaged, and that some of it was so intermixed as to render it difficult within the time at the master's disposal, and the small resources of the port, to deal with the bales separately, these facts had properly great weight with the jury when they came to consider what it was practicable for the master to do with such a cai'go." Their Lordships then dealt with the duty and possibility of the master communicating with the owners or the consignees, holding that he must, to hold himself free from responsibility, estab- lish an inability to communicate with the owner of the goods, and that the possibility of communicating with the owners depended on the circumstance of each case, involving the consideration of the facts which create the urgency for an early sale, the distance of the port, the means of communication which may exist, and the general position of the master in the particular emergency ; that NATURE AND EXTENT OF THE AUTHORITY, 135 such a communication need only be made when an answer can be obtained, or there is a reasonable expectation that it can be obtained before the sale, but that where there is ground for such an expectation, every endeavour, so far as the position in which he is placed will allow, should be made by him to obtain the owner's instructions. And upheld the finding of the jury in favour of the Austi-alasian Steam Navigation the defendants in the action. As re- gards the duty of communicating with the owners of the goods, their Lord- ships, after laying down the general principle to which I have previously referred, said, " the sale, if justifiable at all, must have taken place speedily, for the perishable condition of the wool, which alone justified the master in selling, made it necessary there should be an immediate disposition of it." And after finding that it was not possible for the master to communicate with the owners, said ; — There can be no doubt that the master is bound to employ the telegraph as a means of communication where it can be xxsefully done ; but, in this case, the state of the particular telegraph, the way it was managed, and how far explanatory messages could be transmitted by it, having regard to the time and circumstances in which the master was placed, were proper subjects to be considered by the jury, together with other facts, in determining the question of the practicability of communication It is obvious when a ship is in distress at a distant port, from whence communication with all the owners is impossible, and with any of them difiicult, that the task of selecting (where all are entitled to consideration) those with whom he can and could communicate, must add greatly to the master's labour, and might at times require an amount of time and attention which he could not give unless he neglected more passing duties connected with saving and dealing with the goods. Such a state of things, when it exists, is clearly within the range of the circumstances which the jury may properly be directed to consider in estimating the conduct of the master." A further example of this duty before acting on an emergency may be instanced by the case of WilkmsoJi v. Wilson.^ " The Bonaparte " which was one between the owners of cargo and the person to whom a bottomry bond had been transferred, as to the validity of a bottomry bond, purporting to elfect a ship and cargo, the question whether it aifected the cargo alone comino- up before their Lordships of the Privy Council. There a Svveedish vessel bound from a port in Sweeden to Hull, was driven by stress of weather into another port in Sweeden. Ten days after her arrival the cargo was unladen, and the ship found to be greatly damaged. The repairs Avere completed, and the cargo reloaded. The master at once communicated with the owners of the ship, resident in Sweeden, who being without funds consented to the master taking up a bottomry bond for payment of the necessary repairs ; and the Britisli Consul at the port ' 8 Moo., P. C. C, 459. \M tiif; !,aw ov agevct. where the vessel lay, wrote on helialf of the master and as his agent, to the consignees at Hull, informing thoni of the damage sustained by the vessel, but making no application to them for money, nor referring to the necessity of repairs. No answer was made to this letter, and the master hypothecated the ship freight and cargo for the money borrowed for the repairs ; held that such notice to the consignees was sufficient notice to authorize the master raising the money by bottomry on the cargo. Further examples of action taken in cases of difficulty may be found in Hunter v. Parker,^ Trouson v. Denf,^ Gaudet V. Brown,^ Christie v. Row^ and The Elizabeth.^ But before concluding this question of " emergency," it may be well to refer to the case of Chapman v. Morton^ in which case, in the judgment of the Chief Baron, reference is made to a somewhat peculiar uni'eported case, in which it was held that the agents could not be considered to be agents of necessity to dispose of the cargo, (which case, however, would in all probability be considered to be a case falling within section 189 of the Contract Act) ; there a shipment of goods was made from a port in Italy to Malta ; at the time of the arrival there the plague raged, the consignees accordingly sent the ship to Messina, and there sold the cargo. The vendors having failed, and an action being brought by the owners of the goods against the consignees at Malta, the latter were held responsible, it being considered that the circumstances of the case did not make them agents of necessity to dispose of the cargo on behalf of the vendors. Implied authority of particular kinds of agents ; Partners. — Each member of a partnership is its general agent ; the extent of his authority is determined by the kind of acts which are necessary or usually done in carry- ing on the business of such a partnership as that of which he is a member. Partners may stipulate among themselves that some one of them only shall enter into particular contracts or into any contracts, or may restrict in any way they please the powers of any one of them, but with such private ar- rangements, third persons dealing with the firm without notice, have no concern. The public have a right to assume that every partner has authority from his co-partners to bind the whole firm by acts done or contracts entered into which are necessary for the purpose of the partnership business.''' The question what is necessary for the purpose of carrying on a partnership must of course be determined by the natui*e of the particular business carried on by the partners. » 7 M. & W., 342. See also Bli/th v. Birmingham Water Works Company, 11 East., "84. » 8 Moo., P. C, 419. • L. R., 5 P. C, 164, 165. • L. R., 4 Q. B., 127 ; L. R., 5 Q. B., 544. » 2 Dodson, 403. • 11 M. & W., 534. » Ind. Contr. Act, a. 251. See Con v. Hn^kman, 8 H. L. Cas., 262, (304). IMPLIED AUTHORITY OF CERTAIN CLASSES OF AGENTS. 137 But the act of one partner to bind the firm must he necessary for the carrying on of its business, if all that can be said of it was that it was convenient, or that it facilitated the transaction of the business of the firm, that is not sufficient in the absence of evidence of sanction by the other partners. ^ What is necessary for carrying on the business of the firm under ordinary circumstances and in the usual Avay is a fair test ; but nevertheless as a partner is in the same position as any other agent, he will be at liberty in an emergency to do all such acts for the purpose of protecting his co-partners from loss as would be done by a person of ordinaiy prudence in his own case, under similar circumstances,^ this distinguishes the law so far from that laid down in Hawfayne v. Bourne.^ There appears, however, to be a marked distinction between monies borrowed and debts contracted for the necessary purpose of carrying on or preserving a business. This distinction will be found in consulting the cases Hawtayne v. Bourne and Hawken v. Bourne,* and the words in which this distinction is pointed out by Lord Chief Justice Turner in Ex-parte Chippendale in re German Mining Company. Authority in all cases of partnership. — Generally it may be said that every partner, whatever the nature of the partnership business, will be presumed to have power, to engage clerks for the benefit of the firm.^ As to this authority Lord Rolf doubted whether in every case it would be necessary, when a contract is entered into with partners, to show, in order to charge them all, that benefit would necessarily result to the firm ; and said that " there might be cases in which the partnership would be bound, although that might not be the case ; but it must always be a sti-ong fact to show that the partner acted for the firm if it be established that the contract was for the benefit of the firm ; the point to be considered in each case is, is the party acting for himself alone, or on account of the firm.'' To make tender of a debt due by the firm ;^ to receive payments due to the firm,'^ to grant receipts for debts due to the firm -^ to release a debt,^ but not in fraud of his co-partners and collusively,!'^ and not so as to set it off as against a private debt of his own -^^ to draw cheques in the name of the ' Brettel v. William, 4 Ex , 630. * Ind. Contr. Act, s. 189. " Hawtayne v. Bourne, 7 M. & W., 595. Ex-parte Chippendale, 4 De G., M. & G., 19. * 8 M. & W., 7o3. » Beckham v. Brake, 9 M. & W., 79. * Douglas v. Patrick, 3 T. R., 683. ' Anon Case, 12 Mod., 446. Duff v. East Indian Company, 15 Ves., 118, (213). * Henderson v. Wild, 2 Camp., 561 ; Bristow v. Taylor, 2 iStark, N. P. C, 50. * Ha^oksha^v v. Parkins, 2 Swanst., 539. ^° A:ipinall v. London and North-Westerti Railway Company, Ha., 325. »' Piercy v. Fynney, L. R., 2 Eq., 69. . . i;38 THE r,.\vv oi- Af;i:Ncv. (inn or tho lirm's bankers ;1 even tlionj^li ho l)e a slecpiiif,' pailiicr ;2 and pro- bably to (•n<,'-a^fc ti) i)ay a (l('l)t cbu; hy the (iriii.-^ Authority of firm of bankers. — A managing partner in a firm of raaha- jans has i)o\vor to bind liis eo-i)artnei's by a l)ond securing payment of a debt due by the tirm.* So one member of a (iim of bankers has been liehl to liavc authority to accept security for a del)t due to the liiin.^ It also appears that one partner in a banking or agency house abroad has power to grant a letter of credit binding on his co-partners,^ and that a banker may negociate bills deposited by his customer, to such an extent as the necessary demands of the latter may require without express authority^ A banker also has authority when his customer accepts a bill made payable at the bank, to apply what balance he may have in hand belonging to such customer in payment of the bill, even though there be no express order to pay.' But is there no implied authority for a bank to p.ay a third person a note made payable at its place of business, simply because of the fact that the maker has funds sufficient for that purpose, in the absence of any course of dealing or previous instruction so to apply the deposit.^ In commercial partnership. — The authority of the partners depends on the nature of the particular business carried on by the firm ; but it has been held that the sale of one partner is the sale of the firm -^^ that one partner has a power to borrow on the credit of the firm when necessary so to do •}'^ and if he has power, to borrow it has been held that he mny pledge the personal pro- perty of the firm for that purpose, and such power is not gone upon dissolu- tion of the firm ■}^ that one partner has power to get an advance npon drafts, and bind the firm by his action, unless the person making the advance was aware that the advance was intended for the separate account of the borrower }^ that he has power to procure an insurance for himself and co-partners on partner- ' Laws V. Rand, 3 C. B. N. S., 4-12. * Bac]ihouse v. Charlton, L. R., 8 Ch. D., 444. • Laci/ V. McXeile, 4 D. & Ry., 7. * Hakim Syiid Ahmed Hossain v. Kurneedan, 24 W. R., 60. » Weikersheim's Case, Tj. R., 8 Ch. App., 831, (838). • Hope V. Gust, 1 East., 53. ' Thompson v. Giles, 3 D. & R., 733. » Kymer v. Laivrie, 18 L. J. Q. B., 218. » 6i-isson V. Com7nercial National Bank, L. T. 20tli July 1889. "» Lambert's Case, Goodbolt, 244. " Gordon v. Ellis, 7 M. & G. 607, (621) ; Rothivell v. Humphrei/s, I Esp., 406. Denton v. Rodic, 3 Camp., 493; Lane v. Williams, 2 Vera., 277. Beckham v. Drale, 9 M. A W., 79. >» Butchard v. Dresser, 4 DeG., M. & G., 542. *• Ejc-parte Bonbonus, 8 Yes., 540. IMPLIED AUTHORITY OF CERTAIN CLASSES OP AGENTS. 139 ship property ;^ that one partner has power to assent to a creditor's composition deed, 2 that he may buy goods on credit, and this, even though the goods be pawned by the buyer, provided that there is no collusion between the buyer and the seller ;^ that he may borrow money and give a note thei-efor in the name of the firm, though the money be not brought into partnership, nor the note given with the privity of the other partners ;* but it submitted that such borrowing must be shown to be necessary for the business. And if the business of the partnership be such as ordinarily requires bills of exchange, then unless re- strained by agreement, any one partner may draw, accept and endorse bills of exchange in the partnership name for partnership purposes,^ but he has no implied power to accept bills in blank, nor to bind his co-partners, otherwise than jointly with himself,^ nor can he bind them severally by joint and promis- sory note signed by himself and by him on their behalfJ But partners may bind each other by di'awing, accepting or endorsing bills of exchange or promis- sory notes in the name of the firm,* and provided that the bill or note be directed to the partnership, he may do so in his own name.^ So also all contracts of sale or purchase by one partner on joint account, and for the purposes or con- nected with the partnership are binding on the firm.^*^ So also a promise or ad- mission by one partner will bind the firm.^'- He has, however, no implied authority to pay a pi-ivate debt with partnership funds. ^^ But a partner in a firm not being an ordinary ti-ading partnership, but merely a Carrying Com- pany, formed for the purpose of carting goods from a railway to a town, and for the carrying on of whose business the drawing and accepting of bills or making promissory notes is in no way necessary, has no implied authority to bind such firm by promissory notes in the name of the firm.^^ Nor will partners be bound by a joint security given by one of the partners for a transaction not relating to the partnership, except where the firm's express or implied sanction ' Hooper v. Ludey, 4 Camp., 66. * Dudgeon v. O'Connel, 12 Ir. Eq., 56tj, (573). * Bond V. Gibson, 1 Camp., 185. * Lane v. Williams, 2 Vern., 277. * Ex-parte Darlington District Joint Stock Banking Campanij, 34 L. J. Bk., 10, (12). ' Hogarth v. Latham, L. R., 3 Q. B. D., 643. ' Terring v. Hone, 4 Bing., 32. ® Swann v. Steele, 7 East., 210. Maelae v. Sutherland, 2 El. & Bl., 1. Bank of Australia V. Breillat, 6 Moo., P. C, 152. Hall V. Smith, 1 B. & C, 407. Wilks v. Back, 2 East., 152. Wells v. Masterman, 2 Esp., 731. ■" Sandilands v. Marsh, 2 B. & Aid., 680 ; Brettel v. Williams, 4 Ex., 623. " Dimca7i y. Loivndes, 3 Camp., 478. '* Kendal v. Wood, L. R., 6 Ex., 243. "» Premabhai Hemabhai v. Brown, 10 Bom. H. C, 319. Act XXVI of 1881, a. 27. 140 line t.AW OK AGENCY. can be shown, or where the ijivin^ of sucli security ia necessary for the carrying on of the business of tlie firm ;i nor lias one partner any authority to bind the partnership in any other name than that held out to the world as the name of the firn .'" Nor has one partner any implied authority to open a banking account on behalf of his firm otherwise than in the name of the firm^ although it appears he may transfer the partnership account.* And one partner has no implied authority to mortgage immoveable property belonging to the partnership business without the consent of the others;^ nor has he implied power to take a lease for the firm of a house for partnei'ship purposes ;^ nor can he refer a dispute the subject of a suit to arbitration ;7 nor can he submit partnership disputes to ar- bitr.ation -^ nor can he consent to judgment against the firm ;^ nor has an agent, appointed by fill the partners to wind up their business authority to accept bills drawn on the firm, or to accept a bill in the name of one partner.^'' He has power to execute a joint and several promissory note if it is necessary for the business. ^^ In a firm consisting of printer and- publisher, the publi.sher has in certain cii'cumstances implied power to order goods on credit and bind the firm ; thus where in an action by stationers who supplied paper for two particular works, on the orders of the publishers of the works, against the printers of them, on the gi'ound that the printers and publishers were pax'tners in the works, it was held that if the printers were partners in the publications at the time when the orders were given they were liable, although the pub- lishers only were liable in the first instance. ^^ Authority of a Kurta. — When the acts of a managing member of a Joint Hindu family proceed from an intention to provide for some family need, or to perform an indispensable religious duty, or to benefit the joint estate, they are binding upon the other members of the family.i^ The manager by Dayabhaga law carrying on a family business has power to mortgage the joint family pro- ' Crawford v. Stirlimj, 4 Esp., 207. Dniicun v. Lownde-'i, 3 Camp., 478. 2 Pritchard v. Draper, 1 Rass. & M., 199. ^ Alliance Bank v. Keardeij, L. K.., 6 C. P., 433. * Beale v. Caddich, 2 H. & N., 326. * Juggeivundas Keeka Shah v. Ramdas, Brijbookuii Dis, 2 Moo. I. A., 487. Harrison v. Delhi and London Bank, I. L. R., 4 All., 427, (458). « Sharp V. Milligan, 22 Boav., GOG. ' Hattoii V. Boi/le, 3 H. & N., 500. 8 Steady. Salt,S Bing., lUl. * Munster v. Cox, L. R., 10 App. Gas., 680. Hambridge v. De la Cronce, 3 C. B., 742. '» Odell V. Cormack, L. R., 19 Q. B. D., 223. " Maclac v. Sutherland, 3 E. & B., 1. Elliot v. Davis, 2 B. & P. 338. '» Gardiner v. Childs, 8 C. & P., 79. »• Saravana Tevan v. Muttayi Animal, 6 Mad., II. C, 71, 6 Moo., I. A., 393, Tagore Lee- turea for 1885, p. 236. IMPLIED AUTHORITY OF CERTAIN CLASSES OF AGENTS. 141 perty and such mortgage is binding on all the members of the partnership.^ The manager in carrying on an ancestral trade can pledge the property and credit of the family for the necessary and ordinary purposes of that trade, and third persons dealing bond fide -vvith such managers are not bound to investigate the status of the family, minor members even being bound by the necessary acts of the manager.2 By necessary acts are meant such as are necessary for the material existence of the undivided family or the preservation of the family property ; but a compromise between co-partners of partnership accounts, and differences by transfer and division of partnership property is not such a necessary act, but is one which is left to be dealt with by the ordinary rules of law, and is one which must be shown clearly to be for the benefit of the infant members before the compromise will be enforced. He may grant a receipt for payment of a debt due to the joint family.^ He may in his discretion expend moneys for the improvement of the family dwelling house, and enter into a mortgage to ob- tain moneys for that purpose.* He may mortgage the interests of the family estate of the other members of the family, for any common family necessity, or for the common benefit and use of the undivided family.^ But a mortgage of the joint family pi'operty by the manager is not binding upon his adult co- sharers unless it is shewn that it was made with their consent either express or implied ; in cases of implied consent, it is not necessary to prove its existence with reference to a particular instance of alienation, but a general consent may be deducible in cases of urgent necessity from the very fact of the manager being intrusted with the management of the family estate by the other members of the family, and the latter entrusting the management of the family affairs to the manager must be presumed to have delegated to him the power of pledging the family credit or estate when it is impossible or extremely inconvenient for the purpose of an efficient management of the estate to consult them and obtain their consent before pledging the estate or their credit.^ He cannot alone consent to the enhancement by his landlord of a joint family tenui^e, or give an ekrah to that effect so as to bind his co-sharers.''' He has no power by acknow- * Bemola Dossee v. Mohv/ii Dossee, I. L. R , 5 Calc , 792. ' Bamlal Thahursidas v. Lackmichand Muniram, 1 Bom. H. C, Ap., 51. Trimbath Anant V. Gopalshet Mahaden, 1 Bom. H. C, (A. C. J.), 27. Johuree Bdbi v. Sree Gopal Misser, I. L. R., 5 Calc. 470. Shan Narain Singh v. Rwjhobur Dy,tl, I. L. R., 3 Calc, 508. JoyTcristo Cotvar v. Nittiyanand Nundy, I. L. R., 3 Calc, 738. ® Sangappa Chanbasappa v. Sahebanna bin Kangedappa, 7 Bom., H. C, A. C, 141. * Ratnam v. Gobmdarajulu, I. L. R., 2 Mad., 339. * Gundo Mahadev v. Rambhat bin Bhanbhaf, 1 Bom., H. C, 39. ^ Miller v. Runga Nath Mouliclc, I. L. R., 12 Cal., 389_. See Mahabeer Pershad v. Rmyiyad Sing, 12 B. L. R., 90 ; 20 W. R. 192. ' Hemayet oolah Chowdry v. Nil Kanth MvUick, 17 W, R., 139. 142 THi: l,A\V OK AGENCY. Icd^incnt to revive a debt hiiircd l)y liiiiiliif ion, except as against himself,' or when aelim,-- :is P. C, 319. « The Catherine, 15 Jar., 232. " Burgon v. Sharpe, 1 Camp., 529. » The Fanny, 48 L. T., 771. 8 Yates V. Hall, 1 T. R , 73. Lloyd V. Guihert, L. E., 1 Q. B., 115. Missoxu-i Steam Ship Co., L. R. 42 Ch. D. 321. »» Read V. Anderson, L. R., 13 Q. R D., 779. L. R., 10 Q. B. D.. lOO. " 1 Bom. H. C, 34. >» W. N., 1887. ^» L. R., 22 Q. B. D., 680. IMPLIED AUTHORITY OF CERTAIN CLASSES OP AGENTS. 147 principal, or the usage of any particnlar port or trade, may be reasonably held to confer an implied authority to insure. ^ Auctioneers. — An auctioneer may make a contract of sale of goods in his own name,2 and can sue the purchaser from the price,^ where the right of no third person intervenes ;* he may maintain an action against a person taking- goods out of his possession.^ And, in common with all agents for sale, has, in the absence of advice to the contrary, authority to receive the proceeds of sale,*^ but only in cash in the absence of any practice or custom to the contrary.''' Where it is customary he may receive the deposit by means of a cheque.^ If he is employed to sell goods for ready money, he has power to receive the money,^ he cannot however deviate from the strict terms of the conditions of sale -j^^ he has no implied poAver to receive more than the deposit ;^i nor has he authority to receive payment by bill of exchange ;^^ but he may take a cheque in lieu of cash -^^ he has implied authority to bind the vendor by his signature, and so also can he bind the bidder.^* He may adjourn the sale from time to time, but he is not bound to adjourn simply because a person sends him notice to say he is ready to make a higher bid than that of the highest bidder.^^ Brokers. — A broker has authority as agent of both vendor and purchaser to sign the contract made by him as agent ;1^ there being nothing to prevent him from acting as agent for both parties on those jjoints where their interests are the same ; but he must, where such is not the case, act as agent for one party exclusively.^''' He, hoAvever, has no authority to contract in his own name,^' or to delegate his duties to another without express authority ;1^ nor to receive the ' See Lindsey v. Gihl»f, 4 Jnr., N. S., 779; 28 L. J. Cli., 692. Green v. Brlggs, 6 Hare, 395. Alexander v. Simms, 23 L, J. Ch., 721. See as to agents to purchase, Mullens v. Miller, L. R., 22 Cli. D., 194. « Williams \. Millington, 1 H. EL, 81. ' Rohinson v. Rutter, 4 El. & Bl., 954. * Dickenson v. Nanl, 4 B. & Ad., 638. » Holmes v. Tutton, 5 El. & Bl., 65. « Cnpel'v. Thornton, 3 C. & P., 352. Sykes v. Giles, 5 M. & W., 645. ■» Catterall v. Hindle, L. R., 1 C. P., 186. Williams v. Evans, L. R., 1 Q. B., 352. Williams V. Sykes, L. R., Q. B., 352. * Farrer v. Lady Hartland, L. R., 25 Ch. D., 637, (642). 3 Sykes v. Giles {arguendo, per Parke B.), 5 M. & W., (650). '<» Jones V. Nanney, 13 Pr., 76. '' Sykes v. Giles, 5 M. & W., 645. " William v. Evans, L. R., 1 Q. B., 352; Sykes v. Giles, 5 M. & W., 645. '» Farrer v. Lacy, L. R., 31 Ch. D., 42, (48). Bridges v. Garrett, L. K., 5 C. P., 451. '♦ Bartlett v. Purnell, 4 Ad. & El., 792 ; Emerson v. Heelis, 2 Taunt., 38. >» Govind Hari Walckar v. Bank of India, 4 Bom. H. C, {O. C. J.), 164. '• Powell V. Edmimds, 12 East., 6. '» Thomson v. Gardiner, L. R., 1 C. P. D., 777. >• Baring v. Corrie, 2 B. & Aid,, 137. '" Cochan v. Mom, 2 M. & S., 301 Eenderton v. Bainmell, 1 Y. «Sc J., 387. 146 THK l,A\V OK A(iKNCT. proceeds of a sale nopociatcd by liim ;' noi- to vary the contract of sale;' nor can lie sue in liiK own name on contract made by him ;8 He has authority to con- tract according to the usage of trade* and do everything necessary within the scope of his authority to cairy out the contract. He has authority to act according to the usage of trade, such usages being tacitly incorporated in the contract, though not expressed in it, juovided the express terms of the writing arc not so inconsistent with the usages so as to exclude them and to change the intrinsic character of the contract.^ Insurance Brokers. — An insurance broker has authority as agent of the underwriter to adjust a loss on a policy where he has authority to subscribe it.^ He may as agent of the assured effect a policy in his own name ;' he may when the policy is left in his hands adjust and receive payments in cash for any return of praemium or any loss on a policy effected by him.^ He may sell in his own name.^ He has no authority to pay a loss ;^o but under certain circumstances he may refer to arbitration a dispute concerning a loss.'*^ He has no power to depute another to act for him,^^ neither has he power to cancel a policy.'^ Ship's Broker. — The mere employment of ship's brokers at a foreign port to find a cargo for a ship and adjust the terms upon which it is to be cairied, does not give them implied power to relieve the master, when he signs the bill of lading presented to him, from the duty of seeing that the dates of shipment are correctly stated in the bill of lading. i* Part owners of ships — Part ownership is but a tenancy in common : and one part owner has no general authority to bind his co-partners for repairs to a ship ; but it is a question of fact whether or no he has express and implied authority given to him.^^ Nor has he power to insure without authority from his co-owners so as to bind them.^^ * Baring v. Corrie, 2 B. & Aid., 137. * Pitta V. Beckett, 13 M. & W., 7*3. Jaidinc Skinntr v. Kuthoraui, Bourko, 43. ' Faiiiie v. Fenton, L. R., 5 Kx., 169. * Dingle v. Uare, 7 C. B. X. S., 145. * Robinson v. Mollett, L. K., 7 H. L., 811. ® Richardson v. Anderson, I Camp., 43, uote^fl). ' Lloijd's V. Harper, L. R., 16 Ch. D., 290, 321. 8 Shee V. Clarkson, 12 East 507, (511). Todd v. Reid, 4 B & Aid., 2l0. » Baring v. Gorne, 2 B. & Aid , 137. '° Bell V. Auldjo, 4 Doug., 48. " Goodson V. Brooke, 4 Camp., 163. •=' Cockran v. Irlam, 2 M. & S., 301. Xenos v. Jnckham, L. K., 2 H. L., 296. '" Xenos V. Wickham, L. R,, 2 H. L., 296, (309). »* Stumore, Weston ^- Co. v. Breen, L. R., 12 App. Cas., 698. '» Brodie v. Hastie, 17 C. B., 109; 25 L. J., C. P., 57. *• Chappell V. Bray, 30 L. J. Ex., 34. 6 H. k K., 145. French v. BaMwu> Inj V. Gilbert, 2 P. Wms., 13, 18, 19. * Daniel v. Ada7ns, 1 Ambl., 495. * 3 Bacons. Abr., 612, Co. Litt., 49. 2 Rolls Abr., 8, 32G. Co. Litt., 181., b. See Co Litt., 52, 6, note fa) 13th ed. Bmcn v. Andrew, 13 Jar., 938. Guthrie v. Armstrong, 5 B. & Aid., 628 ; 1 D. & R., 248, and pp 38, 39, supra. * Parker v. Ectt, 1 Salk., 96, Co. Litt., 49, b, 303, h, (note s). * Sickens v. Irving, 7 C. B. N. S., 165, * Arlapa Narayan v. Nasrsi Keshavji, 8 Bom. II. C, 19. » 2 Kent's Comm. Lect., 41, p. 822, (11th cdj. THE EXERCISE OP THE AUTHORITY. 167 Effect of exceeding the authority. — Where the agent in exercising the authority, does more than he is authorized, in such case, where it is possible to separate that which is beyond the authority from that which is within it, so much only of what he has done as is within the authoi'ity is binding as between him and his principal ; but where no such separation is possible, the principal will not be bound to recognize the transaction. ^ Thus in Baines v. Eiving^ an insurance broker was instructed to underwrite policies, risk not to exceed £100 by any one vessel ; and the broker underwrote a policy for £150, the Court held that the broker had exceeded his authority, and that the contract was not capable of division, and that therefore the principal was not liable to the extent of even £100. So where a firm of carriers authorized one of their partners to draw bills on the firm to the extent of Rs. 200 each ; and the partner made two promissory notes in the name of the firm for Rs. 1,000 each, and the len- der knew that the partner was limited in his authority, but also knew that on other occasions the partner had drawn bills for Rs. 300 which had been previously accepted by the firm ; in an action on the notes, held first that the firm was not liable for the whole amount drawn, and secondly, that the contract whereon the action was founded, was not capable of division, and therefore the firm was not liable to the extent of Rs. 200.^ Nevertheless an excessive exer- cise of the authority will be binding on the principal if he has induced third parties to believe that the agent was acting within the scoije of his authority in so doing.* Effect of doing less than authorized.— Where in exercising the autliority the agent does less than he is authorized, the old rule, laid down in Coke, seems to apply ; there it is said " regulaily it is true that where a man doth lesse than the commandement or authority, there the commandement or authority beino- not pursued, the act is void," but to this rule exceptions are made, and one exception there laid down, is, the case of a decrepit man directing his servant to make a claim on land, and the servant through fear does not go directly upon the land itself, but as near thereto as he dare, in such case it is said, " where a servant doth lesse than he is commanded, yet it sufficeth for that impotentia excusat legem, for scing that the master cannot, and the servant dare not, enter into the land, it sufficeth that he come as neare to the land as he dare " ;^ but otherwise wliei-o there is no such excuse.^ Where the autliority given is to ^ Ind. Contr. Act., ss. 227, 22,S Alexander v. Alexander, 2 Ves., OiO, (Gil). Sco also 1 Bacon's Abridij. " Aui/iuritij," -l-SS. =* L. K, 1 Ex., 320, (323). ' Premabhai Hemabhai v. Brmm, 10 Horn. II. C, 319. ♦ lud. Contr. Act, s. 237. ■^ Co. Litt., 258 (a). ^ Co. Litt,, 258 (6). ir>8 Tiir: i.AW OK vciRNrv. do a lliinq' :i1)soluicIy and llu; attorney doctli it conditionally, the act will be good and llie imaiilliori/ed condition void.l Time of exercising the authority.— The time at wliich the agent should exercise the authority depends on the construction of the authority, and where thez*c is nothing imperatively binding as to time in the authority, it appears that the reasonable convenience and opportunity of the agent may be considered. Thus it has been held in Boe v. EashleigJfi following Freeman v. West,^ that where a power of attoi'ncy authorized the delivery of seisin in accordance with the form and effect of a deed, it was unnecessary for the attox'ney to make livery on the day of the date of the deed, but that he could do so at some convenient opportunity afterwards. There the defendant had granted certain premises to one Dingla (represented in the suit by the plaintiffs, his assignees in bankruptcy) by a deed dated 29th September 1790, from the date thereof for his life ; the lease contained a power of attorney to deliver seisin " according to the form and effect of these presents." Livery of seisin was made by the attorney on the lltli January 1791. In a suit brought in ejectment, it was contended that under the circumstances, the lease was not good inasmuch as livery of seisin could not be made by attorney on a day subsequent to the date of the lease, unless the attoi'ney was specially authorized to do so, which he was not ; and as BMihorit J ior this Hennings V. Pauchai-d,^ was* cited. Abbott C. J., referring to the case in Croke, said ; " that has been already overruled after two arguments in the case of Freeman v. West upon reasons, which appear to me to be quite satisfactory. The Coui't there held that a power to deliver seisin, according to the true meaning of the lease, did not confine the attorney to make livery of seisin on the particular day of the date of the deed, but extended to his doing so at some convenient opportunity afterwards. I think therefore that the livery of seisin was properly made in this case." So under an authority to sell certain property, part may be sold at one time, and part at another.^ So also a power to make livery, the attorney may make livery for part at one time, and for other part at another ^ The agent's exercise of his authority under power of attorney.— The ao-ent may, when acting under a power of attorney, whether created by an instrument executed either before or after the 1st day of May, 1882, if he thinks fit, execute or do any assurance, instrument or thing in and with his own name and signature, and his own seal, where sealing is requii-ed, by the authority of • Gutltrie V. Armstronii, 5 B. & Aid., 628. Co. Litt., 238 (a). « 3 B. & Aid , 156. • 2 Wils , 167. * Cro. Jac, 153. » Com. Dig. "Attorney,'^ C, 15. * Battey v. TreviUi'm, Sir F. Moore, 280, per Anderson G. J. THE EXERCISE OP THE AUTHORITY. 159 the donor of the power. ^ But where a formal instrument is to be executed by the agent under a power the principal and not the agent should be named as a party thereto,^ and generally it may be said, that where an interest is intended to to pass from the princij^al by an instrument, it should in terms be cony eyed by the principal,^ and be executed as provided above. And the reason of it is that the power of attorney vests no interest in the agent, and consequently none can pass from him. Where, however, the authority of the agent is coupled with an interest in the subject matter of the agency, it appears that this rule does not apply, for there the deed of the agent may convey the interest vested in him in connection with the power.'* But it appears that ministerial or transitory acts in pais, such as surrender of a copyhold or to make livery of seisin may be done even by an agent in his own name.^ If authorized under a written power to bring suits, he should do so in the name of the person in whom the legal right of suit is vested, and this is so also where the power, is not in writing.^ But an agent holding a power of attorney even if authoHzed by such power to appear and defend suits on behalf of his principal, is at liberty to refuse to accept service of summons and appear, but may either act upon the power or not as he may think proper.'^ Verbal authority to sign. — As to verbal authorities to sign documents, there may be cases in which a statute may require the personal signature of the signer, but it has been held that the Common \diVf rvle qui facit per almm facit per se should not be restricted, unless a statute makes personal signature indispensable.^ A verbal authorization to sign a memorandum of association has been held sufficient to bind the authorizor.^ In the case last cited Cotton L. J., put the suppositious case of seven persons sitting round a table with a view to signing a document, and one of them saying to the other, " Sign for me," and he considered that to be a sufficient authority. ' Act VII of 1882, s. 2. '■" Dart's V. & P., (5th ed.), 517, (6th ed.), 589. ' Frontin v. Small, 2 Lord Rayon, 1419. Bac. Abr. " Leases," 1, 10, per Lord Chauc. Baron Gilbert. " See Story, 150. * Bac. Abr. "Leases for years," 1, 10. Com. Dig. " Attorney," G., 14. * Tjula Manohur Dos-t v. Kiahen Dijal, 3 N. W. P. H. C, 175. Choonee Snokid x. Eur Pershad, 1 N. W. P. H. 0., (ed. 1873), 277. Juggenath v. Bech, 2 N. W. P. H. C, 60. Eursarun Singh v. Parshun Singh, 2 N. W. P. H. C, 415. Nubeen Chunder Paul v. Stephenson, 15 W. R , 534. Carter v. Misree Lai, 2 N. W., 179. Koonjo Behari Roy v. Poorno Chunder Chatterjee, I. L. R., 9 Calc, 450. Ladlee Feishad v. Qunga Pershad 4 N. W. P. H. C, 50. Fgazooddeen v. Pudinee, 4 N. W. P. H. C, 68. ' In re Luchman Chtuid, I. L. R., 8 Calc, 317. ® Reg V. Justices of Kent, L. R., 8 Q. B., 305. » In re Whitley Partners, L. R., 32 Ch. D., 337. 100 Tui' I, AW III' \(;rN'('v. The exercise ot the authority as to negotiable instruments -I. Promissory notes -II. Bills of exchange. - I. A duly iiuilioii/.cd a^'cnt Hignini,' his name to ii i)i-()iiii.sH()i'y note, l)ill of cxcliangc or cheque, must, if ho intends to avoid personal responsiljility, indicate thereon tliat he si^^ns as agent, or that he docs not therel)y intend to incur personal responsilnlity. If ho does not do so ho will be personally liable on the instrument, save to those who induced him to sign upon the belief that the principal would only be held liable.^ As to whether the rule laid down in s. 233 of the Contract Act, that where an agent is personally liable, a person dealing with him may hold either him or his principal or both of them liable, applies to such a case appears to bo doubtful having regard to the Law Merchant — This matter will, however, be again rcfciTcd to when dealing with the question of the liability of principals to third persons. Effect of the use of the pronoun "I".— It appear.-? that if the agent signs suilicicutly to denote that he is an agent acting on behalf of his principal, the use of the pronoun " I " in the body of the note, is not enough to fix him with the personal responsibility. Thus where one Richard Mitchell one of the members of a iirm of bankers signed a promissory note " I promise to pay the bearer on demand 5£ value received, For John Clarke, Richard Mitchell, J. Phillips, T. Smith, Richard Mitchell." The Court held that such note was prwid facie a promise by one partner, for himself and the other three partners, and it amounted to one pi'omise of the four persons constituting the firm, and that as Mitchell had authority as a partner the firm was bound. 2 The mere addition to the signature of words descriptive of the office of the signer will not be sufficient to free from liability. — The cases of Bottomhnj v. Fisliur^^ Price v. Ttiijhir,^ a})pL'ar to sliow that ])iTsons who promise in their own names to pay money cannot free themselves from personal liability by merely adding to thcii* signatures words descriptive of their office, such as "Secretary or trustee"; and this is also so when the word "executor" is added to a signature^ unless the signer expressly limits his liability to the extent of the assets received by him as such.^ And Lord Chief Jiistice Cockburn in » Act XXVI of 1881, s. 28. * Ex-parte Buckley, in re Clarke, 14 M. & W., 4G0. Sec also as to this Alexander v. Sher L. R., 4 Ex., 104, which, liowevcr, is a case on a note on behalf of a Company. » 1 H. & C, 211, (217). * 5 H. & N , 540. * Cldlds V. Monins, 2 B. and B. 4G0. 5 Moo., 282. * Act XXYI of 1881, 8. 29. THE EXERCISE OF THE AUTHORITY. 161 Button V. Marsh} has laid down, (and the decision has been followed in this country,) that the effect of the aiithorities- is clearly, " that where parties in making a proinisory note describe themselves as directors, or by any similar form of description, but do not state on the face of the document that it is on account or on behalf of those whom they might otherwise be considered as representing — if they merely describe themselves as directors but do not state that they are acting on behalf of the Company — they are individually liable." In Price v. Taylor}' one of the cases above referred to, three persons mem- bei\s of the No. 3, Midland Counties Building Society, signed the following promissory note : " Midland Counties Building Society, No. 3 Birmingham, Two months after demand in writing we promise to pay to Mr. Thomas Price the sum of one hundred pounds with interest after the rate of six pounds per cent, per annum for value received. W. R. Heath, John Taylor, Trustees, W. D. Fisher, Secretary," the Court held that the note showed no intention on the part of the defendants to exempt themselves from personal responsibility. That the words " Midland Counties Building Society, No. 3 " might well be the name of the place from which the note was dated; and that the promise was not qualified. So where principal is named only in body of note.— It is not enough to excuse from liability the agent if he gives merely the name of the principal in the body of the note, and signs it personally himself, the presumption as a general rule being that the executant is liable unless there is clear indication to the contrary. 2 Where principal's name is disclosed in body, and agent signs in* representative character, agent is not liable.— Where the body of the instrument shows that it was executed for a named principal and the person executing it adds words descriptive of his representative character the prin- cipal will be bound.* Signature of Promissory notes by Companies.— Promissory notes, bills of exchange or hundis are binding on a limited Company incorporated under the Indian Companies Act of 1882, if made drawn, ac(;epted or endorsed in the name of the Company, by any person acting under the authority of the Com- ' L. K 6 Q. B., 361, (3Gi). See also New Fleinminj S. .V W. Go. in re I. L. R., 3 Bom., 439 ; I. L. R., 4 Bom., 275. 2 5 H. «& N., 540. • Leidhitter v. Farroiv, 5 M. & S. 345. ♦ JAndns v. Melrose, 2 H. & N., 293. 162 THE LAW OK AGENCY. pany, or if made, iirfopfcd or ondorsod by or on bt-half, or on awonnt of tho Company by any person actincf nndor its autliori'ty.' Agent using words importing agency in signature, and not in the body of the instrument, not personally liable— In AU-xnudfr v. Sizrr,'^ the Secnvtary of an incoi'i)oratcd ("unipany in imisuMnrc of a rcsolntion passod at a general meeting made and sip^ncd a promissory note " On demand T promise to pay Messrs Alexander & Co., or order £1500 valne received. For Mistley Thorpe and "Walter Railway Company. John Sizer, Secretary." Kelly C. B., and Pigott B., (Cleasley B., hesitating,) considered that the contract on the face of it, did not purport to he a personal contract by the .Secre- tary. Kelly C. B., said :— " We find that although in the body of it the per- sonal pronoun " I " is used, it is signed " John Sizer, Secretary for the Company. Unless intended to be the Conpany's note, and not his own, it is difficult to see why it was signed as " Secretary " at all, or why the Company's name was introduced into it. I have no doubt it Avas signed by the defendant only as Secretary, and was intended as the note of the Company lam unable to distinguish this case from Lindns v. Melrose.^ There three of the directors of an incorporated Company signed a note by which they " jointly promised " to pay £600, and to their signatures they added their description, '' director," and the instrument being a note, and not a bill of exchange, they were held not to be liable. Aggs v. Nicholson,* is much to the same effect. It is, however rather a stronger case than the present, for in the bod}- of the note in that case the makers were described as agents." Cleasly B., said : '" Looking at the whole instrument together, and giving full effect to the case of the pronoun '' I " in the body of it, I think, it may be fairly contended that the signature was to be by one person only, and that the person Avho did .sign it assumed thereby a personal liability. But I do not entertain so strong an opinion on the subject as to cause me to differ from the view expressed by the Lord Chief Baron, and my brother Pigott, and I therefore concur with them though with some hesita- tion." The case of Button v. Mnrsh^ is a further example of the individual liability of persons executing negotiable instruments in their oaati names addino- word^ descriptive of their office, but not stating on the face of the document that it is on account of the person for whom they are acting ; and fui-ther shows that the addition of the employers' seal in such case ' Act YI of 1882, s 72 ; read with s. 28 of Act XXVI of 1881. > L. R., 4 Ex., 104.. 8 2 H. & N., 293. • 1 H. & N., 165. » L. R , 6 Q. B., 361. See also McCoUin v. Gilpin, L. R., 5 Q. B. D , 390 ; L. R., 6 Q. B, D., 516. THE EXERCISE OF THE AUTHORITY. 163 is insufficient ; there four directors of a joint Stock Company signed tlieir names to a promissory note " We the directors of the Isle of Man Slate Company Ld., do pr-omise to j^ay J. D for value received (Signed) R. J. N., Chairman, F. H., S. B., H. J. ; " and at one corner of the note the Company's seal was affixed, with " witnessed by L. L.," it was there held that the directors were personally liable as makers of the note ; for that there was nothing in the note itself to exclude this personal liability, and that the fact that the Company's seal was affixed was not sufficient to shew that the note was sigTied on behalf of the Company. Cockburn C. J., said : — " The effect of the authorities is clearly this, that where parties in making a promissory note, or accepting a bill of exchange describe themselves as directors, or by any other similar form of description, but do not state on the face of the document that it is on account or on behalf of those whom they might otherwise be considered as repi-esenting, if they raei^ely describe themselves as directors, but do not state that they are acting on behalf of the Company — they are individually liable. But on the other hand if they state they are signing the note or acceptance on account of or on behalf of some Company or body of whom they are the directors, and the representa- tives, in that case as the case of Lindus v, Melrose^ f^Hj establishes, they do not make themselves liable when they sign their names, but are taken to have been acting for the Company, as the statement on the face of the document represented. If therefore, in this case it had simply stood that the defendants described as directors, but Avithout saying " on behalf of the Company," signed the promissory note, it is clear that they would have been personally liable, and could not be considered as binding the Company. But this was rendered doubtful by the fact of the Corporate seal being affixed to the docu- ment. It does not purport in form to be a promissory note made on behalf of or on account of the Company. So far as the written portion of it goes, it is totally without any such qualifying expression, but some doubt was raised in my mind whether the affixing the seal might not be taken as equivalent to a declara- tion in terms on the face of the note, that the note was signed by the persons who put their names to it on behalf of the Company, and not on behalf of them- selves. But on consideration I agree with my leai^ned Brothei'S that that effect cannot be given to the placing of the seal of the Company upon the note ; it may be that that was simply for the purpose of ear marking the transaction, or in fact showing, as to the directors, that as between them and the Company, it was for the Company they were signing the note, and that it was a transaction in which the proceeds to be received upon the note would operate to the benefit of the Company ; but there is no case which goes the length of saying, that the affixing the seal, where the parties do not other^vise use terms to exclude their personal liability, would have that effect. We think it going too fai- to say that the » 3 H. & N., 177. T6ft TTfK 1,A\V 01- AGENCV. nffixinpf tho seal had tliat elTcet." TliiH nase lias been followed in, In re The New FloiiDiing SpMiiiny and Weavincj Gornpany,^ a case of a hill of exchange in which Grcoii J., gave reasons for concluding that Dtt^^ow v. Marsh was a case falling under s. 47 of the Companies Act of 1862, and stated that English decisions on the construction of that section were directly applicable to the corresponding section of the Indian Companies Act, saying : — " I am of opinion that the cases show that whether or no a note or bill must, on the fact of it, ex^rrenH that it is made, accepted or endorsed, " by or on behalf or on account of " the Company, yet there must be on the face of it that which shows that it was so made, accepted, or endoi-sed, and which excludes the inference that it was made, accepted, or endorsed, by or on behalf, or on account of any other person. A bill, or note, of course, may be in a certain sense on behalf of, or on account of, a Company, though there is upon its face no reference to the Company even in the form of a desci'iption of the persons avIio actually make, accept, or endorse, as being directors or Secretary. As between such persons and the Company, such a bill or note may well be on behalf, or on account, of the Company ; but it is not there- fore so as between the Company and third parties. So far as third paities are concerned, a Company under the Act can be made liable on a bill or note only when such bill or note on the face of it expresses that it was made, accepted, or endorsed by, or on behalf, or on account of the Compan}-, or where that fact appears by necessary inference from what the face of the instrument itself shows. The addition to the signatures of individuals as makers, drawers, acceptors or endorsers of notes or bills, of their description as director or direc- tors, secretary, treasurer, and agent of a certain Company, is not considered to raise such inference, as it does not exclude the supposition that though described as directors, they intended to make themselves personally liable to holders of the instrument, though as between themselves and the Company they may be entitled to be indemnified for anything they may have paid on account of the Company in respect of such notes or bills. But if they intended or may have intended to make themselves personally liable, then they did not intend or may not have intended to make the Company liable to the holders, and in either case it would be impossible to say with certainty, or as a matter of necessary infer- ence, that the note or bill was made, accepted or endorsed on behalf, or on account of the Company." On appeal this decision was affii-med by Sir C. Sargent and Mr. Justice Bayley.^ II. Bills of Exchange. — The exercise of the authority in drawing, accept- ing or endorsing bills of exchange is regulated by section 28 of the Negotiable Insti'uments Act, and in the case of an incorporated Company by that section and 8. 72 of the Indian Companies Act of 1882, this latter section enacts, " that » I. L. R., 3 Bom., 439. * Jn re The New Flemning Spinnivg and Weaving Co., I. L. R,, 4 Bom., 275. THE EXEKCISB OP THE AUTHORITY. 1=66 a promissory note or bill of exchange shall be deemed to have been made, accepted or endorsed on behalf of any Company by any person acting under the authority of the Company ; or if made, accepted or endorsed by or on behalf of the Company, by any person acting under the authority of the Company." Bills accepted on behalf of Companies —Under section 47 of the English Act of 1862 corresponding with s. 72 of the Indian Companies Act, it has, notwith- standing the above rule, which is also the law in England, been held in a case in which the Company was the drawee, and its directors and secretary the acceptors, tbat no terms need appear on the face of the acceptance implying that the bill was accepted on behalf or by authority of the Company, if the bill was in fact accepted by a person acting under the authority or on behalf of the Company. The case referred to is that of Okell v. Charles} there the form of the bill was as follows ; " Twenty-four months after date pay to my order the sum of £275, 35., for value received, Thomas Young. To the Great Snowdon Mountain Copper Mining- Company Limited — Lombard St. and this was crossed — " accepted payable at Messrs. Barclay Beavan and Company." J. Macdonald. Rob. Charles. Directors of the Great Snowdon Mountain Copper Mining Company. D. B. Crosbie, Secretary. Endorsed — Thomas Young. — Okell and Co." The defendants Charles and Macdonald were sued as having individually accepted the bill. The Court of Common Pleas Division decided that the directors not being the drawees could not accept so as to make themselves jiersonally liable ; and from this decision the plaintiffs appealed. The Master of the Rolls said: — " The whole question depends upon the 47th section of the Companies Act, 1862 which enacts that ' a promissory note or bill of exchange shall be deemed to have been made, accepted, or endorsed on behalf of any Company under this Act, if made, accepted or endorsed in the name of the Company, or if made, accepted or endorsed by or on behalf or on account of the Company, by any person acting under the authority of the Company.' It has been admitted in this case that the two directors were persons acting under the authoi-ity of the Company and that they had authority to accept this bill of exchange. The section has, in fact, been fully complied with, but it has been argued that compliance must appear upon the face of the bill^that it must be expressed that it is made on behalf of the Company. But even if such terms as that had been used in the ' 34 L. T., 822. 166 THE LAW OK AGENCY. Act (and thoy liave Jiot) it is still ii (|iic!sli()ii wliothor those bills would he binding upon the defendants personally ; but it is not necessary for us to decide that, as the wolds "expressed to be made on behalf of the Company" are not in the Act of Piirliamcnt In the 45th section of the prior Act it is required not only that bills shall be accepted on behalf of the Company, but also that ' it shall be by such directors expressed to be made or accepted by them on behalf of the said Company.' But those words are left out in the later Act ; in other words they are repealed, because it is no longer intended that it should be ex- pressed on the bill that it is made on behalf of the Company. The legislature have decided that the words are not wanted. The meaning of the words is necessary, but not the words themselves. Does it appear then that these acceptances were made on behalf of the Company P They are directed to the Company, so the Company must accept them. You conclude at once that they are accepted by the drawee. You find that they are accepted by the directors and Secretary of the Company : you conclude that they so accept them on behalf of the Company. If the acceptances had stood alone they might possibly not have been enough to bind the Company, but coupled with the fact that the Company is the drawee, it is pci-fectly clear that they come within the Act, and that the directors are not personaly liable. Kelly C. B., said : — " No tenns need 'appear on the face of the acceptance implying that it is on behalf of or by authority of the Company. The bill shall bind the Company if made by its authority, or on its behalf The case differs from cases on promissory notes, for a promissory note is a totally different thing from an acceptance of a bill of exchano-e which incorporates in the acceptance the person on whom it is drawn." It has been doubted, however, whether the principle laid dowTi in this case would be applicable to the case of a drawer of a bill.i The case of Okell v. Charles, has been discussed and distinguished in the case of the Neio Flemming Spinning and Weaving Company.^ There, the bill of exchange was in the following form. " Sixty days after date of this first of exchange (second and third of the same tenor and date not being paid) pay to the order of Dr. Sidney Smith the sum of rupees two lacs only. Value received and place to the account of G. Padumsey, '• K. Naik. X. Kcssowji, y Secretary, Treasurer, and Agent j The New Flemming S. & W. Co., Ld.J To Messrs. Shamji Nursey and Company, Calcutta. » See Evaus on Pr. & Ag., 214. * I. L. R., 3 Bom., 439. THE EXERCISE OP THE AUTHORITY. 167 The bill was endorsed, No. 990, Rs. 200,000. Due 22nd January, 1879, Pay Bank of Bombay or order Sidney Smith. The question raised was, whether the bill was in such form as to render the Company liable. The authority of the Company to raise money by drawing, endorsing or accepting bills was found in the affirmative. The bill was stated by affidavit to have been accepted by Shamji Nursey and Company. As regards the form of the bill the first two signatures were in Guzerati, with the names in English character following ; the third was in the English charac- ter ; the words and letters " Secretary, treasurer and agent " and " The S. and W. Company, Ld. " in printed letters, as were other formal parts of the instru- ment. Green J., said ; " All that can be said of the fact of there being a print- ed form is that it was caused to be prepared by some person as a form of bill to be drawn by some one — whether alone or with othei-s — who was secretary, ti'easurer, and agent of some Spinning and Weaving Company, as the words " New Flemming " are in writing not in print. Assuming that Companies under the Act are by s. 47 liable on bills of exchange draivn on their behalf, or on account of persons acting under their authority, was this bill such ? The con- clusion at which I ai-rived is, that it was not." His Lordship then laid down the law as set out in words in a previous portion of the lecture, holding that there must be on the face of the bill something to show that it was drawn, accepted or endorsed by or on behalf or on account of the Company, excluding the inference that it was drawn, accepted or endorsed by or on behalf, or an account of any other person. And after stating that he failed to be able to distinguish the case from Button v. Marsh} and considering that that case was one falling under s. 47 of the English Company's Act of 1862, continued : — " Nothing of the nature of an authority was referred to, to meet Diitfon v. Marsh, except a note to s. 47 in Buckley's Treatise on the Companies Act, .3rd ed., p. 1.38, citing a case of Okell V. Charles.^ The report itself is not available here, and the only means we have of knowing what was really decided, is from the note in Buckley, and the entry of the case in Fisher's Digest. The statement of the case by Buckley, however, shows that it was a case of a bill of exchange addressed to the Company by name, and signed, (I suppose it is meant, signed in the way of acceptance) A. B. C. and D. directors of the Company. It is said to have been there held that such a bill bound the Company and not the directors as individuals. But that is a very different case from the present. There the bill was drawn on the Company itself, here on persons, who so far as appears, are wholly strangers to the Company. I think the line of reasoning on which the decision in Okell v. Charles was based, was in all probability the same as is to be found in Mare v, ^ L. R,, 6 Q, B,, 361. " 34 L. T., 822, 166 THK LAW OF AOBNCV. CJhiirh's;^ fhoii'^'li timt was what is fointtumly callrfl a ronvorse case to OJipll v. Charles Now I Imvo liftlo doubt, in my own mind, that if wo had tho report itself, OkcJlv. Charlns would ho found to liave been decided on the same grounds. Tho bill waft drawn on tho Company. UnlcsB tho acceptance was by or on bo- half or on account of the Company, it would have been a nullity, and this coiisidoration was sufiiciont to raise the inference (and this too, wholly apart from ^\]\^.\t appcivi-od on tho face of tho instrnment itself) that the persons who wrote the acceptance, " A. 13. C. and D. directors of the Company," did so on behalf and account of the Company, on whom, and not on them as individuals, the 1)111 wnsdniwu. ;u)il that though they used such form of acceptance as standing by itself, and ajiart from tho fact that the bill was drawn on the Company, would have charged them as individuals, nnd would not have charged the Company " and after distinguishing the case before the Court from Lindus v. Melrose* his Lordship, was of opinion that the addition after the signatures G. P. K. N. N. K., of their description respectively as directors and secretary, treasurer and agent, did not make the bill, a bill drawn by or on behalf or on account of the Company, and that therefore the Company was not liable. On appeal. In re the New Flemming S. and W. Company, Ld.^ it was contended that under s. 47, it was not necessary to bind tho Company, that the bill should expressly state that it was clearlv by or on behalf of the Company (Okell v. Charles) ; and that under that section evidence might be received to show the circumstances under which the bill was drawn. Sargent C. J., said : — " In Corfauld v. Saunders,"^ which was a case under the English Act of 1862, corresponding with the Indian Act of 1866, the question now raised was touched upon in argument, and Chief Justice Bovill in delivering judgment said : — ' It can scarcely be said that a note would be bind- in78. ' I. L. R., 4 Bom., 275. " 2 IT. A- N., 203, n case on a note. ♦ 15 W R., (Eng.) 506 ; 16 L. T. 562. THE EXERCISE OF THE AUTHORITY. 169 ing that if it had been addressed to the directors and accepted by them) the J might possibly not have been enough to bind the Company, but, coupled -with the fact that the Company is the drawee, it is perfectly clear that they come within the Act.' The Master of the Rolls treated the ques- tion, whether the bill was accepted on behalf of the Company, as one to be decided on the face of the instrument. Kelly C. B., however, in his judgment says :-~'N^o terms need appear on the face of the acceptance, implying that it is on behalf or by authority of the Company. The bill shall bind the Company if made by it's authority or on it's behalf. It is admitted here that, de facto the bills were accepted on behalf of the Company and by persons with authority so to bind them.' These remaiks of the Chief Baron would certainly show that he considered the admission by the plaintiff, that the bill was accepted on behalf of the Company, as sufficient to meet the requirements of the Act ; but they cannot be taken even as an expression of opinion that, if the fact had been in dispute between the parties, the defendants could he allowed to prove it in order to discharge them' selves. Although therefore this case goes nearer than any other to raise the question before us, it cannot be regarded as having decided it." With regard to the rule laid down in Miles' clairn^ and in Beckham v. BraJce,^ to the effect — that, nobody is liable on bills of exchange and promissory notes, unless his name, or the name of some partnership or body of persons of which he is one, appears either on the face or the back of the instrument. His Lordship said : — " It is plain however, that in applying this rule, the name on the bill or note need not be the ordinary name of the individual or the partnership but one which the individual or partnership is authorized to be used as his or their name on the bill or note with the intention of pledging their credit" If, therefore, a Company had power to authorize its directors to draw, accept, or endorse bills in their own names on behalf of the Company, evidence might doubtless be given, consistent with the circumstances, to prove that such author- ity had been given ; but we think it requires a far clearer expression of intention, than the language of this section affords, to justify the conclusion that the legislature contemplated a Company, incorporated under the Act, being bound by the use on a bill or note, of any other than the registered name by which it is known to the public." His Lord.ship moreover considered that the phraseology of s. 47 of the Act ot 1862 to the operation of which from the very nature of its provisions, was confined to the form of the bill or note on which the Company is to be held liable, and for the above reason considered that the learned Judge was right in holding that in order to make the Compan}- liable, it must appear on the face of the bill or note, that it was intended to be drawn, accepted or made, on behalf of the Company. This case has been followed in re ' L. R., 9 Ch. App., G35. « 9 M. & W., 79. X 170 TRK LAW np AfiKNCY. the Nnr.wi/ Spinuing and Weaving Company, Ld} But although rliroctors cannot bind a Company hy bill savo as above laid down, yet a Company, which by it's diivftors, acting within their anthority, has sold a bill aw a bill on which it is liable, but which afterwards turns out to be one u])on wliich it is not liable, may be hold liable upon the ground that it has hold out its directors as having an authority to bind the Conipanj'^ by their bill in the foj-m in question, and they not having such authority, the Company would be guilty of misrepresenta- tioK within ss. 18 and 19 of the Contract Act, and would be liable for the amount of the bill.^ In re the Nnrsey Spinning and Weaving Co., the National Bank of India purchased from the above named Company a bill of exchange for 4,000 dollars (Rs. 8,680) di'awu by the Company upon the firm of Nursey Kessowji and Company of Hongkong. " Sixty days after sight 'pay to the order of National Bank of India the sum of 4000 dollars. Value received and, place the same to the account of biDO (Sd.) N. K. > ^. -^ § O r P ( Directors. -M j5 cQ V.T. r. ^ &■ 6c g a 1^ N. K., Secretary, Treasurer, and agent. <'S^^ The Nursey S. and W. Co., Ld." The bill was presented but was dishonoured, and the Bank gave notice to the Company and demanded payment of the bill fi'om the Company as drawers. The Company was ordered to be wound up, and the Bank sent in their claim against the Company as drawers of the bill, held on the authority of the Neio Flemming S. and W. Company, Ld.,^ that having regard to the form of the bill, the Nursey Company could not be made liable as drawer.s. The instrument to bind the Company must be for the purposes of the business of the Company. — Tims in tlu- Ori'mtnl Bank Cnrpnrafinii v. Baree Tea Co., Ld.,^ Messrs. Nicholl and Company drew a bill for Rs. 15000 pay- able to '" us or order " directed to the Managing Agents, Baree Tea Company, Limited. Aci'oss the bill was written " accepted, due 22nd — 25th July 1880. Nicholl and Company, Managing Agents, Baree Tea Company, Ld." This bill Avas endorsed by Nicholl and Company to the Oriental Bank and was dis- counted by the Bank at the market rate, the proceeds being credited in the o-eneral Banking account of Nicholl and Company. Nicholl and Company subsequently drew out the amounts b}' cheques drawn by them personally vrith- out reference to the Bai'ee Tea Company. The Baree Tea Company denied the authority of Nicholl and Company to accept the bill so as to bind the Company, and denied that the bills were di"awn or accepted for the purposes of the Tea Company. It was contended by the Bank that it need not be ex- pressed in woi'ds that the bills were made " by or on behalf of the Company," » I. L. R., 5 Bom., 92. ^ I. L. R., 4 Bom., 275. • I. L. R., 9 Calc, 880. THE EXEKCISE OF THE AUTHORITY. 171 if there was sufficient to sliow that they were so made, and that there was exclusion of personal liability, Jield that it was unnecessary to decide whe- ther the bills were accepted in such form as to bind the Baree Tea Company, as upon the plaintiff Bank's evidences the bill was not drawn or accepted for the purposes of the Company, and that it was not necessary for Nicholl and Company to accept the bill to enable them to carry on the business of the Company. Bills on or by private individuals.— In the case of bills other than those drawn on or by, or accepted by, an incorporated Company, the rule laid down in s. 28 of the Negotiable Instruments Act will apply, and where an agent when acting on behalf of his principal, in the purchase of foreign bills endoi-ses them to him without qualification he will be himself personally liable on his endorsement. 1 So where a bill is drawn by a firm on a private person, it has been held in Mare v. Charles,^ where the bill has been accepted by such person, that he will be personally liable thereon, although he adds to his signature, when accejDting, the designation of his office. In that case the bill ran : — " Three months after date pay to our order the sum of — £ value received in machinery supplied the adventures in Hayter and Holme Moor Mines. J. F. Mare & Co. To Mr. W. Charles. Accepted for the Company. Wm. Charles, Pui'ser." The Court held that the bill was drawn upon the defendant as an individual, and that Avhere a drawer accepts a bill, unless there be upon the face of it a distinct disclaimer of personal liability, he must be taken to have accepted personally, and that the form of acceptance was one making the defendant personally liable. Similarly, where an agent drew a bill on a firm for whom he was agent, without stating that he drew as agent, the Court held that he was responsible, and further doubted whether the agency had been made out.^ As to this case, it has however been said in a later case,* that the decision was not put upon the ground that he must show on the face of the bill that he acted as agent. Effect of custom as to instruments in an oriental language. — The Negotiable Instruments Act of 1881, does not affect any local usage relating to any instrument in an oriental language, but persons by indicating an intention in any negotiable instrument that the legal relations of the parties thereto shall be governed by the Act, may exclude such usages.^ Custom of Dacca as to drawing Hundis. — In Huree Mohun Bysack v. * Qowpy V. Harden, 7 Taunt., 159. * 25 L. J. Q. B., 119. See also Nichols v. Diamond, 23 L. J., Ex., 1. ' Pijou V. Ramkishen, 2 VV. R., 301. * Huree Mohun Bynack, v. Krishna Mohun Bysack, 17 W. K., 442. * Act XXVI of 1881, s. 1. 172 THR r.AW OK ArtKNCT. Krishnn Mohlin B>/mck,^ a chho (Iccidcd pi-oviously tn t lio p;issing of tlic Negotiabln In8tninion<.s vVcfc of 1881 TTiirco Mohun and Ram Chum Pal, gomastas of Sliain Soondoi", drew a liuiidi Cor Rs. 1,000 in their own names in favour of Krishiio MdIiuu, which was accepted by Sham Soondor B^'sack. On due date the pUiiutitl* Krishuo Mohun applied for payment, but the acceptor being unable to pay up the full amount, paid Rs. 400 on account of the hundi, and shortly afterwards became insolvent. The drawee then brought a suit again.st the drawers for the balance. The defence set up was, that they were the gomastas of Sham Soondcr the acceptor, and drew the hundi on his behalf. The Court of first instance found that there was a custom at Dacca, that gomastas draw- ing hundis on their principals were not bound to state on the face of the hundi that they drew as gomastas, and that it was sufficient if it was proved that they stood in that relation to the party on whom the hundi was di'awn. Glover J., said : — It has been moi'e than once held that the Mofussil Courts are not bound by the strict technicalities of the English law ; in this case there is evidence of the most decisive character not only that these defendants are ordinaiy gomastas of Sham Soonder but also that they had no interest whatever in the bill when drawn, and that it was the custom of gomastas in similar situations to draw bills on their principals without being thereby ren- dered liable for the defections of theii' principal In the other case quot-ed Pigou V. Bam Kishen' the point decided had reference to notice of dishonour. No doubt there is in the body of the decision some remarks to the effect that an agent, unless he shows on the face of the bill of exchange that he drew as agent, cannot set up the defence of agency to exonerate himself from liability, but that was not the point on which the decision proceeded, and appeal's to have been an obiter dictum. It was moreover a point which has reference solely to the technical procedure of English law, which does not apply Avhere there is proof of a local custom." Ambiguity as to whom bill is addressed. — An ambiguity in the address of a bill is not enough of itself to displace the liability of an agent accepting it. This was laid down in Herald v. Connah,^ where the bill was as follows, " Three months after date pay to my order £137, 10s., value received in account (Fire policy, No. 697) Thomas Herald. To Henry Comiah, Esq. General Agent of L'Unione Compagna D'Assicui-azione Genorale Accepted payable at 8 York St. !Mauch. on behalf of the Company. H. Connah." » 17 W. fi., 412. » 2 W. K., 301. ' 34 L. T. K. S., 886. THE EXERCISE OF THE AUTHORITY. 17$ In an action against Connah personally on this bill Bramwell B., said : — " To whom was the bill addressed P To Connah. If it had been intended that the bill should have been so addressed to the Company, it should have been so addres- sed in plain words It is true the bill describes Connah as a general agent, but still it is directed to him in his own name, and the rest is mere matter of descrip- tion, showing the reason why it is addressed to him Now I hold that the right way for a person who is accepting for another, to notify that he is so accepting, is for him to use such words as " accepted for " or "^er 'proc^^ but the defendant here makes use of no such expressions. The words used in this bill are not the ordinary words used to show that the acceptor is accepting as agent. And I should say that, even if there were an ambiguity in the address of this bill, that that would not be enough of itself to displace the liability of Connah on his acceptance — but when we see that bill is particularly addressed to him, and when we consider the right way of accepting as agent, is to say that he signs " 'per proc" not " on behalf of," it becomes clearer still that he is personally liable upon it." Cleasby B., was of the same opinion. Huddleston B., said : — " I think this bill was directed to Connah personally, the words " general agent," being words of description merely, and that therefore upon the author- ity of Mare v. Charles^ he is pei-sonally liable as acceptor. Where the bill is drawn for the debt of a third person and is signed without qualification, the signer is liable.— In Soiverby v. Butcher,^ the plain- tiff suj^plied goods consigned to Devey and Company for which Robert Butcher was liable, and for which he drew a bill on Devey and Company making him- self responsible unless they should pay ; the bill was returned in consequence of the shortness of its date, and having a right to another bill from Robert Butcher, the plaintiff went to his oflB.ce to obtain a fresh bill, but on finding that he had left, and that his affairs were under investigation, asked his brother the defendant to sign the bill, the defendant made no objection and signed the bill in his own name without reservation of any kind. Bayley J., said : " He (the defendant) might have given a bill stating on the face of it that he drew it for Robert Butcher ; and if he had stated that he drew it as agent, and had asked for a written acknowledgment that he should only be held liable as agent, he would have acted the part of a prudent man, and having got rid of the personal obligation to which, by signing generally, a party is liable." Vaughan B., said : — " What are the circumstances under which the bill is signed ? The defendant is found in Robert Butcher's counting-house, acting at least as if he was conducting his business, although it is said he was there only to investi- gate his affaii's, and upon the statement made to him by the plaintiff's clerk, he signs the bill without any objection or difficulty. Now what ought he to » 5 E. «t B., 978. ^ 2 Cr. & M., 3C8. 174 inr, law of a(.i;n»y. liavi! tlono, if lio did not intoiid to make liim.solf personally responsible ? Why he ouiifld. to 1kiv(! objected to sig'n, e\ce])t as aji'ent." The exercise of the authority in the case of other, simple contracts, Charterparties ; Bought and Sold notes, &c. — The agent may so exercise his authority as to Tree hiiu.sell' troni all responsibility when contracting; but on the other hand he may also make himself personally liable. The question whether a person actually signing a contract is to be deemed to be contracting pei'sonally, or as agent only, depends upon the intention of the parties as diseovei-able from the contract itself.^ Where it is ])lain on the face oF the conti'aet, that he is contracting on behalf of his piiiicipal he cannot be held pei'sonally liable on the contract -^ and as a consecinencc he cannot sue or be sued thereon. Where, however, he signs the contract in his own name, with- out restriction he is prlnid facie to be deemed to be contracting personally ; and in order to prev^ent this liability from attaching, it must be apparent from the other portions of the document that he did not intend to bind himself as piHin- cipal.^ But the fact that the signature is expressed to be made " as agent " is strong to show that the person signing does not mean to bind himself per- sonally, if the terms of the contract itself do not show a contrary intention,* nevertheless mere words of description attaching to a signature will not alone be sufficient to free the agent from liability. Where, howcA'er, the agent signs the contract being induced to do so on the belief that the principal will alone be held responsible, he will not be liable.^ Charterparties executed by agent so as not to make himself person- ally liable thereon. — In Beslandes v. Gregory,^ the defendants in the body of the charterparty were stated as contracting " as agents to Samuel Fergusson," and the charterparty was signed " For Samuel Fergusson, Gregory Brothers as agents." It was contended that the defendants were liable as principals. Wightman J., said : — " Their signature is plainly expressed to be " for Fergusson'" and " as agents." If that is not enough to exclude them from personal liability, they having contracted in the body of the charterparty also, " as agents," I am at a loss to see what other mode of signature would be sufficient." Crompton J. and Hill J., agreed with this decision. In Wagsfaff y. Andtrsou,^ Bramwell J., said : — In some cases it has been held that the description " as agents " is not conclusive against personal liability, although the signatuie has been professedly " as agent," but I think that those cases cannot be applicable to one of this kind. * Note to Thomson v. Davenport, 2 Sm. L. C, (9th ed.), 420. Soopromonian Setty v. Heilgers, I. L. R., 5 Calc, 71. ' Ind. Contr. Act, s. 230, para. 1. " Note to Thomson v. Davenport, 2 Sm. L. C, 9th ed., 420. ♦ Deslandes v. Gregory, 2 E. & B., 602. * Ind. Contr. Act, s. 234, Wake v. Hariup, 6 II. & X., 7GS, alKrmcd, 1 H. & C., 202. • L. R., 5 C. P. D., 171, (175). THE' EXERCISE OP THE AUTHORITY. 176 Moss and Mitchell are ship-brokers, and ship-brokers usually do not act for them- selves ; it then becomes manifest upon the face of this agreement that Moss and Mitchell are not professing to bind themselves, but are acting for the owners of the F. K. Dundas." In MacTcinnon Macketizie and Gompanxj v. Lang Moir and Com- pany,^ the plaintiffs by charterparty contracted to let the steam ship Oakdale to the defendant. The charterparty stated that the plaintiffs " agreed as agents for owners of the said steam ship," and provided that the owners should bind themselves to receive the cargo on board, and that the master on behalf of the owners should have a lien on the cargo for freight. The charterparty was signed by the plaintiffs in their own name, without restriction. It was admitted that the plaintiffs knew the names of the owners when the charter- party was signed. In a suit against the defendants for breach of the charter- party in refusing to load, West J., said : — " I think that although fifteen or twenty years ago the Common Law Courts in England would almost certainly have decided in favour of the plaintiff's responsibility, and their capacity to sue, yet the more recent decisions of Southwell v. Boxoditch^ and Gadd v. Houghton,'^ establish that in determining whether a personal responsibility has been incurred by the agent, and therefore, a personal capacity to sue, the whole of the con- tract made by him is to be examined. To the same effect is the case of Soopro- monian Setty v. Heilgers,'^ recently decided at Calcutta. The result seems to be, that if the contract made by a person who is an agent is w^orded so as, wdien taken as a whole, to convey to the other contracting party the notion that the agent is contracting in that character, and that he is the mouth-piece through which the principal speaks, he cannot sue or be sued upon the contract. In the present case Messrs. Mackinnon, Mackenzie and Company say they made the agreement " as agents " for the owners of the steam ship Oakdale. No case has yet apparently decided that this would be enough to exclude their personal responsibility, and the corresponding right to sue. In this charterparty, however, there is more than this. It contains a clause by which the owners undertake to receive the cargo, "On being paid freight" If the agents intended to contract a personal liability, this engagement would have been differently expressed. It would have been said " which they engage to receive on being paid, or on the owners being paid." As the contract stands, I think Mackinnon, Mackenzie and Company have clearly indicated that they are acting as agents, and that the contract is " entered into by tlien on behalf of their principals. They speak from the first as agents ; the owners are to receive the cargo, the aimers are to be paid the freight, and the effect of these facts is not done away with by their afterwards signing their own name simply." ' I. L. R., 5 Bom., 581. » L. R., 1 Ex. D., 357. » L. R., 1 C. P. D, 100. 374. ♦ I. L. R., 5 Calc, 71. 17(3 THB r.Aw or aokxct. In ILts-tDiIihoy Vis-rum v. Clnpham} the chartcrparty stated that F. M. and Co. "as ni^'oiits for master and owner" let the steam ship Hatton to E. foi- a (H'l-tain term ; and was si^'ned l)y F. M. and Co. " as agents for master and owner." It appeared that F. M. and Co. were duly authorized to sififn as ag'ents for the owner, but had no autliority from the master to sign the charter as his agents. In a suit by the assignee of the rights of E., under tlxe chartcrparty against the defendants (the master, owner and agents) for an account of monies received by the defendants or their agents in respect of freight &c. Latham J., as to the position of F. M. and Co., said : — " I do not think that they ai'e liable as principals on the charterparty under s. 230 of the Contract Act by reason of their signature as " agents for master and owners," as they appear on the face of the charterparty to sign merely as agents, and the case is governed by, and indeed having regard to the language of the instrument is even stronger than the cases of Soopromonian Setty v. Heilgers^ and Mackiniion, 'Mackenzie and Company v. Lang Moir and Company.^ These cases agree with the English decisions of Fleet v. Murton* Wagstaff v. Anderson,^ Hutchinson v. Tatham,^ a charterparty case not unlike the present." Cases on charterparties executed by the agent so as to make him- self personally liable. — in LLuugh v. Maazaiws,'' decided in 1S7'J, in the body of the charterparty the defendants were described as *' agents for the charterers," but they signed it in their own names, without qualification, held that the defendants were liable, the words " as agents for charterers " in themselves not showing any intention that the agents did not intend to bind themselves as principals. In Lennard v. Bohinson,^ the charter stated that it was agreed between J. M. L. owner of the ship N"., then at Genoa and " R. and F.- of London, Merchants," and was signe'd "by authority of and as agents for jSIr. A. H. of Mimel pro. R. and F. W. F. M. J. M. L. In an action by J. M. L. against R. and F. for damages for detention. The plaintiff declai'ed that A. H. was a foi-eigner but defendant averred that the ' I. L. R., 7 Bom., 51, (65). » I. L. R., 5 Calc, 71. • I. L. R , 5 Bom., 584. • L. R., 7 Q. B., 126. » L. R., 5C.P. D., 171. • L. R., 8 C. P., 482. •> L. R , 4 Ex. D., 104. • 5 El. & Bl , 125 ; bnt see Gadd v. Houghton, L. R., 1 Ex. D., 357, which appears to be irreconoileable with this case. THE EXERCISE OF THE AUTHORITY. 177 agreement was enterred into by the authority of, and for, and on behalf of, and as agents for A. H., and that he had been named to plaintiffs as the principal at the time the charter was made. Lord Campbell C. J., said : — " Looking at the whole of the contract I think the defendants are made personally liable, there is nothing in the signature to prevent them from being so. In the body of the contract they are contracting parties, and they may well become so "by authority of, and as agents for " theii employer, that is, he may be liable to them. Coleridge J., attached some weight to the circumstance that the principal was a foreigner ; for " it seems to me reasonable that a contracting party should require to have a party to whom he may look, and upon whom he may call for performance ; " but considered that the defendants intended to be liable to the contract. Earle J., was of opinion that the defendants had made themselves primarily liable. In Kennedy v. Gonveia,^ a consignee entered into an agreement for the charter of a vessel, " on behalf of Mr. M., merchant of L., the agreement stated "that the said parties agree," and was signed by the consignee personally without describing himself as agent : held that he was personally liable there- under. In Cooke v. Wilson,^ a contract for the conveyance of goods from Liverpool to Australia between J. and R. W. (owner) and S. J. C. on behalf of the Greelong and Melbourne Railway Company was signed J. and R. W., S. J. C. held that S. J. C. was personally bound by the contract in a suit brought by S. J. C. to recover under the contract. Crowder J., said : — " There is nothing upon the face of the contract distinctly showing that the plaintiff was contracting as agent for others. On the contrary there is everything to lead to the conclusion that he was contracting personally," In Parker V. Winlow,^ the charter was between P. of the good ship C. and " W. agent for E. W. and Son " to whom the ship was addressed ; and was signed by W. without restriction, held that W. was personally liable as charterer. Crompton J., said : — " Mere Avords of description attached to the name of a contractor, such as are used here, saying he is agent for ano- ther, cannot limit his liability as contracted. A man, though agent, may very well intend to bind himself ; and he does bind himself if he contracts with- out restrictive words to show that he does not do so personally. It is important that mercantile men should understand that, if they mean to exclude personal recourse against themselves on contracts which they sign, they must use restric- tive words, as if they sign per procuration ; or use some other words to express that they are not to bo personally liable." Lord Campbell C. J., said : — '■ Though it is not necessary, in the view wliicli I take of this case, to decide tlu> (jiu'stion whether the defendant bound hiiusell' pia-sonally by this contract, we ought not ' 3 D. & K., 503. « 1 C. B. N. S., 153. « 7 El. & Bl., 912, 178 TIIR T,AW 0? AGENCY, to allow any donbf tnoxistas to oiir opinion on the oonstcuction of such a contract. T can liavd no doubt myself, that the defendant is liable. He makes the contract liiinsiir, using- iipt words to show that he contracts ; and the only ground sug- gestod for rebutting his personal liability is that he says he is agent for another. But he may well contract and pledge his personal liability, though he is agent for another. If ho had signed the contract as per procuration for E. W. and Son he might have exempted himself from liability, but on piinciplc and on the authorities cited, an agent is personally liable, if he is the contracting party ; and he may be so though he names his principal."' In Schiller v. Fiiilay,* the charterparty was made by Messrs, Finlay Muir and Company " acting for the owners of the good Steamer Atholl " and was signed " Finlay, Muir and Com- peny, agents of Steamer Atholl." In a suit for damages on the breach of a warranty in the charterparty, Phear J., held that Finlay Muir and Company were liable as principals. " It is a general principle that when one makes a contract, it must be taken to be his own contract unless he states at the time that it is not so and gives the name of the person for whom he makes it It is true that F. M. and Company are described as " acting for the owners of the good Steamer Atholl," but this is an entirely different thing in my judgment from saying the ownei's of the good Steamer Atholl are the parties that are agreeing, not F. M. and Company : and F. M. and Company sign theii- own name at the end with an another description, i. e., " Agents of the Steamer Atholl." It seems to me impossible to say that this charterparty, as it stands, is not in terms a contract between F. M. and Company on one side, and Borrodaile Schiller and Company on the other. It is not altogether an insignificant fact in this case that at the time of making of the contract, not only did not B. S. and Company know who the ow^ners were, but F. M. and Company were also ignorant on that point, and it was not probable, T think, that gentlemen forming a mer- cantile firm in Calcutta, such as B. S. and Company, would deliberately enter into a contract such as this with an unknown, unnamed, and absent principal, leaving the representatives of that principal in Calcutta altogether free from liability, and also leaving it to their discretion to say afterwards for whom it was they were contracting." In Adams v. Hall,^ the charter was made between the defendants J. H. and Company " for owners of the good ship R." and A, the defendants signed " for oAvners J. H. and Company " at the trial of a suit against the defendants who were a firm of ship-brokers for damages done to the cargo, three letters which had passed between the plaintiff and the defendants and theii* solici- tors were admitted in evidence which went to show that J. H. and Company were principals, and as soon as the plaintiffs' case was closed, the defendants' solicitor objected that there was no evidence against the defendants as principals, and ' See Williamson v. Barton, 7 H. & N., 899. • 34 U T., 70. " 8 B. L. a., 544,,(549). THE EXERCISE OF THE AUTHORITY, 179 applied for a non-suit on the ground that it appeared upon the charterparty that the defendants were not principals, but only agents of the owner. The Judge held that the defendants were liable as principals. On appeal, it was held that the contract was ambiguous, but when read with the letters, J. H. and Company were personally liable. In Weidner v. Hoggett,^ the words " I under- take to load the ship Der Versuch," in an agreement signed " on account of i3ebside Colliery, W. S. Hoggett," but which mentioned no person with whom Hoggett was contracting with, although the terms of the agreement were com* raunicated by the charterers to the plaintiff the captain of the " Der Yersuch " ; held that there was abundant evidence to show that the undertaking was signed by Hoggett and given to the charterers for, and on behalf of, the captain as an undisclosed principal ; and that the contract was with the defendant personally, and not as agent. It is, however, to be remarked that the decision in Gadd v. Houghton,^ although not directly impugning this case, would probably be held to override it. Bought and Sold notes. — The agent must exercise the same precautions in contracting by means of bought and sold notes to prevent personal liability attaching to his contract, as have been above stated with relation to charterpar- ties.^ A few instances of such contracts where it has been held that he either has, or has not contracted personally may be given. Where he signs without qualification he will be liable. — Thus in Paice V. Walher,'^ the defendants who were brokers, signed a contract for the sale of wheat in the following form : — " Sold A. J. Paice, Esq., London, about 200 quarters wheat, (as agents for John Schmidt and Company of Danzig) (Sd.) Walker and Strange." Kelly C. B., said : — " Although it may be difficult to reconcile, I do not say all the cases, but all the dicta in the cases upon the subject, thex'e is no difficulty in extracting from the authorities a very sound rule, and one on which we can always safely act. That rule is well laid down in the note to Thomson v. Davenport, in 2 Sm. L. C, 6th ed., 344, in these terms, " where a person signs a contract in his own name, without qualification, he is prima facie to be deem- ed to be a person contracting personally, and in order to prevent the liability from attaching, it must be apparent from the other portions of the document that he did not intend to bind himself as principal." I^ow to apply that rule to the present case, the contract is here signed " Walker and Strange," without more, thei'efore without any such qualification as is referred to in the z'ule I have cited, and that circumstance disposes of the many cases adverted to by JMi". Dodeswell, in which the contract was signed by a person describing himself in the signature, and as part of it, as agent. That the incorporation of such ' L. K., 1 C. P. D., 533. • See aute p. 174. » L. R., 1 Ex. D., 357. • L. B., 5 Ex., 173. 180 THR LAW OK AOKVCY. words wiili, or ilioir iiniioxatioii to, tin- Hi>^iiaturo is IIh; qualification referred to in the fir.st part of tlio jjassaufc I liavc cited, is shewn by the conchision of the sen- tence where "the other jjortioiis of tlie document " ai-e contrasted wit li the signature itself. The defendants therefore not signing as agents, is there any- thing in the contract to bring them within the latter part of the rule I have referred to, and to which I entirely accede, that is, is there anything in the document to show that the defendants did not intend to bind themselves other- wise than as agents. The words relied upon to show this are the words " as agents for J. Schmidt and Co. of Danzig." But numerous cases, and among.st them that of Lennard v. Robinson,^ have decided that the use of these words in the body of the contract does not prevent the liability of a party who signs as principal. The rule, therefoie, stands thus, that where a contract is signed by a person without any words importing agency, the person so signing is by vii'tue of the contract both entitled and liable, unless in the body of the contract a contrary intention is clearly shewn." Martin and Pigott B. B. both distin- guished the case from Fairlie v. Fenton.^ Cleasby J., agi^eed with the view expressed by the rest of the Court, but said: ' I am not disposed to reject or to give less than considerable Aveight to the fact that this contract shews on the face of it that it was made on account of a foreign principal." The case of Paice V. Walker^ has, how^ever, been questioned in Gadd v. Houghton,^ a case to which reference will be made later on. Mere words of description insufficient. — In Hutchesou v. Eaton^ the con- tract was as follows : — " Messrs. Hutcheson & Co. We have this day sold to you the following goods and was signed Francis J. Eaton & Son, Brokei^," it was contended that the defendants having signed as brokers were not liable : Brett M. R. said : — According to the authorities, as I understand them, where the contract is drawn up in this way, and the signatui'e is of the name of the persons with " brokers" added, and the contract is not sigiied " as brokers," they are personally liable : for it said to be a signature on theu* behalf, and the word " brokei's" is only a description. Cases in which it has been held that the intention of the person making and executing the contract was not to be bound personally — In Gadd v. Houghton,^ the contract was " Mr. James Gadd. we have this day sold to you on account of James Morand and Company of Valencia 2,000 cases Valencia oranges of the brand (Sd.) J. C. Houghton and Company." James C. J., said : — " The case is not in my opinion in any way governed by » 5 El. & Bl., 125. ♦ L. R., 1 Ex. D., 357. « L. R , 5 Ex., 169. • L. R., 13 Q. B. D., 861. • L. R., 5 Ex., 173. L. R., 1 Ex. D., 357. THE' EXERCISE OP THE AUTHORITY. 181 Paice V. Walker} for whatever the decision was in that case upon the words " as agents " the words in the present case " on account of " are not at all ambiguous, aud it would be impossible to make them words of descrijDtion. The ratio decideyidi in Paice v. Walker was that, having regard to the contract and all the circumstances of the case, the words " as agents " must be consider- ed as merely describing or intimating the fact that the defendants were agents, and did not amount to a statement that they were making a bargain " on account of " another pei-son. Those are the very words used in the pi-esent case. When a man says that he is making a contract " on account of " some- one else, it seems to me that he is using the very strongest terms the English language affords to show, that he is not binding himself, but is binding his principal ; as to Faice v. Walker, I cannot conceive that the words " as agents " can be properly understood as inipliying merely a description. The word " as " seems to exclude that idea. If that case was now before us, I should hold the words " as agents " in that case had the same effect as the words " on account of " in the present case, and that the decision in that case ought not to stand. I do not dissent from the principle that a man does not relieve himself from liability upon a contract by using words which are intended to be merely words of description, but I do not think that words " as agents " were words of description." Quain J., said : — " It is said that in order to relieve the agent from liability, he must sign " as agent " or " on account of " Morand and Company. I cannot see the necessity for adding those words to the sig-nature if you can gather from the contract that he makes it on account of Morand and Company. These words at the end of the signature would add nothing to what has been stated in the body of the contract." In Fairlie v. Fenton,^ above referred to, the plaintiff a broker signed and delivered to the defen- dants a bought note for cotton in the following form " I have this day sold you on account of Mr. Illins A. Timmins of Manchester (signed) Evelyn Fairlie, Broker " held that he was not a contracting party, and could not sue the defendants for breach of contract in refusing to accept the cotton. Martin B., said : — " I am entirely satisfied, even without authority-, that when he states on the face of the contract that he is acting as broker, that is, as a middleman between the two parties, he has no interest, aud cannot sue. If he could sue, he could be sued : and it is obvious on the face of the contract that he does not contract to deliver the goods sold, but only that he has authoi-ity to enter into the contract on behalf of the principal he names. The words " I have " are of no importance to show him a contr-acting party." In Beslandes v. Gregory,^ already cited with reference to charterparties ; the Coui't held that a contract worded. It is agreed between C. ... and C. D. Brothers "a*- agents * L. E., 6 Ex., 173. " L. It., 5 Ex., 169. » 2 El. & El., 602. 182 THE LAW OK AGEXCr. to I'j. F., merchants and charterers,^^ and signed " For E. F. of — C. D. Brothers as atji-nts," was conclusive that the defendants did not sign for themselves as prin- cii»iils ; and that it would roquire cxtxx'inely strong words in the body of the contract to control the cITcct ul" the foi'iii of signature used. Cases on a particular custom making an agent who does not disclose his principal personally liable. Tin' cases of Flrd v. Mnrion,^ Sovthirdl v. Bou'ditch,^ Uumjihrci/ v. Dale,^ Hutchinson v. Tathavi,'^ are all cases in which the words of the contract were insufficient to hold the agent personally liable, had it not been for a proved and admitted custom which made the agent personally liable if he did not disclose the name of his principal. The Indian Contract in 8. 230 embodies this custom, and in all cases in this country an agent who does not disclose his principal is prima facie personally liable. It is unnecessary therefore to refer to the cases above mentioned, save to say that the contracts in those cases were respectively worded and signed as follows : " Sold for your account to oui- principals, signed M. W. as broker." " Sold by your order and for your account to my principals," signed by the broker without words of descrip- tion. " Sold for Messrs. T. and M. to our principals " sig-ned " D. and Com- pany bi^okers." A charterparty expressed to have been made and signed by the defendants " as a^i,a>nts to merchants.'' The same rules are applicable to other contracts.— Thus in Jozies v. Downman,'' an action founded on a special agi'eement, the question axose whether the agreement made the defendant personally responsible, or whether it was entered into by him merely as agent for the firm of Esdaile and Company. The agreement in question Avas contained in certain correspondence, in which the following passages written by the defendants and signed by him personally to the plaintiff occurred, "your bill of charges in this matter I undertake on behalf of Esdaile and Company to pay, and will arrange with you the time and mode immediately after the dividend meetings," and in an earlier part of the same letter, "your bill of costs against I undertake to have paid to you." The Couit held that it was impossible to ascertain with certainty from the language of the letter alone, whether it created a personal liability by the defen* dant 01- not, and that the case disclosed evidence from which inferences might fairly be drawn in favour of cither contention, but that the defendant's authority fell short of sanctioning this jiarticulai- undertaking, and a verdict was entered for the plaintiff. On error in the Court of Exchequer Chamber where the ca.se is reported as Lhivuman v. Jours^^ Tiudal C. J., in giving judgment in the case said, " Looking at the terms of the letter itself, and still more, calling in aid the » L. R., 7 Q. B., 126. * L. R., 8 C. P., 482. » 45 L. J. C. P. L. R., 1 C. P., 374. • 4 Q. B., 235 (note). • El. Bl. & El., 1004 ; 27 L. J. Q. B., 390. • 7 Q. B., 103. THE EXERCISE OP THE AUTHORITY. 183 correspondence net out in the special case which preceded and gave rise to that letter, and which may be considered as part of the transaction, we think it imports, upon the face of it, an undertaking made by Downman as agent of the Esdailes ; and that it is not to be inferred from the facts found, that there was a want of authority on his part to make such undertaking, or any excess of his authority in making it The very terms of the letter itself " I undertake on behalf of Esdaile and Company, to pay " would seem to us, in their natural meaning, to point rather to a promise made by one person as agent for another than as intended to bind the party speaking in the character of a principal, for upon the latter supposition there would appear to be no reason whatever for mentioning the name of the principal. To say the least, however, the expression is capable of bearing this construction ; and when contrasted with the form of expression used by the defendant in the part of the same letter immediately preceding, viz., " your bill of costs I undertake to have paid to you" the distinction between the two modes of expression strongly confirm the interpretation we think it demanded itself." In the case of an unwritten agreement, the question whether the agent is a party to a contract, is a matter of inference from the circum- stances. — In Williamson v. Barton^ the plaintiff put up at auction his farm pro- duce. The defendant bid, and hay and corn were knocked down to him as the high* est bidder, whereiijoon the auctioneer, asked him his name, and on learning it, the auctioneer believing the defendant was bidding for himself wrote his name in his book as purchaser. The plaintiff who was present at the auction had on pre- vious occasions sold to the defendant other goods on behalf of one Smith a contrac- tor to w^iom he was foreman, and he the plaintiff took no objection to the present sale. The fodder was fetched away by Smith's carts and was consumed by Smith's horses. In an action for goods sold and delivered, the defendant pleaded that he had bought the hay and corn not for himself, but for Smith, The Court left it to the jury to say whether the defendant liad authorized the auctioneer to sign his name as the purchaser of the goods, telling them that if they were of that opinion, the defendant was liable for the price, but that if they .should tliink that although the defendant entered into a binding contract, the evidence showed that the goods were delivered not to the defendant, but to some one else, ho was not liable. The jury found for the defendant. In a rule obtained for a new trial for misdirection, Wilde B. and Channell B. were of opinion that th(^ defendant made himself personally liable ; he had communicated to no one that he was acting as agent, or did nothing by word or act indicating that he was not contracting himself and lor himself, Bramwell J. said: " No doubt a person who is acting for another and known by him with whom lie deals to be so » 7 H. & N., 899. 18'1 rnn r,AW of aokscy. actincf, maf and will "bo porHf)rmlly liable if bo contracts as a principal, and that whether ho contracts as a principal, and that whether ho contracts by word of niouili or writing'. The dilfercnco, is that if tho contract is by word of nioutli, it is not possible to say from the agent using tho words " I " and " me " that ho means himself personally : whereas if the contract is in ^vTiting, signed in his own name, and speaking of himself as conti-acting, the natural meaning of the words is, that ho binds himself personally, and he is taken to do so ; and thon tho other party is bound to him. Therefore if the defendant had himself in this case signed the conditions of sale as a purchaser, it may be conceded that ho would have been liable, but the plaintiff would also have been bound to him. But he did not sign the conditions of sale himself ; they were signed by the auctioneer's clerk and unless tho auctioneer's clerk had authority from him so to sio'n his name, the defendant is not bound by that signature. His Lordship therefore held that the question was properly left to the jury to say whe- ther the defendant authorized the auctioneer to write his name as purchaser. And that although the defendant entered into a binding contract, if the goods were de- livered, not to him, but to some other person, he was not liable ; Pollock C. B. held that there was evidence from which the jury might infer that the defendant did not purchase the goods on his OAvn behalf, but as agent only. The Coui-t being equally divided in opinion, the rule dropped. The effect of bought and sold notes. — The question whether bought and sold notes alone constitute the contract, is of some difficulty, the Indian cases on the subject are few in number, and are all cases arising in Calcutta. And havino- regard to the decision of Cowie v. Bemfry} which appears to show a particular custom with regard to these notes, I propose to state first, what the Indian cases on the subject appear to decide, shortly referring hereafter to the leading case upon the subject in England. Where the notes differ. — In Tamvaco v. Skinner,'^ the bought and sold notes did not agree, the bought note containing the words " bought for order of J. S. and Company silk as much as they may supply of November and March bund ; " the sold note " as much as you can supply " of that bund ; the report is silent as to whether any entry was made by the broker in his book, or whether such entry or any evidence other than the notes were befoi-e the Court. The Court held that the bought and sold notes did not constitute a contract binding on J. S. and Company to supply silk of either the November or March bund at a loss. This case is therefore an authority that where bought and sold notes are at variance and there is no other evidence of the contract, there is no contract. Where a bought note is in existence only. — Xext comes the case of > 3 Moo. 1. A., 118. • 2 Ind. Jur. N. S., 221. THE RPPECT OF BOUGHT A^^D SOLD NOTES. 185 MacMnnon v. SMbchunder Seal,^ which decides that the broker's hoaght note is not alone sufficient to make a contract. Custom in Calcutta to contract by bought and sold notes.— The case of Gowle V. Bsmfrij,^ is an important case as it decides that the custom of mer- chants at Calcutta is to contract by bought and sold notes, and points to the fact that such notes alone form the contract ; and fio-ther decides that where there is a variance in the bought and sold notes there is no contract. In that case, Cowie and Company, engaged to purchase from Remfry a certain quantity of indigo, the contract between the parties being carried through by a broker, who delivered a sold note for the approval of Remfry ; the sold note was as follows, "We have sold for you to Cowie and Company, indigo price 205 Company's Rupees per factory maund free of brokerage, with the usual allowance on rejections, viz., on broken, chest, washings, and on stuff inferior to the usual run of the parcel" Remfry or a member of his form, objected to the word " usual " being inserted, and the broker there- upon took the sold note to Cowie and informed him of Remfry's objection. Cowie struck his pen through the word objected to by Remfry, placing his initial over the erasure, and returned the note to the broker, who there- upon delivered it so altered to Remfry. The broker delivered, on the follow- ing day, a bought note which differed in certain material terms from the sold note. In a suit brought by Remfry against Cowie for non-performance of the conti'act contained in the sold note evidence respecting the custom of mer- chants at Calcutta to deliver bought and sold notes was given, this evidence was, however, very conflicting, but the Court decided the case in favour of the plaintiff, considering that the evidence in favour of the custom to deliver bought and sold notes preponderated, but held that the sold note alone formed the contract. On appeal the Judicial Committee held that, according to the custom prevailing amongst merchants at Calcutta, the contract should have been by bought and sold notes, and that the necessary inference was, that the parties had intended to contract according to that custom; further that the actual, dealing between the parties corresponded with the custom, as bought and sold notes had been delivered ; that the contract was not, as held by the lower Court, evidenced by the sold note alone, but was a contract by bought and sold notes according to the custom in use ; that the submission of the sold note to Cowie, was not for the purpose of considering if it contained his intentions, but solely and exclusively for the purpose of asking Cowie's consent to tho removal of the word " usual " ; that this could not be considered a proof of knowledge of con- tents and consent to be bound by the whole instrument, abandoning the usual mode » Bonrke O. C. 354. " 3 Moo. I. A., 448. 190 THR LAW OK AGENCY. of contract by bonc^ht and sold notes : that the contract boinp contained in both the notes, ami ihcro being a uiutwial variance between them, no binding contract had bci'n eftoctcd. There may be cases in which bought and sold notes have been made but which do not nevertheless constitute the contract— CVaWou v. Shau\^ docidi'il in 1872, is auautliority sliowiiig (liat the piutics may intend to contract, and may have contracted previously to the delivery of the bought and sold notes, and should these notes be at variance, parol evidence may be given of the terms of the contract. There the broker made no entry of the con- tract in his book, and there was a material variance in the bought and sold notes delivered ; the notes were accepted and retained by the plaintiff and the defendant respectively; in a suit brought in the Small Cause Court by the plaintiff for non-delivery under the contract, the plaintiff proposed to show by parol evidence what the contract between the parties really was ; this evidence the First Judge refused to allow considering that the fact of the interchange of brought and sold notes showed it to be the intention of the parties that the terms of the contract should be reduced to writing, and that everything which passed between the parties through their broker previously could only be looked upon as the early stages of the negotiation ; the Second Judge, however, consider- ed that for the reasons given by Erie J., in Sivewright v. Archibald,^ parol evidence as to what the parties really intended to be their contract was admis- sible. The two following questions therefore were referred to the High Coui't for decision (1) whether, it was open to the plaintiff to prove by parol eWdence the existence and terms of a contract on which he might maintain his suit ? and (2) whether bought and sold notes materially varying are not, when re- ceived and retained by the parties, conclusive evidence, that in the last stage of theu" negotiations, the parties did intend to make, and believed themselves to have made a contract, but failed to do so ? Couch C. J., said : It being stated that the Statute of Frauds does not apply, we are of opinion that the plaintiff was at liberty to pi'ove by parol evidence, the existence and terms of a contract on Avhich he could maintain the action. In Sivewright v. ArcJiihald^ a memorandum in ■s\Titing of the contract was necessary, as it was within the Statute of Frauds ; and Erie J.'s opinion that the mere delivery of bought and sold notes does not exclude other evidence of the contract in case they disagree, was in accordance Avith that of the other Judges There may be a binding conti"act, if the parties intend it, although bought and sold notes are to be exchanged, or a more formal contract is to be di'awn uji. This is shewn by Heyworth v. Knight.* If the bought and sold notes do not agree, they cannot > 9 B. L. R., 245. ^ 20 L. J. Q. B., 529. " 20 L. J. Q. B., 529. ■• 33 L. J. C. P., 298. THE EFFECT OF BOUGHT AND SOLD NOTES. 187 be used as evidence of the contract, but we cannot agree with the First Judge that their differing, and not being returned is positive evidence that, at the conclusion of the negotiation, the parties did not agi'ee ; the fact being, as we think, that the negotiation was concluded, and the contract made, before the notes were written, and that they were sent by the broker to his principals by way of information. To support the opinion of the First Judge, it would be necessary that there should exist a custom between merchants that they should not be bound until regular bought and sold notes have been exchanged." Bought and sold notes do not necessarily constitute the whole con- tract. — In Jumma Doss v. Srenath Roy^ which was a suit brought to recover monies due under certain small transactions, which the plaintiff alleged to have been lent to the defendant on the pledge of shares between April and September 1883 ; and further alleged that the defendants between October 1883 and March 1884, made certain payments to him, and that on the 5th March it was agreed between them that the plaintiff should take over at the market price of the day all the shares of the defendant which he held ; this was done, and the plaintiff sued for the balance due to him. The defendant denied that there was any loan, and contended that the transactions were out and out sales to the plaintiff, there being, however, at the time of each sale, a contract by bought and sold notes by which the plaintiff agreed to resale the shares at a futui'e date at an enhanced price ; evidence was tendered to show the natui'e of the contract made between the parties, and to show that the bought and sold notes did not constitute the whole contract, this was objected to on the ground that the contracts being reduced into writing, no evidence was admissible other than the bought and sold notes. Trevelyan J., held that the transaction was a sutta one, i. e., sales for cash, and re-purchase for time. And on the ques- tion of the admissibility of the evidence (the decision on this point being given decided at the time the question arose), said : — " The first question is whether the terms of the contract have been reduced to take the form of a document ? If the parties have intended to reduce all the terms of ihe contract into writing, then no parol evidence is admissible, but if they intended only to reduce into writing a portion of the terms of the contract, then I think they are entitled to give parol evidence of the terms which they did not intend to reduce into wiiting. Now when bought and sold notes are exchanged, is it usually intended that these notes should constitute the whole of the contract ? I think not, Mr. Benjamin in his work on the law of sales lays down as the result of the authorities that the bought and sold notes do not constitute the contract. I think that proposition is clearly borne out by the case of Siveivright v. Archibald^ (see especially the decision of Mr. Justice Eai'le in that case) and also by the » I. L. R., 17 Calc, 176 (note). ' 20 L. J. Q. B., 529. 188 Till'; r,AW ov aoency. case of Vanton v. Croftfi.^ In both these cases the distinction between making a conti-aot and a memorandum slicwinpfthat the contract has been made is pointed out. TliiMi the i-osult of these cases is that a broker's note as a memorandum may satisfy the Statute of Frauds, but not exclude pai'ol evidence. In Clarion v. Shaw,* Sir Richard Conch and Markby J., treated the bought and sokl notes, not as the contract, but as information sent by the broker to his principal. Of course bought and sold notes unobjected to may be evidence of the contract, but they do not necessarily constitute the whole contract. Although they differ, Clarion V. Shaiv .shows that parol evidence of the contract may be given "I do not think s. 92 of the Evidence Act applies to this case. I think it applies only to cases where the whole of the terms of the contract have been intended to be reduced into "writing. I think this is shown by the words " adding to " which run in that section ; if it were not for those words I should have been inclined to hold that s. 92 only excluded evidence contradicting, varying, adding to or subtract- ing from such of the terms as had been reduced into "WTiting. The question which has given rise to this argument, is in my opinion admissible." As a general rule bought and sold notes when they agree do consti- tute the contract when the broker's authority is clear.— In the ease of Jadu liai V. Bhtthutaruii Niuidy,^ Mr. finaiivo Vigot says: — " lu Siveicright v. Archi- bald, the bought and sold notes were inconsistent with one another ; it seems to bave been the opinion of the Court that the contract between the par- ties might well have been proved in some other way, if there was one, and if it could be proved so as to satisfy the Statute of Frauds. This, and the other cases on this subject, go no further than to sliow that there may be cases in which bought and sold notes have been made, but in which they do not, never- theless, constitute the contract. But as a general rule, when they agree, they do. Lord Campbell in Sivewright v. Archibald,^ says that where the bought and and sold notes agree, it has been held that they constitute the contract. It may perhaps be a question, looking at the case of Cowie v. Bemfnj,^ which governs this Court, Avhether in Calcutta, bought and sold notes do not by custom pre- sumably constitute the contract, unless this be disproved, once the authority of the bi'oker is established. At any rate, where the authority of the broker to act for both sides is clear, whei'c the bought and sold notes agree, and have been entirely acquiesced in, there can be no doubt that, at least so fai' as their con- tents go, they do constitute the contract." Effect of the Indian Cases. — It appears, therefore, from the above cases, that where the bought and sold notes agi'ee, they, as a general rule, constitute the contract. That in Calcutta there is a question whether the bought and » 33 L. J. Ch. D., 189. * 20 L. J. Q. B., 529. =* 9 B. L. R., 252. » 3 Moo. I. A., 448. • 1. L. R., 17 Calo., 173. THE EFFECT OF BOUGHT AND SOLD NOTES. 189 sold notes do not presumably constitute the contract, unless it be disproved, once the authority of the broker is established ;i but that at all events where they agree, and have been acquiesced in, and the authority of the broker is established, they, so far as their contents go, constitute the contract.^ That neither a bought or a sold note alone constitutes the contract.^ That where the bought and sold notes are at variance, and there is no other evidence of the contract, there is no binding contract between the parties,* that where they vary they cannot be used as evidence of the contract, but there may, nevertheless, be a contract binding on the parties, which may be proved by parol evidence. That pai'ol evidence will not be admitted to add terms inconsistent with bought sold notes which are at variance •,'^ The cases which decide that the bought and sold notes do not necessarily constitute the contract are those of Jumna Doss V. Sreenath Roy^ and Clarion v. Shaiv^ in the former case the bought and sold notes in evidence agreed with one another, and evidence was admitted to show that the bought and sold notes did not constitute a sale but a pledge. But the case of Cowie v. Bemfry was not cited to the Court, and at that time the case of Jadu Bai v. Bhuhotaran Nuncly had not been decided. Sivewright v. Archibald.— This effect of bought and sold notes and the entry in the br-oker's book, have been much discussed in England, and it is not out of place therefore to refer to the case of Siveicright v. Archibald^ There a contract was entered into between the plaintiff and defendant by a broker, who delivered to the defendant a bought note in which the thing bought was named Scotch Iron, and to the plaintiff a sold note in which the thing sold was named Dunlops Iron ; the plaintiff declared on the sold note for breach of contract in that the defendant would not accept or pay for the iron when tendered : There was no signed entry of the contract in the broker's book, and the bought and sold notes being at variance, the defendant objected that there was no contract • the plaintiff contended that the defendant had ratified the contract by request- ing to be released from the contract ; the declaration was then amended to agree with the bought note, and the jury found a verdict for the plaintiff", stating that the defendant had ratified the contract alleged in the declaration. A rule was obtained to set aside the verdict, on the ground that in cases where a con- tract has been made by a broker, and bought and sold notes delivered, they ' Jadu liai v. Bhubotarun Nundi, I. L. R., 17 Calc, 173. * Cowie V. Bemfnj, 3 Moo. I. A., 448. Jadu Eai v. Bhubotarun Nundi, per Pigot J., supra. ' Mackinnon v. Shib Chunder Seal, Boui-kc, 0. C, 354. * Tamvaco v. SUin>ier, 2 Ind. Jur. N. S., 221. » Clarion v. Shaiv, 9 B. B. R., 245. * I. L. R., 17 Calc, 176 (note). ' 20 L. J. Q. B., 52y. 190 Till': l-AW OK AGKNCY. alono constituted the conti^ct, and that all other evidence of the contract was thereby excluded, and that if the notes varied, the contract was disproved, and secondly, that, if evidence was admissible, there was no evidence of ratification of f he contract alleged. Ijord Campbell, C. J., Patteson, J., and Wightman, J., held that there was a material variance between the bought and sold notes, and thorefoi-e, that they did not constitute a valid contract ; and that even assuming there was'ovidence of a ])aix)l agreement, there was no sufficient memorandum in writing, within the Statute of Frauds, to make such contract binding upon the defendant. Further that as between buyer and seller when the bought and sold notes signed and delivered by a broker acting for both parties agree, and there is no signed entry of the contract in the broker's book, the bought and sold notes are the memorandum in wi'iting which satisfies the Statute of Frauds ; but when they materially vary, there is no such binding contract, and neither the bought note delivered to the buyer, nor the sold note delivered to the seller, can then be treated by itself as such memorandum in writing. Their Lordships further held that an entry of a contract made in the broker's book, and signed by him, constitutes the binding contract between the parties ; and a variance between it, and the bought or sold note afterwards delivered by the broker would not affect its validity. Erie, J., was of opinion that bought and sold notes signed and delivered by a broker acting for both parties, who has made no signed entry in his book of the contract, are not, by presumption of law, without other evidence of intention, a binding contract in writing, and do not exclude other evidence of the contract, and of a compliance with the Statute of Frauds in case the bought and sold notes materially vary — holding that the plaintiff was entitled to succeed, on the ground, either that the bought and sold notes did not substan- tially vary, or that the bought note which stated the substance of the contract, was a sufficient memorandum within the Statute of Frauds to bind the defen- dant. The majority of the Court fui-ther found that that was no sufficient evidence of subsequent ratification by the defendant. The authorities for holding that the entry in the broker's book con- stitute the contract, wei-e , at one time abandoned,^ but the strong opinions ex- pressed by the Court in Siveioright v. Archibald^ appear to have i-e-instated the broker's entry as the contract. Signature in point of form. — As regards the sufficiency of the signatui'e in point of form ; this does not seem provided for exhaustively by any Indian enactment. In Geary v, Phjjsic^^ a signatm-e in pencil has been held sufficient. Abbott C. J., said : — " There is no authority for saying that where the law * See Hodgson v. Duvies, 2 Camp, 531. Goon y. Aflalo, 6 B. & C, 117. Thornton v. JUeux, M. &. M., 44. Haues v. Foster, 1 lloo. & R., 368. « 20 L. J. Q. B., 529. • 5 B. & C, 234. CONSTRUCTION OP THE AUTHORITY. 191 requires a contract to be in writing, that writing must be in ink. The passage cited from Lord Coke (Co. Litt. 229 (a)) shews that a deed must be written on paper or parchment,^ but it does not shew that it must be written in ink. That being so, I am of opinion that an endorsement on a bill of exchange may be by writing in pencil. There is not any great danger that our decision will induce individuals to adopt such a mode of writing in preference to that in general use. The imperfection of this mode of writing, its being so subject to obliteration, and the impossibility of proving it when it is obliterated, will prevent its being generally adopted. There being no authority to show that a contract which the law requires to be in winting should be written in any particular mode, or with any specific material, and the law of merchants re- quiring only that an endorsement of bills of exchange should be in writing, without specifying the manner in which the writing is to be made, I am of opinion that the endorsement in this case was a sufficient endorsement in writ- ing within the law of merchants." Under section 2 of Act XIV of 1882, the word " signed " is defined as including " marked, when the person making the mark is unable to write his name " : and it also includes " stamped with the name of the person referred to." And under s. 3 of Act I of 1887, the word " sign " with its grammatical variations and cognate expressions, is defined with reference to a person who is unable to write his name, as including " mark " with its grammatical variations and cognate expressions.^ PART II. CONSTRUCTION OF THE AUTHORITY. General rules for formal instruments.— There are some few rules which have been laid down for the construction of the authority given to the agent, which must be carefully attended to. Firstly, where the authority is given by a formal instrument, such, as a power of attorney, it has been laid down that the authority given thereby must be construed strictly ; the special purpose for which the power is given is first to be regai'ded,^ and the most general words* following the declai'ation of that special purpose, will be construed to be merely all such powers as are needed for its effectuation ;6 yet the authority will, even without the assistance of general words, be held to include all the means neces- ^ See also s. 3, Act I 1872. " Document " and s. 2 of Act XIV of 1882. ^ See Benares, Rajah of v. Debi Dyal Noma, I. L. R., 3 All., 575, and Queen Empress v. Janki Prasad, I. L. 11., 8 All., 293. « Leivis V. Ramsdale, W. N., (1886), 118. * Sheoratan Kuar v. Mahipnl Kuar, per Mahmood J., I. L. R,, 7 All, 258, (270). * Juduh V. Addi Raja Queen Bihi, 2 Mad., II. C, 177. Attuood v. 3/itHuiH;/*-,t7 B. & C, 278, (284). Pen-!/ v. Holl, 6 Jar. N. S., 661. 102 THR r,AVV OK AORNCT. aary to atfaiii Mio nnfomplislnnonf- of iho. prinr-ipal powor.' Anrl in ronstru- ing words in a j)o\vor of attorney the rule applicable to other documents, that the words must be looked at in connection with the context as well as with the general object of the power, must not bo lost sight of.^ I. The power must be construed strictly, the special purpose for which the power is given first to be regarded, and general words follow- ing that special purpose to be construed as being all such powers as are needed for its effectuation. — In Keslmv Bapuji v. Narayan Hhainrnv'' a power appointing a luuktar a true and lawful attorney " to make accurate inquiries as rewards the lands of a certain village mortgaged by the donor, and to redeem the same, to sue or make petition, to make an appeal, or special appeal, and to answer and sign for the donor, and to pass all manner of documents, and to register &c. the same, and to do other work in connection with the same wherever the same may be required to be done, which, the donor, if pi'esont, would have been called on or permitted to do," was held not to authorize the mooktar to enter into an engagement mth a pleader to pay him Rs. 99 as reward on the day of decision of the case instituted to redeem their lands even though the suit be amicably settled. Sarjent J., saying that a mere power to sue would not authorize an agent to do more than employ a vakil on the terms of paying him a reasonable remuneration, and that as to the power " to pass all manner of documents and to have them passed in connection with the lands and to register the same," such a power was by its very terms confined to documents relating to the lands which the client was anxious to recover and not to the suits to be brought to recover them. So a power authorizing the execution of bonds in lieu of former debts does not authorize the execution of a bond to secure a debt already barred by limitation.* Again where a iemadar gave to his brother a power of attorney " to conduct cases on his behalf, to appoint any pleader or muktear, to receive money deposited and due to him from the Courts, to act in dakhil-kharij cases, to purchase villages under decrees, to file receipts and razeenamahs, acquittances and other documents." The donee of the power referred a pending suit to arbitration ; ^Ir. Justice Turner and IMr. Justice Broadhurst said " the language of a written document of this nature when distinct must have its proper effect" " in our judg- ment it is o-oino- too far to hold that these terms authorized the attorney to refer question to arbitration."^ In Budh Singh Dudhuria v. Denendranath Saticul^ » Howard v. Bailie, 2 H. Bl., 618, (G19). » Jonmenjoi/ Coondoo v. Watson, I. L. R., 10 Calc, 901, (911). « I. L. R., 10 Bom., 18. * Hiihlnl Sulcul V. Ramrioti Dey Roy, 11 C. L. R., 581. » Thahnnr Fer. Act 1 of 1872, a. 94. * Act 1 of 1872, s. 95. See Field on Evid., notes on ss. 8 & 95, pp. 92 & 475, (4th ed.) CONSTRUCTION OF THE AUTHORITY. 203 than one, of several persons or things, evidence may be given o£ facts showing which of those persons or things it was intended to apply to.l So also when the language used applies partly to one set of existing facts and partly to another, bnt the whole of it does not apply correctly to either, evidence may be given to show to which of the two it was meant to apply.^ And with reference to the use of technical words in any document, evidence may always be given to show the meaning of illegible or commonly intelligible characters of foreign, obsolete, technical, local and provincial expressions, of abbreviations and of words used in a peculiar sense.^ » Act I of 1872, s. 96. » Act I of 1872, s. 97. • Act I of 1872, a. 98. LECTURE VII. RIGHTS OF TTTR AGENT AGAINST HIS PRINCIPAL. PART I. RIGHT TO COMMISSION. PART II. RIGHT TO A LIEN. Part I. — Commission how fixed — By agreement or usage — If gratnitous agent no right — So if agreement repels the right — When due — When binding contract is made — Examples — The bnsiness must be effected throngh instrumentality of agent — Where agent has Ijrought the parties together ho may bo entitled although coniplctiun of actual business not brought about by him — If contract completed practically constitutes contract, entitled — But transaction must be legal — Not payable where agent misconducts business — Where agent puts himself in a position in which he might be tempted to act corruptly — Where possible to sever contract may bo entitled to partial commission — Revocation before completion of business — When entitled to compensation for revocation — Agent as consignee for sale when entitled — Revocation of authority where employment is qualified, effect of — Where business is prevented by principal — Commission payable subject to approval of title — Fulfilment of contract construed by usage of trade — Lien for commission. Part II. — Lien, what it is — Particular or General — Right given by Statute — Right to general lien — This right not absolute — Banker's lien — Factors lien — Wharfinger's lien — Attorney's lien — Priority of attorney's lien — Policy broker's lien — Particular lien — Manner in which lien is acquired — Possession is necessary — As to what claims the right exists — No lien for oflficious services — It must be for a debt due from the person for whom agent acts — Exception — Under what circumstances right is divested— Not revived by resumption of possession — Exception — Right lost when debt on which it is claimed is satisfied — Not lost by goods being warehoused — Lost by misconduct — Whether lost by taking security — Not lost by set off — Where agent proves in insolvency — May be lost by act of party claiming it — Property detained as, lien cannot be sold — Maritime lien. Right to Commission. — The remuneration given to an agent is usually called " commission," the amount of which is either fixed by express agreement between the principal and the agent, or where no such agreement exists, is determined by the usage of trade in similar cases. '^ An express ari'ange- ment would, howcvei', of course override a usage of trade.^ Where there is no contract and no usage, it has been held- that no conimission is recover- able,^ unless the work is completed.* The agent has a right to his commission, ' Eicke V. Meyer, 3 Camp., -112. Cohen v. Pa^jet, 4 Camp., 96. Roberts v. Jackson, 2 Stark., 225. Chapman v. Dc Tastet, 2 Stark., 204. * Bower v. Jones, 8 Bing., 65. • Taylor V. Breiver, 1 M. & S., 290. Hall v. Guerneii, 2 C. & K., 64i. ♦ Ind. Contr. Act, s. 219. EIGHT OP AfiENT AGAINST HIP PRINCIPAL. 205 unless he is a mere gratuitons ao-ent, or unless the understanding' between the parties repels such a claim. i Thus where a person performed work for a committee under a resolution entered into by them " that any service to be rendered by him should be taken into consideration and such remuneration be made as should be deemed right," it was held that no action would lie to recover a recompense for his work, the resolution importing that the committee were to judge whether any remuneration was due.' Commission usually consists of a percentage upon the actual amount of the value of the business done, or upon the value of the goods sold or bought, or upon the value of the freight of a ship chartered, and is usually paid by the seller of the goods or by the charterer of the ship.^ Where there is a contract on the part of the agent to undertake to guarantee the fulfilment of the contract, or the payment of the goods sold, the commis- sion is what is called " del credere," and for this undertaking the amount of commission is usually somewhat higher than the usual rate of commission given in other cases. Commission when due. — In the absence of any special contract to the contrary, an agent's commission does not become duo until tlie woi'k on which he is employed is completed.* The completion of the agent's work, generally speaking, takes place on his making a binding contract between the parties ; thus in Lockwood v. Levich^ where a binding bargain had been procured by a commission agent, and accepted by the party employing him to procure orders, the agent was held entitled to his commission even though the principal through inability failed to supply the goods contracted for. So in Buskin v. Bamkissen SeaV' the broker was held entitled to his commission after completing a contract, although the defendant refused to carry it out, but secretly sold to the intend- ing purchaser behind the back of the broker. So in Green v. Lucas^ when the de- fendant employed the plaintiff to procure a loan on certain leasehold property agreeing to pay commission upou the amount procured, the plaintiffs entered into negotiation with certain persons who agreed to advance the money subject to the title of the property proving satisfactory, it subsequently turned out that tlie lease prevented the proposing lenders from advancing the money. The plaintiffs then sued the defendant for commission, the Court held that he was entitled to his re- muneration, having done all ho was bound to do ; on appeal the Lord Chancellor ^ Eicke V. Meyer, 3 Camp., 412. Roberts v Jackson, 2 Stark., 225. * Tat/lor V. Brewer, 1 M. & S., 290. ' Levi's Merc. Law, p. 165. * Ind. Contr. Act, s. 219. Hammond v. Holliday, 1 C. & P., 38i. Maester v. AthinA, 1 Marsh., 76 ; 5 Taunt., 381. » 8C. B. N. S., 603. « 23 W. R., 146. ' 31 L. T., 731. On appeal, 33 L. T., 584. 206 THE I,AW OK AflF.NCY. said, " Tt appoars to mo that tlio plaintifTs had done cverythiTif» which apfcnts in thin kind of work arc bound to do, and it would be forcing their liability, if they were to be held liable for what happened after. If the contract afterwards were to go off from the caprice of the lender, or from the infirmity of the title, it would bo immaterial to the plaintiffs, and that appears to be the understanding of the persona themselves." Bramwell B con.strued the word " procure " in the contract, as to procure a lender and not to procure the money. So in Fisher v. Drewefi,^ where the defendant contracted with the plaintiff as follows : " In the event of your procuring me the sum of £2,000 or such other as I shall accept, I agree to pay you a commission of 2| per cent, on any money received." The plaintiff procured a person willing to lend £1,625 if the defendant shewed a sufficient title to his security. The defendant accepted the offer, but failed to show a sufficient title. The negotiations went off, and no money was in fact received by the defendant. The plaintiff claimed his commission. Bramwell L. J. said : " IN'ow the current of modern opinion is to the effect that those who bargain to receive commission for introductions have a right to that commission as soon as they have completed their portion of the bargain, irrespective of what may take place subsequently between the parties introduced Even if the rule that the agent is entitled to a commission when he has done his part, whatever may happen subsequently to prevent his work having effect, is con- fined to the case where the failure has arisen through the default of the employer, the defendant will not profit, for he has given no evidence of the default being in any one but himself." The business must be effected through the instrumentality of the agent. — The business must, however, be effected tlu'ough the insti'umentality of the agent. Thus in an action to recover commission for the procuring of a loan, it is not enough to prove that the loan has indirectly, as a remote and casual consequence resulted from the intervention of the party who sues, but it must be proved that the loan was obtained by means of his agency or by means of some sub-agent of his, from the parties to whom he applied. And if. all that appears is that the party to whom he introduced the subject, declining the proposal, mentioned it to a third party, who, not at his suggestion, but of his o\vn. mere motion knowing nothing of the plaintiff, negotiated the loan on hia o'svn account with the party sued, the commission is not due.^ But where the agent has by acts or words brought the contracting pai'ties together, he may be entitled to commission although the completion of the actual bustTiess, of the agency be not brought about by him ; as in Green v. Bartlett,^ where an auc- » 48 L. J. Ex., 32. * Antrohus v Wickens, 4 F. & F., 291. • 14 C. B. N. S , 681. See also Beningneld v. Kytiaston, 82 L. T. J., 81. RIGHT OF AGENT AGAINST HIS PKIN''IPAL. 207 tioneer and estate agent was employed to sell an estate under an agreement by which he was to receive a commission of 2|^per cent, "if the estate should be sold," and "in case the estate should not be sold" he was to be paid 25£ as compensation for his trouble. The estate was put up for sale but failed to sell ; a person named Hyde who attended at the auction in consequence of the advertisments, but who did not bid, obtained from the auctioneer the name of the owner of the property, and after communicating with the owner, bought the property for £2,500. Previously to the sale being effected the OAvner, the defendant, had written to the plaintiff withdrawing his authority to sell. Erie C. J., said : — " The question whether or not an agent is entitled to commission on a sale of property has repeatedly been litigated : and it has usually been decided that if the relation of buyer and seller is really brought about by the act of the agent, he is entitled to commission, although the actual sale has not been effected by him. I think, the sale here having been brought about through the plaintiff's introduction, the plaintiff is entitled to the stipulated remuneration." As to the effect of this case upon a case of a house agent, see Curtis V. Nixon} So also in Bray v. Chandler,^ the plaintiff a surveyor and agent entered into an agreement with the defendant, upon, amongst other terms, that if the plaintiff should continue for 2| years to discharge efficiently his duties as surveyor, he was to be allowed a commission, besides his salary, of £5 per cent, on the rent of any house let by him for the first year of the ten- ancy. The plaintiff was dismissed from the defendant's service for an alleged breach of one of the conditions of this agreement; the plaintiff sued for wrong- ful dismissal and for commission which he alleged he was entitled to for letting houses, the evidence on this point was, that one King was authorized to make contracts and to receive money on the part of the defendant, and that he had in fact let the houses and i-eceived the commission for so doing ; but the plaintiff claimed to be entitled to this commission also under the agreement, inasmuch as the parties had come to him in the first instance, and he had referred them to King. The Court found that he was entitled to his commission. And in Wilkinson v. Alston^ the defendant having ships for sale employed the plaintiff to obtain purchasers, agreeing to pay a commission if the plaintiff should be the means of introducing a purchaser. In February 1876, the plaintiff in- troduced a person who had been recommended to buy one of the plaintiff's ships by A, and the defendant's agreed that if this resulted in a sale, the plaintiff and A should share the commission. No sale resulted, but in ]\Iarch A mentioned the defendant's same vessel to B, who chanced to call upon liim in reference to a ship of another owner. The plaintiff hearing of this, informed the defendant of B's call, and suggested his seeing B on the subject. The defendant did ' 24 L. T. N. S , 708. * 18 C. B., 718. « 48 L. J. Q. B., 733. 208 ■'"•'• ''■\^^' ^^' AtiKNCV. iKiLliiii" in ilic mattor, and IJ. liad al that time no intention L. R., 9 C. v., 139. * L. R., 1 C P . 505. u 210 Trir r.Aw op aoknct. advaiicoof tho £4,000 was not the consequence directly or indirectly, of tlir noqro- tiations referred to in the offer of tho defendant, and tlicrefore that the plaintiff was not entitled to commission on tho £4,000. So in Lumley v. Nicholson,'^ where the plaintiff was instructed by the defendant to sell an estate which was divided into two lots, one of which was sold to one Armitag'e in October 1881, and for which tho plaintiff received his commission. At this time Armitage was unwilling to purchase the other lot, though the plaintiff still hoped he wonld do 80. In April 1882, the defendant's solicitor wrote to the plaintiff withdrawing the authority to sell that portion of the property. The plaintiff replied, saying, he had withdrawn the property from his books, but intimated that in the event of Armitage, then oi" at any future time becoming the purchaser, he would claim commission on the amount realized. To this, the defendant's solicitor declined to assent. In 1884 the defendant renewed negotiation with Armitage for the remainder of the property, and it was sold to the latter for £19,000. The plaintiff demanded commission and on refusal sued. At the trial, Armitage swore that until long after the revocation of the plaintiff's authority to sell, he had no intention to buy that portion of the property, held that the ultimate sale was not due to any introduction of the plaintiff, and that he could not therefore recover. Here, however, the question of revocation arises, and it appears doubt- ful whether after revocation save in the instance of a sale of goods, the agent could recover more than compensation under ss. 205 and 206 of the Contract Act. But commission can only be claimed by a house agent if the renting is the proximate consequence of the agent's act. — In Curtis v. XUon,^'- the terms on which the plaintiir a house agent usually acted, as shown by his printed card, were, " Upon letting fui-nished houses on rent for any period, £5 per cent- on the first five hundred pounds, 2^ per cent, from £500 to £1,000; 1 jier cent, on all above £1,000 per annum. Upon unfurnished houses £5 per cent, upon one year's rent, and upon the amount of any praemium " : the defendant called on the plaintiff before employing him to let his house, and the plaintiff's manager showed him the card before mentioned, to which the defendant took no objec- tion. After advertising for some time, the plaintiff introduced one !Mi\ Fielden to the defendant, and held several interviews with the parties subsequent to the introduction. Subsequently the plaintiff received from the defendant a letter informing him that he had let his house to Fielden on the folio mng terms : — " from 1st July 1870, three hundred guineas : or 350 guineas if taken on to 1st of ^lay, Mr. Fielden to have the option of taking the house on for another year for 470 guineas." In the agreement subsequently drawn up, there was no men- tion of the option of taking the house on for another year at all. Before the » W. N., (1886), 120. » 2i h. T. N. S., 706. RIGHT OP AGENT AGAINST HIS PRINCIPAL. 211 end of the nine months' tenancy, the defendant and Fielden, through the inter- vention of another house agent, and without any communication to the plaintiff agreed for another yeai^'s occupation fi'om the 1st of April for four hundred and fifty guineas. The plaintiff was paid commission for the first nine months, and brought an action to recover his commission upon the rent of the following year ; at the trial a custom was proved that a house agent received commission upon the i-ent of a furnished house from year to year so long as the tenant to whom be let occupied the house — -held that a house agent could claim commission only on re7it obtained as a proximate consequence of his act; that this is to be generally ascertained from the agreement he has himself prepared : that an option to take on a house, is not exercised if the tenancy be continued upon an agreement for a different rent obtained through the intervention of another house agent ; that a trade custom under such circumstances was irrational and bad : — and that the plaintiff's Suit must fail. Effect of Green v. Bartlett. — The effect of Green V. Bartlett} before cited, on a case of this kind is merely to make a landlord liable when no agreement is made by the agent, but when the landlord makes an agreement with a person whom the agent inti'oduces for that purpose, the agreement then entered into is substituted for that which the agent would otherwise have made.^ And where the agent has brought the contracting parties together it has been held in a special case, that if the contract completed by him practically constitutes the contract which he was authorized to bring about, he is entitled to commission. Thus in Bimmer v. Knoioles,^ the defendant instructed the plaintiff a sui'veyor to sell an estate and agreed to give him £50 if he obtained a purchaser at £2,000. The defendant subsequently raised his price to £3,000. The plaintiff introduced to the defendant a person who took a lease for 1,000 years at £150 a yeai% with the option of pui'chasing for £3,000 within twenty years. Cockburn C. J., said : — " I agree that if a creditor obtains a purchaser without anything being done by the agent whom he employed for that purpose, the agent cannot recover commission : but I proceed on this ground, that the facts of the case practically constituted a purchase." So also in Harris v. Petherlck,^ the defendants agreed with the plaintiff" to I'emunerate him in the event of their " taking into partnei*- ship " one Mowat, introduced by the plaintiff. The defendants afterwai-ds entered into a written agreement with Mowat by Avhich it was agreed that they should enter into partnership as from a specified future day, when a formal deed of partnership should be executed carrying out the terms of the agi'cement. The agreement recognized and adopted the agreement between the plaintiff and the defendants which was by letter. No partncr.ship was, however, ever as a > 14 C. B. N. S., G81. ' 30 L. T., 406. » Per Willos J., CttWts v. Nixov, 21. L. T. N. S., 708. * 39 L. T., 543, 'J12 Tin; LAW OK AfiKNCy. matter of fact eiitorod into botweun Mowat Jind the dcfondants, held that thcro was evidence of a " takinf,' into pai-tnorship " within the terms of the a^^rcement between the plaintiff and the defendants, so as to entitle the plaintiff to com- mission. The transaction for which commission is payable must be legal. — It li as been licld th:it whtTO tlie transaction is iUv 1 M. & S., 543. - 2 B & P., 321. ■ In the matter of McCorkindale, I. L. K., 6 Calc, 1. EIGHT OP AOENT AGAINST HIS PRINCIPAL. 221 thority of In re Moss} held that the death of McCorkindale did not alter the case, and that the Administrator was entitled to the papers. The right to a general lien may also as has been mentioned, be created by express contract -^ and it seems it may also in the same way be modified by extending, confining, or even by excluding its ordinary operation.^ And even without express words it may be excluded, by the terms of the contract being inconsistent with the existence of such right.* So also if the contract stipulates that the payment for the work done is to be paid for in a particular manner or out of a particular fund, the light of lien may be lost in consequence of the agree- ment being inconsistent with it,^ but it will not be so if the terms of the special contract are not inconsistent with the right.^ There also appears to be no reason why a particular lien should not also be created by contract, al- though such contract is of course unnecessary, all classes of agents possessing by Statute a right to a particular lien, and the cases above last cited show, (they being for the most part cases in which the lien was particular) that such a lien may by contract be modified by extending confining, and even excluding the right to its ordinary operation. Banker's Lien. — A banker has a general lien for the balance of his account,^ and also a particular lien on monies belonging to his principal in his hands for his commission and advances.* But not if there is an express con- tract to the contrary or circumstances pointing to the fact that such lien is exclu- ded.^ But his lien does not arise on securities deposited with him for a special purpose, as where exchequer bills are placed in his hands to get interest, or to get them exchanged for new bills. ^"^ And he has no lien on muniments casually left with him after he has refused to advance money on them as a secuiity.H Nor ' L. R., 2 Eq., 345. * Ind. Contr. Act, s. 171. See in re Llangennech Coal Co., W. N., (1887), 22, and Miles v. New Zealand Alf or d Estate Co., L. E,., 32 Ch. D., 266. Bradford Bankiny Co. v. Briggs L. R,, 12 App. Cas., 29, by articles of association. ' Owenson v. Morse, 7 T. R., 64. * Jackson v. Cumtnings, 5 M. & W., 342. Forth v. Simpson, 13 Q. B., 380. * Pinnock v. Harrison, 3 M. & W., 532. » Chase v. Westmore, 5 M, & S., 180. ' Ind. Contr. Act, s. 171. Davis v. Bourner, 5 T. R., 488. Jordaine v. Lefevre, 1 Esp. 66. Brandao v. Barnett, 12 CI, & F., 787, (806). ' Ind. Contr. Act, s. 221. In re European Bank, L. R., 8 Ch., 41. Lecse v. Martin L. R. 17 Eq., 224. * London Chartered Bank of Australia v. White, L. R., 4 App. Cas., 413. Ind. Contr. Act ss. 171, 221. »® Brandao v. Bamett, 12 CI. & F., 787; 3 C. B,, 519. Ma<:nee v. O&rst, L. R., 4 Eq., 315 (325). " Luca.'i V. Dorrien, 7 Taunt, 278. 222 iiir, i,Au OK a<;encv. can lie claim a genoral lien nrisinrr out of a transaction in which the goods or sccuriticM arc by agreement lu-ld for a particulai- purpose or under special cotulitiiMis inconsistent Mitli the claim of a general lien. ^ Nor will he have a lien for a larger amount than the security given for a special advance, although more may be owing.* Nor has he a lien on the deposit of a part- ner on his separate account, for a balance due to the bank from the firm.* His lien will not be affected and he can safely advance money upon security of stock or shares deposited with him by any one, as long as he has no notice or reasonable cause to believe that the stock or shares belong to another ; ])ut where he has such notice or rea.sonable cause to believe, his lien on the deposit is only good as a security for the general balance due to him at the period of notice or constructive notice.* And although deeds be deposited with a banker by way of equitable mortgage which deeds apply to various properties, if it be apparent on the memorandum of deposit and dealing of the parties, that a portion only of those pi-operties was intended as the security, his lien extends no further than that portion.^ And he has no lien on bills paid in to the credit of a customer for the purpose of collection, which bills are not then due, unless he discount or make advances thereon.^ As to the lien of an army agent acting as a banker. See Eoxburghe V. CoxJ Factor's Lien. — A factor has a lien on his principal's goods for the general balance due to him,* he has also a right to retain, until his commission and ad- vances have been paid, any particular goods, papers or property in respect of which his services have been employed.^ He has a lien on the price of goods of the prin- cipal in the hands of a pui-chaser, even though he has given up possession to the latter, whei^e he is acting on a del credere eommissiou, and this is because he has a power of suing and of gx'anting a discharge for the goods ;^'' but otherwise where he has no such special claim on the goods ;^l and the principal's bankruptcy will not affect his lien, even though the factor was aware when making advances that his * Bock V. Oorrit-ne)! , 2 De G. F. & J., 434, (447). Iti re Boivei^, Strathmore v. Vane, L. R. 33 Ch. D., 586. Gentle v. Bank of Eindoogtan Ld., 1 Ind. Jar. N. S., 245. " Vanderzee v. Willis, 3 Bro. C. C, 21. • Watts V. Christie, 11 Beav., 546. ♦ LocJce V. Prescotf, 32 Beav., 261. » Wylde V. Radford, 12 W. R. (Eng.), 38. " Qiles V. Perkins, 9 East., 12. ' L. R., 17 Ch. D., (523). ' Ind. Contr. Act, s. 171. Godin v. London Assurance Co., 1 W. Bl., 104. Brandao v. Barnett, 3 C. B., 519. Kruger v. Wilcox, Ambl., 252. • Ind. Contr. Act, s. 221. Brandao v. Barnett, 3 C. B., 519. '• Drinkwater v. Goodwin, Cowp., 251. " Garratt v. Cidlum, Bull. N. P., 42, Sel. N. 1'., 813. mCiTf? OP AOKNT AGAINST HIS PRINCIPAL. 223 principal was in insolvent circumstances. i But he can claim no lien on goods coming to his hands after the commission of an act of hankruptcy by the con-- signer, although advances have been made by him.^ And where he agrees by special contract for a particular mode of payment he does away with his right to lien. 8 He will have no lien for a debt due from a person for whom he is selling goods, when he is aware of a special arrangement between his principal and the vendee under which the goods were to be taken in part satisfac- tion of a demand which the latter had against the former.* 'Nov has he any lien on property belonging to his principal for advances or debts which accrued before his character of factor commenced ;5 nor will his general lien attach till the goods of his principal come into his actual possession,^ and this though he may have accepted bills upon the strength of a consignment made to him. Nor will an agent lose his lien as factor by reason of his acting under special instruc- tioQS from the principal to sell goods, with the possession of which he has been entrusted, at a particular time and in the principal's name ;7 and in re Hermann Loog Limited,^ it has been held that a salaried agent entrusted by a Company then winding up with goods for sale on commission besides his salary, is entitled to a lien for bills accepted. Wharfinger's Lien. — A wharfinger has not only a lien on goods deposited at his warf for the money due for the wharfage of those particular goods, ^ but has also a right to detain any goods, papers and other property, belonging to his principal in his hands for the balance of his general account^*^ and this though part of his claim is barred. i^' But he has no right of lien upon goods which are not actually landed upon his wharf, although a vessel in which the goods are, be fastened to the wharf and be unloaded.^* The mere fact that a mamifacturer has a wharf upon Avhich he receives goods brought to him by his customers, does not make him a loharfinger, giving him the right to claim a lien for the general balance of his account.^^ Nor ^vill he be deprived of his lien because the owner of the goods deposited with him has acted fraudulently ' Poxcroft V. Devonshire, 2 Burr., 931. ^ Copland V. Stein, 8 T. R., 199. Ziiick v. Walker, 2 Wm. Bl., 115-4. •■^ Cowell v. Simpson, 16 Ves., 280. Walker v. Birch, 6 T, R., 258. * Weymouth v. Boyer, 1 Ves., 416. * Houghton v. MathewH, 3 B. & P., 485. « Kinloch V. Craig, 3 T. R., 119, 783. See Man v. Shiffner, 2 East., 523. ' Stevens v. Biller, L. R , 25 Ch. D., 31. » W. N., (1887), 180; on appeal, 191. " Ind. Confcr. Act, 221. Naylor v. Mangles, 1 Esp., 109. "> Ind. Contr. Act, 171. Naylor v. Mangels, 1 Esp., 109. " Spears v. Hartly, 3 Esp. 81. Richardson v. Ooss, 3 B. & P., 124. '* Syeds v. Hai/s, 4 T. R., 260. " Miller v. Nasmyth's Patent Press Co., 1. L. R., 8 Calc, 312. 224 'I'"" ''AW or AnENCv. towiinls third poifioTiH ])y infi-iiicriii^ fi t r;i(l('-miirk, and his lion in snch case will have priority over tho owner's lion for costs of the action for infringinent, and ho will bo entitled to his costs wlicn made a party to such suit, which should not bo iiijuh? (loponrlont on tho way his (/ounsel arg-ue tho case on his bohalf.*^ Attomies* Lien of. — A.n attorney of a Hif^h Court, in the absence of a con- tract to tlio contrary, has a lien for his general balance of account on all papers and documents belonging to his client, which come to his hands in the course of his pi'ofessional employment.* He has two kinds of lien for his costs, one on tho fund recovered, and tlie other on the papers in his hands ; his lien on the fund recovered is a particular lien only, and does not extend to any general balance due to him for professional services in other cases. ^ His lien is, how- ever, only commensurate with the right which his client has to the papers ;* and if his client is bound to produce them to third parties so also is the attor- ney.^ He has no right to detain papers against a remainderman, when they have come to his hands through the tenant for life.* He has a lien for his costs on a judgment recovered by his client ;' but he does not, acquire a lien for his costs upon the documents of his client which came into his possession, not in the character of solicitor, but as mortgagee of his client's estate ; nor will he acquire a lien for costs due solely to himself, upon documents which came into the joint possession of his partner or partners, but he does not lose his lien for such costs upon documents, Avhich, having come into his own posses- sion are afterwards, continued in the possession of his partner or partners.' His lien on the fruits of a compromise, in a suit in which he is acting, is not extinguished by his taking secuinties which turn out to be worthless.^ The Coui't however, will not interfere, to set aside an arrangement come to between a plaintiff and a defendant in a suit, in favor of an attorney, except where there has been fraud or collusion between the parties.^*' But where a case has been com- promised between a plaintiff and a defendant personally before delivery or pay- ment of the attorney's bill, the defendant will not be liable to i^efund to the > Moet V. Pickering, L. R., 8 Ch. D , 372 overruling L. ii., 6 Ch. D., 770. » Ind. Contr. Act, s. 171. Stevenson v. Bldkelock, 1 M. & S., 535. Ex-parte Nisbett, 2 Sch. 6 Lef., 299. " Ind. Contr. Act, ss. 171, 221. Pope v. Arm-Strong, 3 Sra. & Marsh-, 244, cited in 2 Kent's Coiyim., 853. Devkabai v. Jefer^^on, I. L- R., 10 Bon., 2,")3. * Wakefield v. Newbon, 6 Q. B., 276. Hollis v. Claridge, 4:Ta,nnt., 807. Pell i/ v. Wathen, 7 Hare, 351. » Furlong v. Eoxcard, 2 Sch. & Lof., 115. • Ex-parte Kisbett, 2 Sch , & Lef., 279. Davies v. Vernon, 6 Q. B., 443., (447). » Mitchell V. Oldfield, 4 T. R., 123. » Felly V. Wathen, 7 Hare. 351. » Paries v. Lmimdes, 3 C. B., 808, 829. >"» Slater v. Mayor of Sunderland, 33 L. J. Q. B., 37. Brunsdon v. Allard, 2 El. & El., 19. BIGHT OP AGEN'T AGAINST HIS PRINCIPAL. 225 plaintifE's attorney, unless the attorney has given notice to the defendant before the compromise, not to settle with the plaintiff until payment of his bill.l Bat where after notice of his lien from the plaintiff's attorney to the defendant's attorney, the latter pays over the debt and costs to the plaintiff himself, the plaintiff's attorney can insist on the defendant's attorney paying to him the amount of his lien on such .debt and costs.^ But see the cases of ex-parte Morrison^ and The Hope''' which are authorities that the compromise would stand, if the money is paid over before notice ; but which decisions are said in B,oss v. Buxton,^ not to conflict with the proposition that where a valid compromise has been entered into under which a sum of money, the fruit of the action, is coming to the plaintiff, the defendant or his solicitor", is not at liberty, after express notice by the plaintiff's solicitor of his claim to a lien, to pay that sum over to the plaintiff in disregard of the notice. Where the plaintiff has settled with the defendant, the result of the litigation being doubtful, and he has done so without fraud, the plaintiff's attorney is not entitled to be recouped by the defendant.^ He has also a lien on sums awarded to his client on an arbitra- tion,'' so also on monies levied in execution on behalf of his client.^ An attorney who discharges himself cannot set up a lien for costs as a reason for not delivering up papers necessary to enable his client to proceed with pending matters in litigation to which they relate,^ yet when he is discharged by the client he may set up his lien, and will not be compelled to deliver up to the client the papers on which he claims his lien:^*^ And where an attorney refuses to go on with a suit unless provided with funds, and the client appoints a fresh attorney, this will amount to a discharge by the a^ttorney, and he will be bound to deliver over to the new attorney the papers relating to the suit, on their undertaking to hold them without prejudice to his lien.l^ But an attorney for trustees of an estate which is under the administration of the Court, have not, • Welsh V. Hole, I Doug., 226, 237. Omerod v. Tate, 1 East., 464. Vaughan v. Davies, 2 H. Bl., 440, a case of set off. Jiead v. Duppei; 6 T. R., 561. • Welsh V. Hole, 1 Doug., 226, 237. Omerod v. Tate, 1 East, 464. Ross v. Buxton, L. R., 42 Ch. D., 190. Read v. Dapper, 6 T. R., 361, • L. R., 4Q. B., 153. • L. R., 8 P. D., 144. • L. R., 42 Ch. D., 190. • In re Sullivan v. Pearson, ex-parte Morrison, L. R,, 4 Q. B., 153. Ramnath Dutt v. Matunginee Dossee, 12 B. L. R., 110. ' Omerod v. Tate, 1 East, 464. • Oriffin V. Eyles, 1 H. Bl., 122. » In re Faithful, Brighton and S. C. Rij. Co., L. R., G Eq., 323. In re ilcCorkindale I. L. R., 6 Calc , 1. "> In re Faithful, Brighton and S. C. Ry. Co., L. R., 6 Eq., 325. " Robins v. Ooldingham, L. R., 13 Eq., 440. E R 226 TMK LAW OK AUIJNCY after tljeii- discharg'c, Kuch a lien for costs and money advanced in the suit as •will enable them to rofiiao production of documentH which are required by a Receiver appointed for the management of the estate.^ It appears doubtful whether his lieu for his costs on a fund in Court is general , or is confined to the costs of the particular suit;* His lieu does not extend to debts which ai'o not duo to him in his professional charactej".* Nor has the solicitor for the parties to an administration suit, on a change of attoruios, any right to assort a lieu for costs on papers in his possession in such way as to em- barrass the pi*oceeding3 in the action, but on the contrary be must produce tliem when they ura required for the carrying on of the suit.^ And where in a suit by a debenture holder against a Company, the plaintiff in the course of the proceedings became bankrupt, and another debenture holder was substituted for him as plaintiff, and an order was made directing the solicitor of the first plaintiff to deliver over all papers, etc., to the solicitor of the substituted plaintiff, the soli- citor of the first plaintiff will have no lien on the documents entitling him to prio- rity in respect of his costs.* Where an intending mortgagor instructed a solicitor to prepare a mortgage, and left the title deeds with him for that purpose ; who after preparation of the mortgage, held the mortgage as solicitor of the mort- gagee ; and the mortgagor filed a liquidation petition, and the trustee, for whom the same solicitor was acting, sold the equity of redemption, and the purchase- money came to the hands of the solicitor, he was held to have a lien on the deed against the mortgagor, and was entitled to retain out of the purchase-money, the amount of costs due to him from the mortgagor.^ But where certain mortgagees deposited Avith a solicitor for safe custody their mort- gage deeds ; and the mortgagor afterwards instructed the same solicitor to sell the property, and he employed an auctioneer for that purpose, the solicitor preparing the particulars and conditions of sale ; the sale turned out abor- tive ; and subsequently the mortgagor filed a liquidation petition, and the trustee contracted to sell the mortgaged property, it was held that the solicitor had no lien on the deeds as against the trustee in respect of his costs of the abortive sale.® But a solicitor acting for both moi^tgagee and mortgagor in the preparation of a mortgage, thereby loses his lien on the title deeds, inhisposses- ' Belaney v. Ffrench, L. R,, 8 Ch. D., 918. Bat see in re Capital Fire Insurance Associa- tion, L. R., 24 Ch. D., 408. • Warrall v. Johnson, 2 J. & W., 214. ■ In re Boughton, Boiighton v. Boiighfon, L. B.,23 Ch. D , 169. In re Oallard, L. R., 31 Ch. D., 306. * Batten v. Wedgicood Coal and Iron Company, L. R., 28 Ch. D., 317. But see Hutchin- son V. Nonoood, W. N.', (1886), 112. * In re Messenger, Ex-parte Calvert, L. R., 3 Ch. D., 317. • E»-pcirte F'dler. In ro Long, L R., 16 Ch. D., G17. RIGHT OF AGENT AGAINST HIS PRINCIPAL. 827 sion for costs due to him from the mortgagor, unless such lien is expressly reserved, even though the mortgagee may have known that the solicitor had such a lien as against the mortgagor.^ And where a client mortgaged certain property which was at the time subject to a first mortgage to his solicitor, who prepared the mortgage deed to himself ; and subsequently the mortgagor made a third mortgage to another person, the solicitor was held to have no lien on the mortgage deed for the costs of the preparation of the mortgage deed,' He has a right to retain as his own property letters addressed to him by his client, and copies in his letter book of his own letters to his client, after the client has transferred the business to which such letters relate to other attor- nies.^ But he is not entitled to refuse to produce documents belonging to a bankrupt for the examination of the trustee in bankruptcy, on the ground of his lien on such documents in respect of professional services before the bank- ruptcy.3 Under the Companies Act, s. 115 (Indian ,Comp. Act, s. 162) the solicitor of a Company may be compelled by the official liquidator in the wind- ing up of the Company to produce documents relating to the Company, without prejudice to his lien.^ Where a solicitor was clerk to a local board, with a salary, and transacted both the legal and ordinary business of the board, whatever may be his claim against the board for professional services, he may be compelled, being a servant of the board, to produce for the purpose of a suit by the board all papers and documents belonging to the board ; but he will not be so compelled, as such an order might prejudice his lieu, bafore the trial, without a payment into Coux't is made of a sum sufficient to meet his claim.^ He has as town clerk a lien on papers of the Corpoi-ation with respect to which he has done work as attorney, but not on such as he holds merely as town clerks Meaning of expression " lien on a judgment."— In an action brought on an Irish judgment to which the defendant pleaded a set off of a judgment I'ecovered by him against the plaintiff, and the plaintiff alleged that he was suing as trustee for his attorney who had incurred costs in obtaining the judgment and had a lien upon it, the Court considered that the attorney did not stand in the relation of trustee to a cestui que trust, and that the ^ In re Siiell, L. R., U Ch. D., 105. In re Mason and Taylor, L. R., 10 Ch. D., 729 But see Macfarlen v. Lister, L. R., 37 Ch. D., 88 ic which m re Snell, was distinguished. ■' Sheffield v. Eden, L. R., 10 Ch. D., 29r * In re Wheatcroft, L. R., 6 Ch. D., 97. * In re Toleinan and England Ex-parte Bramble, L. R., 13 Ch. D., 885. * In re South Essex Estuary and Reclamation Co., Ee-parte Faine and Layton, L. R., 4 Cli., 215. Soo also In re Capital Fire hisurance Association, L. R., 24 Ch I)., 408. * Newingtiiti Local Board v. Eldruhje, L. R., 12 Ch. D., 34'.'. * Th9 King v. Stanley, 5 A. & E., 423. 228 TITK LAW OF AOKNCY. only question npon it wns -wlictlicr tlic dofondant ]iad a riglit to set off his judgment against the ])hiintifF ; as to this Cockburn, C. J., said: — " The at- torney has no such liin for costs as to be able to compel the plaintiff to l)ring the action on his behalf, as trustee for him. In truth there is no such thing as a lien except upon something of which you have possession. The matter is thoroughly well explained in Chit. Arch. Pr. pp. 139, 140, (12 Ed.), that although we talk of an attorney having a lien upon a judgment it is in fact only a claim or right to ask for the intervention of the Court for his protection, when, having obtained judgment for his client, he finds there is a probability of the client depriving him of his costs. But this is always on notice to the debtor. Jnd<,'mont for the defendant.^ Lien in cases of winding up. — The solicitor to an official liquidator has no Hen for his costs on the file of the proceedings in the winding up and the docu- ments relating thereto." And where the defendant, a solicitor was employed by one O'Hagan (who was a director and a pi'omoter of a limited Company then in liquidation,) with the privity of thi-ee other persons, the holders as nominees of O'Hagan of certain shares in the Company, to take proceedings in con- nection with the winding up of the Company. And O'Hagan deposited with the defendant the certificates of the shares for the purpose of enabling him to carry out his instructions, and the defendant received from the liquidator of the Company certain cheques in respect of the shares standing in the names of those persons. And in the meantime O'Hagan transfeiTed to the plaintiffs his interest in the shares, with notice of the lien and charge of the defendant thereon for his costs; and the defendant, acting upon the retainer of the plaintiffs, continued the proceedings, and ultimately received from the liquida- tor several cheques payable to O'Hagan and the other three persons re- spectively, it was held, in an action to recover those cheques, that the defendant was entitled, as against the plaintiffs, to a lien upon them for his costs of all the proceedings against the Company, in respect of the shares.* Priority of lien. — An attorney is entitled to enfoi'ce his lien on a sum in Court as against an attaching creditor for all costs incurred up to the date of attachment, and after that date, the attaching creditor can claim payment before the attorney's claim is further satisfied.* So he will have priority over claims for necessai'ies supplied after the institution of the action, but not over claims for necessaries supplied previously.^ Lien of policy brokers. — A policy broker has a general lien on goods in his ' Mercer v. Graves, L. L., 7 Q. JB., 499. " In re Uniori Cement and Brijk Co., Ex-parte Tulhrooh, L. R., 4 Gh., G27. " General Share Trust Co. v. Chapman L. R., 1 Ch. D., 771. * Supiamyan Setty v. Harry Froo Mt(g, I. L. R., 14 Calc, 374. • The Heinrich. 41 L. J. Ad., 68. Newson'a Dig., 150 RIGHT OF. AGENT AGAINST HIS PRINCIPAL. 229 hands "belonging to his principal the assured, and also on the policy ■} he also may retain money received by him on such policy or goods for advances, com- mission and his services rendered, ^ and in the absence of a contract to the con- trary, may retain goods, paper and other property of the principal received by him uutil the amount due to him is paid.^ But if the broker be employed to insure by an agent and he is aware of this, he will have no general lien, but only a lien upon the policy for his commission and the amount of the praemium ;* but if he be not aware of the existence of any other principal but the agent or person employing him, he will have a lien on the policy for the general balance of his account.^ The only question as to the retention of his lien on the general b;ilance in his hands, is " whether he knew or had reason to believe that the person by whom he was employed was only an agent, and the party Avho seeks to depi'ive him of his lien must make out the affirmative."^ If, however, the broker wrongfully dispose of the policy, or even part with the possession of it to his employer, he will lose his lien ; it will, however, revive if he obtain possf^ssion of the policy againJ And where a pei'son acts for his principal both as policy broker and factor, and in the former capacity effects policies and pays the praemia thereon, and in the latter capacity has in his hands goods belong- ing to his principal for the purpose of sale, and on which he has made advances he will be entitled to retain the sum received for a loss on any such policies, as well as in liquidation of his advances on the goods, as for the balance due to him on account of praemia.^ But where a broker employs a factor to insure, he has only a lien on the policy to the extent of the factor's balance against his principal.^ The policy bi^okers lien may, however, be superseded by special arrangement or contract,"^ or by his pai^ticular mode of dealing with the parties for whom he has effected policies. But where he has merely agreed to state monthly accounts and to receive monthly payments made to him his general right of lien is not superseded in any way by this special arrangement. And this is so, though he has effected the iDolicies through an intermediary * Ind. Contr. Act, a. 171. Whitehead v. Vaughan, Cooke's Bank-Law, 6th ed. 442. '■^ Ind. Contr. Act, s. 217. Whitehead v. Vawjhan, Cooke's Bank Law, 442. » Ind. Contr. Act, s. 221. * Mannss v. Henderson, 1 East, 335. Fisher v. Smith, 34 L. T., 912. See however Phillips on Insurance, Vol. II., s. 1909. * Mann v. Forrester, 4 Camp., GO. Siveetimj v. Pearce, 7 C. B. N. S., 449. Fisher v. Srnith 34 L. T., 912. * Westwood V. Bell, per Gibbs C. J., 4 Camp., (353). ' Whitehead v. Vaugham, Cooke's Bank. Law, 442. Westwood v. BeV , 4 Camp., 349. Levy V. Barnard, 2 J. B., Moore, 34 ; 8 Taunt., 149. Newson ou Shipping, 211. 8 Olive V. Smith, 5 Taunt., 5G. » Mann v. Schiffner, 2 East, (529). '• Ind. Contr. Act, 8. 171 230 IH'!' ''AW (IV AfiENCY. whom lie know to bo an intoi-inediary and not the principal, and who has re- oeiv(>(l ]inym(Mit from the principal, but who has not paid the brolcer.*- Particular lien. — The Contract Act gives to all clasHes of agents, in the absence of a contract to the contrary, a particular lien for their commission, disbursements, and services, on all property of their principal which may come to their hands in the course of the business the subject matter of the agency ;' and for advances and expenses properly made and incurred by them, and on moneys received on account of their principal.* Similarly the finder of goods has a particular lien on such goods until he receives compensation foi- his trouble and expense in endeavouring to find out the owner.* So an agent for the sale of goods may enfoi-ce a lien for expenses for advance or commission on the goods consigned to him, even though the whole of the goods consigned to him may not have been sold, or although the sale may not be complete.^ A particular lien in the absence of a contract to the contrary also is given to a bailee for services involving the exercise of skill and labour expended by him on the goods bailed in accordance with the purpose of the particular bailment.® So where the official assignee claimed certain nnbaled jute which had been delivered (at vai'ious times but under one contiact) to a Pressing Company to be baled previously to the insolvency, and the Pressing Company being still then in possession of some of the unbaled jute which had been delivered to them under the contract, refused to deliver it up, claiming a particular lien on it on the ground that these particular goods formed part of a larger quantity which had been pressed by them, and that they had therefore a particular lien over the goods in respect of the balance due to them for the entire quantity pressed under the contract. Wilson J. held that the defendant's contention was valid on the authority of Chase v. Westmore,"^ which showed where a person does work under an entire contract, with reference to goods delivered at different times, such as to establish a lien, he is entitled to that lien on all goods dealt with under the contract.^ The principle on which such a lien is founded is that the bailee has expended his labour and skill in the improvement of the chattel delivered to him, and he therefore has a lien for his charges in ' Fisher v. Smith, L. R., 4 App. Cas., 1. 34 L. T., 912. • Ind. Contr. Act, s. 221. Foxcroft v. Wood, 4 Ruas., 487. In re Bombay Saw Mills Co. Ld., I. Ti. R., 13 Bom., 314. • Ind. Contr. Act, s. 217. • Ind. Contr. Act. s. 168. Hartford v. Jones, 1 Ld. Ray., 393, tliis does away with the effect of Nicholson v. Chapman, 2 H. BI., 258. » Ind. Contr. Act, s. 217. • Ind. Contr. Act, a. 170. See Bevan v. Waters, Mo. & M., 235. Scearfe v. Morgan, 4 M. & W., 270. Franklin v. Hosier, 4 B. & Aid., 341. • 6 M. & W., 180. See also Blake v. Nicholson, 3 M. & S., 167. • Miller v. Namnyth's Fatent Fres« Co., 1. L. K., 8 Calc, 312. RIGHT OP AGENT AGAINST HIS PRINCIPAL. 231 that respect,^ and although the principle has been approved, it has, however, been doubted whether the decision in the case of Bevan v. Walters applies where the animal delivered is a race-horse ;2 and it is clear that that no lien exists in the case of the agistment of milch cows,^ as in such case no addi- tional value is conferred on the cows, and this distinction was maintained in the ease of Sanderson v. Bell,^ and in which Holland B. said : — " The distinction is, that where any work is to be done on a chattel to improve it, or to increase its value, the lien attaches, but where it is merely delivered as in this case, to make a demand upon it, no such right can be suppoi-ted." As to the manner and circumstances under which a lien is acquired. — The person through whom it is acquired must to create a valid lien himself either have the true ownership of the property, or, at least a right to vest it.* If, therefore, he is not the true OAvner of the property ; or if he has no rightful power to dispose of the same,^ or to create a lien ; or if he exceeds his autho- rity ;^ or if he is a mere wrongdoer ; or if his possession is tortious ;^ in such cases, it is obvious that he cannot ordinarily create a lien, or confer it on others.' Nor can a lien be acquired by the wrongful act of the person claiming it ;^ nor by his misrepresentation ;io ^or by his unauthorized or voluntary acts,^^ for in such cases he is a wrongdoer. But where there is a special agreement between the parties that no lien shall be acquired, or an agreement which in itself shows that the agent relied only on the personal credit of the employer, no question of lien can arise. ^^ Possession is necessary. — It is also essential to the validity of a lien that there should be possession of the thing by the person asserting the lien,!^ or by some one who can be considered as his agent, for the purpose of receiving * Bevan v. Waters, Moo. & M., 135; per Best C. J. * Jackson v. Cummins, 5 M. & W., 342, (351). * 2Cr. A M., 304, (313). * Hiscox V. Greenwood, 4 Esp., 174. * Ind. Inaolv. Act, s. 14. Miller v. Chartered Mercantile Bank of India, 6 B. L. R., 701. * Stone V. Lingivnod, 1 Str., 651. ' Ogle V. Atkinson, 5 Taunt., 75G, (763). McCombie v. Davies, 7 East., 5. Madden v. Kempster, 1 Camp. 12. Taylor v. Robinson, 8 Taunt., 648. « Story on Ag., 3G0. » Lempriere v. Pnsley, 2 T. R., 485. '" Madden v. Kempster, 1 Camp., 12. " Stone V. Lingioood, 1 Str., 051. '» Walker v. Birch, G T. R., 258. Sel. N. P., 13G8. ^' Hutton V. Bragg, 7 Tannt., 15. Wilson v. Balfoiir, 2 Camp., 579. Newton v. Thornton 6 East., 25 (note). Kinloch v. Craig, 3 T. R., 119, 783. Shaio v. Neale, 4 Jur. N. S., 695 ; 27 L. J Ch , 444, Heyood v. Waring, 4 Camp., 291. Debnarain Base v. Leisk 1 Hyde, 267. Jackson v. Cummins, 5 M. & W,, (350). -3 2 THK r,AVV OF AGENCY. it.* Unlcfls in'ioorl thoro bo a special contract presorvinpf the lien. And, moreover, this possession must be continuous ; for once a person lias voluntarily parted with goods on which ho has a lien, it will not revive on his recovering possession of them ;2 but it will bo otherwise if the goods are taken from him by friiud or are stolon.^ As to what claims the right exists. — The debt in respect of which the lien is claimed must be due to the agent in his own right, and not merely as agent for a third person. Thus in Iloughton v. Mafhews,^ the defendants who were brokers sold in their own names a parcel of logwood belonging to one Greatham, and also some indigo belonging to one Dixon, both these sales were made to a person named Jackson who did nob pay for the goods, and sub.se- quently became bankrupt. At the time of these sales, there was a general balance both from Greatham and Dixon due to the defendants. Soon after these sales, Jackson put into the hands of the defendants the indigo in question to sell as brokers : this being the first time he had employed the defendants as his brokers. Whilst the indigo remained in the hands of the defendants, Jackson became bankrupt. Upon this the plaintiffs his assignees demanded the indigo and tendered payment of any charges which might have been incurred thereon. The defendant refused to deliver it, claiming a lien upon it, for the debt due from the bankrupt, in consequence of the goods of Greatham and Dixon sold to him, and which still remained unpaid for. Chambre J. ; said " I do not find any authority for saying, that a factor has any general lien in respect of debts which arise prior to the time at which his character of factor commences; and if such a lien is not established by express authority, it does not appear to me to fall within the general principles upon which the lien of factors have been allowed If this were the only point in the case, I should be of opinion that the defendants were not entitled to retain ; but laying this point out of the question, I still think the debts due from the bankrupt in re-;pect of the goods sold to him are not to be considered as due to the defen- dants, so as to authorize them to set off such debts in an action brought against them by the bankrupt's assignees, and that the defendants have no property or interest whatever in these debts. I never yet heard of a person being allowed to protect himself, by setting up debts in reality due to other persons, or that a factor having no demand on his principal, could by transactions with a third. * Reeves v. Cooper, 6 Scott's Cas., 877. * Stceet y. Piim, 1 East, 4. See as to the effect of production to the Court of property on which a lien is claimed in cases of the winding up of Companies' Ind. Comp. Act, s. 162 ; In case of a policy broker, see Newson on Shipping, 211. Cooke's Bank. Law, 442, and p. 229, supra. ■ Wdlace Woodgate, R. & M., 194. « 3 B. & P., 485. EIGHT OF AGENT AGAINST HIS PRINCIPAL. 233 person create a new interest in himself." The rest of the Court, Rooke J. Heath J. and Lord Alvaney C. J. (the latter with some doubt) were of the same opinion, and the plaintiffs were therefore held entitled to recover. So also where an Eng- lish subject in time of war who had received orders to effect an insurance for a neutral foreigner, opened the policy with his usual broker in his own name, but informing him at the time that the property was neutral ; this was held to be a sufficient indication to the broker that the party acted as agent and not on his own account, and therefore the broker had no lien on the policy so effected for his general balance against such agent, as between the broker and the principal.^ No lien for officious services. — If an agent without authority, or un- necessarily, makes himself liable to others for work done to his employer's property, no lien exists in his favour for that which he has paid under such liability.8 It must be for a debt due from the person for whom the agent is acting. — It must also be for a debt due from the person for whose benefit the agent is acting :^ If therefore the person claiming the lien is aware that the person by whom he is employed is himself merely an agent, he will not be allowed to retain property belonging to that agent's principal for a debt due to the agent himself."* But there appears to be an exception in insurance cases, where a broker insures for an agent who conceals his principal ;^ and this is on the ground that the broker is supposed to have made advances on the credit of the policy as long as it remains in his hands. ^ Under what circumstances the right to lien is divested or waived.— It will be lost by the abandonment of the possession of the goods in respect of which it is claimed ;7 thus in Kruger v. Wilcox,^ a factor entitled to a lien on goods consigned to him by his principal, informed a broker employed by the principal, that the principal would sell the goods himself, and gave an order to the wharehouseman to deliver the goods to the broker, who accordingly sold and made out the bills of parcels to the principal, it was held by Lord Chancellor Hardwicke, that this amounted to a delivery of the goods in specie to the prin- ' Maans v. Henderson, 1 East., 335. See also Brandao v. Barneff, 2 Scot. X. R., 90, (113). * Hussey v. Chrlatie, 9 East, 433. * Wei/mouth v. Boijer, 1 Ves., 416. Barry v. Longmore, 12 A. & E., 039. Brtndao v. Barnett, 2 Scott. N. R., (97). * Maanss v. Henderson, 1 East, 335. Westwood v. Bell, 4 Camp., (352). * Westwood V. Bell, 4 Camp., 319. * Mann v. Forrester, 4 Camp., Gl. ' Cooper V. BUI, 3 H. & C, 722. Lickbarrow v. Mason, 6 East, 25 (note). Jones v. Pearle, 1 Str. 556. McGombie v. Davis, 7 East, 5, S:.ott v. Kewin^toti, 1 Moo. & Rob., 252. « Ambler, 252. F F 234 THK LAW OK AORNCn'. cipal, and that tho lion was thoroforo lost. Forhy parting with tho secarity the agent shews that ho trusts merely to tho personal credit of his debtor. Thus an owner of a ship who eharters it out and out to another has no lien on the goods on board such ship, ho having parted with possession of the ship to the charterer.^ But where tho shipowner has reserved to himself a lien for freight iiudor tho chai'tor upon goods shipped, the extent of his lien remains unaltered, whether tho bill of lading is endorsed to a third person for valuable considera- tion, or tho goods ai"e delivered to tho original consignee.^ So where the arrangement was that the plaintiffs out of the sales of certain goods consigned to them, should retain their advances, and hand over the surplus to the con- signor ; and tho consignees accordingly remitted to the consignor the balance due to him having retained what was due to them, but omitting to take into account what was due to their London firm, held that their lien was abandoned by handing over the balance. ^ But in Edxoards v. Sotithgate,* the defendant a packer and shipping agent in London employed by one Morris, who afterwards became bankrupt, to pack and ship 86 packages of goods for Odessa, it being arranged that the bill of lading was to be in the name of the defendant, to be endorsed by him to Morris on payment. The goods were accordingly shipped, but the defendant's charges were not paid before the ship reached Odessa ; on ari'ival and before the goods were unloaded or came to the possession of Morris or his agent, the defendant directed the goods to be returned to England, his charges not having been paid ; held that the assignee in bankruptcy of Morris had no right of action for conversion, and that the defendant had a right of lien on the goods. It will not be revived by resumption of possession.— And where pos- session of the subject matter on which the lieu is claimed is once voluntarily parted with, the lien will not be revived b}' resumption of possession, nor will it give any right to stop in transitu.^ The loss of possession, however, to effect the lien must be voluntary, for if the possession is terminated by fraud, or the property over which the lien is claimed has been stolen, the lien will not be lost. Thus where the defendant sold two hoi'ses to the plaintiff who gave him bills of exchange for the price ; but before the bills were due, the defendant, having a suspicion that the bills were not likely to be honour- ed, went to the plaintiff and asked him to take them back, and give up his property in the horses, which were then at livery in the defendant's stables. » Hutton V. Bragg, 7 Taunt., 14, (27). See also Kinloch v. Craig, I. T. R., 119, 783. * Small V. Moates, 9 Bing., 574, approved in Gledstannes v. Allen, 12 C. B., (221). See also Kerr v. Deslandcs, 10 C. B. N. S., 205 " BUgh V. Partes, 28 Beav., 211. * 10 VV. R., Ex. (Eng.) 528. * Sweet V. Pym, 1 East., 4. Lickbarrow v. Mason, 2 T R., 63. Coombs v. Bristol and Exe- ter By. Co., 27 L. J. Ex., 401, Artaza v. Smallpiece, 1 Esp., 23. RIGHT OF AGENT AGAINST HIS PRINCIPAL. 235 The plaintiff objected ; the defendant afterwards saw the plaintiff again, who in the course of conversation said, " that the horses shall not be taken away till they were paid for." The plaintiff, however, on pretence of taking a ride, sent for the horses, but did not return them, and the defendant discovering this, and the place at which the horses were stabled, said to the stable-keeper that he had been swindled out of them, and he was allowed to take them away. The plaintiff sued for conversion, the defendant contended that he had a lien under a special agreement. Best C. J., left it to the jury to say whether the plaintiff meant by his statement to give the defendant a lien, and whether if he did so, he fraudulently took them away to destroy the lien. The jury found for the defendant •} but as has been already stated the case of the lien of a policy-broker seems to be an exception to this rule,^ although even in such cases there are some cases in which the rule applies.^ Lien may be lost although possession is not parted with.— It may, it appears, be lost in some cases, even where possession is never given up, as where an agent having a lien on certain goods causes them to be taken in execution at his own suit, as in Jacobs v. Latour.^ And the reason of this is, that to sell, the sheriff must have had possession ; and the subsequent possession of the agent is acquired from a person who has no authority to confer a lien ; but if the property be taken from an agent under an execution against his principal at the suit of some third person, the agent will still have a right to insist upon his lien on the goods. ^ It is lost when the debt on which it is claimed is satisfied.— The lien is also lost, when the debt in respect of which the lien is claimed, is satisfied ; thus it has been held that the release of a debt by the execution of a composition deed, puts an end to the lien which a person may claim in respect of the debt.^ So also does the payment over of a balance to the principal.^ Not lost by goods being wharehoused.— But the lien will not be lost by the goods being put into the possession of a depositary or bailee for safe custody, as in the case of goods put into the possession of a wharehouseman or wharfinger for that pui'pose. Thus in Wilson v. Kymer,^ the consignees of a West India cargo deliverable by bill of lading to them or their assignees, he ' Wallace v. Woodgate, R. & M., 194, 1 C. & P., 575. * Wentwood V. Bell, 4 Camp., 349. Whitehead v. Vuughan, Cooko's Bank Law, 442 (Gth ed.) Levy V. Barnard, 8 Taunt., 149. '■^ Levy V. Barnard, 8 Taunt., 149. * 5 Bing., 130. * Jacobs V. Latour, 5 Bing., 130, (132). * Coivi^er V. Qreen, 7 M. & W., G33. Back v. Shippam, 1 Ph., 094. Hewisoii v. Oidhrie, 2 Bing. N. C, 759. ' Blighv. Davieii, 28 Benv., 211. « 1 M. & S., 167. 236 TlIK LAW OF AGENCY. or they payiiit,' frciglit for tlio same, endorsed it to tlic defendants their brokerH for advances made by them, and the cargo on its arrival was landed at tlio West India docks in the name of tlie consignees, but was entered at the custom house by the defendants in their own names, and afterwards the defen- dants obtained delivery from the West India docks under an oi-der from the consignees for that purpose, aiid not under the l^ill of lading. The Court held that the defendants had obtained the goods not by the strength of their title as endorsees, but as agents for them, and that the Captain and his owners had a lien for the freight, not only whilst the goods were on board the ship, but also in the West India docks. Lien lost by misconduct. — A lien may be also lost by misconduct ; thus where the plaintiff pawned a watch and chain with a person named Chapman a pawnbroker, and the plaintiii delivered the duplicate tickets to the defendant for the purpose of getting the watch and chain out of pawn, which the defendant did paying to the pawnbroker the sum for which they were pledged and interest thereon : the plaintiff thereupon demanded the watch and chain from the defendant, Avho denied possessiun of the articles, although admitting receipt of the ticket, and that the watch had once been in his possession ; the plaintiff moreover informed the defendant through an intermediary, that he would allow him " in account" any sum he might have paid to redeem the goods, and further himself wrote to a person in the employ to the defendant, a letter containing these words " before we can come to a just settlement, will !Mr. Cliff give up my watch &c. upon receiving in full whatever he has been repaid for redeeming them." This letter was not replied to. It Avas contended that defendant had a lien on the watch and chain as no tender had been made to him of the money advanced. The Court held that as the defendant had parted with the possession of the articles and would not say to Avhom he had delivered them, he had no right to insist upon a formal tender.^ So the lien will be lost if the pei'son hav- ing a lien on goods wrongfully parts Avith them, as for instance by pledge.* So also it Avill be lost, if a pei'son having a lien upon goods, when they are de- manded of him claims to retain them on a different ground, making no mention of the lien, for he Avill then be held to have waiA-ed it.^ But a claim to lien of a larger amount or on a different account than that for which the pai-ty is entitled to it, may in some cases amount to a dispensation with a tender.* But claiming a lien for the keep of horses and the lodging of men for a longer time than the person is entitled to it, Avill not exonerate the OAvner from making a tender.^ > Jones v. Cliff, 1 Cr. & M., 540. * Scott V. Newington, 1 Moo. & Rob., 252. • Boardtnan v. Sill, 1 Camp., 410 (note). Dirks v. RichanU, 4 M. & G., 574. Weeks v. Goode, 6 C. B. N. S. 367. ♦ Per Willes J., in Allen v. Sitiith, 12 C B. N. S., 638, (645), but see Scarfe v. Morgan, per AldeisoD, B. 4 fil. & W., (281). RIGHT OP AGENT AGAINST HIS PRINCIPAL. 237 As to whether the lien is lost by taking security. — Next as to whether the lien is destroj'ed by taking- a security for the debt. It was held in Cowell v. Simpson,^ that a solicitor had by the acceptance of a security waived his lien, and again in Heioison v. Gnthrie^^ that if a security is taken for a debt for which a person has a lien upon the property of his debtor, such security being payable at a distant date, the lien is gone. But in jbigus v. McLachlan,^ in which both these cases were referred to, the matter has been considered by Kay J. : there, it was held that an innkeeper who accepts security from his guest for the payment of hotel charges does not waive his lien at Common law upon such goods for the amount of such charges, unless there is something in the nature of the security, or in the circumstances under which it was taken which is inconsistent with the existence or continuance of the lien and therefore destructive of it. And it seems that if security be taken, as for instance, a bill of exchange, and it be dishonoured, the lien will not be gone.* And where the question was, whether a right of lien and power of sale by virtue of a power of attorney over certain shares pledged with the plaintiffs by the defen- dants as security for the repayment of a loan originally secured by a fii'st promissory note, was lost by the plaintiffs subsequently taking from the defen- dant a second promissory note in lieu of the first which was receipted and returned ; — it was held, that the original debt continued to exist, that the first promissory note and the shares were given as a security for that loan ; and that the second promissory note was also given for that loan, no new debt being created, and that therefoi-e the lien was not lost.^ Lien not ordinarily lost by set-off. — A set-off, however, cannot be considered as destroying a lien, unless it be so agreed upon between the parties.^ It may, however, be that an arrangement may be entered into between the parties that the work to be done on account of which the lien is to be claimed, should be paid for in a particular manner and out of a particular fund ; and that being the only debt on which the lien is claimed, it might be an answer to it in that way ; or, if the debt having been created, the parties come to a new arrangement, and agree that the debt shall be satisfied in a particular way, then the lien is lost ; for tlien it would be in tinith a debt ])aid.'' Effect on lien, where agent proves in bankruptcy for the debt on Whioh it is claimed. — The lien will, in England, be divested by the agent ' IG Ves., 230. ^ 3 Scott., 298. 8 L. R., 23 Ch. D., 33U. * Stevenson v. Blakelock, 1 M. & S., 535, (514). * Stewart v. Delhi and London Bank, Ld., 17 W. K., 201. * Finnock v. Hai-rison, 3 M. & W., 532. ' Ibid., per Alderson B., p. 639. 238 TIIK /,A\V f)V AOKNCY. provint^ for his (l(!l)t in liiinkT-iqdcy, for in Huch oaso, proof nnrlor commiRHion is oquiv'alont to payment. ^ The question wlietlier hankniptey of a person does away with an express contract cst!il)lishiMf( a lien was raised in Clarke V. FcU.^ There, a tradesman undertook to work upon a carria(^(! delivered to liim for a person to whom he was indebted, and it was agi'ced that the work should bo paid for m ready money ; the tradesman subsequently became bankrupt, the carriage passed into the hands of his assignees. The repairs were done and the owner of the carriage demanded the carriage from the assignees, and proposed to strike off the cost of the repairs from the amount which was owed to him by the tradesman. The assignees refused to deliver, except for ready money, and they alleged that the repairs were completed after the bankruptcy. The owner contended that the sums were mutual debts at the time of the bankruptcy and ought to be set off against each other in accordance with s. 50 of 6 Geo. IV, c. 16, held that there was no mutual credit of a nature to exclude the lien. Littledale J., said : — " I think, under the circumstances of this case, there was no mutual credit of a nature to exclude the lien insisted upon by the defendants. If there had not been a contract to pay ready money, I should have been of a diif erent opinion ; for although in that case there would still have been a lien on the carriage for the work done by the bankrupt, yet, as the bankrupt was also indebted to the plain- tiffs, the question would have been on which side the balance lay, and that was in favour of the plaintiffs. But the agreement to pay ready money makes all the difference." Taunton J. said : — " For some purposes there was a mutual credit in this case ; if the plaintiffs had gone before the commission to prove their demand on the bill, there was so far a mutual credit that the assignees might have said : — ' Thei'e is so much due to the estate for repairs, the com- missioners must state the exact balance, and allow that and no more to be proved' but no such proceeding took place, if it had, the right to detain would have been gone, because the assignees would, in this way, have received payment of their demand. The question here, therefore, is, whether the credit was such as, on the bankruptcy of the tradesman, annulled his bargain with the plaintiffs, that bargain being to the effect, that unless he was paid in ready money he should be at liberty to detain the carriage. I think the bankruptcy did not annul that bargain nor deprive the bankrupt's estate of the benefit of that lien." Patterson J., said : — " I admit that the law of mutual credit under the Bankrupt Act goes further than the ordinary law of set-off : Eose v. Eart,^ Buclianan v. Fiiidlay,* and Ease v. Sims^ shews this : and I agree with I»Ir, Cleasby that there is a mutual credit ^vithin the Act, ' Ex-parle Hnrnbij, in re Tarleton, Bucks Bank Cas., 351. •» 9 B. & C, 738. * 4 B. & Aid , 404. » 1 B. &Ald., 521. • 8 Taunt., 499. RIGHT OP AGENT AGAINST HIS PRINCIPAL. 239 where a debt, or that which will terminate in a debt, exists on each side ; but the question in this case, is, whether the bankruptcy of one party does away with an express contract establishing a lien for payment of a particular debt. I find no case which decides that it can." Lien lost by act of party claiming" it.— The lien may also be divested by act of the party claiming it . Thus if the lien is claimed by a fix'm of attorneys, and the members of that firm dissolve partnership, the dissolution will operate as a discharge by the firm of the relation of attoi'ney and client, and the lien will be lost.^ Ordinarily property detained as lien cannot be sold.— Lastly, property detained as a lien cannot be sold unless by consent of the owner.^ Tindal C. J., in Smart v. Sandars"^ says " The relation of principal and factor, where money has been advanced on goods consigned for sale is not that of pawner and pawnee. The goods are delivered for sale, on account of, and for the benefit of the principal, and not by way of security to indemnity sgainst a lien, al- though they operate as such a security, the factor having a lien upon them, or upon their proceeds, when sold, for the amount of his claim against the principal. The authority of the factor whether general or special, may become irrevocable when advances have been made ; but there is nothing in the trans- action from which can be inferred that it was part of the contract, that at any time the goods should be forfeited, or the authority to sell enlarged, so as to enable the factor to sell at any time for repayment of advances, without reference to its being for the interest of the principal to sell at that time, and for that price. Nor can we find any principle in the law by which, in- dependently of contract, such authority is given." Maritime Lien. — A maritime lien, must be something which adheres to the ship from the time that the facts happened which gave the maritime lien, and then continues binding on the ship until it is discharged It commences and there it continues until it comes to an end.3 It takes place in an action in rem from the moment of the arrest of the ship.'*' It was formerly held that a master of a ship had a maritime lien on the ship for disbursements ;^ but these decisions have lately been ovei-ruled in the case of Hamilton v. Barker The Sara,^ and it has been therein definitely decided by the House of Lox-ds that ' McCorkindale, in re, I. L. K., 6 Calc, 1. ^ Smart v. Sandars, IG L. J. C. P., (IS). Jones v. Thurlof, 8 Mod., 173 Jnues v. Peaiie, 1 Str., 557. ' The Two Ellens, L. R., 4 P. C, (IG9). See also Hanner v. Hell, 7 Moo. P. C, 281. ^ The Cella, L. R.. 13 P. D., 88. » The Mary Ann, L. R., 1 A. & E., 8. The Feronia, L. R., 2 A. & E., (J5. The Ringdove L. R., 11 P. D., 120. " L. R., 14 App. Cas., 200. 240 THR LAW OP AOENCY. tho Admiralty Court Act 18G1 (24 Vic. c. 10) floos not f^vc the master a maritime lion on the ship for disbursements. Lord Macnaghtcn in his jnd^-ment in this case .said : — " It is clear !, 32 L. J. Adm., 97. • Stveet V. Fi/m, 1 East., 4. • Oppenheim v. Russell, 3 B. & P., 42. • Synith v. Ooss, 1 Camp., 282. Bhola Nath v. Baij Nath, 2 Agra H. C, 11. • Merca7itile and Exchange Bank v. Gladstone, L. R., 3 Ex., 233. • Ind. Contr. Act, s. 99. Bohtlingk v. Inglis, 3 East., 381. ' See Blackburn on Sale, 327. • 3 T. R., 119. " Blackhurn on Sale, 337. »» 2 Agra H. C, 11. ** Bejijamin on Sale, 733. Kearslake v. Morgan, 5 T. R., 515, (518). Piichford v. Maxwell, 6 T. R., 52. Oivenson v. Morse, 7 T. R., 64. James v. Williams, 13 M. & W , 828. Griffith V. Owen, 13 M. & W. 58. Plinsley v. Westlcy, 2 Bing. N. C , 249. Belshaw V. Bmh, 11 0. B., 191. Cwrie v. Misa, L. E., 10 Ex., 153, (163). RIGHT OP AGENT AGAINST HIS PRINCIPAL. 247 Btit if a dispute as to the intention of the parties arises, the question is one of fact ; the intention that a bill or note is to he taken as absolute payment for goods sold, having to be clearly shown and not deduced fi-om ambiguous ex- pressions.l During what period the right continues.— The right continues as long as the goods are in transit. Goods are considered in transit, whilst they are in the possession of the carrier, or lodged at any place in the course of trans- mission to the buyer, and have not come into his possession, or the possession of any person on his behalf otherwise than as being in the possession of the carrier, or as being so lodged. 2 When goods are in transit. — If goods, therefore, are in the possession of the carrier, qua carrier, they are still in transit, and are liable to be stopped ,3 and that is so, even if the carrier has been named by the vendee.* But where the purchaser sends his own ship, and orders the goods to be deliver- ed on board his own ship, and the contract is to deliver free on board, then the ship is the place of delivery, and the transit is at an end, just as much as was said in Van Casteel v. Booker,^ as if the purchaser had sent his own carts, as distinguished from having the goods put into the cart of a carrier. And this is so, if the ship sent is the general ship of the purchaser.^ The right of stoppage may, however, even in such case be preserved to the vendor, if he take a bill of lading in such term as to indicate that he reserves a _/«« cUsponendi over the goods ; and this can be, and was, done by a vendor in the case of Turner v. Trustees of the Liverpool Dochs,'^ by taking a bill of lading, and making the goods deliverable to his order ; or it may be done by, transmitting the bill of lading endorsed in blank to an agent to be delivered only in case payment is made.^ As to the effect of making goods deliverable to the shipper's order, see Ogg v. Shuter.^ Supposing however, that a vendor is ignorant of the fact that the vessel in which he is shipping his goods belongs to the purchaser, it ap- pears to be an open question whether such delivery could properly be held to be ' Goldshede v. Cottrell, 2 M. & W., 20. Steadman v. Gooch, 1 Esp., 5. '^ Ind. Contr. Act, s. 100. Kendal v. Marshall, L. R., 11 Q. B. D., 356, (364, 365). Ex- parte Rosevear China Clay Company, L. R., 11 Ch. D., 560, 8 Mills V. Ball, 2 B. ^- P., 457. * Hoist V. Poivnal, 1 Esp., 240. Rosevear China Clay Company, 2 L. R., 11 Cli. 13., 500, Lickbarroiv v. Ifa.so?;, 1 Sm. L. C, 7th ed., 818 notes. * 2 Ex., 691. « Berndston v. Strang, per Sir W. Pago Wood V. C, L. R., 4 Eq , 481, (491). ' 6 Ex., 543. Schotsmans v. Lancashire and Yorkshire Ry. Co., L. E., 2 Ch., 332, (33G), per Lord Chelmsford. ^ Key V. Cotesioorth, 7 Exch., 595, and see Hoare v. Dresser, 7 H. L. Cas., 290. L. R., 1 C. P. D., 47 ; 44 L. J. C. P., 161. 24S TUB l,AW Of AQENCY. coniplofp.' WluTO flio pnroliasor cliarfcrs asliip for tho pnrpoao of tho carnaj^o of Mi(^ cfoofls hoiit'-lif. by liim, the ((uostion, wliotlior tlio transit is at end whrn the jT-oods iivc (h'livc?'(Ml on l)()!ii(l is, " is it th(; man's ownship that receives the goods, or lias ho contracttMl witli some one else rjud carrier to deliver the ^oods, so that according to the ordinary rule as laid down in Bohtlingky. Inrjlis,^ and continually referred to as settled law upon the subject, the transitus is only at an end when tho carrier has arrived at the place of destination and has delivered the goods.* Where the purchaser requires the goods to be placed on board a ship chai'tered by himself and about to sail on a roving voyage, the transit will be ended when the goods are on board.* The question whether the vessel chartered by the buyer is to be considered his own ship, depends on the nature of the charter- party. "If the chartei-er is the owner for the voyage, that is, if the ship has been demised to him, and he has employed the captain, so that the captain is his servant, then a delivery on board such a chartered ship world be delivery to the buyer ; but if tho owner of the vessel has his own captain and crew on board, so that the captain is the servant of the owner, and the effect of the charter is merely to secure to the charterer the exclusive use of the vessel, then a delivery by the vendor of goods on board, is not a delivery to the buyer, but to an agent for carriage."^ But otherwise when the goods are only arrived in a vessel at a port for orders, though the vendee is to give orders for their ultimate destination.^ "Wliere the contract is to deliver cargo free on board at a certain place, no mention being made of the destination of the cargo, it has been held in Bosevear v. China Clay Company,'^ that the transit does not cease on shipment, and that the mere circumstance of the non-disclosure of the destination of the cargo is immaterial and does not affect the vendor's right to stop in transit. Whether the transit is the original transit or a fresh one —Other and more difficult questions arise when it is necessaiy to determine whether or not the transit upon which the goods are going when stopped, is the original or a fresh ti'ansit, or whether the goods have reached a place from which fresh orders from the purchaser are required to give them a new destination. This point has been dealt with in Bethell v. Clark and Company'^ in the * Per Lord Chelmsford in Schotsmans v. Lancashire and Torloihire By. Co., L. R,, 2 Ch., (535). * 3 East., 381, * Berndston v. Stranr,, L. R., 4 Eq , 4S1, (492). * Berndston v. Strang, L. R., 4 Eq., (490). * Benjamin on Sale, 856. . * Fraser v. Witt, L. R., 7 Eq., 64. ' L. R., 11 Ch. D., 560. « L. R., 20 Q. B. D., 615. RIGHT OP AGENT AGAINST HIS PRINCIPAL. 249 Court of Appeal. There, goods were purchased bj merchants in London of manufacturers in "Wolverhampton, the purchaser writing to the vendors directing them to consign the goods to the " Barling Downs, to Melbourne, loading in the East India Docks." The goods were delivez'ed to carriers to be forwarded to the ship. The vendors being informed of the purchaser's insol- vency gave notice to the carriers to stop the goods, but too late to prevent their shipment on board the Darling Downs. The ship sailed for Melbourne, but befoi'e she arrived, the vendors claimed the goods fi'om the shipowners as their property ; held that the transit was not at an end till the goods arrived at Mel- bourne. Lord Esher said ; " There has been a difficulty in some cases where the question was, whether the original transit was at an end, and a fresh transit had begun. The way in which that question has been dealt with is this ; where the transit is a transit which has been caused either by the terms of the contract or by the directions of the purchaser to the vendor, the right of stoppage in transitu exists ; but, if the goods are not in the hands of the carrier by reason either of the terms of the contract or by the directions of the purchaser to the vendor, but are in transitu afterwards in consequence of fresh directions given by the purchaser for a new transit, then such transit is no part of the original transit, and the right to stop is gone. So also, if the pui-- chaser gives oi-ders that the goods shall be sent to a particular place, there to be kept till he gives fresh orders as to their destination to a new caiTier, the original ti^ansit is at an end when they have reached that place, and any further transit is a fresh and independent transit." Transit may not be ended even where the goods are wharehoused.— The transit, however, may not be ended even though the goods are deposited in a wharehouse to which they have been sent by the vendor on the pui^chaser's order. In such cases, in order to determine whether the transit has ceased or not, the question to be asked in all cases of that and a like kind is, — in what capacity are the goods held by the wharehouseman or other custodian ?1 Has the person Avho has the custody of the goods got possession as an agent to forward from the vendor to the buyer, or as an agent to hold for the buyer P^ If he is an ao-ent to forward, the transit is not at an end -^ but if he is agent to hold for the buyer then the transit has ceased,^ although the place be not that of the ultimate destination of the goods.* ' Blackburn 07i Sale, 35.3. Bethel v. Clark, L. R , 19 Q. B. D. (558), per Mathew J, '^ Smith V. Goss, 1 Camp., 282. Coates v. Railton, 6 B. & C, 422. Jackson v. Nichol, 5 Bing. N. C, 508. Ex-parte- Barrow, in re Wonlnell, L, R., 6 Ch. D., 783. ' Leeds v. Wright, 3 B.- & P., 320. Scott v. Pettit, 3 B. & P., 4G9. Valpy v. aihson, 4 C. B., 837. Ex-parte Gibbes, L. R., 1 Ch. D., 101. Kendall v. Marshall, L. R., 11 Q. B. D., 356. * Ex-parte Miles, in re Issacs, L. R., 15 Q. B. D., 39. Kendall v. Marshall, L. R., 11 Q. B. D., 356. H H '250 PHE \.AW Of AnEN'OY, Whether goods are held by person as carrier or wharehouseman. — I'lic (|n('stiuii wlictliov, irlini /In; (jiii„h Inin' mirlifl llfir rlr.s/ umf ujh, tlicy remain ill the linnrls of the caT-ricM' iy/((/, can-ici', oi' if liiinlcd. wlietlier tlie Avharehouse- iTian is the agent of the buyer to receive tlieni and liold them on the bnyor's account, is, (as the question of possession is itself ambiguous) to be gatliered from the intention of the parties,^ from their minor acts. If the possessor of the goods has the intention to hold them for the buyer, and not as agent to forwai'd, and the buyer intends the possessor so to hold them for him, the transitus is at an end ; but says, Mr. IBlaekburn,^ I apprehend that both these intents must concur, and that neither can the carrier, of his own will, convert himself into a wharehouseman, so as to terminate the transitus mthout the agreeing mind of the hny or (James v. Griffin;)^ nor can the buyer change the capacity in Avhich the carrier holds possession without his assent, at least until the carrier has no right whatsoever to retain possession against the buyer (Jackson v. Nichol,)'^ In James v. Gri^n,^ the bankrupt sent his son to land the goods at the whai'f Avhere he was accustomed to have goods landed and kept until he carried them away in his own carts ; but he at the same time told liis son, that he "would not meddle with the goods, and that he did not intend to keep thera, and that the vendor ought to have them. The goods were, however, landed, by the son's directions, at the wharf, and there stopped in transit by the vendor. The Court (Abinger C. B., dissenting) held the declaration made to the son to be admissible in evidence, although it was not communicated to the vendor or to the wharfinger ; and that such declaration showed that the bankrupt had not taken possession of the goods as owner, and therefore that the transitus, was not detennined. Loi^d Abinger's dissent to this, was based on the ground that the intention of the bankrupt not having been commTinicated to the wharfinger, the agency of the latter could not be affected by it, and that the ti'ansit was therefore ended; His Lordship considering that the result of the Court's decision would be to protect underhand intentions of bankrupts, and to qualify the acts done by them in niaking contracts with any person who might receive goods in their names. In the case of Jackaon v. Nichol,'^ the buyers made repeated demands for the goods after the arrival of the vessel, and before stoppage, but the master of the vessel refused delivery, and the Coui't held that the goods had not come into the possession of the buyer. That the carrier cannot change his character so as to become the buyer's agent to hold the goods, without the latter's assent, appears fi'om the cases of Bolton v. Lancashire and Yorkshire By. Co.,^ and ex-parte Barrow."^ ' James v. Qrijffin, 2 M & W., 623. Whitehead v. .inder.onn, 9 M. W., 518. » Blackbnrn on Sale. 364. » 2 M. & W., 623. » 2 M. & W., G23. • L. R.. 1 C. P., -4.31 ; 35 L. J. C. P., 137. ♦ 5 Bing. N. C, 508. ' L. R.. G Cli. D., 783. RIGHT OF AGENT AGAINST HIS PRINCIPAL. 251 And the case of Whitehead v. Anderson,^ is an antliority foi" the converse proposition that the bnyei' cannot compel a canner to become his bailee to keep the goods, without the lattei-'s assent. And in ex-parfe Cooper in re McLaren,^ this principle was expressed by James L. J., as follows : — " When goods are placed in the possession of a carrier, to be carried for the vendor, to be delivered to the purchaser, the trausitns is not at an end so long as the carrier continues to hold the goods as a carrier. It is not at an end until the carrier, by agreement between himself and the consignee, undertakes to hold the goods for the consignee, not as carrier, but as his agent. Of course the same principle will apply to a wharehouseman or a wharfinger." What is the actual delivery to the vendee which ends the transit.— The actual delivery to the vendee or his agent, wliich puts an end to the tran- situs, may be, as says Parke B., " at the vendee's own wharehouse, or at a place which he uses as his o^vn, though belonging to another, for the deposit of goods ;^ or at a place where he means the goods to remain, until a fresh destination is communicated to them by orders from himself ;* or it may be by the vendee's taking possession by himself or agent at some point shox^t of the original intended place of destination. "6 Lord Abinger in the same case laid down the law to be well settled " that in all cases of the sale and transmission of goods, the transitus is at an end when the property comes, either into the actual possession of the vendee, or, to that place where, by his authority, they are destined to come for his use and to await his orders, where there is nothing fux'ther to be done with the goods but to sell them to a customer, or to apply them to his own use ; where in effect, there is to be no further change of possession till a change of property takes place, the transit is at an end." As to this see also G. I. P. By. Co. v. Hanmandas Bamkison.^ The carrier may, however, become agent to hold the goods for the buyer, even though he claims to retain them until his lien for freight is satisfied •,'^ whether he does in fact become such an agent, is, ao-ain a question of intention ; where, however, there is any special agi-eement betAvcen the vendor and purchaser as to the destination of the goods, the transit will, of course continue until the goods have reached that destination.^ 1 9 M. & W., 518. See also Coventry v. Gladstone, L. R., 6 Eq., 44. 2 L. R., 11 Ch. D., 08. " Scott V. Pettit, 3 B, & P., 409. Roive v. Fickfonl, 8 Taunt., 83. * Dixon V. Baldwin, 5 East., 175. » Ja7nes v. Griffin, 2 M. & W., 033, per Parke, B. * I. L. R., 14 Bom., 57. ' See Allan v. Gripper, 2 Cr. & J., 218, bat see Grawshay v. Eades, \ B. & C., 18]. * Benjamin on Sule, 807. Ex-parte Watson, w »•« Love, L. R., 5 Cli. D., 35. Ex-varte Roseveur, China Clay Company, L. R., 11 Ch. D., 500, (570i, Bethel v. Clark L R 19 Q. B. D., 553, (559, 500). L. R., 20 Q. B. D., 615. 252 TflK [,A\V OK AflF.NrV. Vendee may anticipate termination of transit. — The vendee, however, may anticipjito tlic term iimt ion of the transit, by taking' possession of the goods before the destinated place of delivery is reached ; this is clear from the remarks of Bowen C. J., in Kendal v. Marshall^ " where goods are sold to be sent to a particular destination, the transitus is not at an end until the goods have reached the place named by the vendee to the vendor as their destination. One exception, at least, is to be found to the principle here laid down : the vendee can always anticipate the place of destination, if he can succeed in getting the goods out of the hands of the can-ier. In that case, the transit is at an end, whatever may have been said as to the place of destination, and this shows that the real test (when delivery to the vendee is spoken of) is not what is said but what is done." Part delivery. — But the transit is not terminated by a part delivery of the goods. There have been different expressions of opinion at various times as to whether the delivery of a portion of the goods, the subject of an entire con- tract, operates as a constructive delivery of the whole, so as to put an end to the right of stopping in transitu. But it has now been settled that the deli- very of part operates as a constructive delivery of the whole only when the delivery of part takes place in the course of the delivery of the whole, and the taking possession by the buyer of that part is the acceptance of constructive posses- sion of the "whole.* But it seems that Avhere a purchaser takes part shewing an intention acquiesced in by the cai'rier, to receive and take possession of the whole, that may be a constructive possession of the whole by the acquies- cense of both parties.^ And in Kemp v. Falk* Lord Blackbui-n, in dealing with the question whether the delivery of part is a delivery of the whole, says : — " It may be a delivery of the whole. In agreeing for the delivery of goods with a person you are not bound to take an actual corporeal delivery of the whole in order to constitute such a delivery, and it may very well be that the delivery of a part of the goods is sufficient to afford strong evidence that it is intended as a delivery of the whole. If both parties intend it as a delivery of the whole, then it is a delivery of the whole ; but if either of the parties does not intend it as a delivery of the whole, if either of them dissents, then it is not a delivery of the whole. I had always understood the law upon that point to have been an agreed law, which nobody ever doubted since an elaborate judgment in Dixon V. Yates^ by Lord "Wensleydale, who was then Parke J. The rule I have always » L. R., 11 Ch. D., (369); see also Whitehead v. Anderson, 9 M. & W., 518, (534). Oppen- heim r. Russell, 3 R. & P., 5-i. * Bolton V. Lanchashire and Yorkshire Ry. Co., L. R., 1 C. P., 431, per Willes J. • Jones V. Jones, 8 M. & W., 431. ♦ L. R., 7 App. Cas., (586). • 5 B. & Ad., 313. RIGHT OF AGENT AGAINST HIS PRINCIPAL. 253 understood, from that time down to the present, to be that the delivery of a part may be delivery of the whole, if it is so intended, but that it is not such a delivery unless it is so intended, and I rather think that the onus is upon those who say that it was so intended." The right may be defeated by an assignment to a second purchaser whilst the goods are in transit. — Although the right does not cease on the buyer's re-selling the goods, while in transit, and I'eceiving the price, but continues until the goods have been delivered to the second buyer, or to some person on his behalf,^ which proposition is founded on the principle that a second vendee of a chattel cannot stand in a better position than his vendor,^ yet where the buyer (rightfully^) obtains a bill of lading or other document of title to the goods, and assigns it while the goods are in transit to a second buyer, who is acting in good faith, and who gives for them valuable consideration, the right of stopping will be defeated.'* Although the mere fact that the ptu'chaser of goods has resold them, and that the bill of lading has been made out in the name of the sub-pui chaser, does not put an end to the transitus, or destroy the right of the original vendor to stop the goods in transitu. 5 It is, as has been mentioned, further necessary, that the assio-n- ment of the bill of lading to be effective against the right of stopping, must be an assignment by the buyer to a second buyer who is acting in good faith, thus if such second buyer should be aware that the consignee was insolvent, and then takes the assignment for the purpose of defeating the right to stop in transitu thereby intending to defraud the consignor out of the price, he will be actino- iniald fide, and will be held to stand in the same situation as the consignee.^ But the mere fact that the indorsee has notice that the vendor has not been paid, is not sufficient to establish mala fides? In Salomons v. Nisse)i.,^ the criterion is said to be " does the pui-chaser take the bill of lading fairly and honestly," or " without notice of such circumsttmces as rendered the bill of lading not faii'ly and honestly assignable." But although a bill of lading may have been en- * lad. Contr. Act, s. 101. Golding Davis Sf' Co., Ld., in re Kniijht, L. R., 13 Ch. D,, (G33), (636;. * Dixon V. Yates, 5 B. & Ad., 313, (339), but see the remarks of Lord Fitzgerald in Kemp V. Fal]c, L. R., 7 App. Cas., (590). * The word rightfully is not made use of iu the Contract Act, but it can hardly be sup- posed t/i at it was intentionally omitted; it is probable that Courts in India would follow tliu English law, which holds that the obtaining of the bill, must be riglitl'ul, and at all events no Court would be justified in upholding a fraud. * Ind. Contr. Act, s. 102. Jenki/ns v Usbounw, 8 Scott. N. K., 5o5, (521). * Golding Davis ^ Co., Ex-parte, in re Kiiiyht, L. K., 13 Ch. D., G28. * Cumming v. Brown, 9 East., 514. ' Gumming v. Brown, 9 East., 506. » 2 T. il., 674, (681). 2rjt THK r,A\V OF- AORN'CY. dorscci fo ii liniin fidi: jnu'cliasi^r, it is as I liav(> ])oint('(l out ncccHsary to defeat Htnp))an:(' lliat tlu> l)ill of huliiit^ slionld have conic into his possession with the aiilliority of tlic vctulDr. It' it l)c stolon I'lvjrn liirn, or ti'ansfcrred without his autliority, a siil)sc(|iu'nt buiid fide transt'ci'oo for value cannot make tith; under it, as against the shipper of tlie goods. ^ This dicfnm is, however, confined in its terms to tlic original transfer of a bill of lading deliverable to the assigns of the shipper.'' The assignment must be for valuable consideration. Past debt.— The assignment to defeat tlie right of stoppage must be for valuable consideration. It has been held in Rodger v. Comptoir U Escompte de Paris,^ that the forbearance or release of an antecedent claim is not a good consideration for an indorsement of a bill of lading, so as to defeat an unpaid vendor's right of stoppage in transitu ; In that ease Sir Joseph Napier said : — " Doubtless the vendor's claim cannot prevail ao-ainst the claim of a transferee for value given on the faith of a negotiable security, fairly and honestly taken : to the extent to which he has so given value he has a prior claim. IJut the rule is founded on the reason of it, as already explained ; cessante ratione, cessat ipsa lex. Where there is no advance made or value o-iven upon the faith of the documents ; where the object is simply by a sweepin-inont was fliOT'ofnro to dofido /, 7 Taunt., 169. Kemp v. Falk, h. E., 7 App. Cas , (585), per Lord Blackburn. RIGHT OF AGENT AGAINST HIS PRINCIPAL. 261 by the Bills of Lading Act of 1856 ;i nor will the effect of stoppage be to put an end to the contract.^ PART II. RIGHT TO INDEMNITY. The agent's right to be indemnified and compensated.— Upon general principles, an agent is entitled to indemnity from liis jirincipal against liabilities incurred by him in executing the orders of his principal,^ unless those order are illegal, or unless the liabilities are incurred in respect of some illegal act of the agent himself, or by reason of his default. ^ This rule is in accordance with the eivil law " officium nemini debet esse daranosum" (Ins. Lib. 56, para. 4), and is laid down in the Indian Contract Act,* as follows : — 1. That an agent is entitled to be indemnified by his principal against the consequences of all lawful acts^ done by him in exercise of the authority con- ferred. 2. That an agent is entitled to be indemnified by his principal against the (Consequences of acts done in good faith, even though such acts cause injury to the rights of third persons ; but the principal will not be liable to indemnify the agent against the consequences of an act which is criminal, which he may have employed the agent to carry out. 3. That the agent is entitled to be compensated by his principal in respect of injury caused to him by the principal's neglect or want of skill. Right to indemnity against lawful acts.— Under this heading fall cases in which the agent has defended suits on behalf of his principal, and has been put to costs, charges and expenses therefor ; or where he has on behalf of the principal properly made advances or incurred expenses in the business of the agency;^ or expenses incurred for wharehousing duty, freight, lighterage, porterage, general average, salvage, repairs, travelling expenses, and foi- othei- acts done to preserve the property of his principal ; in all such cases he is entitled to recover against the pi-incipal expenses or advances so made.''' Requisites entitling agent to recover from his principal.—lu order to entitle an agent to recover from his j^rincipal, under such circumstances, he must show, first, that the loss arose from the fact of his agency ; secondly, that he was acting within the scope of his authority ; and thirdly, that the fault was not attri- * Act IX of 1856. * Ind. Coutr. Act, s. 106. See aiso Uod(json v. Lmj, 7 T. II., 115. Clay v. Harrison, 10 B. & C, 99. SteiAeiis v. WilJcinnon, 2 B. S; Ad., 323. » Thacher v. Harchj, L. R., 4 Q. B. D., 635, ^ Ind. Contr. Act, ss. 222, 223, 224, 225. » See Ma Wine v. Burn, 4 VV. R , (R. R.), 1. * Belts V. Arbuthnott ^ Co., W) W. R. 1'. C, 65. ' See Story, 336, 336. 1 Rolls. Abiid., 124, 7. 262 Tnii i-Avv OK AOKNcr. butablo to any fault or ladies on his part. Thus whore an agent defended on account of his principal a suit brought on breach of contract to deliver, which suit was decreed in full in favour of the plaintiff ; the agent was held entitled to recover the amount, of damages sustained by him in defending such suit.^ So where a principal sent his factor abroad and commissioned him to draw on foreign mer- chants, which hr did, and so stated in tlie account which lie furnished to his prin- cipal, and the principal gave credit for the bills drawn, as for cash, but by his contrivance the bills were not accepted ; it was held that the factor could not be concluded by his account, and was entitled to be paid.^ So where an auctioneer had under authority sold an estate, the title of which was objected to, and refusing to return the deposit, was sued to compel him so to do, whereupon he after notice to his principal to defend the suit, which the latter refused to do, repaid the de- posit and paid all costs of the suit which had been incurred, together with the costs of his own attorney and the duties on the sale, and sued his principal to recover the expenses so incurred by him : it was held that he was entitled to I'ecover the moneys paid on all other accounts than those of costs, as to recover costs there should have been a special count, and thei*e being no such count the plaintiff could not recover costs under the action as framed which was one for paid only. But there is little doubt that he would have been entitled to recover all the costs also, had the action been rightly framed.^ So where a merchant in London sold, on commission for a merchant in Sweeden, three cargoes of timber to arrive, and the Sweedish mer- chant drew on the London merchant a bill of exchange for part of the produce. The Sweedish merchant then consigned two of the cargoes to H. and Company of Lon- don, dii-ecting them to deliver to the London merchant the bills of lading, on the latter making acknowledgments (which the Sweedish merchant had no right to re- quire) and on accepting a bill of exchange for the remaining produce of the three cargoes according to the account sale made out by the Sweedish merchant. The London merchant gave a notice to H. and Company that he claimed the bills of lading without performing any part of the conditions, and on a subsequent occa- sion obtained possession of the bills of lading on the understanding that he would perform the conditions, and although he did not give the i-cquired acknowleg- ment he accepted the bill, which H. and Company negotiated, and paid over the pi'oceeds to the Sweedish merchant — held, in a suit instituted by the London merchant against H. and Company and the Sweedish merchant, that H. and Company were bound by the notice of the London merchant's rights, who was entitled to be re-imbursed by H. and Company to the extent of the money re- ceived on the bill, the monies paid by him for or in respect of the three * Frixione v. Tagliaferro, 10 Moo. P. C, 175, (196). * Wurr V. Praed, Colics P. C, 57. * Spurrier v. Elderton, 5 Esp., 1. RIGHT OP AGENT AGAINST HIS PRINCIPAL. 263 cargoes, so far as these suras were not covered by the proceeds of the two car- goes received.^ So in Brittain v. Lloyd,^ where an auctioneer was employed by a dealer to sell an estate by auction, which was bought in at the sale, and the Commissioner of Excise refused to remit the duty thereon, and ultimately com- pelled the auctioneer to pay it, held, that he might recover the duty from his employer in an action for money lent which is maintainable in every case in which there has been a payment of money by the plaintiff to a third party, at the request of the defendant, with an undertaking, express or implied, to i^epay the amount, and it is immaterial whether the defendant is relieved from a liability, by the payment, or not. It is however as yet undecided, whether a com- mission agent is entitled to be indemnified out of the proceeds of his principal's goods sold by him against all liabilities incurred by him, including the amount of an accommodation bill drawn by the principal, and accepted by such agent.''^ The agent will be entitled to be indemnified for payments made by him in accordance with the custom of particular markets— In Bayhy v. Wilkins,''' the defendant ordered the plaintiff a stock-broker to purchase for him 20 shares in a certain railway at a certain price, which the plaintiff did accord- ingly. The defendant paid the amount with commission and the transfer was made. Before the sale a call had been made, but was not then dae, and no mention was made of it. Immediately after the sale the vendor paid up the call, though not then due, which it was necessary under 8 and 9 Vic. c. 16, s. 6 to do in order to make the transfer. The plaintiff pursuant to a rule of the Stock Exchange paid the amount of the call over to the vendor -.—held, that the defendant in employing a broker on the Stock Exchange, must be taken to have contemplated that which was the rule of the Stock Exchange, and that the plaintiff was entitled to recover from the defendant the amount paid over in an action for money paid to the defendant's use. So where the custom of a parti- cular market compelled an agent, who had contracted under instructions from his principal for the purchase of shares of a certain Company, to pay the price of the shares to the person from whom he had bought them, the agent was held entitled to recover such sums from the principal, (although the contract could not be completed by transfer before the winding of the Company), as at the time the payment was made, the contract had not been ascertained to be void under s. 153 of the English Companies Act under 1862 (s. 107 of Act YT of 1882). ^ So also where a sharebroker was employed to buy shares on a particular market » Dresser v. Uoare, 2 Jar. N S., 1151. 26 L. J. Ch., 51. « 15 L. J. Ex., 43. • Hood V. Stallybrass, L. 11 , 3 App. Cus., 880, 38 L. T., 826. • 18 L J. C. P., 273. • Whitehead v. hod, Chapman v. Shepherd, L. R., 2 C. P., 228. See sAbo Seth Mull \. Choija Midi, 1. L. R., 5 Calc, 121. 2C}i- rnv. law ov aofvcy. wluM'o Mie usaofo was, that whoro a piircliascr did not pay for hi« sharps within a <,'iv(Mi fimc, the vendor, giving the purchaser notice, might rc-sell and charge hlin with tlic (lilforence on a re-sale; and the broker acting under authority boiiglit at audi mai-ket in liiis own name and was compelled to pay a difference on the shares, through the neglect of the principal to supply funds, it was held that he might sue his principal for the mrtney so paid.^ For further cases on this point, I'clating to the right to iiidcinnity for paymonts miido in accordance with the rules of the Stock Exchange see the cases collected in Campbell on Sale and Agency, pp. 4I-2-44-8. Agent acting" without default incurring" losses is entitled to be indemnified- — Further if an agent has, without his own default incurred losses or damagL's in the course of the business of the agency, or in following out the instructions of his principal, he will be entitled to be compensated there- for ; but yet it is not every loss or damage for which the agent \vill be entitled to reimbursement from the principal, for the principal is only liable for such losses and damages as are direct and immediate, and naturally flow from the execution of the agency .^ Thus in Duncan v. Hill,^ the plaintiff's brokers on the London Stock Exchange bought for the defendant certain shares for the account of the loth July 1870, and on that day by his instructions carried them over to the account of the 2f>th July, and paid differences amounting to £1,(388. The defendant and various others, principals of the plaintiff, not having paid the amount due from them in respect of the contract of the loth July, tlie plaintiffs became defaulters and in conformity with the rules of the Stock Exchange, they were declared defaulters and their transaction closed. On the closing of the account a further sum became due from them in respect of differences upon the contracts carried over by them for the defendant. The jilaintiffs paid a dividend of 6s. 6d. in the pound and a further dividend was expected. A suit was brought in the name of the plaintiffs, but for the beneflt of their creditors, to recover the sum of £6.013, which included the £1,688 as well as the sum which the defendants became liable to pay upon their being declared defualters, held that the defendants were not liable for anything beyond the £1,688, there being no implied promise by a principal to his agent to indemnify him for loss caused, not by reason of his having entered into contracts which he was authorized to enter into by the principal, but by reason of his own insolvency. Blackburn J., said : " There was no failure by the defendants in any part of theii' undertakings, there was no evidence that the insolvency of the plaintiffs was occasioned by reason of their having entered into contracts for the defendants, it is consistent with the evidence that the plaintiffs could have become insolvent precisely at the same time as they ' Pollock v. Stabler, 12 Q. B., 765. ' Stoiy, 339, 3-iL • L. R., 8 Ex., 242. BIGHT OP AGBNT AGAINST HIS PRINCIPAL. 265 did if tliey had not entered into any contract for either of the defendants. The plaintiff's insolvency was, so far as regards the defendants, entirely the result of their own default." Where, however, the loss which the agent has incurred has arisen by his own default, e. g., by reason of his insolvency, and not by reason of his having entered into contracts which he has been authorized to enter into, there is no promise which can be implied on the part of his principal to indemnify him.^ Indemnity for loss from imprudent acts done within the authority. — The agent has moreover a riglit to be indemnified against the consequence of even imprudent acts done, within the authority conferred, and without neglect and fraud on his part. Thus in Overend Guerney v. Gibh,^ where certain directors were authorized, under the Articles of Association of the Company incorporated for the purpose, to purchase and acquire, under cer- tain stipulations as to guarantee or otherwise as might be agreed upon, the business of Overend and Gruerney and Company as it then stood ; and the directors purchased the whole business including all the assets and liabi- lities, taking as a guarantee of the value of the assets a security which the Court subsequently found sufficient ; no charge of any fraudulent character was made against the directors, or of any breach of duty, or of any negli- gence, or of their not having done honestly what they considered to be their duty towards the Company ; but they were sued by the Company and sought to be made liable for all the loss which was sustained in consequence of the failui'e of the Company a short time after it was incorporated, on the allegation that they were trustees for the Company, and that in purchasing the business they •did an act so improvident and imprudent that it amounted to crassa negligentia and consequently to a breach of trust; Lord Chelmsford in giving judgment on the case, said : — " They (the directors) did it (purchased), it is admitted honestly and fairly, and believing that they were doing it in discharge of their duty, and it seems to me to be a very strong and unusual thing for a suit to be now instituted to make the directors liable for the loss which has occurred under these circu.mstances. In fact, it amounts to this ; an agent (because these directors are really more in the character of agents than of trustees, they are mandatories), an agent being authorized to do an act, which act is in itself an imprudent one, and which the principal ought never to have authorized to be done, is when the loss is occasioned by his having done the act, to be made liable for it. That certainly is rather a startling proposition, and one which it would I'cquire a great deal of argument to lead me to adopt." No indemnity where the agent is unskilful. — It has, however, been held that although au agcut is outitled to l)r iiulciuuificd against the conse- ' Dunoan v. Hill, L. R., 8 Ex., 242. * L. R., 5 H. L., 494. K K 266 TifK i,Aw ruf AfJKvoy. qiipncos of his lawful acts, yet, if ho is a paid a^ont, and coTidncts himself with such unHkilfulnosa as to incur unnocosaary oxpenscs, lio cannot recover fioiii liis piiiicipiil ; tliiis in Capp v. Tojihain,^ \Thei-e an auctioneer was em- ployed to sell an estate, and on heinpf asked by the solicitor of his principal whether he had taken ])ropcr precautions to avoid payment of certain duties payable under Statute in the case of the property- ])eing bought in, and having replied in the ainrmative; and it afterwards turned out that he was liable to pay such, duties, and he on compulsion did so, and sued his principal for the amount, the agent was held not to be entitled to recover, he having war- ranted that proper precautions had been taken to prevent the duty attaching in the event of there being no sale, though both parties were mistaken in the law. But it has been held by Wilde C. J. and Maule J., that where an agent compromises an action which he might have defended with some chance of success, but uses his best discretion in acting as he did, he may require his principal to indemnify him for the amount he has paid, 2 but this appears to have been dissented from by Cress well J. No indemnity for voluntary advances. — Where an agent makes a voluntary or uflicimis payment, tliongh for tlie benefit of his principal, he will not be entitled to be indemnified therefor.^ Thus where goods were shipped under a bill of lading which stated that freight had been paid, and this bill of lading was endorsed over for value to the plaintiff by one Wylie, who endorsed it over to the defendants, for the purpose of making a sale of the goods, which the defendants did at public auction, and when called upon by the purchasers to make delivery, found that the goods had been stopped for freight, which had not as it turned out been paid as stated in the bill of lading. The defen- dants in oi'der to get the goods, paitl the freight, delivered the goods and received the price, but in accounting to the plaintiff claimed to retain the amount paid by them as freight ; held by Lord Tenterden that the defendants had made the payment in their own wrong, and were not entitled to make the deduction.* Indemnity for payments without special instruction, but adopted.— In Sentance v. Hawleij,^ the plaintiff a broker bought for the defendant three lots of sugars numbered 67, 68, and 69, the prompt day being the 20th July ; by the terms of sale payment was either to be made by cash on the 20th July, by acceptance at seventy-one days from May the 14th, or on delivery » 6 East , 392. See also Rolls .\br., 125, pi. 10. « Pettman v. Kehle, 19 L. J. C. P.. 327. « Edmi!li'.' And hero i(. may !)(> adilod, Unit tlun'o stuMiis in ho no distinction he- (wccri Mil acliinl paynKMit made by an agent in tho excrciso of the power con- ferred upon liiin, ami :i iial)ility to pay incurred hy Iiim; he is erpially in either case eiitillrd to he iiidcinnilicd ai^aiiist the consequences of any lawful act done by hini.'^ Indemnity for act done in good faith though to injury of third person. — Where one person employs another to do an act and the agent does the act in good faith, the employer is liable to indemnify the agent against the consequences of that act, though it causes injury to the rights of third persons. 3 This iirinciple on wliich ;in implication of an indemnity arises, is laid down in Toplis V. Grane,'* there the defendant an attorney on behalf of his client authorized the plaintiffs who were brokers to distrain certain goods on the premises of A for rent due, whereupon the distress Avas made. Some of the goods being privileged from distress and claimed by certain persons alleging themselves to be the true owners, the plaintiffs required an indemnity, which the defendant gave on behalf of his client, and afterwards said he would give a further guaiantee. The owners of the privileged goods having sued and recovered against the plaintiffs, the latter sued for an indemnity against the costs, charges and expenses incurred. Tindal C. J., said: — " "We think, that the defendant by his conduct throughout the whole transaction caused the plaintiffs to believe that they were acting under an indemnity from him, and that such indemnity there- fore, may be justly inferred to have been given And Ave think the evidence brings the case before us within the principle laid doAATi by the Court of Queen's Bench in Belts v. Gibhins,^ that where an act has been done by the plaintiff under the express directions of the defendant, Avhich occasions an injuiy to the right of third persons, yet if such act is not apparently illegal in itself, but is done honestly and bond fide in compliance Avith the defendant's directions, he shall be bound to indemnify the plaintiff against the consequences thereof." Judgment was given for the plaintiffs. So in Johnsfonv. Usborne,^ Avhere the defendant a corn merchant in Ireland, sent AAi'itten instructions to the plaintiff a comi-factor his del credere agent, to sell oats of a certain quality at a certain price on his, the defendant's, account ; and the oats sold proved to be of infei'ior quality, and by reason thereof the plaintiff Avas obliged to pay to the vendee a difference in A'alue, it was held that he was entitled to recover the difference from the defendant. So in Adamson V. Jarvis,"^ the defendant having cattle of great value in his possession represented to the plaintiff, an auctioneer, that he had authority to dispose of such property, » Gibson v. Minet, 2 Bing. 7 ; 9 Moo., 31 ; I C. & P., 217. * 2 A. & E., 57. " Lacey v. Hill, L. R., 18 Eq., 182, (191). • 11 A. & E., 549. 8 Incl. Contr. Act, s. 223. ' 4 Bing., 66. * 5 Bing. N. C, 636. BIGHT OF AGENT AGAINST HIS PRINCIPAL. 273 and requested the plaintiff to sell the cattle for hira. The plaintiff believing the representation to be true, and not knowing either at the time, or at any time after the representation was made, that the cattle did not belong to the defen- dant, sold them and paid the proceeds over to the defendant. Subsequently the true owner of the cattle so sold, obliged the plaintiff to pay damages and costs. The defendant then refused to make good to the plaintiff the amount paid by him, and the plaintiff sued him for the recovery of the same. Best 0. J. said ; — the case was to be governed by the principle which regulates all laws of principal and agent, viz., that " every man who employs another to do an act which the employer appears to have a right to authorize him to do, undertakes to indem- nify him for all such acts as would be lawful, if the employer had the authority he pretends to have. A contrary doctrine would create great alarm, auctioneers, brokers, factors and agents, do not take regular indemnities. These would be, indeed surprised, if, having sold goods for a man and paid him the proceeds, and having suffered afterwards in an action at the suit of the true owners, they were to find themselves wrong-doers, and could not recover compensation from him who had induced them to do the \vrong." The case was decided in favour of the plaintiff. Principle that wrong-doers cannot have redress against each other, explained — It was in the case last cited contended that there could be no indemnity between wrong-doers ; and this no doubt is so ;1 but the Court held that the rule that wrong- doers cannot have redress for contribution against each other is confined to cases whether the person seeking redress must be presumed to have known that he was doing an milawfal act. Thus in Betts v. Gibbons,' where the defendant consigned to the plaintiffs ten casks of acetate of lime for N" and W, two of which casks were delivered, but the remaining eight continued in the plaintiff's hands up to the time of the bankruptcy of N and W ; on which the plaintiffs, by the defendant's orders, refused to deliver them to the assignees of N^ and W, and at the request of the defendant delivered them to some other persons. The assignees of N and W brought an action against the plaintiffs in trover for the eight casks. The plaintiffs then wi^ote to the defendants stating that they looked to him for an indemnity, and enquiring whether they should defend, stating that they should settle the action in default of their receiving instructions. After some negotiations the plaintiffs paid the sum claimed against them by the assignees with costs, and sued the defendant de- claiming upon a promise to indemnify, for the sum so paid by them. Taunton J., said : — " The principle laid down in Merryweather v. Nuau,^ is too i)lain to * Wilson V. Milner, 2 Camp., 452. Pearson \. Skelton, \ II. & Vf. oO^:. Mernjiceather y. Nixan, 8 T. R., 186. 2 Sni. L. C, 5G9. Farebi other v. Ansley, 1 Camp., 3-13. * 2 A. & E., 57. « 8 T. E., 186. L L 271 Tni; r,A\v ok a(;f.ncv. be mistaken, tlio law will not imply an indemnity between wrong-rlocrs. But the case is altered when the matter is indifferent in itself, and where it turns upon circinnstances, whether the act be wi-onf^ or not. The act dcjne hei"e, by chanj>-injj^ the destination of the poods at the order of the dt, 13 C. B., 46G ; 22 L. J. C. P., 175; Wilkinso7i V. Coverdale, 1 Esp., 75. ^ Sm. Mer. Law, 4tli ed., 112. Coggs v. Bernard, 1 Sm. L. C, 200 in noti.t. Wilkinson V. CorerdaJe, 1 Esp., 75. Shilliheer y. Gli/n,2 M. & W, 143. Smith v. Lascelles, 2 East., 188. * Balfe V. West, 22 L. J. C. P., 175 ; 13 C. B., 46G. * Com. Dig. "Merchant" B. lud. Cont. Act, s. 211. CorZeW v. Gordon, 3 Camp, 472 Boorman v. Brown, 3 Q. B , 511, (529). Smith v. Lascelles, 2 East., 188 * 4 Camp., 183. ' Davis V. Garrett, G Bing., 716 DUTIES OF THE AGENT TO HIS PRINCIPAL. 283 voyaging on her course, deviated therefrom to chase prizes, and whilst in the act of deviating and chasing was captured, and the plaintiff's goods thereby became lost to him, held, that the plaintiff might recover from the defendant. ^ So where the plaintiff instructed the defendants who were brokers to purchase for him 60 bales of cotton and paid to the brokers part of the purchase money ; but the defendants made a contract in their own name for the pur- chase of a much larger quantity, viz., 300 bales on account of the plaintiff and other principals. Pollock C. B., said : — " The defendants were authorized to buy a certain quantity of cotton for the plaintiff ; instead of complying with their instructions, they bought a much larger quantity for the plaintiff and divers other people, and the plaintiff was prevented from coming forward and pro- tecting his own rights. I think, therefore, that though a contract was made, it was not the contract the plaintiff authorized the defendants to make, and therefore as he paid the money on the faith that a contract had been entered into, which turns out never to have existed, he is entitled to have it returned. ^ The rest of the Court were of the same opinion. If, on the other hand, he has by acting in a manner inconsistent with his instructions, made any profit to himself, he will be bound to account for it to his principal. ^ But where a broker was directed to purchase 280 scrip of " the Kentish Coast Railway Company," and purchased scrip of that name which was on the market, and the genuineness of the scrip was denied by the diz^ectors who alleged that it was issued by their Seci^etary without authority ; and the principal then sued the broker to recov^er the sum expended, on the gi'ound that the scrip pur- chased was not genuine " Kentish Coast Railway scrip." Alder.son B., said, " The question is simply this — was what the parties bought in the market, '" Ken- tish Coast Railway scrip ? It appears that it was signed by the Secretary ; and if this was the only Kentish Coast Railway scrip in the market, as appears to have been the case, and one party choses to sell and the other to bay that, then the latter has got all that he contracted to buy.* But where clear instructions were given by the plaintiffs to the defendants to insure goods and also the prae- mium, and the defendants insured the goods but not the praemium. Lord Ellenborough held that the defendants were liable to the plaintiffs for neglect to insure the praemium and this notwithstanding the policy included an illegal clause in another respect.^ So where a merchant directed a factor to sell wheat at 7 shillings per bushell, and the factor sold for six shillings and foui* pence ' Parker v. James, 4 Camp., 112. '' Bnstock V. Jardine, M L. J. Ex., 112, 3 H. & C, 700 ; 11 Jiir. N. S., 580. ' Ind. Contr. Act, s. 211. Com. Dig. " Mcrchunt " B. Russcl v. P.ilwcr, 2 Wils., 325. Shiells V. Blackburn, 1 U. Bl., 161. * Lambert v. Heath, 15 M. & W., 48G. * Glaser v. Cowie, 1 M. & S , 52. 28i Tur: law ok agknct. claimiiifif to sell on accouiiL of udvanccs made by liini on the wheat, it Avas lield (hat ho was chargeable* So where a broker in contravention of what amounted to exprcsa. instructions to deliver for leady money only, delivered on credit, he was held accountable.' But whei-e certain merchants consigned to commis- siou agents in China goods to l)c sold, directing the proceeds thereof to be in- vested as follows " if tea is not obtainable at our limits you may invest one half of the whole proceeds in silk at prices, &c if silk is obtainable at much i)elow these prices, you may substitute it in part for tea, even if the latter is to be had Avithin our limits, at your discretion ; silk was obtainable at one time within the limits, and they did not execute the order at the time ; the Coui't held that the words " you may invest " were directory, and did not leave the matter to the discretion of the agents, and held them liable in damages.^ But the agent will not be liable for not following out the instructions of his principal, if to do so would hv. a fi-and upon third pcrsi)iis> Laches in notifying dissent to a notified deviation from instructions may prevent a plaintiff from recovering. — As where the plaintiff consigned goods for sale to a captain of a ship bound to Calcutta, and directed him to invest the proceeds in certain specified articles ; the captain sold the goods and invested the proceeds in sugar which was not one of the articles specified in his instructions, and informed the plaintiff of his purchase by letter. The captain had no commercial establishment in England, but it appeared that a certain insurance broker had acted for him in some insurance transaction, the plaintiff therefore went to this broker more than 2 mouths after hearing from the captain and notified that he would not accept the sugar, and advised the broker to insure. The broker declined to interfere between the plaintiff and the broker and would not insux'e ; held in an action brought by the plaintiff against the captain to recover the proceeds of the goods shipped by him, that al- though the captain had not followed out his instructions, yet having given the plaintiff notice of his deviation from the instructions, and the plaintiff not having notified that he dissented until more than 2 months after receiving the notice, he must be taken to have assented to the deviation.^ Substantial compliance with instructions sufficient.— But it appears that a substantial compliance with his instructions will if he has acted rightly bo sufficient to hold him harmless. Thus in Jolmston v. Kershaw,^ the defen- dant directed the plaintiff's to purchase for him 100 bales of cotton of a specified ' Smart v. Sandara, 16 L. J. C. P., 39. See also Dufresne v Hutchin<-on, 3 Taunt., 117. » Boonnan v. Broim, 3 Q. B., 511 ; 11 CI. & F., 1. « Entwistle v. Dent, 1 Ex., 812. * Bexwell v. Christie, 1 Gowp., 395. * Frince v, Clark, 1 B. & C, 186. * L. R., 2 Ex., 82. DUTIES OF THE AGENT TO HIS PRINCIPAL. 285 quality, tlie order ran as follows : " I beg to confirm my letter of the 23rd of February, and hope you will have executed fully all the cotton ordered, and consider it still in force. If executed, please regard this as an order for 100 more." The question in the case was, whether the letter meant an order to purchase 100 bales at once, in one and the same pui-chase, or whether it meant an order to purchase 100 bales in such manner, and at such times, as the agents might find it practicable, having i-egard to the state of the market. The plaintiffs purchased ninety-four bales only. Kelly C. B., said : " If they (the agents) could at one time have obtained all the 100 bales, it would have been their duty to have done so. But we may faii'ly conclude from their conduct that they could not. They actually bought 94 ; surely they would, if they could, have bought the remaining six. Not being- able to buy them, were they to leave the order altogether unexecuted ? Rather, it was their duty, and was I think contemplated by the defendant, that they should buy as many bales as they could get, and make up the total number as soon as practicable I think, therefore, that although we have no direct evidence to show that the state of the market was such as to i-ender it impossible for the plaintiffs to purchase the 100 bales all at once, that the parties to the transaction must have understood that the purchase was to be made, if necessary, in several minor quantities." Channell B., was of the same opinion, adding : — " I am of opinion that the order must not be taken as an order to buy 100 specific bales of cotton at one time, but that the plaintiffs by purchasing 9-4 bales have executed it with due and reasonable diligence." Where the order appears to be given with reference to a custom of the trade, or market it will be so construed.— In Boden v. French^ where the directions were " please sell for me 200 tons of anthracite coal now ly- ing at Neale's wharf .... at such price as will realise not less than 15 shillings per ton, net cash, less your commission for such sale," and the agent sold 100 tons at 15 shillings and sixpence per ton at two months' credit ; and the employer sued the agent for not suing for ready money according to his instructions ; Jervis C. J., held that the contract was to say the least of it very doubtful, and that the plaintiff had failed to make out that the authority given by the letter, was to effect sales for ready money only. Ci-esswell, J,, considered that it might be assumed that tlie contract had some reference to some known usage of the coal trade, and that it was clear that by the usage of the trade, a commission agent might sell without making the purchaser pay to his principal ready money ; and that if there had been some usage by which the agent was to pay i-eady money to his principal, though the sale was on credit, that would seem to be the contract contemplated, by the parties ; but that was not the contract on which the plaintiff had declared. Williams J., was of the same » 10 C. B., 886. 286 IMK liAW O? AGENCY opinion : and llu- plaintiff was tlicrefoi-c non-suitofl. In In-iand v. Jjivinfjxton,^ flu) ordiT ^ivcn by tlio dcfondant to the plaintiff a cominisHioii agent at iMaiiiiiiiis was "to purchaso and ship 500 tons of sugar, 50 tons more or less of no moment, if it enable you to get a suitable vessel." Five hundred tons could not be pui'chased in one lot at Mauritius, and it was the customary course of business there, in carrying out an order for a large quantity of sugar, to purchase it in smaller quantities from time to time from different persons. The plaintiff purchased for the defendant 400 tons, when prices rose, and before he could complete the order, the defendant countermanded it, held that the clause as to 500 tons more or less, was not a limitation of the quantity to be purchased, but was a discretion left to the plaintiffs that they might not be fettered in obtaining a vessel ; but that the defendant must be taken to have been giving the order with reference to the circumstances of the Mauritius market, and therefore that each quantity as it was purchased by the plaintiff was purchased on behalf of the defendant, and that he was bound to accept it. Where instructions are ambiguous. — Where, however, the directions given to the agent are in such uncertain terms as to be susceptible of two different meanings and the agent bond, fide adopts one of them and acts upon them, it is not competent to the principal to repudiate the act as unauthorized because he meant the order to be read in the other sense of which it is equally capable. It is a fair answer to such an attempt to disown the agent's authority to t^ll the principal that the departure from his intention was occasioned by his own fault, and that he should have given his orders in clear and unambiguous terms. In such cases the agent will not be held responsible if any loss is occasioned to the principal .2 No particular instructions — Where the principal has given no particulai- instructions to tlic agent as to the mode of conducting the business, the latter is bound to conduct the business entrusted and accepted by him, according to the custom which prevails in doing business of the same kind at the place where the agent conducts such business.^ Thus where a factor, who has no special instructions how to sell, and there is no practice to sell on credit, sells on credit to a person of unimpeachable credit, who subsequently becomes insolvent, the factor is chargeable ; but where the usage is for the factor to sell on credit, and he sells to a person of good credit at the time, who afterwards becomes insolvent, the factor is not chargeable, but otherwise if it be a man ' L. R., 2 Q. B., 99. ' h eland v. Livingston, per Lord Chelmsford, L. R., 5 II. L., (-416). See also Co. Litt. 42. a Sheppard's Touch, ch. v. a. 9. p. 88 and Rodger v. Comptoir UEscompte de Paris, L. R. 2. P. C. at p. 406. ' Ind. Coutr. Act, s. 211. Wilshire v. Sims, 1 Camp., 258. Anon. Case, 12 Mod., 514. Knight v. Lord Flymouth, 3 Atk., 430. DUTIES OP THE AGENT TO HIS PRINCIPAL, 287 notoriously discredited at the time of sale.^ So where an agent is Employed to sell stock, sold it and took as payment for it a promissory note ; and paid the note into his own bankers, where it was attached for a debt of his own, and subsequently the principal refused to make the transfer, as he had received no part of the purchase money, held that as he had not sold the stock in the usual manner he was chargeable. ^ But where a merchant orders an insurance broker to effect a policy of insurance for him on a cargo of corn, without giving any directions as to those with whom the policy is to be effected, and the broker effects the policy with a chartered Company by whose policy corn is warranted against partial losess, although the ship be stranded; and a partial loss happened upon such cargo after a stranding of the ship, held that no action would lie against the broker for not effecting the insurance with private underwriters, who would have been, by the common form of policy used by them, liable for the pai'tial loss.^ And where a customer delivered to his London bankers certain bills in order that payment might be obtained by them from the acceptor, who resided in London, and the bankers tendered the bills to the acceptor for pay- ment, who gave them a cheque upon a banker in London for the amount, upon receipt of which cheque they delivered up the bills to the acceptor ; the cheque was dishonoured, and the customer sued his London bankers for negligence : held tliat the bankers had acted in the ordinary course of tirade and ought not to be made answerable.'* So where a carrier has instruction to carry goods to a certain place, and the carrier delivers without ordex^s to a person not entitled, he is chargeable.^ And whei-e a merchant directed his agent to insure a cargo of fruit, but gave no particular instructions how or with whom to insure but merely a general order to insure, and the agent insured with an Insurance Company whose policies upon fruit always contained an exception " free from particular average ": the goods suffered a partial loss, and such as were recovered were damaged, and the price fetched did not suffice to pay the salvage on tliem. The plaintiff' sued the defendant for not insuring according to his directions. The Court held that the plaintiff having given no directions at all, the agent was at liberty, as he acted bond fide, to elect between the underwriters.^ How- ever, the law in this country in such a case would be that the agent should act according to the custom prevailing in the place in which he carried on his business ; although if there was no particular custom in the place, he should at all events if possible refer to his principal for instructions, and failing any ' Anon. Case, 12 Mod., 515 « Wilshire v. Sims, 1 Camp., 257. ^ Comber v. Anderson, 1 Camp., 523. ® Russell V. Uankey, G East., 12. ^ Youl V. Harbottle, Peak. N. P. C, 68. • Moore v. Mounjuc, 2 Cowp,, 479. 288 TlfF T,AW OF AOrNC'Y. bcinpf sonf, to liim lie sliould act in snoh way in canyinp out liis ori)»inal instnioiinns as a priul(Mit num would not, in liis own case nndcr similar cir- onmstanccs.* Where instructions are illegal or criminal— Bnt, althouf^h the general rule is that he is bound to follow out his instructions, he will not he so bound when his instructions are illegal or immoral -^ provided at least that the illegali- ty or immorality formed part of the original agreement between himself and his ]HMncipal. Thus in the case of Catlin v. Bell,^ before cited, Avhere the action ])rought by the principal against the agent was for not accounting for goods delivered to him for sale, and the defence raised to such action was that the agent could not be held liable as the goods wore exported without payment of export duties, it was held that this was no defence inasmuch as it was not proved that the evasion of the duties was actually agreed upon between the plaintiff and defendant. Nor will he be liable for not following out his instructions where there is an overwhelming force preventing him from so doing, or when the instructions given have become impossible.* Departure from instructions justified in a case of difficulty or emer- gency. — Nor will he be bound to follow out his instructions and therefore will not 1)0 liable for not so doing, if, in an emergency (there being no time to con- sult his principal before action taken) he acts, in such manner as a man of oi'dinarj' prudence in his own case and under similar circumstances would have acted, for the purpose of protecting his principal from loss ;^ for instructions " in every case of mercantile agency are applicable only to the ordinary course of things, and the agent will be justified in cases of extreme necessity and emergency, in deviating from them."^ Thus a factor has been held not liable, for selling at a less pince than he was authorized to sell at, where he does so with good reason^ Duty of agent requested to insure. — In connection ^^-ith this duty of the agent to follow out his instructions, it may be well to draw particular attention to the duty of an agent requested to effect an insurance. Generally speaking, a person to whom an order to insure has been transmitted is under no obligation to accept the trust ; but there are certain cases in which an > Ind. Contr. Act, 214, 189. ^ Holman v. Johni^on, Cowp., 3U. Ex-parfe Mather, 3 Ves , 373. Trt>5sfei- v. De Tas'tet, 7 T. R., 157. » 4 Camp., 183. ♦ Ind. Contr. Act, s. £6, (cl. 1). Inder Perf Ind. Coutr. Acts, 213. 298 TJtE t,A\V OK A(iRNrV. accounts, and nop^loct in ihia respect is a good f^round foi- rlmrg^ing him ^vith interest.* An account must, however, bo demanded from him, or the agency ter- minated, before a suit is resorted to.2 But if no account is rendered within a reasonable time, and hv is fotiml accountable, he must bear the costs of the suit instituted to have an account tiikcn, and it is no excuse to say that he tendered a gross sum, which, as it eventually turned out, was sufficient to have covered all that was due fi-om liini.^ And whore the suit has been brought, and a decree passed directing him to account for all monies that have come to his hand, he can only discharge himself by so doing, and it is alwaj's open to the decree- holder to show that this has not been done.* Mode of taking" the account. — Moreover it is the duty of the agent to account irrespective of auy contract to that effect, and he will not discharge himself from the duty of accounting, by merely delivering to his employer a set of written accounts, without attending to explain them, and producing vouchers by Avhich the items of disbursement are supported ; and when this is done, it is the province of the principal to point out the entries in such accounts which he alleges to be erroneous, and, in respect of tran.sactions not .shown in the accounts, to state what monies have been received and not credited ; and it then becomes the duty of the judge or officer directed to take the account in the suit in which the account has been ordered, to proceed to deal with the questions thus raised between the parties, treating each item separate- ly. ^ If on the other hand, no sufficient accounts have been rendered by the agent, the proper and convenient mode of so doing is for the Coui"t to fix a day before which the defendant should file a written statement of his accounts, exhibiting therein all the items of i^eceipt for which he is accountable on one side, and all items of disbursement on the otlier, and to fix another later day before which the plaintiff should file any objections which he may have to make to these accounts when filed ; and finally the Couii ought to appoint a third day upon which an enquiry into the truth and correctness of the state- ments of account filed by the defendant should be made, and on that enquii'y he will take all such e-\adence in the way of books, and vouchers, and so on, as the defendant is entitled to produce, as well as the testimony of necessai-y witnesses, and also all evidence on the part of the plaintiff tending to invali- date the accounts or to surcharge them ; and eventually upon the determination of the enquiry, the Judge should satisfy himself as to the amount which is ' Pearce v. Green, 1 Jac. & Walk., 135. » Act XV of 1877, Sch. II Art, s. 88, 89. Topham v. Braddich, 1 Taunt., 572. * Collyer v. Dudle;/, 1 Turn & Rnss., 421. 2 L. J. Ch., 15. * Woomanath Roy Choicdhry v. Sreenath Singh, 15 W. R., 260. * Annoda Persad Roy v. Dicnrku Xath Gangopadht/a, I. L. R., G Calc, (757j. DUTIES OP THE AOKNT TO HIS PMNCIPAL. 299 due upon the account as established by the evidence of both parties, and frame his decree accordingly. He oaght not to give a decree for alternative damages founded upon any antecedently estimated amount, which must, apart from the evidence be simply a matter of conjecture or of claim. He should give no decree other than an order on the defendant to file his accounts before the accounts have been taken, and then confine his decree to such amount as he may find to be due upon the proper taking of the accounts against the defendant ; and if the defendant prove contumacious with regard to filing his statement of accounts, the Judge may proceed with the taking of accounts against him on the footing of evidence furnished by the plaintiff, and in so doing he may make all re- asonable presumptions against the defendant.' The agent when so accounting, should, however, to enable him to prepare such accounts as the principal is entitled to, be allowed to have .reasonable access, at proper times and in the presence of responsible persons, to such books and papers in the plaintiff's possession, as may be necessary for the preparation of his accounts.^ And it should be distinctly made known to the agent the siDecific period over which the account is requii^ed, the property or matter as to which the account is sought, and the nature of the accounts required.^ And although the procedure laid do^vn in AuHoda Persad Roy v. Dwarka Natli Gangopadhya, ought to be followed, yet if in a suit in the mofussil a principal prays merely that the defendant be ordei-ed to render an account, a second suit brought by him for the recovery of the money found due by the defendant on examining the accounts will not be barred as res judicata J'' And where a defendant in a suit for a balance of an account due to the plaintiff" as a commission agent, denies the agency, and alleges that there is a contract of sale, the burden of proving that he has sustained losses in his capacity of agent is on the plaintiff, and his case will not be made out by uncorroborated entries in his account books.^ In taking an account between an agent and his principal, either party are at liberty to waive inquiry as to particular periods of time, or particular depart- ments of expenditure ; but neither are at liberty to shut out the other from inquiry otherwise ;^ it may, however, possibly be the case that in a suit for an account, the issue between the parties is so simple, and so clearly raised and met by evidence as to be ready for decision at the time, but the general rule is the * Syud Shah Alaiahmed v. Nusibnn, 24 W. R., 7a " Annoda Persad Roy v. Dwarka Nath Gamjopadhya, I. L. R., G Calc., 758. See ala Degamher Mozumdar v. Kalhjnath Roy, I. L. R., 7 Calc, 654. ' Fran Nath Chuckerbutti/ v. Beny Ameeti, 9 W. R., 250. * Oobind Mohun Chuckerbutti/ v. Sherriff, 1. L. R., 7 Calc, 169. See also Syfoollah Khan V. Jhapa Thakoor, 20 W. R., 309. * Jugal Kishore v. Girdhar Lai, I. L. R., All., 12 lud. Jar., 216. Hurriuuth Rai v. Krishna Kumar Bakshi, I. L R., 14 Calc, 147. nOO THK I, AW OK AOENCY. other wfiy.' Tn takinp; an anoount the nofcnt is prima facin liable for what he has received, and is bound to discharp;o himself; but the evidence wliich is considered sufficient to discharge him, may vary as to dilfeient items, and he certainly may bo entitled to all such intendments and presumptions as arc made in favour of one who is called upon to render an account of transactions whicli have taken place long ago, thougli under circumstances which prevent any absolute bar by lapse of timc.^ The agent, however, maybe freed from liability if he accounts and shows that he has expended such monies as came to his hands for his principal's benefit and with his express authority.* But where he denies receipts, his fiduciary position and his accountability in toto, and this defence is shewn to be false, he will be ordered to pay the whole costs of litigation.' Where there has been on the pai-t of the agent any fraud or imposition, the whole account, thougb settled, may be re-opened.^ And where the plaintiff alleged an open account and in general terras falsification, and the defendant pleaded an account stated and required a specific statement of falsification which the plaintiff refused to give, the Court although holding that the account was settled and that the defendant was entitled to a verdict, yet allowed the plaintiff to amend by stating instances of falsification.''' Although where thei*e ai'e only mistakes and omissions in a stated account, the party objecting will be allowed no more than to siu'charge and falsify, yet if it is apparent to the Court, that thei'c has been fraud and imposition, the whole account will be re-opened, not- withstanding that the account was of 23 yeai's' standing,^ and this even where the fraud is discovered after the account is balanced.^ So Avhere the defendant acted as the plaintiff's agent in certain commercial transactions up to July 1867. when the plaintiff fell into difficulties and executed a composition deed under the Bankruptcy Act, whereby he covenanted to pay eight shillings in the pound to his creditors, they releasing him from all his liabilities. The defendant was not present at the meeting at which the composition was agi'eed upon, but after- wards claimed to be a creditor in respect of the said traiisactions for £300, and his name was inserted in the schedule, and he assented to the deed and received the composition payable thereunder. But afterwards the plaintiff investigated the defendant's accounts, and then for the first time discovered that the defendants had in his accounts inserted numeixjus false charges of the amounts paid by him '■ Hurrinath Rai v. Krishna Kumar Bakshi, I. L. R., 14 Calc, 147. ■ Fagan v. Gkunder Kant Banerjee, 7 W. R., 452. See also as to set off Mohima Runjnn Roy Ghowdhri/ v. Nobo Coomar Misser, 18 W. R., 339. ' Mozelei/ v. Coivie, 47 L. J. Ch., 271. Clarke v. Tipping, 9 Bcav., 284. • Mo»eley v. Cmoie, 47 L. J. Ch., 271. • Vernon v. Vernon, 2 Atk., 119. See also Clarke v. Tipping, 9 Boav., 284. ilozeley v. Goivie, 47 L. J. Ch., 271. And Chambers v. Goldivin, 5 Ves., 837. • Vagliano Bros. v. Bank of England, L. E., 22 Q. B. D., 103. DUTIES OF THE AOENT TO HIS PRINCIPAL, 30l on account of these tt^ansactions, and he then filed a bill for an account, it was held that the composition deed was no bar to the decree for account in favour of the plaintiff.^ Further where accounts ai'e impeached, and it is shewn that they contain errors of considerable extent both in number and amount, whether caused by mistake or fraud, the Court will order such accounts, though extending over a long period of years, to be opened, and will not merely give liberty to surcharge and falsity ; and supposing a fiduciary relation to exist between the parties, the Court will make a similar order if such accounts are shewn to contain a less number of errors, or if they contain any fraudulent entries.'^ Duty of Commissioner in taking" accounts. — Where the accounts in a suit have have been referred to a Commissioner appointed by the Court under s. 394 of the Civil Procedure Code, with powei's under s. 398 ; it is his duty to make out an account showing to the Court exactly what the account in the books of account show, and nothing else ; he is practically to place himself in the position of an assistant to the Court, so as to give the Court all the information which the accounts give, so as to enable the Court to deal with them in a satisfactory manner. And where the accounts are ambiguous, or where they do not disclose the facts, it is his duty to take evidence on that point, so as to report to the Court what is the meaning of any particular series of entries, for the pui-pose of enabling the Court to give a judgment upon them. He has no power to deal with the case as though he were a judge or an arbitrator, or to give a judgment either in favour of the plaintiff or the defendant : and where he did so, the Court treated his report as non-existent ; and itself decided the matter of account on such materials as were before it.^ Reference in suit for account. — Where in a suit for an account, it was ordered by consent of the parties that the cause should be referred to a Com- missioner to take accounts, who in taking them was to decide upon all questions of fact, whether as to the delivery of certain merchandise delivered, or other- wise with full powers for the purpose of the investigation ; and that if ques- tions of law should arise and could not be settled or disposed of before the Commissioner, they were to be submitted to the Court, their Lordships of the Privy Council were of opinion that such a reference was different from the ordinary reference to a Commissioner to examine accounts under the Code of Civil Procedure, and expressed a doubt whether it were competent foi" the Court to re- open the question of account against a clear finding upon a question of fact relating to the account made by the Commissioner upon the evidence properly before him.* '■ Pike V. Dickinson, L. K., 12 Eq., Gl. ' Williamson v. Barbour, L. R., 9 Cli. D., o2{). Applicable in India so as to stay limitation only where there is fraud. ' Tincowri Deli v. Satyadi/al Banerjee, per rotluani C. J., apj). from Orig. decree, No. 323 of 1875, decided by Tethram C. J., and Gordon J., on tlie 2nd August, 1889. * Watson V. Aga Mehedee Sherajee, L. K., 1 1. A., 34t*. 302 I'nr; i,a\v or Afii'vcv. Misconduct in not accounting, how looked upon by Court of Chancery in the case of a general agent. The ncolcci- of ;m ^,l^i'ut, a solicitor, to keep iv^ulai- accounts and pioscrve voncliors against himself has been held by the Court of Chancery sufficient to warrant the total disallowance of a bill of costs for business done as a solicitor on behalf of his principal, the principal having died before the bill was px'esented, and the agent having acted as the principal's confidential agent and receiver of his rents ;i the principle on which this deci- sion was based being that a general agent is in duty bound to keep regular accounts of his money transactions, for when such an agent is employed, he has the power of receiving money to an amount which there is no means of getting at, unless regular accounts of receipts and payments are kept by him. This was pointed out by Sir W. Page Wood in re Lee ex-parfe Neville,^ where his Lordship held that the principle of White v. Lady Lincoln did not apply where the solicitor was not the general agent of the client, so as to be able to receive the client's money at all times without his knowledge, but only received money for him in respect of separate transactions of which the client was aware at the time, and knew what was to be received. Destruction of books. No accounts or vouchers. Unascertainable claims. — Where an agent has refused to account and there is evidence of spoliation of bank books, he will be answerable for the principal sum in which he is charged to be accountable, and for interest thereon in lieu of the profits he has failed to account for.^ And Avhere he has kept no regular accounts and vouchers of the business of the agency, the omission so to do, Avill always be construed unfavourably to the agent ;* and where an agent made claims for expenses on account of his principal, which, from the conduct of the agent under- taking the business without authority or agreement, conld not be ascertained, such claims were disallowed.^ Payment over to third parties. — And as a general rule, an agent or collector cannot discharge himself respecting monies for which he is liable to account, by proving payments or advances to third parties, unless he can show that such payments or advances were made by the express authority of his principal or with his knowledge and consent.^ Interest. — Where the agent retains monies of his principal, which he has not been required to pay, he should not ordinarily be requii'ed to pay interest ; but if his conduct has been fraudulent, he should be charged with in- * White V. Lady Lincoln, 2 Yes., 363. ^ L R., 4, Ch., 43, (45). ' Rampershad Tewarry v. Shev Chunder Doss, 10 Moo. I. A., 490. ♦ Ghedworth (Lord) v. Edwards, 8 Ves., 46, (49). • Beaumont v. Boultbee, 11 Ves., 358. • Fagan v. Chunder Kant Banerjee, 7 W. R., 542. DUTIES OF THE AGENT TO HIS PRINCIPAL. 303 terest ;* or where a demand has been made, or where the ao^ency is terminated, and no accounts have been rendered, it is presumed that interest would be charge- able at the discretion of the Court. So if money be remitted to an agent, and he make use of it for his own trade, he will be liable for interest, but if he leave it dead in his own hands it appears that he has been considered not liable. 2 The case of an auctioneer receiving a deposit appears to be treated differently, Lord Tenterden C. J., in Harington v. HoggaH,^ distinguishes his case as being that of a stakeholder, from that of an agent, and says : — " A stake- holder does not receive the money for either party, he receives it for both and until the event is known, it is his duty to keep it in his own hands ; if he thinks fit to employ it, and make interest of it, by laying it out in the funds or otherwise, and any loss accrue, he must be answerable for that loss ; and if he is to answer for the loss, it seems to me he has a right to any intermediate ad- vantage which may arise." Xor will he be liable for interest if he invest such deposit at the request of one of the parties to the auction sale.* A late case that of Harsant v. Blame,^ has decided that an agent is bound to account, and on refusal is chargeable with interest so long as he fails to render an account. And where an agent instead of submitting to an account, falsely denied his receipts, his fiduciary position and his accountability, and a decree for an account was made, the Court held that he should be directed to pay the whole costs of the suit, independently of the result of the account.^ It has been said by a learned Judge, however, that " interest should be allowed only in cases where there is a contract for the payment of money on a certain day, as on bills of exchange, pro- missory notes ; or where there has been an express promise to pay interest, or where from the course of dealing between the parties, it ma}^ be inferred that this was their intention, or where it can be proved that the money has been used, and interest has been actually made.'"'' Further, if the agent has made a profit by trading or has received interest on his principal's money whilst in his hands, the agent will be bound to account both for profit and interest. ^ Compound Interest. — And with regard to the subject of charging the agent compound interest, although interest, is entirely in the discretion of the Court, except when provided for by contract or special Acts, it may not be out of place to refer to the principles laid down in England on this point. ' Sital Perghad v. Monohiu- Doss, 23 W. R., 235. Turner v. Bitrkiushaw, L, 11., 2 CIi., 488. * Ro'jers v. Boelwi, 2 Esp., 701. » 1 B. & Ad., 577. * Harltujton r. Hoijijart, 1 B. & Ad , (oH'J). * 12 Ind. Jur., 79 per lid. Escher, Lindley and Lopes L. .J. " Eurronath Roy v. Krishna Coomnr Bakslii, I. L. R , 1 -I Cnlc, 147, L. K., 13 1. A., 123. ' De HaviUand v. Botverhank, 1 Camp., 49. See Act XIV of 1882, s.s. 209-210. * Broicn v. Litton, 1 T. W., 141. Diplock v. Blackhmn, 3 Camp., 43. :{()t THK f,A\V OK A(iENCV. In Eiii,'liiiiil " ihf) prinoiplo ro<^ai'iliri<^ irifci-osf, uppoai's " sayH Lord Ifatherley, in Burdii-h v. Girrirk} " io l)o that flie Court doos not proceed against an accounting ]);irfy l)y way of pnnisliing liim for making use of his principal's money by directing rests, or payment of compound interest, but proceeds upon this principle, either that he has made, or has put himself into such a position as that ho is to bo presumed to have made, 5 per cent., or compound interest, as the case may be. Tf the Court finds it is stated in the bill, and proved, or possibly (and I guard nyyself upon this part of the case) if it is not stated, but admitted on the face of the answer, without any state- ment on the bill, that the money received has been invested in an ordinai-y tratle the whole course of decision has tended to this, that the Court presumes that tlie pai"ty against whom relief is sought has made that amount of profit which persona ordinarily do make in trade, and in those cases the Court directs rests to be made." Lord Justice Giffai'd, as to the point of compound interest said : — " No doubt the principle applicable to that point was very cleai'ly laid do\vn by Lord Cranworth in Attorney General v. Alforcl.' All that this Court can do as against a defendant in such a case as this by way of penalty is to make him pay the costs of the suit. The question of interest clearly depends upon the amount which the person who has improperly applied the money may be fairly presumed to have made. If ho has applied it to his own use, I think it is quite right to say that he ought never to be heard to say that he has made less than 5 per cent., and that that is a fair presumption to make ; but if you seek to go fui'ther than that, and to charge him with more than 5 per cent., you must make out a case for that purpose." Mixing principal's funds with his own.— And if the agent mix the property or money of his employer with his own property or money, it lies upon him to distinguish them, and if he fails so to do, the whole will be taken to belong to his principal ;S for every presumption will be made against him where he makes it impossible for the principal to distinguish his pixjperty.* And where an agent mixed up his private transactions with those of his principal, and failed to prove that the money was borrowed for the benefit of his principal and her Avard, and where the transaction on the part of the lender was found not to be bond fide inasmuch as he did not satisfy himself that the ao-ent was borrowing for the legal necessity of the ward's estate, he was held personally liable.' And even if the agent deposits assets belonging to his principal with bankers on their bank notes carrying interest and the bankers ' L. R., 5 Ch., 2il. ' 4 De G. M. & G., 843. * Lupton V. White, 15 Ves. 432, (410, 442) see also Clarice v. Tipping, 9 Beav., 284. * Armory v. Delamire, 1 Str , 504. * Juggurnath Roy Ghoivdhry v. Munorakha Dassee, 2 W. R., 156. DUTIES OP THE AGENT TO HIS PRINCIPAL, 305 shortly after fail, there being no necessity for such deposit, he will he held liable. 1 Agent liable to account to principal only. — The agent is, however, liable to account only to his principal ; thus Avhere a trustee managed the trust pro- perty through an agent, appointed by him, who received the income and held the title deeds of the trust properties in his possession, and the agent was made a party to an information for an account and scheme, the Court held that he was not a proper party, and that he could only be called upon to account to the trustee. 2 So also where the plaintiffs, who were landowners in N'ew Zealand and had offices in Grlascow but no office or agency in London, shipped wheat to England for sale in the London market, taking bills of lading in which the wheat was made deliverable to themselves and endorsing these bills to Mathews and Company at Grlascow with instructions as agents of the plaintiff to sell the goods in London : and Mathews & Co. having no house or agency in London en- dorsed the bills over to the defendants who were corn-factors for the purpose of the sale of the wheat ; the endorsement in both cases being merely for the pur- pose of sale and not for the purpose of passing the property ; and the defendants effected the sale and jDaid the proceeds into their own account, and from time to time made remittances to Mathews and Company, who shortly after failed being indebted to the defendants. The plaintiffs then sued the defendants alleging that they (the plaintiffs) through their agents retained and employed the defen- dants to effect the sales in question and asking for an account ; the defendants denied that they were employed by the plaintiffs and contended that they were only accountable to Mathews and Company ; held that the plaintiffs were not entitled to succeed, as there was no privity of contract between them and the defendants, and the defendants did not stand -in any fiduciary character to the plaintiffs so as to entitle them, the latter, to follow the proceeds of the property in tlie defendants' liands.^ Duty of partners to account. — It is similarly the duty of all the partners of the firm to see that accui'ate accounts are kept of all money transactions of the partnership business, and to allow access to each other to all books of accounts.* If no books of account are kept at all, or if they are so kept as to be unin- telligible, or if they are destroyed or ^vi'ongfully Avithheld, and an account is ' DarU V. Marti/n, 1 Beav., 525. Massey v. Banner, 1 J. & W., 24.1. Fletcher v. Walker, 3 Madd., 73. '■^ Attorney General v. Chesterfield (Earl of), 18 Beav., 596. Sec also Myler v. Fitzpatrick, 6 Madd. & Geld., 360 and Gibbon v. BnlcUar Tetvaree 23 W. R., 242. Ind. Contr. Act, s. 192. " New Zealand and Australian Land Co. v. Watson, L. R., 7 Q. B. D., 374, * Ind. Contr. Act, s. 257. Rowe v. Wood, 2 Jao. & W., 558 ; Lindl., 807. Taylor v. Davis, 3 Beav,, 388, (note). P V .'{Of) nil-. i,As\ nh Ai;i:\rv. (liroctod, every ]ii"f'siini])ti()ii will bo ma L. R., 5 Ch., 233. > 2 H. L. Cas., 35. » 5 Jur. N. S., 381. ♦ L. 11., 18 Ch., D., 296. * Eherodemoney Dossee v. Doorgamoney Dossee, I. L. R., 4 Calc, (465, 469). Saroda Fershad Chattopadhya v. Brojonath Bhuttacharjee, I. L. E., 5 Calc, 910. Greender Chunder Ghose v. Mackintosh, I. L. R., 4 Calc, 897. • Bengal Act VIII of 1869, s. 30. ^ Beer Chunder Manickya v. Hurro Chunder Burmon, I. L. R., 9 Calc, 211. * Neio Flemminj Spinning and Weaving Co, v. Kessowji Kaik, I. L. R., 9 Bom. 373, (394), per Scott, J. DUTIES OP THE AGENT TO HIS PRINCIPAL. 309 by the principal deserves particular notice. And that is that it is his bounden duty not to deal on his own account in the business of the agency, without first obtaining the consent of his principal, and acquainting him with all material circumstances which have come to his own knowledge on the subject ; and if he does so, the principal may repudiate the transaction, if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.i The right of the principal where this duty has been abused, has been dealt with by the Courts of Equity in England in numerous cases, and the agent has there been held to stand in a fiduciary position towards the principal.'^ Concealment of material facts. — It is one of the first duties of an agent to disclose all material facts relating to the business of the agency to his principal. And much more therefore it his duty to do so, whenever he proposes to deal in this business of the agency on his own account ; for his so dealing* on his own account was never intended by the principal on appointing the agent, but rather on the contrary it was on the faith that the agent will act purely and disinterestedly for the benefit of his employer that he was so appointed at all. The principle on which this duty is founded, is, that an agent will not be allowed to place himself in a situation, which, under ordinary circumstances, would tempt a man to do that which is not the best for his pi'incipal. Thus an agent employed to purchase cannot buy his own goods for his principal, neither can an agent employed to sell piu-chase for himself his principal's goods, and if they do so, the principal may repudiate such transactions.^ And neither will he be allowed to purchase for his own benefit.* And, as will be seen hereafter, if the principal adopts the transaction, he may claim the benefit of it. But to establish a prima facie case of con- structive purchase by an agent out of the funds of his principal, it must be px'oved that at the time of the purchase, the agent had funds in his hands belonging to his principal, sufficient to meet the purchase, it is not enough to show that the defendant is the agent of the plaintifi', and that he has no funds of his own wherewith to purchase property.^ Nor may an agent employed to settle a claim buy and enforce it against his principal.^ So where a * Ind. Contr. Act, s. 215. * See Tate v. Williamson, L. R., 2 Ch., 55. Knatchhidl v. Uallett, L. 11., 13 Ch. D., 606. Erlanger v. Sombrero Phosphate Co., L. R., 5 Ch. D., (118), on appeal, L. R. 3 App. Cas., 1218. E7nma Silver Mining Co. v. Grant, L. R., 17 Ch. D., 122. * Bentley v. Craven, 18 Beav., 75. Ex-parte Dyster, 2 Roso, 319. Rothschild v. Bruukmun 2 Blighs N. S., 165. * Austin V. Chambers, 1 CI. & F., 1. * Meer Sufdur Ali v. Woolfut Ali, 3 W. R., 232. « Reed v. Norris, 2 My. & Cr., 361. 310 TirR t,AW OK AOKNCT. rclativo of ii ^•oung' man who \viih in iinpociinioiis circumstances and liarl sought his n^hitivc's ad vice, was advised by the relative to allow one W, to look into his alia lis and <() arraTige for payment of his debts ; and the youth informed W, that he was willin*;; to sell a portion of a freehold estate belonging to him, and after some conversation as to value, W agi'ced to buy the estate for £7,000, but insisted on the youth consulting his friends on the matter, and an independant solicitor was employed on the youth's behalf. And W, on his part after taking the advice of a mining engincei', discovered that there were valuable mines under the land, which the engineer valued at £20,000, but did not communicate this info}'niatioii to the youth ; subsequently the sale w^as concluded and shortly afterwards the 3'oung man died. In a suit brought by his executors to set aside the sale, it Avas hold that the purchaser was placed in a fiduciary position to- wards the youth, and that it was his duty to have disclosed all material inform- ation which he had acquired, and the not having done so, the sale was set aside. ^ So in Gillett v. Pepper come, ^ a person employed a broker to purchase some canal shares, and the broker apparently bought them from one Cole, the ostensible owner, but it subsequently turned out that these shares actually be- longed to the broker, and that they had shortly previous been transferred into the names of the apparent vendors as trustees for him. After a lapse of several years the employer discovered what had been done, and brought a suit to set aside the transaction. There Avas no evidence that the price paid for the shares was exti'avagant, or that any fraud had been practised, and it appeared that the plaintiff was a large propxnetor of shares purchased fi'om other persons. The Master of the Rolls said : — " Where a man employs another as his agent, it is on the faith that such agent will act in the matter purely and disinterestedly for the benefit of his employer, and assuredly not with the notion that the person whose assistance is required as agent has himself in the very transaction an interest directly opposed to that of his principal It is not necessary to shew that fraud was intended, or that loss afterwards took place in consequence of these transactions, because the defendant, though he might have entertained no inten- tion wdiatever of fraud, was placed in such a situation of trust with regard to the plaintiff that the transaction cannot, in the contemplation of the Court, be considered valid The defendant ought to take back the shares with all dividends which have been paid upon them, with interest at 5 per cent, and the costs of the suit." Concealment of material facts by promoters.— As will be hereafter seen promoters stand generally in the same position as an agent Avith regai'd to this duty to disclose all material facts. In The Phosphate Sewage Company ' Tate V. Williamson, L. R., 2 Cli., 55. * 3 Beav., 78. See also RothschiM v. Brooleman, 5 Bli. N. S., 165. DUTIES OF THE AGENT TO HIS PRINCIPAL. 311 V. Hartmont} certain person who were the owners of a concession from a foreign Government combined together to form a Company to purchase the concession, knowing at tlie time that through their default it was voidable and liable to forfeitare. The owners and others who were the promoters of the Company, fraudulently sold the concession, being aware of the infirmity of the title, to ti-ustees for the intended Company, and it was transferred to the Company by the trustees, who were to be paid a portion of the purchase money for their share in the transaction. The solicitors for the vendors, who were also the solicitors for the Company concealed the invalidity of the title, and the trustees neglected to require evidence to establish title. The Company brought a suit against the owners of the concession, the promoters, the trustees, the directors, and the solicitors, to obtain repayment of the whole purchase money. Lord Justice James held that the owners and promoters must repay the whole purchase money, and that the trustees who received money in the nature of a bribe for neglecting their duty must repay what they had so received, and as to this last repayment, his Lordship said : — " Commission received by an agent or trustee of a purchaser from a vendor Avithout the knowledge of his principal is in this Court a bribe — it is a profit which the principal has a right to extract from the agent whenever it comes to his knowledge." In this countxy the principal might repudiate the transaction. The rule that the pi'incipal may repudiate, where the agent has dealt in the business of the agency without the knowledge and consent of the principal has been held to apply, so that any sui^reptitious dealing between one principal to a contract and the agent of the other principal, has been held to be a fraud in equity, and which would entitle the first named principal to have the contract rescinded, or to refuse to proceed with it in any shape. Thus where a Telegraph Works Company agreed Avith a Cable Company to lay a cable, the cable to be paid for by a sum payable when the cable Avas begun, and by twelve instalments payable on certificates by the Cable Company's engineer, who was named in the contract. And shortly after the contract Avas entered into, the engineer Avho Avas engaged to lay other cables for the Works Company, agreed Avith them to lay this cable also for a sum of money to be paid to him by instalments payable by the Works Company Avhen they received the instalments from the Cable Company, it AA-as held that under the circumstances, the agreement between the engineer and Woi'ks Com- pany Avas a fraud, which entitled the Cable Company to have their contract rescinded, and to receive back the money Avhich they had paid under that contract.* > L. R, 5Cli. D., 394, (157). * Panama and South Facific Telegraph Co, v. India Rubber Outtn Perchn and Telegraph Works Co., L. R., 10 Ch., 515. 312 TUR t,A\V OP AORNCV. Concealment of material fact in insurance cases —Whorn a master of ii sliip oi' ol.lu'i- rc.s])on.sil)le a^'cnt, willully uiLliliold.s any information, or by culpable nogligonco withholds any material fact, it is quite rif^ht to hold the ownt'i- to 1)0 HO far idontiliod with the ai^ont as to vitiate a policy. ' This duty to act bona fide is construed in England with strictness — The Courts in I"]iin-laii(l liavo bi'cn most sti-ict in insist iiiLC on tin; agent acting bond fide towards his jii-incipal, and have held that where an agent for sale takes an interest in a purchase negotiated by himself, he is bound to disclose to his principal the exact nature of his interest ; and it will not be enough for him merely to disclose that he has an interest, or to make statements such as would put the principal on enquiry ; and in such case the burden of proving that a full disclosure was made lies on the agent, and is not discharged merely by the a^ent swearing that he did so, if his evidence is contradicted by the principal, and not corroborated. ^ Where the dealings of the agent are disadvantageous to principal — The case of an agent for sale of an estate colluding with a purchaser, and in consideration of a bribe allowing the purchaser to obtain the estate at less than its value, Avith a view to a sale at a higher price to a sub-purchaser, the transaction beino- concealed from the vendor, appears to be met by s. 215 of the Contract Act ; that is to say, the principal might repudiate the transaction as being disadvantage- ous to him ; Vice-Chancellor Malins, however, in a case^ in which such a trans- action took place, although the Appeal Court gave no opinion on the point, held that both the agent and the purchaser were severally liable to pay to the vendor the increased amount obtained by the sub-sale. This right of the prin- cipal is expressly provided for by section 215 of the Contract Act, and the principal will in such case be able to repudiate the transaction. Secret gratuities to agents.— Where a party with whom an agent is negotiating on the part of another, agrees to give, or does give a secret gratuity, and that gratuity influences the mind of the agent, directly or indirectly in assentino- to anything prejudicial to his employer in making the contract, this is sufficient to vitiate the contract.* And an agent receiving such gratuity or com- mission has been held unable to sue for its recovery, it being immaterial that the principal was not damaged by the agent's conduct.^ Principal may claim irregular profits made by agent.— And further, if any protit has resulted to the agent when so dealing without the knowledge > Proudfoot V. Montefiore, L. R., 2 Q. B., 511. Fitzherbert v. Mather, 1 T. R., 12. Strihley V. Imperial Marine Insurance Co., 34 L. T. X. S., 281, per Blackbarn J. * Dunne v. English, L. R., 18 Eq., 524. 8 Morgan v. Elford, L. R., 4 Ch. D., 352. * Stnith V. Sorbif, L. R., 3 Q. B. D., 552, (note). * Harrington v, Victoria Graving Docks Co., L. R., 3 Q. B. D., 549. DUTIEf? OP THE AGENT TO HIS PRINCIPAL. 313 of hif? principal on his own account in the business of the agency, such profit can be claimed from him by his principal.^ For, as says Lord Justice James, " It appears to me very important, that we should concur in laying down again and again, the general principle that in this Court no agent in the course of his agency, in the matter of his agency, can be allowed to make any profit without the knowledge and consent of his principal ; that that rule is an inflexible rule, and must be applied inexorably by this Court, which is not entitled, in my opinion, in my judgment, to receive evidence or suggestion, or argument as to whether the principal did or did not suffer any injuiy in fact, for the safety of mankind requires that no agent shall be able to put his principal to the danger of such an enc^uiry as that."^ Thus where the defendant being aware that the plaintiff was desirous of obtaining shares in a certain Com- pany, represented to the latter that he, the plaintiff, could procure a certain number of such shares at £3 a share, and the plaintiff agreed to purchase at that price, and the shares were thereupon transferred, in part to him and in part to his nominees, and he paid to the defendant the price agreed upon, namely, three pound per share, but afterwards discovered that the defendant was in fact the owner of these shares, having just bought them at two pounds a share, it was held that the defendant was in fact an agent for the plaintiff, and that he was bound to pay back to the plaintiff the difference between the price of the shares.^ This case was followed in 3Iorison v. Thomp- son,'* where the plaintiff authorized the defendant a broker to buy a ship for him from a third person, on the basis of an offer of £9,000, and eventually the ship was purchased through the defendant for £9,250. But prior to the sale, an arrangement had been made between the vendor, and his broker, that if the latter could sell the ship for more than £8,500, he might retain for himself the excess ; and it Avas arranged between the defendant and the vendor's broker, without the knowledge or sanction of the plaintiff, that the defendant should receive from the vendor's broker a portion of such excess, and accordingly the defendant received £225 part of the excess over £8,500. On discovering this, the plaintiff brought an action to recover from the defendant this sum. The jury found that the defendant was the agent of the plaintiff to purchase the ship as cheaply as §hc could be got, and that the plaintiff could have obtained her cheaper, but for the arrangement between the vendor and his broker. The Court therefore held that the plaintiff was entitled to recover. ' lud. Contr. Act, s. 21G. Imperial Mercantile Credit Association v. Coleman, L. R., 6 H. L., 189. '' Parker v. McKenna, L. R, 10 Cli., 9G, (121). See also Hat/ s Case, L. R., 10 Ch., 593, (601). * Kimber v. Barber, L. R., 8 Ch., 56. * L. R., 9Q. B.,480. <4 Q .'{14 TirF r,AW f)|- \UKNCY. So whore an a^cnt. nfTcctorl an insurnnco for his pn'ncipiil. and in so doinj^ received a i-ccoipt for the full amount dnc, but rcecivod fi-oni the Insurance Company, a induction of 10 per cent. Avhich represented the usual allowance made by the Insurance Company to merchants and others for inti'f)dncing' insurances where the pracmium is paid within a given time, held that he was bound to pay over the amount to his principal.* So where the plaintiff became the owner of a house by reason of the death of his brother, by whom the defendant had been employed as his solicitor. The defendant was at that time in negotiation with B. a person who wished to obtain a lease of the house in question, and received from him £50 on the terms of the following document, " In consideration of £50 paid to me by B, I agree to pay B, £100 if the heir-at-law does not execute the lease to B, within a reasonable time." The plaintiff acting under the defendant's advice, executed the lease to B, but on learning what had taken place, sued the defendant to recover the £50. The Court (Lord Esher Fry L. J., and Lopes L. J.,) found, that the defendant whilst acting as the plaintiff's solicitor had in effect made a bet with the other party to the negotiation, a transaction which must have inevitably disabled him from giving proper advice to his client, and held that the plaintiff was entitled to recover." And this principle applies with equal force to the relation of vakeel and client. ^ And under this rule W'Ould fall the case of a promoter of a Company making a gift to a direc- tor, whilst there arc any questions open between the Company and the pro- moter ; and it has been held that where such is the case, the gift must be accounted for by the director to the Company, and the latter have the option of claiming the thing given, or its highest value whilst held by the director.* The case of the army agent making a profit out of the tradesmen supplying an outfit for an officer would fall under that section, 216 of the Contract Act, there the plaintiff, residing in India, employed the defendant, an army agent and accoutrement maker, as her agent in England, and authorized him to provide her son, who was about to proceed to India as a cornet, with a reasonable outfit, and accordingly the articles composing such outfit were paid for thi'ough the defendant ; but the tradesmen allowed him a discount off the invoiced prices having increased their prices with reference to such allowance, while the de- fendant charged the full price against the plaintiff, alleging that this was the universal practice as between army agents and tradesmen ; but of this practice the plaintiff had no actual knowledge. James V. C, held that the defendant was bound to account to the plaintiff for the discounts allowed to him.'" » Queen of Spain v. F Ind. Contr. Act, s. 212. ^ Mayne on Damages, 471. • 15 C. B., 46. B R 322 Tin: r.Aw oi- aokvcv. nsifainsf flu* jiliiinlifTs to exactly tlio same ainomit as that wliicli Mio |)laintiffs had asfainst thcni. ^faulo J., said: — "That whicli is f;om[)hiinod f)f in th(! plea would j.^ Measure of damages under s. 214 of the Companies Act —The measm-e of damages where an officer of a Company has been guilty of mis-feasance, and has been called upon to contribute under s. 165 of the English Companies Act (Ind. Comp. Act, s. 214), has been discussed in McKay's case.* There, the owner of a mine by an agreement adopted by a Company agi'eed with McKay, acting on behalf of the Company, to sell the mine to the Company for a price partly in cash and partly in paid-up shares. B}' another agi'eement not known to the Company, the vendor Avas to give McKay for his trouble 600 of the paid-up shares. The Company was formed, and whilst jSIcKay was secretary to the Company the shares were allotted to the vendor, and transfers of 600 of them by the vendor to McKay were prepared. These shares were afterwai'ds ti'ans- » 8 B. L. K., 544. • L. R., 2 Ch. D., 1, LIABILITY OF AGENT TO PRINCIPAL. 325 ferred to McKay, and 500 of tliem remained in his hands when the Company was ordered to be wound up, held that McKay was a wi'ongdoer, and therefoi'e in estimating the damages, a presumption might be made against him which could not be made against a person who was not a wrongdoer ; a considerable number of shares weie taken by solvent persons though a great many were allotted to persons who proved insolvent ; held that it was the duty of the directors to see that the shares were taken by solvent persons, and it being impossible to assume, in favour of a wrongdoer, that the persons who might otherwise have taken these shares would have been insolvent, it was to be assumed that these shares could have been disposed of for their full value. The full value of the shares there- foi'e was given. Brett J., said : " There is no fixed legal rule to determine the amount of the damages. Of course he cannot be ordered to pay any damages which are not consequent on this act, but he can be ordered to pay the largest amount of damages that could at any time have been incurred. This may be said to be the full value of the shares as it may be assumed that they might have been allotted to a solvent holder, who would have paid for these shares if McKay had not had them." The damages must be the necessary result of the neglect,— Further the damages miast be the necessary result of the agent's neglect. Thus in a case cited by Mr. Mayne, where the plaintiff had been nonsuited in an action against the underwriters on the ground of concealment of material information, and claimed in the suit against his agent to include the cost of the action on the policy ; Lord Eldon said there was no necessity to bring that action to enable the plaintiff to recover, and as it did not appear that the action on the policy was brought by the desire or with the concurrence of the agent, he ought not to be charged with the costs of it.i Damages not to be too remote. — Such damage must not be too remote or indirect, but must be the proximate and natui'al result of the agent's neglect, want of skill or misconduct. Thus in Robert and Chariol v. Isaac,^ the plaintiffs chartered a ship of the defendant, and by the charterparty it was stipulated that the said ship being tight, staunch, and strong should receive from the plain- tiffs a full cargo of rice, and when loaded should proceed to St. Denis, the penalty for the uon- performance of the charterparty being the estimated amount of freight. The plaintiffs began to load in May and had nearly finished when it was discovered in June that the ship was leaking, and in consequence of this, the cargo had to be shifted, and a portion of it having been found to be damaged had to be replaced after the leak was stopped. The charge for sliifting and the cost of the substituted cargo was paid by the defendant. Cojisidcrable * Seller v. Work, Marsli. lua , 243, (4tli Ed.). Mayitc on Damages, 472. * 6 B. L. 11. App., 20. 32f) 'I'HK T.AW OF AOKNCT. delay oocuiTod in consequence of the leak, and the carpfo was not fully stowed until tli(> (Mid of July. In May when the plaintiffs had loaded a portion of the cari-o, iiiiil liiid obtained bills of lading, they drew bills of exchange at 60 days' sight for the vmIiic of I he cargo covered by the bills of lading on their agent at St. Denis, Avliich they sold to the Comptoir D'Escompte de Paris, hppothe- cating the cargo for the amount of tlioir draft. Other similar drafts were subsequently drawn and sold. When tlio plaintiffs received notice of the leakage, they, in anticipation of delay, ar-ranged with the Comptoir D'Escompte de Paris that the bills should not be forwarded forthwith, but should be held by the Comptoir D'Escompte, and renewed by the plaintiffs on the completion of the loadinp-, the plaintiffs paying interest on the bills in the meantime at 9 per cent, per annum. On receiving the bills, the plaintiffs in consequence of the difference in the I'ate of exchange were out of pocket Rs. 400. And in a suit against the owner for breach of the charterparty in not supplying a tight ship, they sought to recover, as damages arising out of such breach, the interest iiaid by tliera on the drafts in pursuance of their arrangement with the Comptoir D'Escompte, the sum they had to pay on renewing the bills, a further sum for interest on the bills which they could not negotiate in consequence of not being able to obtain bills of lading from the defendant, and the value of the stamps on the bills which had been cancelled in consequence of the plaintiff's arrange- ment with the Comptoir D'Escompte. Phear J., said : " It is obvious that the damages which these sums represent, are not damages which necessarily follow from the circumstance that the ship was not staunch and strong, and they, therefore, cannot be fastened on the owner of the ship as a consequence of his breach of the charterparty in this respect, unless some other fact be added to connect them with it. As I understand the case the plaintiffs say that the fact of the ship not being staunch and strong caused a delay in the loadino", and that it was a necessary consequence of this delay that the charterers should be obliged to stay the forwarding of any di-afts which they migbt have drawn against the cargo, and to renew them if the time of the renewing of those di'afts expired, or threatened to expire, during the delay, and therefore that the owners of the ship are bound to pay to the charterers all the costs which have resulted from their taking this course. Xow it seems to me that there is nothing whatever stated, from the beginning to the end of the case, which would justify the infei^ence that the owners of the ship executed the charterparty in \'iew of a course of pi'oceedings of this kind, and there is cei'tainly nothing in the contract of chai'terpai'ty generally from which the owners miTst be presumed to expect that the charterer quit chai'terer would, in the ordinary course of business, be involved in the transactions out of which the plaintiff's losses arose. I will say fiu-ther that there is nothing in the case to show that there was any necessity, or even expediency, other than the cir- LIABTLTTY OF AGENT TO PRINCIPAL. 32?" cumstances of his own affairs, which would oblige the charterer, after he had actually drawn against the cargo, from delaying to forward his bills and shipping documents to their destination In short I can find nothing to indicate the slightest ground upon Avhich the owners of the ship should be made liable to recoup the charterer the particular losses for which the plaintiffs here sue, as being in any way a proximate consequence of the temporary want of sea- worthiness of the ship." Right to nominal damages. — The principal has a right to nominal damages for his agent's neglect ; this point was decided in Van Wart v. Wooley,^ whore A and Company resident in America employed their agents who resided at Birmingham to purchase and ship goods for them. On account of such purchases they sent to their agent a bill di^awn by Cranston and Company in America on Grey and Lindsay in London payable at 60 days after sight to the order of the plaintiff, but did not endorse it. The agent employed his bankers to present the bill for acceptance ; Grey and Lindsay refused to accept, but of this the bankers did not give notice until the day of payment when it was again presented and dishonoured. Before the bill arrived in England, Cranston and Company became bankrupt, and they had not, either when the bill was drawn, or at any time before it became due, any funds in the hands of the drawee. In an action by the agent against the bankers for neglecting to give him notice of the non-acceptance of the bill, Abbott C. J., held that inasmuch as A and Company, not having endorsed the bill, were not entitled to notice of dishonour, and still remained liable to the agent for the price of goods sent to them, and the drawer was not entitled to notice as he had no funds in the hands of the drawee, the agent could not recover the whole amount of the bill, but such damages only as he had sustained in consequence of his having been de- layed in the pursuit of his remedy against the drawer , as to this question of loss Abbott C. J., said : — " The amount of this loss has not been inquired into or ascertained. Perhaps it may be merely nominal ; but even if it be so, the plaintiff was entitled to a veixlict for nominal damages. In order therefore to do justice between these parties, the cause must be again submitted to a jury." A rule was accordingly drawn up for a new trial. On the new trial it was ad- mitted that the plaintiff" had in the meantime recovered from A and Company, the amount of the bill with interest. It was contended therefore that there was no injury. Lord Tenderden C. J., said : " Every man employing another to present a bill for him is entitled to notice from that other of its dishonour. If he does not receive that notice, he suffers damage, though he may ultimately icceive the amount of the bill, and he is thorefoi'c entitled to a verdict."* But Ihis doctrine does not apply to an application under the 165th section of the ' 3 B. & C, 439. " M. & M., 520. 328 Tnn r,Aw of aoencv. Oompanios Act, (Tnrl. CJompanics Art, s. 214). For. the rip^lit wliicli that softion >r\vv.>i is not given to a Company, or the representatives of a Company \vith whom MuM'o is a contract, or as towards whom there is a duty, or as regards whom there is a breach of duty ; but tlie right under that section is given to " any liquidator or any creditor, or contributory of the Company ", and there is no duty, or breach of duty to the Company in respect of which a creditor or contributory can maintain an action, but he has a right to this extent, that if, owing to a mis-feasance or breach of duty, the funds of the Company in which he is interested have been diminished, those funds shall again be made good, and the assets of the Company shall be recouped the loss which they have sus- tained."^ Plaintiff cannot remodel his case for damages.— Where a plaintiff prefers a claim against another for damages on account of negligence, and it is possible that the Court may take one or more different views as to the proper measure of damages, the plaintiff must come prepared with evidence as to the amount of damages according to whichever view the Court may adopt, and if the evidence pi'oduced is applicable to one view only, the Court will not give the plaintiff a re-trial and allow him to remodel his casc.^ The adoption of a contract by a principal puts an end to his right against the agent for breach of duty. — Although, where an agent, before accepting the agency has an interest in property which subsequently formed the subject matter of the agency, and during his agency sells that property to his principal without disclosing his interest, the principal might at his option repudiate the transaction, yet if the option which the principal had, is exercised by confirming the contract with knowledge of all facts, it appears that the agent cannot be made liable for the transaction. Thus, where one Fenn who was the ao"ent of a Company to purchase a specific property in which, before the com- mencement of his agency, he had acquired an interest, purchased that property lor the Company without disclosing to the Company his interest therein, but after the purchase the fact was fully disclosed, and with the knowledge so acquix-ed the Company elected to retain the property, it was held that no relief oould be o-iven as against him, as when he acquired his interest in the property he was not a trustee for the Company and could not be treated as having pur- chased it on behalf of the Company at the price he gave for it, and therefore was not chargeable with the difference between the price at which he bought and the price paid by the Company, and could not be charged with the difference between the price paid by the Company and the value of the property when the Company bought it, as that would be making a new contract between the » Cavendish Bentinch v. Fenn, L. R., 12 App. Cas., (662). » ^nuncio Lall Dnfs v. Bni/cuunt Ravi Roy, I. L. R., 5 Calc, 283, per Garth C. J. LIATJILITY OP AGENT TO PRmCIPAL. 329 parties. 1 Lord Justice Fry in that case, said : — " This case is not the case of an agent ■\vho, after lie has accepted the agency, has acquii^ed property, the purchase of whieli was within the sco]:)C of his agency, and then has re-sold that property to his principal at a larger sum, in which case it is obvious that the pinncipal may say that the original purchase by the agent at a smaller price was a purchase on behalf of the principal. Wor is this the case of a man who accepts an agency to buy some article in the market, and then sells to his prin- cipal his own goods, in which case it may be that the agent is liable for not performing his agency by purchasing in the market, supposing it was possible for him to do so. This case is distinguished from that, by there being a direc- tion to buy a specific property. Nor again, is this the case of an agent who, by any subsequent acts of his own, has rendered the rescission of the contract by his principal impossible. I express no opinion whether or no, in that case, the principal would have a right against the agent, notwithstanding the non-rescis- sion of the contract. This is a case in which the agent, before accepting the agency had an interest in the property, and during the agency sold that property to his principal without disclosing his interest. That in such a case the principal would have a right to rescind there can be no doubt. The option which the principal had, has in this case been exercised by confirming the contract with knowledge of the facts, and the question is whether, after that affimnance, the agent is liable in any sum to his pinncipal. There is no autho- I'ity which determines this point, and it therefore, is to be determined upon prin- ciple I think that the case is one in which the adoption of the contract by the principal puts an end, and ought to put an end, to any further rights against the agent. It appears to me that to allow the principal to affirm the contract, and after the affirmance to claim, not only to retain the property, but to get the difference between the price at which it was bought and some other price, is, however you may state it, and, however you may turn the proposition about, to enable the principal, against the will of his agent, to enter into a new conti^act with the agent, a thing which is ])lainly impossible, or else it is an attempt on the part of the principal to confiscate the pi^operty of his agent on some ground which, I confess I do not understand. It is said that, notwithstanding the rati- fication of the contract, the pi'incipal may claim some profits from the agent because those profits were made surreptitiously or clandestinely. It appears to mo that the answer to that is this, that whatever the profits are, and, however they are to be measured, those profits result, not from the original contract, but from the affirmance of the conti-act by the principal, and that, therefore the profits which are made by the agent arc neither clandestine nor surreptitious. I can conceive two possible claims being made. The one would be on the view that the profits were the difference between the i)inchasing and the selling price • ' In re Cape Breton Co., L. R., 29 Ch. D., 795. s s 330" Till', r,A\v f)K AfaiNOY. ill llic liniids of (lie agent, Imt us luis iilroady licon ohservcd hy liOi-d .Instico BowcMi, tliiit ciuiiiot possibly be ilie measure of tlie elaiiii of tlie piniicij)al, because at the (laio when the iigcnt puirhased he was not the af^eut of the principal, and the principal, therefore, had no right to go back to that date and fix it as the time at Avhich he ac(|ui)'cd a right to retain the property at the price paid for it by tlic agent. The otlier claim \V(juld be on the view that the profits were the difference between the real value, or the market value, if a market value exists, and the actual price at which the i)ro])Lrty was sold by the agent to the prin- cipal. 1 think the principal cannot claim that difference, because it appcai-s to me that in such a case as this, whei-e the princii)al had no right to claim the property as having been purchased on his behalf at the smaller price, the volun- tary ratification of the purchase by the j^rincipal is equivalent for this purpose to a new sale by the agent to the principal after the i-elation between them had ceased, and that it is only in consequence of that ratification or adoption that any profits remain in the hands of the agent." This case has been approved in Ladywell Mining Co. v. Brookes^ where it is said that the gi-ound on which the decision in in re Cape Breton Co. depended was that rescission being impossible the Company could not obtain from the directors the profit made in the trans- action. Liability for acts of the sub-agent. — Not only is the agent liable to his principal for his own neglect, want of skill and misconduct, but he is also responsible for the acts of his sub-agent.^ Thus where the plaintiffs were general agents at Shanghai and employed local agents at various places in China, their local agent at Kinkiang being the defendant, and it was part of the business of the plaintiffs to make advances through the Company's local agents to Chinese merchants upon goods intended for shipment by their Companies steamers ; the defendant employed a sub-agent to make such advances with power to draw' on the plaintiffs, and the sub-agent fraudulently drew on the plaintiffs for an amount not advanced, which di'aft was duly honoui'ed by the plaintiffs. Sir R. P. Collier, held that their sub-agent was acting within his authority in making out accounts and inserting therein advances made on ac- count of the plaintiffs, and in di-awing bills for the purpose of covering advances made, and although it could not be assumed that he was authorized to commit a fraud, it was yet within his authority to have made such an advance as was charged for, and that the case therefore fell within the authority of Bancick V. English Joint Stock Bank° in which Mr. Justice Willes had observed " In all those cases it may be said, as it was said here, that the master had not authorized the act. It is true he had not authorized the particular act, but he has put the agent in his place to do that class of acts, and he must be answerable for the • L. R., 35 Ch. D., 400 (408) (414). » L. R., 2 Ex., 259. * Ind, Contr. Act, s. 192. LIABILITY OF AOBNT TO PRINCIPAL. 331 manner in which that agent has conchicted himself in doing the business which it was the act of his master to place him in ;" the defendant was therefore held liable for the acts of the sub-agent.^ Agent not liable for refusal to make bets on behalf of principal. — An agent is, under no legal liablity to his principal for breach of contract to make bets, which if made, would be not recoverable by law. Thus in Cohen V. Kittell,^ the plaintiff employed the defendant to make certain bets on his account, which the defendant neglected to do : the plaintiff sued the defen- dant to recover damages for the breach of contract of agency. The Court were of opinion that the contract was one which if made would have been null and void, the performance of which could not be enforced by any legal proceed- ings for the benefit of the plaintiff, and that the breach of such a contract could give no right of action to the principal. The right of the plaintiff to have recovered in respect of the contx'act said to have been made on his behalf, being an essential ingredient in the case against the agent for negligence in not conti-acting. Where the agent has, however, made the bet, won it, and been paid, he is bound to pay it over to his principal.^ Liability of directors for negligence. — The directors of a Company are equally with other agents liable for negligence. They are responsible for the management of thq Company, where by the articles of association, the business is to be conducted by the board with the assistance of an agent ; and they cannot divest themselves of their responsibility by delegating the whole manage- ment to the agent, and abstaining from all inquiry, for if he proves unfaithful under such circumstances, the liability is theirs, just as much as if they them- selves had been unfaithful ; and further the estate of a deceased director may also be held liable for such negligence, as the mis-feasance of a director is a breach of trust, and not a mere personal default.''' Liability of a commission agent. — The nature of a dealing between a merchant in one county and a commission agent in another, and the liability of one to the other of them is discussed at much length in Ireland v. Livingston,^ the relationship between them is that of principal and agent.^ Agent's right of set-off. — In connection with the liability of the agent to his pi'incipal, some few defences which may be raised by the agent may be ^ See also Swire v. Francis, L. U., A App. Cas., ICO. Mackay v. Conunen-ial Bank of Neio Brunsiviclc, L. R., 5 P. C, 412. ■•» L. K., 22 Q. B. D., 680. ' Beeston v. Beeston, L. K., 1 Ex. D., 13. Bridfjer v. Savaje, L. R., 15 Q. B. !)., 3G3. * New Flemming Spinniiuj ^' Weaving Co. v. Kessowji Naik, 1. L. R., 9 Bom., 373. Maho- med Noor Khun v. Hur Di/al, 1 Agra H. C, 01. » L. R., 5 H. L., 395. • Cassaboglou v. Gibhs, L. R., 11 Q. B. D., 797. Mahomed Ally Ebrahim Pirkhan v. Schiller Dosogne ^ Co., I. L. R., 13 Bom., 47u. 332 riii; i.aw i>\- ackncy. incntioiiril. Tlu; right to .set-ofT iij)i)(!ars to be tlic same as that wliicli is open to all other pei'sons ; and is fjovei'iiod therefore by the ordinary rules of law laid down as to the right to i)lead a set off.' But the right given by s. Ill, of the Civil Procedure Code, docs not take away any right of set off, either legal or equitable, which parties would have independently of that section ; the right will bo found to exist not only in cases of mutual debts and credits, but also where the cross demands arise out of one and the same transac- tion, or are so connected in their nature and circumstances as to make it inequitable that the plaintiff" should recover, and the defendant be driven to a cross suit.2 The right may, however, be waived,^ or excluded by express con- tract. But nevertheless the right, it is submitted, cannot be made use of by an agent against his principal, where its result would be a breach of the agent's duty to his principal, lu answer to a suit for money had and received, the agent would be at liberty to set oft" and deduct all just allowances which he has a right to retain out of the very sum demanded.* Defences in suits for account and for goods sold.— And in a suit for an account where he has been employed to sell goods on credit, he cannot be called upon to pay over the money to the principal until he has received the whole from the person to whom he sold the goods, unless the delay in payment is occasioned by his neglect. 6 So also it would be a good defence in an action brought against an agent for goods sold and delivered, to plead that at the time of sale he disclosed the name of the principal, unless indeed the agent is acting under a del credere commission.^ But he will not in an action for money had and received for the use of his principal be allowed to set up the illegality of the contract as a defence.''' The right to compel interpleader. — The agent camiot as a general rule compel his principal to interplead with third parties claiming property in his hands adversely to his principal,^ but where the third person claims title created by the principal's act subsequently to the delivery of the property to the agent, he may compel the parties to interplead.^ * Act XIV of 1882,3. 111. * Clark V. Buthnavaloo Chetti, 2 Mad. H. C, 296. Kischorchand Champalal v. Madhoicji Visrain, I. L. R., 4 Bom., 407. Bhaghat Panda v. Bamdeb Panda, I. L. R., 11 Calc, 557. Pragi Lai v. Maxwell, I. L. R., 7 All., 284. " See Pragi Lai v. Maxicell, I. L. R., 7 All., 284, (280). * Bale V. Sollet, 4 Barr., 2133. » Varden v. Parker, 2 Esp., 710. * AUop V. Silvester, 1 C. & P., 107. » Tenant v. Elliot, 1 B. & P., 3. Farmer v. Russell, 1 B. & P., 29G, but see Booth v. Hodgson, 6 T. R., 405. * Crawshai/ v. Thomtan, 2 My. & Cr., 1. » Tanner v. European Baiik, L. R., 1 Ex., 2(31, which is uuder Statute : See also Crawford v. Fisher, 1 Hare, 436. LIABILITV OF AGENT TO PRINCIPAL. 333 He cannot dispute the title of his principal. — It is a settled rule of law that an ag-eut cannot dispute the title of his principal ; thus in Dixon v. Haviond} where a bankrupt named Davidson was the surviving partner of one Flowerden, and Flowerden being possessed of a ship had assigned it to one Hart to secure an advance of £1,000, and the ship was accordingly register- ed in Hart's name. But subsequently Hamond, the defendant, advanced to Flowerden the sum of £900 for the purpose of paying oif Hart's debt, and his name was then substituted on the register for that of Hart for the pur- pose of securing the debt. And the defendant who was an insurance broker effected an insurance as agent for Flowerden and Davidson, and charged them with the pi^aemiums. The ship being lost, the underwi'iters paid the loss to the defendant as the agent of Flowerden and Davidson. An action was brought by the assignees of Davidson to recover back from the defendant a sum of £1,900 being the difference between the sum of £2,800 received, and the sum of £900 which he had advanced on the security of the ship ; it was contended by the defendant that he was only accountable to the executors of Flowerden to whom the ship originally belonged. Held, that the right of the plaintiffs to recover depended on the settled rule of law, that an agent shall not be allowed to dispute the title of his principal ; and the agent having received the money in that capacity, could not afterwards say that he did not do so. And the ao-ent bein"- the agent for the partnership could not be permitted to say that he received it for the benefit of Flowerden alone. A further example of this rule of law is to be found in White v. Bartlett.^ When jus tertii may be set up.— As it is the agent's duty to pay over all sums received in the business of the agency, so will the agent be liable to his principal if he do not do so, and he will not ordinarily be allowed to set up as the ad^verse title of a third person to defeat the title of his principal. Thus where the plaintiff", the captain and part owner of a vessel, authorized the defendant a broker to insui'e the vessel ; the insurance was effected and the vessel subsequently lost ; and the defendant received the insurance money from the underwriters. Three other persons, also part owners of the vessel in question wrote to the defendant infoi'ming him of their shares in the vessel, and holding the broker accountable if he parted Avith the money. The defen- dant paid over £500 to the plaintiff, but refused to pay over the balance of the insurance money. The plaintiff' therefore sued to I'ecover the amount with- held. It was contended on behalf of the defendant, that the plaintiff could not bring the action alone in his own name, he being a part ownei- oidy, and set up the right of the other part owners to the fund sued for. The Lord Chief » 2 B. & Aid., 310. * 9 Biug., 378 ; but see the case of Hardmun v. Willcock, 9 Biiig., 382, (uote). .S34 nir law ok Af;F,N'CY. Hui'oii, iis also tlic" I'cm.'iiiKler of tlio Court, hel 2 H. & N., 293, 3 H. & N., 177. ' 9 M. & W., 96, per Parke B. » 3 M. & W., 834. RIGHT OF PRINCIPAL AGAINST THIRD PARTIES. 347 I am not aware of any rule of the Law Merchant regarding bills or notes which should interfere in this case to intei'cept the ordinary general rule of law that a principal may sue upon the contract made on his behalf by his agent. Then the case states that the circumstances under which the note was made Avere, that it was so made in respect of a transaction between the plaintiff Ramiah, his agent, and the defendant, and that the consideration for the note moved from the plaintiff. The amount is due to the plaintiff and he is the holder of the note. We are therefore of opinion that the construction, by the learned Judge, of the note was not correct, and we decide that the plaintiff was entitled to sue upon it." Where the agent has contracted in such form as to make himself personally liable. — The principal again has a right to enforce all contracts entered into by the agent with third pai'ties in which the agent has made himself personally liable.^ And where the agent contracts with a person who neither knows, nor has reason to suspect, that he is an agent, his principal may also require the performance of the contract, but if he does so, he does so subject to the right of the other contracting party to set up and make use of the same rights and defences as he would have had as against the agent if the agent had been principal -^ that is to say, he must take the contract subject to all equities.*^ And one of such rights open to such other contracting party as is last mentioned is, that he may, if the principal discloses himself before the contract is completed, refuse to fulfil the contract, if he can show that, if he had known who was the principal in the contract, or if he had known that the agent was not a principal, he would not have entered into the contract,""* always provided, however, that such contracting party has not induced the principal to act upon the belief that the agent only will be held liable.^ And although the agent may also be entitled to sue on the contract as well as the principal,^ yet the principal's right to sue is paramount to that of the agent,'^ save where the latter has a lien over the .subject matter of the suit equal to the claim of the principal.* For the mere fact that an agent is employed can never affect the right of the pinncipal to receive money justly due to him.^ As to whether on notice an undis- >■ Ind. Coutr. Act, ss. 230, para 2, 233. * Ind. Contr. Act, s. 231. Dresser v. Norwood, di L. J. C. V., 43. Weshvood v. Bell, 4 Camp., 34-9. George v. Clagijett, 7 T. R., 359. ' Premji Trikamdas v. Madhowji Mimji, I. L. R., 4 Bora., 447. * Iiid. Contr. Act, s. 231, para. 2. Humble v. Hunter, 17 L J. Q. B., 350. ' Premji Trikamdasv. Madhowji Mwnji,!.!!. '&.,4:liom.. 4^1. Ind. Coutr. Act, s. 234, Heald V. Kenworthy, 10 Ex., 739. [ciprocal. * Ind. Contr. Act, 233, conversely ; the right to sue and the li;ibility to be sued being re- ' Morris v. Cleasbi/, 1 M. & S., 570. ® Evans on Prin. Sf A(j , 472. Hudson v. Granjer, 5 B. & Aid., 27. " Tayler v. Ashmedh Koonwur, 4 W. R., 86. 348 ri"' 'AW OK AOENCV, closed principal may step in and aflirni or revoke the aj^ent's contract, the late case of Glubb v. Campbell,^ is an authority. There, Miss Glubb had a nephew, a clerk on tho Stock Exchange, and she was induced to entrust him with a sum of money amounting to £2,700, of which £800 was given to advance him in his business, and the remainder was to be invested on good security to pay 10 per cent., of which the plaintiff was to receive 8 per cent., and the nephew 2 percent. The nephew entered into negotiations with the defendant Campbell, and finally the money was lent to him at 10 per cent., he also entering into a bond for repayment : thei'c was also some negotiations as to Campbell giving security, but none was in fact given. In January 1888, the plaintiff discovered that the money had not been invested in accoi'dance with her instructions, and a solicitor was therefore instructed to enquire into the matter. Campbell had meanwhile paid back certain sums to the nephew, and on the nephew's representation paid fui'ther sums, although having received notice of the plain- tiff's claim to the money. On the 9tli January, Campbell promised to make no more payments. Meanwhile in August the plaintiff's nephew had com- menced an action against Campbell for the recovery of the whole sum lent by hiraj and an order was made that the matter be referred to a referee. On these facts Cave J., held that there was no evidence of fraud on the part of Campbell to go to the jury. The pleadings were amended and tlie action was fi'amed as for money had and received. On behalf of the plaintiff, who had intervened, it was urged that as an undisclosed principal, she could, on notice given, step in and either affinn or revoke the contract, and that after such notice all payments made to the nephew were void as against the plaintiff — held that notice having been given, Campbell ought not to have made further pay- ments except to the plaintiff, and that the plaintiff should recover the whole sum lent less the amount paid back to the nephew before notice. Principal's right to adopt unauthorized contract made by agent with third party. — And again if an agent, having a principal, contract without, or in excess of, his authority the principal may ratify the contract and sue upon it ;2 although in the case of a fictitious agent ha^nng no pi-incipal, the agent would not be able himself to sue.^ The princii)al will not, however, be able to ratify any unauthorized act unless he ratifies the whole of the transaction of which such act formed a part.* But such ratification will have no effect, if it subjects a third party to damages or terminates any right or interest of such thii'd party. ^ » L. T. 14th Dec, 1889, p. 119. » Eouth V. Tho7npson, 13 East, 274. lud. Contr. Act, s. 196. • Ind. Contr. Act, s. 236. * lud. Contr. Act, s. 199. Smith v. Hodson, 4 T. R., 211. I) 2 Camp., 805. * 1 Camp., 337. RIGHT OP PRINCIPAL AGAINST THIRD PARTIES. 351 Right to rescind contract where agent has acted fraudulently on prin- cipal. — Where an agent has made an agreement with a contractor which amounts to a fraud on his principal, the latter has a right to rescind the contract and to recover back all monies paid under it, or to have such other relief as the Court may think right to give him.^ Right to follow money wrongly applied by the agent. — Where the principal is justified in repudiating the act of his agent he may follow his property, or whatever it has been converted into, into the hands of third parties, as long as it is possible to identify it. Thus where a dj.\aft for money was en- tru-sted to a broker to buy exchequer bills for his principal, and the broker received the money and misapplied it by purchasing American Stock and bullion, intending to abscond with it and go to America, and he did so abscond, but was caught before he quitted England, and thereupon delivered over the Stock and bullion to his principal who sold the gold and received the proceeds ; the bi'oker, however, became a bankrupt on the day on which he misapplied the monies, and his assignees sought to recover the proceeds above mentioned ; the Court, however, held that the principal was entitled to withhold the proceeds from the assignees.^ Lord Ellenborough said : " The plaintiffs (the assignees) are not entitled to recover if the defendant has succeeded in maintain- ing these propositions in point of law, viz., that the property of a principal entrusted by him to his factor for any special purpose belongs to the principal, notwithstanding any change which that property may have undergone in point of form, so long as such property is capable of being identified, and distinguish- ed from all other property. And secondly, that all property thus circumstanced is equally recoverable from the assignees of the factor in the event of his l)ecoming a bankrupt, as it was from the factor himself before his bankruptcy. And, indeed^ upon a view of the authorities, and consideration of the arguments, it should seem that if the property in its original state and form was covered with a trust in favour of the principal, no change of that state or form can divest it of such trust, or give the factor or those who represent him in I'iglit, any other more valid claim in respect to it than they had before such change." His Ijordships therefore decided these points in favour of the defendant. So where one Cooke, a trustee, employed a broker, who had notice of the trust, to sell out consols and invest the proceeds in railway stock ; and the broker sold for ca.sh, bought railway stock to the same amount for the settling day, and recovered the price of the consols in a cheque, which he paid into his account at liis bankers. The broker stopped payment before the settling day and went into liquidation. Cooke claimed so much of the broker's balance at his bankers as was attribut- ' Panama and South PdcijJc Telegraph Co. r. India Ruhber Gntfa Fercha (ind Telegraph Works Co., L. R. 10 Ch. 515. * Taylor v. Phiiner, 3 M. & S., 562. 352 Tf"' ''-^^V (iK AfiKNCV. iil)lo to tlic price of the consols. The Iloj^iatrar disallowed the clfiim. On ii])i)oal, held, on the principle of Taylnr v. Plumer,^ that if the money could bo traced, it could be followed, and the case went back to the Registrar for a finding on that point.* It was, however, at one time held that money which a Banking Company had been employed as agents to collect and remit, but which they paid into their own bank, and subsequently went into liquidation, could not be followed and claimed in priority to the claim of other creditors of the bank -^ but this case has been dissented from in In re HallelCs Estate, Knatclibull v. HalletA And there is no difference between the position of a factor or agent and tlic position of a trustee as regards following money. So far from that being the case all the decided cases proceed on the ground that there is no such distinction, and the only reason for any difficulty, is the difficulty of ascertainment, i. e., tracing the fund.* " It has," as say.s Thesiger L. J., in Knatchbull v. Hallett,^ at page 722, " been established for a very long period, in cases of law as well as in cases of equity, that the prin- ciples relating to the following of trust property are equally applicable to the case of a trustee and to the case of factors, bailees or other kind of agents. It has been also established, and for a long period, that those principles may, under certain circumstances, be apiDlicable to money as well as to specific chattels. The principle of law may be stated in these terms, namely, that wherever a specific chattel is entrusted by one man to another, either for the purposes of safe custody, or for the pui-pose of being disposed of for the benefit of the person entrusting the chattel, whether the chattel bas been rightfully or AVi^ongfully disposed of, it may be followed at any time, although either the chattel itself, or the money constituting the proceeds of that chattel, may have been mixed and confounded in a mass of the like material. There is no doubt that there are to be found here and there in the books, dicta, principally of Common Law Judges, which would appear to militate against the generality of that proposition, and which would appear to show that in the mind of those Judges there was the view that while chattels might be followed, or money so long as it could be looked upon as a specific chattel, as money numbered and placed in a bag, yet when those monies had been mixed with other monies that there was no ear mark, and neither at Law nor in Equity could they be followed. With reference, however, to those dicta it appears to me that there are two observations to be made. In the fii'st place 1 cannot find any decision which has followed out those dicta to their conse- ' 3 M. & S., 562. * Ex-parte Cooke in re Strachan, L. R., 4 Ch. D., 122. • Ex.parfe Dale ^ Co., L. R., 11 Ch. D., 772. ♦ L. R., 13 Ch. D., 696. • In re Hallett Estate Knatchbull v. Hallett, L. R., 13 Ch. D., 718, 719, 720, 722. RIGHT OP PRIXCrPAr. AGAINST THIRD PARTIE?? . 353 quences, assuming that those dicta are to be treated as having the generality which at first sight attaches to them. And in the second place, it appears to me, that in many cases those dicta, looking to the facts of the particular case, may be restrained to those facts, and possibly may have a more limited mean- ing than that which has been attached to them by Mr. Justice Fry in the case of ex.-parte Dale.^ As far as I can judge, the only exception to the general proposition which I have stated is not a real exception, but an ap- parent exception, for all cases where it has been held that monies mixed and comfounded, but still existing in a mass, cannot be followed, may, I think, be resolved into cases where, although there may have been a trust with reference to the disposition of the particular chattel which those monies subsequently represented, there was no trust, no duty in reference to the monies themselves beyond the ordinary duty of a man to pay his debts ; in other words that they were cases where the relationship of debtor and creditor had been constituted, in- stead of the relation either of trustee and cestui que trust, or principal and agent." It is true that ex-parte Dale takes a different view, but that case has been dissented from in the one last cited. Right to recover goods wrongfully distrained.— The principal also has a right to recover goods which have been wrongfully distrained on at the premises of his agent where they had been sent by the principal on commission sale. Thus in Findon v. M'Laren,'^ the plaintiff sent a carriage to one John Bayley for sale on commission; and whilst the carriage was standing exposed for sale, the defen- dant, a bailiff, took it as a distress for rent due from Bayley, on which the plain- tiff brought a suit to recover the carriage. The Court held that the case fell within the principle of the cases regarding auctioneers, and that goods in the hands of a commission agent for sale in the way of his business were exempted from distress, and that therefore the plaintiff was entitled to recover. Right to recover property wrongfully disposed of by agents.— Wliere a servant has wrongfully disposed of property belonging to his master which has been given into his charge, the master has a right to sue the person into whose hands the goods came to recover the same. Thus in Biddomoye Dabee v. Sittaram,^ the plaintiff a lady of property left her house in Calcutta in chai'ge of her jemadar, who, amongst other properties belonging to his mistress, had charge of a box of jewels. The jemadar in the plaintiff's absence broke open the box and pawned the jewels with the defendants. The plaintiff" sued the defendants in trover to re- cover the articles pawned. Garth C. J., held that the plaintiff was entitled to recover. Such cases as the above do not fall within the provisions of s. 178 of the Contract Act, which is intended to re-produce part of the Factors Act, and it has been held that that Act applies to mercantile transactions and not » L. R., 11 Ch. 0., 772. * G Q. B., 891. • I. L. R., 4 Calc, 497. W vr .'^'►4 THK I, AW ctK A<;i;.\cv. to caso.s ol' julvaiiccs on fni'iili uri' ii'^cd in ii p)-iviifi' lirm^c not In the wmv of trade. ^ Exception to right of principal to recover property disposed of by agent. — Wliere tile ajj^ent lias not obtained the ^-ood.s of iii.s principal by means of an offence or fraud, he will be at liberty to pledge them to third peraonR, and if snoli lliird person acts in good faith, and nnder circumstances which are not such as to raise a reasonable presumption that the agent in pledging is acting improperly, the principal will not be able to recover them "without redeeming the pledge ;* and not only may he do so where he has possession of the goods, but he may also, with similar restrictions, pledge the goods where he has possession of the bill of lading, dock- warrant, wharehou.se- keeper's certificate, wharfinger's certificate, or warrant or order for delivery, or any other document of title to the goods, ^ and similarly in all such cases if he complies -nath the restrictions I have mentioned, the principal will be unable to recover save subject to redeeming the pledge. This section (178) of the Contract Act is intended to replace portions of Act XX of 1844 the Factors Act, which has been repealed ; the wording of the section does away with the numerous cases on the words " agent intrusted with possession," and appears to allow the power of pledging to all persons bond fide in unquali- fied possession of goods and their documents of title. Nor does it appear that it is now necessary that the advance .should be " a present advance," but it may, it seems, be one for an antecedent debt ; nor is it necessary that the agent in possession of the goods or documents of title .should have any existing authority to pledge them, the fact that he is so in possession being alone suflB- cient, if he acts otherwise within the section, to enable him to do so. As to whether general liens are excluded, from the piotection given by this section, see the remarks of Lindley J., in Kalfenbach v. Leiois* where the question was decided in the affirmative on the 1st section .of 5 and 6 Vic. c. 39, which was at one time extended to India by Act XX of 1844. The test whether the pledgee acts in good faith, was, under the old Act, the answer to the question .whether the circumstances of the transaction were such that a reasonable man, and a man of business applying his understanding to them would certainly know that the agent had not authority to make the pledge,^ that test will equally apply to s. 178 of the Contract Act. The case just referred to,^ was an action of trover to recover the value of certain bales of twist ; the goods in question were shipped in London consigned to Mes.srs. Gouger Jenkins and Com]iany of Calcutta, the ' Wood V. Bowcliffe, 6 Hare, 191. * Ind. Contr. Act, s. 178. ' Ind. Contr. Act, s. 178. * L. R., 2t Ch. D., 5-i, (79). * QobitHlOhvnder Sein v. Ryan, 9 Moo. I. A., 140, (153). RIGHT OF PRINCIPAL AGAINST THIRD PARTIES. 355 business of that firm being then caiTiecT on in Calcutta by one Cockshott under a power of attorney. The firm had been in the habit of employing a banian, and to this man Cockshott gave the bill of lading of the twist, endorsing it in blank in order that the banian might obtain a delivery order and the delivery of the goods to the firm. It was also the duty of the banian to find purchasers for the firin's goods, and to receive the price after the purchaser had been approved by the fu^m. The banian contracted to sell the twist, with Cockshott's assent, to one Doorgapersand ; and received from Cockshott the bill of lading for the purpose of delivering the goods under this contract, one of the terms of which was that the goods were to be cleared away and settled for within forty- one days. Without the knowledge or aiithority of Cockshott the banian sought to borrow from one Grobind Chunder Sein a money-lender Rs. 20,000 on a pledge of the bill of lading. The money-lender after making enquiry from Cockshott as to the power of attorney be held from the firm, but making no enquiry from the banian as to his authority to pledge, advanced Rs. 20,000 or thereabouts less a discount of Rs. 400, and took from the banian his note of hand and a memorandum of deposit of the bill of lading in consideration of the advance so made; and the banian on his side authorizing Gobind to sell the goods for his own benefit if repayment w^as not made in six weeks. At this time the banian was largely indebted to the firm of Grouger Jenkins and Company and having been pressed by Cockshott to reduce the amount of his debt, he had recourse to the above expedient to raise the money, and out of the money so advanced paid Rs. 10,000 to the account of the firm with the Oriental Bank. Gobind Chunder Sein on expiry of the six weeks, applied for delivery of the goods, this was refused on the firm of Gouger Jenkins and Company indemnifying the captain of the ship on board whose ship the goods lay. Gobind then sued in trover to recover the goods. The action was tried by Sir James Colville and Sir Charles M. R. Jackson, who gave judgment in favour of the defendant ; a rule nisi for a new trial on the ground of misdirection (on a point next to be mentioned) having been obtained, and the rule having been heard, and the plaintiff having rested his title under the Factors Act of 1844 and the defendant insisting that there was evidence for which the Court might conclude that the alleged contract with Doogapershad was a mere fraudulent contrivance on the part of the banian in oi^der that he might obtain possession of the goods, and that therefore upon the authority of King.sford v. Merry} and Higgins v. Biuion," the pledge by the banians could give no title even to a bond fide pledgee. The Court decided that it had been rightly decided by the lower Court that the cir- cumstance of the whole transaction were such as that the plaintiff as a reasonable man and a man of business applying his understanding to them ' 2G L. J. Ex , 83. * 26 L. J. Ex., 342. 356 Tiir'] LAW OF AflENCV. would certainly know that the banian had no authority to make the pledge, if not also that ho was acting maid fide in I'espcct thereof against his prin- cipals, and that there was no ground for disturbing the verdict in favour of the defendant. The plaintiff then appealed to the Privy Council. Their Lord.ships held that there had been no misdirection, and on the authority of Navulshaiv v. Brownrigg} approved of the manner in which the case had been left to the jury ; and on the question whether the plaintiff had notice that the banian had no authority to make the pledge, or that he was acting mold fide towards his principals ? held, that the banian had no express authority to pledge, and that even if he had implied aiithority, there was nothing to show that the plaintiff was aware of such an authority or acted upon the credit of it : and further that it was clear that th.e banian had acted maid fide towards his principals, and he being largely indebted to thiem at the time of the transaction, had sought to make a payment to them fraudulently by raising money on their own goods ; and from the circumstances of the case, their Lordships came to the conclusion that the plaintiff must have been perfectly certain that the banian was acting without authority, and although, it was unnecessaiy to say whether witli mala fides, their Lordships added that they did not themselves entertain any doubt that it was so. Effect of fraud in pledging". — But the principal will have a right to re- cover his goods pledged by the agent whenever possession of them has been obtained by fraud. Thus where one Verkade a foreign merchant employed one !Moffat to transmit offers and to act in the ordinary business as a commission agent, and Moffat effected a sale to one Lambe of 40 tons of oil to be delivered in May and June, but before the oil came deliverable, without any authority from Verkade, and without his knowledge, agreed with Lambe to cancel the contract. Verkade shipped a parcel of this oil in pursuance of the contract, the bill of lading of this shipment being di'a^NTi in favour of Verkade or order, and it was by him specially endorsed in favour of Lambe or order and sent to Moffat together with a bill of exchange dra-^A-n upon Lambe. Moffat instead of procuring Lambc's acceptance of the bill, and handing over the bill of lading, took the bill of lading to Lambe and told him that the endorsement on it was a mistake, and requested him to endorse the bill of lading in order that the goods might be entered at the Custom House ; Lambe, believing this, endorsed over the bill generally, thereupon Moffat handed it with insti'uctions for landing and whare- housing to certain wharehousemen ; and on the same day obtained from the plaintiffs an advance of £350 on the security of the oil and gave them an order for the same. Verkade subsequently claimed the oil, and the wharfingers refused ' 2 De G. M. «& G., 452, referred to as a very valuable authority in Kalfenbach v. Leicis, L. R , 24 Ch. D., (78). RIGHT OF PRINCIPAL AGAINST THIRD PARTIES. 357 therefore to deliver it to the plaintiffs, and sued to have it declared that he was entitled to a charge on the oil ; The question before the Court was, whether the pledge by Moffat to the plaintiff was valid against Verkade by- virtue of the Factors Act. Vice-Chancellor Giffard held that if Moffat had become apparently entitled without the act of any third person, it might be that he would have been able to bind his principal Yerkade, but that Moffat was merely employed to negotiate a contract, and the bill of lading was specially endorsed by Verkade to Lambe ; that Verkade had nothing to do with the endors- ing of the bill of lading by Lambe at Moffat's request, and as it was no act of his which put the oil in the power of Moffat the pledge was not protected by the Factors Act.i '■ Vaughan v. Moffat, 38 L. J. Ch., 144. LECTURK XI. lilABIl^ITY OF AGENT TO THIRD PARTIES. (iiMicral rule is tliiit ho in only liiihlo for mis-feasance — Bat wliere lie contracts in his own iiaino h(j is persouully liablo — E.\aini)lo.s — Qaestion whether he is personally liable is one of intention and construction — Effect of cesser clause on agent's liability under charter- party — When no oral evidence admissible to discharge agent from liability in case of written contracts — Rule, no evidence to discharge agent, but there may be to charge principal — Ground for this rule — Presumptions of agent's liability — Where agent acts for a foreign principal — Where the principal is not disclosed — These presumptions are rebuttable — What is sufficient disclosure to prevent liability — Effect of not enquiring for whom agent is acting, when it is known that he does business for himself and for a principal — Custom not to disclose may free agent from liability — Grounds on which the English cases on undisclosed principal are decided — The agent is presumably liable where the principal is disclosed but cannot be sued — Liability of pnblic agents in contract — Liability of Commission agents — Liability in cases of warrant of authority — Measure of damages in such cases — Liability of agent acting under innocent mistake — F(3r mis- representation from a mutual mistake of law — Misrepresentation should be one of fact and not of law — Non-liability where third person induces belief that he will not be liable — Liability to refund monies paid by mistake to his principal after notice — Plea of payment over — Liability for money paid for use of principal but not paid over — Where agent is a stakeholder — To refund money paid to him by coercion — Liability to third persons for refusal to pay over monies as directed by principal — Liability in tort — For mis- feasance — When both agent and third person are gnilty of frand — Liability of masters of vessels in tort — Liability for false and fraudulent statements made with actual fraud — Liability for deceit — Director not liable for frand of co-director — Liability for conversion — Liability of innocent agent for conversion— Effect of appropriation where there is a dispute — Ordinai'y and special damages — Joint tort feasoia in trespass — Liability of public agent for wrongful act — Liability of judicial officers. General rule. — As a general rule an agent is only liable to third persons for mis-feasance ; and the reason of this rule is clear when it is considered that he owes performance of his duties as agent only to his principal, and therefore no suit will lie against him by thii-d persons for non-performance of such duties. But nevertheless, although this is so, he is, as every other person would be, liable to third persons where he negligently or wilfully causes injury to others. And fui-ther he may, as will be next pointed out, render himself liable to third persons by reason of the manner iu which he has contracted with them. But as a general rule he will not be liable on contracts entered into by him on behalf of his principal, in the absence of a contract to that effect.^ ' Ind. Contr. Act, a. 230, para. 1. Seo Ealee Mohun Sircar v. Humauti Eader Mahomed Ali Mima, 25 W. R., 91. LIABILITY OF AGENT TO THTRn PARTIES. 359 Where the agent contracts in his own name. — Where an ag-ent signs a contract in liis own name without qualification, he is, prima, facie deemed to be contracting personally, and is therefore personally liable. Thus where an auctioneer after a sale signed in his own name an agreement which ran as follows : — "I do hereby acknowledge to have sold this day and I the undersigned do acknowledge this day to have purchased," he was held to have rendered himself personally responsible on the contract, l So where a person describing himself as agent and consignee of a certain vessel entered into an agreement in his own name stating therein, amongst other matters, "that the said parties thereto agreed" he was held to be personally liable, the " said parties " being held to be the persons actually contracting.^ So in Lefevre v. Lloyd?' where the plaintiff applied to Maitland and Company to sell some cotton for him, who replied that they could obtain 20c?. per lb for it, if it corresponded with sample. The plaintiff wrote that his friends accepted the offer, and Maitland and Company replied that the party would take the cotton at 2()d. per ft, to be paid for in a bill at 2 months from its arrival. The plaintiff accepted these terms ; Maitland and Company had employed one Lloyd (who at the time of action had died and was represented by his administrator) as a broker to sell the cotton. He havino- on the arrival of the goods ascertained the price drcAv a bill on the purchaser for the amount and delivered it to Maitland and Company, who remitted it to the plaintiff. The bill was dishonoured, and the plaintiff therefore sued Lloyd's administrator on the bill. The defence was that the defendant havino- drawn the bill only as agent for the plaintiff, and without any considei-ation for so doing, the plaintiff not being himself present to do, was not liable. The Court lield that he was personally liable. So when Littledale and Company a firm of brokers sold hemp by auction at their rooms, and gave an invoice describino- the goods as " bought of Littledale and Company," and received part of the price, but failed to deliver the goods ; on an action being brouglit against them In- the purchaser they were held personally liable as sellers.* So again where the defendant an estate agent, conti\acted to sell land to the plaintiff who paid the deposit, the defendant signing a receipt in his own name for such deposit, and the plaintiff also signed an agreement containing the terms of the purchase. On the owner of the land refusing to complete the purchase, the plaintiff" sued the defendant for damages for breach of contract to sell, it Avas held tliat the defendant was personally liable.^ In Cooke v. Wilson,^ the contract ran. " It is mutually agreed between J. and R. Wilson owners of the sliip Jessica now in London of the fii\st part, and L. S. J. Cooke (the plaiiitilV) oti bclialf of tlie » Qrau V. OHtheridge, I M. & U., (US. * Jones v. Littledale, 6 A. & E., 480. * Kennedy v. Go')weia, 3 D. & K., 503. • Long v. Millar, L. R., 4 C. P. D. 450. • 5 Taunt, 749. • 1 C. B. N. S., 153. 360 TnR r,A\V op AfiKNCV. Goolonji^ and M(^ll)niun(> Ilailway Company of tlio ohiior part, that tho .ship should be ready to take on boanl (U'rtain sjjccilicd ^fxjds " //te ratm of freight defer in! nod itpon hy the said partie.s to this agraetnent one-third to he paid in London on receipt of hills of lading, and the remainder by the Geelong and Mel- boui'ne Railway Company at Geelong" ; this contract was signed J. and R. Wilson, S. J. Cooke, the goods were damaged when being taken on board, and Cooke sued "Wilson for damages; Cresswell J., held that Cooke was personally boa'nd by the contract and could therefore sue. Conversely ho would have thereupon been liable. So again in Higgins v. Senior} the contract was "Mr. S. Mead. We have this day sold through you to Messrs. V. Higgins and Son 1,000 tons of varteg iron. (Sd.) " John Senior and Company," " William Senior," it was held that the contract purported to be made, on the face of it, by the defendant Senior and that he was personally liable thereon. So again in Salig Rim V. Jiiggnn Nath,'^ where the defendant's agent unconditionally accepted a bill in his own name, he was held liable. So again in Norton v. Herron,^ where a p(>rson described himself in the beginning of an agreement to grant a lease as makino" it on behalf of another, but in the subsequent part of it stated that he agreed to execute the lease, he was held personally liable. And where a person covenanted for himself and his heirs and under his own hand and seal for the act of another, he was held peirsonally bound by the covenant although he described himself in the deed as covenanting for and on the part and on behalf of such other person.* So in Burrell v. Jones,^ where the plaintiff let an estate to one Jones and, the rent being in arrears, caused a distress to be made for rent, and whilst the bailiff Avas in possession, the defendants who were the solicitors of the assio'nees of the tenant against whom a commission in bankruptcy had issued, applied to the plaintiff's solicitor Mr. Houston to deliver up the distress, and sent him the following signed undei'taking " We as solicitors of the assignees of the said L. J. Jones do hereby undertake to pay Hon. P. R. D. l^urrell such rent as shall appear due to him from the said L. J. Jones, provided it do not exceed the value of the effects distrained;" held that the expression '• we as solicitoi^s undertake," bound those who personally signed it. The question of the agent's liability is one of intention as discover- able from the contract. One test of the agent's liability, is, to see who is by the provisions of the contract the person who is to carry it out ; but in each case the question is, however, whether the intention of the agent to bind him- 1 f^ >t. & W., 844. * Appleton v. Biulls, 5 East, 147. * 1 Agra H. C, 137. • 3 B. A- Aid., 47. M C. & P., 648, Ry. & M. 229. LIABILITY OF AGENT TO THIRD PARTIES. 361 self personally appears. i Thus in Tanner v. Christian,'^ a written agreement was expressed to be made between Christian on behalf of one Norris, and Tanner, the effect of this agreement was — that Christian on the part of Norris agreed to let to Tanner a house for a term of years, Tanner paying rent to " Christian for the use of Norris." No auction to be held on the j^remises with- out the consent in writing of Christian on the part of Norris ; Tanner to take a lease and execute a counterpart, " when called upon to do so by Christian on the part of Norris " — Christian signed in his own name. Norris did not sign. In an action by Tanner against Christian for not completing the lease, held, that it sufficiently appeared to be the intention of the parties that Christian should himself contract ; and that, therefore, he was personally liable. " There is no doubt," said Wightman J., " That a person acting for and on behalf of another, may contract in such terms as to bind himself personally. In each case the question is whether the intention that he should do so appears. One test is, to see who is by the provisions of the conti-act to act in the performance of it. Now here Christian, though for and on behalf of Norris, for whom perhaps he was merely agent, has made a contract by which he himself is to do all that is to be done. Taking the whole language of the agreement together, it is not Norris, but Christian on behalf of Norris, who agrees to let. The rent is made payable to Christian, he is to give the licence to authorize the holding of auctions On the face of it, it appears Christian is to act, and that being so, it is precisely the same as Norton v. Herron^ in which the defendant on be- half of another agreed that he, the defendant, should grant a lease, and was held personally liable on that ground." So also in Williamson v. Barton,'^ where the defendant attended an auction and bid for certain goods which Avere knocked doT\Ti to him, whereupon the auctioneers immediately asked him for his name in the usual way ; he gave it, and the auctioneer wrote it down as the name of the buyer. The goods were afterwards delivered. On the defendant being sued for the price he alleged that he bought only as agent for one Smith and had not made himself liable. It was proved that the defendant was the foreman of Smith, who was a contractor for some public woi'ks in the neighbourhood, that in truth, the goods were bought for Smith, and that his carts were used to carry away the goods, and that the goods (hay and corn) were consumed by Smith's horses ; and further that the plaintiff knew the defendant to be Smith's foreman, but knew nothing as to his agency on that occasion ; but that the auctioneer knew nothing of Smith and knew nothing of the defendant or his position. Wilde B., ' Snoprnmonian Sctlij v. ITeilgers, I. L. R., 5 Calc, 71. Mackiimon, Mackenzie and Co. v. Lang Moir, I. L. R., 5 Bom., 58k Thoinpsou v. Davenport, 2 Sm. L. C, 420, (0th ed.) " 4E1. & HI., 591. " Ry. & M., 220, 1 C. & 1'., ol8. * 7 JI. & N., 899. X X 362 Tlir; I, AW OF AriF.N'CY, on tlu'st' fiicts, said : " It is well SL-tticd that an agent is responsible, though known by the other party to be an agent, if, by tlie terms of the contract, he makes himself the contracting party see Iligrjins v. Senior} And the late cases arising on chartci'parties have illustr.ated this principle forcibly, Leonard v. Robinson,^ Parker V. Winlow."^ His Lordship (with whom Channel B., agreed) eventually held that a person who bids at an auction and gives his name simply to the auctioneer, must be understood to be the contracting party, and ought to be held liable as such ; but that even if the evidence warranted the jury in find- ing that the plaintiff actually knew that the defendant was purchasing as agent, the question would remain whether the defendant by his conduct made himself per- sonally liable. That his conduct was that of a man buying for himself, and not for another person ; Pollock C. B. and Bramwell B., however, were of opinion that there was evidence to show that the defendant purchased as agent only. So again where a charterpai'ty was entered into between A. of the ship " Celerity " and B. agent of C, which was signed by A, in his own name, the Court held that A., was personally liable, stating that "the only ground for rebutt- ing his personal liability was, that he says he is agent for another, but he may well contract and pledge his personal liability, though he is agent for another."* And in Paice v. Walher^^ the contract was " Bought of Messrs. Walker and Strange, London, about 200 quarters wheat (as agents for John Schmidt and Company, of Danzig) " and was signed by the defendant's firm Walker and Strange without qualification, the Court, held the defendants personally liable ; but this decision has been questioned in Gadd v. Houghton,^ and cannot therefore be considered as binding. In the case last mentioned the contract ran " Mr. George Gadd, we have this day sold to 3-ou on account of James Morand and Company, Valencia, 2,000 cases. Valencia oranges Sd. J. C. Houghton and Company." the Court held that the words " on account of " were clear to show that the defendants did not intend to be personally liable. The rule as laid do\\"n in Smith's Leading Cases,'' in Thompson v. Davenport, to determine whether agents contract as principals, is as folloAvs : — "The question whether the person actually sig^iing the contract is to be deemed to be contracting personally or as agent only, depends upon the intention of the parties as discoverable from the contract itself, and it may be laid down as a general rule, that whei'e a person signs a contract in his own name Avithout qualification, he is prima facie to be deemed to be a person contracting personally. Aaid in order to prevent this liability from attaching, it must be apparent from the other portions of the * 8 M. & W., 834. ' 5 El. & Bi., 125. * 7 El. & Bl., 942. * Purhcr v. Winlou; 7 El. & Bl , 042. * L. R 5 Ex., 173. » L. R. 1 Ex. D., 357. ' 2 Sin. L. C, 420, (9th cd.) LIABILITY OF AGENT TO THIRD PARTIES. 363 document that lie did not intend to bind himself as principal." For instance, he may if entering into a charterparty in his own name -without qualification save himself by a cesser clause. The agent can expressly save himself from liability. — But even if he contracts in his own name he may expressly exempt himself from liability. Thus when entering into a charterparty he may escape liability by the insertion in the charterparty of a cesser clause ; this clause provides that the liability of the agent is to cease as soon as the cargo is loaded ; and where there is siicli a clause, he will not be liable for anything that may happen after the loading •} or he may save himself by so wording the contract as to make it clear on the face of it, that he is oul}- an agent with regard to it. 2 No oral evidence admissible to discharge agent from liability, in case of written contracts. — Where an agent has entered into a written con- tract in his own name, no oral evidence will be admissible for the piu'pose of exonerating him from liability. This appears clear from Section 92 of the Evidence Act (subject to the provisos there set out) which section lays down that where the terms of any contract have been reduced to the form of a document and have been proved, no evidence of any oral agreement or state- ment shall be admitted as between the parties to such instrument for the pur- pose of contradicting, varying, adding to, or subtracting from its terms. On this point there is a dictum of !Mr. Justice Wilson in Soopramanian Setty v. Heilgier,^ a case on the question of liability of an agent under s. 230 of the Contract Act, to the effect that he considered that if on the face of a ^%-iitteu contract an agent appears to be personally liable, he could not escape liability by the evidence of any disclosure of his principal apart from the wiitten contract. Rule, no evidence admissible to discharge agent, but may be admitted to charge principal. — The rule of law in England on this point is that parol evi- dence to discharge the agent is not admissible ; but although it is not admissible to discharge the agent, yet it is admissible to charge with liability the principal. As to whether evidence to charge the principal in this countiy would be admissible apart from the contract there is not much authority. The reasoning on which this rule of English law is based is given in Higgius v. Senior* Jones v. Littledale^ and Beckham v. JDrakeJ In Higgins v. Senior, Parke B. said : — " The question in this case ' Green v. Kophe, 18 C. B., 519. Ogleshy v. Tglesias, 1 El. & BI. E]., 930. - Oadd V. Houghton, L. R., 1 Ex. D., 357. Deslandes v. Gre^^orii, 2 El. & EI., 602. Soopro- monian Sefti/ v. Heilgevs, I. L. 11., 9 Calc, 71. Mackinnon, ilucketizie v. Lanff Muir, I. L. 11., 5 Bom., 584. " I. L. R., 5 Calc, 71. * 8 M. & W., 844. * G A. & E., 486. * 9 M. & W., 79. 3«!| I hi; law of AdIINCV. is wlictlicr ill an ac( i(jn on fin :i<^rccitifiit in wiifiny iMici)orf in{^ on llio fiu-c of it to bo iniiilc i»y the defendant, and subscribed l>y liini, foi- the wale and delivery by him of goods above the value of £10, it is competent for the defendant to discliarf»'e himself on the plea of non-assumpsit, by proving that the agreement was really made by him by the authority of, and as agent for, a third person, and that the plaintiff knew those facts at the time when the agreement Avas made and signed. Upon consideration we think it was not. There is no doubt that where such an agreement is made, it is competent to show that one or both of the contract- ing parties were agents for other persons, and acted as such agents in making the contract, so as to give the benefit of the contract on the one hand to,^ and charge with liability on the otlicr,^ the unnamed principal, and this, whether the agi'eement be or be not required to be in writing by the Statute of Frauds ; and this evidence in no way contradicts the written agreement. It does not deny that it is binding on those whom, on the face of it, it purports to bind ; but shows that it also binds another, by reason that the act of the agent in signing the agreement, in pursuance of his authority, is in law the act of the principal. But on the other hand to allow evidence to be given that the party who appears on the face of the instrument to be personally a contracting party, is not such, would be to allow parol evidence to contradict the written agreement, which cannot be done. And this view of the law accords with the decisions, not merely as to bills of exchange^ signed by a person without stating his agency on the face of the bill, but as to other written contracts, namely, the cases of Jones V. Littledale,'^ and Magee v. Atkinson.^ It is true that the case of Jones v. Littledale might be suppoited on the ground that the agent really intended to contract as principal ; but Lord Denman in delivering the judgment of the Coui't lays down this as a general proposition, ' that if the agent contracts in such foi'm as to make himself personally responsible, he cannot afterwards whether his piincipal were or wc)-e not known at the time of the contract, relieve himself from responsibility." The evidence was held not to be admissible. In Jo7ies v. Littledale, the case above referred to, Loi'd Denman says : — " There is no doubt that evidence is admissible on behalf of one of the contracting parties to show that the other was agent only, though contracting is his own name, and so to fix the real principal, but it is clear that if the agent contracts in such form as to make himself personally responsible, he cannot afterwai"ds, whether his principal were or were not known at the time of the contract relieve himself from that responsibility." * Garrett v. Handley, 4 B. & C, 64J.. Bateman v. Phillips, 15 East, 272. * Patterson v. Gundasequi, 15 East, 62. Calder v. Dohell, L. R., 6 C. P., 486. ■ So%verhy v. Butcher, 2 C. & M., 371. Leferre v. Lloyd, 5 Taunt, 749. * 6 A. & Iv,486. * 2 M. A- \V., 440. LIABILITY OF AGENT TO THIRD PARTIKS, 8G5 Ground for this rule. — The ground on which this doctnne as to evidence being admissible to charge with liability a principal not named in the contract rests, is explained by Parke B., in Beckham v. Brake} to be, that the act of the agent is the act of the principal, and the subscription of the agent is the sub- scription of the principal. Baron Parke, however, excepts cases of bills of exchange, which cases he treats as an exception standing upon the law-mer- chant.2 The only English case in which any learned Judge appears to doubt the distinction between the admissibility of parol evidence to charge with liability an unnamed principal, and its inadmissible to discharge the agent from liability, is that of C alder v. Dohell,^ where Mr. Justice Montague- Smith says : — " I have felt some doubt as to the soundness of that distinction. How- ever it has been followed in a great number of cases, and is now well estab- lished ; and although technical, it appears to consist with the practical busi- ness of mankind. Whether strictly logical or not, it is recognized by law." So again in Trueman v. Loder,* evidence was allowed to be given to charge the principal. There the defendant was sued on a broker's note which ran, " Sold for Mr. Edward Higginbotham." It was proved that the defendant, a mer- chant of St. Petersburg, had established Higginbotham in London to conduct the defendant's business in the name of Higginbotham, which name was painted outside the business premises and used in all contracts. It was agreed that the name of Higginbotham was not in the written contract, and the Court said : — " Among the ingenious arguments pressed by the defendant's Counsel, there was one which it may be fit to notice ; the supposition that parol evidence was introduced to vary the contract, showing it not to have been made by Higginbotham, but by the defendant who gave him the authority. Parol evidence is always necessary to show that the party sued is the person making the contract and bound by it. Whether he does so in his own name or in that of another, or in a feigned name, and Avhether the contract be signed by his own hand, or by that of an agent, are inquiries not different in their nature from the question who has just ordered goods in a shop. If he is sued for the price and his identity made out, the contract is not varied by appearing to have been made by him in a name not his own If the defendant chose to appoint an agent to carry on trade for him in the name of Higginbotham, he clearly authorized that person to do all that would be necessary for him to can-y it on ; among other things, to employ a broker to sell for him ; and it does not lie in his mouth to deny that the name of Higginbotham so inserted by the broker in the sold note is the defendant's own name of business." The question has ' 9 M. & W., 79, (96). * See as to tliis in this country lecture ou " Liability of Principal to Third Parties." * L. R., r>C. P., 486, (496). * 11 A. & E., 589. ',U]C) riir LAW i.K AriF.N'f'v. boon ilisousscd in I ho iiutcs to tlic Iciuliii;,' case of TlKjinpaon v. Davcnporl,^ tliere it is said : — "It has been said, ihiit if A contract in writing without naming his pi-iiicipal, so that ho appears upon the writing to be himself the principal, does not a creditor who seeks to show, that while thus professedly con- tracting for himself, he really contracted for a principal, endeavour to infringe fliis nile of evidence, by adding to the written contract a new term at variance witii the written terms ? This question, it is, however apprehended, must i-eceive different answers upon different occasions, answers vai'ying according to the object with which it is sought to introduce the parol testimony, which it is submitted, never can be heard for the purpose of discharging the agent, but may always be so for that of charging the principal." That parol evi- dence can never be admitted for the purpose of exonerating an agent who has entered into a written contract in which he appears as principal, even though he should propose to show, if allowed, that he mentioned his principal at the time of entering into it seems to be now well established. "^ The Engli.sh cases, therefore, show that parol evidence may be given to charge the principal but not discharge the agent. In the Indian cases Mr. Justice Wilson* has thrown out that parol evidence is not admissible apart from the contract to discharge the agent ; The case of Purmanandass Jivandass v. Cormaclfi was not one ao-ainst an agent, but was a claim made against the Company (the principal) and does not therefore touch this point, althoiigh there the Company contended that credit had been given to the agent and evidence was received on that point. In Bommee Chetty Bamiah v. Visvanada Pillay,^ Mr. Justice Keman in the year 1871, laid down that evidence was admissible to charge with liability a prin- cipal, althous-h not to discharge the agent ; and it appears that their evidence was taken as to the cii'cum stances under which the note on which the case was founded, was given ; the suit, however, was not one in which it was sought to make either the principal or the agent liable on the note, but Avas the converse question of the pi-incipaVs right to sue — whilst in Sheo Churn Sahoo v. Curtis^ no such evidence was allowed, but that case was again on a promissory note, and probably was decided in accordance with the law merchant. If section 92 of the Evidence Act is applicable (for it has been held that that section only applies where it is intended that the whole of the terms of the contract have been reduced into writing^) the question is w^hether the seeking to show that a person other than or as well as the agent is also liable on the contract, is in » 2 Sm. L. C, 9th ed., p. 423, 42 1. See also Taylor on Evidence, Vol. 2, p. 982, (8th ed.) • Sooprotnonwi Setty v. Heilgers, I. L. R., 5 Calc, 71. ' Furmandass Jivandass v. Cormack, I. L. R., 6 Bom., 326. • 3 W. R., 140. • G Mad. Jnr., 305. • Jumna Doss v. Sreenath Roy, I. L. R... 17 Calc, 176, (uute). LIABILITY OP AGENT TO THIRD PARTIES. 367 any way " adding to or varying " tlie contract, if not it would be admissible ; such evidence lias been often held not to contradict the terms of the document. Presumption of agent's liability. — Where the agent authorizedly contracts on behalf of his principal no liability will attach to him,^ save in the following cases, 1. Where the contract is made by him for the sale or purchase of goods for a merchant resident abroad : 2. Where he does not disclose the name of his principal ; 3. Where the principal, though disclosed, cannot be sued. In these three cases a presumption ai'ises that the agent is contracting per- sonally'^ ; this presumption may, however, be rebutted by the terms of the con- tract itself,^ or where there is no written contract by inference from the cir- cumstances of each case.^ Where agent acts for foreign principal. — First, where the agent makes a sale or purchase for a merchant residing abroad. In this case the presump- tion is that he is personally liable ; that presumption may, however be rebutted by the terms of the contract itself, or by the circumstance of the case as show- ing what was the true intention of the contracting parties. The grounds on which this clause of section 230 of the Contract Act is based, is, no doubt, the rule of English Law on this subject ; that law holds such an agent to be personally liable, partly on the ground that credit is given to the agent, and partly upon the ground of general convenience, and the usage of trade. At first the early cases of Thompson v. Davenport^ and De Gaillon v. L'Aigle,^ appear to have treated their liability as more than a prima facie one, but in later cases the dicta of Lord Tenterden and Eyre C. J. in those cases have been con- sidered to show only a prima facie liability. The later cases of Armstrong v. Stokes,^ Elhinger Actiengesselschaft v. Claye'' and Hutton v. Bulloch,^ all of which were decided subsequently to the date on which the Indian Contract Act re- ceived the assent of the Governor- Gener-al in Council on the 25tli August 1872 are, therefore though instructive on the point of the liability of an agent act- ing for a foreign principal, of no direct bearing on the intention of the framcrs of that Act. There are no Indian cases decided on this clause of section 230 ; there is, however, one case on the question decided pi-eviously to the Contract * Ind. Contr. Act, s. 230, para. 1. Uurrigh Chunder Telapattur v. O'BrieH, 14 W. R., 248. * Ind. Contr. Act, s. 230, paru. 2. Per Wilson J., in Soopromoniaii Setttj v. Heihjcrs, I. L. R., 5 Calc, 71. 8 Williamson v. Barton, 7 U. & N., 899 ; 31 L. J. Ex., 174. * 9 B. & C, 78. » 1 B & P., 3fi8. * L. R., 7 Q. B., 598. ' L. R., 8 Q. B., 313. " L. R, 8 Q B., 331. nOS NIK LAW (»K Ar;i;N'cv. Act, viz., McGaviii v. Wilson.^ It was s(nif,'lit to injikc tlic section applicable in Mahomed Ally Ebrahim Pirkhan v. Schiller Dosorjne and Ouinpany* where it ■was contended that a certain indent constituted a contract for sale by certain agents in Bombay on behalf of a manufacturer residing in Paris, and that the agent had entered into a contract for a foreign principal and was therefore lialilt' on fill! contract as the party to whom credit had been given ; but the Court lu-ld that the indent in question was merely a letter of instruction to the agents to buy for the niei'chant in Bombay, and that it would be straining language too far to hold that the document amounted to a contract of sale on account of a foreign manufacturer ; and the case therefore is only an authority as to the liability and position of a commission agent with instructions to place an order. In determining whether the agent in the case provided for by cl. 1 of para. 2 of s. 230 of the Contract Act, is personally liable, the terms of the con- tract itself where there is a written contract and the circumstances of the case where it is not in writing, and the intention of the parties must be looked at, and if those terms and intentions are such as to rebut the fact of his being personally liable, he will not be held to be so. Where the principal is not disclosed. — Secondly, where the agent contracts for a principal but does not disclose that principal's name, the presump- tion is that the agent will be liable,^ although this presumption is rebuttable. In Hanson v. Bobdean,'^ where the plaintiff bought a post obit bond at an auc- tion, where the defendant acted as auctioneer, and the bond not being assigned within the time agreed upon by the conditions of sale the plaintiff brought an action against the auctioneer. The name of the principal was not mentioned at the time of the sale, and one of the conditions was, that £25 per cent., should be paid as a deposit, but although the plaintiff was to give £645 for the bond, only £50 was paid down, Avhich it was proved the defendant agreed to accept as a deposit. The defendant contended that the principal, and not the auctioneer, was liable to an action. Lord Kenyon, said, " where an auctioneer names his pi'incipal, it is not proper that he should be liable to an action, yet it is a very diffei-ent case when the auctioneer sells the commodity without saying on whose behalf he sells it ; in such case the purchaser is entitled to look to him personally for the completion of the contract." In Franldyn v. Laniond,^ which was a suit brought against some auctioneers for not transferring cei-tain i*ailway shares sold by them to the plaintiff ; it appeared that the plaintiff bought at auction thi-ee lots of one hundred railway shares each, one of the conditions of sale being " the balance of the purchase money shall be paid at the office ' 1 Ind. Jnr., 405. ' Pcake's N. V. C, 103. » I. L. R., 13 Bom., -170. * 4 C. B., 637. " Jiul. Conti-. Act, s. 230, p;iia., 2. LIABILITY OF AGENT TO THIRD PARTIES. 369 of the auctioneers on the day following the sale, except in cases whei'e any- special transfers are required, and to such the utmost expedition shall be given." After the sale the plaintiff received the three hundred shares, together with a bill of parcels describing the transaction as a sale of " three hundred shares," and paid the price. The name of the owner of the shares was not disclosed at the time of sale, but upon the plaintiff applying for a transfer, the constitu- tion of the Company requiring a transfer by deed, the auctioneers informed him that they were only acting as agents in the transaction, and referred him to their principal. In an action against the auctioneers for not transferring, held that they had not disclosed their principal at the time of the sale and were therefore perso- nally liable. In Pater v. Gordon,^ decided by the Madras High Court in February 1872 previously to the Contract Act, the defendants who were known by the plain- tiffs to be acting as agents for the captain and owners of the ship Durley agreed with the plaintiffs to carry certain goods of the plaintiffs on board the ship from Madras to Calcutta. The defendants did not at the time of the contract in terms say that they contracted only as agents, and the plaintiffs did not know the names of the owners, or of the captain. The question referred to the High Court was, whether the facts above stated showed a sufficient dis- closure of the defendant's principals to bring the case within the rule relating to contracts made by agents on behalf of disclosed principals. The Court held, that in the absence of anything more than knowledge that the defendants were acting as agents of the master and owners of a ship in the Madras roads, a decision declaring the agents liable, was strictly in accordance wdtli English law. A case^ lately decided by the Appeal Court, on reference from the Calcutta Court of Small Causes, has, however, decided that in the following written contract tho broker did not disclose his principal and was therefore liable. There, tlie con- tract was : " Sold this day by order and for account of E. E. Gabboy to my principal 4 per cent. G. P. N.'s for 200,000, at 98-11 clear of brokerage. (Sd.) A. T. Avetoom, Broker." This note was endorsed by way of acceptance " A. T. Avetoom for principal." The plaintiff sued the defendant who was a broker, and who was acting for both parties for damages for failure to take up his conti'act for the purchase of these Government Securities. The defendant at the time of the delivery of the broker's note to the plaintiff informed the plaintiff that he was unable to give the name of his principal and said to him, " if you won't accept the con- tract you are at liberty to do so " ; on the date for delivery the plaintilf teiulored the paper to the defendant, and he refused to accept it, as he considered ho was not personally liable under the contract. He, however, 1 nK.iulli and 24 ' 7 Mad. II. C , 82; 7 Mad. Jnr., 215. ' Gubbo)/ V. Avct'iom, to be report el in I. L, Iv., 17 CnU\ V V ,•^70 Mil I \\V 'll' Ai.KNCV. (liiy.s iifli-i- l.lui CDiit.iiict (litsclu.sc.d liis prlnciicil. Tliu Cliicf J u'l^'c licl'l iIkiIscc- fciou 2:J() of Iho Contnuifc Act assumcil IHII knovvledgoon both sides tli;it tlu- agent is filtering in(i> a coiiiiiicf only as a'^ciit iov some princi[)al whose iiaine he does not (liseh)so, and Ihci-c being no diselosuro of the prineipal's name at the time th(> eontract was made, the presumption was tliat the broker was liable, a sub- sequent disclosure being insufficient to rebut the presumption, and decided the case in favour of the plaintiff subject to the opinion of the High Court as to whether or n(jt upon tlie terms of the contract as they appeared on the face of the sold nolo, ami on the tcrius of s. 2:^.0 of the Contract Act his judgment was correct. The case was heard by the Chief Justice and Mr. Justice Pigot, and in tho argument the cases of Southwell v. Buwdltch,^ Gadd v. Houghton,^ Fleet v. Mudon,^ Soopromonian Setty v. Heilgers,* Machenzie, Lyall v. Lang Moir and Company,^ Pike V. Ongley,^ and Paice v. Taylor,'^ were cited, the Court held that there Avas on tho contract nothing to rebut the personal liability of the broker; the words " A. T. Avetoom for principal," endorsed on the conti-act merely showing that tho broker was acting for a real principal ; and were not sufficient to rebut the pre- sumption arising under s. 230 of the Contract Act, which presumption only arises when there is a principal — and further that the case of Fleet v. Murton and Pater v. Gordon,^ were sufficient authority to show that the agent might be liable notwithstanding words such as were used in the contract before the Court. The presumption of the agent's personal liability is capable of being rebutted. — Where the contract is in writing the presumption that the agent is personally liable may be rebutted by the terms of the contract itself, and to that end the whole contract will be looked into. Thus in Mackinnon, Mackenzie and Company v. Lang, Moir and Company,'^ a case on a charterparty, the plaintiffs agreed " as agents for owners of the steam ship Oakdale," and the chax'ter provided that the o\viiers should bind themselves to receive the cargo on board, and that the master on behalf of the owners should have a lien on the cargo for freight ; the charterparty was signed by the plaintiffs and defendants in their own names ; the plaintiffs sued the defendants for breach of the charter- party in refusing to load, it was held that the plaintiffs on the face of the contract clearly indicated that they were acting as agents and that the contract was entered into by them on behalf of theii' principals. They were therefore held to be not in a position to sue : and the right to sue and the liability to be sued being recipi'ocal, they would in the converse case have been held not liable to be sued. So also in Soopromonian Setfy v. Heilgers,^^ it was held that » 45 L. J. C. P., (530 ; L. R., 1 C. P., 374. « L. K., 1« Q. B. D., 708. » L. R , 1 Ex. D., 357. * L. R , 5 Ex., 173. « L. K., 7 Q. B., 126. » 7 Mad. H. C, 82, 7 Mad Jur., 215. ♦ I. L. R., 5 Calc, 71. » 1. L. R., 5 Bora., 584, » 1. L. R., 5 Bom., 584. "» I. L. R , 5 Culc, 71. IJAnil.TTY OF AOENT TO THIKD PARTIES. 371 tlie presumption arising under s. 230 was rebutted by the terms of the contract itself. There the defendants " as agents for and on behalf of the owners of the steamship Lumley Castle " chartered the said steamship to the plaintiffs for fivo months, the charter providing that the steamer should be provided with a proper and efficient crow of seamen, engineers, stokers, firemen, and other neces- sary persons for working cargo with all despatch ; and that in taking in and dis- charging cargo, the master and his crew with his boats should aid and assist to the utmost of their power, and that the owners or agents of the steamship should be held responsible to the charterei's for any incapacity, want of skill, insobriety or negligence on the part of the master, officers, engineers etc. of the ship, but the names of the principals were not disclosed in the charterparty, although their names were verbally disclosed before the charter was signed ; it was thcro sought to hold the agents liable for refusing to supply stevedores and other persons in addition to the crew, it being contended by the defendants that they were not liable as parties to the contract. Mr. Justice Wilson said : — " The liability depends on s. 230 of the Indian Contract Act the present contract is one in terms made by Messrs. Heilgers and Company as ag'ents for and on behalf of the owners of the Steamship Lumley Castle. It is signed " P. W. Heilgers and Company, agents for owners of Steamsliip Lumley Castle." It follows, if the case be governed by the first part of the section, that they are not bound unless the terms of the contract are such as to show that they meant to bind themselves personally. I find nothing to that effect in the contract. On the conti'ary, I think, an intention not to bind themselves is plainly shown. There are only two clauses in the contract which can be thought to point the other way, it is said " the said agents covenant and agi'ee with the charterers in the manner following," I think that means that they covenant as agents for, and on behalf of their principals. The other clause is the later one, which says, that the master shall be responsible in certain instances, and again that the owners or agents shall be responsible for the consequences of certain kinds, I think the meaning is, that the owners contract that the master shall do cei'tain things, and the owners contract that they or their agents shall make good certain losses. But it is necessary to look also at the second part of the section. It says " such a contract (tliat is, a contract by the agent personally) shall be presumed to exist," where any of three specified conditions exists. I think that means that such a contract shall be pi^esumed to exist unless the contrary appears. That seems to me the natural meaning of the words. And further it is legitimate here to refer to the Indian Evidence Act, an Act having specially to do with presumptions. Section 4, says ' whenever it is directed by this Act that the Court shall presume a fact, it sliall regard such fact as proved unless and until it is disproved.' We may 1 think properly ai)ply the same con.structiou to the section of the Contract ;^72 ii'K i.wv 111' .\<:knvv. Act, iiiiil |.ii>iiiiu' llif a^''ciil lu Iji' |R:r.soinilly liaMc, iiiilus.s in any of tin: .speci- fied easi'S ill! intention to the contrary is shown. Now one of tliesc specified cases, is, w heie " the agent docs not disclose the name of his pi-incipal." Two meanings liavo heen proposed for those woids. C'onnsel for the phiintifT, Mr. Hill, siivs th(>y mean (in the case of a certain contract) where the name of the iiriiicipal is not disclosed on the face of the contract. Mr. Phillips, says that any disclosure is sufficient. I am inclined to think Mr. Hill's view is riffht, though it is not necessary, for the reasons I shall state, to decide the point. But I incline to think that these words must be read subject to the provisions of s. 92 of the F]vidcncc Act, and tluit if on the face of a written contract, an agent appears to be personally liable, he could not escape liability by the evidence of any disclosure of his principal's name apart from the docu- ment. Still, if this be so, if this is a contract on behalf of an undisclosed princi- pal, so as to bring the case within the second clause of the section, I think the defendants are, nevertheless, secured against personal liability, because the prima facie presumption of an intention to contract personally is rebutted by the language of the contract itself. If Mr. Phillips' contention be right, and the disclosure of the principal may, to satisfy the section, be in the document or outside it, then the matter is clear. The agents did not disclose the names of their principals at the time of the contract, and the case falls within the first, not the second clause of the section ; upon any view I think that the defendants are entitled to have the suit dismissed."^ So also in Hasonhhoy Visram v. Clapham,^ Avhere Finlay Muir and Company " as agents for the master and owners of the Steamship Hutton," lot the ship to one Essa Ahmed for three and not more than four months, for Rs. 15,000 per month, payment thereof to be made in cash fortnightly in advance to owner's agents in Bombay. Mes.srs. Finlay Muir and Company signing the charter as " agents for the master and owuicr of the Steamship Hutton " Latham J., held them not to be liable on the contract under s. 230 of the Contract Act, although they were liable under s. 235 : the case being in his opinion, having rcgai'd to the language of the instrument, even stronger than the cases of Soopromonian Setty v. Heilgers,^ Machinnon, Maclcenzie and Company v. Lang Moir and Company,^ which cases his Lordship said agreed with the English decisions of Fleet v. Mnrfo7i,* Wagffaff v. Anderson,^ and HutcMmon v. Tatham ;^ adding that he could not agree with Mr. Pollock in his work on Contracts at [>. 121 where it is suggested that thei'e * Soopromonian Setty v. Heilgers, I. L. E., 5 Calc, 71. " I. L. E., 7 Bom., 51. ■ I, L. R., 5 Bora., 584. ♦ L. R., 7 Q. B., 126. * L. R , 5 C. P. D., 171. • L. R., 8 C. P., 482. LIABILITY OF AGENT TO THIRD PARTTK:^. 373 was a possible difference between the English and Indian law as to the liability of agents for an undisclosed principal ; and that he was unable to consider the weight of Mr. Pollock's opinion as counterbalancing that of the two Indian deci- sions referred to, with which he agreed, and as further Mr. Pollock did not appear to have considered the effect of the words " shall be presumed to exist," or what evidence is sufficient to displace the presumption. This point was previously referred to by Bayley J., in Purmanandass Jivandass v. Cormach.^ In the case last mentioned it has been held that sub-clause 2, section 230 is inapplicable when the agent has made himself personally liable by a written agTeement, it being in such a case incorrect to presume a contract on the agent's part when he has made an express contract on which he is liable.* What is sufficient disclosure. — As to whether the disclosure of the name of the principal must be on the face of the contract to meet requirements of section 230, the Bombay High Court do not consider it necessary that in the case of a written contract, the disclosure must be on the face of the contract itself, as was thrown out in MacMnnon, Mackenzie and Company v. Lang Moir,"^ Mr. Justice West has decided that actual knowledge of the principal's name is equivalent to disclosure. As to this, his Lordship says : — " A presumption, it is said, arises that an agent may sue and be sued where he has not disclosed the name of his principal. " Disclosure," no doubt, means to make known, and here perhaps, there was no declaration — probably not. But the case may be supposed of the agents having contracted with the same charterers for the same ship shortly before, or of the charterers to the agent's knowledge being by other means acquainted with the owner's names. In such a case a disclosui'e would be im- possible, yet I do not think that the presumption would operate. The essential point is the knowledge, and here the name of the ship and the registry number being given, the defendants not only knew that the agents were not owners, but could immediately find out, if they did not know before, whom the owners were. This I think was equivalent to actual knowledge, and actual knowledge is equi- valent to disclosure, the sole object of Avhich would be to convey such know- ledge." Mr. Justice Wilson has, however, intimated in Soopranundan Setty v, Heilgers^* that no disclosure apart from the contract can relieve the agent from liability. On the other hand the Chief Justice Sir Comer Pcthcram in xivetoum V. Crubhoy,^ threw out in the course of the argument, that he was by no means prepared to say that the disclosure must be on the face of the contract. Peacock C. J., has, in the case of Gmvie v. Dhurmsee Pooujabhoy,'^ infiinuted, (tliougli tlie intimation is nhiter and the case was decided in 18(i()) tlint a coiiti-acf luiide witlv ' T. L. R., G Bom., (857). •• I. L. R., 5 Calc, 71. * T}>[(\, p, (S,'-,7). ' To bo reported in I. L. R., 17 Cilc. ^ I. L. R., 5 liuni., 58i. • 2 lud. Jur., N. S., 75, (8G;. ;{7I- Tiir i.Aw (>F \fir\<'T. oxprcHS Vcfcl'i'iico to ii |iriiici|i:il, |1|(Uil;1i idI liy imiiic. woiiM nut ronlul' tlio li^oiit pcrsoiijill y lialilc jis tlio a^^eiiL i»f an iiiidisclosrd |)riiifi|iiil. 'I'lio exj)reHH rcfcronco tliure I'd'cn'od to was in tlicHi- woi-ds "as aj^onts for flic owncis of tlie sliip Sir JainRr< jet" Family." Effect of not enquiring whether broker is acting for himself or for prin- cipal where it is known that the broker does business in both ways. - Alllioii<^h as a general lule, a pcr,sit of dealing both for princi- pals and on his own acccnmt, has been held in England not to convey an assinance that he is selling on his own account, but is on the contrai-y equi- valent to an express intimation lliat the ])i'operty being sold is either the property of the broker or the property of a principal who has employed him as agent to sell, and a purchaser who is content to buy on such terms cannot when the real principal comes forward, allege that the bi'oker sold the property as his own. Bnt if he desires to deal with the broker as a principal and not as agent in order to secure a right to set off he is put upon enquiiy ; and if the broker refuse to state whether he is acting for himself or for a principal, the buyer may decline to enter into the transaction, but if he choses to purchase without enquiry, or notwithstanding the broker's refusal to give information, he does so with notice that there may be a principal for whom the broker is acting as agent. ^ Local custom in case of hundis. Custom not to disclose may free the agent from liability. — But notwithstanding an agent is in general liable to third persons on notes or contracts entered into with tliem in his own name, where there is a local custom or usage for such agents to issue hundis in their own names without making themselves liable thereby, such custom will prevail.* Thus in Ilari Mohun Bysak v. Krishna Mohan Bysak,^ Hari Mohun and another who were gomastas of the acceptor drew a hundi in their own names in favour of the plaintiff payable 60 days after date, which was accepted by one Sham Sundar Bysak. Some months after the hundis became due, the acceptor paid the drawees and afterwards became insolvent. The drawees alleged that ten months after the hundi became due they gave notice to the drawers and to the acceptor that unless they paid up, a suit would be brought against them. The suit was brought and the drawers contended that they drew as agents, and that therefore according to raei-cantile usage at Dacca at which place the bill was drawn, they were not liable ; the usage being for agents to draw hundis on their principals without » Cooke V. Eshelby, L. K., 12 App. Caa., 277. » liid. Contr. Act, s. 2. Act XXVI uf 1881. s. 1. » U 13. L U. App., 1. LIABILITY OF AGENT TO THIRD PARTIES. 375 disclosing the fact in the hundi ; and that on proof of such custom the drawer was not liable. Evidence was given to show that Sham Sundar wrote the body of the hundi, and that the drawers were his gomastas and were living with him. The Subordinate Judge found in favour of the custom and held the defendants not liable ; the District Judge reversed this decision, finding that the custom probably existed, but stating that the defeiidants had not signed as gomastas. On appeal, Glover J., said : — " The Judge disposed of the case on the technical rules of English law, and took no notice of the evidence on the record as to the prevailing local custom ; he decided against the defendants simply on the ground that the bill does not show that it was drawn by the defendants as the agents of Sham Sundar. It has been more than once decided by this Court, that the local custom in such matters is to prevail, and that the Mofussil Courts are not boand by the strict technicalities of English law." And after referring to the case of Pigou v. Bam Kishen,^ which his Lordship said was obiter as to the rule that an agent signing a bill of exchange in his own name cannot set up that he signed as agent, held the defendants not liable. Grounds on which English cases on undisclosed principals are de- cided. — The cases in England on the liability of a broker who does not disclose his principal are decided either on the ground that he is personally liable by means of some words appearing on the face of the contract ; or from some im- plied or understood contract arising fi'om the usage of trade. '^ This is seen from the cases of Southwell v. Bowditch^ and Pike v. Ognly,'^ but to make him liable on the custom, the custom mast be proved. In the former case the words " Sold by your order and for your account to my principals," the contract being signed in the broker's name without any words descriptive of his ofl&ce, were held by the Court of Appeal in the absence of proof of the custom referred to, to be insufficient to make the broker personally liable. The liability, however, in this country entirely depends on s. 230 of the Contract Act, which Avas in all probability based on the custom of trade in force in England. Where there is a principal disclosed, who cannot be sued.— Next as to the agent's liability where tlie principal though disclosed cannot be sucd.^ This liability appears to answer to the rule in English law, that persons though contracting as agents, are nevertheless liable where there is no responsible pinncipal to i-esort to. And may be illustrated by the following cases. Thus in Bnrrell v. Jones^ the solicitors of the assigness of a bankrupt tenant, upon ' 2 W. K., 3U1. =* Cases on aeage : Uiimphrey v. Dale, 7 E. & li., 2GG ; E. B. & E., 1001. Fled v. Mur(o)i, L. R., 7 Q. B., 126. » 45 L. J. C P. 630 ; L. 11,, 1 C. P., 37-i. ♦ L. R., Q. B. D., 7U8. * Ind. Coutr., Act, s. 230, para. 2 (cl. 3). ' 3 B & Aid., i7. 37G Till" I,\\V r»K AflENCV. whoso land a distress had 1h;c;ii |)ut in Ijy tho hmdlord, ^avu I lie ft)ll(jwiii}^ wiiHcn iiiKicrtakiuL,' : — "Wo, as solicitoi'H to the assignocH undortakc to pay (i) Mr. Hiiiicll his rent, provided it do not exceed the value of the effects dis- tiained." Jlolioyd J., said : — "T am of opinion that the defendants (the solici- tors) are peisonall}' liable. If they are not, nobody is bound by the under- taking ; for it is perfectly clear that the assignees are not bound." So also by cases of tho class of Eaton v. Bell,^ where an Inclosure Act empowered the Commissionci's to make a rate to defray the expenses of piassing and oxecnt- iiiL!" tlie Act, and enacted that persons advancing money should be paid out of the first money raised by the Commissioners. Expenses were incurred in the execution of the Act before any rate was made. And to defray these cxpcn.ses, the Commissioners drew drafts upon their bankers re([airing them to pay tlic sums therein mentioned on account of the public drainage, and to place the same to their account as Commissioners. The bankers during a period of six years continued to advance considerable sums by paying these drafts. The Court held the Commissioners per.sonally liable. Bayloy J., said : — The form of the draft is " to pay A. B., or bearer on account of the public di-ainage." The persons, therefore, who signed that order, assert that the money is to be applied to the purpose of the public drainage. The draft then goes on " and place the same to our account as Commissioners of the Inclosure Act." Therefore the money is placed to their debit in the account, which they have, as Commis- sioners. It does not say, "place the same to the account of the inclosure," but " to our account as Commissioners." Now the defendants (the Commissioners) must have known what they had collected, and what means they had of collect- ing more ; and they ought to have taken care, before they drew drafts, that they had money to reimburse the persons who advanced money on those drafts. So in Horsley v. Bell,^ where an Act of Parliament was passed to make a brook navigable, and the defendants, amongst others, were named as Commissioners to put the Act in execution ; the Commissioners being empowered to borrow money on the tolls to arise from the navigation. Large subscriptions were made, and the work was begun. The Commissioners appointed a treasurer and a surveyor. The defendants were, or represented, all the acting Commissioners, who employed the plaintiff to make cuts on different parts of the brook, and gave orders at their several meetings. Several orders were made at different meetings, and by such of the defendants as were present at those meetings, but none of the defendants were present at all the meetings, or joined in all the orders ; but every one of them were present, and joined in making some of the ordei'S. The plaintiff sued all the acting Commissioners. The Court held that the Commissioners who acted were personally liable. So where a jiospital had • -) R & .\I(l , 31. * 2 Arnbl., 700, sec also Cullcn \. QuceiiDhury, 1 Bro. Ch. Hop., 101. T/IABILITY OF AGENT TO THIRD PARTIES, 377 been set on foot supported "by voluntary contributions ; its affairs being conducted by a committee appointed by the subscribers at large, one of tlie members of which was the defendant who usually presided at the meeting of the committee : at a meeting at which the defendant attended, the steward of the hospital produced a bill for bread supplied to the hospital by the plaintiff who was a baker ; it did not, however, appear who had appointed the baker or who had ordered the bread. The plaintiff sued the defendant for bread supplied. The jury found that the defendant had acted, in such manner as to induce the plaintiff to believe that he was to look to him for payment, and judgment was given against the defen- dant ; on appeal this judgment was affirmed ;^ this liability may also be illus- trated by such cases as Kelner v. Baxter,^ where there is no principal existing at the time of the contract but the principal comes into existence afterwards. Liability of public agents in contract. — There appears to be no distinc- tion made in the Contract Act between the liability of a public and a private agent. The rule of English law as to this is, however, different ; under that law agents of Government, from the supposition that their office excludes the presumption of credit being given to them personally, are not held liable for contracts made by them in their public capacity, although there be no other person against whom a legal remedy lies to enforce the contract.^ Previously to the passing of the Contract Act, however, there appears to have been one case decided in this country on the basis of the English rule.* There are also certain dicta unnecessary, however, for the decision of the case in the case of the Peninsular and Oriental Steam Navigation Co. v. Secretary of State,'^ which seems to indicate that the rule of English law is recognizable in India ; the question raised in that case was the converse one, namely, whether the Secretary of State for India in Council was liable for the damage occasioned by the negligence of servants in the service of Government assuming them to have been guilty of such negligence as would have rendered an ordinary employer liable. It was there contended,^ that the Secretary of State, as regards his liability, must be considered as a public offi,cer emploj^ed by the State, the Court, how- ever, decided that the East India Company were not the public servants of Government, and therefore did not fall tmder the principle of the cases ivith regard to the liabilities of such persons. It cannot, however, be safely said that the foregoing case and dicta are sufficient since the passing of the Contract Act ' BurU V. Smith, 7 East, 705. See also Parrott v. Ei/re, 10 Biiig., 283. • L. R., 2 C. P., 174. • Paley on Pr. & Ag., 37-4. Ooodivin v. Robarts, L. R., 10 E.^., 76. Tioycross v. Dreyfuss, L. R., 5 Ch. D., 605. Evans on Pr. & Ag., 352. • Sreenath Roy v. Ross, 4 W. R., S. C. Ct. Ref., 13, (16). • Bourke's Rep., 166. • Bourke's Rep., (185), (188), (188). Z Z 378 rnr: i.kw ok aorncy. to ffoo from lialiility an afjfont of frovornment who has not disclosorl his princi- ]):il. Tlio position of the Secretary of State in tliis ronntry is different to that of the Sovcreiijn in England ; for in some eases the foinior can l)e sued in this country,^ wliereas in England the Sovereign cannot he sued, the only remedy for the Ruhject being by a Petitioii of Right.* PossihJy, having regard to the position of th(^ Secretary of State, a pnblic agent, a servant for the Secretary of State, might not be held personally liable for not disclosing his principal when acting within his powers, Avhere the act done or contract entered into is with re- ference to what are usually termed the Sovereign powers of Government ; and would be held personally liable where the act done or contract entered into by him on behalf of the Secretary of State is one in which the Secretary of State, although possessing Sovereign powers, is not acting with such powers, but in the conduct of an undertaking which might be carried on by private individuals. However, unless the distinction I have suggested, exists, there seems under the Contract Act, no reason to suppose that an agent of Government, is in any better position than a private agent, and unless the public agent discloses his principal, lie would bo prtind fnrip. liable on his contract. Liability of Commission Agents. — The liability of a commission agent through whom goods have been ordered to the person giving the order, is ex- plained in the case of Mahomed Ally Ehrahim Ph-khan v. Schiller Dnsogiie and Company,^ there the defendants traded in Bombay as merchants and commission agents under the style of Schiller Dosogne and Company, being a branch of a Fx-ench firm trading in Paris under the same name, of which firm also the defendants were members. The Paris firm were agents of certain manufacturers in zinc. The plaintiff, a Bombay merchant, ordered out 48 casks of zinc through the defendants' fii'm in Bombay by an indent order in the following form : " I hereby request you to instruct your agents to purchase for me (if possible) the undermentioned goods on my account and risk upon the terms stated below," these terms amongst other mattei's limited the time within which the shipment was to be made. The plaintiff later on consented to an increase being made to the original price fixed on. The defendants having communicated with theii' Paris firm wrote to the plaintiff. " Wo have the pleasure to inform you that onr home firm has reported by wire, ' Placed at your increased limit. ' " Subsequent- ly the defendants wrote to the plaintiff saying that the manufactiu'crs could not fulfil the order in the time agreed upon, asking whether he would extend the time or cancel the indent. Simultaneously the plaintiff wrote to the defendants sa^nng that as the time had been exceeded he would purchase zinc in the market on the defendant's account. This the plaintiff did and sued the defen- * See Secrefarij of State v. Hari Rhanji, I. h. R. 5 Mad . 273. * Machenth v. Haldiiiaud, 1 T. R., 172 * I. L. R., 13 Bom., 470. LIABILITY OF AGENT TO THIRD PARTIES. 379 dants to recover the difference in price as damages on account of the defendants having failed to perform their contract for the delivery of the zinc. The Chief Judge of the Small Cause Court, who referred the question to the High Court was of opinion that the plaintiff had employed the defendants as his agents only to foi^ward his order to the Paris fii-m, who were in fact the pi-incipals in the contract of agency to deal with the manufacturers and were disclosed as such on the indent ; so that even as agents the Bombay firm would be liable to the plaintiff for their misconduct only in the transmission of the order to, and the replies from, the Paris firm, and not for the misconduct of the latter firm in conducting the business of the agency with the manufacturers ; whilst neither the Bombay firm, nor the Paris firm rendered themselves liable as vendors to the plaintiff upon a contract to sell and deliver ; and as the damages claimed were claimed as arising from breach of contract of sale and not on a contract of agency he dismissed the suit contingent on the opinion of the High Court as to the correctness of his decision. Sarjent C. J., held that neither the defen- dants, nor their Paris firm had entered into any contract of sale on which they were liable to the plaintiff, they having only constituted themselves his agents to place the order, i. e., to effect a contract of purchase on his account with the manufactui-ers of the zinc, and consequently the action brought for breach of contract would not lie. This decision of his Lordship was based on the case of Ireland v. Livingston,^ as viewed by Gasseboglou v. Gibbs.^ With regard to the liability of a commission agent in Bombay who accepts a commission to order out goods at a fixed rate, and undertakes that they shall be invoiced to the person giving the order at that rate, he has been held (in the absence of a usage to the contrary) not to have fulfilled his contract by obtaining goods answering to the terms of the order from another firm in Bombay and tender- ing them to the person giving the order, and has been therefore held liable for damages.* Liability in cases of warrant of authority.— We next come to the question of the liability of a pretended agent, in such case there is no doubt that the third person has a remedy in tort, but by a fiction of law he is also given a remedy ex contracftc on an implied promise. Here the third person may waive the tort and proceed in contract. Thus it is an actionable wrong to retain money paid by mistake, but there is also a fiction of a promise implied in law to repay such money, which affords a remedy by suit on an implied contract in almost all cases in which a defendant has received money which he ought to refund, and even where goods taken or retained have been converted into money. » L. R., 6 H. L., 395. " L. R., 11 Q. B. D., 797. * Bombay United Merchantu Co. v. Doolubram Sakvlcfiaud, 1. L. H., 12 Bom., 50. 380 THE LAW OK AGENCY. There is also a similar fiction of law in the case of an ostensible aj^ent obtaining a contract in the name of a principal whose authority he misrepresents, in whicli class of case the agent is clearly liable in tort for an action in deceit, but that liability being purely a tort, would not extend to his executors, nor could he be held pei-soually liable on a contract which he purposes to make in the name of an existing principal, so to meet these difficulties, the law implies on his I'epresentation a warranty that he has authority from the person he names as his principal, on which warranty he or his estate is answerable ex contractu} The principle of waiver of tort applies only to cases of implied contracts, and has been well stated as follows : — Where the circumstances, under which the law will imply a promise and so raise a contract which does not exist in fact, are such as also to fall within the definition of tort, the party injured may sue in tort, or if he pleases may waive the tort and sue in contract on the implied pro- mise.2 To take an examijle of the case of the agent's liability for a misrepre- sentation ; the Contract Act by s. 235 lays do^vn that a person who untruly represents himself to be the authorized agent of another, and thereby induces a third person to deal with him as such agent, is liable, if his alleged employer does not ratify his acts, to make compensation to the other in respect of any loss or damage which he has incurred by so dealing.^ The rule thus laid down is based on the case of Collen v. Wright,^ which case has been recognized and slightly extended by more modern decisions,^ the present effect of which is similar to the rule in the Contract Act, and is set out clearly in Firbank's executors v. Humphreys^ as follows : " Where a person by asserting that he has the authority of the principal induces another person to enter into any ti'ansaction which he would not have entered into but for that that assertion, and the assertion turns out to be untrue to the injury of the person to whom it is made, it must be taken that the person making it undertook that it was time, and he is there- fore liable personally for the damage that occurs." In that case the plaintiff sued to recover damages against five dii'ectors of the Charnwood Forest Railway Company on the ground that they had represented to him that certain certi- ficates for debentui-e stock of the Company were good and valid certificates, and were issued under the borrowing power of the Company, and that they, the directors, had power to issue the certificates to the plaintiff. The facts were, that one Firbauk had contracted to make a railway, and did work for ' Pollock on Tort, p. 442. * Piggott on Tort, p. 34. ■ Ind. Contr. Act, 235. * 7 E. & B., 701. 8 E. & B., 647. * McCollin V. Gilpin, L. E., 6 Q. B. D., 51G. Cherry v. Colnial Banlt of Australasia, 38 L. J. P. C., 49. Richardson v. Williamson, L. R., 6 Q. B., 276 * L. K., 18, Q. B. D., 54. LIABILITY OF AGENT TO THIRD PARTIES 38l which he was entitled to be paid cash. The Company not bein^ in a position to pay, an agreement was made dnriDg the progress of the M'orks-by which Firbank agreed to accept debenture stock in lieu of cash. The defendants who were directors of the Company, thereupon issued to Firbank certificates for the agreed amount of debenture stock. Such certificates being signed by two of the defendants. At that time, although the fact was not known to the defen- dants, all the debenture stock which the Company were entitled to issue had been issued, and consequently that which the plaintiff received was an over issue and valueless. The Company went into liquidation, but valid debentui'e stock retained its par value ; held that the defendants were liable on their implied representation that they had authority to issue valid debenture stock which would be a good security, and that under the circumstances the damages were the nominal amount of the stock which Firbank ought to have received under his agreement. So also Avhere the defendants, the agents of an Amei'ican Insurance Company, represented to the plaintiff, an insured, who had obtained a decree for £1,000 against the Marine Insurance Company, that they Avere authorized by the Company to offer £800 in settlement of the plaintiff's decreed claim, and the plaintiff relying upon the accuracy of the representation entered into an agreement for the settlement of the claim, but it subsequently tui-ned out that the defendants were not authorized to make the agTeement ; it Avas held, in a suit brought against the defendants to recover damages for breach of warranty of authoi'ity, that the plaintiff was entitled to recover,^ and this decision was upheld on appeal. 2 On a similar principle where the plaintiff lent £70 to a benefit building society, and received a receipt, sig-ned by the defendants as two dii-cc- tors of the Society, certifying that the plaintiffs had deposited £70 for three months certain to be repaid with interest after 14 days' notice, and it aj^peared that the Society had no power to boi-row money, and the plaintiff", being unable to recover the moncj^ lent, sued the defendants. Cockburu C. J., said : — " By the law of Eugland jiersons who induce otiiers to act on the supposition that they have authority to enter into a binding contract on behalf of third persons, on it turning out that they have no such authority may be sued for damages for the breach of an implied warranty of authority. This was decided in Collen v. Wright and other cases. "^ The case of Colleu v. Wright has been folloAved in Hassonbhoy Visram v. Clapha)ii ;''' see also the case of Muhendronath Mookerjee^ decided previously to the passing of the Contiact Act. The subject * Mccl- V. Wendt, L. R., 21 Q. B. D, 120. ■' VV. N., (1889), 14. ' Richardson r. Williamson, L. R., (J (i- B., 27G. Soo ulsu Chupleu v. Bnmsicick Building Society, L. R., 6 Q. B. D., f7l7). * I. L. R., 7 Bom., 65. * 9 W. R., 208. 382 no; i,a\v ok auencv. of tho liahilify of an ag'cnt who lias acted witlioiit authority is exhaustively discuss(Ml in Smonf. v. 7/Ar?-?/, I there Baron Ahlci-Hon says : — " There is no doubt that in the case of a 1) iiudiih'nt misrepresentation of his authority, with an intention to deceive, the aj^ent wouhi he personally responsible. But indepen- dently of this, which is perfectly fi-ee from doubt, there seem to be still two other classes of cases, in which an ag^ent who without actual authority makeH a contract in the name of liis principal is personally liable, even where no proof of such fraudulent intention can be given. First, where he has no autho- rity, and knows it, but nevertheless makes the contract as having such autho- rity. In that case on the plainest principles of justice, he is liable. For he induces the other pai-ty to enter into the contract on what amounts to a mis- ji'epresentation of a fact peculiarly Avithin his own knowledge ; and it is but just, that he who does so should be considered as holding himself out as one having competent authority to contract, and as guaranteeing the consequences arising from any want of such authority. But there is a third class, in which the Coui'ts have held that where a party making the contract as agent bond fide believes that such authority is vested in him, but has in fact no such authority, he is still personally^ liable. In these cases, it is true, the agent is not actuated by any fraudulent motives ; nor has he made any statement which he knows to be untrue. But still his liability depends on the same principles as before. It is a wrong, differing only in degree, bu^t not in essence from the former case, to state as true Avhat the individual making such statement does not know to be true, even though he does not know it to be false, but believes, without sufficient grounds, that the statement will ultimately turn out to be correct. And if that wrong produces injury to a third person, who is wholly ignorant of the grounds on which such belief of the supposed agent is founded, and who has relied on the cori'ectness of his assertion, it is equally just that he who makes such assertion should be personally liable for its consequences. On examination of the authorities, we are satisfied that all the cases in which the agent has been held personally liable, will be found to arrange themselves, under one or other of these thi-ee classes." Measure of damages for breach of warrant of authority.— The injured person is entitled to all the damages which are the natural and proximate con- sequence of the false assertion of authority, for, as says Lord Esher in the National Coffee Palace Company.'^ " The measure of damages in actions for breach of warranty is always the same in every case, I will not consider what theoretically it ought to be, but I say we must decide it according to the rule which has been followed for a series of years. Spedding v. Nevell,^ Goodwin v. Fraiici-n^ are cases ■ 10 M. & VV., 1. • L. B., 4 C. P., 212. ' L. E., 24 Ch. D., 371. " L. R., 5 C. P., 295. LIABILITY OF AGENT TO THIRD PARTIES. 383 in whicli the plaintiff was the intended purchaser, and Simons v. Patchett^ was a case in which the plaintiff was an intended vendor, and in all these cases the Court laid down that the measure of damages was what the plaintiff actually lost by losing the particular contract which was to have been made by the alleged principal if the defendant had had the authority he professed to have : in other words what the plaintiff would have gained by the contract which the defendant warranted should be made."^ Liability of agent acting under innocent mistake. Non-liability where the injury is not caused directly and solely by his act —A person acting as agent and hong, fide believing himself to have due authority from the principal, when in point of fact he has no authority, and who is therefore acting under an innocent mistake, is nevertheless liable to third parties for injuries caused by his acts, on the principle that where one of two innocent persons must suffer a loss, he ought to bear it who has been the sole means of producing it, by inducing the other to place a false confidence in his acts and to repose upon the truth of his statements. And his misrepresentation may, as will be next seen, have the effect of vitiating any contract entered into by him on his principal's behalf within the authority granted. ^ But where the injury is not caused directly and solely in consequence of any representation of the agent, but rather in conse- quence of a letter addressed to the person suffering the wrong delivered by the agent, the latter will not be held liable for any loss which is incurred. Thus Avhere two letters were pi'esented to one Mooney, one addressed to himself, and the other to the manager of the Mnssoorie Savings Bank both purporting to be written by Rai Kuar Bir Singh. In the letter to Mooney, he was requested to deliver to the manager of the Bank the letter addressed to him, and the letter to the manager contained a request for payment of Rs. 2,800 through IMooney — Mooney delivered the letter to the manager who upon the strengtii of it made over the sum asked for to Mooney, who gave a receipt for the same in tlic name of Rai Kuar, and afterwards handed over this sum to the person who brought the two letters ; and it subsequently Avas discovered that thc^ k'tters wei'O for- geries, and the Bank sued Mooney to recover the money paid ro him : held that in presenting the letter, in i-eceiving the notes, and in granting a receipt for them, tlie defendant was in some sense an agent of Rai Kuar, but iuasmucli as the notes were given on the authority of the letter adch-es.sed to the plaintiff himself, and not in consequence of any representation made by the defen- dant, the latter could not be held liable for the loss sustained by the former.* » 7 E. & B., 5G8. * See also Meek v. Wendt, L. R., 21, Q. B. D., 126, Hughes v. Graeme, 33, L. J. Q. B., 335. Randell v. Ti iinmer, 18 C. B., 78G. Pnw y. Davis, 30 L. .1. Q. B., 257. 8 Iiul, Cont. Act, 88. 18, 19, 238. * Monnei/ v. Mufixonrin S(tvi>ifi.-> Biiiik, H .Ml. II. C, 310. ;{g.|. TIIF r.AW OK AdKMCV, Effect of misrepresentation and fraud of agent.— Misrepresentations and fiMiids comniitlod by un^oiifs acfinj,' in lln- business of their prineipals' and wifliiii Ibf imthority f,nven to them have the same effect on their contracts, as (h()ii.t,di the fraud or misrepresentation had been committed by the principal. ^ ]Jnt although this is so, the agent is nevertheless liable to third parties in damages for his misrepresentations ; but it appears that he cannot be made liable for making a misrepresentation.^ unless it is a misrepresentation in point of fact, and not merely in point of law. Thus in Beattie v. Ebun/ where three directors of a Railway Company opened on behalf of the Company an account with a bank, and sent a letter signed by the three as, directors requesting the bank to honour cheques signed by the two of the directors and countersigned by the secretary. And the account having been largely overdrawn by means of such cheques, the bank sued the Company, recovered judgment and issued an elegit, but the proceeds being insufficient to satisfy the debt, the bank filed a bill to make the directors personally liable. Vice-Chancellor Bacon held on the authority of Collen v. Wright,^ Cherry v. Colonial Bank of Aus^ tralasia,^ Richardson v. Williamson,^ that where agents or others acting on be- half of a Company, so act that, without any words to that effect, their acts amount to a representation that they have authority to enter into a con- tract upon which the dealings which may be in question are based, they incur a personal liability to make good the representation, and that therefore the defendants were bound to make good to the Bank the amount due to it, in- curred upon the faith of their letter of authority. On appeal this decision was reversed, the Coui^t holding that the directors were not personally liable for the debt under the letter of request, for that, assuming the letter to contain a representation that the dia^ectors had power to overdraw the account, and such representation to be erroneous, this was not a representation of fact, which the persons making it were bound to make good, but only a mistaken representation of the law ; and moreover that, even if it had been such a false representation as the directors were bound to make good, the bank would have had no claim against them, since it had been able to enforce the same remedies against the Company as if the representation had been true. Misrepresentation from a mutual mistake of law. — Where there has been a misrcjirLsentatiou arising from a mutual mistake of law the agent ' Ind. Contr, Act, ss. 138, 18, 19. Grant v. Noncai/, 10 C. B., 665. Bancick y. Ett^lish Joint Stock, Bk., L. R., 2 Ex., 262. * Ind. Contr. Act, s. 18. • L. E., 7 Ch., 777. * 8 El. & Bl., 647. » L. R., 3 P. C, 24. • L. R., 6 Q. B., 276. WABILITY OF AGENT TO THIRD PARTIES. 385 making such misrepresentation will not be held liable. Thus were the Llanid- loes Company had power under its Acts to issue £100,000 preference shares and a large amount of ordinary shares ; and by a later Act was amalgamated, to- gether with other Companies, with the Cambrian Railway Company, at which time it had issued £85,000 preference shares, which were to rank as N'o. 1 Pre- ference Stock, and £60,000 ordinaiy shares, which were to rank as No. 2 Pre- ference Stock ; and power was reserved by the Act to the Cambrian Railway Company to raise any capital which any of the Amalgamated Companies had power to raise before the amalgamation; the directors under a ftona^cZe belief that they had power to raise the remaining £50,000 preference shares of the Llanidloes Company, and to make them rank with the £85,000 No. 1 Preference Stock, issued £15,000 preference stock and described them in the certificates, which were signed by the directors and the Secretary, as " No. 1 Preference Stock"; some of this stock was purchased by the plaintiff who, some 5 years before his suit, discovered, on a scheme filed in Chancery for arranging the aifairs of the Cambrian Railway Company, that the Court had decided that the new stock was not No. 1 Preference Stock, but ranked below it and No. 2 Pre- ference Stock. The plaintiff thereupon filed his bill alleging that he had been deceived by the form in which the stock had been issued and the certificates made, and praying that the Company, Directors and Secretary might be held liable for the misrepresentation. The Master of the Rolls held that the Company, Dii'ectors and Secretary were liable to make good the misrepresentation made to the plaintiffs, and either to issue No. 1 Preference Stock to them or repay them their purchase money. On appeal James L. J., held that to maintain the case of misrepresentation the representation must be wilful and fraudulent, and that the evidence in the case failed to prove that the plaintiff was in any way deceived by anything said to him ; Bramwell L. J., said, " If there has been a misrepresentation at all it is not a misrepresentation that he was getting this stock, but a misrepresentation, under a misconception in which he shared, as to the rights of the New £15,000 Stock." Their Lordships after making some strong remarks on the fact that the plaintiff had allowed 5 years to go by without complaint, after being informed that he had not had transferred to him the stock which he thought he was buying, reversed the decision of the Master of the Rolls. I Agent not liable where third person induces belief that his principal only will be liable. — Wheic tin- agent lias made a contract with a tliii-d person, who knows that he is an agent, and such third person induces the agent to act upon the belief that the principal only will be held liable, the agent will not be liable on the contract.*^ ' Eaglesfield v. Marquis of Londonderri/, L. R., 4 Ch. D., 693. » Ind. Contr. Act, s. 234. AAA 386 I'"': I'^w OK ,\<\KSC\. Liability to refund to true owner money paid over by mistake- When- moiioy or property han by mistake been paid or «l('liv(;i-eil to an a;(ont for the use of his princi|)al, if the agent pay th(! money or deliver tho property to his pi'ineipiil he will l)c liable to I'efund or restore the same to the true owner ;l and although s. 72 of the Contract Act makes no distinction in words between mistakes of fact and law, yet that section should be read with section 22 ; under the law of England i^egarding payments made by agents in mistake, the agent's liability appears from the reported cases to depend upon whether he makes the payment over to his principal innocently, i. e., whether lie does so before or after notice of the mistake. This distinction is apparent from the case of Ex-parte Edwards in re Chapman.^ Farther examples of this rule may be found in the cases of Sharland v. Mildon,^ B idler v. Harrison,'^ and Holland v. Bussell.^ I have pointed out this distinction which arises if section 72 of the Contract Act applies alike to cases of principal and agent as well as to cases in which no ao-ent is concerned, i. e., in cases where the payment is made by mistake by one principal to another principal (as to which latter class of cases there is no doubt that it does apply), as in England there is an exception to the rule of law — that an ao-ent Avho, by mistake, and before notice of the mistake, pays over to his principal monies paid to him for his principal's use by third persons is not liable to refund the sum so paid — which exception is that a broker or other agent who has paid over monies to another broker or agent before receiving notice of his mistake is liable to refund the sum so paid over where no principal's name ap- pears ; for in such case the matter is treated as being between two principals. This exception to which I have just referred is illustrated by the case of Xeicnll V. Tomlinson,^ decided in the Court of Common Pleas by Chief Justice Bovill, Mr. Justice Byles, Mr. Justice Montague Smith, and Mr. Justice Brett, there, the plaintiff and defendant both carried on business as cotton brokers ; and the latter sold to the former a large quantity of cotton ; no bought or sold note was signed, but an invoice was sent to the plaintiff in which the defendant's clerk added up the weights erroneously, and charged for 325 hundredweight instead of 225 hundredweight the amount of cotton actually delivered. The plaintiff paid for the larger quantity, but afterwards found out his mistake, he having paid nearly £500 too much. The defendant refused to repay this sum on the o-round that he had closed his account with his principal, for whom he had acted in the sale, before the mistake was discovered. The plaintiff sued the defendant to recover the amount ; Bovill C. J., held that the universal rule of ^ Ind. Contr. Act, s. 72. » L. E., 13 Q. B. D., 747. ' 5 Hare, 460. * 2 Cowp., 568. » 1 B. & S., 424 ; 30 L. J. Q. B., 308 ; 32 L. J. Q. B., 297. • L. R., G C. P., 405 ; 7 Mad. Jur., 38 LIABILITY OF AGEXT TO THIRD PARTIES. 387 law was that money paid under a mistake of fact can be recovered back. That the rule that an agent, paying over money to his principal before receiving notice not to pay it over cannot be made to refund it to another person, did not apply as the real principal's name never appeared, in the transaction ; but that as the evidence shewed that the plaintiff and defendant had treated one another as principals, the plaintiff could therefore recover. Plea of payment over where there is fraud. — That the plea of innocent payment over to the principal is of no avail where the latter is acting fraudulent- ly, is seen from the case of Shugan Chand v. The Government,^ there a treasury officer paid money under a mistake of fact to the defendant who was the innocent agent of a person who had contrived a fraud, and he was held on the authority of Tugman v. HopTiins'''' entitled to recover under s. 72 notwithstanding that the plea of payment over to the defendant's principal was set up. Money had for the use of the principal and not paid oyer.— And whex^e an agent receives money for the use of his principal, from a third person, and does not pay it over he will be liable. Thus where a debtor of the plaintiffs transmitted a sum of money to the defendant, who admitted- having received it, and being afterwards informed that it was meant to be paid to the plaintiff, said that he would so pay it ; and these statements were communicated to the plain- tiff by the defendant's authority, held that on the defendants failing to pay, the plaintiff might sue him for money had and received, and that the defendant could not allege a want of consideration moving from plaintiff to himself, as the defen- dant being the agent of the plaintiff, that agency supplied the consideration.^ Liability of agent where he is a stakeholder.— Where an agent who is in the position of a stakeholder, receives a deposit to be paid over on fulfilment of a certain given condition, and pays such deposit over to his principal before the condition is fulfilled, he will be liable to refund to the person entitled to the money deposited.* Thus in Essaji Adamji v. Bhimji Purshotam,^ the plaintiff pur- chased certain immoveable property at an auction sale and deposited with the auctioneer a portion of the purchase money. The vendor, however, refused to con- vey the property to the plaintiff, whereupon the plaintiff brought a suit against the vendor to recover the money deposited by him. The Court held that the money having beeia deposited with the actioneer as a stakeholder and not as an agent merely, and being in his hands, the action to recover it lay against the auctioneer and not against the vendor. The distinction between the liability of an agent and that of a stakeholder is referred to in Bamford v. Shuttleworth.^ ' I. L. R., 1 All., 79. « 4 M. & G., 389. 8 Lily V. Hays, 5 A. & E., 548. * Biirrough v. Skinner, 5 Barr., 2639. Fitrtado v. Lmnluij, L. T. Feb. 1st, 1890, p. 240. » 4 Bom. H. C. ((). C. J.), 125. • 11 A. & E., 926. 388 TMK I, AW OV AOENCY. Liability to refund money paid to him under coercion — So iilso if money is });iid over to an aj^'eiit iiiider coercion lie must repay it.' The act charged as coercion must, however, be illegal.' Thus whei'e a bailiff illegally compelled the plaintiff under a tlii-eat of distraining his goods, to pay him a certain sum of money, it was IkjUI that the fact of the bailiff having before the commencement of the action paid over tlie entire sum to the sheriff who had paid it into the exchequer constituted no defence to the action.* So al.so where certain trustees were to grant a lease to the plaintiff of a certain property in which one Clark had a contingent interest, and who was therefore a necessary party to the lease. And in order to procure his concurrence, Hudson the attorney for the trustees wrote to him stating the circumstances, in reply to Avhich the defendant, the attorney to Clark, entered into correspondence with Hudson, requiring from him a copy of the will under which Clark was interested. For this, and fqr searching for the will, the defendant had a claim upon Clark, his client, and eventuall}' it was agreed that Clark should grant and confirm on the terms, as the defendant contended, that all past costs, as well as those occasioned by such joining in the lease should be paid by the trustees, but as Hudson contended, only that such latter costs should be paid. The defendant sent his account of costs to Hudson who complained of the amount. The defendant declined to execute unless the costs were paid. The defendant sub- sequently obtained Clark's execution. Hudson then demanded the lease from the defendant and tendered him a smaller sum than that claimed ; but as the defendant refused to give up the lease on such tender, Hudson paid the full amount claimed under protest, and then brought an action to recover the sum so paid or so much as was overpaid, the Couj-t held he was entitled to re- cover.* Refusal to pay over monies as directed by principal.— He will also be liable if he refuse to pay over to third parties monies directed to be paid to them by his principal. Thus in Patorni v. Campbell.^ where one Calvo appointed the defendant his agent to receive payment in Mexico of the proceeds of the cargoes of a ship of which Calvo was the owner. The defendant received notice from the plaintiff that Calvo had assigned to him all the sums of money that might be due and owing or received on account of the said ship ; and in pursuance of this notice, the defendant paid over to the plaintiff, from time to time, considerable sums of money. Subsequently the defendant was informed by Calvo that he had made a composition with his creditors, and amongst * Ind. Contr., Act, s. 72. * Ind. Contr. Act, a. 15. • Snowden v. Dai is, 1 Taunt, 359. See also Miller t. Aris, 1 Selw. N. P., 92. ♦ Smith V. &lea:p, 12 M. «fc W., 685. » 12 M. & W.. 277. LIABILITY OF AGENT TO THIRD PARTIES. 389 them with the plaintiff, and at Calvo's request, the defendant sent him an account of the sums he had paid to the plaintiff. Subsequently the defendant received from his agents abroad a bill of exchange for £733 drawn by them against the amount of a dividend on the value of a cargo of the same ship, and thereupon the defendant wx-ote to the plaintiff, stating that he should hold the same at his disposal, in virtue of the assignment, and also to Calvo, informing him that he should deliver the proceeds of the bill to the plaintiff when it became due. Subsequently the defendant received a letter from Calvo, in which, after stating that the plaintiff had been overpaid his debt, he expressly prohibited the defendant from paying over the amount of the bill, or any monies whatever to the plaintiff. The bill became due, and the defendant accordingly retained the proceeds in his hands, and refused to pay them over to the plaintiff, who in consequence sued him for money had and received to recover the amount thereof. A summons was taken out calling upon the plain- tiff to interplead ; but the Court refused to make any order, on the ground that Calvo was a foreigner out of the jurisdiction. Parke B., said, " This is not the case for an interpleader. The moment the defendant agreed to hold the bill for the plaintiff, it became his bill, just as if the defendant had paid him so much money." But where the agent does not accept the agency he will not be liable to the appointees even if he receive the money, thus in Williams v. Everett,"^ where one Kelly who resided at the Cape of Good Hope remitted on England to the defendant his banker in London, with directions to pay the amount of the bills in certain specified proportions to the plaintiff and other creditors who would produce their letters of advice from him on the subject, and desiring the defendant to put upon the back of the respective bills the amount paid to each person, and to cancel each bill paid off. The plaintiff, before the bills became due, gave notice to the defendant that he had received a letter from Kelly ordering payment of his debt out of the remittance, and offered an indemnity, if he (the defendant) would hand over one of such bills to him. The defendant refused so to do, or to act upon the letter written by Kelly, although he admitted the receipt of it, and the identity of the plaintiff, and although he subsequently received the money upon the bills. The plaintiff thereupon sued the defendant for money had and received to his use, contending that by the receipt of the money, the defendant had irrevocably acceded to the appro})riation of it, as directed in the letter of advice from Kelly. Lord Elleuborough non-suited the plaintilT. considei-ing that the defendant had renounced the terms on wliidi ihc liiils were Fe- mitted before the money was actually received, and it was therefore only money had and received to the use of the remitter of Hie bills, but his * 14 East, 68:2. ;i<>0 NIK I.AW (Pfc- AUKNCy. liordsliip rcsci-vc'd tlio point. A luli; was :iccoi(lijif(ly moved for to set aside the virdifl. Ijoid Ellonliorongh C. .1, said: — " It will be observed that there is no assent on tin- part of tlie defendant to hold this money for the purposes mentioned in the letter ; but on the contrary an express refusal to tlie creditor so to do. If, in order to constitute a privity between the plaintiff and the (Icrnulant as to tlie subject of this demand, an assent express or implied be necossaiy, the assent can in this case be only an implied one, and that too implied against the expiess dissent of the party to be charged. By the act of receiving the bill, the (Kfendant agreed to hold it till paid, and its contents when paid, for the use of the remitter. It is entire to the remitter to give, and countermand his own directions respecting the bill as often as he pleases, and the person to whom the bill is remitted may still hold the bill when received, and its amount when received, for the use of the remitter himself, until by some engagement entered into by himself with the person who is the object of the remittance, he has precluded himself from so doing, and has appropriated the remittance to the use of such person. After such circumstance, he cannot retract the consent he may have once given, but is bound to hold it for the use of the appointee. If it be money had and received for the use of the plaintiff under the orders which accompanied the remittance, it occurs as fit to be asked, ivhen did it become so ? It could not be so before the money was received on the bill becoming due ; and at that instant, supposing the defendant had been robbed of the cash or notes in which the bill in question had been paid, or they had been burnt or lost by accident, who would have borne the loss thus occa- sioned. Surely the remitter Kelly, and not the plaintilf and his other creditoi"S in whose favoui- he had directed the application of the money according to their several proportions to be made. This appears to us to decide the question, for in all cases of specific property lost in the hands of an agent, where the agent is not himself responsible for the cause of the loss, the liability to bear the loss is the test and consequence of being the pi'oprietor, as the principal of such agent ; Here no agency for the plaintiff ever commenced but was repudiated by the defendant in the first instance. We are of opinion therefore, that upon no principle of law can the defendant be said to stand in such privity in respect to the plaintiff, as that the £200 claimed in this action can be said to have been money had and received to the plaintiff's use." He ^vill not, however, be liable to the orio-inal remitter where there has been no direct engagement entered into by him to hold the money for the use of others. Thus in Cohh v. Becke,^ the plain- tiff Cobb bcino- a defendant in an action at the suit of one Cutbush, and a Mr. Dally of Rochester, being Cobb's attorney, and the defendants Daily's agents in London, an order was made for staying proceedings on payment of debt and costs. Cobb paid money to Dally for this purpose, upon which Dally sent to ' 6 Q. B., 936. LIABILITY OF AGENT TO THIRD PARTIES. 391 the defendants his own cheque for £20, being somewhat more than the debt and costs, directing them to pay the debt and costs. They acknowledged the receipt to Dally by letter, and said that the money should be applied accordingly. Afterwards they retained it in satisfactioh of a balance of general account due to them from Dally. Cobb then brought this action against them for money had and received, and at the trial it was found that the defendants knew the money remitted to them to be Cobb's, and a verdict was taken for the plaintiff, subject to a motion to enter a nonsuit. On a rule nisi being heard, it was said by Denraan C. J., : " If Cobb had transmitted the money direct to the defendants, or if he had desired Dally to transmit to them specifically, and they had received it as from Cobb and not as from Dally, doubtless they would have become Cobb's agents, and accountable to him for the appro- priation of it. But upon the evidence it appears that Cobb paid the money to Dally for the purpose of paying the debt and costs, but without any specific directions through what channel it was to be remitted. The money appears to have been mixed with Daily's general funds ; and he sent to the defendants his OAVB cheque ; he was at libei-ty to have sent the money through his bankers, or direct to Cutbush's attorney, or through any channel which he chose to select ; and unless the person through whom he sent, be he who he would, became, by the employment of Dally, the agent of Cobb, it seems difficult to contend that the defendants became so It it not pretended that an agent can delegate his authority, or that he can, by emplo^'ing a third person to do the whole or any part of the business entrusted to him, make that third person an agent of the principal. But it is argued for the plaintift'. tliat Dull v was merely the hand employed to forward the plaintiff's money to the defendants, to be by them applied in payment of the debt and costs. If the facts warranted such a conclusion, doubtless this action might be maintained. But, as the facts shew that the plaintiffs employed Dally, and that Dally, and not the plaintiffs, employed the defendant, we are of opinion that no privity is established be- tween the plaintiff and defendants." The rule for a nonsuit was therefore made absolute. Liability to third persons in tort. Liable for mis-feasance only.— The agent is liable to third persons for mis-feasance only. Tlie g^Mieial i ule on this subject is stated by Holt C. J., in Lane v. Cotton.^ " A servant or deputy, quatenus such, cannot be charged for neglect, but the principal onl\' shall be charged for it; but for a mis-feasance an action will lie against a deputy or servant, but not quatenus a deputy or servant, but as a wrono-. doei*." It is, however, essential to an action in tort that the act complained of should, under the circumstances, be legally wrongful as regards the nartv coniplainiug, that is, must prejudicially affect him in some legal rit^ht • ' 12 Mod., 473, (188). 392 '■""'•■ '•'^"' '"■' AfiKN'CV. merely (li.it i< "ill, liouc.vci- diioclly, with icrcicucc lo tlu^ pi-()|)crty of third pcrsons,2 or if he dispose of pioptM-ty whicli iiiiiy hnppeii to be in his liands, but to which his principal hus no title, t>r if in the course of his employment he bo guilty of any fraud c)i- niisi'cpivsentation lie will lie li;il)l(> to third persons for all damages which they may sustain by reason of such his tortious act, Avhether such acts have l)oeu done howl fide by command of his principal and for his benefit,^ or at the mere will and for the benefit of the agent himself.* Liability of agent where both he and the person contracting with him are guilty of fraud against his principal— 'J' hf Ex-King of Oado gave orders to one of his officers Sufdur Ally, to procure the erection of certain buildino-s ; Sufdur Ally made over to Gassem Khan, who was also one of the Ex-Kino-'s officers, the contracting for a portion of the Avork. The contract for this portion of the Avork was given a contractor, who alone signed the contract, it stiimliiting amongst other matters that Gassem was to be allowed Rs. 20,000 out of every Rs. 100,000 paid to the contractor. And by another agreement between the contractor and the Ex-King Avho was unable to read, it was arrano-ed that an araeen appointed by Gassem should daily approve of the work done and reject any bad work or materials. The contractor executed some portion of the w^ork which was frequently checked and examined by Gassem or his a"-ents. Part of these works were rejected and rebuilt, but before completion he was discliaro-ed from further performance of the contract, and his accounts were made out and sealed by Gassem. The contractor then sued the Ex-King, Sufdur Ally, and Gassem to obtain payment for the work done under the con- tract held that Gassem had not either by the terms of the contract or by his subsequent conduct whilst acting on behalf of the Ex-King made himself per- sonally liable ; and that the contract was of such a description that the con- tractor was not entitled to a decree agaiust the Ex-King or Sufdur Ally, as both Gassem and the contractor were parties to a fraud on the Ex-King.^ Liability of master of vessels.— The master of a merchant ship is usually liable for all acts of negligence or mis-feasance on the pai't of the officers or crew of the vessel by which the cargo or the property of othei's is damaged.^ And this is so as ho and not the owners of the vessel has usually the power of ' Rogers v. Rajendro Diitt, 2 W. R., 51. * TFi.^e V. Burn., 4 W. R., Rec. R., 1. « Mill V. Hawl words " Tnoorporatccl by Spooial Act of J*arlimont 4o anrl 4(> Vic. auMiorizini*' (lio use of sfoam or oMioi- mofiv(> powoi-," and stafing in flic 1)()(1\' of tlio prosppcfns, " ono f,'roat, fcatnro of fliis imdcrtiikini.'', to which considcriiblo importance shoiihl bo attacliod, is tliat by the Special Act of Parliament obtained, fh(> Cf)inpany has tlin rigrht fx) use steam or nicclinnical motive power insft^id f)r liorses," and fin-tlier mentioning ''the nnnsnally favonrablo conditions ns to motive power open to the Company." But in reality the Special Act authorized the use of .steam power or other mechanical power only with the consent of the Board of Trade, and subject to periodical renewal of such consent, and also with the consent of. two local corporations, and subject to such conditions as they might prescribe. At the time the prospectus was issued there was fair and reasonable expectation that all these consents •wotild, be given, but none of them had been given. The plain- tiff took shares on the faith of this prospectus, and stated in his evidence that he was induced to take them by the statement that the Company had the right to use steam power, and also by his knowledge of, and interest in the locality, and his confidence in the character of the directors. The Board of Trade refused their sanction to the use of steam power and the Company was wound up. The plaintiff commenced an action to set aside the purchase, which was, however, prevented from being effectual, because the winding up petition of the Company Avas presented a few days before, he therefore brought an action against the directors claiming damages for their mistatement in the prospectus ; it was held by the Court of appeal reversing the decision of Stirling J., that the directors were liable for the mis-statement, as it was made without reasonable "■round for their believing it; but the decision of the Appellant Court was reversed by the House of Lords. It will be well, as the case in the Appeal Court sums np most of the authorities, to give an insight into the law laid doAvn as to what is necessary to found an action for deceit, for the law^ as laid down was not disputed in any of the Courts. Opinion of the Judges in Peek v. Derry as to the requisites for an action for damages for deceit.— Stirling J., in the Couit of tiist in.stauce, stated the law on the subject to be as follows ; he said : — " In order that the person who brings it (an action of deceit) may be able to maintain it, he must pi'ove several things. First of all, complaining as he does of a statement which he says is untrue, he must prove that the persons whom he sues, actually made ov are t>esponsible for that statement. Secondly, he must show that that state- ment is untrue in fact. Thii-dly, he must shew more than that, not merely that, but that it is fraudulent Fourthly, he must prove that he acted on that untrue representation, and that he has suffered damage." With regard to the meaning of the word " fraudulent " his Lord.'^hip said : — '' If a, man makes a statement knowing it to be untrue, and believing it not to be true, there is no LIADILITV Of AGENT TO THIRD PARTIES. 395 question that it is a fraud. If he makes a positive assertion without having any belief on the subject one way or the other, that is also fraud. But I think there ai-e dicta which go to show that statements may be fraudulent which do not fall within any of these categories. Perhaps the law on that point is not quite settled yet. The difference of opinion may be very well illustrated by what was said by Lord Chelmsford, and by Lord Cran worth respectively in the well-known case of Western Bank of Scotland v. Adie.^ " I do not think it necessary for me upon this occasion to consider which of these views, if they do in fact conflict, is the more accurate and I propose to deal with this case upon the footing that I have got to consider whe- ther the directors, assuming that they made a misrepresentation, had any reasonable grounds for making the statement which they did." His Lordship then on the facts found that the directors thought that the Company vnih. which they were connected, had the right to use steam, and further that they entertained that belief on reasonable grounds, and came to the conclusion that their action was not fraudulent in any sense which would render them liable for an action of deceit. On appeal Lord Justice Cotton stated the law with regard to an action for deceit, and the circumstances under which a defen- dant would be made liable, as follows : — " Where a man makes a statement to bo acted upon by others which is false, and which is known by him to be false, or is made by him recklessly, or without care whether it is trae or false, that is, without any reasonable gi-ound for believing if to be true, he is liable in an action of deceit at the suit of any one to whom it was addressed, and who was materially induced by the mis-state- ment to do an act to his prejudice." On the question as to whether in order to make a man liable in an action of deceit, which is grounded on fraud, it must be made out that the person making the statement was fraudulent in so making it, His Lordship after referring to Edrjington v. Fitzmaurice,"^ and Weir v. Bell,'^ said : " I do not propose to enter into a discussion as to whether legal fraud is a happy expression, it is not one which I should adopt ; but the question is, whether there is not a duty on the pai't of those who make statements to be acted upon by others, and whether there is not a right in those persons to whom the statements are made, hi my opinion there is a duty. When a man makes statements which he desires that others should act upon, especially when they are in a prospectus intended to be circulated among the public in order to induce them to take shares — in my opinion there is a duty cast upon the director or other person who makes those statements to take care that there are no expressions in them which, in fact, are false : to take care that he has reasonable ground for the material statements which ' L. 1{., 1 H. L. ScL., 145, 161. ' L. K., 2.ii Ch. D., 4S>2. ' L. li., 3 Ex. D., 238 396 Tlli; LAW OK AGENCY. are coutaiiicd in that duciuuL-ut which hu preparea aud circulates for the very purpose of its being acted upon by others. And although, in my opi- nion, it is not necessary that there should Ix; what I call fraud, yet in these actions, accoi'ding to my view of the law, there must be a departui-e from duty, and in my opinion when a man makes an untrue statement with an intention that it shall be acted upon without any reasonable ground for believing that statement to be true, he makes default in a duty which was thrown upon him from the position he lias taken upon himself, and he violates the right which those to whom he makes the statement have to have true statements only made to them. And I should say that when a man makes a false statement to induce others to act upon it, without reasonable ground to suppose it to be true, and without taking cai'e to ascertain whether it is true, he is liable civilly as much as a person who commits what is usually called fraud, and tells an untruth knowing it to be an untruth." On the facts his Lordship found that the statements in the prospectus were false ; and that the directors had no I'easonable ground for believing the statements to be true. On the question as to whether the plaintiff was induced by this statement to take shai'es, his Lordship held that it was not necessary that the mis-statement should be the motive, in the sense of the only motive, the only inducement to the party who has acted to his prejudice so to act. It is quite sufficient if the statement is a material inducement to the party to act upon it." Sir J. Hannen expressed the law to be : — " If a man takes upon himself to assert a thing to be true, which he does not know to be true, and has no reasonable ground to believe it to be true in order to induce another to act upon the assertion, Avho does .so act and is thereby damnified, the jDerson so damnified is entitled to maintain an action for deceit." And on the facts his Lordship held that the plaiatifE had made out his case. Lord Justice Lopes expressed the principle of law governing this class of cases to be that, ''if a person makes to another a material and definite statement of a fact which is false, intending that person to rely upon it, and he does rely upon it, and is thereby damaged, then the person making the statement is liable to make compensation to the person to whom it is made — tii-st, if it is false to the knowledge of the person making it ; secondly, if it is untrue in fact and not believed to be true by the person making it ; thirdly, if it is untrue in fact and is made recklessl}', for instance without any knowledge on the subject, and without taking the trouble to ascertain if it is true or false ; foui'thly, if it is untrue in fact but believed to be true, but without any reasonable gi'ounds for such belief," and in applying those principles to the case his Lordship found in favour of the plaintiff. In the House of Lords,^ the decision of the Coui't of Appeal was reversed, it being held that an action of deceit -will not lie merely ' Deny v. Peek, L. E , 14 App. Cos., 337. LIABILITY OF AGEXT TO THIRD PARTIES. 397 for a false statement, carelessly made, bat honestly believed to be tx'ue ; and that there must be actual fraud. Their Lordships adopting the first three de- finitions of fraud as given by Lopes J. in the Court of Appeal, but discarding the fourth. This decision of the House of Lords has been followed in the case of Glasier v. BoUs^ in which Lopes L. J., reads the opinions of the leai-ned Lords in Berry v. Peek, to be that the inaccuracy of a statement, however uni^eason- able, if honest and bond fide, will not support an action for deceit, because it does not contain the necessary element of dishonesty. A director is not liable for fraud of a co-director or of any other agent of a Company unless he has authorized it. — As a general rule one agent is not responsible for the acts of another agent unless he does some- thing by which he makes himself a principal in the fraud. ^ Thus a director of a Company is not liable for a fraud, such as the issue of a fraudulent prospectus of the Company committed by his co-directors, or by any other agent of the Company, unless he has either expressly authorized or tacitly permitted its commission. Fry J., said : " I conceive the general law to be this, that the persons responsible for a fraud are of two classes. First, the actual perpe- trators of the fraud, the authors of it, the agents who commit it, the parties to it, those who concur in it, who either do something to produce the fraudulent result, or abstain from doing something, which they are under an obligation to the deceived person to do in order to prevent fraud. Secondly, the principal for whom an agent in the performance of his duties as agent commits the fraud is also responsible. But as a general rule, I think that one agent is not responsi- ble for the acts of another agent, unless he does something by which he makes himself a principal in the fraud.''^ But he will be held liable if whilst his in- formation or knowledge is the same as that of his co-directors, he authorizes the issue of a prospectus, knowing that one giving the whole truth could not be issued, as in such case he cannot be heard to say that he has not taken part in issaiug the prospectus.* Liability of agent for conversion.— The agent is also liable to third persons for conversion, which is a pure tort, and may be defined as a wrong done by an unauthorized act which deprives another of his property perman- ently or for an indefinite time.^ Actual dealing with another's goods as owner for however short a time, and however limited a pui-jiose, is conversion ;^ and it makes no difference that such act is done under a mistaken but honest ' L. R., 42 Ch. D., 436. » Cargill v. Boiver, L. R., 10 Ch. D., 502, (513). " Cargill v. Bonier, L. R., 10 Ch. D., 502. ♦ Peek V. Gueniei/, L. R., G E. & I. App. Cas., 378. Kerr on Francis, 4U». • Per Bramwdl B. Hiort v. Bott, L. R., E.\., 86, (89). " Hollins V. Foiuler, L. R., 7 H. L., 757. Pollotk on Torts, 290. 398 lUli l-AW OK AUIiNCV. and even reasonable suspicion of being lawfully entitled,' or even with the intention of benefitting the true owner.* As to whether a mere ministerial dealing with goods at the request of an apparent owner who has control of lliciii aiiHmiits to a conversion see ILullins v. Fuivler.'^ Liability of innocent agent for conversion— Where the act of the agent in interniecldliiig witli property is obviously wrongful, if the principal is not the true ownei- or has not his authority, the agent is not protected from liability, but if he is an innocent agent, ho must look to his principal for indem- nity ; but where the act of an innocent agent is not obviously \\Tongful, if the principal is not the owner and has not his authority, there the agent is excused. Thus in McEntire v. Potter and Company,^ the defendants insurance brokers in Loudon effected for one Grey, a shipowner in Dublin, insurance upon the hull and chartered freight of one of his ships, which ship was subsequently lost. Shortly after this loss Grey was adjudicated bankrupt ; and the plaintiflFs, who were his official assignees, became the assignees of his estate. After the adjudication Grey instructed the defendants to collect from the insui^ance office and to forward to him the insurance monies due upon the policies ; this was done by the defendants in due course, they having had no notice that Grey had been adjudicated a bankrupt. The plaintiffs as assignees of Grey's estate sued the defendants to recover the money so paid over to Grey ; Cave J., held that the defendants were liable, the plaintiffs' title having become complete upon adjudica- tion. In the case of Fowler v. HoUin,i,^ the plaintiffs sued the defendants who were cotton brokers to recover the value of 13 bales of cotton. The cotton was fraudulently bought by one Bayley from the plaintiffs' brokers ; and the defen- dants without notice of any fraud bought in their own names, as principals, this cotton from Bayley, informing Bayley that they would disclose the names of their principals in the course of the day, which they did ; the defendants subse- quently sold it to Michols and Company, at the same price at which thev had bought it, charging a commission. The defendants obtained a delivery order from Bayley, took delivery of the cotton and despatched it to JSlichols and Com- pany who tui"ned it into yarn. The defendants in buying the cotton were intending to act as brokers for Michols and Company. The plaintiffs sued the defendants for the price ; the juiy found that they had dealt with the goods as agents for principals, and Willes J., directed a verdict to be entered for the de- fendants, reserving leave to the plaintiffs to move to enter the verdict for them. A rule was obtained and was made absolute. On appeal the Judges were equally ' Hollins V. Fowler, L. 11., 7 II. L , 757. Pollock ou Torts, 290. * Per Bramwell B. Hiort v. Bott, L. R , 9 Ex., 86, (89). • L. R., 7 H. L., at p. 766. ♦ L. R., 22 Q. B. D., 438. • L. R., 7 Q. B., 616. LIABILITY OF AGENT TO THIRD PARTIES. 399 divided in opinion and the judgment of the Court below stood affirmed. Martin Channell and Cleasby B. B., affirming the judgment of the Court below, Kelly 0. B., Byles and Brett J. J., dissenting. The Court therefore held that the defen- dants were liable in trover for the price of the cotton. Mr. Justice Brett, was of opinion, that a broker, who acting only as such, negotiates a bargain of purchase and sale and passes a delivery order is not thereby guilty of a conversion so as to be liable in an action for trover, and that the asportation of the cotton from the wharehouse to the station of despatch being without reference or intention as to whose was the property in the cotton, was not a conversion. Martin and Channell B. B., considered that it was well settled that the assumption and exercise of dominion, (asportation being an exercise of dominion) over a chattel inconsistent with the title and general dominion which tlie true owner has in and over it, is a conversion, and that it was immaterial whether the act done was for the use of the defendant himself, or of a third person, and that any one who deals wrongfully with the goods of another is equally liable whether he be principal or agent. Cleasly B., was of opinion that as the real principals were not disclosed at the time the bargain was made, the defendants necessarily became the parties to the contract until the real principals being ascertained were adopted by the sellers, and by their dealing with the cotton became liable for a conversion. Kelly C. B., and Byles J., considered the defendants were not guilty of conversion, inasmuch as they had acted only as brokers, and had exercised no dominion over the cotton in their own right and for their own bene- fit. Kelly C. B., on this point said ; " It is true that a conversion has been cor- rectly defined to be the exercising of dominion over property inconsistent with the title of the owner. But justice, expediency, public policy and common sense have introduced exceptions or qualifications to this doctrine. A cari-ier, who delivers a quantity of merchandise to one who claims and receives it as owner, a packer who packs and prepares for shipment and actually ships and consigns goods to one who receives and deals with them as his own, exercises dominion over them adversely to, and inconsistent with, the rights of the true owner. Why then should not a broker, who interferes in the transfer of goods, not in his own right oi- on his own account, or chaiming them as his own, but as the medium only between the vendor and purchaser, deriving no benefit from the transaction except his commission, be hehl equally williiu the exception which has been applied to carriers and packers ? Considering the vast number and variety of the transactions effected, and the immense amount of property dealt with by bi^okers acting in the ordinary and accustomed course of business in London and Liverpool, and other great commercial towns, it seems most un- reasonable and unjust that they should be bound to enquire into the titles of all the sellers of all the mcrcliandi.ses in respect of which they ncgociate contracts as brokers, or incnir the risk of bring compelled to make good the value to 400 TIIK r,AW OK ACt'NTY. some unknown ownors, wlio Imvf been improvident ononjjh to part with thorn to a (lislionost poi-son in whom tlujy have reposed a misplaced confidence. Then ciin it ni:il of liis real or apparent authority, and has otherwise lawfully oontractcd with such (liird party on his principal's behalf.' Thus wlicri^ a nianib pfomasta having complete control of an aratdari business borrow- ed money cm belialf and in the name of liis principal for the purposes of the busi- ness, it was hold that the borrowing being an ordinary incident of the business, (lie iiiiiuii);vl w:is liable in a suit brought against the principal by the lender of the moiie}'.* But if the agent lias not acted within the scope of his authority or ajipai-cnt authority in the business of the agency, and the act done by the agent is one which is unnecessary for the pi-iucipal's business, the principal will not be held liable.^ Thus where the managing agents of the Baree Tea Company had a o-eueral bankintr account with the Oriental Bank, which account they were allow- ed to overdraw on having the overdraft properly secured. And nnder the articles of Association of the Company the managing agents Messrs. Nichols and Company had power to draw, accept, endorse and negotiate on behalf of the Company all notes, drafts &c. as should be necessary for enabling them to carry on the business of the Company, ar.d Nichols and Company purporting to act under this power drew a bill on the managing agents of the Company, which was accepted by the Company, and endorsed by Nichols and Company to the Oriental Bank who credited the amount to Nichols and Company's general account ; and this amount was drawn out by cheques drawn by Nichols and Company personally, without reference to the Baree Tea Company, and there was no proof that the money had been expended for the purposes of the Baree Tea Company, the Court held in a suit by the Bank against the Baree Tea Company that the latter were not liable on the bills as acceptors. Garth C. J., said : — " The question appears to be one of fact. "Was the bill drawn and accepted for the purposes of the Com- pany ? or can we say upon the evidence that it was necessary for carrying on the business of the defendants Company that the bill should have been nego- tiated ? It has not been shewn that any of these sums were required for or expended upon the defendants' Tea Garden, or were otherwise used for the pur- pose of the defendant Company even if the Rs. 15,000, (the amount of the bill in question) had been paid into the hands of Nichols and Company instead of beiuo- applied by the plaintiffs in discharge of Nichols and Company's private debt to them, I much doubt whether the defendants would be liable to pay the amount of the bills, unless it could be shown, Avhich it certainly has not in this suit, that the money was really required for the purposes of the defendant Company.* » Ind. Coiitr. Act, ss. 230, 233. Roghoohardi/al Mundur v. Christian, 3 W. R., 123. « Denohundhoo Shaw v. Rally Doss Roy, (unrep.), App. No. 23 of 1887, decided by Peth- rara C. J., "Wilson and Tottenham JJ., on the 2-tth November, 1887. ■ See post p. 421 " Liability to third jiersons for apparent authority of the agent.' Mackentie, Lijall v. Moses, 22 W. R., 156. ♦ Oriental Banlc Corporation v. Baree Tea Co.. T. L, R , 9 Calc, 880. WABTT/TTT OP PPTWCrPAr, TO THfBK PATfTTE^. 409 AncT further tlie contract made by the agent for his principal, in order to bind the latter to third parties, mnst be one which the principal is not entitled to repudiate.' Where the principal is undisclosed he is liable when discovered.— Although as has been pointed out in the lecture on the Liability of the Agent to third parties, the agent is presumed to have contracted personally when not disclosing his principal, and is in such cases prima facie liable on the contract ;« yet inasmuch as the contract entered into by the agent is in reality that of the pinncipal, it having been made at his command, the principal will, at the option of the third person, when discovered, be liable to be sued on the contract.^ A test of whether a person answers to the definition of an undisclosed principal, and can be sued as such will be found in the case of United Kingdom Mutual Steam Ship Company Assurance Association v. Nevill.^ Exception to the rule. — This rule that an undisclosed principal when discovered is liable to be sued at the election of the third person if such elec- tion is made, as will be seen hereafter, within a reasonable time, is subject to this qualification, viz., that he will not be held liable if such third person has induced the principal to act upon the belief that the agent only would be held liable.^ This is made clear by the decision of Mr. Justice Harriot in Premji Trikandas v. Madhowji JFuiiji,^ there the defendant was a merchant residino" in Dholera whose agents in Bombay were Moti Granesh and Narranji Kessawji, the latter of whom carried on business at Bombay under the name of Sunderii Kes- sowij, Moti Ganesh being a servant of the defendants who used to purchase for the defendant under directions from Sunderi Kessowji. A running account was kept between the defendant and his agents, in which the former was debited with the price of goods purchased on his account, hy the agents, and was cre- dited with the price of goods sold by the agents on his account, and with the amount of remittances which he sent to the agents from time to time. In ful- Hlment of orders received from the defendant in March 1879, the agents bouo-ht From the plaintiff during the month of March, three lots of cocoauuts, viz. 20,000, 10,160, and 26,626 at certain rates, the purchase-money to be paid on delivery. At the time of making the three sales, the plaintiff did not know and Iiad no reason to suspect that Sunderi Kessowji was purchasing as agent, but considered him to be the principal in the transaction. The two fii^st lots of cocoanuts were trans-shipped from the plaintiff's boats to the " Laksmiprasad," and the third lot to the " Lalsary " for transport to Dholera. The " Lalsary " ' Ind. Contr. Act, s. 215. See p. 309. • Ind. Contr. Act, s. 230, para. 2. • Ind. Contr. Act, s. 233. Furmanandass Jivandass v. Cormack, I. L. R., 6 Bom., 324, • L. R., 19 Q. B. D., 110. • Ind. Contr. Act, 8. 234. • Premji Trikandax v. Madhotvji Munji, T. L. R., 4 Bom., 447. D D D 410 TlfK LAW OK AURNOV. sailed fi-oni JJoniljiiy (»ii the ;{Ist Aliiicli, and on iinivul af l)li 2 Sm. L. C , 7th Ed., 364. ' L. R., 7 Q. B., 598. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 411 and agent has not been altered to the prejudice of the principal. To arrive at this desired construction not only should I have, as suggested, to substitute the word " former " for " principal," but it would also be necessary to alter the concluding sentence of the section, by substituting the word ' principal ' for the words ' other party to the contract.' Moreover the illustration to the section would be inapplicable Section 234 imposes a further qualification upon the rights given to the other contracting party by the second portion of the first paragraph of section 231. It will be seen therefore, if my view of the construction of the section is correct, that the Indian Contract Act has by section 232 adopted, as regards the principal, the qualification imposed on him by English law, namely, that he must take the contract subject to all the equities, in the same way as if the agent were the real principal : but that, in the converse case of the other contracting party, it has not imposed upon him the qualification laid doxmi by the cases of Thompson v. Davenport and Armstrong v. Stokes, namely, that his (the other contracting party's) right to hold the principal liable, is subject to the qualification that the principal has not paid the agent, or that the state of the accounts between the principal and agent has not been altered to the prejudice of the principal. The only qualification imposed on the assertion, by the other contracting party, of his right as against the principal, is that imposed by s. 234, namely, that he has not induced the principal to act upon the belief that the agent only Avill be held liable. This qualification is almost the language used by Parke B., in Heald v. Eenworthy,^ in explanation of the language of Bayley J., in Thompson v. Davenport. Parke B., says : — ^' If for example the principal is induced by the conduct of the seller, to pay his own agent on the faith that the agent will settle with the seller, in such a case the seller would be precluded from recovering, as it would be unjust for him so to do. But under ordinary circumstances, the plaintiff in such case is entitled to recover, unless he has either deceived the defendant (there the principal) or induced him to alter his position." It will not be out of place to refer more fully the case of Heald v. Ken- tvortliy,^ as it appears to be the case on which section 234 of the Indian Contract Act is based. The declaration in that case was for goods sold and delivered, to which the defendant pleaded that the purchase was made by one Tayloi', the defendant's agent, and that the defendant, within a reason- able time after the sale, and not unduly early, bond fide paid to Taylor suffi- cient money to pay the plaintiff. The plea was subsequently amended so as to admit that a debt had been created between the plaintiffs and the defendant, but the amended plea is not set out in the report. Pollock C. B., said : " I am of opinion that the plea is bad. It comes shortly to this — a person employs his agent to pui-chase goods for him, with authority to pledge his credit. ' 24 L. J. Ex., 76. 412 i"K LAW OK AOKNCY. The agt'iit tluus Ko, :ind thus creates a debt; aud 1 aj,'rce with the remark made by my Brother Parke, that nil the cases in which the principal has been held to be discharged, are cases in which the seller has enabled the atrent to misrepre- sent, or where the agent by some conduct adopted by the seller has placed his principal in a worse situation than that he ought to be in. This plea contains nothing of that sort. It merely states that the plaintiffs treated Taylor as the principal, and that the defendant bond fide settled with him." Parke B., said : " I am of the same opinion. The plea simjily states that after the contract was entered into between the plaintiffs and a third party, the agent of the defendant, under circumstances which rendered the defendant liable upon it, the latter paid the agent ; I am of opinion that this is no defence to this action. It is clear- that if a person orders an agent to make a purchase for him, he is bound to see that the agent pays the debt ; aud the giving the agent money for that puipose does not amount to payment, unless the agent pays it accordingly. But thei-e are no doubt cases and dicta which, unless they be understood with some qualification, afford ground for the position taken by the Counsel for the defendant." His Lordship then quoted the dictum of Bayley J., in Thompson v. Davenport, viz.. ' that if the agent does make himself personally liable, it does not follow that the principal may not be liable also, subject to this qualification, that the principal shall not be prejudiced by being made personally liable if the justice of the case is, that he should not be peisonally liable If 'the principal has paid the agent, or if the state of accounts between the agent here and the principal would make it unjust, that the seller should call on the principal the fact of payment or such a state of accounts would be an answer to an action brought by the seller where he had looked to the responsibility of the agent," and proceeded : — " The expression ' make it unjust,' is very vague, but if rightly understood, what the learned Judge said, is. no doubt, true. If the conduct of the seller would make it unjust for him to call upon the buyer for the money ; as, for example, where the principal is induced by the conduct of the seller to pay his agent the money on the faith that the agent and the seller have come to a settlement on the matter, or if any representation to that effect is made by the seller, either by words or contract, the seller cannot afterwards throw off the mask and sue the principal. It would be nnjnsf for him to do so. But I think there is no case of this kind where the plaintiff has been precluded from recovering, unless he has in some way contributed either to deceive the defen- dant or to induce him to alter his position." To the same effect, in the same case, was the opinion of Alderson B., who said: — "But there must be some act on the part of the creditor to wan-ant us in saying that the payment by the debtor to his agent, is to be treated as a payment to the creditor." "With reference to the arguments based on Armstrong v. Stokes} nsed by the • L. R., 7 Q. B., 698. LIABILITY OP PRINCIPAL TO THIRD PARTIES. 413 defendant's Counsel in the Bombay case before Mr. Justice Marriott, I may here remark, that although Armstrong v. Stohes does not appear to be law in Iildia, that case has been to a great extent disapproved of in Irvine v. Watson} which was a case in which the vendor knew that the person with .whom he was dealing had a principal behind, although he did not know who that principal was. Brett L. J., in that case said : " If the authorities stood there " {i. e., previous to the decision of Armstrong v. Stokes) " I should have no doubt that the limita- tion put by Parke B., (in Heald v. Kenworthy) on the earlier wide qualification was correct. But it is suggested that that limitation was overruled in Armstrong V. StoJces. I think, hoAvever, that the Court thei'e did not intend to overrule it, but to treat the case before them, as one to which the limitation did not apply... If the case of Armstrong v. Stokes arises again, we reserve to ourselves, sitting here, the right of reconsidering it." Baggallay L. J., also said: — "It is to be observed that they were mere dicta, (in Thompson v. Davenport) and quite unnecessary to the decision. The largeness of those dicta, has since been dissented from by Parke B., in Heald v. Kentvorthy, and with his dissent, I entirely agree." It therefore appears, that the dicta of Thompson v. Davenport, Smyth V. Andsrson, and the ruling in Armstrong v. Stokes are no longer con- sidered correct on this point, and that the rule laid down by Parke B., in Heald V. Kenworthy prevails. In India the case of Irvine v. Watson^ would be in accord- ance with s. 234 of the Contract Act, as also as has been seen is the case of Heald v. Kemoorthy, I therefore think that it is correct to say that the only qualification to the right of the vendor to hold an undisclosed principal liable, (whether in the case where the vendor at the time of the sale supposes the agent to be himself a principal and gives credit to him alone, and afterwai'ds discover the principal, and also where the vendor knows that the person Avith whom he is dealing has a principal behind, although he does not know Avho that i)rincipal is) is that laid down by Baron Parke in Heald v. Kcnicorthy, viz., that where the principal is induced by the conduct of the seller to pay his agent the money on the faith that the agent and selk'i; li;i\e come to a settle- ment on the matter, or if any representation to that effect is made by the .seller, either by words or conduct, the seller cannot then turn round and throw off the mask and sue the pi^ncipal ; or in other words, the only qualification is, that laid down by s. 234 of the Contract Act as based upon Heald v. Kenirorthy. It may be remarked that in Armstrong v. Stokes,'^ it is said of Heald v. Kenicorthy, " that the case arose on a demurrer to a plea, which plea as amended is not set out in (he report, and therefoi-e it is not easy to say what was tlic actual clcci.sion ; that it does not appearthat in any part of the jilea set out that the plaiutill' was 1 L. K, 5 y. H. I)., Hi, in the Court '»<•!. .w L. K.. ', q. M. I)., lo-'. '■' L. R , 7 y. B., 598. 414 I in; law hk agenct. i^'iior.iiit of (lie cxistrnco ol (lie (l( r(!ii(l!iiit as |>iiiici|)iil till sifter th(! defendant Imd [iiiid (lie moiiry, nor even that tlic (Irrciidiiiit hclicived siicli to he; the case. And timt tlieivioi'u the ])lea nus not such as to raise the very point ; tiiat the opinions of the Coiut wei'c hut dlrta entitled to hiyh resp(!ct as an authority, but not bindinp^ as a decision."' But haviiitif rei^ard to the o|iinif)ns given in Irvine v. Watson^ in the Court of Appeal, and to the fact that iu India the law is laid down for us in section 234 of the Contract Act, whether that i.s so or not, will not affect the law as adniiuistei-ed in this country. Where the principal is induced to believe by the seller that exclusive credit is given by the seller to the agent, a settlement or payment made by the known or unknown principal to his agent before the due date of payment, may of course relieve the principal from responsibility to the seller.'^ IJut mere delay in enforcing payment from an agent will not be sufficient to discharge the principal from his liability ; but in order to discharge him from a debt contracted by his agent, the principal must show that the creditor has himself mislead him into supposing that he has elected to give exclu- sive credit to the agent, and that the principal has been prejudiced by that sup- position.^ In the case last cited therefore the doctrine laid down in Heald v. Ke7i- ivorthy* and sanctioned by the Coui't in Irvine v. Watson,^ has been clearly followed. As to the principal's liability on negotiable instruments where his name is not disclosed- — A question may arise as to whether the rule iu force iu England as to negotiable instruments, namely, that nobody is liable upon a bill of exchange or promissory note unless his name, or the name of some partner- ship or body of persons of Avhich he is one appears either on the face or the back of the instrument, holds good in India (although this rule appears to be no longer law as far as acceptances of bills by agents of Companies are concerned since the case of Okell v. Charles,)^ having regard to sections 27 and 28 of the Negotiable Instruments Act and s. 233 of the Contract Act. The rule above stated is foTinded on the Law Merchant ; and is referred to by Lord Abinger in Beckham v. Drake^ as follows : — " The right to sue the principal when disclosed does not apply to bills of exchange accepted or endorsed by the agent in his own name ; for by the Law Merchant a chose in action is passed by endorse- ment, and each party who receives the bill is making a contract Avith the parties upon the face of it and with no other party whatever." This rule is also re- ferred to in Lindiis v. Bradwell,'^ Thomas v. Bishop,'^ NichoUs v. Diamond,^ Lead- bitter v. Farruw,^^ In re Adansonia Fibre Company, Miles's claim,^^ and Byles o» ' L. K., 5 Q. B. D., 4U. ' 5 C. B., 583 ; 17 L. J. C. P., 171. » Irvine v. Watson, L. E., 5 Q. B. D , 102, (107) » 2 Str., 955 • Davidson v. Donaldaon, L. R., 9 Q. B. D., G23. » 23 L. J. Ex., 1. • 10 Ex., 739. '" 5 M. & S., 349. » 34 L. T., 822. " L. R., 9 Ch., 635. • 9 M. & W., 92, LIABILITY OF PBINCTPAf, TO THIRD PARTIES. 415 Bills (14th ed., p. 44, 13th ed., p. 38), Button v. Marsh} Alexander v. Sizer.* The question appears to be, is section 233 of the Contract Act applicable to the case of negotiable instruments ? From certain remarks made on page 1 of the Introductory Chapter to Cunningham and Shepherd's Contract Act, it appears that certain special subsidiary chapters of the law of contract, amongst which is mentioned the law regulating promissory notes and bills of exchange, are said to have been intentionally omitted from the Contract Act. However in a report^ of a Select Committee on the Negotiable Instruments Act, the Com- missioners say in paragraph 13, '" We made s. 40, (which section now answers to s. 28 of the Act, ) agree with the Contract Act by wording the exception thus: — "except to those who induced him to sign upon the belief that the principal only would be held liable ;" this agreement, however, clearly only applies as to s. 234 of the Contract Act, and not to the whole Act. But again in para. 16, they say, " We have omitted s. 42, as the Indian Con- tract Act, 1872, will of *its o^vn force extend to all contracts evidenced by bills, notes and cheques."- Also in para. 34, they say : — " We are well aware that the Bill does not deal exhaustively with the subject ; but we believe that the Bill, the Contract Act (to which it is a supplement) and the Evidence Act will, taken together, supply rules sufficient for the disposal of the ques- tions that ordinarily arise as to the rights of parties to negotiable instruments." These remarks appear to show that the Contract Act and the Negotiable Instru- ments Act together form the law on contracts evidenced by bills and notes. There do not appear to be many Indian cases on the subject. There is, however, the case of Sheo Churn Sahoo v. Curtis,'^ decided in 1865, which appears to have been decided on the Law Merchant as reference is thei*e made to Byles on Bills ; in that case it was held that where an agent signs a note Avithout disclosing liis principal, the principal could not be made liable, and that no evidence was admissible to establish his liability. In the case of Synd Ali v. Gopal Doss,^ it was held that the Law Mex-chant was not applicable to tlie Mofus- sil where custom is set up. In Fiyuu v. Earn Kishen.,'^ there are cei'tain dicta, (which are, however, refei'red to in ILurree Mohun Bijsack v. Krishore Muhuv Bysack} as being distinctly obiter,) Avhich at all events refer to the English rule of law as existent in India; and again there is the decision of Bommee Chetty Bamiah v. Visvanada Pillay,^ which refers to the rule of English law, and » L. R., 6Q. B., 361. » L. R., 4 Ex., 102. « See Part V, p. 163 of the Gazette of India, dated 20th June, 1878. • 3 W. R., 139. » 13 W. R., 420. « 2 W. R., 302. ^17,.W, R., 442. « 6 Mad., Jnr., 305. fin T1TR r.AW fir AiiRVf'V. infoi's, I fliiiik, (liiii it is Mpplif.ihlf in India. All tliosf casos'are, liowever, pre- vious to tho Contract Act. And la.stly, there i.s the case of In re the New Fleviminq Spinnitiff and Weaving Company,^ a case of a Company, decided in 1870, in which Bcrlilinm v. DrnJce. and in re Aflanxrmia Fibre Comjpnny, Miles^s rlaim, ai'c bnlli considci'od and in Avhich case the Court of appeal held that in order to ninkc a Coiiipnny liiiblc on n hill or note it must appear on the face of it that it was intended to he di-awn, accepted or made on liehalf of the Company, and that no evidence dehors the hill or note was admissible under the companies Act to show on whose behalf the bill or note was made — and that case has been followed in Tn re Numey Spinning and Weaving Company* I would further point out that neither the Contract Act, nor the Negotiable Instruments Act are ex- haustive, and that it may well be that the Law Merchant is not therefore inter- fered with. A somewhat analogous instance of the Common law liabilities of Common Carriers being held not to be touched by the Contract Act will be found in the cases of Moothora Kant Shato v. India General Steam Navigation Company,^ and Moheshicar Das Y . Carter.^ And lastly it must be remembered that negotiable paper circulates amongst the mercantile communities of the world as repre- senting money, and it is therefore of importance that the character and liability of the parties to it shall appear with certainty upon the face of the paper itself. And if, as said Mr. Latham in the Bombay case, evidence were to be admitted of an undisclosed principal in the case of a bill or note, the value of the bill or note as a negotiable instrument would be destroyed ; for they both go into the market on the credit of the name appearing on them. And if there- fore evidence were to be admitted that some unknown person was really liable, an element of uncertainty would be introduced that would destroy their value. Further, a drawer of a bill is entitled to get notice of its dishonoiu', and without such notice he is discharged ; but a holder of such bill may not know at the time that it was drawn by a Company, and so be unable to give notice. Election. — Wherever, a vendor discovers that the person with whom he has contracted, is acting for a principal, he may hold either the principal or agent or both of them severally liable.^ In such case either the principal or the ao-ent may, when sued, contend that his liability to be sued was put an end to by the plaintiff's election to sue the other party.^ Thus in Purmamindass Jivandass V. Cormacli,'^ Pnrmanundass claimed to rank as a creditor of the New Flemming » I. L. R., 3 Bora., 439: on appeal I. L. E., 4 Bom., 275, (278), (285). * T. L. R., 5 Bom., 92. ' I. L. R., 10 Calc, 166. ♦ I. L. R., 10 Calc, 210. » Ind. Contr, Act, s. 233. • Evans on Principal and Agent, 528. Gouree Sunkur v. Bholee Peishad, 11 W. R,, 247. ' I. L. R., 6 Bom., 326. LrARILITY OF PKTNCIPAL TO THIRD PARTIES. 417 Spinning" and Weaving Company Ld. in liquidation in respect of a sura which he had lent to Nursey Kessowji, then the secretaiy, treasurer, and agent of four ■ Mill Companies, amongst wliich was the New Flemming Spinning and Weaving Company ; Purmannndass, being at that time unaware on behalf of what principal Nui"sey was acting ; the money being advanced to him as an agent for an undis- closed principal. To secure this loan Nursey executed an agi'eement and deposited shares of the Company with Purmannndass; the father of Nursey fiu^ther guaran- teed in writing, the repayment of the above loan. Subsequently Nursey, without the knowledge of his father, extended the time for repayment of this loan. Nursey shortly afterwards became insolvent, and about the same time an application was made to wind up the Company. Purmannndass then made enquiries from the New Flemming Company if the sum he had lent appeared to his credit in their books, and was informed that this was so. Shortly after this Purmannndass through his attornies gave notice that he should sell the shares deposited with him as security, and, the Company being then in liquidation, claimed payment from the Company of the sums lent, filing his claim before the Official Liquida- tor. Purmannndass also sued the father of Nursey on his guarantee, but without success, the suit being dismissed on the ground that time had been given to Nursey Avithout the knowledge of the guarantor. In the claim proceedings, it was con- tended by the Official Liquidator that the loan w'as to Nui'sey personally, and that credit had been given to him and to his guarantor and not to the Company ; that Pui'manundass having elected to give credit to the agent and not to the Com- pany, knowing that the latter was the principal, was not entitled afterwards to turn round and charge the principal on the default of the agent. Mr. Justice Bayley found that Nursey had power from the Company to borrow, that he was per- sonally liable under his express contract, but that having acted for an undisclosed principal, the claimant was at liberty on discovery of the principal to hold the Company or Nursey or both of them liable ; that he had not at any time in- duced the directors of the New Flemming Company to act upon the belief that Nursey only would be held liable, but had asserted his claim against the Com- pany with all his power ; and with reference to this question of election said, " Purmannndass, directly he knew who the principals really were, elected to proceed against them, and in no way and at no time can he be said to have elected to proceed against Nursey. An election once validly made is final, and cannot be opened or altered, and a fresh election made." So again in Colder v. DobcU,^ Mr. Justice Montague Smith says : — " The cases shew that the seller may make his election whenever the principal is discovered ; and the only difference in principle between the case where the principal is disclosed and where ho is not disclosed, is, that in the former case the election may be made at the very time ' L. ]{ , (J C. 1'., ISu, ( W7). K K E 4IS TIIK LAW OK AdKVCV. tlie contract is Tiitxde." Tliis liL^lit of clcffidn is, linwrvcr, sii])jpft to this, tliat if the third person lins indiici'il ciiln r the ;ilc<'iiI oi- tlic |iiiiiciji;il to act on the hclic'f that tlic |iiiii(i|ial or nf^ctit will he. held exclusively iiablo, he cannot then liavi' a iiLrlit to elect lietweeii tlieiii.' Election must be made within a reasonable time. -Althoii;,'h the tliii'd iHTSon has a rig-ht to elect as to wlioni lie will hold liable, yet ho must make such election Avithin a reasonable time after the discovery of the real principal. For as Mr. Justice Hill says in Smethurst v. Mitchell,'* " It is most important that the vendcn-, when he is made acquainted a.s to who is his principal, should make his election within a reasonable time. The language of the Judges in all the cases is, 'on discovering the principal there- upon the vendor has a right to charge the principal ' a vendor cannot hold his principal liable where there is an}- circumstance in the case which render.s it not right or equitable that he .should do so ; for instance, by lying by, and by his conduct inducing the purchaser to change his position." What is evidence of election. — The case of Colder v. Dobell,^ to which Mr. Justice Bayley in the Bombay ca.se refers, lays down some few points on the que.stioii of election which may be usefully referred to as showing what is evidence of election; there, a broker entered into a contract in his own name, although he had verbally disclosed to the vendors who his principal was : it Avas contended that the very fact of the plaintiffs (the vendors) entering into the contract with the broker, and the demand from him of payment were evidence of election. Bovill C. J., said : — " Election must be a matter of fact ; and it appears that at the time of entering into the contract, the plaintiffs ex- pressly refused to trust Cherry (the broker). The next ground of alleged election was the demand of payment made on the broker. That, however, was an equivocal act. If the plaintiffs have got the responsibility of a principal, the demands made upon the agent may have been made upon him on behalf of his principal." Willes J., said : — It would be a very remarkable conti-act if the buyer could sue the sellers upon it, and yet the sellers he precluded from suing the buyers. The result is, that the defendant must show that his liability was put an end to by the election. That is what Lord Tenterden meant when he said in Tliompson v. Davenport* that, ' if at the time of the sale the seller know not only that the person who is nominally dealing with him is not prin- cipal, but agent, and also know who the principal really is, and notwithstanding all that knowledge, choses to make the agent his debtor, dealing with him alone, then, according to Addison v. Gandaseqne,^ and Paterson v. Gandaseqtie,^ the seller cannot afterwards, on the failure of the agent, turn round and chai'ge • Ind. Contr. Act, s. 234. ♦ 9 B & C, 98. » » Jnr., N. S., 978 ; 1 El. ct El., 622. * 1 Tannt., 57-t. • L. R., 6 C. P., 4SG. * 15 East., 62. LIABILITY OF PRINCIPAL TO THIRD PARTIES. '^19 the principal, having once made his election at the time when he had the powei' of choosing between the one and the other.' I do not agree with Mr. Holkar that two persons cannot be severally liable npon the same contract. The question is, whether there was anything in the circumstances of this case to negative or exclude the liability of both principal and agent, or to substitute the liability of the latter for that of the former." Montague Smith J., said : — " I agree that it " (the entering " into the contract Avith Cherry in his owu name) was strong evidence " (that the plaintiffs had elected to treat Cherry alone as the principal ;) " but if the parol evidence (to charge the principal) was admissible, it shews what the real transaction between the parties was Mr. Holkar contended, that the election was made and conclusively made at the time of the contract. The cases show that the seller may make his election when- ever the principal is discovered ; and that the only difference in principle between the case whei^e the principal is disclosed and where he is not disclosed, is, that, in the former case, the election may be made at the very time the contract is made." As to what constitutes a conclusive election.— Whether in regard to proceedings taken against the agent anything short of judgment and satisfaction would be sufficient to exclude resort to the pi'incipal is the point raised in Priestly v. Fernie,^ a case also referred to in the Bombay case of Purmaniuidass Jivandass v. Cormack. There, an action had been brought in the Supi'eme Court of Melbourne against the captain of a ship for the non-delivery of goods pursuant to a bill of lading, in which the plaintiff recovered judgment. A feresh judgment was obtained in the Court of Exchequer at Westminster, and upon the judgment which was then recovered against the defendant (the captain) a ca sa was issued, upon which the captain was arrested and detained until he was subsequently made a bankrupt. An action was then brought by the same plaintiff for the same breach upon the bill of lading against the shipowner (the principal), to which was set up, by way of defence, the previous proceedings against the captain, which were relied on as a conclusive election in point of law to hold the captain alone responsible and discharge the shipowner. It was argued on behalf of the plaintiff in that case, that generally resort might be had to the principal unless the agent had been so dealt with as to render such a course unjust, and that so far as legal proceedings against the agent were concerned, nothing short of satisfaction as well as recovery of judgment would have that effect, and it was pointed out that the discharge of the captain by force oF tlio bjuiki-upt law, and without the plaintiff's consent, did not amount to satisfaction. Urn aiwell 13.. licld. that where an agent who has made a contract in his own name has been sued on it to judgment, even without satisfaction, no second action wouUl l)c maintainable ' 3 H. & C.,y77. 420 'I II I' i.wv or A(;f;\rv. aj^niiiist llic ))riiiri|);il. Rut (j)iiaiii .1.. in ilclivci-iiiL,'- jud^'inciit in ^'»/7/'.< v. WiUidiii- «)«' snvs wiHi rcLTiiiMl lo I lie jud^'inciil of IJi'iiinwcIl H., in ('rifsllij \. FttrntP., "It is clciii' lioin the liiny'uafi^o used by IJrnniwoIl IJ., that whilst it was considored that jialL;uKut against the ap^cnt, even without satisfaction, would constitute a couclusive election, yet that no legal proceedings short of judgment would have that effect, for he distinctly points out that by the word ' sue ' he means ' sue to judgment.' If the facts in the present case were similar to these in Priestly X. Fernie, we sluMild, of course, be bound by the decision in that case to hold that " suing" the ])riucipal in the sense in which the word " sue" is there used, would, though the claim remained unsatisfied, amount to a binding election." The mere fact of filing an affidavit of proof against the estate of an insolvent agent to an undiscovered principal, after that undiscovered principal is known to the creditor, is not conclusive election by the ci'editor to treat the agent as his debtor ; although it might possibly, in an appropriate case, constitute with other facts some evidence of election to be submitted to the jury.^ And it is clear that the election must be made within a reasonable time after the vendor has discover- ed the principal ; and nine months has been considered not to be within the limits of such reasonable time.^ Doubts, however, have been expressed by the learned Judges of the Madi-as Court, in Head v. P. M. Mutukarappen Chetty,^ how far the doctrine of Priestly v. Fernie^ ought to be applied to this country, or if applied whether, to a case of election by suit in a foreign country and the ob- taining of a judgment there which has no fruits; I tliink, however, that as the !Madras and Bombay Courts in the cases about to be referred to, have, since 1871 the date of the decision referred to, referred to the case of Priestly v. Fernie and drawn deductions therefrom in the judgments delivered, it may be taken that the doubt expressed no longer exi.sts. In the Bombay case referred to^ it was, as before stated, sought to show that Purmanundass had elected to treat Nursey Kessowji as his debtor, for whom one Kessowji Naik had stood security ; no action was ever there taken against the agent Nursey Kessowji. but Purmanun- dass sued Kessowji Naik, but did not obtain judgment against him as the suit was dismissed with costs; it was there said by Mr. Justice Bay ley ; — "No case has been cited, nor I believe does any exist, which shows that suing a person, who has guaranteed, a loan, or the price of goods sold to an agent, and, moreover, suing him without success is a binding election to deal with the agent as alone ^ L. R., 10 Q. B., (60). • Curtis V. Williamson, L. R., 10 Q. B., 57. • Smethherst v. Mitchell, 1 El. & El., G22. • 6 Mad. Jur., 217. • 3 H. &C., 977. • Funnaninidass V. Jivandass v. Cormaclc, I. L. R., 6 Bom, 326. Sco also Dcvrav Krishna Halambhai, I. L. R., 1 Bom., 87. LTABILITV OF PRIXCIPAF, TO THIRD PARTTKS. 421 liable, and abandon all right to take proceedings against his principals. Here the election to go against the Company and to charge them as principals had been duly and finally made long before proceedings were commenced against Kessowji Naik." And in the Madras case of Ramam v. Vairaram,^ where a creditor sued an agent of his debtor, alleging that the agent had made himself liable for the debt, and the suit was dismissed on the ground that the creditor gave credit to the principal, and the creditor then sued the principal for the same debt, it was contended that the suit against the agent was conclusive evidence of an election to give credit to the agent ; and for this position Priestly v. Fernie, was relied on ; the Court held that the principle transit in rem judicatam did not apply, as there was no judgment against the agent on the debt. When the principal is a merchant residing abroad.— In such case practically the same principles apply as are aj)plicable to the liability of un- disclosed principals — and in fact in all cases in which the presumption is, that the agent has contracted personally,^ the third person with whom he has con- tracted may hold the principal also liable.^ It is, however, not apparent how this rule is to be applied to the third clause of the second paragraph of Section 230 of the Contract Act, namely, in the case where the principal, though disclosed, cannot be siied. Liability to third person for the apparent authority of the agent. ^ Again if the principal by words or conduct has induced third pci'sons to believe that acts or obligations done or incurred by his agent without authority, were in reality done and incurred within the scope of his authority, in such case he will be bound by the acts of his agent, and will be liable therefor ;* for third parties cannot be affected by any private arrangement between the principal and the agent. And as has been mentioned in the lecture on the " Nature and Extent of the Authority," the apparent authority is in such cases to be taken to be the real authority. In considering this liability, care must be taken to note that the Contract Act makes no distinction between acts done by an agent acting under a general authority, and one having merely a special authority, for where a man deals with an agent knowing that lie is an agent, he is bound to inquire as to the extent of the agency, and if he does not do so, he must be taken to know the limits of the agent's authority.^ Tluis where a European firm employed an agent to make purchases of jute in the bazar, upon orders * I. L. R., 7 Mad., 392. ■^ Iiul. Contr. Act, s. 230, para. 2. « Iiul. Contr. Act, s. 233. * Ind. Contr Act, s. 237. Edmund.-i v. But-hell.L. R., 1 Q. B., 97 Suminrrs v. Solomon 26 L. J. Q. B., 301. National Bolivian Nnvitjation Co. v. Wilxnn, L. R., 5 App Gas , 209. * Levy V. Richardson, W. N , (IbBU), Eng., 25. Ind. Cuntr. Act, s. 237. Soe also Story 127, note 2. A'22 Tlir I.WV fiK ACKNTY. which uric in I'lirci- fni' two ). » 8 Moo. 1. A., 529, (581). F F F 42G TIM- LAW rii' Acrvrv. cuhtoiii III' (rnilr, or fi'om tho iiatuii; of the agency, a sub-agent must, ov may bo employed, tlu' |nincipal will be responsible to third persons for all acts done by liiii), just in (he same manner as if he were an agent originally ay)pointcd by the principal.'- But where the agent has without authority appointed a person to act as sub-agent, the principal will not be responsible to third parties for the acts of such sub-agent. * Whilst where the agent has under an express or implied authority named or nominated another person to act for his principal in the business of the agency ; such person is not considered to be a sub-agent, but stands in the position of an agent to the principal, and the ordinary rule as to the principal's I'esponsibility for the acts of an agent, will apply to acts of such person.* LiabiKty of principal for agent" s admissions. — As an agent can only act within the scope of his authority ; therefore declarations or admissions made by him as to a particular fact are not admi.ssible, unless they fall within the natui'e of his employment as such agent.* The rule admitting the declarations of an agent is founded, says Mr. Taylor, upon his legal identity with the principal, they bind only so far as the agent has authority to make them.^ The Indian Evidence Act enacts that statements made by a party to the proceeding, or by an agent to any such party, whom the Court regards, under the circum- stances of the case, as expressly or impliedly authorized by him to make them are admissions.^ This section therefore leaves it open to the Court to deal ■with each case as it arises, upon its merits.'' The test by "which it is to be decided whether the admission is binding on the principal being, is the agent under the circumstance of the case expressly or impliedly authorized to make the admission ? Principle on which agent's admissions are binding on the principal. — The pi'inciple on which admissions of an agent are supposed to be admissible against the principal are treated of by the Master of the Rolls in Fairlie v. Hastie^ a leading case on this class of evidence, as follows : — " As a general proposition, ■what one man says, not upon oath, cannot be evidence against another man. The exception must arise out of some peculiarity of situation, coupled with the declarations made by one. An agent may undoubtedly, within the scope of his authority, bind his principal by his agreement ; and in many cases by his acts. ' Ind. Contr. Act, s. 192. » Ind. Contr. Act, s. 193. ■ Ind. Contr. Act, s. 194. • Schuimck v. Loclx, 10 Moo , 39. Vencataramanna v. Chavela Atchiyamma, 6 Mad. H. 0. 127. Garth v. Howard, 8 Bing., 451. ' Taylor on Evidence, para. 541. • Act I of 1872, s. 18. » See Field on Evid., note, p. 117. • 10 Yes., 126. LIABILTTV OF PRINCIPAL TO THIRD PARTIEf. 427 Wliat tlie agent has said may be what constitutes the agi^eement of the prin- cipal ; or the representations or statements made may be the foundation of, or the inducement to, the agreement. Therefore, if writing is not necessary by law, evidence must be admitted to prove that the agent did make the statement or representation. So with regard to acts done, the words with which those acts are accompanied frequently tend to determine their quality. The party, there- fore, to be bound by the act must be aifected by the words. But except in oue or the other of those ways, I do not know how what is said by an agent can be evidence against the principal." An admission made by an agent is original evidence and not hearsay ; and being regarded as verbal acts, they are receiv- able in evidence without calling the agent himself to prove tliem.^ The admission must be regarding that which is the foundation of the suit, or in other words must have reference to the subject matter of the agency. — That the admission must be one with reference to the subject matter of the agency is quite clear ; In Peto v. Hague,^ Lord Ellenborough says : — What is said by an agent respecting a contract or other matter, in the course of his employment, which contract or matter is the foundation of the action, is good evidence to affect the principal, aliter what is said by him on another occasion." And as says Gibbs J., in Langhorn v. Allnutt.^ " When it is proved that A is agent of B, whatever A does or says or writes in the making of a contract as agent of B, is admissible in evidence because it is pai't of the contract which he makes for B, and therefore binds him ; but it is not admissible as his account of what passes." A further rule has also been laid down, viz., that an admission cannot be made with reference to bygone transactions ;* this rule does not appear to have ever been laid down in any reported case in this country, but there is little doubt that the Courts Avonld regai-d such an admis- sion, as one not " expressly or impliedly authorized " by the principal. The authority to make admission is at once put an end to by the determination of the agency, whether or no the determination of the agency has been properly brought about. ^ Rule. — It appears thei'efore that the admission must be within the scope and nature of the agent's authority, and with reference to the subject matter of the agency, and further should have been made in the course of his emplo}'- ment, and at the time of the transaction. And previous to tlioir admissiou the agent's authority must be proved. Admission by pleader, &C. — A statement nnulo in a case by a picador on ' Doe dem Oraham v. Haivhins, 2 Q. B , 212. Taylor on Evid., pani. 531). * 5 Esp , 134. See also Helyer v. Haivke, 5 Esp , 72. ' 4 Taunb., 511, (519). See also Coats v, Bainbridge, 5 Biug , 58. * Great Western Rij. Co. v. Il'i7/i,s, 34 L. J. C P., 105. * Kalee Churn Rtiwanee v, Bengal Coal Co., 21 W. K., 405. 4-iM 'iiii: LAW (>!•• A<;i:\rv. Ih'1i:i1I III' liis cliciil after full coiLsiilcriition, aud consultiition, has been held to bind llir cliiiit in another 8uit to which he is a party. ^ Tliis case, however, is very meagrely reported, and it does not appear in wliat way the prior admis- sion Avas connected with the second suit, further than by a bald statement that in the first suit "the plaintiff's claim was admitted and it was proposed to allow tlic chiini to be satisfied out of profits of tlie very mouzuh which it is alleged the defendant in the second suit held in izarah." So where a person sued as a sltaifce IcliulUt for possession of a four-anna share in a zemindari, in which suit ilio defendant's pleader admitted that his client was not a shaffee khullit, but claimed as a slialjec jur, the Court held that the defendant was bound by the admission of his pleader, and that a shaffee khullit having a preferable title under Mahomedau law was eutilcd to recover .2 But an admission made by a vakil cannot bind his client in a criminal case.^ Neither is a mooktear authorized under the Limitation Act of 1859, to bind his client by an admission of title.* iJiit an application made by a pleader on behalf of his client authorized by vakulatnamah for the purpose of postponing an execution sale has been held under the Limitation Act of 1877, s. 19, to be a sufficient acknowledgment by the pleader of his client's liability in respect of the right of the decree-holder to immediate execution of his decree, so as to bind the client thereby, and give a fi'csh starting point from which limitation would run.^ And a similar view has been taken by the Calcutta High Court on an application made by a vakil for additional time for payment of the amount of a decree.® "With reference to admission of fact by agents ; no fact need be proved which the parties or their a,"-ents agj^ee to admit at the hearing,' or which before the hearing they agi-eo to admit by any writing imder their liand,^ or which by any rule of pleading, in force at the time they are deemed to have admitted by their pleadings."^ Admission by partners. — Each member of a firm being the agent of the others for all purposes within the scope of the partnership business, admissions * Oomahuttee v. Parmhnath Pandei/, 15 W. R., 135. * Hitr Dyal Singh v. Heera Lall, IG W. R., 107. ■ Queen v. Kazim Mundle, 17 W. R. Cr., 10. * Luchmee Buksh Roy v. Runjeet Bam Fanday, 13 B. L. R., 177. * Ramhit Rai v. Satgur Rai, I. L. R., 3 All., ilS. Fateh Muhammed v Gopal Das.t, I. L R., 7 AH., 429. « Ram Goomar Kur v. Jalcur Ali, I. L. R., 8 Calc, 716 ; 10 C. L. R , G13. Torce Maliomed V. Mahomed Mabood, I. L. R., 9 Calc, 730 ; 13 C. L. R., 91. ' Rajunder Narain Rae v. Bijaigobind Sing, 2 "Moo. 1 A., 253. Khajah Abdool Gunnee v. Gow Monee Debia, 9 VV. R , 375. Kower Narain Roi/ v. Sreenafh Hitter, 9 W. R., 485. Kaleekanund Bhuttacharjee v. Gireebala Debia, 10 W. R., 322. Dossee v. Pitambur Pundah, 21 W. R., 332. " Act XIV of 1882, s. 128. » Act 1 of 1872, s. 58. LIABILITY OF PRINCIPAL TO THIED PARTIES. 429 by one (provided the Court regards liim as authorized to make the admission) are binding on all, unless, under the special circumstances of the case, an inten- tion can be inferred, that a particular act should not be binding without the direct concurrence of each individual partner.^ Mr. Lindley says, the admission of one partner with reference to a partnership transaction are evidence against the firm,2 but are not necessarily conclusive.^ And it has been held that even after dissolution an admission by one partner as to a payment of a debt due to the fii-m will bind the others.* But as to this case, Mr. Taylor remarks, that had the person making the admission not been jointly interested, as far as the debt was concerned, with the person against whom his statement was tendered in evidence, the decision would have, in all probability, been the other way.° But even dui'ing the continuance of the partnership, one partner cannot acknow- ledge a debt, or make a part payment, or payment of interest so as to give a new period of limitation binding on the firm, unless specially authorized in writing so to do.^ The admission of a partner as to a subject not of co- partnership, but of conjoint ownership in a vessel, is not binding on his co- partner. 7 Admission by a wife. — Where a husband has permitted his wife to act for him in any department of business, her admissions or acknowledgments in respect of such business are admissible in evidence against him ;^ but she can- not bind him by admissions, unless they fall within the scope of the autho- rity which she may reasonably be presumed to have derived from him.^ Declarations of deceased agent when admissible. — Statements, written or verbal, of relevant facts made by an agent who is dead are admissible, when the statement is made by the agent in the ordinary course of business,^*^ and in particular when it consists of an entry or memorandum made by him in book.s kept in the ordinary course of business, or in the discharge of professional duties, or when such statement is an acknowledgment written or signed by him of the receipt of money, goods, securities or property of any kind ; or of a docu- ment used in commerce written or signed by him, or of the date of a letter or other document usually dated, written or signed by him.^'^ ' Latch V. Wedlake, 11 A. & E., 959. Taylor on Evid., para. 598. * Wood V. Braddick, 1 Taant., 104. ' Wiclcham v. Wkkham, 2 K. & J., 491. Lindley on Partncrshij), 128. * Pritchard v. Draper, 1 Russ. & My., 191. * See Taylor, para. 586. Sec also Act I of 1872, s. 18, (1), (2). « Act XV of 1877, 8. 21. ' Jaggers v. Bennings, 1 Stark., 14. * Clifford V. Burton, 8 Moo., IG. » Meredith v. Fo.ster, 11 M. & \V., 202 ; 12 L. J. Ex., 183, '» Stapyltou V. Ch'U'jh, 2 El. &. Bl., 933. " lad. Evid. Act, s. 32. 4^0 Tni: i,.\\v OK Airvrv. Liability of principal by reason of notice given to the agent. Actual notice. Aflnal notictMo llic Ji^^'ut is, (iiiidui- ccrtiiiii (•(iiulil icnis) cousti-uctive notico to (lie iuinci]>;il liimscH'.' Foi- if this were not 8o, it would cause preat iiu-onvonii'iico, aiul notico might be avoided in every case by employing an agent. And for tlie same reason, information obtained by an agent has (under certain conditions) the same effect as though it had been obtained by the principal liimsclf.2 It has often been said that the knowledge of the agent is the know- ledge of the principal; but this phrase has been elaborately criticized by the Master of the Rolls in Blackburn v. Vigors,^ and is there said by his Lordship to be " evidently too large," " and if literally applied, it would often be wickedly untrue ;" and Lord Halsbury in the same case,* on appeal before the House of Lords says, " Some agents so far represent the principal that in all respects their acts and intentions and their knowledge may truly be said to be the acts, intentions, and knowledge of the principal, other agents may have so limited and narrow an authority both in fact and in the common understanding of their form of employment that it would be quite inaccurate to say that such an agent's knowledge or intentions are the knowledge or intentions of his principal : and whether his acts are the acts of his principal depends upon the specific authority he has received Where the employment of the agent is such that in respect of the particular matter in question he really does represent the principal, the formula that the knowledge of the agent is his knowledge is I think correct, but it is obvious that that formula can ouly be applied when the words " agent " and " principal " are limited in their application." Constructive notice. — Constructive notice has been defined as evidence of notice, the presumption of which is so violent, that the Court will not allow of its beino- contradicted. ^ The doctrine of constructive notice depends upon two con- siderations, first, that certain things existing in the relation or the conduct of pai'ties, or in the case between them, beget a presumption so strong of actual knowledge, that the law holds the knowledge to exist, because it is highly improbable it should not ; and next, that policy and the safety of the public, forbids a person to deny knowledge, while he is so dealing as to keep himself io-norant, and yet all the while let his agent know, and himself, perhaps, profit by that knowledge.^ The principles upon which this doctrine rest are also ' Vane V. Vane, L. R., 8 Ch., 383, (399). Bradley v. Riches, L. R., 9 Ch , 189, (196). • Pmudfort v. Mo7itefore, L. R., 2 Q. B., 511. • L. R., 17 Q' B D., 553, (557). • Blackburn Lou- <.^ Co. v. Vigors, L. R., 12 App. Cas , (538). • Per Eyre C. B., in Plumb v. Flnitt, 2 Aust., 438. Whito of constructive notice resting on the f^i-omid of tlic oxistencc of such a duty on tlic part of tlio agont." Whether the employment of a person by an agent to do a ministerial act constitutes that person an agent so as to affect the principal with notice of his knowledge. Nor t. It would be au encouragement of fraud to apply the rules of notice, which were establi.' lied for the safety of mankind to a transaction like this. Similai'ly on a somewliat analogous principle to tliat laid down in Kennedy v. Crreeu,^ the doctrine of * L. H., 26 Ch. D., 501, and Doonja Narain Sony. Banei/ iladltub Mozoonidar, I. L. R., 7 Calc, 201, (205). " SluD-pc V. For/, h. U., 4, Cli. App, f 10). » 3 My. & K., 6ya. 436 Tin: I, AW or aorncy. coiisd'iicl ivc iinllcc lins hccii held iii)t (o npply to cases wlicre thf; porHon scekiiig tlic Ix'iiclit of (liiit (loi'iriiic has l)ceii guilty of sccrocy in the transaction with Constrn('ti\(' nolict! of wliicli he seeks to alTerl a [mfrliaser'.' Carelessness in obtaining information, effect of on a purchaser.— Wlioro a person is proved to have liarl a knowledf^e of certain facts, or to have been in a position, the reasonable consequence of which knowledge or position would be, that he would have been leJ to make further enquiry, which would have disclosed a particular fact, the law will fix him with having himself had notice of that particular fact ; for there may be such wilful negligence in abstaining from enquiry into facts which would convey actual notice, as may properly be held to have the consequences of notice actually obtained ; but if there is not actual notice, and no wulful or fraudulent turning away from an enquiry into, and consequent knowledge of facts which the circumstances would suggest to a prudent mind, then the doctrine of constructive notice ought not to be ap))lied.2 Thus where one Baney Madhub, who was the owner of a tenure under two leases, one of which was in his own name and in the other in the name of his cousin, whilst in prison for an offence under the Penal Code gave a power of attorney to his cousin and to two other persons containing an authority to any two of them to sell his property if occasion required. Previous to his imprisonment a suit had been instituted against him for arrears of rent by one of his zemindars, which suit was decreed pending the imprisonment, and the tenure was in execution sold and purchased in the name of one Gopal Das ; and subse- quently two of the attoruies, one of whom was the cousin, conveyed the other leasehold tenure to Gopal Das and Chota Rankal Das ostensibly for valuable con- sideration. Some time after this, one Doorga Narain Sen became the purchaser of both the tenures under a kobala executed by Gopal Das and Chota Rakhal Das. On Baney Madhub Mitter's discharge from prison, he took proceedings under the Criminal Procedure Code to obtain possession of these properties, and an order was made, giving him possession, whereupon Doorga Narain Sen brought a suit against him to recover possession, as a purchaser for value without notice. The lower Court dismissed the suit, holding that the plaintiff had notice at the time of his purchase, that the sales and conveyances to Gopal Das and Rakhal Das from the two attorneys were benami transactions for Baney Madhub. First, because the I'ecitals of the conveyances were sufficient to put him upon enquiry, secondly, that at all events he was fixed with constructive notice, because he did not ask for the accounts or zemindary papers and did not obtain the deeds. Pontifex J., found that the plaintiff had made enquiry from one of the attornies of Baney Madhub as to whether there was any harm in purchasing, and had been » Horma>'ji T^mulji v. Manhuvarhai, 12 Bom. H. C, 262. * For Pontifox J,, in Doorga Narain Sen V, Baney Madhv.h Mozoomdar, I. L. R., 7 Calc, 201. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 437 told that there was not, and that the zemindary papers were actually given to the plaintiff on his purchase ; and held that with respect to his not obtaining the deeds, such negligence might be important as against a third person with whom they might have been deposited for value, but it was of comparative unimportance as against Baney Madhub, who had placed his affairs in the hands of attornies, one at least of whom had assured the plaintiff that he was safe in pxu'chasing ; that moreover the neglect to ask for deeds, in a country where registration prevailed, applied with but slight force ; and that there was therefore no ground for fixing the plaintiff with constructive notice that the transactions were benami ; and that as the Court below had not found that there was any actual notice, and as the circumstances of the case were insufficient to fix the plaintiff with construc- tive notice, the plaintiff must be considered to be a purchaser for value without notice.^ The rule referred to by Pontifex J., is more stringently laid down in the case of in re Hall and Company,^ in which Sterling J., adopts the views of Lord Cranworth,^ regarding the application of the doctrine of constructive notice, namely, " that where a person has actual notice of any matter of fact, there can be no danger of doing injustice if he is held to be bound by all the consequences of that which he knows to exist ; but where he has not actual notice, he ought not to be treated as if he had notice, unless the circumstances are such as enable the Court to say, not only that he might have acquired, but also, that he ought to have acquired, the notice with which it is sought to affect him — that he would have acquired it but for his gross negligence in the conduct of the business in question. The question, when it is sought to affect a pui'chaser with constructive notice, is not whether he had the means of obtaining, and might by prudent caution have obtained the knowledge in question, but whether the not obtaining it was an act of gross or culpable neg- ligence. It is obvious that no definite rule as to what will amount to gross or calpable negligence, so as to meet every case, can possibly be laid down." And in connection with this rule, the ease of Fuller v. Benett,^ should bo referred to, in which a continuous dealing with the same title by a solicitor acting for all parties, was held to be within the transaction in which he was employed. There, pending a treaty for sale to one Benett, the vendor agreed to give a creditor a mortgage on the estate to be sold, and notice of the agi'cement was given to the purchaser's solicitors, and then tiie treaty for sale ceased for upwards of five years, and the vendor dying, the purchaser bought the estate from his representatives and mortgaged it ; the same solicitors Messrs. Farrer and Company having been concerned for the imrcliaser from the * Boorga Narain Sen v. Baney Madhiih Mozooindar, I. L. K., 7 Cnlc, 199. * L. R., 37 Ch. D., 720. 8 Ware v. Egmont, 4 DeG., M. & G., iOO. E.. 'V\ic. V'ico-Chancellor, after stating, that tlio rule tliat notice to a solicitor Avill not bind the client unless it be in the same transaction, or at least during the time of tlie solicitor's employment in that transaction, had been always understood by him to be a rule positive juris adopted by Courts in favour of innocent purchasers said, " in the case before me I consider it to bo immaterial whether the treaty between Sir J. F. Dillon and Mr. Bcnett, (the first treaty for sale) [and that between Mr. Benett and Messrs. Dillon after Sir J. F. Dillon's death, (the treaty which terminated in the actual sale) were the same or not — whether the latter was a continuance of the first or a new treaty, — Messrs. Farrer and Company were the solicitors of the defendant Benett from the commencement of the treaty in 1831, to its close. The notices of the plaintiff's (the creditor's) interest were given to them in March 1832, as the solicitor of Benett. Those notices were retained and preserved by them ; and in this suit they come out of their possession from the answer of their clients I cannot discover any ground upon which Mr. Benett can escape from the consequences of the notice. If Mr. Benett is bound by the notice, Mr. Marjoribanks (the second mortgagee) mut be bound by it also, not because abstractedly he is to be bound by facts which came to their knowledge of his solicitor in other transactions, but because the solicitor he employed in the business of the mortgage had notice of the plaintiffs (the creditor who had a charge) interest, as the solicitor of the mortgagor, in the very transaction in which he the mortgagee so employed him." How far an insured is affected by information acquired by agent who is not the agent through whom the policy is affected.— Although where an insurance is eft'ected through an agent, non-disclosure of material facts, known to the agent ouly, will aft'eet his principal, and give the insurer good grounds for avoiding the contract ; yet the responsibility of an innocent insured for the non-communication of facts which happen to be within the private knowledge of persons whom he merely employs to obtain an insurance upon a particular risk, ought not to be carried beyond the person who actually makes the contract on his behalf. Thus where the plaintiff instructed a broker to effect for him a re-insurance upon an overdue ship ; and Avhilst the broker was actinof on behalf of the plaintiff, he received information of a material fact tendino- to show that the ship was lost ; the broker did not communicate this information to the plaintiff, and failed to obtain an insurance for him. After- wards the plaintiff, through another broker, effected a policy of insurance, lost or not lost, which was underwritten by the defendant. The ship had in fact been lost some time before the plaintiff tried to re-insure her, but neither the plaintiff, not the broker who effected the insurance, knew of or concealed from TJABILITT OF PRIVCTPAL TO TTTIRD PARTFES. 439 the defendant any fact tending' to show that the ship had been lost. The defendant sought to resist payment of the policy of insurance, lost or not lost, on the ground that he was not informed of the fact tending to show the ship was lost which was within the knowledge of the first broker who failed to obtain the insurance, contending that the knowledge acquired by hira whilst endeavouring to effect the insurance must be imputed to the plaintiff ; and in support of this contention his counsel cited the cases Fitzherhert v. Mather} Glad- stone V. King,^ Pi-oudfoof v. 2Iontefiore^ and Stribley v. Imijerial Marine Insurance- Company,^ Day J., held that the non-communication of the information referred to did not vitiate the policy ; The Court of Appeal,-^ Lindley and Lopes L. JJ., Lord Esher M. R., dissenting, reversed the decision of Day J., and held that the plaintiff could not recover upon the policy underwritten by the defendant. On appeal to the House of Lords, ^ the decision of the Queen's Bench Division was reversed; Lord Halsbury said: — "What then is the position of the broker in this case, whose knowledge, though not communicated, is held to be that of the principal ? He certainly is not employed to acquire such knowledge, nor can any insurer suppose that he has knowledge in the ordinary course of employ- ment like the captain of a ship, or the owner himself, as to the condition or history of the ship. In this particular case, the knowledge was acquired, not because he was the agent of the assured, but, from the accident that he was general agent for another person. The reason why, if he had effected the in- surance, his knowledge, unless he communicated it, would have been fatal to the policy, is because his agency was to effect an insurance, and the authority to make the conti^act drew with it all the necessary powers and responsibilities which are involved in such an employment ; but he had no general agency — he had no other authority than the authority to make the particular contract, and his authority ended before the contract sued on was made. When it was made no relation between him and the shipowner existed which made or continued him an agent for whose knowledge his former principal was responsible. There was no material fact known to any agent which was not disclosed at the point of time at which the contract was made ; there was no one possessed of know- ledge whose duty it was to communicate such knowledge." Lord Watson said : — " Hi this case it is sought to extend the imputed knowledge of the insured to all facts which during the period of his employment became known to any agent, other than the agent effecting the policy in question, who was employed at any » 1 T. R., 12. = 1 M. & S., 34. « L. 11., 2 Q. B., 511. * L. E., 1 Q. B. D., 507. * Blarkhurn, Low ^ Co. v. Vigors, L. R., 17 Q. B. D., 553. ® Blackburn, Loiu ^' Co. v. Vigors, L. R., 12 App , Cbs., 531. 440 I II K I, AW OK AdKNCV. tiim- succcssJully or iiiisiicccsHriilly, to iiisiu'c; tlie whole or any j)ai't of the same risk with that covered by th(! ])olic!y. This is a case of re-insurance, but it is obvious that the principle, if admitted, would be equally applicable to the oi'ififiual contract. I am of opinion, with your Lordships, that the responsibility of an innocent assui'cd for the non-communication of facts which happen to be within the private knowledge of persons whom he merely employs to obtain an insurance upon a particular risk, ought not to be carried beyond the person who actually makes the contract on his behalf. There is no authority whatever for enlarging his responsibility beyond that limit, unless it is to be found in the decisions which relate to captains and ship agents ; and these do not appear to me to have any analogy to the case of agents employed to effect a policy. There is a material difference in the relations of these two classes of agents to their employer. The one class is specially employed for the purpose of communicating to him the very facts which the law requires him to divulge to his insurer; the other is employed not to procure or furnish information concerning the ship, but to effect an insurance. There is also, as the Master of the Rolls pointed out, an important difference in the positions of those two classes with respect to the insurer. He is entitled to contract, and does contract on the basis that all material facts connected with the vessel insured, known to the agent employed for that purpose, have been by him communicated, in due course, to his prin- cipal. So also when an agent to insure is brought into contract with an insurer, the latter transacts on the footing that the agent has disclosed every material circumstance within his personal knowledge, Avhether it be known to his prin- cipal or not ; but it cannot be reasonably suggested that the insurer relies, to any extent, upon the private information possessed by persons of whose existence he prcsuinably knows nothing." Doctrine ought not to be extended. — " It has frequently been said by eminent Judges, says Lord Macnaghten in the case last cited, " that the doctrine of constructive notice ought not to be extended. It seems to me that the decision under appeal involves a great and a dangerous extension of that doctrine. Thei^e is nothing unreasonable in imputing to a shipowner who effects an insurance on his vessel all the information with regard to his own property which the agent to whom the management of that property is committed possessed at the time and might in the ordinary course of things have communicated to his employer. In such a case it may be said without impropriety that the knowledge of the agent is the knowledge of the principal. But the case is different when the agent whose knowledge it is sought to impute to the principal is not the agent to whom the principal looks for information, but an agent employed for the special pui'pose of effecting the insurance. It is quite true that the insurance would be vitiated by concealment on the part of such an agent just as it would be by concealment on the part of the principal. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 441 But that is not because the knowledge of the agent is to be imputed to the principal, but because the agent of the assured is bound, as the principal is bound, to communicate to the underwriters all material facts within his knowledge. Concealment of those facts is a breach of duty on his part to those with whom his principal has placed him in communication ; Lynch V. Dunsfoi'd,^ it would in my opinion, be a dangerous extension of the doctrine of constructive notice to hold that persons who are themselves absolutely innocent of any concealment or misrepresentation, and who have not wilfully shut their eyes or closed their ears to any means of informa- tion, are to be affected with the knowledge of matters which other persons may be morally though not legally bound to communicate to them." The case last cited must, however, be compared with the case of Blackburn v. Haslam,'^ in which the same plaintiffs employed a firm of insurance brokers to re-in- sure a ship which was overdue : and the brokers received information tending to show that the ship, as was the fact, was lost ; but without communicating this information to the plaintiffs, they telegraphed in the plaintiffs' name to their own London agents, stating the rate of insurance praemium which the plaintiffs were prepared to pay. The reply to this telegram was sent direct to the plaintiffs, and communications subsequently followed between the plaintiffs and the London agents and the London agents ; through a firm of London In- surance brokers, effected a policy of re-insui"ince at a higher rate of praemium, which policy was underwritten by the defendant ; the Court on these facts held that the policy was void on the ground of concealment of material facts by the agents of the assured ; considering that the case was distinguishable from that of Blaclihurn, Loio and Company v. Vigors,^ as the opinion expressed in that case that it was not the duty ol the agents to communicate to their principals the information which they had received, must be taken, as applying to the particular facts of the case then before the House of Lords, which shewed that, before the negotiation for the policy sued upon had commenced, all con- nection of the plaintiff with his former brokers had ceased, and not as applying to a case, the facts of which show that so far from the connection between the principals and their agents ceasine, the brokers use the name of the prin- cipals to continue negotiations, and the pi'lucipals adopt the act and themselves continue and cany out what their broker had commenced. ^ 13 East., 494. * L. R., 21 Q. B. D., 144. ' L. R., 12 App. Cas., 531, R H H LECTURE XU. — iContinve'l.) PART II.— LIABILITY OF PRINCIPAL TO THIRD PARTIES FOR AGENT'S WRONGFUL ACTS AND NEGLIGENCE. General rnlo as to principal's liability — Definition of negligence — The act mast be done with- in the scope of the agent's employment— Principal must have complete control over the work done by the agent — Principal's liability for contractor's servants — Liability for contractor's servants where employer selects his own servants — Daty imposed on em- ployer to see work properly carried out — Ground for the rule under earlier authorities — Liability of owners of carriages let to hire who select the coachman — Where hirer selects the coachman — Liability under Statute of proprietors of cab and horses to third persons for negligence of cab-driver — Non-liability of master for injury caused by a servant to fellow servant ; Common employment — Principle of this exception — Is common master essential to common employment — Liability of Corporation for breach of statutory duty — Liability of managing owners for negligence of captain— Managing owner's liability for pilot's negligence — Liability for agent's wilful and malicious acts — Liability of prin- cipal for directions given to Sheriflf to seize goods of wrong person — For mistake in excess of agent's authority — Liability of common carriers — Qualifications of the prin- cipal's liability for negligence of agent — Distinction between doctrine of contributory negligence and t'oZenti non fit injuria — Act of God— Fis major — Natural forces— Acci- dental injury — Liability of Secretary of State for negligence of agent. Liability of principal for wrongful acts and negligence of agent. General rule as to principal's liability. — The principal is responsible to third parties for the wrongful or negligent acts of his agent comiaitted whilst engaged in the course of his employment ; but not for acts of negligence done hj the agent out of the scope of his authority or inconsistent with the course of his employment.^ There can be no question as to his liability where he has expressly directed the wrong to be done, for qui facit per alium facit per S^'c. ; or where he has given directions which could be executed only by its commission,^ or where he has ratified the act.^ But the question of his liability is not to be determined by whether or no the agent had authority to do the act, but whether when so acting, he was acting in the scope of his cmploj'ment in the business of his principal. Negligence. — Legal negligence implies a neglect of duty to do or to forbear » Coleman v. Riches,\(i C. B., 101. Sfecens v. TToodw-acc?, L. R , 7 Q. B. D., 318. Scott V. Shepherd, 2 Wm. Bl, 892 » Smith's Merc. Law, 144. Gregory v. Pipe;-, 9 B. & C, 591. • Bani Shamasundari Debi v. Dukhee Mandal, 2 B. L. R., (0. C. J.), 227. Ahdoola bin Shaik Ally v. Stephens, 2 Ind Jnr., 0. S., 17, a case of pablic officer as principal. LIABILITV OF PRINCIPAL TO THIRD PARTIES. 443 from doing an act. " It is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs would do, or doing something which a prudent and reasonable man would not do."^ The usual question put in determining whether there is evidence of negligence is thei^efore the question whether a duty exists to do that which was left undone, or not to do what was done ; if that question can be answered in the affirmative, then there is negligence. The test by which the acts or omissions are to be adjudged is found in the question whether or no the acts or omissions would have been committed by a prudent man when placed in the position of the man who is alleged to have caused neglect, or in other words on the question, what would a prudent man have done under the cir- cumstances of the particular case then before the Court ? To make the principal liable, the act must be one done within the scope of the agent's employment. — In the generality of cases founded on negligence, it will be found that the agent or servant has committed the act in violation of his duty to his employer ; and this, as has been mentioned above, excludes the act from falling within the authority of the agent, and shows that the question of authority or no authority is not the test of the principal's liability. The act must be done in the perfoimiance of the business of the principal, and within, therefore, the scope of his employment. If the act is committed outside the scope of the emplyment or is one inconsistent with the course of his employ- ment, the principal will not be liable. ^ What is, or, is not outside the scope of his employment, is, of course a question of fact. If the agent goes beyond the course of his employment, for his own purposes, to do some act on his own account, unconnected with the principal's business, the principal will not be liable ; but nevertheless it is not every deviation from the course of the agent's employment, which will relieve the principal from responsibility ; but there must be a total departure from the course of the principal's business, and not merely a deviation taken on the servant's own account.^ The principal must have complete control over the work done by his agent. — ^Tlie principal or master must, to be liable for the agent's or servant's negligence, have complete control over the work done by his agent or servant, he must retain in himself the power of controlling the work ;* the relationship * Blyth V. Birmingham Watenvorks Co., 11 East., 784. * Mitchell V. Crastveller, 13 C. B., 237. Storey v. Ashton., L. K., 4 Q. B., 476. Coleman Y. Riches, 16 C. B.ylOi. Joel v. Morrison, 6 C. & P., 501. Middleton v. Fowler, I Salk., 282. Rarjner v. Mitchell, L. R., 2 C. P. D., 357. " Raijner v. Mitchell, L. R., 2 C. P. D., 357. Whatman v. Tearsov, L. R., 3 C. P., 422. Pollock on Torts, p. 74. * Jones V. Corporation of Liverpool, L. R., 14 Q. B, D., 890. See Bombay Trading Company V. Khairaj Tejpall, I. L. R., 7 Bom., 119. Po?(7e.s- v. Hider, 25 Jj J. Q. B., 331. Fowler v, Locke, L R., 7 C. P. 272. Venablex v. Smit/i, L. R., 2 Q. B. D , 279. 444 TMK LAW (iir Ar.E.NTT. of iiKiMici- niul sorvnnt must l)o (lisdiii^uislii'd from tliat of an employer and an independent contractor undertakinjr work for the employer, as Buch contractor will not render liable to third persons the employer, if durinf^ the course of the work he is carryinfj out he is guilty of negligence ; ho not being under the con- trol of the employer.^ For he who controls the work is alone answerable for the workman.'* In ascertaining who is liable for the act of a wrongdoer, yon must look to the Avrongdoer himself, or to the first person in the ascending line who is the employer and has control over the work ; you cannot go further back, and make the employer of that person liable.^ Nevertheless the remoter em- ployer may make himself liable to third parties, if, he, at any time, interferes or assumes specific control, but in such case he is not an agent, but a principal,* and slight evidence of su' h interference has been held sufficient to render him liable.^ Liability for contractor's servants. — Where a person voluntarily entrusts work to a contractor who selects and employs his own servants, such person will not generally be liable for any injury caused to third persons by the con- tractor's servants in the course of carrying out such work.^ But where a person authorizes lawful work, or work from Avhich, if properly done, no evil conse- quences can arise, he is not liable for the negligence of the contractor's servants ;' but if the work is unlawful, or the injury is a natural consequence of the work even when properly executed, then he is liable. Thus in Ellis v. Sheffield Gas Consumer Company,^ the defendant contracted with Watson Brothers to open trenches along the streets of Sheffield in order that the defendants might lay gas pipes there, and afterwards to fill up the trenches and make good the surface and flagging. The trenches were opened by the servants of Watson, and after the pipes were laid they proceeded to fill up the trenches and restore the flagging. In doing so, the servants of Watson Brothers carelessly left a heap of stones and earth upon the footway, and the plaintiff passing along the street, fell over them and broke her arm. Neither the defendants nor Wat- son Brothers had any legal excuse for breaking open the street, which was a public one. It was objected for the defendants that the cause of the accident "was the negligence of the servants of Watson Brothei's, for which they alone ' See Pollock on Torts, p. 69. Sadler v. Henlock, per Crompton J., 4 E. & B., 578. • Miligan v. Wedge, 11 A. & E., 757. Goslin v. AQricrxltural Hall Co., 34 L. T. N. S., 59. Abbott V. Freeman, 34 L. T. N. S., 544. » Murra;/ v. Currie, L. R., 6 C. P., 24, (27). • McLauglin v. Pryor, 4 M. & G., 48, per Willes J. • Burgess v. Graij, 1 C. B., 578. Pollock on Torts, 71. • Rapson v. Cuhitt, 9 M. & W., 710. Allen v. Hayward, 7 Q. B., 960. Overton v. Freeman, 11 C. B.. 867. Miligan v. Wedge, 11 A. & E., 757. ' Ullman v. Justices of the Peace from Toivn of Calcutta, 8 B. L. R., 265, (276). • 2 El. & Bl., 767. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 445 were responsible. It was answered that the contract was to do an illegal act, viz., to commit a nuisance, and, that being so that the defendants were re- sponsible. Lord Campbell said : — " I am clearly of opinion that, if the contractor does the thing which he is employed to do, the employer is responsible for that thing as if he did it himself. I perfectly approve of the cases which have been cited. J^ In those cases the contractor was employed to do a thing perfectly law- ful ; the relation of master and servant did not subsist between the employer and those actually doing the work ; and therefore the employer was not liable for their negligence. He was not answerable for anything beyond what he employed the contractor to do, and that being lawful, he was not liable at all. But in the present case the defendant had no right to break up the streets at all ; they employed Watson Brothers to break up the streets, and in so doing to heap up earth and stones so as to be a public nuisance, and it was in conse- quence of this being done by their ordei\s that the plaintiff sustained damage. It would be monstrous if the party causing another to do a thing were exempted from liability for that act, merely because there was a contract between him and the person immediately cau-sing the act " to be done." If, however, the work might have been done in a lawful manner, the employer will not be liable if it be done in an unlawful manner.^ Duty is imposed on employer to see work properly carried out. — But where a person orders woi'k to be executed, from which, in the natural course of things, injurious consequences to his neighbour must be expected to arise, unless means are adopted by which such consequences may be prevent- ed, he will be bound to see to the doing of that which is necessary to prevent the raischief, and cannot relieve himself from responsibility by transferring the duty to a contractor. And even an indemnity from the contractor will not save him from liability. ^ Thus in Boiver v. 'Peate,'* the plaintiff and the defendant were the respective owners to two adjoining houses, the plaintiff being entitled to the support, for his house, of the defendant's soil. The defendant employed a contractor to pull down his house, excavate the foundations, and rebuild the house ; the contractor undertaking the risk of supporting the plaintiff's house, as far as might be necessaiy daring the work, and to make good any damage, and satisfy any claims arising therefrom. During the progi-ess of the work the plaintiff's house was injured, owing to the means taken by tiie contractor * Overton v. Freeman, 11 C. B., 8G7. Knight v. Fox, 5 Ex., 721. Pcachey v. Rowland, 22 L. J. N. S., C. P., 81. " Peacheij v. Roiuland, 22 L. J., C. P., 81. " Dalton V. Angus, L. R., 6 App. Cas., 740, (829). Hole v. Sitfingbourne Railway Co., 6 H. & N., 488. Pichard v. Smith, 10 C. B. N. S., 473. Tarry v. Ashton, L. R., 1 Q. B. D., 314. Gray v. Fidlen, 5 B. & S., 970; 32 L. J. Q. B., 169. 34 L. J. Q. B , 265. * L. R., 1 Q. B. D., 321. See also Percival v. Hughes, L. R, 9 Q. B. D., 441. 446 T7IF. LAW or AGENCY. to support, if. lioincf iTisniTiflont. It was contendod for the defendant that the injury compliiincd ol' Imd arisen from the neglip^cncc of the contractor alone, and the defendant was entitled to the benefit of the general rule that>vhcn a person employs a contractor to do a work, lawful in itself, and involving no injurious consequences to others, and damage arises to another party from the negligence of the contx-actor or his servant, the contractor and not the employer is liable. Lord Cockburn, C. J., with reference to the stipulations made between the defendant and the contractor, said : — " He (the defendant) directs an act to be done from whicli injurious consequences will result unless means are taken to prevent them in the shape of additional work, but omits to direct the latter to be done as part of the work to be executed, contenting himself with securing to himself a pecuniary indemnity in the event of any claim arising from damage to the adjoining property. He is, therefore, not in a position of a man who has simply authorized and contracted for the execution of a work from which, if executed with due care, no injury can arise, and who is therefore, not to be held responsible, if, Avhile the work is going on, injury arises from the negligence of the contractor or his seiwants. The answer to the defendant's contention may, however, as it appears to us, be placed on a broader ground, namely, that a man who orders work to be executed, from Avhich, in the natural course of things, injurious consequences to his neighbour must be expected to arise, unless means are adopted by which such consequences may be prevented, is bound to see to the doing of that which is necessary to prevent the mischief, and cannot relieve himself of his responsibility by employing some one else — whether it be the contractor employed to do the work from which the danger arises, or some independent person — to do what is necessary to prevent the act he has ordered to be done from becoming wrongful. There is an obvious differ- ence between committing work to a contractor to be executed, from which, if properly done, no injurious consequences can arise, and handing over to him work to be done from whicli mischeivous consequences will arise unless preven- tive measures are adopted. "While it may be just to hold the paii:y authorizing the work in the former case exempt from liability for injury resulting from negligence which he had no reason to anticipate, there is, on the other hand, good ground for holding him liable for injury caused by an act certain to be attended with injurious consequences, if such consequences are not in fact prevented, no matter through whose default the omission to take the necessary measures for such prevention may arise." His Lordship, therefore, held the defendant liable. In the case of Lemaitre v. Davis,^ the defendant employed a contractor to do certain work which was necessary to his premises. The plaintiff was the lessee of the premises adjoining to those in which the work was carried out. » L. R., 19 Ch. D,, 281. LIABILITY OP PRINCIPAL TO THIRD PARTIES. 447 The defendant caused his premises to be pulled down without notice to the plaintiff, and in the course of this demolition, the western wall, the support of which the plaintiff had a right to, was removed, and in consequence thereof a vault in the plaintiff's premises was damaged. The contractor repaired the damage done ; but the plaintiff stated that he had suffered further damage by reason of his premises having been wrongfully entered upon. Both Davis, the employer of the contractor, and the contractor were made parties defendant. Hall V. C. found that the plaintiff had a right to the support of the defendant's wall, and that the enjoyment of the right had not been clam, or otherwise than open, and as regards the liability of the defendant Davis, and said :— " The works were to be done by the defendant Davis in the ordinary course by a contractor ; and the contract and specification, properly read, must be taken to include the works which were done, and which were not objected to as being done under them. The defendant Davis doing the work with the assistance of a contrac- tor was doing his own works, and it was his duty to see that the works were properly done, and that certain precautions were taken, either by himself or his agent, by shoring, to prevent any injury to his neighbour's vault. Such precautions were not taken. The defendant Davis cannot shift the responsibility from himself by saying that he employed a contractor, and that it was his wi'ongful act. It would be a strange thing if principals should be allowed to escape from liability when altering their premises, and expecting new buildino-s, by saying that they employed contractors under the specifications which were drawn up for their guidance, and that the contractors only were liable for any injury which might happen. I apply the principles laid down in Balton v. Angus^ to the circumstances of the case, and I hold that both the defendants are liable for the injury which was done." Similarly in Pickard v. Smith,^ the defen- dant employed a coal merchant to put coals into his collar, and he was held liable for injury suffered by the plaintiff from his falling through the cellar opening which had been left open by the negligence of the coal merchant's servants. Williams J. said :— " Unquestionably no one can be made liable for an act or breach of duty unless it be traceable to himself or his servant or servants, in the coarse of his or their employment. Consequently, if an independent con- tractor is employed to do a lawful act, and in the course of the woi'k, he or his servants commit some casual act of wrong or negligence, the employer is not answerable. To this effect are many authoi-ities That rule is, however, inapplicable to cases in which the act which occasions the injury is one which the contractor was employed to do; nor by pai-ity of reasoning, to cases in which the contractor is entrusted with the performance of a duty incumbent ' L. R., 6 App. Cas., 740. » 10 C. B. N. S., 470. Soe also Gray v. Pxdlen, 5 B. A, S., 970 and Hole v. Sittingbourne Ry. Co., 6 H. & N., 488. 448 TIIK LAW OK Aflfc;M;Y. oil hi.s emi)loyur, and neglects its fullilnieiit, wliurel)}' an injury is occasioned. Now iu the present case, the defendant employed the coal merchant to open the trap door in order to put in the coals ; and he trusted him to guard it whilst open, and to close it when the coals Avcre all put in. The act of opening it was the act of the employer, though done through the agency of the coal merchant ; and the defendant, having thereby caused danger, was bound to take reasonable means to prevent mischief. The performance of this duty he omitted ; and the fact of his having entrusted it to a person who neglected it, furni-shes no excuse either iu good sense or law." Ground for this rule under the earlier authorities.— Under this last rule, fall cascs^ which in the earlier reports are ccnisidci'eil to be grounded on a duty imposed on au owner of lixed property towards third persons, which duty held him liable though the injury was occasioned by the negligence of contractors or their servants, and not by the immediate servants of the owner. This rule is referred to by Littledale J., in Laugher v. Pointer,^ as follows : — " Where a man is iu possession of fixed property he must take care that his property is so used and managed that other persons are not injured, and that, -whether his pi-operty be managed by his own immediate servants or by contractors or their servants. The injuries done upon land and buildings being in the nature of nuisances for which the occupier ought to be chargeable when occasioned by any acts of persons whom he brings upon the premises." Liability of owners of carriages let to hire who select coachmen — The old principle last referred to has been said, in Laugher v. Pointer,^ by Little- dale J. not to apply to moveables, which case illustrates the liability of owners of carriao-es let to hire who select and send their own coachmen ; there, a gentleman, the defendant, hired from a jobman for the day a pair of horses, -which were driven in his own carriage by a driver who was selected and appointed by the jobmaster ; whilst making use of these horses through the negligence of the driver an accident happened to the plaintiff's horses. Littledale J., said : — " Accordino" to the rules of law every man is answerable for injuries occasioned by his own personal negligence, and he is also answerable for acts done by the neglio'ence of those whom the law denominates his servants and the question is whether the coachman, by whose negligence the injury was occasioned, is to be considered a servant of the defendant? The rule applies not only to domestic servants who may have the care of carriages, horses and other things in the employ of the family, but extends to other servants whom the master or o-wner selects and appoints to do any work or superintend any business, although such servants be not in the immediate employ, or under the superintendence of » Bush V. Steinman, 1 B. & P., 404. Stone v. Cartwright, 6 T. R., 411. Sly v. Edgley, 6 Esp., 1. Ltttledale v. Lonsdale, 2 H. Bl., 299. See Piggott on Torts, p. 92, » 6 B & C, 572. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 449 the master. As, for instance, if a man is the owner of a ship, he himself appoints the master, and he desires the master to select and appoint the crew, the crew thus become appointed by the owner, and are his servants for the manage- ment and government of the ship, and if any damage happen through their default, it is the same as if it happened through the immediate default of the owner himself This, however, is not the case of a man employing his own immediate servants for the jobman was a person carrying on a distinct em- ployment of his o-\vn, in which he furnished men, and let out horses to hire to all such persons as chose to employ him." His Lordship then referred to Stone v. Cartivriyht,^ Bush v. Steinman,^ Sly v. Edgley,^ and said ; " Supposing these cases to be rightly decided, there is. this material distinction, that there the injury was done upon or near, and in respect of, the property of the defendants, of which they were in possession at the time. And the rule of law may be that in all cases where a man is in possession of fixed property, he must take care that his property is so used and managed that other persons ax'e not injured, and that, whether his property be managed by his own immediate servants or by contractors or their servants. The injuries done upon land or buildings are in the nature of nuisances, for which the occupier ought to be chargeable when occasioned by any acts of persons whom he brings upon the pi'emises." His Lordship then held that the coachman was the servant of the jobmaster, and that therefore the defendant was not liable.* Liability where the hirer of carriage selects the coachman.— But if the hirer of the carriage from a job master, drives himself, or appoints the coach- man and provides horses, the job master cannot be made responsible for the negligence of the coachman.^ But on the other hand, as has been before men- tioned, if the hii'er interfere in any way by taking the actual management of the hired horses, or directs the hired coachman to act in a particular way, if accident happens, he will bo liable.'^ Liability under Statute of proprietor of cab and horse to third per- sons for negligence of cab driver. — Under the provisions of the Hackney Carriage Acts, (1 & 2 Wm. IV, c. 22 ; 6 & 7 Vic, c. 86) a driver of a cab hiring a cab or horse at so much per day, keeping for himself any profit over and above the sum paid to the proprietor, is considered as a servant oi- agent of the proprietor with autlioi-ity to enter into contracts for the einph)yineiit • 6T. R., 411. » 1 B. & P., 104. ■ 6 Esp., 6. • Sec also the cases of Smith v. Lawrence, 2 M. & 11., 2. Summell v. Wriiihl, ."> Ksp., 2tj3. Dean, V. Brnnthwaite, 5 Esp. 35. QiKtrnuui v. Bm'iielt, li M, & \V., 507. » Croft V. Alison, 4 B. & Aid., 590. • Qnannan v. Burned, 6 M, & W., ( I'JU), pur I'uiko B. I I 1 450 IMIv LAW (pF Aiil-Ni'Y. of the ciil) Oil wliicli til.' pioprictor is lial)lu to the third poi'soim sulTci-iiij^ claraagc> And this is so in India under Bombay Act VI of 1803.* But these cases do not appear to have in view the natui-e of the conti'act between the cab proprietor and the driver ; in cases in which the driver is injured, the rela- tionship between the cab-proprietor and the driver is that of bailor and bailee, and the proprietor would be liable to the driver ; this was so held in Fowle>- v. Luck,^ by Byles and Groves JJ., Willcs J., however, considering that the re- lation was one of master and servant, and that therefore, in the absence of personal negligence or misconduct on his part, the proprietor was not respon- sible. And where the driver hires only the cab and provides the horse and harness himself, the cab proprietor has been held not to be liable to a third person suffering damage by the negligence of the driver.* Common employment. — Where two or more agents are employed by the principal he will not be liable for the negligence of one of them causing injury to the others. This rule may be stated more broadly, as follows, that a master is not liable to his servant for injury received from any ordinary risk of, or incident to, the service, including acts or defaults of any other person employed in the same service,^ but the employment need not necessarily be about the same kind of work,^ and it makes no difference if the one agent is a foreman and the other a mere labourer ; the standing or position of the agents being immaterial ;'^ and a mere volunteer is in the same position as a servant.^ The principle which exempts a master from liability to his servant for injury caused by the negligence of his fellow servant, is that the servant must be assumed to encounter the ordinary risks incident to the service at the time of entering into the contract.^ This is shewn by the case of Morgan v. Vale of Neath Railway Company,^^ where the plaintiff was in the employment of the Railway Company, to do carpenter's work required by them on the line of railway, and the persons who caused the wrong '■ Powles V. Eider, 6 El. & Bl , 207, followed in Venahles v. Smith, L. R., 2 Q. B. D., 279. " Bombaij Tramway Co. v. Khairaj Tejpall, I. L. R., 7 Bom., 119. ' L. R., 7 C. P., 272. ♦ King v. Spurr, L. R., 8 Q. B. D., 104. * Tiinney v. Midland Ry. Co., L. R., 1 C. P., 201. See also the case of Mary Anne Vurner V. S. P. ^ D. Ry. Co., cited in Alex, on Torts, p. 38. Charlesv. Taylor,!,. B,.,SC. P. D., 492. Morgan v. Vale of Neath Ry. Co., L. R., 1 Q. B., 149. Lovell v. Howell, 34 L. T. N. S., 183. L. R., 1 C. P. D., 161. ' Feltham V. England, h. B,., 2 Q. B., 33. Howell v. Landore Siemen's Steel Co., h. R., 10 Q. B., 62. • Potter V. Faulkner, 31 L. J. Q. B., 30. Degg v. Midland Ry. Co., 1 H. & N., 773. Holmes V. North- Eaaterji Ry. Co., L. R., 4 Ex., 254. Nicholson v. Luncaiihire and Yorkshire Ry. Co., 34 L. J. Ex., 84. " Lovell V. Hotvell, L. R., 1 C. P. D,, 161. "» 5 B. & S., 73G, LIABILITY OF PRINCIPAL TO THIRD PARTIES. 451 were porters in the employment of the same Company, engaged in shifting a locomotive engine by means of a turntable, and they allowed the engine to pro- ject so far beyond the turntable that the end of it struck against and displaced a ladder which was one of the supports of the scaifold on which the plaintiff was standing, and he fell from it to the ground and received severe injuries. The plaintiff and the porters wei-e engaged in a common employment and doing work for a common object, viz., fitting the line for tr-affic. Erie C. J., said: — " The principle of the cases which have established that the master is not liable to his servant for damage caused by a fellow workman is put very clearly by Blackburn J., in the course of his judgment, in the Court below. ' There are many cases where the immediate object on which the one servant is employed is very dissimilar from that on which the other is employed, and yet the risk of injury from the negligence of the one is so much a natural and necessary con- sequence of the employment which the other accepts, that it must be included in the risks which are to be considered in his wages.' I think that, whenever the employment is such as necessarily to bring the person accej)ting it into contact with the traffic is one of the risks necessarily and naturally incident to such an employment, and within the rulc."^ Whether a common master is essential in cases of common employ- ment. — In all cases in which the question of common employment arises, it is said to be essential that there should be a common master ; and, therefore, where one of the servants is under the control of a contractor and another under the con- ti'actor's employer, the question does not arise. Thus where the White Moss Colliery Company having begun to sink a shaft in their colliery, and having fixed an engine near the mouth of the shaft, agTeed with a contractor to do the sinking and excavating at a certain price per yard ; the contractor being bound to find all labour, and the Company to provide and place at the disposal of the contractor the necessary engine power, ropes, &c. with an engineer to work the engine who was employed and paid by the Company, but the engine and the engineer were to be under the control of the contractor. Tho plaintiff, who was one of the men employed and paid by the contractor, was injured whilst working at the bottom of the shaft, through the negligence of the engineer; held, in an action brought by the plaintiff against the Company, that though the engineer remained the general servant of the Company, yet being under the orders and control of the contractor at the time of the accident, he was acting as the servant of the contractor, and not of the Company, wlio were therefore not liable for his negligence.* So where the plaintiff was a porter in the employment of the London and North- Western Railway Com- ' See also Warburton v. 0. W. Rij- <^o., L. R., 2 Ex., 30, per Kelly C B. * Ruurhe v. White J/oss Collienj Co., L. K., 2 C. P., 205 452 nil, I.WV (![•■ ACJRXfV. |)Miiv. ill .Miiiiclu-stcr Sditioii, Jiiid the (IftciKliints, aiiotlifi' liiiilway Company, iisrd I lijit station, and their Korvants whilst within the station were subject to tlie rules of the London and North-Wcstern Railway Company, and to the control of their Station Master. The plaintiff whilst engaged in his usual employment in the station was injured by the negligence of the defcmdant's engine driver in shunting a train, it was held that the plaintiff and the defen- dant's engine tb'iv^er wei'e not fellow servants, and that the defendants were liable.' So again where there were two stations at Leeds the one belonging to the Great Northern Railway Company, and the other to the North-Eastem Railway Company, (the defendant Company ;) these stations abutted on one another, and were approached by parallel lines of rails, the entrance and exits from the stations being governed by signals and points worked by signal- men, one of whom was the plaintiff ; the duty of such signal-men being common to both stations ; one Swainson was paid and engaged by the Great Northern Railway Company, and wore their uniform, but his duty was to attend to the defendant's goods trains as well as those of the Great Northern Railway Com- pany. An engine of the defendant's was upon the lines of the Great Northern Railway Company, and Swainson signalled to the engine-driver to go on to the defendant's lines ; the driver obeyed and having reversed the engine, negligently ran over and killed Swainson, who was then looking at a train coming in another direction ; it was held in the Court of Appeal that Swainson and the driver of the engine "were not engaged in a common employment, and that the defendant Company were bound to compensate Swainson's widow.* The authorities, hoAvever, on this subject do not appear to be easily recon- cilable. Thus in Johnson v. Lindsay,^ where an action was brought by a work- man in the employment of Messrs. Higgs and Hill, contractors, who were engaged in erecting a block of artizan's dwellings, againts Messrs. Lindsay, who were sub-contractors under them for making a fire-proof floor, to recover damages for an injury sustained thx'ough the negligence of a workman in the service of Messrs. Lindsay. The jui'y found a verdict for the plaintiff, which verdict the defendants applied to the Divisional Court to set aside ; Lopes L. J. and Cotton L. J., were of opinion that the defendants became sub-contractors under Higgs and Hill, and were, together with the men directly employed by them, in the employment and under the general control of Higgs and Hill, "woi'king together for one common object, namely, the carrpng out of Higgs and Hill's contract, and taking upon themselves all the risks naturally incident to the work which they had undertaken. And that therefore Higgs and Hill were the common masters of the injuring and the injured man. and the case therefore • Warhitrton v. O. W. Ry. Co., L. R., 2 Ex., 30. • Sn-ainson v. North Eastern Ry. Co., L. R., 3 Ex. 0.. 341. • W. N. Eug., (1889), 169; L. R., 23 Q. B. D., 5U8. LIABTLITY OF PRINCIPAL TO THIRD PARTIES. 453 fell within tlie principle of Wiggett v. Fox,^ and their Lordships held that as there was a common employment, and a common master the defendants were not liable. Lord Justice Fry, however, was of a different opinion, considering that the defendants were not sub-contractors to Higgs and Hill, but were in- dependent contractors for their part of the work, and was fui^ther of opinion that even supposing they were sub-contractors, the question arose, whether Higgs and Hill were responsible for any control over the work and the work- men ; there being no evidence that such was the case, he was of opinion that the defendants were alone responsible for their part of the work. He further added that the authorities^ were not easily reconcilable, but considered that they established the principle that the control of the principal employer over the work and the men was the test to apply in ascertaining whether the master was liable or not. And was of opinion that there was a common employment but no common master, and that whether the defendants were sub-contractors or independent contractors, there was no gi^ound for the exemption of his master. The appeal was therefore dismissed. This case appears to be the first case in which the doctrine of common employment has been applied to a sub- contractor, in all other reported cases the defendant having been the principal contractor. Breach of Statutory duty by Corporation.— Whenever an Act imposes upon any public body the duty of maintaining or repairing a highway, or any public work, and special damage is sustained by a particular individual from the neglect of the public duty, an action for damages is maintainable against such public body,s unless there are provisions in the Act creating such public body limiting their liability,* or the duty of repairing is not absolute. ^ The rule being that in the absence of something to show a contrary intention, the legisla- ture intends that the body, the creature of the Act, shall have the same duties, and that its funds shall be rendered subject to the same liabilities, as the general law would impose on a private person doing the same things.^ This rule has been applied by the Court of Appeal in the case of the Corporation of the Toivn of GaJcntta v. Anderson."' Liability of managing owner for captain's negligence.— A managing owner is liable to third parties for the negligence of the captain who is trad- ' L. R., 11 Ex., 832. * Wiggett v. Fox, L. R., 11 Ex., 832, as explained by Abraham v. Rei/nolds, 5 II. & N., 143. Rourlce v. White Moss Golliery Co., L, R , 2 C. P. D., 205. Swaiiisoii v. N. E. Ry. Co., L. R., 3 Ex. D., 341. ' Oibbs V. Trustees of Liverpool Doclts, L. R., 1 App. Cas., 93. * Young v. Davis, 31 L. J. Ex., 256. » Wilson V. Mat/or of Halifax, L. R., 3 Ex., 114. * Oibbs V. Trustees of Liverpool Docks, L. R., 1 App. Cas., 110, per Blackburn J. Addi- son on Torts, 7-10. •" I. L. R., 10 Calc., 445. inn- imlrpi'inlciilly find rcii(k'i'iii<<; a sliai'c of LIk- proCilH io llio owiioi-.l So wliore a .steamer while cm a voyage from Mnrsoilles to London fidl in with the " Sardis " which had been disabled by an accident to her machinery, and the master of the Thetis agreed to tow the .Sardis to port, and in endeavouring to do so, negligently came into collision with the Sai'dis and sank her, held that the master was acting within the scope of his authority, and that the owners of the Thetis were therefore liable for the damage.^ But where the master of a mei-chant ship appoints his officers and crew he will himself be usaally held liable to third persons for all acts of negligence or mis-feasance on the part of the officers or crew by which the cargo or the property of others is damaged \> but not for trespass committed wilfully by his crew.* Liability of owner and master of ships for pilot's negligence.— The owner and master of a ship are, in the absence of contributory negligence on the part of the master or crew, exempted from all liability for loss or damage occasioned by the fault or incapacity of any qualified pilot, who has charge of the ship within any district where the employment of a pilot is compulsory -^ and it has been held that he is exempt where the master is authorized to employ a pilot and elects to do so.^ But in cases, where, though the pilotage is compulsory, the control of the navigation of a vessel is not vested in the pilot, but remains solely with the master of the ship, the pilot being merely the adviser of the master, the owner of the ship will not be freed from liability.^ As to the limitation of liability of owners of British and Foreign vessels, see 25 and 26 Vic. c. 63, s. 54. Where the employment of a pilot is compulsory on board a vessel, and, such pilot being on board, an accident happens through negligence in the management of the vessel, it lies upon the owners, in order to exempt themselves from liability, to show that the negligence causing the accident was that of the pilot. If such negligence is partly that of the master or crew, and partly that of the pilot, the o^Tiers are not exempted from liability. But if it be proved on the part of the owners that the pilot was in fault, and there is no sufficient proof that the master or crew were also in fault in any particular which contributed, or may have contributed, to the accident, the owners will have relieved themselves of the burden of proof which the law casts > Bteel V. iesfer, L. R., 3 C. P. D., 121. " The Thetis, L. R., ^ Adm., 365. ■ Maude and Pollock on Shipping, 154. ♦ Boiccher v. Noidstroin, 1 Taunt., 568. Sutherland v. Shaiv, Bourke, (A C. J.), 92, 144. ' 17 & 18 Vic, c. 104, s. 388. The General Steam Navigation Co. v. British and Colonial Steam Navigation Co., L. R., 4 Ex., 238. The Thames Conservators v. Hall, L. R., 3 C. P., 415. The Hibernian, L. R., 4 P. C, 511. • The Hanover, Boiirke, (V. A. J), 15. » The Guy Mannering, L. R., 7 P. D., 52. On appeal L. R., 7 P. D., 132 ; 51 L. J. P., 17. Newson's Dig. on Shipping, 174. , LIABILITY OF PRINCIPAL TO THIRD PARTIES. 455 upon tliem.i And, similarly, it has been held that a pilot employed under the compulsory clauses of the Merchant Shipping Act, 1854, does not undertake the risk of damage by negligence of the crew as incident to his employment.^ Liability for agent's wilful and malicious acts. — This liability again depends upon whether or no the act is done in the course of the master's employ- ment.2 If the act is done by the agent within the scope of his employment, the principal will be liable ;* if done outside the scope of his employment, the principal will not be liable.^ Liability of principal for direction given by his agent to sheriff to seize goods of the wrong person. — The principal is also liable for an errone- ous endorsement on a writ made by his solicitor and delivered to the sheriff whereby the goods of a person other than the judgment-debtor are seized. Thus in Morris v. Salherg,^ the defendant had recovered judgment in an action on bills of exchange against the plaintiff's son G. M. IMorris. And a writ directing the sheriff to levy the amount of the judgment upon the goods of G. M. Morris was taken out by the defendant's solicitor, who endorsed the writ, "Levy 170£ 16s. llcZ. on the goods of the defendant; the defendant is a gentle- man who resides at Sarnau Park, Cardigan, South Wales, in your bailmck." The address so given was the residence of the plaintiff G. Morris, not of his son, who resided elsewhere. The sheriff entered on the premises so described and seized goods of the plaintiff. The plaintiff therefore sued the defendant for trespass and wrongful seizure. It was admitted at the trial by the defen- dant's Counsel that if a subsequent ratification by the defendant of the act of the sheriff was possible in law, circumstances existed which amounted to such ratification, but he contended that there could be no ratification as the sheriff was not the defendant's agent. Stephen J., on the authority of Childers v. Wooler,"^ gave judgment for the defendant. Lord Esher M. R., on appeal said : — " The question for the Court was, whether the endoi'sement on the writ was a dii'cction to the sheriff or not We have in this case something endorsed on the writ by the defendant's solicitor, by whose action in making such en- dorsement the defendant is bound ; and even if it was not meant to be a direction to seize the goods seized, yet I think if it was in such a form ■ as to mislead the sheriff into thinking that it was, the result would be the same ; for ^ Muhammad Yusuf v. P. and 0. Steam Navigation Co., G Bom. II. C, 98. * Smith V. Steele, L. R., 10 Q. B., 125. ' Croft V, Alison, 4 B. & Aid., 590. Gunga Gobind Singh v. Peeroo Manjee, ><. 1). A., (1853), Bengal, 339. * Huzzey v. Field, 2 C. M. & R., 432. * Boivcher v. Noidstrom, 1 Taunt., 5G8. « L. R., 22 Q. B. D., 614. ' 2 El. & El., 287. 456 TIIF LAW OV AGKNCT. if n jKMvson makes a statement tliat may well mislead, and does in fact mislead the sIierilT into thinking that ho was directed to seize the goods seized, it seems to me that such a statement renders the maker of it liable as if he had intended to give such a direction." His Lordship refbrred to the cases of Rowles v. Senior^ Jarmain v. Ilooper* and Ghilders v. Wooler,^ and said that in Jarmain v. Hooper, the conclusion at which the Court arrived really amounted to a decision that such an endorsement might be equivalent to a direction to the sheriff, and might constitute the sheriff the bailiff of the execution creditor and that, though it be given not by the execution creditor himself, but by his attorney, the execution creditor would be liable. With reference to the question of ratification, his Lordship said : — " If there cannot be such a ratification in law, then the distinction taken by the majority of the Court in Ghilders v. Wooler'^ with regard to Jarmain v. Hooper,'^ on the ground that that case proceeded on ratification, must necessarily fall to the ground. In that case the two decisions would be in conflict ; and the question would be which way are we to decide . . . ... If one of the two cases has to be overruled, I think w^e have the authority of the Court of Appeal* for saying that it would be Ghilders v. Waaler, not Jarmain v. Hooper. If Jarmain v. Hooper is not overruled, it seems to me in point, and Lindley L. J., says in giving judgment in Smith v. Keal with regard to Jarmain v. Hooper, ' I have often had occasion to consider that case and I do not think it has been shaken by any subsequent decisions. Whatever objections to it may have been felt by some Judges, it has been taken as good law, and has been constantly acted upon.' The Court of Appeal in Smith v. Keal took the distinction that in the case before them the direction was not by endorsement in writing on the writ, but by word of mouth after delivery of the writ. They do not say that such a direction by word of mouth, if given by the execution creditor himself, would not have rendered him liable, but they say that the execution ci-editor's solicitor can only bind him by a direction given in writino" on the writ, and therefore that the defendant was not liable in respect of the direction given verbally by his solicitor's clerk. In the present case there •was an endorsement on the writ which was evidence for the jury on the question which was put to them, and they answered that question in the affirmative. I think their finding brings the case within Jarmain v. Hooper, and that the learned Judge ought to have given judgment accordingly. The appeal must be allowed and judgment entered for the plaintiff." " Fry L. J., said : — " In my opinion the defendant's Counsel was right in saying that, if a direction was given no ratification would be necessary, but if no direction were given, then, as the sheriff in seizing the goods acted as the servant of the Court or of the Queen, not of the execution creditor, there could be no ratification by the execution > 8 Q. B., 677. « 2 EI. & El., 287. » 6 M. & G., 827. * Smith r. Koil, L. R , 3 Q. B. D., 3K1 LIABILITY OF PRTNCTPAf. TO THIRD PARTIES, 457 creditor. But if this be the correct view, it certainly iinderraineR the authority of the case of Ghilders v. Wooler, and shews that the distinction taken there was untenable. But whether this case is looked at with reference to the decision in Jarmain v. Hooper} or with reference to that in Ghilders v. Wooler,^ the result seems to be the same. If Jarmain v. Hooper be correct, then the endorsement on the writ was a sufficient direction to the sheriff to make the execution creditor liable for his act in seizing the goods, and the case will be governed by that decision. If on the other hand Ghilders v. Wooler be right, it follows that subsequent circumstances shewing a ratification would be admissible to fix the defendant with liability The true view appears to me to be that the previous direction of the execu.tion creditor may make the sheriff his servant for the purpose of seizing the goods, and an endorsement on the "OTit may amount to such a direction, and it is a question of fact whether in the particular case it does so." For mistake in excess of authority. — The master is liable to third persons for wrongs done in his master's business by the servant in mistake or excess of the lawful authority given to him : — But, as says Mr. Pollock in his work on Torts, ^ to establish a right of action against the master it must be shewn (a) that the servant intended to do on behalf of his master something of a kind which he was in fact authorized to do ; (6) that the act, if done in a proper manner, or under circumstances erroneously supposed by the servant to exist, would have been lawful." There appears here (as will be pointed out) to be a distinction between the cases in which the agent is entrusted with the general conduct of his master's business and cases where the agent has been appointed to a special sphere of duty. Tlius in the latter class of cases where a station master gave the plaintiff into custody, on account of the plaintiff refusing to pay for the carriage of a horse on the defendant Company's line, until the station master by telegraph ascertained that a pass or certificate produced by the plaintiff was in order ; Blackburn J., said : " The only question is, whether there Avas evidence that the station master was clothed with authority ; that his act, in detaining the plaintiff in custody, was within the scope of his authorit}', and was such as that the evidence before the juiy would properly convince them that he was authorized on the part of the Company to do the wrongful act and consequently that the Company were responsible. There can be no question since the decision of the case of Goff v. Great Northern Bailway Gompany* that when a Railway Company or any other body (for it does not matter whether it is a Railway Company or not) have upon the spot a person acting as their agent, that is evidence to go to the jury that that person has authority from them to do all those things on their behalf which are right and proper in the ' G M. & G., 827. * p. 76. • 2 El. & El., 287. * 30 L. J, Q. B., lis ; 3 El. & El., G72. K K K •f'r)R THT! T,AW OF ACIENCV. cxiti-cncios of tlioii' bnsi'iioss ; all such things as .somobnrly must make np liin mind on l)olifiIf of the Company Avhothor tlioy slionUl bf done or not, and tlio I'mcI (Ii;iI tli(> ('Ompany are absent, ;iud (lie pci'son is flicic to manage theii- affairs is prima, facie evidence that he was clothed with anthority to do all that was rig'ht and proper ; and if he happens to make a mistake, or commits an excess, while actinn" within the scope of liis anthoi-ity his employers are responsible for it."' And where n F(n'emini pnitcr mnler the impression tliat the ])laintiff was stealinii' timber belonoiny- to the Company i^ave him into custody on that eharo'e, and the plaintiff' was acquitted and sued the Company for assault and raise imprisonment, tlie Court iield tliat the Company were I'esponsible. Mon- tag'ue Smith J., said : — " No doubt if, in furtherance of the particular business of tlie C(nn])any, it is necessaiy to arrest a person, tlie servants of the Com- pany liave an implied authority to do it. thus, if thei'e is a bye-law of the Com- jiany, and ]iower to arrest any person infringino- it. it must be presumed that the Com])any give anthoiity to any one tlie}- put in chai'ge of the station so to enforce it, since this can only be done by the Company's servants on the spot. Here, however, the cause of the arrest was not at all connected with the Com- pany's business, and it cannot, 1 think, be presumed that the Company give authority to their servants generally to apprehend any person Avhom the ser- vants think is committing a felony, even though on the Company's property.'** In none of the above cases did the question of the authority of a manager or agent entrusted Avith the general conduct of his master's business arise. Thej' wei'c all cases of particular agencies where the agent had been appointed to a special sphere of duty ; and the result of those decisions is, that the anthority to arrest offenders was only implied where the duties ^A-liich the officer was employed to discharge could not be efficiently performed for the benefit of his em])lovei'. unless he had jiower to apprehend offenders pi'oniptly on the spot.^ Hut where the question of the authority of the manager or agent entrusted with the general conduct of his master's business arises, the test is. has he a general authoi'ity to do the act comi)lained of, or a particular axithority to act in cases of an emergency. Thus in the Banl- of Xew Sonfh Wales v. Oiresfon.^ it has been held that the arrest and the prosecution of offenders, is not within the ordinary routine of banking business, and therefore not within the ordinary scope of a bank manager's authority. Evidence accordingly is required to show that such arrest or prosecution is within the scope of the duties and class of acts such manager is authorized to perfoi'm. That authority may be general, or ' Povltnn V. London and S. IT. /?//. Co., L. R., 2 Q. \i., o34. See .ilso as to cases niuler tliis class, Eastern Covjities Ry. Go. v. Broom, 6 Ex., 314. Moore v. ili'tropnlitan R>i. Co., L. R.,.8 Q. B., 36. Allen v. London and N. W. Ri/. Co., L. R., 6 Q. B., fio. " Edu-ards v. London and N. W. Ry. Co., L. R., 5 C. P., 445. • BfJMfc 0) New South Wales v. Oweston, L. R., 4 App. Cas., 270, (288). LIABILITY OF PRINCIPAL TO THIRD PARTIES. 459 it may be special and derived from the exigency of the particular occasion on Avhich it is exei'cised. And in tlie former case it will be enough to show com- monly that the agent was acting in Avhat he did on behalf of the principal ; but in the latter case evidence should be given of a state of facts which shews that such exigency is present, or from which it might reasonably be supposed to be present. ^ In a case in which it was sought to make a Railway Company liable in damages for an alleged defamation of a passenger by one of the Company's guards, the Court held that the alleged defamatory statement was a statement merely amounting to a mere expression of suspicion that the passenger had travelled without a ticket, and that it Avas doubtful whether a suit Avould lie at all even against the guard, but that it would certainly not lie against the Com- pany. Wilkinson J., as to this said : — " Undoubtedly the Railway Company is responsible for the manner in which their servants do any act which is within the scope of their authority, and is answerable for any tortious acts of their servants, provided that such act is not done from any caprice of the servant, but in the course of his employment. But it Avould be straining this principle of laAV to an unprecedented extent to hold that, because the guard of a train in the execution of his duty expressed a suspicion not altogether iinfounded, that a passenger Avas travelling Avitli a wrong ticket, the Company was liable in damages to that passenger for slander.^ Liability of common carrier. — The Common laAV of England regulating the responsibility of Common Carriers is in force in this country, and is not affected by the pi-ovisions of the Contract Act. He is therefore liable for all losses of goods entrusted to him foi* carriage, except those occasioned by the act of God or the Queen's enemies.^ The laAv implies that he contracts to ensure the safe delivery of goods entrusted to him. He may, however, in this country limit his liability by conforming to the provision of section 10 of the Railway Act of 1879, or to the provision of s. 6 of the Carriers Act of 1865. The Bombay High Court in Kucerji Tnlsidas v. G. I. P. Eaihvay Compaui/* have held that the Common laAV rule Avhereby common carriers are held liable as insurers of goods against all risk except the act of God or the King's enemies is not now in force in India ; but this decision has been dissented from by a Full Bench of the Calcutta High Court in the case above cited.'' The cari'ier does not insure against the irresistible act of nature, nor against defects in the thing- carried itself ; and if he can shoAv that either the act of nature or the defect of the thing itself, or both taken together, formed the sole, direct and iiresistible cause of the loss he is dischai-ged. In order to sIioav that the cause of the loss ■' Bank of New Boutli Wales v. Oweston, L. R., 4, App. Cas., 27U, (288). * South Indian Rij. Co. v. Rauikri.^hud, I. L. K., 13 Mad., 34. ^ Mothoom Kant Sluim v. India General Uleaia Navigation Co., 1. L. iv., lU Calc, IGG. " 1. L. R., 3 Bom., lU'J. ■tUO IIIK l-AW ftp A(iKNCy. was irrosistible, it is not, howovor, noet^sKiiry to prove tliiit it was absoliit<;ly im- possible for the carrier to prevent it, but it is Kufficicnt to prove that by no reasonable precautious under the circumstance couM it have been prevented.^ It must, however, be remembered that there are certain carnei's who are not common carriers, e. g., a shipowner, and who would not be therefore subject to the liability of a common carrier, that is to say, he does not insure goods bailed to him for carriage.^ Such carriei's may, however, and generally do limit their liability under their bill of lading. The distinction di-awn between common cairiers and such carriers as I have last mentioned is refeiTcd to by Cockbum C. ^., in Nugent v. Smith: "I find all jurists who treat of this form of bailment carefully distinguishing between the common earner and the private ship. Parsons a writer of considerable authority on this subject, defines a common carrier to be ' one who offers to cany goods for any pei'son between cei'tain termini and on a certain I'oute. He is bound to cany for all who tender to him goods and the price of cairiage, and insui^es these goods against all loss but that arising from the act of God or the public enemy, and has a lien on the goods for the price of the can'iage. If either of these elements is wanting, we say the carrier is not a common carrier either by land or water. If we are right in this, no vessel will be a common carrier that does not ply regulai-ly, alone or in connection with others, on some definite route, or between two certain termini.' Thus a dak carriage proprietor has been held not to be a common carrier -^ so also the px'oprietors of the Government Bullock train. ^ So also a Foreign Steam Ship Company,* so also the British India Steam Navigation Company. 6 But the Great Eastern Peninsula Railwaj Company have been so held.^ The liability of carriers whether common cai'iiers or othere appeitain rather more to the subject of bailments than to that of Principal and Agent, and I do not propose to pursue theii' different liabilities. The cases cited will » Nwoent V. Smith, L. R , 1 C. P. D., 423. But see Vandorf v. Hamilton, L. R., 16 Q. B. D., (633), where Lopes J., has stated the broad principal that " a carrier by sea is, like a common carrier, apart from express contract, absolutely responsible for the goods entrusted to him, and insures them against all contingencies excepting only the act of God and the enemies of the Queen," and in this statement of the Common law Lord Chief Justice Bowen and Lord Chief Justice Fry concur. See L. R., 17 Q. B. D., (683). See also an article on the Liability of Shipowners at Common Law, Vol. V, Law Quarterly Review, p. 15. " Todal Singh v. Thampson, 2 All. H. C, 237. ■ Postmaster of Bareillt/ v. Earle, 3 All. H. C, 195, • Mackillican v. Cotnpagnie des Mes^wjenen 2Iaritime de France, I. L. R., 6 Calc, 227. • Jellicoe v. British hidia Steam Navigation Co., I. L. R., 10 Calc, 489. • Surutram Bhaya v. G. I. P. Ry. Co., I. L. R., 3 Bom., 96. Lihwardas Gulabchand v. G. I. P. Ry. Co., I. L. R., 3 Bom., 120. See also the remarks of Garth C. J., in Mothoora Kant Shaw v. India General Steam Navigation Co., I. L. R., 10 Calc, (187). LIABILITY OF PIUKCIPAL TO THIRD PARTIES. 46) show the claims made against such cai-riers, and will also point out the different ways in which they can limit their liabilities.^ As to this latter point, and as to the degree of care which is required to protect them from liability in respect of a loss arising fro-m the act of God see Nugent v. Smith.^ Qualifications of the principal's liability. Contributory negligence. — Although a third person may in the cases referred to bo alilc to ix'corer against the principal for the negligence of the agent ; yet he cannot do so if his own negligence has contributed to the accident. But yet it is not every negli- gence on the part of the plaintiff which in any degree contributes to the mis- chief which will bar him of his remedy, but only such negligence that the defendant could not by the exercise of ordinary care have avoided the i^esult.^ The effect on the suit of the plaintiff's negligence in causing the wrong is given in Davey v. London and 8. W. By. Go.,^ Fdrdham v. Brighton By. Co.,^ Thorwood V. Bryan^ ; and Weller v. London Brighton and South Coast By.,'' as to a vessel. The Bernina,^ Tuff v. Wannan ;^ as to the onus of proof with regard to contri- butory negligence, see Wakelm v. London and S. W. By. Co.i" Distinction between doctrine of contributory negligence and volenti non fit iiijuria. — Contributor}- negligence arises where theie has been a breach of duty on the defendant's part, not where ex-hypothesi there has been none. It rests upon the view that though the defendant has in fact been negligent, yet the plaintiff has by his own carelessness severed the casual connection between the defendant's negligence and the accident which has occurred ; and that the de- fendant's negligence accordingly is not the true proximate cause of the injury. It was for this reason that under the old English form of pleading, the defence of con- tributory negligence was raised, in actions based on negligence, under the plea of " not guilty." It was said in Weblui, v. Ballard,^^ that in an inquiry whether the plaintiff had been guilty of contributory negligence, the plaintiff's knowledge may have even led him to exercise extraordinary care. But the doctrine of volenti non Jit injuria stands outside the defence of contributory negligence, and is in no way limited by it. In individual instances the two ideas sometimes seem to cover the * See also Moheshwar Das v. Carter, I. L. K., lu Calc, 210, and Ha*>a/i6/io^ Visram v. B. /. S. 2V. Co., I. L. R., 13 Born., 571. * L. R., 1 C. P. D., 436. « Radley v. L. cf N. W. Ry. Co., L. K., 1 A pp. C;is., 75-i. * L. R., 12 Q. D., 70. » L. R., 3 C. P., 368. * 8C. B,, 115. ' L. K., 9 C. P., 12G. 8 L. R., 11 P. D., 31. * 5 C. B. N. S., 573, aud the cases collected in Evan's on Pr. & Ag., j). 570. •0 L. R., 12 App. Cas., 41. " L. R., 17 Q. B. D., 122. 462 i'llK ^A^V 01' AGENCY. same f^i'uiUKl, but carclus.suc.s.s is not the siiiiic thing as intelligent choiee, and the Latin maxim often applies where there has been no earelessness at all. A (•(Mifusioii of ideas has I'lcfpicnlly hi^en ereated in aeeidcnt eases by an assump- tion that negligenee to the many who are ignorant may be i)roperly treated as negligcnec as regards the one individual who knows and runs the lisk, and by dealing with the ease as if it turiu-d only on a subsequent investigation into eontributory negligenee. in many instances it is immaterial to distinguish between the two defences, but the importance of the distinction has been pointed out by Earle .1., in his summing up to the jury in Indervuiur v. Dames,^ and by Coekburn C. J., in WooiUey v. Metropolitan JJistrict By. Co.^ These two defences, that which rests on the doctrine volenti non Jit injuria, and that which is popularly described as contributory negligence are thei-efore quite different.^ In a late case. Lord Bramwell has hekl that where a man is not physically constrained, where he can at his option do a thing or not, and he docs it, the maxim voJf^iiti non fit injuria applies, but the question whether this is so or not was distinctly left ojjcu by other of the learned Judges in that case.* In England this liability of the principal for his servant's negligence, is governed by the Employers Liability Act of 1880, 42 & 44 Vic, c. 42 ; and in decisions under that Act, it has been held that the maxim volenti non Jit injuria has no applica- tion where the injui'y arises from the breach of a statutoiy duty on the piu't of the emi)loyer.^ Vis Major. '• Act of God " as applied to carrier exceptions— A further qualification of the third peison's i-ight against the pi-incipal, is when the act occasioning the injury is the act of God, or in other words can be classed under the head of Vis major. The dehnition of what amounts to an act of God has been laid down in Nugent v. Sniith,^ there Coekburn C. J., says at p. 434. " The definition which is given by Mr. Justice Bi'ett of Avhat is termed in our law, the " act of God " is. that it must be such a dii'ect, and violent, and sudden, irresistible act of nature, as could not by any amount of ability have been foreseen, or if foreseen could not by any amount of human care and skill have been resisted The exposition here given appears to me too wide as regards the degree of care required of the shipownei-, and as exacting more than can be properly expected of him. It is somewhat remarkable that previously to the present case no judicial exposition has occurred of the meaning of the term "' act of God,"" as regards the degree of > L. R., 1 C. P., 277. " L. R., 2 Ex. D., 384. ■ Thomas v. Quarlerynaiii, per Bowen L. J., L. R., Q. B. D., (697). ♦ Memhery v. G. W. By. Co., L. K., 14 App. Cas., 179. » Baddehy v. Earl Granville, L. R., 19 Q. B. D., 423. • L. R., 1 C. r. D., (434). LIABILITY OF PRINCIPAL TO THIRD PARTIES. 463 care to be applied by the carrier in order to entitle himself to the benefit of its protection. We mnst endeavour to lay down an intelligible rule. Tliat a storm at sea is included in the temn " act of Clod " can admit of no doubt whatever. Storm and tempest have always been mentioned in dealing with this subject as among the instances of viz major coming under the denomination of " act of God;" bat it is equally true, that it is not under all cii'cumstances that inevitable accident arising from the so-called act of God Avill, any more than inevitable accident in general by the Roman and Continental law, afford im- munity to the carrier. This must depend on his ability to avert the effects of the m 7nq/or, and the degree of diligence which he is bound to apply to that end. It is at once obvious, as was pointed out by Lord Mansfield in Fnrward v. Pittarcl} that all causes of inevitable accident — casus fortuitus — may be divided into two classes — those which are occasioned by the elementary forces of nature unconnected with the agency of man or other cause, and those which liave theii- origin either in whole or in part in the agency of man, whether in acts of commission or omission, of non-feasance or of mis-feasance, or in any other cause independent of the agency of natural forces. It is obvious that it would be altogether incongruous to apply the term " act of God," to the latter class of inevitable accident. It is equally clear that storm and tempest belong to the class to which the temn " act of God " is properly applicable. On the other hand, it must be admitted that it is not because an accident is occasioned by the agency of nature, and therefore by what may be termed the " act of God, " that it naturally follows that the carrier is entitled to inamunity. The rain which fertilises the earth, tlie wind which enables the ship to navigate the ocean ai'e as much within the term act oi God, as the rainfall which causes a river to burst its banks and carry destruction over a Avhole district, or the cyclone that drives a ship against a rock or sends it to tlie bottom. Yet tlie carrier who by the rule is entitled to pi'otection in the latter case, would clearly not be able to claim it in case of damage occurring in the formei-. For here, another pinnciple comes into play. Tlie cai'rier is bound to do liis utmost to protect goods committed to liis charge from loss or damage, aud if lie fiiils herein he becomes liable from the nature of his contract. In the one ease lie can protect the goods by pioper cai-e, in the other it is beyond his power to do so. If by his default in omitting to take tlic necessary care loss or damage ensues, he remains responsible, though the so-called act of (lod may have been the immediate cause of the mischief. If the ship is unseaworthy, and hence perishes from the storm which it otherwise would hnvc> wcatluMcd ; if the carrier by undue deviation or delay exposes himself to the danger wliicli lie otherwise would have avoided, or if by his rashness he unnecessarily enrounti-vs ' 1 'I'. F?., 27. 464 rUK t,A\V III' AOKNOY it, as by puHiiiGf in soa in a rac^in2^ Mtonn, tlio loss cannot be saipli- cable, as for instance, where a person enters into a contract to be liable for damages under particular circumstances, or an Act of Parliament imposes a liability for damages occasioned by particular circumstances, in such cases it is no defence.* Accidental injury. — Accidental injury, or inevitable accident, also fall under the head of vis major, and will exempt from liability where a person is doing a lawful act and nnintentionally causes damage.^ Liability of Secretary of State for negligence and other torts of pub- lic servant. — The Secretary of State for India in Council is liable for damage oceasioucd by the negligence of servants in the service of Grovernment, if the negligence is such as would render an ordinary employer liable.* Thus in the case of the P. and 0. Company v. Secretary of State,^ before referred to, which was a suit brought by the plaintiffs for damage done to one of their horses through the negligence of some men employed at one of the Grovernment dockyards, which dockyard was carried on by the Government in the same way, and for the same purposes, as any private firm or. Company might have carried on a similar business. Sir Barnes Peacock decided that the Government of India were responsible to the plaintiffs upon the ground that the negligence com- plained of was an act done by their servants in carrying on the ordinary busi- ness of ship-builders, unconnected altogether with the exercise of Sovereign powers, and which any firm or individual might have carried on for the same purpose. It being held that the East India Company would have been liable in such a case before 21 and 22 Vic. c. 106 was passed, and that the Government of India were equally liable after the Act came into operation. It is re- marked in this case that there is a clear distinction between acts done in the exercise of what are usually termed Sovereign powers, and acts done in the conduct of undertakings which might be carried on by private individuals -w-ithout having such powers delegated to them ; and it has been remarked by Peacock C. J., that where an act is done or a contract entered into it in the L. R., 5 Ex., 204; L. R., 7 Ex.; 247. * River Wear Gommissionerg v. Adamson, 26 W. R., (Eng.), 217 ; L. R , 2 .\pp. Cas. 743. Paradine v. Jones, 4 T. R., 6G0. ■ Holmes v. Mather, L. H., 10 Ex., 261. Hammack v. White, 11 C. B. N. S., 588. * Peninsular and Oriental Steam Navigation Co. v. Secretary of State, 5 Bom. H. C. App., 1 ; Bonrke Rep., Pt. VII, 167. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 465 exercise of powders usually called Sovereign powers, by which is meant powers which cannot be lawfully exercised except by a Sovereign, or private individual delegated by a Sovereign to exercise them, no action will lie.^ This latter prin- ciple was followed in Nobin Ghtinder Bey v. Secretary of State for India,^ where the plaintiff sued the Secretary of State to establish his claim to obtain licenses to sell excisable liquors, on the gi'ound that he was the highest bidder at the sale held by the Collector for the right to sell such liquors ; the Court holding, that the suit was not maintainable, being in respect of acts done by Govei*nment in the exercise of Sovereign powers. The Madras Court have, however, held that the principle was wrongly stated in that case, and have dissented from it,^ and the case has also been questioned by the High Court of Allahabad.'* In the Madras case it was held by the Court of Appeal that the act of State which the Municipal Courts of British India are debarred from taking cog- nizance of, are acts done in the exercise of Sovereign powers, which do not profess to be justified by Municipal law. There the plaintiff had shipped salt from Bombay to the Malabar Ports, having conformed to the provisions of the Bombay Salt Act of 1873, and having paid the full duty leviable under the Indian Tariff Act of 1875. By notification under that Act, the Governor-General in Council had exempted salt which had paid the excise duty at Bombay from liability to pay more than the difference between what was so paid, and the import duty leviable under the Tariff Act. Whilst the salt was in transit, the Salt Act of 1877, which raised the duty, came into force ; and the Collector of Malabar levied 11 annas a maund on the salt imported, in the belief that he was so authorized to act by law, and his action was ratified by Government. It was there admitted that the Secretary of State would be liable in a case in which the East India Company, would have been liable, but it was contended that the East India Company would not have been liable to have been sued in a case like the one before the Court, but only in cases in which a petition of right would lie to the Crown, and in certain other cases in which they had entered into contractual engagements of a quasi private character. Mr. Justice Turner held that the suit was one either for restitution of the sum wrongfully seized and held, or for damages for the wrongful taking, and was therefore in its nature apparently a claim for which a petition of right would lie as between the subject and the Sovereign ; and after stating that the question did not wholly depend on the nature of the relief prayed, but also on the question as to whether the person who committed the tortious act, was, in such a position relatively to the Crown that the Crown, ^ P. and 0. Steam Navigation Co. v. Secretary of State, Boarke, Pt. VII. 167. » I. L. R., 1 Calc, 11. * Hari Bhanji v. Secretary of State, I. L. R., 4 Mad., 344 ; on appeal, I. L. R., 5 Mad., 273. * Kishen Chand v. Secretary of State, I. L. R., 3 All,, 829 (835.) L L L 466 Tnr, r,.\vv dk agency. or the Secretary of State, could ]u\ iiuuh^ icsponsiblo through him ; held, that alMiontfli there was no i)rovisi()u uf law rendering' Custom House officers in express terms amenahle to the law for aets doJie in their offieial capacity, they Avei'e nevertheless liiiblr iiiidci' llic piinciph's wliicli had become vested in the hiw by the earlier legislation, whereby the Supreme Government submitted to have questions as to rights in dispute between its officers of revenue and its subjects determined in its own Courts ; and th;it the suit would therefore lie against the Customs officers, and as his act had been ratified by the Government the Govei'nnient was liable to be sued for damages for the AVTongful aet. Non-liability for acts done in the exercise of Sovereign powers which do not profess to be justified by Municipal law.— On appeaU in the case last mentioned Sir Charles Turner C. J. and Mr. Justiee Muttasami Ayyar upheld the judgment of the lower Court and held that the act of State of which the Municipal Courts of British India are debarred from taking cog- nizance, were acts done in the exercise of Sovereign powers whieh do not profess to be justified by Municijial law ; — His Lordship the Chief Justice in delivering judgment said with reference to the case of Nobin Chunder Bey V. Secretary of State, " With the hesitation suggested by the respect due to the leai'ned Judges by -whom the case of Nob in Chunder Bey was decided, we are unable to acquiesce in the propriety of the decision. Two principal rules regulate the maintenance of proceedings at law by a subject against a Sovereign, the one having relation to the personal status of the defendant, the other to the character of the act in respect of which relief is sought. The East India Company was not a Sovereign, and the personal ex- emption from suit which is the attribute of sovereignty did not attach to it. Nabob of the Carnatic v. E. I. Company,'^ Bank of Bengal v. E. I. Com- pany,^ P. and 0. Steam Navigation Company v. Secretary of State,* and this is further shoAvn by the circumstance that the Company was held liable for the negligence or misconduct of its officers in cases in which the sovereign would not have been held liable even on a petition of right The second rule to which we have referred as having relation to the nature of the act complained of, is the rule that Municipal Courts have no jurisdiction to entertain claims against the Government arising out of acts of State. What is the sense in which the term " act of State " is to be understood in this rule ? In one sense all acts done by the officers of the Governmeut in the exercise of powers con- ferred on them for purposes of administration and which cannot legally be done ' Secretary of State v. Hari Bhartji, I. L. E,, 5 Mad., 273, * 1 Ves. Jan., 370 : 2 Ves. Jun., 56. ' Bignell's Calo. Rep., cited in Bourke, Pt. VII, 180. * Bonrke, Pt. VII. 166—198. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 467 by private persons may be termed acts of State. There are cases in which it has been held that the East India Company was answerable to the Municipal Courts on the ground that the acts complained of were committed in the con- duct of undertaking's which might be carried on by private persons. The Peni7isula and Oriental Steam Navigation Company v. Secretary of State)- In those cases it was not necessary to do more than to call attention to the general distinC' tion between acts done in the exercise of powers usually termed Sovereign powers, and acts done in the conduct of undertakings which might be carried on by persons who enjoyed no delegated j)owers of sovereignty. In the conduct of the commercial operation of the Company the occurrence of actionable wi'ongs could hardly be altogether avoided, and it was obvious that no character of sovereignty attached to such operations. But the decision in the case of Nvbin Chunder Dey goes beyond the decisions to which we have referred. It is apparent that the learned Judges had in view the able judgment in the P. and 0. Steam Navigation Company v. Secretary of State ; but whereas in that case after noticing the distinction above mentioned, the Court held that exemption from suit could not be claimed in respect of the latter class of acts, and ex- pressed no opinion that all acts of the former class would enjoy such immunity, in Nobin Chunder Bey's case it has been ruled that the liability of the Govern- ment or its officers to suit is restricted to acts of the former class. It appears to us that this position cannot be maintained, and that the decided cases show that in the class of acts whicli are competent to the Government and not to any private person, a distinction taken is between those which lie outside the province of Municipal law, and those which fall within the law, and that it is the former only that in this country the Municipal Courts in British India cannot take cognizance. Acts done by the Government in the exex'cise of the Sovereign poAvers of making peace and war and of concluding treaties obviously do not fall within the province of Municipal law, and although in the administration of domestic affairs the Government ordinarily exercise powers which are regulated bj the law, yet there are cases in which the supreme necessity of providing for the public safety coihpels the Government to acts which do not pretend to justify them by any canon of Municipal law. For the exercise of these powers the Government, though irresponsible to the Courts, is not wholly without responsi- bility. Under the constitution of England it is more or less responsible to Parlia- ment through the responsible ministers of the Crown. Acts done in the exercise of Sovereign powers, but which do not profess to be justified by Municipal law, are what we understand to be the acts of State of which Municipal Coui'ts are not authorized to take cognizance." There is no distinction as to the liability of the Secretary of State between a liability under contract and a liability arising » Bourke, Pt, VII, 166—188. 468 THE. LAW Of AUBNCr. out of a wronpffnl act.^ Tho liability of Government in the case of a ratifica- tion of a wrongful act of its officer, has been recognized in the case of the Collector of Mastilipatam v. Cavaly Vencata Narayanappa.^ * P. iV 0. St. Nav. Co. V. Secretary of State, 5 Bom. II. C. App., (16). ■ 8 Mdo. I. A., 529. LECTURE XU.—{Gontimied.) PART III.— LIABILITY OF PRINCIPAL FOR AGENT'S FRAUD AND MIS-REPRESENTATIONS. Liability for fraud and misrepresentation — Must be in the course of master's business and for benefit of master — Liability for fraud even though unauthorized — Same principles appli- cable to corporations — Principal not liable where agent makes misrepresentation for his own benefit — In action for deceit, fraud must be actual fraud — Effect of fraud or misrepre- sentation on agreements— Innocent principal liable to third persons — Liability of firm for fraud of one of its members — Liability of principal for criminal acts. Liability for agent's fraud and misrepresentation in deceit.— A prin- cipal is liable to third parties for all frauds and misrepresentations committed or made by his agent acting in the course of his employment, and for the benefit of his principal, even though no express command or privity of the principal be proved. 1 But if the fraud or misrepresentation be outside the course of the agents employment, the principal mil not be liable ;' unless he subsequently adopts or i^atifies the fraiid or misrepresentation.'' Liability even though the fraud is unauthorized.— To make the princi- ])al responsible in an action of deceit the fraud or misrepresentation must have been committed in the course of his emplo)'ment and for his principal's benefit, even though he was ignorant of, and did not authorize the fraud or mis- representation, for as is said by the House of Lords in Mackay v. Commercial Bank of Neiv Brunswick,'^ "It is seldom possible to prove that the fraudulent act complained of was not committed by the express authority of the principal, or that he gave his agent general authority to commit wrongs or frauds. Indeed it may be generally assumed that in mercantile transactions, principals do not authorize their agents to act wrongfully, and consequently tliat frauds are beyond " the scope of the agent's authority " in the narrowest sense of which the expression admits. But so nari^ow a sense would have the effect ' Banvick v. English Joint Stock Bank, L. H., 2 E.v., 265, per Willos J. Fuller v. Wilnon, 3 Q. B., 58, which was reversed on ground tliat the iiii.srepresoiitation was on tlie part of the tliird person, 3 Q. B., Iu09. ^ Ghapleo V. Brunswick Benefit Building Society, L. E., 9 Q. B D., fiOG. Kmr on Frauds p. 84. Ayre's case, 25 Beav., 513. Atforney-Genrrfil v. Rn/./s, 1 .Tur. N. R., lOSk Grant v. Nor^uay, 10 C. B., 6R5. • jRat Kishen Ghand v. Shnobaran Rai, 7 All. If. C, I'il. Udell v. Atherton, 7 H. & N., 172. * L. R., 5 P. C, 394, (-411). See also per Willes J., in Bartcick v. Enfflish Joiiit Stock Bank, L. R., 2 Ex , 269. 470 THE r,A\v (ty a>,esc\. of pnablincf principals largely to avail themselves of the frauds of tlieir agents, witliout sulToring losses or incurring liabilities on account of them, and would bo opposed as much as to justice as to authority. A wider construction has been put upon the words. Principals have been held liable for frauds when it has not been pi-oved that they authorized the particular fraud complained of, or gave a general authority to commit frauds." Corporations. — These principles are likewise applicable to Corporations ; thus in Barwick v. English Joint Stock Bank,^ an innocent principal (a Corporation Limited) was held responsible for the fraudulent representation of its authorized agent acting within his authority to the same extent as if it were his own fraud. In that case the plaintiff having for some time on a guarantee of the defen- dants supplied J. D. a customer of theirs with oats on credit for carrying out a Governments contract, refused to continue to do so unless he had a better guarantee. The defendant's manager thereupon gave him a written guarantee to the effect that the customer's cheque on the bank in plaintiff's favour, in pay- ment of the oats supplied would be paid on receipt of the Government money in priority to any other payment " except to this bank." The customer was then indebted to the bank to the amount of £12,000, but this fact was not known to the plaintiff, nor was it communicated to him by tlie manager. The plaintiff thereupon supplied oats to the extent of £1,217 ; and the Government money amounting to £2,676 was received by the customer, and paid into the bank ; but his cheque for the price of the oats drawn on the bank in favour of the plaintiffs was dishonoured by the defendants who claimed to retain the whole sum paid in part satisfaction of their debt. The plaintiff then brought an action for false representation against the bank, held that there was evidence to go to the jury that the manager knew and intended that the guarantee should be unavailing, and had fraudiilently concealed from the plaintiff the fact which would make it so ; and also, that the defendants were liable for the fraud of their a cent, and that the fraud was pi-operly laid as the fraud of the defendants. Mr. Justice Willes said : — " With respect to the question whether a principal is answerable for the acts of his agent in the course of his master's business, and for his master's benefit, no sensible distinction can be dra^vn between the case of fraud and of any other wrong. The general rule is, that the master is answerable for every such wi-ong of the servant or agent as is committed in the course of the sex'vice and for the master's benefit, though no express command or privity of the master be proved. The principle is acted on every day in running down cases. It has been applied also to direct trespass to goods In all these cases it may be said, as it is said here that the master had not authorized the act. It is true he has not authorized the particular » L. R., 2 Ex., 259. LIABILITY OP PRINCIPAL TO THIRD PARTIES, 471 act, but he has put the agent in his place to do that class of acts, and he must be ans^^erable for the niannei' in which that agent has conducted him- self in doing the business which it was the act of his master to place him in." It was therefore held that the Corporation was liable for the misrepresenta- tion of its agent. This decision has been commented or by Bramwell L. J., in Weir v. Bell,^ who has said the reasons giyen for it were not satis- factory, but that he considered it could be supported on other grounds. On the other hand, in the case of the Western Bank of Scotland v. Addie^ in which the case of Barwick v. English Joint Stock Bank was not considered, it has been held that a Corporation may be made responsible for the frauds of its agents to the extent to which the Company have profited fi-om these frauds, but that they cannot be sued as wrong-doers in an action of deceit by imparting to them the misconduct of those they have employed. There the plaintiff had been, it was alleged, induced by the fraudulent representa- tion of the Bank's agents, the directors, to buy from the Company certain shares, and claimed to recover from the Company his shares, and to be re- imbursed in damages, but after his purchase and before the action the Company which had been an unincorporated Company, was, Avith his con- cuiTence, incorporated and registered under the Joint Stock Company's Act, 1856. The case was decided just two days after the case of Barwick v. English Joint Stock Bank Company. Lord Chelmsford said : •' The distinction to be drawn from the authorities, and which is sanctioned by sound pi'inciples appears to be this ; — where a person has been drawn into a contract to purchase shares belonging to a Company by fraudulent misrepresentations of the directors, and the dii-ec- tors in the name of the Company, seek to enforce that contract, or the per- son who has been deceived institutes a suit against the Company to rescind the conti'act on the ground of fraud, the misrepresentations are imputable to the Company, and the purchaser cannot be held to his contract, because a Company cannot retain any benefit which they have obtained through the fraud of theu' agents. But if the person who has been induced to purchase shares by the fraud of the directors, instead of seeking to set aside the con- tract, prefers to bring an action for damages for the deceit, such an action cannot be maintained against the Company, but only against the dii-ectors." Lord Cranworth said : — '* He was a party to a proceeding whereby the Company from which the piu'chase was made was put an end to ; it ceased to be an unincorporated, and became an incorporated Company with many statutable incidents connected with it, which did not exist before the incorpoi'ation. The new Company, is now in course of being wound up : he conies too late ; the ' L. R., 3 Ex., 239. • L. E., 1 Sch. App., 1-46. See also uu this puiut Sew Bnimmuk and Ru C". r. Couyheare, 9 H. L. Caa., 726. 472 ''HK LAW OF AGENCY. appcllantfl nro not the persons who wore ^'tiilty of the fi-and, anrl althonp^h the iucoi-ponvtctl C'()iiii)aiiy is l)y llic express ])rovisions of tlie Statute, under whieh it was ineorjioi-attHl, iiiade lial)h' for t he deV)ts and liuhilities incurred before the incorporation, I eannot read the Statute as transfemng to the incorporated Company a liability to be sued for frauds or other acts committed by the directors before incorporation An incorporated Company cannot in its corpoi-ate character be called upon to answer for an action for deceit. But if by the fraud of its agents, third persons have been defrauded, the Corporation may be responsible to the extent to which its funds have profited by those frauds. Tf it is supposed that in what I said in Banger v. Great Western Railway Company,^ decided in this House, I meant to give it as my opinion that the Company could in that case have been made to answer as for tort in an action of deceit, 1 can only say 1 had no such meaning An attentive consideration of the cases has convinced me that the true principle is, that these corporate bodies throuo-h whose agents so large a portion of the business of the country is now can'ied on, may be made responsible for the frauds of those agents to the extent to which the Companies have profited from these frauds, but they can- not be sued as wrong-doers, by imparting to them the misconduct of those whom they have employed. A person defrauded by directors, if the subsequent acts and dcalino-s of the parties have been such as to leave him no remedy but an action for the fraud, must seek his remedy against the directors personally." This opinion of their Lordships appears to be at variance to that of Willes J., in Barwick v. English Joint Stock Bank,^ which has been approved by the Privy Council in Mackay v. The Commercial Bank of New Brunswick,^ by Lord Selbourne in Hoiddsworth v. The City of Glascotv Bank,^ and by Bowen L. J., in the British Mutual Banking Conpany v. Charmvood Forest Railway Company,^ which cases all appear to decide that where the principal, although a Corporation, has benefited by the fraud of its agents, the principal may be held liable in an action of deceit • and inasmuch as their Lordships were unaware of the decision of Barwick V. Englvih Joint Stock Bank, at the time when the Western Bank of Scotland v. Addie was decided, it cannot at all events be said to have been intentionally anta- o-onistic to it. And in Houldsworth v. City of Olascow Bank^ (which is an authority for the proposition that an action of deceit against a Company by a shareholder in it is not maintainable) Lord Selborne has adverted to the dictum of Lord Crauworth in the Western Bank of Scotland v. Addie,'' and whilst admitting the substantial accuracy of Lord Cranworth's statement of the law as there laid do-wn, considered that his dictum on the point of pleading might be technically • 5 H. L. Cas., 72. * L. R., 18 Q. B. D., 714. « L. R., 2 Ex., 259. " L. R., 5 App. Cas., 317, (327). • L. R., 5 P. C, 394. ' L. R., 1 H. L. Sc, 145. • L. R., 5 App. Cas., 317. LIABILITY OF PRINCIPAL TO THIRD PARTIES. 473 inaccurate. The effect of Houldsioorth v. City of Glascow Bank, and of Western Bank of Scotland v. Addie is as is said, in Benjamin on Sale, p. 458, (9tli ed.) that the only remedy of a shareholder in a Joint Stock Company, who has been induced to purchase shares by the fraud of the agent of the Company, is rescis- sion of the contract and restitutio i7i integrum and if he is debarred from seeking that relief by the declared insolvency of the Company, or from any other cause there is no remedy open to him except to bring a personal action against the agent who has been actually guilty of the fraud. Principal not liable when the agfent makes misrepresentation for his own benefit — That the fraud or misrepresentation must be for the benefit of the principal, is clear from the case of the British Mutual Banking Com- pany V. The Charnwood Forest Bailway Company,^ which was also an action for deceit. There a customer of the Bank having applied for a loan upon the security of certain transfers of the debenture stock of the defendant Com- pany, the manager made enquiries of a former Secretary of the Company, and was infoi-med by the latter that the Company had sufl&cient stock to meet the transfers. The advance was accordingly made, but the transfers were in fact fictitious documents which had been issued by the former Secretary without the knowledge or consent of the defendants, in collusion with the alleged trans- ferer, who afterwards absconded. The plaintiff bank had previous dealings with the former Secretary, but were unaware that he had ceased to be Secretary to the defendants. The suit was brought to render the defendants liable for the over issue of their stock. The juiy found that the enquiries were made from the former Secretary as Secretary to the defendants, and that the defendants had held him out as theu' Secretary to answer enquiries. Lord Coleridge left the plaintiff to move to enter judgment ; for the defendant it was argued that they were not liable because the former Secretary had committed the fraud for his own private benefit, and that a Corporation deriving no benefit from the fraud of its agent is not responsible for it, whilst for the plaintiffs it was contended that the defendants wore bound by their agent's statements, and were liable for his fraud. Manisty and Mathew JJ., held tliat there was no difference between a Cor- poration and an ordinary principal, and that the defendants wei'e liable even if they had derived no benefit from their agent's fraud; but on appeal the Court held that a principal could not be held liable in an action of deceit for the unauthorized and fraudulent act of his servant committed not for the general or special benefit of the principal, but for the servant's or agent's private ends. The Master of the Rolls further added, that he considered there would be great danger in departing from the definition of liability laid down by Willcs J. in Banvick v. English Joint Stock Bank,^ and in extending the * L. R., 18 Q. B. D., 714. * L. R., 2 Ex., 257. M M M 174 THE LAW OF AGENCY. roKponsibility of a principal for the frauds committed by a Kervant or agent ■boyoiul tho boundaries hitherto roco^izcd by Englisli law. This decision o(jnally applies to Corporations as to unincorporated Companys or Societies, as well as other jirincipals.' In action for deceit the fraud must be actual fraud. — It has been held in a late case of i'c/-/// v. Pck.'^ in uliidi all tlic old antliorities were reviewed (which ease will be found more fully set out in pi'evious pages that in an action of deceit, actual fraud must be proved ; and that a false statement made through carelessness and without reasonable ground for believing it to bo true, may be evidence of fraud, but does not necessarily amount to fraiid. And that such a statement if made in the honest belief that it is true is not fraudulent, and does not render the person making it liable to an action of deceit. It is important that it should be borne in mind that an action for deceit differs essentially from one brought to obtain rescission of a contract on the ground of misrepresentation of a material fact. The principles which govern the two actions differ widely. Where rescission is claimed it is only necessary to prove that there was misrepresentation ; then, however, honestly it may have been made, however free from blame the person who made it, the contract, having been obtained by misrepresentation, cannot stand. In an action of deceit, on the contrary, it is not enough to establish misrepresenta- tion alone ;^ the additional elements necessary were held by their Lordships to be, that it must be shewn that the false representation has been made know- ingly or without belief in its truth, or recklessly, without caring whether it be ti^ue or false. This decision therefore reinstates the general imle laid down for actions in deceit by Bramwell J., in BiclRlTY — CouUnnenient by, 114. as to negotiable in.strutnfnts, 414. LEASES— power of land agent to gr.Tnt, 1 12. gomastu to grant, 113. I0i2 ini>f:x. lAiASF.S—Cnntiuiinl. power of iiiiibH to j^ninl, 11^. — ])!irl iicr to take, 140, LT;C;iSliATIVE AUTHORITY— (lortrino of dolcsation attciiiptccl to be applied to a, 41. LETTERS OF INSTRUCTION— appointment of agent by, 27. LIABILITY OF AGENT TO TUIRD PAR- TIES— generally, 358 to 406. Jv Contract. a qnestion of intention, 360. whore he contracts in liis own name, 359. may expressly save himself from liability, 303. when presnmed to be liable^ 3G7, 370. where acting for foreign principal, 367 where pi-incipal is not disclosed, 3li8. __ ■ disclosed but cannot be siied, 375. where custom supervenes, 374. where he is a public agent, 377. commission agent, 378. for wan-ant of authority, 379. for innocent mistake, 383. for misrepresentation and fraud, 384. not liable where he is induced to believe principal will bo liable. 385. to refund to true owner money paid by mistake, 386. for not paying over money to principal, 387, 388. where he is a stakeholder, 387. to refund money paid to him nnder co- ercion, 388. /(/ Tort. for mis-fcasance only, 391. where he and thii'd person act fraudu- lently, 392. is a master of a ship, 393. for fiilsc and fraudulent statements. 393. not liable for fraud of co-director, 397. for conversion, 397. joint tort feasors in trespass, 401. where he is a public agent, 402. where a judicial officer, 403. LIABILITY OF AGENT TO PRINCIPAL— generally, 321 to 336. for breach of all duties, 281 to 320. for want of skill, neglect and miscon- duct, 321. for acts of sub-agent, 330. not for refusal to make bets, 331. for negligence, where a director, 331. where a commission agent, 331. Sec Duty. LIAIUIJTY OF I'RINCIPAL TO THIRD J'ARTIErf— generally, 407 to 479. In contract. where he is disclosed, 407. where nndiacloscd, 400. on nc'gotiablo instruments, 414. where a foreign merchant, 421. for appnrent authority of agent, 421. to luive claim of set-off made against him, 423. where employing an ignorant agent, 423. for mistake of telegraph clerk, 423. where contract differs from intended contract, 423 where a steward, 424. wliere he is a master of a ship, 424. whore he is the Secretary of State, 424. for agent's admissions, 426 to 4.30. by reason of notice given to agent, 430 to 441. For nefjligence and lorongs — general rule, 442. for acts within scope of agent's employ- ment, 443. for work under his control, 443. for contractor's servants, 444 to 448. where job- master, 448, 449. not in cases of common employment, 450. where a corporation, 453. where a managing owner, 453. for pilot's negligence, 453, 454. for wilfnl and malicious acts, 455. for mistake in excess of authority, 457. where a common carrier, 459. qualifications of liability, 461 to 464 where he is Secretary of State, 4G4to -468. For misrepresentation and fraud — generally, 469 to 479. in deceit, 469, 474. even if fraud unauthorized, 469. even if innocent, 475. where a corporation, 470. frand must be for his benefit, 473. on agent's agreements, 474. of firm for frand of co-partners, 477. for criminal acts, 478. LIABILITY OF PRINCIPAL TO AGENT— see Commission, Indemnity, Lien, Stoj>- page in Transit, Right of Agent against Principal. LIEN— agent's right to, 218 to 241. definition of, 218. is particular or general, 218. right of general, 219. who entitled to general, 219. given by s. 171, Contract Act not absolute, 219. INDEX. 493 LIE N — Gontiyiued. of bankers, 219. of factors, 222. of wharfingers, 223. of attorneys, 224 to 228. " on judgment," meaning of, 227. in cases of winding up, 228. of attorney priority of, 228. of policy brokers, 229. particular, who entitled to, 230. how acquired, 231. possession is necessary to, 231. to what claims the right exists, 232. must be due to agent in his own right, 232. special agreement as to, 231. for commission, 218. none for officious services, 233. must be for debt due from the person for whom agent is acting, 233. but not so in insurance cases, 233. where broker insures for agent who con- ceals principal, 233. when and under what circumstances waived, 233. not revived by resumption of possession, 234. exception in insurance cases, 234. lost although possession not parted with, 235. lost when debt is satisfied, 235. not lost by goods being wharehouscd, 235. lost by misconduct, 236. whether lost by taking security, 237. not ordinarily lost by set-off, 237. where agent pi'oves in bankruptcy for debt on which lien is claimed, effect on, 237. may be lost by act of person claiming it, 239. on property, does not ordinarily allow of sale of property, 239. on ships, 239. for wages of master and crew, 241. none for disbursements of master, 240. for towage, 241. docs not give a right to stop in transit, 234. of agent may preserve agent's right to sue on contracts, 343. LIMITATION— in suits for account, 307, 308. LIQUIDATORS— delegation by, 55. LOSS WITHOUT DEFAULT— indemnity to agent for, 2G4. * LUNACY BY INQUISITION— whcLlier necessary to cousUtiito uusound- uess of miud, Ui;. MACHINERY— liability of master for negligence in in- specting, 277. MAJORITY ACT OF 1875 - whom it affects, 5, 6. exemptions from, 5. MAJORITY— prior to Majority Ac*, 5. under Majority Act. 5. agent to be responsible to principal must be of, 4. MALICIOUS ACTS— liability of principal for agents, 455. MANAGING AGENT— cannot bind Company by promissory note unnecessary for business, 117. MARITIME LIEN— for what claimable, 239 to 241. MANAGING OWNER— when liable for captain's negligence, 453. MARRIAGE BROKERAGE CONTKACTS, 212. MASTER OF SHIPS— definition of, 14. liability in contract of, 424 implied authority of. 14, 143 to 146. liability to third persons in tort, 392. when agent for charterers, 144. MAXIMS — " delegatus non potest delegari," 46. " volenti non fit injuria," 461. " quifacit per alium facit per se, 442. MEASURE OF DAMAGES, see Damages. MINISTERIAL ACTS— delegation of, 45. may be done by agent after insolvency, 98, MISCONDUCT— of agent disentitles him to commission, 212. Hen lost by, 236. no induiiinity to agent guilty of, 291. agent liable to principal for, 321. MIS-FEASANCE— agent liable to third person for, 282, 391. onus of proof of, 320. MISREPRESENTATION— liability of principal for agent's fraud and, 469. effect of, on agreements, 354 to 479, 474. rcmecl\- for, 175, •10 1. INDRX. M I ST A KM - ri;,dil, 1)1' iH-incipjil (o rocnvor money paid over l)y u^oiit l)y, .'{!■!). lialiility of aj^oiit uiidci iTinocont, 383. of law, Tiiisro])rosoiitation from, 348. liala'lity of aj^eiiL to rofuiid to true owner iiioiioy jiaid by, .386. in excess of agent's autliority, who liable for, 157. MONEY— right of principal to follow, when wrong- ly applied by agent, 351. MUKTARS— definition of, 17. extent of authority of, 114. cannot acknowledge principal's title un- less authorized, 114. may do formal acts, without reference to all joint principals, 114. cannat refer to arbitration unless autho- rized, 115. cannot pay barred debts when authorized to execntc bonds in lien of former debts, 115. has no implied power to execute convey- ances, 114. may act in what Courts, 17. duties, how regulated, 17. power of, to remunerate pleaders, 115. MUTUAL CREDITS, 237, 238. MUTUAL MISTAKE OF LAW— agent not liable to third person for, 384. NATURE AND EXTENT OF AUTHOR- ITY— See Authority. NAIBS— extent of authority of, 113. cannot under general power grant pottahs, 113. cannot distrain unless authorized, 113. cannot institute suits unless specially authorized, 114. NECESSARIES - when wife may bind husband for, 149, 151- NEGLIGENCE— liability of principal for agent's, 4^12 to 468. general rule as to this liability, 442. definition of, 442. must be within scope of agent's employ- ment to affect principal, 443. NEGOTIABLE INSTRUMENTS— execution of, 160 to 173. liability of undisclosed principal on, 414. NOMINAL DAMAGES, sec Damages. NON-FEASANCE— nnremunoratod agent not liable for, 282. remunerated agent liable for, 281, 282, 321. NOTICE TO AGENT— effect of, on ]n-incipal, 430. when effective as between principal and third j)artie8, 431. must to affect ])rincipal be material to the business, 433. cmjiloyed ministerially, effect of, 434. who is n(jt agent through whom insu- rance effected, 438 extent of doctrine that notice to agent is notice to principal, 440. of revocation, 86, 87, 88, 92, 93, 94, 95. of renunciation, 91. NOTICE TO QUIT— signed by one of several joint tenants, 30. OCCUPIER OF FIXED PROPERTY— liability cf, 418. ONUS OF PROOF— of dishonest concealment of facts by agent, 320 of mis-feasance, 230. ORDER AND DISPOSITION CLAUSE, 102. PAROL AUTHORITY- agent may act under, 18. construction of, 201. exercise of, 183. PAROL EVIDENCE— not admissible to discharge agent, 363. whether admissible to charge principal, 363 to 364. in cases of patent ambiguity, exclusion of, 202. in cases of latent ambiguity, admission of, 202. to explain technical words, 203. where bought and sold notes vary, 189. as to whether bought and sold notes constitute contract, 188. PARTICULAR LIEN, see Lien. PARTNERS— are general agents of each other, 14, 136. members of a Company are not, 15. in ancestral trade, description of, 15. no special mode of appointment of, 27. implied authoritv of, 27, 111, 136, 137, 138, 139, 140. ' liable only for wrongs in the " firm's busi- ness," 477. liability of, for fraud of co-partners. 477. INDEX. 495 PARTNERSHIP- terminated b}' death, 93. authorities implied in commercial, 138. all cases of, 137. PART OWNERS OP SHIPS— implied authority of, 148. PAYMENT— partner may receive, for firm, 137. Kurta may I'eceive, for joint family, 141. attorney may empower clerk to receive, 142. niay be received by auctioneers in cash, 147. —————— where customary by cheque, 147. broker has no authority to receive, 147. wlien insurance broker may receive, 148. factors may receive and make, 1 52. of debt extinguishes lien, 235. by agent in accordance with custom indemnity for, 263. without instructions by agent adopted by principal, indemnity for, 2G6. after revocation of authority, 271. to third parties, when answer to a suit, for account, 302. wrongly made by agent, right of prin- cipal to follow, 352. made by mistake liability of agent to refund, 386, 388. directed by principal, but not made by agent, liability of agent for, 387. PERSONAL CONFIDENCE— ground on which agent is to act in per- son, 39. PETITION OF RIGHT, 378. PILOT— negligence of, effect of on master and owner, 454. when employed compulsorily, not mas- ter's servant, 451-. liability of when employed under 17 and 18 Vic. c 104, 455. when liable for negligence, 454. PLEADER— definition of, 153. may withdraw case, 153, 154. may bind by admissions when, 153. may conipronuse when, 154. PLEDGE— of property by agent, when principal may recover, 353 to 357. POLICY BROKER— lien of, 228. right of, to sue on contract in his own name, 313. POWER OE ATTORNEY— right to possession of, 7. after revocation, 8, construction of, 191 to 201. revocation of, 82 to 104. PRESUMPTION— of liability of agent, 3G7. of liability of agent may be rebutted, 370. of delegation, 33. PRINCIPAL— definition of, 2. I. Eights of, against agent. to insist on agency being carried out, when, 281. to have his instructions carried out, 282 to 288. to insist on insurance, when, 288. to insist on the agent acting personally when, 289. to have the business skilfully conducted, 290, 29.5, 321. to immediate communication, in cases of difficulty, 296. to payment by agent, 297. to direcf production of documents, 297. to have proper accounts, 297. to full disclosure of all material facts, 308 to 312, 319. to repudiate contract when agents' dealings are disadvantageous, 312. to claim all irregular profits, 312 to 319. See Liability of Agent to Priuciijal and Duty. II. Righta of, againat Third Parties. generally, 345 to 357. to sue on agent's contracts, 345, 346. to sue where agent is personally liable, 347. to adopt agent's contracts, 348. to recover money paid by agent by mis- take or on no consideration, 349. to recover unnecessary payments by agent, 349. to recover deposits on conti-acts rescind- ed, 350. to recind contract where there is fraud, 351, 475. to follow money wrongly applied by agent, 351. to recover a wrongful distress, 353. to recover property wrongly disposed of by agent, 353 to 357. III. Liahilitxi of, to Agent. See Commision, Lien, Stoppage in Tran- situ, Indemnity. IV. Liahility of, to Third Persons. generally, 407 to 479. 496 IN'PF.X. riUNCIPAL— nrt6t7i/!/ (if, to Third prrsouH {continued.) wlion (lisc'losod, 407. wluTo undisclosed, when discovered, 409 to '111. on negntiiiblo iiislrumonta, 414. wlioii a foroipti ni(M"cliiiTit, 421. I'or apparent authority of aj^ent, 421. (<> have a claim of sot-off made, 423. ■where employiiifj an illiterate agent, 423. i'or mistake of telegr.-iph clerk, -ISS. where agent has not entered into the contract ordered, 423. for acts of Rub-agenL, 424. for agent's admissions, 42G to 420. by reason of notice given to agent, 430 to 411. for wrongful acta and negligence of agent, 412 to 468. for acts of contractor's servants, 444 to 448. for wrong directions given to Sheriff, 455. for mistake in excess of agent's author- ity, 457. for agent's fraud and misrepresentations, 469 to 470. for agent's criminal acts, when, 478. PROFITS, see, Secret Trofits. PROMISSORY KOTES— execution of, 160 to 164. effect of words of description in signa- ture of, 160. effect of, where principal is only named in body of, 161. signed in a representative character with principal's name disclosed, 161. execution of, by Companies, 161. effect of using wtn-ds importing agency in signature and not in body of, 162. when partners may give, 139. PROMOTERS— duty of, to account, 306, 317. to act botiil fide, 310. concealment of material facts by, 310. stand in a fiduciary position, 3l7. PROSPECTUS— liability of directors for fraud in, 303. PUBLIC AGENTS— liability of in contract, 377. in tort, 402. powers of, to bind Government, 154. QUALITY— indemnity by principal to agent for sale of goods of inferior quality, 272, RATIFICATION— where there nia}' be, 57, meaning of, 57. RATIFICATION -Co»al, 94 (note). agent, 95. but only after notice, 95. by insolvency of principal, 90. but only after notice of insolvency, 97. what is sutKcient notice in case of in- solvency of principal, 97. agency with interest not torniinalcd ]>y insolvency, 98. of trusts, 104. agent's right to conmiissiuu on, 215, RIGHT OF AGENT AGAINST PRINCI- PAL— See Commission, Lien, Stoppage in Tran- situ, Indemnity. RIGHT OF AGENT AGAINST THIRD PARTIES— to sue where he is personally liable, 337 to 339. on contracts in his own name un- der seal, 340. • where he has a special interest in contract, 340. ■ to recover money paid by mis- take, 343. cannot sue for specific performance where falsely contracting as agent, 339. right of agent to sue is subservient to that of jirincipal, 343. right to sue in tort when, 344. RIGHT OP PRINCIPAL AGAINST AGENT— See Duty of Agent, aiid Liability of Agent to Principal. RIGHT OF PRINCIPAL AGAINST THIRD PARTIES -see Principal. RIGHT TO SUE PRINCIPAL OR AGENT— is in the alternative, 41G. when right exists, 416, 417, 418. continues up to judgment, 419. SALARY— out of rents collected, does not give an interest in the agency, 85. SALE— contract of, may be made in anctioneei-'s own nmno, 147. by brokers how carried out, 147. of ship by master when may be, 146. of cargo by master wlien may be, 145. by factors how carried out, 13, 152. by Government agent in excess of autho- rity, 154. agent cannot buy property placed in his hands for, 309, 310. by broker who has goods put in his hands, 105. must take jilace as authorized, 156. by del-credere agent, uatnro of, 13. SEAL— appointment of agent under, 18. wlien noces.iar}- in conti'acts by Corpora- tions, 19 to 26. alliKi'd to jn-oinissorv notes does not affect liability of nn'ikers, 162, 163. contrac-t under, lias no groutor officiicy than other contracts, 13. 401^ TNI>MX. SECRET r.U.VTUITIES AND PROFITf?— received by ngont, right of principal to, •Mi. received by ono partner riglit of firm to, :nc,. received by promoters riglit of Company to, 317. SECRET LIMITATIONS OF TUE AUTHOR- ITY— effect of as between principal and agent, lOG. — principal and third parties, lOG. SECRET PROFITS, see Secret Gratuities. SECRETARY OF A COMPANY— has no power to make representations as to financial condition of the Company, 117. SECRETARY OF STATE— liability of in contract, 154, 424. for negligence, 4'6-i to 4G8. SERVANT— liability of master for acts of, 412 to 4]-3. mav be appointed by Corporation without deed, 21. is assumed to encounter ordinary risks of service, 450. SET-OFF— agent's right to, 331. liability of principal to a claim of, 423. SHEBAIT— may alienate under necessity, 113. may possibly grant mocurnrree leases, 113. SUEUIFF— • liability of principal for directions given by agent to, 455 implied indemnity to, for damage done by wrongful sale, 274. whether agent for judgment creditor or Crown, 274. Sfl IP- power of master to sell on necossitj', 146. lien of master and crew on, for wages, 241. no lien on, for disbursements, 239, 240. law applicable to, is that of the flag, 116. SHIP BROKERS— definition of, 13. authority of, 14. when entitled to commission, 14. SHIP'S HUSBAND- definition of, 14. authority of, 14. SILENCE— ratification may be implied from, 03. not always Buflicicut evidence of ratifica- tion, 64. SIMPLE CONTRACTS— mode of execution of, 174 to 184. SKILL AND DILIGENCE— required by agent, 290. amount of, requisite, 295. required of solicitor acting for client, 293. SOCIETIES, see Clubs. SOLD NOTE, see, Bought and Sold Notes. SOLICITOR, see Attorney. SOUNDN'ESS OF MIND— neccssai-y to hold agent responsible to principal, 4. definition of, 6. SPECIAL AUTHORITY— definition of, 106. SPECIAL INTEREST— in business of agency gives agent right to sale, 340. SPECIFIC ADVANCE- how stoppage made where instrument of title is assigned to secure, 257. STAKEHOLDER— liability of agent as, 387. distinguished from agent, 387. STANDING BY may amount to ratification, 05. STATUTES— 13 and 14 Car. II, c. U 37 Geo. Ill, c. 142, s. 14 6 Geo. IV, c. 16, s. 50 ... 21 Geo. IV, c. 70, ss. 24, 25 I and 2 W. IV, c. 22 ... 241, 6 and 7 Vic, c. 86 8 and 9 Vic, c. 109, s. 18 268, II and 12 Vic, C. 21, s. 7 17 and 18 Vic, c. 104 24 Vic, c 10 25 and 26 Vic, c. 6.3, c. 89, I s. 54 s. 47 s, 153 s. 165 s. 1 240, 164, 168, 320, 30 and 31 Vic, c. 20, 32 and ?3 Vic, c. 71, s. 3 sub. s. 5 45 and 46 Vic, c. 39 ... 394, STOPP.IGE IN TRANSIT— what it is. 242. 350 404 238 404 4J9 4^19 270 96 231 101 455 2U 454 169 263 327 269 103 433 INDEX. 499 STOPPAGE IN TRk-NSlT— Continued. who may exercise the right, 243 to 245. by consignor, 244. by factor, 244. by duly authorized agent, 245. by surety, when, 245. by person taking bill of lading, 245. by person endorsing bill of lading to his own order, 245. [246. not exercisable in satisfaction of a lien, whether defeated by taking bill of ex- change, 246. continues whilst goods are in transit, 247. when goods are in transit for jDurposes of, 247. effect of purchaser chartering his own ship, on stop23age of goods on board 248. where contract is to deliver goods free on board, 248. right to, may depend on nature of char- terparty, 248. question whether the transit is the ori- ginal transit or a fresh one, 248. transit not always ended when goods are wharehoused, 249. when question is whether goods are held by person as carrier or wharehouseman, 250. when goods have reached their destina- tion, 250. what is the actual delivery which ends the transit, 251. vendee may anticipate termination of transit, 252. [252. effect of part delivery on the right to, may be defeated by assignment to a se- cond pui'chaser whilst goods in transit, 253. but not so where the assignment to second purchaser is maid fide, 253. the assignment ml^gt be for valuable con- sidei'ation to effect the right of, 254. whether assignment of goods for past debts effect the right of, 254 to 2?7. right of, not lost until conditions in bill of lading fulfilled, 257. how made, where instrument of title is assgined to secure siJecific advance, 257. mode of effecting, 260. what are instruments of title with refer- ence to, 257. SUB-AGENT— definition of, 36. who responsible to, 36. distinguished from substitute, 37. when may be employed, 46, 50, 51. liability of principal for acts of, 425. SURST.\NTrAL COMPLIANCE WITH IX- STUUCTIONS— saves agent from liabilitv, 284, SUBSTITUTES— appointment of by agent, 37. who res])onsible for, 38, 426. distinguished from sub-agents, 37. STATION MASTER— when clothed with authority to arrest 457. STATUTORY DUTY— breach of, by Corporation, 453. STEWARD OF A FETE— liability of, for acts of general manager, 424. TAZI MANDI CHITTIS- custom as to, in Calcutta, 129. TELEGRAPH COMPANIES— are mere agents to transmit orders 423. TIME BARGAINS— defined, 271. not necessarily invalid, 271. TITLE— subject to approval of Solicitor before commission payable, 217. of principal may not be disputed by agent, 33. instruments of, what are, 257. instrument of, assigned to secure specific advance, 257. effect of concealment of invalidity of, by attorney, 411. TORT— waiver of, 380. right of agent to sue third party in, 344. liability of agent to third person in, 391. liability of public agent in, 402. may bo ratified, 71. TRAP DOOR— neglect of agent to shut, liability of prin- cipal, for, 448. TRUST— revocation of, 104. TRUSTEE— delegation by, 52. UNDISCLOSED PRINCIPAL— defined, 3. right of to sue third person is subject to ociuities, 347. liable to bo sued when discovered, 409. exception to this latter rule, 409. j)rcsuinption in cases of, 367, 36"<, 370. ground of decision for English cases on, 37». 500 INDKX. UNIVERSAL ACKNT— dofiiiition of, lOG. oxtont of authority of, JOG. UNSOUND MIND— mcnniiiR of, G. na cxpliiiiunl by Lonl Coko, G. druiikomicss wlicu included in, 7. knowlediifo of, 1)5. Avhcu it affects agency, Ol, 95. USAGE OF TRADE— Contract Act subject to, 1. meaning of the term, 48. evidence as to, 47. lio\v far may control contract, ^S. must not bo inconsistent with contract, 49. cannot change its intrinsic character, 49. to employ sub-agent, 50. incidental authorities arising from, 118. is knowledge of, necessaiy, 119. if unreasonable, principal ignorant of it not bound, 124. rules as to, to be deduced from Rolinsoji v, Mollett, 124. how proved, 128. oral evidence of, when admissible, 126. as to Tazi Mandi Chittis, 128. indemnity of agent for payment made under, 263 duty of agent where order is given with reference to, 285. VARIANCE — effect of exercising the authority with a variance, 15G, 284, 28G. VAKIL— definition of, 16. duties of, 16. where may act, 16, 17. subject to rules of Legal Practitioucrs Act, 17. admissions by, 427. VERBAL AUTnORITV— may be given to agent, 18, to sign, 158. VIS MAJOR— a qualification of carrier's liability, 459. as a])iilie(l to carrier's exceptions, -WiS. what included in, 463. does not always exempt from liability, 464>. VOLENTI NON FIT INJURIA— distinguished from contributory negli- gence, 461. VOLUNTEER— is in the same position as servant with reference to rule as to common employ- ment, 450. WAGERING CONTRACTS— not unlawful, 268, 270. winner of, cannot enforce, 269. agent may recover from principal money paid for principal on account of, 269. WARRANT OF AUTHORITY— liability of agent to third persons for, 379. measure of damages for breach of, 382. WHAREHOUSEMAN— holding goods does not necessarily, put an end to transit, 249. WHARFINGER— lien of, 223. WILFUL ACTS— liability of principal for agent's, 455. WRONG-DOERS— cannot have redress against each other, 273. UC SOUTHERN REGIONAL LIBRARY FACILITY AA 000 857 066 5