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Agency - From: 1900 To: 1929

This page lists 27 cases, and was prepared on 02 April 2018.


 
 Hovenden and Sons v Millhoff; 1900 - [1900] 83 LT 41
 
King v Hutton [1900] 2 QB 504; [1900] 83 LT 68
1900
CA

Trusts, Agency
"The most compelling indicator for or against a trusteeship of an agent's receipts is the nature of the account agreed to be kept by the agent with his principal. If, after each individual transaction or group of related transactions he effects for his principal, he is to pay over the proceeds in his hands – minus any commission payable – then he will ordinarily be a trustee. But where an agent is effecting both sales and purchases for his principal, or is discharging liabilities for his principal out of monies received, and he keeps a running account with periodic settlement dates at which he pays over the balance of account (if any), he will, ordinarily, be a debtor only – the debtor-only conclusion being reinforced if there are present in the accounts (1) set offs, other than for commission, or (2) interest charges on credits and debits".
1 Citers


 
Van Praagh v Everidge [1902] 2 Ch 266
1902
ChD

Agency
A power of attorney conferred by a bidder on an auctioneer of land to execute the memorandum of sale if it is knocked down to him was held to be irrevocable
1 Citers


 
The Winkfield [1902] P 42
1902


Agency
A bailee in possession has a right to recover for loss or damage to his bailor's goods even though he would have had a good defence to an action by the bailor.
1 Citers


 
Millar Son and Co v Radford (1903) 19 TLR 575
1903
CA
Sir Richard Henn Collins MR
Agency, Contract
For an estate agent to recover his commission, it was "necessary" to show that the agent's introduction was an "efficient" (namely effective) cause in bringing about the transaction.
1 Citers



 
 Starkey v The Bank of England; HL 1903 - [1903] AC 114
 
Andrews v Ramsay [1903] 2 KB 635
1903

Lord Alverstone CJ, Wills J
Agency
The plaintiff asked the defendant estate agents to find a purchaser for his property at a price of £2,500 and if one such was found the agents' fee would be £50. A purchaser, one Clutterbuck, at £2,100 was found. He paid the agents £100 by way of deposit. The agents paid the principal £50 and, with the principal's consent, retained £50 as their commission. But it then transpired that the agents had had a side deal with Clutterbuck whereby he paid them £20. In the first action the principal claimed and recovered the £20 as a secret profit made by the agent in breach his duty of good faith. In the second action the principal claimed the return of the £50. Held. He succeeded - even though he had had the benefit of the agent's services.
Lord Alverstone CJ said: "It is said that the defendants ought not to be called upon to hand over the £50 to the plaintiff because the plaintiff has had the benefit of their services. The principle of Salomons v. Pender (1865) 3 H&C 639 seems to me to govern the case, and it is, in my opinion, amply sufficient to do so. In that case it was held that an agent who was himself interested in a contract to purchase property of his principal was not entitled to any commission from the principal. The principle there laid down is that, when a person who purports to act as an agent is not in a position to say to his principal, "I have been acting as your agent, and I have done my duty by you," he is not entitled to recover any commission from that principal . . It seems to me that this case is only an instance of an agent who has acted improperly being unable to recover his commission from his principal. It is impossible to say what the result might have been if the agent in this case had acted honestly. It is clear that the purchaser was willing to give £20 more than the price which the plaintiff received, and it may well be that he would have given more than that. It is impossible to gauge in any way what the plaintiff has lost by the improper conduct of the defendants. I think, therefore, that the interest of the agents here was adverse to that of the principal. A principal is entitled to have an honest agent, and it is only the honest agent who is entitled to any commission. In my opinion, if an agent directly or indirectly colludes with the other side, and so acts in opposition to the interest of his principal, he is not entitled to any commission. That is, I think, supported both by authority and on principle; but if, as is suggested, there is no authority directly bearing on the question, I think that the sooner such an authority is made the better."
Wills J said: "The £50 in question was paid by the purchaser to the defendants as agents for the plaintiff as part of the £100 deposit on the purchase, and the defendants were allowed by the plaintiff to retain £50 in the belief that they had earned that sum as commission. If the money had all been paid over, and the defendants had had to sue the plaintiff for commission, it seems to me perfectly clear that they could not recover it. They would have no chance whatever of succeeding in such an action, and I think that they ought not to stand in any better position because the plaintiff, believing that they had acted properly, had allowed them to retain the £50. The case ought to be the same whether the commission has already been paid or whether the agent has to sue for it."
1 Cites

1 Citers


 
Hippisley v Knee Bros [1905] 1 KB 1; [1905] 1 LJKB 68; [1905] 92 LT 20; [1905] 21 TLR 5; [1905] 49 Sol Jo 15
1903
CA
Lord Alverstone CJ, Kennedy J
Agency
The defendant auctioneers were employed by the plaintiff to sell some goods. The payment was to be percentage commission with a minimum of £20, certain fixed amounts and "all out of pocket" expenses, particularly advertising. The sale triggered the minimum commission and the auctioneers' bill included that plus the gross cost of the advertisements. In fact the auctioneers had received a discount on this cost. They included the gross sum in the bill in the honest but mistaken belief that there was a custom which entitled them to do this, the point being that if the client had ordered the advertisements directly, no discount would have been given. The bill was paid in full. When, later, the plaintiff discovered that there had been a discount he sued, not only for the amount of the discount, but also for the entire £20 commission. Held. He succeeded in the first claim but not the second. The defendants were not entitled to charge more thatn they had been called upon to pay, but the discounts were received without fraud, and the recovery of expenses was only ancillary to the main item and purpose of the contract, so the commission itself remained payable.
Kennedy J: "With regard to the £20 claim, I agree with my Lord that this is not one of the cases in which it would be just to deprive the agent of his agreed remuneration as well as of his secret profit. I feel it is difficult to lay down any definite rule upon the subject with confidence, but I would venture to suggest the following: that where the agent's remuneration is to be paid for the performance of several inseparable duties, if the agent is unfaithful in the performance of any one of those duties by reason of his receiving a secret profit in connection with it - and I here use that word "unfaithful" as including a breach of obligation without moral turpitude - it may be that he will forfeit his remuneration, just as in certain cases a captain of a ship might be held in the Admiralty Court to forfeit his wages as a result of misconduct in any branch of his duty as a captain; but where the several duties to be performed are separable, as to my mind they are in the present case, the receipt of a secret profit in connection with one of those duties would not, in the absence of fraud, involve the loss of the remuneration which has been fairly earned in the proper discharge of the other duties. Here the auctioneers were employed for a certain commission to act faithfully as auctioneers. If they had improperly by connivance sold to a purchaser at a lower price than they could fairly have got they would clearly not have been able to recover their commission. There is nothing of this kind in the present case. But by the special terms of their contract they undertook, in addition to their duty as auctioneers, that if the plaintiff would pay them their out of pocket expenses they would truly account to the plaintiff for those expenses. And it seems to me that it would be wrong to say that because the defendants failed in the performance of their duty properly to account for the out of pocket expenses, therefore they are not to have their commission, although they performed all their duty as auctioneers faithfully."
1 Citers


 
Andrew v Ramsay and Co [1903] 72 LJKB 865
1903


Agency
The defendant had been employed as agent by the plaintiff to sell property belonging to the plaintiff. The defendant achieved this and was paid his commission, but had also taken a secret commission from the buyer. The plaintiff sought repayment of the commission. Held: The action succeeded. Where an agent takes a commission secret from his principal, the principal may refuse to pay or recover any commission under the main agency contract. The action for and recovery of the secret commission had not operated as a ratification of the sale.
1 Citers


 
Van Praagh v Everidge [1903] 1 Ch. 434
1904
CA

Contract, Agency

1 Cites


 
Bartram and Sons v Lloyd [1904] 90 LTR 357
1904


Agency
A secret commission had been agreed and paid to the agent. The court was asked whether the principal had elected to affirm the contract with the other party at a later meeting when he was given some information about what had happened. Held: He had not. The principal had still not made his election with full knowledge of the material facts. There had been an inadequate initial disclosure.
1 Citers



 
 Sheffield Corporation v Barclay; HL 1905 - [1905] AC 392

 
 Nitedals Taenstikfabrik v Bruster; 1906 - [1906] 2 Ch 671
 
Frith v Frith [1906] UKPC 18; [1906] AC 254; (1906) 94 LT 383
21 Mar 1906
PC

Agency
Turks and Caicos Islands - A manager sought to claim that the power of attorney, which authorised him to enter into possession of and manage an estate in the Turks and Caicos Islands, and to receive rents and profits and pay debts due by the owners, was irrevocable because he had separately undertaken at their request to guarantee the payment of a debt secured by mortgage over the estate. He argued that if he was called upon as surety, the power would enable him to recover any amount paid. Held: His appeal failed because the authority when conferred was not "expressed or intended to be used for the purpose of subserving [the manager's] interest as guarantor and had no connection with it"
Lord Atkinson observed that to allow an agent to exercise his authority after it has been revoked would amount to the specific enforcement of a relationship which is by its nature not specifically enforceable.
Lord Atkinson contiued: " . . the essential distinction between this case and those cited is this, that in each of the latter power and authority were given to a particular individual to do a particular thing, the doing of which conferred a benefit upon him, the authority ceasing when the benefit was reaped, while in this case, as already pointed out, nothing of that kind was ever provided for or contemplated."
1 Citers

[ Bailii ]
 
Great Eastern Railway Company v Lord's Trustee [1909] AC 109
1909
HL

Company, Contract, Agency
The House was asked whether the appellant railway company had delivered the goods unconditionally to the goods owner so as to lose its lien for the price of coal carriage, or was there an agreement conferring "a right in equity to any personal chattels or to any charge or security thereon" under the 1878 Act. Held. (Majority) It had not done so. The lien which it exercised, therefore, was based upon its actual possession as carrier of the goods, which was not destroyed by its contractual arrangements with the receiver or by delivery up of the goods. A lien is a mere personal right of detention and therefore requires actual possession.
The word "charge" does not in its ordinary and accepted legal sense embrace a legal possessory lien even, so it would seem, if the contract gives the right of sale.
Bills of Sale Act 1878
1 Citers


 
International Sponge Importers Ltd v Andrew Watt and Sons [1911] UKHL 1; [1911] AC 279; 1911 1 SLT 414; 1911 SC (HL) 57
31 Mar 1911
HL

Scotland, Contract, Agency, Torts - Other

[ Bailii ]
 
Stait v Fenner [1912] 2 Ch 504
1912

Neville J
Trusts, Agency, Landlord and Tenant
The lease to Fenner contained a break clause. The lease was legally assigned to X and then to Y. Y then agreed to assign back to Fenner (but no formal assignment was entered). Fenner then "assigned" to Z (the contract saying that he was not obliged to get in the bare legal estate outstanding in Y). Z then exercised the break clause. Held: The beneficiary under a bare trust is not thereby constituted the agent of the trustee. A break clause was operable by the tenant if he gave notice and if he should pay all the rent and perform all the covenants up to the determination of the lease. The question for the court was whether that condition for payment and performance was a condition precedent to be performed before the expiration of the term: "it must have been intended, in construing a covenant of this kind, that the question whether the lease does or does not exist after the expiration of the seven or fourteen years should be capable of being decided there and then and not left to future contingency leaving both the lessor and the lessee in uncertainty as to whether they are bound by the lease or whether they are not." In this case the condition was a condition precedent.
Neville J held: "In my opinion, the legal estate in the term being outstanding, it was not competent for the lessee or any assignee of the lessee who had not the legal estate vested in him to give a notice."
1 Citers



 
 Banbury v Bank of Montreal; PC 1918 - [1918-19] All ER Rep 1; [1918] AC 626; 87 LJKB 1158; 119 LT 446; 36 Digest (Rep 1) 14

 
 Coldman v Hill; CA 1918 - 120 LT 412; [1919] 1 KB 443; [1918] All ER Rep 438
 
Les Affreteurs Reunis SA v Leopold Walford (London) Ltd [1919] AC 801
1919
HL
Lord Birkenhead LC, Viscount Finlay and Lords Atkinson Wrenbury
Agency, Transport, Contract
With regard to Robertson -v- Wait: "My Lords, so far as I am aware, that case has not before engaged the attention of this House, and I think it right to say plainly that I agree with that decision and I agree with the reasoning, shortly as it is expressed, upon which the decision was founded. In this connection I would refer to the well-known case of In re Empress Engineering Company. In the judgment of Sir George Jessel MR the principle is examined which, in my view, underlies and is the explanation of the decision in Robertson v. Wait. The Master of the Rolls uses this language: ‘So, again, it is quite possible that one of the parties to the agreement may be the nominee or trustee of the third person. As Lord Justice James suggested to me in the course of the argument, a married woman may nominate somebody to contract on her behalf, but then the person makes the contract really as trustee for somebody else, and it is because he contracts in that character that the cestui que trust can take the benefit of the contract.’ It appears to me plain that for convenience, and under long established practice, the broker in such cases, in effect, nominates the charterer to contract on his behalf, influenced probably by the circumstance that there is always a contract between charterer and owner in which this stipulation, which is to enure to the benefit of the broker, may very conveniently be inserted. In these cases the broker, on ultimate analysis, appoints the charterer to contract on his behalf. I agree therefore with the conclusion arrived at by all the learned judges in Robertson v. Wait, that in such cases charterers can sue as trustees on behalf of the broker."
1 Cites

1 Citers


 
Said v Butt [1920] 3 KB 497
1920

McCardie J
Contract, Agency
The plaintiff wanted to go to a play's first night. He had fallen out with the management of the theatre, and knew that he would not get a ticket in his own name. He got a friend to go to the theatre and buy a ticket for him without disclosing the fact. When he turned up for the performance he was refused admission. Held: His claim was dismissed. A first night is a special event with characteristics of its own, and tickets are only given or sold to persons whom the management selects and wishes to favour. The purchaser's identity was a material element in the formation of the contract and that the failure to disclose the fact that the ticket was bought on his behalf prevented the plaintiff from asserting that he was the undisclosed principal.
1 Citers


 
Camillo Tank Steamship Company Limited v Alexandria Engineering Works (1921) 38 TLR 134
1921

Viscount Cave
Agency
Viscount Cave (dissenting on other points) said: "The expression "account stated" . . has more than one meaning. It sometimes means a claim to payment made by one party and admitted by the other to be correct. An account stated in this sense is no more than an admission of a debt out of court; and whilst it is no doubt cogent evidence against the admitting party, and throws upon him the burden of proving that the debt is not due, it may, like any other admission, be shown to have been made in error."
1 Citers


 
Rhodes v Macalister (1923) 29 Com Cas 19
1923
CA
Bankes, Scrutton, Atkin LJJ
Agency, Equity
The plaintiff agent acted to find a seller of mineral rights for the defendant principal. He told his principal that the properties could be purchased for from £8,000 to £10,000. If the agent could find a seller at below £9,000, then, the defendant agreed, the plaintiff could have the difference between the actual price and £9,000. The agent found a seller at £6,625 and claimed the difference, viz. £2,375. But secretly the agent had also negotiated with the seller, at a time when they made the contract with the buyer, to be paid a commission on the sale. Lush J had found for the defendant. Held: The agent's claim failed. It made no difference to the agent's position that no damage was caused to his principal, or that the principal may be advantaged by the agent's breach of duty in accepting the secret commission.
Bankes LJ said: "There seems to be an idea prevalent that a person who is acting agent or servant of another is committing no wrong to his employer in taking a commission or bribe from the other side, provided that in his opinion his employer or principal does not have to pay more than if the bribe were not given. There cannot be a greater misconception of what the law is, or what the duty of a servant or agent towards his master or principal in reference to such maters is, and I do not think the rule can too often be repeated or its application more frequently insisted upon. . . what was [the agent's] position and what was his duty. Of course, as long as he was acting for the vendors of these properties only he was perfectly entitled to suggest to them that they should fix a price which would include a commission to himself, and he would be perfectly justified in receiving that commission or putting forward the price to an intending purchaser as the only price which he could persuade the vendors to give, so long as that was his real opinion. But the moment he accepted the position of agent for the intending purchasers his entire position in law changed. He could no longer consistently with his duty, unless he disclosed the facts, act as agent for the vendors to procure purchasers with the result of some commission or payment to himself. He could not retain that position consistently with his duty to the purchasers of obtaining these properties at as low a price as he possibly could. . . the moment he accepted the position of agent to procure these properties as cheap as possible for the intending purchasers his interest and duty conflicted, and he could no longer act honestly towards the intending purchasers without disclosing to them that in that figure of £8,000 to £10,000 which he had mentioned as the probable price of these properties he had included a figure which he intended should cover a commission to himself."
Scrutton LJ said: "I agree with the judgment that has just been delivered and I only propose to re-state it in my own words because I think it is of very great importance that the principle upon which we are acting should be thoroughly understood, and from Mr Vachell's argument it is not thoroughly understood by commercial men, especially in that part of the country from which his clients appear to come . . The law I take to be this: that an agent must not take remuneration from the other side without both disclosure to and consent from his principal. If he does take such remuneration he acts so adversely to this employer that he forfeits all remuneration from the employer, although the employer takes the benefit and has not suffered a loss by it. . . I hope it is thoroughly understood in London; and if it is not thoroughly understood in the Forest of Dean, then the sooner it is understood there the better for commercial honesty." and
"But I decide it on the broad principle that whether it causes damage or not, when you are employed by one man for payment to negotiate with another man, to take payment from that other man without disclosing it to your employer is a dishonest act. It does not matter that the employer takes the benefit of his contract with the vendor; that has no effect whatever on the contract with the agent, and it does not matter that damage is not shown. The result may actually be that the employer makes money out of the fact that the agent has taken commission.
In this case, therefore, it appears that as one of the two joint agents has, in breach of his duty, taken commission from the other side, he forfeits, and they both forfeit, all right to remuneration from their employer. The more that principle is enforced the better for the honesty of commercial transactions. I have only repeated what my Lord has said because it cannot be repeated too often to commercial men – that in matters of agency they must act with strict honesty."
Atkin LJ said: "This is a class of case where the Courts always have maintained, and do maintain, and I trust always will maintain, a very high standard of conduct on the part of agents. It is a standard of conduct which I am afraid sometimes conflicts with the standard of conduct adopted for themselves by commercial men - not by honourable men in commerce, but by a great many men engaged in mercantile transactions. I entirely agree with what has been said as to the importance of repeating and letting it be known as widely as possible what the standard of conduct expected of an agent is at law. . . Now that is not an impossible standard of attainment. It is laid down by the law and it is in respect of a practical matter. The remedy is a very simple one and it is well within the compass of any ordinary business man. The complete remedy is disclosure, and if an agent wishes to receive any kind of remuneration from the other side and wishes to test whether it is honest or not, he has simply to disclose the matter to his own employer and rest upon the consequences of that. If his employer consents to it, then he has performed everything that is required of an upright and responsible agent."
1 Cites

1 Citers



 
 Prager v Blatspiel, Stamp and Heacock Ltd; 1924 - [1924] 1 KB 566

 
 JC Houghton and Co v Northard, Lowe and Wills; HL 1927 - [1928] AC 1; [1927] All ER 97
 
Keppel v Wheeler [1927] 1 KB 577
1927
CA
Bankes LJ, Atkin LJ
Agency
The plaintiff engaged the defendant estate agents to sell a property, instructing them to market it at £6,500 but that he would accept £6,000. The plaintiff accepted an offer of £6,150 "subject to contract". Before exchange, another potential buyer offered £6,750. Instead of communicating that offer to their principal, the agents went to the original offeror, suggesting he could sell on and make a profit. They did so in good faith, believing that they had already fulfilled their duty to their principal, not understanding that only formal exchange of contract brings their duty to an end. Held: The plaintiff was awarded damages for breach of the agents' duty. These were the difference between the two prices, namely £600 less the extra commission which that £600 would have earned. But the plaintiff had to pay commission on the sale itself.
Bankes LJ said: "The appellant contended that the agents have disentitled themselves to recover the commission, but I do not take that view at all. It seems to me that an agent might quite properly claim his commission, and yet have to pay damages for committing a bona fide mistake which amounts to a breach of duty. In these circumstances, I think the respondents are entitled to the claim which they make for commission."
Atkin LJ said: "The other question is whether the respondents should succeed on their counterclaim. Now I am quite clear that if an agent in the course of his employment has been proved to be guilty of some breach of fiduciary duty, in practically every case he would forfeit any right to remuneration at all. That seems to me to be well established. On the other hand, there may well be breaches of duty which do not go to the whole contract, and which would not prevent the agent from recovering his remuneration; and as in this case it is found that the agents acted in good faith, and as the transaction was completed and the appellant has had the benefit of it, he must pay the commission. Therefore, I think, the defendants are entitled to recover on their counterclaim."
1 Citers



 
 Reckitt v Barnett Pembroke and Slater Ltd; HL 1929 - [1929] AC 176
 
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