Frederick and Edgar Oliver jointly owned Consols and bank stock. Frederick instructed Starkey a stockbroker to sell them. Frederick signed the necessary powers of attorney in his own name and forged Edgar’s signature. Starkey presented the powers of attorney to the Bank of England, who duly affected the transfer. Once the forgery was established the Bank was liable to replace the Consols and the stock, and sued Starkey for breach of warranty of authority.
Held: Starkey was liable. The Earl of Halsbury LC set out the notion that it was necessary to establish a contract between the purported principal and the plaintiff as illogical, and confusing the question whether the facts established a contractual warranty between plaintiff and defendant, with the question as to whether a contract follows in consequence of a representation. He said: ‘that which does enforce the liability is this – that under the circumstances of this document being presented to the Bank for the purpose of being acted upon, and being acted upon on the representation that the agent had the authority of the principal, which he had not, that does import an obligation – the contract being for good consideration – an undertaking on the part of the agent that the thing he represented to be genuine was genuine.’
Judges:
Earl of Halsbury LC
Citations:
[1903] AC 114
Jurisdiction:
England and Wales
Cited by:
Cited – A and J Fabrications (Batley) Ltd v Grant Thornton and Others ChD 1998
The plaintiffs, the majority creditors of a company in liquidation, alleged that they had agreed with Grant Thornton, the defendants, to support the appointment of one of the firm’s partners or employees as liquidator of the company, with a view to . .
Lists of cited by and citing cases may be incomplete.
Agency, Financial Services
Updated: 14 May 2022; Ref: scu.261594