Agency - 1900- 1929

These cases are extracted from a very large database. The entries on that database are now being published individually to the main swarb.co.uk website in a much improved form. As cases are published here, the entry here will be replaced by a link to the same case in that improved form on swarb.co.uk. In addition the swarb.co.uk site includes very substantial numbers of cases after 2000. Please take the time to look.  

This page lists 19 cases, and was prepared on 05 June 2013. These case are being transferred one by one to the main swarb.co.uk site which presents them better, with links to full text where we have it, and much improved cross referencing.

King -v- Hutton [1900] 2 QB 504 CA; [1900] 83 LT 68
1900 CA	Trusts, Agency	Casemap 1 Citers
	"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".

Hovenden and Sons -v- Millhoff; 1900

The Winkfield [1902] P 42
1902	Agency	1 Citers
	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.

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	Casemap 1 Citers
	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."

Andrews -v- Ramsay; 1903

Millar Son & Co -v- Radford; CA 1903

Starkey -v- The Bank of England [1903] AC 114
1903 HL Earl of Halsbury LC	Agency, Financial Services	Casemap 1 Citers
	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."

Bartram & Sons -v- Lloyd; 1904

Nitedals Taenstikfabrik -v- Bruster [1906] 2 Ch 671
1906 Neville J	Agency	Casemap 1 Citers
	Commission was allowed for an agent despite an alleged breach of duty. Neville J discussed Andrews v Ramsay saying its doctrine: "does not apply to the case of an agency where the transactions in question are separable"

International Sponge Importers Ltd -v- Andrew Watt & 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	Casemap 1 Citers
	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.

Les Affreteurs Reunis SA -v- Leopold Walford (London) Ltd; HL 1919

Said -v- Butt [1920] 3 KB 497
1920 McCardie J	Contract, Agency	1 Citers
	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.

Camillo Tank Steamship Company Limited -v- Alexandria Engineering Works (1921) 38 TLR 134
1921	Agency	Casemap 1 Citers
	Viscount Cave (dissenting on other points): "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."

Rhodes -v- Macalister (1923) 29 Com Cas 19
1923 CA Bankes LJ, Scrutton LJ, Atkin LJ	Agency	Casemap
	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, he 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. Held. The agent's claim failed. 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."

Prager -v- Blatspiel, Stamp and Heacock Ltd [1924] 1 KB 566
1924 McCardie J	Constitutional, Agency	Casemap 1 Citers
	McCardie J spoke of the demand of an expanding society for an expanding common law. An agent must act bona fide in the interests of his principal.

Keppel -v- Wheeler [1927] 1 KB 577
1927 CA Bankes LJ, Atkin LJ	Agency	1 Citers
	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: "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."

J.C Houghton & Co -v- Northard, Lowe & Wills [1928] AC 1
1928 HL	Agency
	The law does not make the unreal assumption that agents will reveal to their principals the fraud which they are comitting on them.

Reckitt -v- Barnett Pembroke & Slater Ltd [1929] AC 176
1929 HL	Agency	1 Citers
	The House was asked whether a power of attorney included a power to draw cheques on the principal's bank account in order to pay his own debts. The Court of Appeal by a majority, Russell J dissenting, had held that it did having regard to the terms of a letter written by the principal to his bankers. Held: The decision was reversed. A power of attorney is to be construed strictly. The House adopted the statement of Russell LJ: "the primary object of a power of attorney is to enable the attorney to act in the management of his principal's affairs. An attorney cannot in the absence of a clear power to do so, make presents to himself or to others of his principal's property "