Agency - 1930- 1959

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This page lists 12 cases, and was prepared on 04 October 2008.

Collins -v- Associated Greyhound Racecourses Ltd [1930] 1 Ch 1
1930 CA	Agency	Casemap 1 Citers
	An undisclosed principal cannot intervene where the nature of the contract shows that the contract was intended to be with the agent personally.

Luxor (Eastbourne) -v- Cooper [1941] AC 108
1941 HL Lord Wright, Viscount Simon LC, Lord Russell	Agency, Contract	Casemap 1 Cites 1 Citers
	The vendor company had instructed agents to sell properties on its behalf and had agreed to pay commission on completion of the sale. The sale was agreed with a prospective purchaser introduced by the agents. Before the sale was completed, the vendor company withdrew from the sale because of an objection by one of its directors. The vendor company later sold to someone who had not been introduced by the agents. The agents claimed their commission. Held: A property owner was under no implied obligation not to deal with his property in such a way that the estate agent was deprived of the opportunity of earning the agreed commission. The House considered the use of implied terms. Lord Wright said: "The expression 'implied term' is used in different senses. Sometimes it denotes some term which does not depend on the actual intention of the parties but on a rule of law, such as the terms, warranties or conditions which, if not expressly excluded, the law imports, as for instance under the Sale of Goods Act and the Marine Insurance Act. . But a case like the present is different because what it is sought to imply is based on an intention imputed to the parties from their actual circumstances." Viscount Simon LC said: "in contracts made with commission agents there is no justification for introducing an implied term unless it is necessary to do so for the purpose of giving to the contract the business effect which both parties to it intended it should have". Lord Russell said: "As to the claim for damages, this rests upon the implication of some provision in the commission contract, the exact terms of which were variously stated in the course of argument, the object always being to bind the principal not to refuse to complete the sale to the client whom the agent has introduced. I can find no safe ground on which to base the introduction of any such implied term. Implied terms, as we all know, can only be justified under the compulsion of some necessity. No such compulsion or necessity exists in the case under consideration. The agent is promised a commission if he introduces a purchaser at a specified or minimum price. The owner is desirous of selling. The chances are largely in favour of the deal going through, if a purchaser introduced. The agent takes the risk in the hope of a substantial remuneration for comparatively small exertion … There is no lack of business efficacy in such a contract, even though the principal is free to refuse to sell to the agent's client." and "in my opinion there is no necessity in these contracts for any implication; and the legal position can be stated thus:- If according to the true construction of the contract the event has happened upon the happening of which the agent has acquired a vested right to the commission … then no act or omission by the principal or anyone else can deprive the agent of that right; but until that event has happened, the agent cannot complain if the principal refuses to proceed with, or carry to completion, the transaction with the agent's client".

Eccles -v- Bryant and Pollock [1948] Ch 93; [1947] 2 All ER 865
1947 CA Lord Greene MR, Cohen and Asquith LJJ	Landlord and Tenant, Contract, Legal Professions, Agency	Casemap 1 Citers
	The Plaintiff contended that a letter written by the purchaser's solicitor which effectively set out the terms of the agreement, enclosed the part of the contract signed by the purchaser, and asked in exchange for the counter-part signed by the vendor, created a binding contract between the parties. Held: Negotiations subject to contract for the grant of a lease remain in a state of negotiation until exchange of lease and counter-part. Letters written by solicitors, acting as solicitors relating to a proposed grant of a lease, or related to a proposed acquisition of property by sale, are letters written by agents of the parties who have no authority to conclude a contract; they are not written by agents within whose ostensible authority there lies the function of making a contract. Once the documents had been exchanged however, the parties would be bound. Lord Greene MR said: "One thing is quite clear on the facts of this case to my mind, that both firms of solicitors, one of whom - that is the vendors' solicitors - practised in East Grinstead and the other of whom, the purchaser's solicitors, practised in London, when they were instructed to carry this matter through by their respective clients, contemplated and intended from beginning to end to do so in the customary way which is familiar to every firm of solicitors in the country, namely, by preparing the engrossment of the draft contract when agreed in duplicate, the intention being to do what I have no doubt at this very moment is happening in dozens of solicitors' offices all over the country, namely, to exchange the two parts when signed by their respective clients." and "When parties are proposing to enter into a contract, the manner in which the contract is to be created so as to bind them must be gathered from the intentions of the parties express or implied. In such a contract as this, there is a well-known, common and customary method of dealing; namely, by exchange, and anyone who contemplates that method of dealing cannot contemplate the coming into existence of a binding contract before the exchange takes place. Lord Greene MR continued: "It was argued that exchange is a mere matter of machinery, having in itself no particular importance and no particular significance. So far as significance is concerned, it appears to me that not only is it not right to say of exchange that it has no significance, but it is the crucial and vital fact which brings the contract into existence. As for importance, it is of the greatest importance, and that is why in past ages this procedure came to be recognised by everybody to be the proper procedure and was adopted. When you are dealing with contracts for the sale of land, it is of the greatest importance to the vendor that he should have a document signed by the purchaser, and to the purchaser that he should have a document signed by the vendor. It is of the greatest importance that there should be no dispute whether a contract had or had not been made and that there should be no dispute as to the terms of it. This particular procedure of exchange ensures that none of those difficulties will arise. Each party has got what is a document of title, because directly a contract in writing relating to land is entered into, it is a document of title. That can be illustrated, of course, by remembering the simple case where a purchaser makes a sub-sale. The contract is a vital document for the purpose of the sub-sale. If he had not got the vendor's part, signed by the vendor, to show to the sub-purchaser, he would not be able to make a good title. "If the argument for the purchaser is right and the contract comes into existence before exchange takes place, it would mean that neither party could call upon the other to hand over his part. The non-exchanged part would remain the property of the party who signed it, because exchange would be no element in the contract at all and therefore you could get this position, that the purchaser might wish to resell and would have no right to obtain from the vendor the vendor's signed part."

Industries and General Mortgage Co Ltd [1949] 2 All ER 573
1949 Slade J	Agency, Torts - Other	Casemap 1 Cites 1 Citers
	The court discussed difficulties in defining what is a bribe: "Yes, but earlier the learned judge has said that if a gift be made to a confidential agent with a view to inducing him, it is a bribe, and, therefore, in using the later language and referring to the bribes the learned judge is in effect saying: "I am using these later presumptions in cases where a bribe has been established and I have already defined a bribe as being only something which has been established as being paid with a certain motive." That, of course, would tear up the whole of the learned judge's observation because he says lower down that the courts will not receive evidence as to what is the motive of the person making the payment. The motive will be conclusively inferred against him."

Fowler -v- Bratt [1950] 2 KB 96
1950	Agency	Casemap
	It is open to a vendor of a property to withdraw the property from sale and from the estate agent at any time prior to exchange of contracts.

Heskell -v- Continental Express Ltd [1950] 1 All ER 1033
1950 Devlin J	Negligence, Agency	Casemap 1 Citers
	The court discussed how a warranty of authority could arise in an agent: "An agent who warrants that he has authority need warrant no more than the bare fact. In the absence of special circumstances, he makes no warranty or representation about how he got his authority, whether it is express or implied, specific or general. Still less does he warrant that an event, on which the proper exercise of a general authority may depend, has in fact taken place." Two causes of the damage at issue were equally operative "in that if either had ceased the damage would have ceased": Where the wrong is a tort, it is clearly settled that the wrongdoer cannot excuse himself by pointing to another cause. It is enough that the tort should be a cause and it is unnecessary to evaluate competing causes and ascertain which of them is dominant .... . In the case of breach of contract the position is not so clear . . . Whatever the true rule of causation may be I am satisfied that if a breach of contract is one of two causes, both co-operating and both of equal efficacy, as I find in this case, it is sufficient to carry judgment for damages. Reischer v Borwick [1894] 2 QB 548 establishes that for the purposes of a contract of insurance it is sufficient if an insured event is, in this sense, a co-operating cause of the loss. I do not think that Yorkshire Dale SS Co Ltd v Minister of War Transport [1942] AC 691, with its insistence on the ascertainment of "the cause", disapproved this principle. The case decided that the cause of a loss has to be ascertained by the standard of common sense of the ordinary man. Common sense is a blunt instrument not suited for probing into minute points, and I cannot believe that if the ordinary man thinks that two causes are of approximately equal efficacy, he cannot say so without being interrogated on fine distinctions.

Bank Melli Iran -v- Barclays Bank Ltd [1951] 2 Lloyds Rep 362
1951	Agency, Banking	1 Citers

Reading -v- Attorney General [1951] AC 507; [1951] 1 All ER 617; [1951] 1 TLR 480; 95 Sol Jo 155
1951 HL Viscount Jowitt LC, Lord Porter, Lord Normand, Lord Oaksey	Agency, Armed Forces	Casemap 1 Citers
	The applicant had been a sergeant in the army. He had misused army property and his uniform to assist in smuggling operations. After serving his sentence he now sought repayment of the money he had earned. Held: His claim failed. The money had been earned by his use of his official position, and therefore his employer was entitled to keep the money even though it had been earned unlawfully. The soldier owed a fiduciary duty to the Crown, which was an additional ground on which he lost his claim.

Midgeley Estates Ltd -v- Hands [1952] 2 QB 432
1952 Jenkins, LJ	Agency	Casemap 1 Citers
	In the absence of some other clear expression of intent, the intention of the estate agent and vendor when entering into an agreement concerning the sale of a property is likely to be that the commission stipulated for should be payable only in the event of an actual sale resulting.

Rama Corporation Limited -v- Proved Tin and General Investment Limited [1952] 2 QB 147
1952	Company, Agency	Casemap 1 Citers
	The court considered the doctrine of ostensible authority as regards the actions of a single director of a company, identifying three essential elements.

Peter Long and Partners v Burns [1956] 1 WLR 1083
1956 CA Romer LJ, Singleton LJ, Morris LJ	Agency, Contract	Casemap 1 Citers
	The estate agency agreement at issue said that commission was payable on the agents "introducing a person ready, willing and able to enter into a binding contract to purchase". The purchaser entered into the contract, but then resiled after discovery of a misrepresentation. The contract was cancelled by agreement between the parties on payment of a sum of money by the purchaser. The estate agents claimed their commission but the vendor refused to pay. The agent failed in their action for breach of contract. That action failed. Held: In this context, a "binding contract" meant one which was legally enforceable by the vendor against the purchaser. Since the contract had been rendered unenforceable by the vendor as a result of the innocent misrepresentation of the estate agents, no commission was payable. The estate agents argued that the vendor could not take advantage of the misrepresentation made by them to the purchaser since she herself had given the relevant information to the estate agents. Singleton LJ did not agree. The making of such a representation to the purchaser without checking the information given by the vendor bordered on recklessness. Romer, LJ, said: "I have no doubt that the contract which [the purchaser] did sign was not a binding contract within the terms of the commission note. I agree … that "a binding contract" in this context is the same as a legally binding contract, and that means a contract binding on the purchaser and legally enforceable against the purchaser by the vendor. The contract which [the purchaser] signed was never legally enforceable against her by [the vendor] because of the innocent misrepresentation which was made to her by [the estate agents' representative]. Moreover, the contract was voidable by [the purchaser], who could rescind it the moment that she discovered what the true facts were. Accordingly, it appears to me impossible to say that it was a binding contract within the meaning of that phrase as used in the commission note. A voidable contract, when rescinded, is avoided ab initio." Morris LJ said: "The Plaintiffs further submit there was an estoppel. They plead as follows in paragraph 3 of the reply: "If it is found that the said contract was not binding on [the purchaser] [the estate agents] will further say that [the vendor] having innocently misled [the estate agents' representative] who upon [the vendor's] said instructions innocently misled [the purchaser], [the vendor] is estopped from setting up her own misrepresentation, resulting in the rescission of her contract with [the purchaser], to defeat [the estate agents'] claim for commission." But, in my judgment, this is not a case where the doctrine of estoppel can be relied upon. There was nothing to prevent [the purchaser] from proving that there had been an innocent misrepresentation and so from resiling from the contract. Upon proof that [the purchaser] did disaffirm the contract it was shown there had been no binding contract and so that commission had not been earned. There is no evidence, for no oral evidence was called, that had Mrs Pritchard known the true facts as to the road widening she might have purchased at a lower figure and so enabled [the estate agents] to earn some commission. There was no evidence to that effect. What, then, is the legal basis of [the estate agents'] complaint? [The estate agents] may say that they wasted some time because they had some dealing with [the purchaser] which led to an abortive contract. But there is no claim against [the vendor] on that basis; nor do I see there could be. [The vendor] made no fraudulent misrepresentation to [the estate agents], and no sort of suggestion of that kind is or could be made. [The estate agents] do not suggest that [the vendor] gave any warranty to them of the truth of the representation which she made."

Allan -v- Leo Lines Ltd [1957] 1 LL 127
1957 Devlin J	Agency	Casemap
	The court, considering whether an estate agent was entitled to his commission, emphasised the importance of the mere introduction of a buyer. In this case first the plaintiff was “the effective cause of the introduction”; and that that was “a very important consideration in determining who is the cause of the sale because in these matters the introduction is perhaps often the main difficulty.” Negotiations and efforts by the buyer personally did not displace the causative effect of the introduction which was the effective cause of the sale. If a broker effects an introduction and is willing to go on with the usual business negotiation, it hardly lies in the mouth of an owner who takes it out of his hands to say that he has made no further contribution.