JOHN & CO. v. DE MEL

058-NLR-NLR-V-12-JOHN-&-CO.-v.-DE-MEL.pdf


( 212 )
mu.
July 23-
Present : The Hon. Sir Joseph T. Hutchinson, Ciiief Justice,and Mr. Justice Wood Renton.
JOHN & CO<«. BE MEL.1). C., Colombo, 26,166.
Auctioneer and, broker—Sale as auctioneer—Action for price— Limitedauthority o] auctioneer—Sale as broker-—Agent of oumer- -Right ofowner to sue..
An auctioneer is entitled to sue the purchaser for the pi ' • ofgoods sold by him as auctioneer, unless there is something in thecircumstances or in the conditions of sale to rebut the presumptionthat he is so. entitled.
Where a firm doing business as auctioneers and brokers sell goods .by public auction, and circumstances show that in doing so theyacted merely as brokers or as auctioneers with limited authority,they are not entitled to maintain an action for the price.
The extent of an auctioneer’s authority in regard to any salemust be determined by the conditions of sale and by all thecircumstances of that particular transaction.
T
HIS was an action by the plaintiffs, a firm of auctioneers andbrokers, to recover from defendant a sum of Rs. 8,636-78,
being the value of certain plumbago bought by the defendant at apublic auction held by the plaintiffs on December 7, 1907. Thecircumstances attending the sale are fully set out in the judgmentof the District Judge as well as in the judgments of the SupremeCourt. The defendant denied that there was any contract betweenhim and the plaintiffs, and pleaded that plaintiffs acted merely asthe agents of the owner, and that they were not entitled to sue.
The following issues were agreed upon :—
(1) Can plaintiffs as auctioneers maintain this action againstthe defendant V
Did the plaintiffs act in this matter as auctioneers or merelyas brokers ?
Have the plaintiffs been paid their brokerage
The Acting District Judge (F. R. Dias, Esq.) delivered thefollowing judgment, dismissing the plaintiffs’ action (June 23,1908) : –
“ The plaintiffs, Messrs. E. John &■ Co., who are described in theplaint as licensed auctioneers and brokers, are suing -Mr. Jacobde Mel for the recovery of Rs. 8,636-78, the value of two lots ofplumbago alleged to have been sold by them to him on December 7,1907, in their capacity of auctioneers. The defendant admits that
( 213 )
he bought the stuff at the price named and even took delivery, butdenies the right of the plaintiffs to maintain this action, as theydid not act in this matter as auctioneers, but only as brokers ormiddlemen on behalf of a disclosed principal, viz., Mrs. D. C. G.A tfcyg.il le. In other words. Ins contract was with Mrs. Attygalle,tlie owner of the plumbago, and not with the plaintiffs at all.
•' It has been urged on behalf of the plaintiff that this was anordinary public auction, earned out by the plaintiffs after dueadvertisement, so that they are the proper parties to sue thepurchaser, who refuses to pay. In support of this contentioncounsel has cited the case of Williams v. MiUington,1 where itwas held that an auctioneer employed to sell the goods of a thirdperson by auction may maintain an action for goods sold anddelivered against a buyer, although the sale was held at the houseof sucli third person, and the goods were publicly known to bethe jjroperty of the latter. The principle upon which this andother cases of the same class have been decided is that anauctioneer has a special property in the goods which lie is employedto sell, with a lien upon them and upon the price, when paid, forthe charges of the sale and his commission, &c., so that, he maymake the contract- of sale in his own name, and therefore, sue thepurchaser for the price. There can be no question as to thesoundness of this law. and if the facts be as alleged by the plaintiffs,viz., that, they sold this plumbago as auctioneers, they will certainlybe entitled to succeed.
“ Now, what are the facts of the case before us ? The onlyevidence put forward by the plaintiffs is that of their assistant,Mr. Gratiaen, and, according to tl^at evidence, it is quite clear thatthe position taken up by the plaintiffs is utterly untenable. Theynever professed to act as auctioneers at all in this matter, butexpressly r,s brokers. The three gentlemen who compose the plain-tiffs’ firm are said to be licensed auctioneers and brokers. Thereis no evidence of this however, but, as the. defendant has admittedthat averment, we may take it as correct. Neither of these threegentlemen was present at the alleged auction sale, nor took theslightest part in it, but it would appear that Mr. Meaden, who isdescribed as another assistant in the plaintiffs’ firm, sat at a tablewith Mr. Gratiaen and Mr. T. G. Jayewardene (the son-in-law andlocal representative, of the owner of the plumbago), called for bidsfor the various lots, of which there were some eight or ten, knockeddown some of the lots to the highest bidders, and withdrew the otherlots ; but- before the bidders left the room they were also privatelysettled on some of them, the defendant being one, after consultationwith Mr. Jayewardene, who had full control of the sale. Whatright or authority Mr. Meaden or Mr. Gratiaen had" to conduct anauction sale on behalf of the plaintiffs we have not been told, and
11 H. Bl. SI.
1909.
July 23.
( 214 )
1909.
July 23.
so far as the legal effect of that performance goes for the purpose ofbinding either the plaintiffs, the owner of the goods, or the pur-chasers, it might equally well have been enacted by the firm’s officeboy or any clerk. Neither Mr. Meaden nor Mr. Gratiaen was alicensed broker or auctioneer, and in what they did they clearlyviolated the law. If the plaintiffs had been employed as auctioneersto sell the goods, they should have carried out the sale themselves.Their agency was personal, and cannot, without special authority(of which there is no evidence), be delegated to another : Vicariusnon habet vicarium. It is true that in practice an auctioneerfrequently employs his clerk or assistant to use the hammer andmake the outcry, or even to write down in his book the names ofthe purchasers, but that can only be done under his own immediatedirection and supervision. There are no doubt certain well-recog-nized exceptions where an authority to delegate an agent’s powerswill be implied, generally on the ground that there is no personalconfidence reposed or still required, and that the duties are capableof being equally well discharged by any person, e.g., in the case ofpurely ministerial acts, where no special discretion or skill is required,and of acts subsidiary to the main purpose; but in cases wherean agent has implied authority to sign a contract for both parties(as an auctioneer or broker), his clerk or assistant will certainly beincompetent to represent him (vide Peirce v. Corf} Bdi v.Balls2). As Lord Eldon said, in the case of Coles v. Trecothick,3‘ the doctrine is very dangerous indeed, that if an auctioneer isauthorized to sell, all his clerks, when he goes out of town, are, inconsequence of any usage in that business, agents for the personwho authorized him.’ In my opinion, therefore, nothing thatMr. Meaden did on the day in question amounted to an auction salecarried out by the plaintiffs so as to entitle him to maintain anaction.
“ There are other grounds, too, for holding that the plaintiffsnever intended in this matter to act as auctioneers. From startto finish, so far as the documentary evidence shows, the plaintiffsnever once described themselves as auctioneers. The very noticein the newspapers (P 1), by which they advertised the intendedsale of this plumbago, is signed by ‘ E. John & Co., Brokers.’The printed heading in their stationery nowhere describes them asauctioneers, but only as ‘ Produce, Exchange, and Share Brokers.’The conditions of sale (D 1) used at this sale refers to ‘ brokerageof 1 per cent, payable by seller,’ and not to any auctioneer’scommission ; and lastly, the contract of sale (D 2), which is signedpersonally by the plaintiffs’ firm, describes them as ‘ brokers ’ pureand simple. How in the face of all this it can for a moment becontended that they acted as auctioneers I utterly fail to see. It
1 L.R.9 Q. B. 210. 215.
'3 9 Ves. 234.
{1897) 1 Ch. 683.
( 215 )
sorely cannot be that it was their sense of dignity alone or somesuch private reason which made them avoid the somewhat plebeianappellation of ‘auctioneers,’ and if that were so there is no evidenceof it. On the contrary, it seems to me that they did not givethemselves such a false description in this matter, because it wasnot an auctioneering transaction at all, but one of pure brokerage.The fact that the buyer in this instance was ascertained by puttingup the lots for public competition, as alleged, oannot make theslightest difference, as there is nothing to prevent a broker fromresorting to any expedient he likes to discover a buyer for intro-duction to tbe seller. Even if we assume that Mr. Meaden had alegal right as plaintiffs’ representative to carry out the auction salehe is said to have done, it is quite clear that the part he playedwas no more than that of ‘a mere crier or broker,’ so that theplaintiffs were exactly in that same position as regards the owner.In such a case, says Benjamin on Sales (p. 741), ‘ it is plain thatif the auctioneer acts as a mere crier or broker for a principalwho has retained the possession of the goods, the auctioneer has noimplied authority to receive payment of the price.’ In the presentcase the goods were always in the possession of the owner at herstore in Kurunegala, and the plaintiffs did no more than introducethe defendant to her as a buyer of two of the lots, and delivery wasgiven to him by her on his letter addressed direct to her and not tothe plaintiffs (D 9).
“ The fallacy underlying the plaintiffs’ case is this. The defendantmade no contract with them, but he made one through them withMrs. Attygalle, the disclosed owner of the plumbago. It is impos-sible to get over that fact, and the document D 2 signed by theplaintiffs’ firm is fatal to the position they now try to- assume.This is the best and only evidence admissible to show the truecharacter of the contract which bound the parties. This is datedDecember 7, 1907, the very day on which the auction sale is saidto have taken place, and is an ordinary broker’s contract or 1 Soldnote.’ It is headed ‘ Contract,’ addressed to the defendant asbuyer, and signed by the plaintiffs as ‘ Brokers ’ on behalf of theseller. It runs as follows :—
“ ‘ Dear Sir,—We beg to advise having sold this day on accountof Mrs. D. C. G. Attygalle to yourself of uncured plumbago by publicauction as follows :—Tons 13, No. 2, &c. Delivery at Kurunegalawithout barrels within fourteen days. Payment within fourteendays, unless otherwise arranged with Mr. Jayewardene.
“ ‘ Yours faithfully,
“ ‘ E. John & Co.,
“ ‘ Brokers.’
“ Nothing can be plainer than this document, which was certainlynot one which the plaintiffs would have sat down to prepare if the
1909.
July 23.
( 216 )
1909. transaction they had with the defendant on that day was in theJuly 23. capacity of -/uctioneers knocking down a lot to the highest bidder~ at a public sale. It is the ordinary brokers’ contract note, makingthe contract between the buyer and the seller. Their functionsstopped there, and the contract does not render them liable eitheras purchaser or seller of the goods. They cannot sue or be suedon it, as they are not a contracting party, and the document onthe face of it discloses who the contracting parties are.
“ What appears to have happened in the present case was this.Mr. Meaden, the plaintiffs’ assistant, having secured the defendantas a buyer for two of these lots, the plaintiffs in their capacity ofbrokers introduced him to the owner of the goods, and made thecontract D 2 in the usual course of business. 'Phis is the only con-tract. which governs the parties before the Court, and no evidenceis admissible to show that the plaintiffs acted in anv other capacityhut what this solemn document, duly stamped, shows, viz., as1 brokers.’ That being so, the law applicable to the case is quiteclear, and I cannot do better than adopt the very words used byKelly, C.B.. in the case of Fairlie v. Fenton,1 which exactly fitthe case now before us : ‘ We know-, of course, that a broker, oranybody else, may so frame a contract as to make himself personallyliable, and to entitle himself to sue personally on the contract.But w herever the broker enters into a contract as broker , describinghimself as a broker as in this contract, and naming his principal,the action is not maintainable by him. I know of no exception tothis rule ; and I may observe that no instance lias ever occurredwithin my experience in which an action has been held maintainableby a broker, who describes himself as such upon a contract containingno words expressly or by necessary implication making him liablein his own person.’
“ No further comment is necessary as regards the law, but I maymake one further observation on the facts, which show that theplaintiffs could never have intended to act except as brokers. Aswe all know', a broker is not entrusted with the possession of thegoods, and ought not to sell in his own name, as the principal whotrusts a broker has the right to expect that he will not sell in hisown name (Baring v. Corrie 2). The plumbago in this case wasnever in plaintiffs’ possession, and it was to be delivered and paidfor as arranged with Mr. Jayew'ardene. As a matter of fact it wasso delivered, and the person who sent the account to defendant forpayment wras not the plaintiffs, but Mr. Jayewardene (vide. D 3).The defendant, who had another account against Mrs. Attygallefor Rs. 4.200 on some other transaction, naturally deducted thatsum. and sent to Mr. Jayew'ardene a cheque in favour of Mrs.Attvgalle for the difference, viz., Rs. 4.436-78. If Mrs. Attygallewas the plaintiff in this action, the defendant was clearly entitled
1 L. H. 5 Exch. m.
1 :> B. & Aid. 137, 143.
( 217 )
to set off that item, and it is obvious that it is in order to preventany discussion as to the validity of that counter-claim that theplaintiffs have been put forward to figure in this action.
“ Even if they sold this stuff as auctioneers, the utmost extentof their lien over the goods or the proceeds sale is Rs. 86-36, and Ican scarcely believe that they have come into Court and embarkedon this litigation for the purpose of protecting that paltry interest.The evidence of Mr. Gratiaen shows that the plaintiffs have a runningaccount with Mrs. Attygalle, and whatever brokerage or commissionthey were entitled to on this sale has already been settled.
“ I dismiss the plaintiffs’ action with costs.”
The plaintiffs appealed.
Bawa (with him E. W. Jayeivardene), for the plaintiffs, appellants.
Sampayo, K.C. (with him Cooray), for the defendant, respondent.
Cur. adv. wiU.
July 23, 1909. Hutchinson C.J.—
This is an appeal by the plaintiffs against a decree dismissing theiraction. They say in their plaint that they are licensed auctioneersand brokers, and that as such auctioneers they on December 7,1907,at Colombo, sold by public auction certain plumbago, two lots ofwhich the defendant bought at the sale; that the defendant tookdelivery, but has not paid the price ; .and they claim judgment forthe price, Rs. 8,636-78.
The defendant in his answer admits the above averments, but saysthat the plaintiffs were with regard to the matters above stated agentsof Mrs. Attygalle, and that the contract for the sale and purchaseof the plumbago was between Mrs. Attygalle and the defendant;that at the time of the sale the plumbago was in her possessionin her store at Kurunegala, and that she delivered it to the defendantin pursuance of the contract; that she was indebted to him onAnother account in the sum of Rs. 4,200, and that he tendered to herRs. 4,436*78, being the said sum of Rs. 8,636'78, less the said debtof Rs. 4,200; and he denied the plaintiffs’ right to sue for theRs. 8,636-78 or any part of it.
The issues settled were:—
Can the plaintiffs as auctioneers maintain this action ?
Did the plaintiffs act in-this matter as auctioneers or merely
as brokers ?
Have the plaintiffs been paid their brokerage ?
The plaintiffs’ counsel objected to the 2nd issue, but I think it i6raised in the answer, which alleges that the plaintiffs were merelyacting as Mrs. Attygalle’s agents, and that the defendant’s contractwas with her and not with the plaintiffs.
18-.
190b.July 23.
( 218 )
1909.
July 23.
Hutchinson
C.J.
There was put in evidence an advertisement of the proposed sale,published in a local paper on December 2, which states that “We areinstructed to sell by public auction on account of Mrs. Attygalle at
our office100 tons of uncured plumbago, lying at Polwatte-
pitiya stores, Kurunegala; ” signed “ E. John & Co., Brokers,Colombo.” At the sale conditions of sale were read out; they wereon a printed form headed i! E. John. & Co., Produce, Exchange, andShare Brokers ; ” the 3rd condition was “ Brokerage of 1 per cent,payable by the seller ; ” and the 5th, “ Payment within ten days,or as arranged with Mr. Jayewardene.” The plaintiffs distributedorders for drawing samples to intending bidders before the sale.The plumbago was sold in lots, of which the defendant bought two.There was no reserve on any lot; but Mr. Jayewardene was in thesale room as representing the owner, and as the lots were put up and11id for, he indicated to the auctioneer whether any particular bidwas to be accepted or not.
Immediately after the sale the plaintiffs sent to the defendanta, letter in these terms : “ We beg to advise having sold this dayon account of Mrs. Attygalle to yourself of uncured plumbagoby public auction as follows,” describing the lots and the price ;
“ delivery at Kurunegala without barrels within fourteen days,unless otherwise arranged with Mr. Jayewardene. Yours faithfully,
John & Co., Brokers.” This is on a form with the same printedheading as the conditions of sale. A few days after the sale thedefendant’s agent, Henry de Mel, met Mr. Gratiaen, a. representativeof the plaintiffs’ firm, who had been present at the sale, and asked fora delivery order, which Mr. Gratiaen says he instructed Mr. Jaye-wardene to send him. On December 11 Henry de Mel wrote to Mr.Jayewardene asking him to send a delivery order, or to instruct hismen at Kurunegala to deliver the plumbago to the defendant’s menthere. On the 14th the plumbago was delivered to the defendant.On the 16th Mr. Jayewardene sent to the defendant an account forthe plumbago, Rs. 8,636'78, which the defendant returned on the20th with a cheque for Rs. 4,436'78, deducting the Rs. 4,200 whichhe claimed from Mrs. Attygalle. She refused to accept this; andthe plaintiffs then, on the 21st, wrote to the defendant asking himto send to the plaintiffs a cheque “ in favour of Mr. Jayewardene ”for the full amount. To this the defendant’s proctor replied that hisclient had contracted with Mrs. Attygalle, and did not acknowledgeany liability to the plaintiffs.
The plaintiffs have not. been paid their commission in respect ofthe plumbago sold to the defendant. They had done a good deal ofbusiness for Mrs. Attygalle, and she has au account with them ; theydid not know her personally, but in all their transactions with heit hey dealt with Mr. Javewaidene, who is her son-in-law, as her agent.This plumbago was never in their possession; it was always atKui unegala in Mrs. Attygalle’s store.
( 219 )
The defendant’s counsel, on the hearing of the appegl, urged that 1909.there is no evidence that the person who conducted the sale had an July 23-auctioneer’s license. But there is no evidence that he had not, and Hutchinsokit is too late to raise that objection now.V. J.
An auctioneer is generally entitled to sue the purchaser for theprice of goods sold by him as auctioneer, unless there is somethingin the circumstance? or in the conditions of sale to rebut the pre-sumption that he is so entitled. The plaintiffs in the conditions ofsale and in the contract note of December 7 describe themselves as“brokers,” and the 3rd condition speaks of their “brokerage” aspayable by the seller; but that, of course, is not conclusive that theywere acting merely as brokers. On the other hand, the sale was byauction ; but that, again, is not conclusive, for there is nothing toprevent a broker from finding a purchaser by putting up the goodsto auction instead of by going round to possible buyers privatelyand asking them to make offers. As Benjamin says, in his book onSales (p. 792, 5th edition), “ if the auctioneer acts as a mere crieror broker for a principal who has retained the possession of thegoods, the auctioneer has no implied authority to receive payment ofthe price.”
There is no evidence as to whether it is usual on sales made bybrokers in Colombo by public auction for the buyer to deal directlywith the auctioneer and take delivery of the goods from him and topay him, or whether he takes delivery from and pays the sellerof the goods. It seems clear, however, that in this case if thedefendant had paid the full amount to Mrs. Attvgalle, or her agent,
Mr. Jayewardene, the plaintiffs would have been quite satisfied.
Having regard to the 3rd of the conditions of sale, that brokerageis to be paid by the seller, and the 5th condition, that payment is tobe made within ten days, unless otherwise arranged with Mr. Jaye-wardene, and the terms of the contract note of December 7, and the.fact that the plumbago was at Kurunegala in the possession of Mrs.
Attygalle, and that it was delivered to the buyer by her, I am ofopinion that the contract was between the buyer and Mrs. Attygalle :that the parties intended that payment should be made only to Mis.
Attygalle, or her agent, Mr. Jayewardene; and that the plaintiffsacted merely as brokers.
I think the appeal should be dismissed with costs.
Wood Renton J.—
The facts have been stated by my Lord, the Chief Justice, and Iwill not repeat them. I do not agree with Mr. de Sampayo thatit is possible for the respondent in the present case to avail himselfof the principle of law laid down in such cases as Holmes v. Tutton.'which decide that, if the lien of an auctioneer is proved to have beensatisfied by the payment of his charges, he can no longer recover the> (1855) 5 B: <Ss B. 82.
1909.
July 28.
WoodRenton J.
( 220 )
purchase price of the goods sold at the auction from the buyer. Inthis case there is nothing to show that the appellants’ charges havebeen paid. It is true that there is some evidence of the existence ofa running account between the appellants and Mrs. Attygalle. Butthere is no evidence on the record showing that the appellants, inconnection with that aooount, have at present in their possessionmoney belonging to Mrs. Attygalle, which they cam utilize for thepurpose of discharging her indebtedness to them in regard to thesale of the plumbago which has given rise to this action. I am alsounable to accept Mr. de Sampayo’s contention that this case can betreated as a simple sale by a broker on behalf of a client. There canbe no real analogy between the proceedings of the appellants in thepresent case and the course of the business which an ordinary brokerconducts. I do not think that it is possible to say that the act of theappellants in advertising the sale of the plumbago by public auctioncan be regarded as legally equivalent to that of a broker goinground the market on the outlook for customers for his principal’sgoods. I have, however, come to the conclusion that the realposition of the appellants in the present case was that of auctioneers,or of brokers selling by auction, but with a limited authority. Thereis no controversy as to what the legal position of an auctioneerwith an authority so limited is. It is defined by Benjamin, in histreatise on Sale (5th edition, page 792), as follows :—“ It is plainthat if the auctioneer acts as a mere crier or broker for a principalwho has retained the possession of the goods, the auctioneer has noimplied authority to receive payment of the price.” In furthersupport of that proposition, I may refer to the cases of Sykesv. Giles1 and Mainprice v. Westley,® which show, I may add, thatthe question of the extent of the auctioneer’s authority is to bedetermined by the conditions of sale and by all the circumstancesof the particular transaction that the Court has to interpret.
I proceed to apply this principle to the case now before us. Inthe first place, it is to be noted that the appellants, in their advertise-ment of the sale, not only, as is often the case in such advertisements,disclose the name of the vendor in connection with the property,but expressly state that the sale is to take place “ on account ofMrs. D. C. G. Attygalle.” In addition to that, the appellantssigned the advertisement of the sale as “ brokers.” The conditionsof the sale itself are even more significant of the capacity in whichthe appellants were acting. The 3rd condition, which has beenquoted by my Lord, the Cluef Justice, that brokerage of 1 per cent,is to be payable by the seller, and the 5th condition, stipulating thatpayment is to be made within ten days or as arranged with Mr.Jayewardene, point in the same direction. It is clear that Mr.Jayewardene was Mi’s. Attygalle’s agent. I am unable to construethe 5th condition of sale, as Mr. Bawa invited us to do, as meaning1 (1839) 5 M. <fc W. <>45.* (1865 ) 6 B. <b S. 420.
( 221 )
that the payment was to be made to the appellants, either withinten days, or within such extended time as Mr. Jayewardenepermitted. It is just here that we have to look to the conduct ofthe parties themselves for the purpose of interpreting the conditionsof sale and the real nature of the contract. It is dear from theevidence adduced by the appellants themselves that Mr. Jayewar-dene attended the sale as the agent of Mrs. Attygalle, and that hecontrolled in every respect, except as regards the mechanical act ofputting up and crying the various lots which were to be disposed of,its whole conduct and management. Moreover, in the advice noteto the respondent by the appellants, they do not claim payment forthemselves. They reoite once more, in slightly varied language,the 5th condition of sale, and say that “payment is to be madewithin fourteen days, unless otherwise arranged with Mr. Jayewar-dene.” In addition to all this, we find that the plumbago sold wasnever in the physical possession of the appellants—a circumstancewhich, of course, in itself would not defeat the appellants’ lienif they were selling as auctioneers with a general authority, butwhich has to be taken account of in deciding whether or not theywere acting in that capacity—and that Mr. Jayewardene himselfsent in to the respondent a bill for the price of the plumbago whichthe appellants had sold. It is to be regretted, I think, that theparties in this case have not adduced evidence showing what thecustom of the trade in regard to sales of this kind is. But we haveto decide the case on the materials which they have thought fit toplace before us, and on those materials I have come to the conclusionthat the decision of the learned District Judge should, for the reasonsI have given, be upheld.
I would dismiss the appeal with costs.
1909.July 23.
WoodRenton J.
Appeal dismissed.