COMMISSION CASE.

Timaru Herald, Volume XIC, Issue 13420, 18 October 1907, Page 6

COMMISSION CASE.

GUINNESS AND LeCREN V. QUINN.

ARGUMENT IN THE APPEAL COURT.

The Chief Justice (Sir Robert Stout) and Justices Williams, Demiiston and Button, sitting in the Court of Apeal on Monday, heard argument in the case Guinness and LeCren v. Quinn. Mr Skerrett, K.C., and J[r Hamilton appeared for the appellant company, and Mr Kinnerney (Perry, Perry and Kinnerney) for the respondent. CASE FOR THE APPELLANTS. Mr Skerrett, K.C., for the appellant company, said:—" There is no dispute of fact between the parties except as to one fact, viz., as to -whether it was stated by the respondent at the time the second contract ■was entered into thafc he was not going to pay commission, but that fact, in the -view that is taken on behalf of the appellants, is immaterial, because even if the respondent did make such a statement it -was made too late, for the commission was then already earned. The grounds of the judgment of Mr Justice Chapman are the following:—l. That there was never any employment of the appellants by the respondent to sell the farm; 2. That if there was an employment, then it had lapsed by eduction of time; 3. That even if there was an authority to enter into an agreement to sell or to sell, there •was no authority to enter into the agreement which was entered into by the appellants on the respondent's behalf; 4. That the second agreement (of the 16th September) was entered into by the respondent on the express condition that he was not to pay commission. The facts are these : The appellants are land agents and auctioneers, and the respondent was a farmer. Mr Hume says that the farm had been on the books of the appellants for four years, first at £22 per acre, and subsequently at £25 per acre. In his judgment Mr Justice Chapman says that he does not know what "on the books" meant, but there is no doubt that it is a colloquial way of that the farm was in the hands of the appellants as commission agents for " sale. The next fact to be noticed is that this farm was in the hands of other agents for sale. Thafc does not appear very clearly from the case, but the evidence as to it will be found on the middle of p. 6 in the evidence of Hume. The list there referred to i 3 the list of the South Canterbury Fanners' Co-operative Association. No date is given, however, as the date of the list, and the- matter is really of no importance. The next fact brings us down to June 1906, when Hume was driving one Wright to inspect properties and met the respondent. The account of the interview with the respondent as given by Hume is uncontradicted, see p.. 5 of the case. It is also corroborated by Hinch in his evidence at p. 8. It was a distant recognition, three months before the sale was effected, of the authority of the appellants to sell the farm. The only other possible construction is that it- was an authority to sell it to Wright alone, but that was not suggested by ifche respondent in his evidence, and the whole tenour of the evidence shows that it was a general authority to sell to any purchaser that the agents could find. This is proved by the fact that subsequently Hume took one Watson over the farm with a view to selling it to him, and Quinn. was aware of this and made no objection. See p. 5 of the case, Hums's evidence, and the admission by Quinn in his evidence at p. 8. Hume then brought the property under the notice of Flynn, the man who subsequently purchased it. See ths letter Exhibit A. Flynn came into Hume's office and asrked whether he could not get the place cheaper than £25 per acre. Hume told him to make an differ,- and he made a written offer (Exhibit B, p 10). which shows that it was made on the 3rd of September, 1906. Mr Justice Chapman comments on the fact that this is an authority by Flynn to the appellants to make this offer and that therefore they were acting as Flynn's agents, and he seems to base his comment on the fact that Hume in'his evidence refers to Flynn as tha appellants' principal; but the letter means nothing more than an authority to offer £22 per acre to the appellants' principal, who was Quinn, for the appellants' authority was only to find a purchaser, and not to selL What took place on the communication of that offer to the respondent is uncontradicted : see p. 5 of Hume's evidence, and it disposes of the question as to whether the appellants had authority from Quinn to find a purchaser for the farm. Quinn said that he would not sell under £25 per acre, but he did not .say that the appellants wdre not authorised to act for Mm in the matter of finding a purchaser; on the contrary, the conversation assumes that the appellants still had that authority. Flynn then agreed to buy at £25 per acre, and the letter (Exhibit D) was sent by the appellants to tha respondent. Mr Justice Chapman comments on the fact that in that letter the appellants said, "Trusting the above will be satisfactory " as showing that the appellants were really actinjr as agents for Flynn, and not as the respondent's agents; but the submission is thai that expression is merely a question of convention-il politeness. It is impossible to contend in the face of the evidence that there wpg no j continuing authority in the appellants' right up to the time of sale. The agreement that was signed by Flynn purports I

to be nothing more than an offer by him | to buy the place at £25 subject to the | terms therein set out. It was on the usual form that was used by the appellants in cases of a sale of property, and even if the respondent refused' to sell on those terms, still at that time the appellants had already earned thsir commission, for they had done what they were authorised' to do —brought forward a purchaser who was willing to purchase at the price which the respondent was asking . Clearly, even if the respondent said then that lie would not sell at £25 per acre, the appellants were entitled to their commission for finding a purchaser at that price. The terms of the offer signed by Flynn were these: First, cash, possession on the 30th September, interest on the purchase money at 5 per cent, until completion from the date of possession, the property to pa6s subject to all easements. The provisions of clauses 4, 5, 6 and 7 of the memorandum were also perfectly reasonable provisions, and generally in favour of the respondent. The differences between the two agreements are very slight, and are these: In the second agreement the provision as to the purchaser paying cash is modified, and he= is given credit: that- is distinctly in the purchaser's favour and against the interest of the respondent. The date of delivery of possession is postponed from the 30th of September till the 12th pf October: that is of little importance. The provision in the first agreement as to the respondent putting no more stock on the land is left out in the second agreement: that also as a minor matter, and on the whole the first agreement was more in favour of the respondent than the second . When the respondent received the letter stating that the appellants had found a purchaser for Jiie farm, the evidence shows that he kept out of Hume's way, and when he at length met him told' him that he Jiad changed his mind and did not intend to sell at £25, but it was too late then. Hume and Flynn went out to see the respondent on the following Sunday—the 16th September—and they were at his place more than four hours. The conversation that there took place is what is in controversy in this case, but as before stated that is immaterial. Hume's account of what took place is at p. 5 and p. 6 of the case, and Flynn's account is at P-_7. >He says that the respondent said

That is my price net." That would mean that the price and commission were to be paid by the purchaser as a matter of bargain between the vendor and purchaser, because there was no consideration between the purchaser and the agents. The purchaser repudiated the payment of commission, and Hume stated that the appellants claimed commission, and there is no evidence that they acquiesced in the condition attempted to be made by the respondent. If the respondent could make such a condition at that tima without the acquiescence of the appellants it would mean this: That a principal can take advantage of the work of an agent without having to pay commission if just before signing the agreement the states that he is not going to pay any commission. Such a position is manifestly unfair to the agent, and is not law. Page 30 of the case contains the salient part of the judgment of Mr Justice Chapman. He states that the case can be decided on the evidence of the appellants. That was proper, because the appeal was on law and fact, and on the facts the Magistrate had the appellants. The learned Judge then states the facts as mentioned by Hume in his evidence, and draws the conclusion that the appellants had no authority to find a purchaser for the property. That conclusion, as has been pointed out, is not supported by the -evidence. It does not matter for the purposes of the appellants' case whether the authority was to sell or to find a purchaser. Sir Robert Stout: In England a commission agent has only authority to find a purchaser, unless he is given express authority to enter into an agreement for sale. Mr Skerrett; That seems to have been the law until recently, but recent decisions seem to show that a commission agent generally has implied authority to enter into an agreement to sell on the terms on which ha has been authorised by his principal. The learned Judge at the top of p. 31 states that the effect of respondent refusing Flynn's offer of £22 per acre wAs to negative the authority of the appellants to sell, but the inference to be drawn from that is clearly to the contrary.

Mr Justice Denniston: Is it not cleai that the appellants did not purport to have authority to sell the property, but only to find a purchaser, for they did not sign the first agreement as agents on behalf of the respondent, but submitted it to him as an offer from the purchaser? Mr- Skerrett: Yes, that is the position. The learned Judge then goes on to state that the finding of the Magistrate is based on the assumption that the commission was earned on the 12th September. It wes on the sale on the 16th September—which, however, was dated on the 12th, showing that it was a confirmation of the first agreement—that commission was earned. The second agreement also shows that the appellants were treated as the respondent's agents, for they were expressly made his agents in thr? agreement for the purpose of receiving the purchase money.

Mr Justice Denni»ton : If a principal puts property into the hands of an agent •who k for a sale, and raises tlie price of the property. I should think it was his duty to give notice to the agent.

Mr Skerrett: Yes. This is lite the c;use of Dillon v. McDonald. (21 N.Z.L.R 45) decided by the Chief Justice, when an authority given a long time previously was recognised shortly before the date of the sale. The basis of the judgment in the Court below seems to be that Hume tras really acting as agent for Flynn, but there -was no legal relationship between them, and the accidental mse of the word " principal" by Hume in describing Flynn in bis evidenoe is not enough to • constitute such a relationship. Hume was merely describing the purchaser of the property. Mr Justice Denniston: Were they not both his principals for the purpose of bringing them together? Mr Skerrett: Yes. The last part of the judgment in the Court below deais with the interview and the agreement ma.de on the Sundav—the 16th September. He states, at p. 32, that " the evidence shows from the fiist." Mr Justice Williams : What does " the first" mean? Does it mean from the beginning of the interview on the Sunday, or from the time when the respondent first refused to sell on the terms of the first agreement ? '[ Mr Skerrett: It is submitted: that it means from the first on the Sunday, but it'is possible that it means from the time the fiist agreement was submitted to the respondent, for he says in his evidence that he stated he would not pay commission.

Sir Robert Stout: The respondent in his evidence does not say that lie objected first thing on Sunday to the payment of commission. . - >

Mr Skerrett: It is admitted, however, that he did object, and Hume's evidence seems to make that clear. In the. last paragraph of his judgment the learned Judge says, " The work done by Hums was done, as is often the case, under no actual agreement that it should be paid for, but in the hope that it would result in a commission to the company," etc. I db not understand that statement.

Sir Robert Stout: If you employ a man to work in your garden and nothing is said about payment, would you nob have to pay him? Mr Skerrett: Clearly. The cases where commission agents do commission work "on spec" are cases where it is agreed that tli? commission shall be paid only upon the transaction being completed. TTiose cases have nothing to do with this case. The fact of employment has been found by the Magistrate in the appellants' favour, and it will be for the respondent to show that that finding is demonstrably wrong before this Court will- upset it. The weight of evidence is, however, in favour of the Magistrate's finding. As to the question that the authority had lapsed by effluxion of time, the appellants rely uppii letter D. which concludes the matter. How can it be said that the authority lapsed when it was recognised by the. respondent as being in force on the 13th of September? As to the question whether the appellants had power to enter into the first agreement, that, it is submitted, is entirely immaterial; and further, the appellants entc-red into no agreement, for they did not sign the memorandum as agents on behalf of the vendor, but, having obtained a binding ' offer on the part of the purchaser, submitted it to the vendor for his approval. The last question is whether a principal can take advantage of the work of an agent, and then escape the paymen of commission by the mere statement that, he will not pay commission made immediately before signing the agreement. - . Sir Robert Stout: There seems to be no suggestion that Hume absented to the condition made by the respondent. Mr Skerrett: No, and the inference ought to. ba the other way. vendor is going to take advantage of TLtyj. work done by the agent Jie must, while the contract is executory and before he lias bound himself, obtain the assent of the agent to the contract for the payment of commission, and he cannot repudiate the contract with the agent and at the same time affirm the contract with the purchase? which the labours of the agent have brought about. But even on ths facts it is not proved rthat the respondent made it a condition precedent to signing the contract that no, commission was to be payable, for he only .raised the question once according .to the evidence, and then aid not insist on it, and the Magistrate has found that it was probably done in a bantering manner and was not intended to be serious. If the principal derives advantage from the labour of the agent and then takes the work out of the agent'shands the agent can sue the principal for the dkmages he has suffered, and if it is a trick to deprive the agent of the chance of earning his commission he can sue for the commission: Noah v. Owen (2 T.L.R. 364). That case was commented on and followed by Williams, J., in Hinchey v. Keam (20 N.Z.L.R. 478, 481). It is clear that an action 1 would in such a case lie for a quantum, meruit in. lieu of damages: Prickett v. Badger (I C.B.N.S 296)) : Bilbee v. Hasse (5 T.L.R ,677). If the property is sold on reasonable terms the vendor must pay commission; Nosotti v. Auerbach (79 L.T. 413). In that case the agent had, without express authority, fixed a day for the delivery of possession, and it was left to a jury to say whether the date fixed was reasonable. It was held that is was. . Sir Robert Stout: Ido not think''that this point arises, for the agreement was signed by the respondent, and the only alterations made were at his suggestion, and do not seem to have varied the first agreement in any very essential manner.

Mr Skenett : Tliat is so. The condition about the stock that was left out in the second agreement was a mater of minor importance, and was counterbalanced b the respondent giving credit to the purchaser and waving hi right to cash payment under first agreement. ' Further, even if there was nothing said in the agreement about the respondent putting on stock after its date, the respondent, was a quasi-trustee on the property for the purchaser, and clearly could not, after the date of the sale, put on stock so as to eat the grass bare. On the question of the appellants' authority, see Dillon v. McDonald (21 N.Z.L3- 45). Mr Hamilton said that the Magistrate evidently doubted whether ,the assertion of . the respondents thai. lie would not pay commission was made seriously: see his judgment, p. 13 of the case. He also found that the respondent was a shrewd man of business, and! was not misled in any way. There was also the fact in his judgment that the respondent had successfully got out of paying commission on another transaction in a similar way. These findings of fact of the Magistrate should be given effect to unless they were demonstrably wrong. They were supported by the evidence, and there was nothing to show that they were demonstrably wrong. THE RESPONDENT'S CASE. Mr W. E. Kinnerney, for the respondent, said : —lf Hume had any authority from the respondent to sell, it had expired by effluxion of time in June 1906, at the time of the interview between Hume and the respondent on the Makikihi Road. This is clear from Hume's inquiry on that occasion: " What money are you putting onit now Mr Quinn?" see p- 5 of the case.

Sir Robert Stoufc: The respondent does not deny the authority to sell that was previously given, or the conversation as given bv Hume in his evidence. Mr Kinnerney: No. Mr Justice Dsnnislon': All you are

getting rid of by that contention is the authority on the books? Mr Kinnemey: Yes. Mr Justice Williams : It does not follow that because the' respondent raised the price of his land at that interview lie determined the authority to sell. Mr Kinnemey: I submit that the true inference that should be drawn by the Court from that conversation is that Hume knew that his authority had lapsed. Sir Robert Stout: But you admit the fact in the previous sentence, namely, that the respondent invited Hume to show Wright over his farm? Mr Kinnemey: lam bound by the Magistrate's notes, which are very imperfect.

Sir Robert Stout: Is there any suggestion in your notes that the respondent contradicted that fact? .

Mr Skerrett: No. See p. 24 of the case.

Mr Kinnemey: The respondent says at p. 24, according to my notes of the evidence, that Hume had no , authority to sell this place. The.-statement referred to by your Honour is not denied in terms, but it is dfenied in substance.

Mr Justice Denniston : Do contend that we can go outside the Magistrate's notes of evidence taken by the Magistrate? MrKinnerney: This is a'rehearing, and the Magistrate's notes may be supplemented, but. not contradicted. From the conduct and! language of Hume on that occasion, as disclosed. by the evidence, itshould be inferred that he knew that his authority had lapsed. In any case, the authority then given by. the .respondent was only an authority to sell to Wright, and not a general authority, and this is important, seeing that the sale was afterwards made on terms. Sir Robert Stout : You cannot surely contend in the face' of the evidence as to the attempted sale to Watson, of which the respondent had knowledge, and ,in face of the evidence as to the pale: j to Flynn, that it .was an authority only to uell to Wright? t

Mr Justice Denniston: It iseems to me that there was no authority to sell to anyone, but only to iincl a purchaser willing to purchase at £25 per acre; and this is what the appellants did; Mi* Kinnerney: Ths authority, whatever it was, was not executed by the first agreement* because that was nothing more than an offer,: and .was not binding on the respondent.:

Mr Jmtica Denniston: If he brings a buyer, does; not that entitle him to commission?

Mr Kinnerney: It must be on the terms authorised, and if 011 unauthorised' terms he has not earned his" commission. n.e made' one unauthorised term which debarred the respondent from putting a single sheep on his land. If, instead of having authority to' find a purchaser merely lie had had authority to sell and to sign an agreement of sale on behalf of the vendor, then if he had sighed an agreement containing terms he was nob authorised to agree to, the 'respondent would clearly not have been bound' by these terms. If he would not have been able to bind the respondent in euch a case, then he could just as clearly; not bind the respondent by obtaining an offer on tterm's on which he was not authorised to find a purchaser. .

Sir Robert Stout:' But lie found such a jturchaser as the respondent required at the price he required. ' • ' Mr Justice Denniston: If a principle, effectuates a sale through the introduction of an agent, he\ must pay that agent 'his commission.

Mr Kinnerney: I submit that tliat is not so, unless he effectuates the sale' upon the terms on which he has been authorised to sell: Latter v. Parsons (26 N.Z.L.R. 645, 655, per Edwards, J.). That is the basis of the judgment in'the Court below, that the appellants exceeded! their authority. ■ ■" Mr Justice Williams : Suppose that- the authority had been to sell at £25 per acre, and Hume, ha-d brought a man who offered £22; per acre, and the respondent had accepted that offer, would lie not have to pay commission on the sale at £22 per acre. ; Mr Kinnerney: Yes, because in that case the • respondent would ..have..' agreed to the bargain, but I am,' arguing that the appellants did not earn their commission by what took place on the 12th of September. I shall deal with what took place on the 16th later. Sir Robert Stout': Does, that matter, seeing that the agreement was dated on. the 12th, and that in it the appellants were made tM respondent's agents for the receipt of the purchase money? ill- Kinnerney: The fact that the second agreement was dated on the 12th proves nothing, for it might have been so dated because the 16th was a Sunday, and that fact alone Certainly would not confirm the agreement of the 12th. The very fact of the making of another agreement on the 16th shows that the agreement of the 12th was not confirmed by the respondent. The fact that the appellants were made the respondent's agents for • the. receipt of the purchase does not prove that they were entitled to. commission. In this case thu authority to the appellants was revoked before they found a purchaser on the authorised conditions': Hinch-ey v. Keam (20 N.Z.L.R 478). : That case is strongly in the respondent's favour. See also Christie v. Martin (26 N.Z.L.R. 908, 911, per Cooper, J.). Although no .special terms were mentioned in the instructions to sell given by the respondent to the appellants —if such instructions , were given—still, seeing that they fixed terms to .suit the purchaser, ,and; obtained only in offer by the buyer to purchase on these terms, they did not pursue their authority, and were therefore not entitled to commission on the 12tli of September. The respondent rejected this offer, and whatever his reason may have been, as there existed-in law>a sufficient reason for the rejection, he was entitled , to reject it and to revoke his authority. ■ Such a revocation would end the right of the appellants to commission.; Nosofcti v. Auerbach (79 L.T. 413) - is- ih. the respondent's favour, because it is customary in a sale of lands to fix a time for • possession, and it was a reasonable ■ time* fixedv The whole question there was whether in even fixing a reasonable .time for.delivery of possesion .the agent, was not exceeding his.vpowetts. The case tends to. show-that the insertion of conditions in the : agreement-, in favour, of yie purchaser is clearly an excess of authority that will not bind the vendor..

' Mr Justice Den iston: Mr Skerrett has never contended that the appellants' could have forced the respondent t* accept the purchaser on the® condition^ 1 of the fiist agreement, and to pay commission. ';n Mr Kinnern-ey: As to the agreement of the 16th September, Hume's evidence shows that the respondent declined to sign the first agreement, and also to sign' the second agreement except on the express stipulation that he was not to pay commission.

Mr Justice' Denniston : The whole question is: Was there an agreement entered' into in which the respondent successfully repudiated the payment of commission? Mr Kinnerney: There was no liability on respondent's part to pay commission up to the 16th, and his liability must depend upon what took place on that date. Mr Jvstice Williams: You cannot split the transaction into two parts. Sir .Robert; Stout: Is there not a continued employment? ~ Mr Kinnerney: No; because on the 12th. the respondent had refused to- sell the place at £25 per acre, and that terminated the appellants' authority and the liability of the respondent to pay commission.

Mr Justice Dennis Ion: It wis terminated foi' the moment, and. tlio 'thread' was almost immediately picked up and carried on, and it must therefore be 100-.-at as one transaction. Mr Kinnerney: What took place before the 16th can only be looked at as part of the history of the .transaction • t'P ' to the 16th no commission had been eariKcl. It is plain from the evidence that the respondent stated from the very outset- 01 the 16th that he would not pay commission. VI. Mr Justice Denniston: Hume did' not accept or acquiesce in that. Mr Kinnerney: Not expressly, b.it it must be inferred from his conduct that he did. Sir Robert Stout: Do you suggest, that the appellant 6 were to do this iig-.aey business for nothing? „ Mr Kinnerney: The appellants, finding that tiie respondent was not willing to go on 'with the transaction at all, thought it better to complete the matter in the hope that they- would be able to make the respondent pay afterwards by fixing a legal obligation upon him. Huipe chcee to go on" and take his chance. In. any case lie thought he would have a share of the clearing sale. Mr Justice Denniston: That is nob mentioned. . ' . , Mr, Kinnerney : The evidence is that there is always, a clearing sale in such cases as this. If the Court came to the conclusion that the respondent was only trying to get out of paying the commission he would be liable, but there is no evidence to support that presumption. Mr Justice Denniston: If the respondent had refused to sell ori the 16th and had afterwards sold to Flynn for £25 per acre the appellants would have been entitled to commission; why are. they not entitled when the respondent cells through tli em? _ . Mr Kinnerney: The evidence as to~ what was said on the 16th comes to this: that one party said yes, and the- other party said no, andxthere was no agreement of any kind as to the payment of commission, and the ' parties went on, without making any eucli agreement, to complete the agreement for sale. It must be taken by the Court in these circumstances that Hume acquiesced in the condition, made by the respondent . Usually in these cases the liability to payment of commission is more or less a question of implication. Hume having got the agreement signed, and the respondent having parted 1 with the farm on the condition, that he was not to pay commission,, he cannot be inferred' to Have waived the condition, for he never waived the condition. See Flynn's evidence, who was a witness for the appellants, and also Hume's evidence and the respondent's own evidence. There is no evidence that the respondent's condition was made in a bantering spirit or not seriously. 'The onus of proof that lie waived the condition is on the appellants, and that onus is not discharged. The Magistrate only found -that there was some doubt as "to whether the. condition was made in banter, but did nob find as a fact .that is was. Something lias been made about the respondent haviiig done a similar thing before in order* to escape the payment of commission, but there irs nothing in that. The agent who was alleged to have .been done out of the commission was a witness for the respondent, and his -evidence- (Mundell) does not support the finding of the Magistrate. He said that an arrangement was made. The inference that had been drawn from tliafc evidence is a most unfair one. The statement of claim and the plaint note' both refer to the 12th of September as the date on which the commission was earned. It is not suggested that, the appellants are bound by that date, but both the appellants and'tlie Magistrate have assumed, and the learned in the Court -below lias found, that the claim was for commission earned on 12th. i\s to the right of the respondent to revoke- the authority -before a sale was effected- on the authority given to the appellants, see Toppiri J v. Healy (11 W.R. '466). : The latter part of the lieadnote of that case is not good law. There was a revocation on the 12th of September by the respondent before a sale had been effected as authorised; and the appellants having gone on after that with'out an agreement by hi'm to pay commission, and on liie express stipulation that he would not pay commission no commission was earned, by tliem. * Judgment was reserved.