MCLEOD AND COMPANY Vs. IVAN JONES AND COMPANY

JUDGEMENT

(1.) This is a suit brought to recover damages for the breach of a contract to take delivery of and to pay for 4 Westcott Cars, 12 Lexington Cars and 70 Nash Cars sold by the plaintiffs to the defendants. In his opening address Counsel for the plaintiffs stated that the plaintiffs relationship to the defendants in respect of the sale of these cars was partly that of agent to the principal and partly that of vendor to vendee. At the trial he applied for leave to amend the plaint by adding a claim in the alternative for an indemnity as agents, but I refused the application because in my opinion there was no reasonable ground for permitting an amendment of the claim at so late a stage in the proceedings, and also because, if the amendment were to be allowed a new cause of action would be admitted which is now time- barred. I do not wish it to be understood, however that, in my opinion the proposition which was propounded on behalf of the plaintiffs is one to which I. should give my assent. No doubt circumstances may arise in which a person who enters into a contract of sale as agent, for example, as agent for an undisclosed principal, may be deemed to be either a principal or an agent vis a vis the other party to the contract of sale; but in the eye of the law, in my opinion, he cannot be regarded as filling at the same time both capacities. In effecting the contract of sale, he must needs have acted either as a principal, or as an agent. Now the legal position of a commission agent who sells or purchases goods for a foreign principal is well-known, and has been frequently defined. It may be that the agreement between a commission agent and the party for whom he is acting may, at the outset, be that between a principal and his agent, and so long as the contract remains executory the relationship of principal and agent may <JGN>Page</JGN> 2 of 6 subsist between the parties. It has also been held that such a broker may possess a right in certain circumstances to stop the goods in transit. But in my opinion after the contract of purchase has been effected the relationship of the parties quoad the contract of sale ceases to be that of the principal and agent, and ripens into that of vendor and purchaser; though it may be necessary to refer to some other agreement, for example the prior agreement of agency, in order to ascertain the terms and conditions of the contract of sale. If the law were to be otherwise, the result would be that in so far as the agent was acting as vendor he would be under no obligation to account to the other party to the contract in respect of any profit which he might have made through buying or selling the goods in question to that other party. On the other hand, in so far as he was acting as the agent of the principal he would be liable to account to his principal in respect of any profit in excess of the agreement commission which he might have made out of the transaction. Where goods are sold through A, A must either sell on his own account as principal or, as an agent for B must create privity of contract between B, and a third party [see Feise V/s. Wray (1802) 3 East. 93 : 6 R.R. 551 : 102 E.R. 532, Ireland V/s. Livingstone (1872) 5 H.L. 395 : 41 L.J.Q.B. 201 : 27 L.T. 79, Robinson v. Mollett (1875) 7 H.L. 802 : 44 L.J.C.P. 362 : 33 L.T. 544, Cassaboglon V/s. Gibbs (1883) 11 Q.B.D. 797 : 52 L.J.Q.B. 538 : 48 L.T. 850 : 82 W.R. 138, Ex parte Miles, In Re: Isaacs (1885) 15 Q.B.D. 39 : 54 L.J.Q.B. 566 and Paul Beier V/s. Chotalal Javerdas 30 B. 1 : 6 Bom. L.R. 948 It is no uninteresting to observe that Lord Blackburn in his Book on Contracts of Sale (3rd Edition page 352) states the position of a commission agent acting for a foreign principal to be as follows: It seems that in cases where a factor acting for a foreign correspondent purchases goods in his own name and on his own credit, it is rather too qualified a phrase to say merely that he stands in the position of a seller quoad the consignee : if he is not a seller it is difficult to say who is, as there would be much difficulty in establishing any privity of contract between the foreign correspondent, and the original seller. But there is very gradual progression through these cases in which the original seller has a right to elect between the liability of a factor and the consignee as principals up to those cases in which the factor if liable, at all, is liable merely as a surety, and there may be consequently difficulty at times, in determining whether an agent can be said to be in the position! of seller so as to give him the right to stop the goods in transit on his own. account or not. See further on this subject Siffen V/s. Wray (1805) 6 East. 371 : 2 Smith 480.

(2.) As I have stated it may, be difficult to ascertain whether in any particular case the relationship between the parties is that of principal and agent or of vendor and vendee, but inevitably, in my opinion, it must be either the one or the other. I was referred certain passages in the judgment of Mr. Justice Blackburn, as he then was, in Ireland V/s. Livingston. (1872) 5 H.L. 395 : 41 L.J.Q.B. 201 : 27 L.T. 79 but, in my opinion, these passages when submitted to analysis do not support the proposition that an agent can enter into a contract of <JGN>Page</JGN> 3 of 6 sale or purchase for or with a foreign principal without creating the relationship of vendor and purchaser between the par-ties to the contract. In Robinson V/s. Mollett (1875) 7 H.L. 802 : 44 L.J.C.P. 362 : 33 L.T. 544. Mr. Justice Blackburn in impressing an opinion contrary to that of Mr. Justice Brett, a great Master of Commercial Law, and other learned Judges appeared to think that an agent might purchase goods for his principal without himself being the vendor or creating privity of contract between his principal and a third person, but the opinion which that very learned Judge then expressed was dissented from and; if I may venture to say so, rightly deprecated by other learned Judges and was treated as erroneous by the House of Lords. In this case, however, I will not yield to the temptation to discuss this question further because in my opinion it is clear that in relation to the sale of the motor cars in question in this case the allegation of the plaintiffs, as set out in the plaint, that they were acting as principals is the correct inference to be drawn from the facts. It will, be enough to say in respect of the cars which were sold by Nash to the plaintiffs and re-sold by them to the defendants that McLeod & Co., had contracted with Nash to take consignments of these oars before they had come into any contractual relationship whatever with the defendants, and I have no doubt that in effecting the contract of sale of these cars to the defendants the plaintiffs acted as principals, and not as agents.

(3.) As regards the 4 Westcott Cars and the Lexington Cars it was not contended that the contract of sale was entered into by Ivan Jones with the plaintiffs otherwise than as principals. With respect to the 4 Westcott Oars in the course of the case, in my opinion acting on sound advice, the plaintiffs abandoned their claim. As regards the 12 Lexington Cars the controversy, between the parties arose in this way.