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intends no fraud.' But where the party undertakes to act, as an agent, for the principal, bona fide believing that he has due authority; but, in point of fact, he has no authority, and therefore acts under an innocent mistake. In this case, however, the agent is held by law to be equally as responsible as he is in the two former cases, although he is guilty of no intentional fraud or moral turpitude.2 This whole doctrine proceeds upon a plain principle of justice; for every person, so acting for another, by a natural, if not by a necessary implication, holds himself out as having competent authority to do the act, and he thereby draws the other party into a reciprocal engagement. In short, the signature of the agent amounts to an affirmation, that he has authority to do the particular act: or, at all events, that he bona fide believes himself to have that authority. If he has no such authority, and acts bona fide, still he does a wrong to the other party; and if that wrong produces an injury to the latter, owing to his confidence in the truth of an express or implied assertion of authority by the agent, it is perfectly just, that he who makes such an assertion, should be personally responsible for the consequences, rather than that the injury should be borne by the other party, who has been misled by it. It is a

2

3

Downman v. Jones, 7 Q. B. 103.

4

* Randell r. Trimen, 18 Com. B. 786; Smout v. Ilbery, 10 M. & W. 1 Kelner v. Baxter, L. R. 2 C. P. 174.

Polhill . Walter, 3 B. & Ad. 114. • Smout v. Ilbery, 10 M. & W. 1.

plain principle of equity, as well as of law, that where one of two innocent persons must suffer a loss, he ought to bear it, who has been the sole means of producing it, by inducing the other to place a false confidence in his acts, and to repose upon the truth of his statements.1

By a charter-party, dated 20th September, 1880, F. M. & Co., as agents for master and owner, let the Steam-ship "Hutton" to E. for a term of not less than three and not more than four months, for the sum of Rs. 15,000 per month payable in advance. By a subsequent agreement the term was extended to 30th March 1881, and the charterer was to pay at the rate of Rs. 18,000 a month for the extended time. On 27th February 1881, the ship being about to proceed on her last voyage to Calcutta and thence to Bombay, E., finding himself unable to pay more than Rs. 6,000 out of the sum of Rs. 18,000, which was then due as hire for the month ending 9th March 1881, requested the plaintiff to pay F. M. & Co., on his behalf the remaining Rs. 12,000. The plaintiffs did so in consideration of an agreement, whereby E. assigned to them all the freight payable to E. and all benefits under the said charter-party in respect of the then intended voyage of the "Hutton." It was also agreed between the plaintiffs and E. that the said ship should be consigned to the plaintiffs at Calcutta and also to

1 Story on Agency, s. 261.

them at Bombay; and that the plaintiff's should receive all the freight, passage money, &c., to be recovered for the said voyage; the plaintiff's charging two per cent. commission on the gross value of the freight shipped in Calcutta, and two per cent. on the amount of freight collected by them in Bombay, and interest on the said sum of Rs. 12,000 at the rate of nine per cent. per annum. Due notice of this agreement was given to F. M. & Co., on 11th March. E., being unable to pay the Rs. 6,000, requested the plaintiffs to pay that sum to F. M. & Co., on his behalf, which the plaintiff's did, E. agreeing that the said payment should be on the same terms as those on which the

Rs. 12,000 had been paid. The ship, having proceeded to Calcutta, returned with cargo to Bombay, where she arrived on 2nd April 1881. F. M. & Co., as agents for master and owner, refused to allow the plaintiff's to collect the freight payable in Bombay, and collected it themselves.

The plaintiffs brought this suit, in the first instance, against the owner and the master of the "Hutton" (first and second defendants), praying for an account of the monies received by the defendants or their agents in respect of the freight, and for payment of the balance found due after deducting the sums properly payable to the defendants for hire of the ship, and for Rs. 400 damages sustained by the plaintiff's by reason of the wrongful acts of the defendants, whereby the

plaintiffs had been deprived of the two per cent. commission. The plaintiff's alleged that the balance due to them would be about Rs. 9,500. The first defendant did not appear. The second defendant (the master) contended that he was not liable; that F. M. & Co., had been specially appointed as agents of the owner; that they were not his (the master's) agents, and that they had no authority to sign the charter-party for him. He admitted that the sum of Rs. 12,000 had been paid to F. M. & Co. by the plaintiffs as agents for the owner; but as to the Rs. 6,000 he denied that it had been paid to F. M. & Co. on his account or on account of the owner. He further alleged that there was a large sum due by E. in respect of hire of the ship and other proper claims against him under the charterparty, and that the defendants were, therefore, justified in refusing the demands of the plaintiff's as assignees of E. until the whole of their claims against E. were liquidated. He alleged that F. M. & Co. had received the freight of the ship, amounting to Rs. 20,426, and he claimed a lien on this sum in respect of the sum of Rs. 19,282 due for hire and other charges on the said ship, and Rs. 605 for money paid for short delivery of goods. The plaintiff's subsequently made F. M. & Co. defendants to the suit. In their written statement, F. M. & Co. stated that they had signed the charterparty as agents only and not as principals, and they contended that the plaintiffs could not proceed simultaneously against the first defendant and the

econd defendant, but must elect to proceed sepaately against either; and, further, that the plaintiffs ould not proceed simultaneously against themselves F. M. & Co.) and the second defendant, but should lect to proceed separately against either. They dmitted the receipt of the Rs. 12,000 as agents for he first defendant, and not as agents of the second lefendant. As to the Rs. 6,000 they alleged that t had been paid to them, not on account of the 'Hutton," but in respect of claims which they had against E. in connection with the "Clan Gordon," another ship which had been chartered by E. They admitted the receipt of the freight of the "Hutton," amounting to Rs. 20,426, but claimed a lien on this sum in respect of hire and other proper charges due under the charter-party.

Held that the second defendant (the master) was not liable on the charter-party. He had given no authority to F. M. & Co, to sign it as his agents; and his conduct in acting under the charter-party, being referable to his character of, and duty as master, did not amount to ratification. But, inasmuch as he claimed to deduct from the freight received in Bombay, sums which were paid either by him or to F. M. & Co. for him, he was so far a proper party to the suit.

Held also, that under section 230 of the Indian Contract Act (IX. of 1872), F. M. & Co. were not

(a)

(a) s. 230-In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.

Such a contract shall be presumed to exist in the following cases :

1. Where the contract is made by an agent for the sale or purchase of

goods for a merchant resident abroad.

2. Where the agent does not disclose the name of his principal.

3. Where the principal, though disclosed, cannot be sued.

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