C. A.

1910

STUBBS

v. SLATER.

Cozens

blank, in which the numbers of the shares were specified, but the name of the purchaser and the consideration were, of course, not specified. It was the ordinary well-known transfer in blank. Now what is the effect of that? I am astonished that there should be any doubt about it. So long ago as 1899 Stirling J. in London and Midland Bank v. Mitchell (1) Hardy M.R. dealt with a case of precisely this nature and indicated what was the legal effect of it. That was a case in which certain shares together with a blank transfer had been deposited with a bank to secure a debt, and it was held that the bank had not lost their right against the shares although their simple contract remedy against the client was lost by reason of the Statute of Limitations. The Court there pointed out that the whole transaction was a mortgage as to which the bank were entitled to the ordinary remedy of foreclosure. Precisely the same point came before me in 1901 in Harrold v. Plenty (2), where I pointed out the distinction between the position of a mortgagee and a pledgee. I refer to my judgment in that case, not as laying down any new law, but as stating what is perfectly well known law. I there said: "Now, it is plain that a pledgee is in a very different position from an ordinary mortgagee. He has only a special property in the thing pledged. He may obtain a sale, but he cannot obtain a foreclosure. I do not think that this is properly a case of pledge. A share is a chose in action." This then was a transaction of mortgage and not a transaction of pledge. It was a transaction of mortgage, in which there was no express power of sale given, but which by law involves and implies a right in the mortgagee to sell after giving reasonable notice. I need scarcely pause to say that the notice here was reasonable, if ever there was reasonable notice. Then the matter came before the Court of Appeal in 1902 in Deverges v. Sandeman, Clark & Co. (3) There it was laid down that in the case of a mortgage by deposit of shares there is an implied power to sell, if no time is fixed, upon giving reasonable notice, and the only point decided in that case was whether or not the notice was reasonable. Nothing else was there decided except that the general principle applicable to (1) [1899] 2 Ch. 161. (2) [1901] 2 Ch. 314, 316.

(3) [1902] 1 Ch. 579, 597.

C. A.

1910

-

STUBBS

V. SLATER. Cozens

tender to the

transactions of this kind was for the first time laid down by the Court of Appeal. In the course of my judgment, which I refer to only because I see no reason to change the view which I there expressed, I say this: "Although a mistake as to the amount due may destroy the effect of the notice, as between pledgor and Hardy M.R. pledgee-Pigot v. Cubley (1)-I think that is not the law as between mortgagor and mortgagee. In order to restrain a mortgagee from selling, in the absence of fraud, it is not sufficient to contest the amount due on the mortgage. The mortgagor must pay into Court, or mortgagee, the amount claimed to be due." I there referred to Pigot v. Cubley (1), saying that a mistake as to the amount due might destroy the effect of the notice as between pledgor and pledgee. I have looked at that case again and as at present advised I can find nothing in the judgment in the Court which bears out the last sentence in the head-note, which says that "a notice that he "-i.e., the pledgee-" will sell unless an excessive sum be paid immediately, is not such a notice as will justify the sale." But, however that may be, it seems to me that in a mortgage as distinguished from a pledge that head-note affords no ground for the contention that a mortgagee has not a power of sale after giving reasonable notice unless the notice specifies with precise accuracy the amount due on the mortgage. I see no ground for making any exception from the general law in this particular class of mortgage. There was here alleged to be due on the mortgage the sum of 691. odd. That being so, and there having been abundant applications for payment, I am clearly of opinion that the mortgagees had a perfect right to sell these shares. No question arose as to the price at which the shares were sold. The shares were not shares of which there was any market price. The transfer was a transfer naming the whole 390 shares, and it seems to me impossible to impute any blame to the defendants for doing that which the plaintiff himself by the form of the transfer had authorized them to do-sell the whole block of shares. But then it is said by the plaintiff, "You, the brokers, had an offer for a smaller lot which would have been sufficient to pay your (1) 15 C. B. (N.S.) 701.

debt." The answer is that they could not have given a direct
title to a purchaser to a portion of the 390 shares because the
blank transfer was for the whole 390. I therefore see no
ground for saying that the sale was otherwise than authorized
and proper.
I think that the view taken by Neville J. was
perfectly right and that this appeal must be dismissed.

I have purposely thus far not alluded to an argument on which great stress was laid by the plaintiff's counsel but which I am unable to apprehend. It was contended that the brokers were not entitled to exercise the power of sale and close the account on one and the same day. Why not? The 691. odd was a debt presently due and payable. It was due and payable altogether irrespective of what might have been the result, if the defendants had again carried over the shares, of the realization of the shares. There were two positions. The plaintiff owed the defendants 691. odd, a debt for which they had security. Further, the plaintiff, being an impecunious person in the sense of not having the money available for payment, was bound to indemnify the defendants and put them in funds to complete the purchase although it was never intended that he should complete. It was always intended that the brokers should have the right to close the account and to enter into a contract with somebody else to buy, and that is what they eventually did, with the result that there was some small profit on this last occasion. The plaintiff may, of course, have an account against the mortgagees of the proceeds of sale, but he is not content with that.

The other part of the case raises an entirely different point. The plaintiff says "I employed you as brokers; I do not go so far as to say I thought you were going to carry over the shares for me for thirteen months for nothing, but I say that you are not entitled to anything more than the commission of 18. per share which you got on the opening transaction." That may be right, but, to say the least, it is startling. We are not dealing here with any case of fraud or misconduct. So far as I can see the brokers have acted with perfect honesty and propriety. What they did was this. I take the first of the continuation notes, which are all in the same

C. A.

1910

STUBBS

v.

ŞLATER.

Cozens

Hardy M.R

C. A.

1910

STUBBS

v.

SLATER.

CozensHardy M.R.

form. It says "We beg to advise continuation on your account
of the undermentioned stocks, subject to the rules of the London
Stock Exchange." Then it states that the shares were bought
for such and such a day and sold for such and such another day,
and it gives the prices, and then there is this charge of “84d.
net." The plaintiff admits that his attention was called to this
item. The evidence shews that the word "net" is really a technical
term on the Stock Exchange. The plaintiff asked no question
as to the meaning of the term. What then does it mean? I
understand the word to mean that nothing more will be charged
than this 8d. net. The plaintiff was not a babe in arms in
respect of Stock Exchange transactions. According to his own
statement he had had on more than one occasion what he calls
a flutter on the Stock Exchange, and he probably knew what
contango meant; but he says he did not know the meaning of
the term "net." I think the true view is that this sum "83d.
net" consists of two items, first, the contango charged by the
jobber, and, secondly, the broker's remuneration.
When once

you arrive at the conclusion that in all reasonableness the
brokers were to be remunerated for their services and that
there was no express contract with the plaintiff as to their
method of remuneration, I fail to see here any hidden or secret
profit within the meaning of the cases.
I think there was no
breach of duty on the part of the defendants in claiming
remuneration for their services in carrying over the shares.
The idea that they were to carry over during all this period for
nothing appears to me to be quite unreasonable, and, if it were
necessary, I should be prepared to hold that by using this
Stock Exchange term "net," which asserts that the broker's
commission as well as the contango is included in the charge,
the defendants were not in any sense claiming a secret commis-
sion, but were merely using language appropriate to the Stock
Exchange in claiming this remuneration. But it is not necessary
to proceed on that footing. Ex concessis the brokers were
entitled to some commission. There was here no express
agreement as to the amount of the commission. What then?
It follows that they are entitled to a quantum meruit. The
plaintiff does not allege that the amount charged is otherwise than

C. A.

1910

STUBBS

v.

SLATER.

Cozens

proper as a quantum meruit, and as a matter of fact the amount charged is much less than the half commission which is usually charged in these transactions, and which the plaintiff admitted he had paid on former occasions. There is therefore no ground whatever for saying that the plaintiff is entitled to an order against the defendants for repayment of this 171. odd, the amount Hardy M.R. charged for their commission. I cannot help thinking that Neville J. has been unduly impressed by an entirely different class of cases-cases in which there was such a breach by the agent of his duty as agent that the matter might be properly regarded as a fraudulent transaction. But here the defendants have acted throughout with perfect propriety. The result is that the plaintiff's appeal must be dismissed with costs and the defendants' appeal allowed with costs, and that the action must be dismissed with costs, the defendants to have the costs of the counter-claim. But the plaintiff is entitled to an account of the proceeds of the sale of the 390 shares, if he so desires, at his own risk as to costs.

BUCKLEY L.J. It is logically convenient to deal first with the cross-appeal of the defendants, the stockbrokers. The learned. judge has given judgment against them for 17. odd, that being the difference between the amount which they charged the plaintiff in the continuation notes and the amount which they actually paid to the jobber. The question is whether that is right. The accounts which the defendants rendered to the plaintiff have charged him every fortnight a certain sum (say)

83d. net." That was a sum which exceeded the amount they were paying to the jobber and was a sum charged to cover both the payment made to the jobber and the services of the brokers in carrying over the shares. I understand the word "net " to mean "neat" or exact. If you speak of "net" profits you mean the profits remaining after making all proper deductions. If a tradesman sends in his account and charges so much "net" he means "I am not going to allow you any discount off this; I am not going to charge you any less sum." According to the language of the Stock Exchange it seems that the word "net" is used to mean "I am not going to charge you any more than