The result has proved equally advantageous to his principal. If this custom is to be upheld, it will be equally binding on a person who may find himself without any other principal to look to, and with only an insolvent broker to be responsible to him. It is not difficult to conjecture how the vicious practice sought to be justified as a custom has grown up. If a broker is at liberty to buy in large quantities, and sell to his principals in small, this, doubtless, facilitates the earning of his brokerage, and so the more readily to do this, and to save himself the trouble of negotiating separate contracts, he sacrifices the interest of his principal, which is to have the security not merely of the brokers but of another principal. case to which this has been likened of a merchant abroad buying of several persons and shipping to his correspondent in this country, charging a fixed commission on the price paid, is not parallel. That is not the business of a broker, but a business of a totally different character, well known as that of a commission merchant. The business of such a merchant is not to negotiate a contract between his correspondent and third persons, and therefore differs from the employment of a broker in the essential point on which, as it seems to me, the determination of this case depends. For these reasons, I think that the judgment of the Court below should be reversed. 66 MELLOR, J.-I propose to confine my observations on this case to one transaction only, as it raises the question upon which our decision must turn. The defendant, who is a merchant at Liverpool, on the 2nd of April, 1869, instructed the plaintiffs, who are sworn brokers carrying on business in London, to buy for him 50 tons of tallow, June delivery, at 468. 6d., who on the same day by letter informed the defendant that they had succeeded in buying for 'his account" 50 tons of tallow, and enclosed in such letter a formal bought-note, beginning as follows: "We have this day bought for your account 50 tons nett, in casks, &c." and signed "Mollett, Bull and Unsworth, sworn brokers." The plaintiffs, who had other orders from other customers, bought several lots of tallow in their own names, with the intention of distributing and appropriating them to their various customers in proportion to their several orders, but there was no sold note between the plaintiffs and their sellers corresponding to the bought note sent to the defendant, and no such purchase as therein represented was in fact made by the plaintiff's for the defendant. The 50 tons were not delivered, nor did the sellers deliver any tallow to the plaintiffs, but the practice was to write it off in a general account between the plaintiffs and their sellers, upon which a balance was struck and the plaintiffs paid or allowed or set off any difference occasioned by the state of the market. It was admitted in the argument before us that the effect of this mode of dealing by the broker was to deprive the defendant of all resource against the seller in case of non-delivery of the tallow, and threw him entirely upon the responsibility of the broker; and it was further admitted that unless the custom said to exist in the tallow trade in the London market authorised the plaintiffs to make the contract which they actually made for the defendant, he was not bound by it. It is clear that the defendant employed the plaintiffs in the character of brokers only, and it was incompetent for them, as it appears to me, to enter into any contract for the defendant, the effect of which was to convert themselves into sellers, and thus deprive the defendant of the responsibility of a principal. The plaintiffs professed to act as brokers only, and in that character charged the defendant with a commission for so acting. A merchant may well trust to the skill and integrity of a broker to make a contract for him with a solvent principal, whilst he may be indisposed to trust to his (the broker's) own solvency. It was, however, contended that the universal practice of the London tallow trade must be taken as incorporated with the authority given by the defendant to the plaintiffs as such brokers. The statement of such custom or practice is to be found in the 29th paragraph of the case, and if it is to be taken as incorporated into the authority given by the defendant to the plaintiffs, it no doubt authorised them to purchase any quantity of tallow in their own names, making themselves thereby responsible to their sellers, and in appropriating to each of their customers the quantity of tallow necessary to satisfy his individual order. I quite agree that the custom or practice of a market thoroughly established must bind a person who authorises a broker to make a contract for him, although the custom is in fact unknown to him so far as it regulates merely what is done in the market, and applies to the mode of the performance of the business for which the broker is engaged, but I think that no usage or custom of a market unknown to the principal can enable the broker to change his essential character and become himself the real seller, and deprive his principal of the responsibility of a seller. I have already observed that the principal may have confidence in the skill and experience of his broker and yet have none in his solvency. In the present case there was no ratification of the broker's authority, and therefore unless the custom can be read into the original authority, there was no contract binding upon the defendant. It is said that it cannot matter to the defendant how or from whom the tallow is procured, provided he obtains the delivery of that which he instructed the broker to purchase. That might be so if in fact the broker was able to insure the delivery of the tallow pursuant to the contract, but the defendant, as it appears to me, was not bound to accept the broker's sole responsibility for such delivery. Had the broker written to the defendant and informed him of the custom or practice of the trade in London, it is probable that the defendant would not have objected to have his order placed according to such custom, notwithstanding that it did not give him the responsibility of a seller, but the brokers did not do that, and in fact represented that they had bought on the defendant's account the 50 tons of tallow in question. I think that the true limit of the effect of a practice or custom of a market with respect to such transactions is that stated by my brother Willes in delivering the judgment of himself and my brother Keat ing, in the Court below, and I fully concur in that judgment. I ought to say that the case of Bostock v. Jardine (1), which was cited by my brother Willes, and in a manner relied upon as an authority in point, is misreported in the 3rd volume of Hurlstone & Coltman's Reports, but appears to me to be more accurately reported in the 34th volume of the Law Journal Reports, Exchequer. It was tried before me at Liverpool, and I have referred to my notes and find that no question was put to the jury, but that I directed a verdict for the plaintiff, giving the defendants leave to move to enter a verdict for the defendants, or a nonsuit, upon which it appears that the Court of Exchequer granted a rule which was afterwards discharged, and the case is only an authority for that which was conceded in the argument, viz., that without the aid of the custom, no contract binding the defendant was made in the present case. I am of opinion that the rule to enter the verdict for the defendant should be made absolute. BLACKBURN, J.-This was an appeal from the judgment of the Court of Common Pleas, which was argued in the sittings after Trinity Term, before the Lord Chief Baron and my brothers Channell, Mellor, Hannen, and Cleasby, and myself. At the trial, the verdict was entered for the plaintiffs, subject to leave to move on grounds which we must take to be accurately set forth in the case before us. A rule was granted in the Common Pleas, on the argument of which it appeared that Bovill, C.J., and Montague Smith, J., were of opinion that the rule should be discharged, and Willes, J., and Keating, J., were of opinion that the rule should be made absolute. The Court being equally divided in opinion, no judgment was pronounced, but the rule was discharged and the verdict stood, and now the question is brought before this Court on appeal. The opinions of the judges below are reported in Mollett v. Robinson (12). After a good deal of consideration, I have come to the conclusion that the verdict found for the plaintiffs is right, and should not be dis (12) 39 Law J. Rep. (N.s.) C.P. 290. turbed. The great question in the case is whether the orders given by the defendant to the plaintiffs to buy tallow for him, are to be understood as incorporating the customary terms, and so as to give the plaintiffs authority to act in the manner which the jury have found to be the established custom of brokers in the London tallow trade. We in the Court of Appeal must act on this finding as true and treat them as being really the customary terms. If the orders are to be understood as incorporating these customary terms, the plaintiffs have pursued their authority, and there is no difficulty as to the pleadings. For I apprehend that where a person acting at the request of and in pursuance of an authority given by another has incurred a liability, and has in consequence been before action obliged to pay money in discharge of that liability, he is entitled to have that money repaid to him, and the count for money paid is a proper count under which to recover it-Brittain V. Lloyd (13). The orders are set out in the 8th and 9th paragraphs of the case. They are not requests to the plaintiffs to sell tallow to the defendant, but are expressed to be orders to the plaintiffs to buy tallow for the defendant, and a discretion is given to the plaintiffs to fix the price, which would be quite inconsistent with the plaintiffs being themselves the vendors. Those orders were given to the plaintiffs in their character of brokers, and they especially call themselves brokers when acting in pursuance of their orders, and they charge commission as brokers. I do not attach so much weight to the use of the word "broker," but I think the discretion as to the price and the charge of commission are conclusive to shew that the orders were given to the plaintiffs, intending them to act, not as principals, but as agents for the defendant, and middlemen and negotia. tors, which is the thing which is meant by the word "broker." Prima facie, the legal effect of accepting such orders is that the plaintiffs were employed by the defendant on the terms that they should (13) 14 Mee. & W. 762; s. c. 15 Law J. Rep. (N.S.) Exch. 43. perform all the ordinary duties of brokers, and have all the ordinary authority of a broker. But this is only prima facie. The terms on which the parties deal may be varied, so as to impose on the brokers duties and liabilities, and give them powers beyond those which would be implied by law from the employment, or so as to relieve them from some of the duties which would be otherwise imposed on them. And this may be either by express agreement between the parties, or by the force of a custom of a particular trade, tacitly incorporated as part of their agreement. For if it is perfectly well known that those engaged in a particular trade are always understood to deal on certain terms, the employment, unless there is something to shew the contrary, is to be taken to be, by the agreement of the parties, on the customary terms, though they were not expressed. This is in conformity with the maxim, "In contractibus tacite veniunt ea qua sunt moris et consuetudinis." Pothier, in his Traité des Obligations, Partie 1, sect. 1, art. 7, § 95 (Tom. 1, p. 52, Dupin's ed. 1827), expresses the same rule thus: "On sousentend dans un contrat les clauses qui y sont d'usage, quoi qu'elles ne soient pas exprimeés.' And this tacit variation of the terms from those which would otherwise be implied by law, has the same effect as if it was express. The great question in the present case is, whether there is enough to shew that the customary terms are not to be tacitly incorporated. In the judgment of my brothers Willes and Keating below, it is said to be "an elementary proposition that a custom of trade may control the mode of performance of a contract, but cannot change its intrinsic character." To some extent I agree with this. If the terms are such as to be inconsistent with the nature of the employment, so that if they prevailed they would change its nature altogether, I think they should be rejected. In such a case, if the employment and the terms were expressed at full length beside each other, there would be an apparent contradiction and incongruity. As for instance, if an order was given, "Act for me as my agent, to buy for me and receive commission from me for your services as such agent, on the terms that you are neither to have the powers, nor perform the services, nor be subject to the liabilities of an agent, but shall be subject to the liabilities and have the rights of a vendor," there would be a patent contradiction on the face of the order. If this was all expressed it would be a question of construction whether the order was to be considered void for uncertainty, or whether the expressed terms were to prevail, though the effect would be that the relation between the parties would not be that of principal and agent at all. The duty of the Court is to construe "ut res magis valeat," and therefore generally in the construction the expressed terms would prevail, though that would have the effect of making the real relation different from the nominal one. But if those terms could only be brought in, because, being the customary terms, they were to be tacitly understood, I think it Iwould be different. The maxim, "expressum cessare facit tacitum," would then apply, and if the employment was to be that of an agent, and the customary terms if incorporated would make it, not that of an agent at all, the expressed employment would prevail over the tacit terms, and cause them to be rejected as inconsistent with and repugnant to the express employment. To make my meaning plainer, I will put a case of a trade such as that of a jobber, who sells to any one who comes to him at a fraction above the market price, and buys of any one at a fraction below the market price. If such a person received an order, expressed as if he was for commission to act as an agent to buy for his correspondent, he ought, unless he was willing to act as an agent, to reject it, informing his correspondent of his mistake, and that he was not an agent but a jobber, for I think that if he accepted the order thus expressed, he would incur the liabilities of an agent, however well-known it might be that he was a jobber, and that jobbers did not incur such liabilities. And I think this would be so even though the fraction, which as a jobber he would receive, was in amount the same as the commission which as agent he would receive. If this is all that is meant by the passage I have cited from my brother Willes's judgment, I agree with it, though I differ as to its application to the present case. I have already expressed my opinion that the orders clearly express an intention that the plaintiffs should buy for the defendant, acting as his agent, and receiving pay for his services as such; and if I thought that the effect of tacitly incorporating in the orders the custom set out in paragraph twenty-nine of the case would be to change the relation between the parties from that of principal and agent to that of buyer and seller, so as to deprive the defendant of the services of the plaintiffs for which he pays commission; and more particularly if I thought the effect of the custom was to put the duty which the plaintiffs would owe to the defendant, to obtain for him as good a bargain as was practicable, in conflict with their interest, I should, as at present advised, think that the customary terms must be rejected as excluded by the terms of the employment. I have thought it right to say so, though it is not necessary in the view I take of the case to decide this, for I come to the conclusion that the custom is perfectly consistent with the employment of the plaintiffs as brokers to buy for the defendant, and leaves the plaintiffs under liabilities to the defendant for the due performance of services quite sufficient to be a consideration for the commission, though the effect of the custom is materially to vary both the duty and the authority of the plaintiffs, from that which would be implied by law if no such custom was incorporated. In this I take a different view of the facts from that which seems to have been taken by my brothers Willes and Keating in the Court below. It is therefore necessary to examine what the facts of the case are. The order of the 2nd of April was to buy for the defendant fifty tons for the June delivery. On that day it appears in the eighth paragraph the plaintiffs sent the defendant a formal bought-note for fifty tons, setting out all the terms of the contract and signed by the plaintiffs as brokers. In the twelfth paragraph it is stated that on receiving the defendant's order of the 2nd of April the plaintiff's entered into a contract with W. W. Simpson & Co. for the purchase of 150 tons of tallow, intending to appropriate fifty out of these 150 tons to the defendant's order, and 100 to another order which the plaintiffs had received from another person, and the plaintiffs sent a sold-note to W. W. Simpson & Co. for 150 tons of tallow, in all respects corresponding with the note sent to the defendant, except in the quantity. It is this variance in the quantity that raises the first difficulty, and I agree that but for the custom it would be fatal; but what at present I wish to point out is that there was no breach of the fiduciary relation between the parties, nor anything inconsistent with the employment, which the plaintiffs had accepted, to buy for the defendant as cheap as they could, and the duty which I think is in consequence thrown upon those who accept such an employment, not to put their interest in conflict with their duty as they would do if they were to make themselves the principals, who would profit if the price was higher. Had the plaintiffs obtained the consent of W. W. Simpson & Co. to divide the contract, and had delivered to them two soldnotes, one for 50 tons, and the other for 100 tons, the transaction would have been all regular and binding without the aid of any custom at all. The plaintiffs had not in the least degree more interest in the transaction because the contract was not divided; they would have been liable for the fulfilment of the contract as brokers who did not disclose the name of their principal, as much in the one case as in the other; and in neither case was their personal interest put in conflict with their duty to their employers. manner in which the order of the 28th of April was acted upon is stated in paragraphs 9 and 13. It differs in this, that there were two sold-notes for smaller quantities than the one bought-note, but in other respects it was similar. In this case also there was no breach of the duty imposed by the fiduciary relation between the parties. I am the more anxious to point out this because, as I have already intimated, I should, as at present advised, give judgment for the defendant if I did not think that this was the fact. But though there was not any breach of this The con fiduciary relation, there was an important departure from the ordinary duty of a broker. The ordinary duty of a broker is to make a contract between his employer and some other person; and though the broker may, in consideration of a del credere commission-see Coutourier v. Hastie (14)-or according to the custom of particular trades, in consideration of his not being called upon to disclose the name of his principal-see Cropper v. Cook (15), Fleet v. Merton (16)-incur personal liability to see that the tract is performed, yet the employer has a right to have the liability of the other person as well, and this is an important matter. In the present case, W. W. Simpson & Co. have failed, whilst the brokers (the plaintiffs) have remained solvent, and so the liability of the contractor is not of consequence, but it might very well have been that W. W. Simpson & Co. had remained solvent and the brokers failed. Then the importance of having a contractor bound to the defendant would have been obvious. The person who employs a broker on the terms that the broker is to make a contract for him with another, relies on the skill and intelligence of the broker who is to select his contractor, and who will choose a solvent one, but he has no occasion to inquire whether the broker has enough capital to meet the contracts. Even where the name of the contractor is not disclosed, and the broker is personally liable, it is a great security to have, in addition, the liability of a contractor who, though not named, is, if the broker has done his duty, a person of repute, such as a broker might reasonably trust. Now in the present case there is no contract between the defendant and W. W. Simpson & Co. The defendant could not call upon W. W. Simpson & Co. to deliver him 50 tons of tallow under the contract of the 2nd of April, because W. W. Simpson & Co. had not engaged to deliver any smaller quantity than 150 tons. Nor could W. W. Simpson & Co., if willing to deliver the smaller quantity of 50 tons, (14) 8 Exch. Rep. 55; s. c. 22 Law J. Rep. (N.S.) Exch. 97. (15) Law Rep. 3 C.P. 194. |