Principal and Agent-Broker-Usage of Trade.

The defendant, a Liverpool merchant, employed the plaintiffs, sworn brokers of London, to buy for him a certain quantity of tallow in the London tallow market; the plaintiffs, having other orders, bought in their own name a quantity sufficient to include these orders also, exchanging with the vendors notes for the larger quantity (not specific) but sending the defendant a sold-note, as brokers, for the smaller quantity (not specific); the plaintiffs afterwards balanced and settled various transactions (including this) which they had with the said vendors, and when the time for delivery to the defendant came, bought the requisite quantity of tallow and tendered it to the defendant; the defendant refused to accept because the plaintiffs had made no binding contract between him and the said vendors for the smaller quantity, and the plaintiffs having thereby incurred loss, brought their action on the ground that they were justified in acting as they did by the custom (unknown to the defendant) of the London tallow market for brokers, when they receive an order, to contract in their own names either for the amount ordered or any other amount at their convenience, exchanging notes as above described, becoming personally liable, and balancing as above described, and if the principals refused to accept or deliver, to buy or sell against them and charge them with the loss :-Held, per CLEASBY, B., HANNEN, J., and MELLOR, J., that the plaintiffs were employed to act as brokers only, that the custom turned them into vendors, and that such custom therefore was inconsistent with the employment and not binding on the defendant; but by BLACKBURN, J., CHANNELL, B., and KELLY, C.B., that the custom was consistent with the employment and binding on him; per BLACKBURN, J., because, though the plaintiff's were employed as brokers, the custom only gave an alternative power to dispense with NEW SERIES, 41.-C.P.

privity of contract, the brokers becoming personally liable; per CHANNELL, B., because the employment by the defendant to buy for him, meant as a broker in the London tallow trade, and the custom did not necessarily make the plaintiffs sellers; and per KELLY, C.B., because the effect of the custom was to allow the defendant to sue in the plaintiffs' names, and give him the guarantie of the plaintiffs.

This was an appeal from the decision (reported 39 Law J. Rep. (N.S.) C.P. 290) of the Court of Common Pleas, as to whether a rule to set aside a verdict for the plaintiffs, and enter a nonsuit, should be made absolute or discharged. The matter having been argued before four judges of that Court, two (Bovill, C.J., and Montague Smith, J.) held, that the rule should be discharged, whilst two (Willes, J., and Keating, J.) held, that it should be made absolute, upon which the rule dropped, which for the purposes of appeal from that Court is the same as the rule being discharged. Although the facts material to the decision in the Court below are sufficiently set forth in the report thereof, the division of opinion of this Court also, and the reference to and reliance on the particular statements in the case stated on appeal, make it advisable to set it out in extenso.

CASE.

1. The action was brought to recover damages alleged to have been sustained by the plaintiffs in consequence of the non-performance by the defendant of two contracts for the purchase of tallow which the plaintiffs allege they entered into, for and on account of the defendant.

2. The declaration contained three counts, the first of which was upon an employment by the defendant of the plaintiffs as his agents and brokers, to enter into contracts for the purchase for the defendant, of two quantities of tallow of 50 tons and 200 tous respectively, upon the terms of certain bought notes in the said first count set out, and upon the further terms and conditions that the defendant would accept and pay for the said tallow according to the terms of the said contracts, and would indemnify and save harmless the plaintiffs against any loss or

K

liability they might sustain by having entered into the said contracts for the defendant, and the plaintiffs in the said first count alleged that in pursuance of the said employment, and upon the terms thereof, they purchased the said tallow, and that although the defendant refused to accept and pay for the said tallow, and the plaintiff's thereby became liable to take up the same, and sustained great losses, yet the defendant refused to indemnify the plaintiffs.

The second count of the declaration was on an agreement between the plaintiffs and the defendant that the plaintiff's should sell to the defendant, and the defendant should buy and accept from the plaintiff's the said parcels of tallow respectively upon the term and conditions in the bought-notes in the first count of the declaration set out, and the plaintiffs in the said second count alleged that the defendant refused to accept and did not accept the said tallow, whereby the plaintiffs sustained great loss by losing the agreed prices, and by the tallow being thrown back on their hands.

The third count of the declaration was a common money count for goods bargained and sold, money lent, money paid, interest and money due upon accounts stated.

3. To so much of the first count as relates to the said fifty tons, the defendant pleaded that he did not employ the plaintiff's upon the terms alleged; that the plaintiffs did not purchase the said tallow in pursuance of the said employment and upon the terms thereof; that the sellers were not ready and willing to deliver the tallow, and that by reason thereof the plaintiffs did not sustain any loss; that the sellers did not give notice according to the terms of the bought-notes, and that by reason thereof the plaintiffs did not sustain any loss; that the plaintiffs exonerated and discharged the defendant from accepting and paying for the tallow, and indemnifying the plaintiffs; and lastly, that the plaintiffs did not sustain any loss in respect of the said tallow as alleged.

To so much of the first count as relates to the said 200 tons of tallow, the plaintiff pleaded similar pleas.

To the second count of the declaration

the defendant pleaded that it was not agreed as alleged; that the plaintiffs exonerated and discharged the defendant from the said agreements; that the plaintiffs were not ready and willing to deliver the tallow; and to the money count the defendant pleaded never indebted, payment and set-off.

4. On all these pleas issue was joined, and a copy of the issue marked A is contained in the appendix hereto. (It is, however, unnecessary to set it forth.)

5. The cause came on for trial at the London sittings after Michaelmas term, 1869, before the Lord Chief Justice of the Common Pleas and a Special Jury, and the following facts were proved or admitted

6. The plaintiffs are sworn brokers, carrying on business in the City of London under the firm of Mollett, Bull and Unsworth, and the defendant is a merchant carrying on business at Liverpool. The plaintiffs and the defendant had, previously to the transactions in question in this cause, had several business transactions together in the buying and selling tallow.

7. On the 2nd of April, 1869, the defendant met the plaintiff, Richard Houghton Unsworth, at Liverpool, and gave him an order to buy for him fifty tons of tallow, June delivery, at 46s. 6d., and the same day the said Richard Houghton Unsworth telegraphed to his firm in London to execute the defendant's said order.

8. On the same day the plaintiffs, after the receipt of the said telegram in London, wrote and sent to the defendant the following letter and bought-note

"37, Mincing Lane, 16, Mark Lane,

"London, E.C., 2nd April, 1869. "C. J. Robinson, Esq.,

Liverpool.

"Sir,-We have received a message to buy for your account fifty tons tallow, June delivery, at 46s. 6d., and which we succeeded in doing, since when our market has further improved, and we close 46s. 6d. at 46s. 9d. for April, June, 47s., nearest price June, 46s. for October, December.

"We enclose contracts.

"We are, respectfully,

"Sir, your obedient servant,
"Mollett, Bull & Unsworth."

'London, 2d April, 1869. "C. J. Robinson, Esq.

"We have this day bought for your account fifty tons nett.

"In casks, of St. Petersburgh first sort yellow candle tallow, now and of the brack of 1868-9, at 46s. 6d. per cwt.

"The tallow is to be delivered in warehouse in London, at such time or times as may suit the seller, between the 1st and 30th June next, both days inclusive.

"A written notice containing the ship's name, and the marks and numbers, and where lying, is to be given by the seller, when all or any part is ready for delivery, and the tallow is then to be at the disposal of the buyer. Should any accident arise within the prompt (by fire or otherwise), to the tallow tendered, so as to render it unmerchantable, it is not to be considered a fulfilment of the contract, so far as regards the portion damaged or destroyed.

"The tallow is to be taken at the landing weights, and paid for in ready money on receiving the order for delivery within fourteen days from the date of the notice, if already weighed, or from finishing the weighing, if ex-ship, allowing 2 per cent. discount, and interest at the rate of 5 per cent. per annum, for any amount paid previous to the prompt. The tallow is to lie at the risk and charge of the seller, until the prompt draft, 6 lbs. per cash. Tare, 12 lbs. per cwt.

"Should any objection be made to the quality of the tallow, the same is to be settled by arbitration in the usual manner; but this contract is not to be void on that account.

"If 1869 tallow, 2 lbs. only draft. "Your obedient servants, "Mollett, Bull & Unsworth, "Sworn brokers." 9. On the 28th of April, the defendant sent a further order by telegram from Liverpool to the plaintiffs in London, requesting them to buy 200 tons as follows:

"28th April, 1869.

"Charles Robinson. "Mollett, Bull & Unsworth, London. "Buy two hundred tons tallow, for June, best terms."

And on the same day the defendant con

"37, Mincing Lane, 16, Mark Lane, 'London, E.C., 28th April, 1869.

"C. J. Robinson, Esq.,

"Liverpool.

"Dear Sir,-We thank you for your telegram of to-day, to buy 200 tons of tallow for June, on best terms. Our market opened very good, and soon 44s. 3d. was paid for April, and 44s. 6d. for June, but just before going on 'Change, we received your message, and as there was a temporary dulness, we fortunately succeeded in picking your 200 tons up at 44s. 3d., and now have much pleasure in enclosing contract.

"We trust the market will improve, in order that you may make a profit. We ourselves think there is every sign of it doing so, and tallow bought now will pay.

"The spot demand here is very good, and fully 500 casks, Y.C., done for consumption to day at 44s. 3d. Home tallow is scarce, and the holders of Y.C. tallow will only sell their tallow to the trade.

"For your own information, the holders of the real tallow have not been selling at all. It is true 200 tons were sold at 45s., but it was bought back yesterday at 448.

"There is only one great seller (Rayner), and he owns he is selling on bear account; but don't mention this. We close strong at 44s. April, 44s. 3d. June, and 45s. end of year, buyers all positions. There are orders in our market for June to the

extent of 500 tons or more, at 44s. 3d., not executed. Yours truly,

"Mollett, Bull & Unsworth."

"London, 28th April, 1869.

"C. J. Robinson, Esq.

"We have this day bought for your account 200 tons nett, in casks of St Petersburgh, first sort yellow candle tallow, new, and of the brack of 1868-9, at forty four shillings and three pence per cwt. (Then followed provisions similar to those in the bought-note of 2nd of April.).

"Your obedient servants,

"Mollett, Bull & Unsworth, "Sworn Brokers." 11. Upon the receipt of the abovementioned orders from the defendant, the plaintiffs made purchases of tallow from other brokers in the trade, in the manner hereinafter described.

12. On receiving the defendant's order of the 2nd of April, the plaintiffs entered into a contract with one William Sharman, a Russia broker trading under the firm of Messrs. W. W. Simpson & Co., for. the purchase of 150 tons of tallow, intending to appropriate 50 out of these 150 tons to the defendant's said order, and 100 to another order which the plaintiffs had received from another person, and the plaintiffs made out and sent to the said Messrs. W. W. Simpson & Co., a soldnote and received from them a boughtnote in respect of the said 150 tons, of which the following are copies:

"London, 2nd April, 1869. "Messrs. W. W. Simpson & Co.

"We have this day sold for your account one hundred and fifty tons nett, in casks of St. Petersburg, first sort yellow candle tallow, new, and of the 1868 brack of

1869

at forty-six shillings and six pence per cwt. (Then followed provisions similar to those in the bought note of the 2nd of April.)

"Your obedient servants, "(Signed) Mollett, Bull & Unsworth, "Sworn brokers.

"Brokerage per cent."

sort yellow candle tallow, new, and of the 1868 brack of at forty-six shillings and 1869 six-pence per cwt. (Then followed provisions similar to those in the boughtnote of the 2nd of April.)

"W. W. Simpson & Co. "South Sea House, Threadneedle Street, "London, 2nd April, 1869. "Commission per cent."

order of the 28th of April, the plaintiffs 13. On receiving the defendant's second entered into a contract with Messrs. Rayner & Co. for the purchase of 200 tons of tallow, and into a contract with the said Messrs. W. W. Simpson & Co. for the purchase of 150 tons of tallow, intending to appropriate to the defendant's second order the said 150 tons, and 50 tons out of the said 200 tons, and on the said 28th of April bought and sold-notes were passed between the plaintiffs and the said Messrs. Rayner & Co., and the said Messrs. W. W. Simpson & Co., of which the following are copies.

"London, 28th April, 1869. "Messrs. W. W. Simpson & Co.

"We have this day sold for your account, one hundred and fifty tons nett, in casks of St. Petersburgh, first sort yellow candle tallow, new, and of the brack of

1868 at forty-four shillings and three

1869

pence per cwt. (Then followed provisions similar to those in the bought-note of the 2nd of April.)

"Your obedient servants, "(Signed) Mollett, Bull & Unsworth, "Sworn brokers."

"Bought for account of Messrs. Mollett, Bull & Unsworth one hundred and fifty tons nett in casks of St. Petersburgh first sort yellow candle tallow, new, and of the 1868

brack of at forty-four shillings and 1869

provisions similar to those in the boughtthreepence per cwt. (Then followed note of the 2nd of April.)

"W. W. Simpson & Co.,

"South Sea House, Threadneedle Street,
"London, 28th April, 1869."

at

count two hundred tons nett in casks of St. Petersburg first sort yellow candle 1868, tallow, new, and of the brack of 1869, forty-four shillings and threepence per cwt. (Then followed provisions similar to those in the bought-note of the 2nd of April.)

"Your obedient Servants,

"Mollett, Bull, & Unsworth, "Sworn Brokers."

14. Settlements of transactions in tallow are usually made in London in the months of April, May, and June respectively, and on the May settlement the said William Sharman, trading under the firm of Messrs. W. W. Simpson & Co., as aforesaid, failed, and was unable to meet his engagements. Thereupon the plaintiffs and the said Messrs. W. W. Simpson & Co. having many transactions together outstanding in respect of the sale and purchase of tallow balanced and settled an account thereof, wherein the quantity of tallow sold was set off against the quantity of tallow purchased by the plaintiffs on account of Messrs. W. W. Simpson & Co., whereby it appeared that the plaintiffs had sold between 100 and 200 tons more than they had purchased on account of Messrs. W. W. Simpson & Co.

15. Between the 4th and 31st of May, 1869, certain letters passed between the plaintiffs and the defendant, copies of which, marked B, C, D, E, F, G, and H, respectively, are contained in the appendix. (It is sufficient to say that these were letters asking for and giving information and advice as to the state of the market, and what transactions it was advisable to undertake.)

16. On the 31st of May and the 1st of June the plaintiffs sent to the defendant letters dated the 31st of May and 1st of June respectively, enclosing respectively a notice that they were ready to deliver 117 casks or 50 tons of tallow, in fulfilment of the defendant's order of the 2nd of April, 1869, and a notice that they were ready to deliver 175 casks or 75 tons of tallow, in part fulfilment of the defendant's order of the 28th of April, 1869. Copies of these letters and of these notices marked respectively

I, J, K, and L are contained in the appendix. (It is, however, unncessary to set them forth.)

17. Between the 1st and 8th of June certain letters passed between the plaintiffs and the defendant, copies of which, marked M, N, O, P, and Q respectively, are contained in the appendix. (It is, however, unnecessary to set them forth; they simply related to the question of taking up and of selling the tallow, and the state of the market.)

18. On the 8th of June the plaintiffs wrote and sent to the defendant a letter enclosing a notice that they were ready to deliver 170 casks, or 75 tons more tallow, in further fulfilment of the defendant's order of the 28th of April. In the same letter the plaintiffs enclosed two invoices, one dated the 7th of June, in respect of the afore-mentioned (in paragraph 16) 175 casks of tallow, and the other dated the 8th of June, in respect of the aforesaid (in paragraph 16) 117 casks. Copies of the said letter, notice, and invoices marked R, S, T, and U, respectively, are contained in the appendix. (As to these, it need only be said that brokerage was contained in the invoices.)

19. On the 9th of June the defendant acknowledged the receipt of the said letter and inclosures.

20. On the 10th of June the plaintiffs wrote and sent to the defendant a letter inclosing an invoice in respect of the afore-mentioned (in paragraph 18) 170 casks of tallow. Copies of the said letter and the invoice marked V and W respectively are contained in the appendix. (It is only necessary to say that brokerage was contained in the letter.)

21. On the 14th of June the plaintiffs wrote and sent to the defendant the letter, a copy of which, marked X, is contained in the appendix. (The letter discussed the state of the market, and presumed a remittance was coming.)

22. The defendant having before the 15th of June ascertained that the said Messrs. Simpson & Co. had failed, and had not themselves tendered the tallow, gave notice to the plaintiffs that he would not accept the tallow.

23. On the 15th of June the plaintiffs