December 24, 1906.]
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DOW.
CHINA OVERLAND TRADE REPORT.
427
known to both
own want of understanding. Nay (more, this The clear statement of principle of | The language difficulty duty seems to me to apply not merely to under- liability for the agent's fraud is too contracting parties, and his legal position mast standing the terms and conditions of the often fogged by references to the mister's be that of agent of the plaintiff with contract, but also the subject matter of it. It benefit, without which it is sometimes said his authority to tra slate the terms of the is really useless for Chinamen who enter into liability does not arise. I do not think, alter a contract, which have boon written in contracts with Europeans to rely entirely on careful study of the authorities, that this English by his principal. Applying the what, in the colonial vernacular, is called "my mesus that an actual benefit must have foregoing principles to this new position of the no savvy. In this case this was carried to been received by the master, which might parties, I cannot doubt that if Wing Kee had exce88. A man who has been in the sugar trade be negatived by showing that the contract erroneously interpreted those terms his prin. for 20 years wishes me to believe that he does entered into on his behalf had resulted in a loss. cipal would be liable. And further, I do not not know the difference between beet and cane I believe it to be no more than synonymona se how the notice in Chin se that the English sugar: that he thinks cane sugar is grown in
with "on behalf of " the principal: the words would alone be proof would better the Europe, and that some sugar is extracted, so he contract has been entered into on behalf of the principal's position; for here were Chinese has been told, from rees or timber. The role principal, and therefore for his benefit. There bayers ignorant of what those English terms of "Simple Simons was carried to an extreme do seem, however, to be traces of another and were, and here was Wing Koo, ■ Chinaman, point: and is well that Chinese merchants distinct principle, that a master will be liable sent by the principal to conclude the contract, should understand that the Court gives them for the fraudulent act of his servant, although I have no doubt whatever that the Chinese credit for too much astuteness in their coun-it is outside the scope of his authority, if he buyers would be outitled to look to the mercial dealings to believe in it. Commerce has derived benefit from it; but probably only plaintiff's agent to give them a correct in the East and West would soon come to a to the extent of the benefit. Then there is the translation of the English terms. He must standstill if it were allowed to prevail. This question of the benefit received by the agent. be held to have been sent with that ex- merchant, however, wanted me to believe some- This is clear, that if the fraudulent act press object in view. But Wing Kee did thing more: that he did not understand the has been done by the agent for his
more than this. He deliberately altered the times and seasons of the crops, and its
own purpose or benefit, the principal will not terms of the contract, the terms as he had influence on the sugar market. This was be liable. This is analogous to the cases where translated them, at the request of the defend- more plausible. But from the answers hea coachman has borrowed his master's ants, alleging an authority to do so, which he in gave to the questions I put to him there carriage
and goes for a jaunt on his fact did not possess. Undoubtedly, as Mr. was every now and then a glint upon the OWB. The master is not liable for damage Pollock pnt it, the defendants were negligent dark surface of his ignorance which showed me caused by the coachman's negligence. I do in so readily accepting Wing Kee's statement that, though he might not be conversant with not think, however, this can be stretched that he had authority. But bringing the case all the influences which bear upon the sugar to cover a case where the agent receivas re- into line with the chain of argument I am now market, he knew a great deal more than he chose muneration, whether in the form of commissiou pursuing, in this aspect of it it must fall to be to reveal. I am quite certain that he knew what or not, for entering into the contract on his decided by the general principle of the law as he was doing when he entered into this contract, principal's behalf. One further point should above stated: The agent has exceeded his author- and why he was doing it. On the other hand, be referred to: many of the cises deal with the ity, and the principal is not liable A decision I am bound to add this word of warning to the fraudulent acts of persons who are in the service under the Statut of Frands was referred to- European merchants. The system of com. of the principal, e.g.. by managers of banks. Pleriu v. Downing (1 C.P.D. 220)— which Mr. pradores is so great a practical afeguard that The principle is the same whether the Pollock contended was applicable to this case. it may have induced a feeling of security in agent's service be general or special, but those I am not quite clear on the point; but, in view entering into contracts which perhaps the law cases for the most part go off on the enquiry of the conclusion at which I have already may hardly justify. But the somewhat nice which is peculiar to them, whether the act arrived, it isuunecessary to go into the question. questions which I am compelled to examine in comes within the class of acts which the agent So far as the condition of the English version of this case will arise in cases where the European was authorised to perform; they do not help the contract is concerned, that the sugar was to be has no compradore to fall back upon, and perhaps much in deciding such a case as the present, delivered "as soon as possible," the question, as an unexpected liability will arise. There had been where the authority is to do a specific act, and I pointed out at the trial, is a purely commer another practical form of security introduced the fraud has arisen in the doing of it. The cial one. But there was no serious evidence into this contract-the statement in Chinese enquiry in such a case is much more narrow, and offered to shake that given on this head by the that the English words would alone be proof- must be examined with the greatest care, by the manager of the plaintiff firm. I am satisfied and I shall have to consider how far this can light of the doctrine of Bramwill L. J. in Weir that having regard to that evidence, and the effect the purpose for which it was introduced. r. Bell. As to this I do not think it much consignment having been shipped within 10 I now come to the question of law in issue, as matters whether the fraud is committed against days of the coming of the angar of the new it is essential to the proper determination of the third party or the principal himself: crop upon the market, that condition was amply this case that the principle of law shou'd be whichever way the resulting action raay be fulfilled. Judgment must therefore be for the clear before we 800 whether the facts brought. the underlying principle must be the plaintiff, with costs. come within it. Udell v. Atherton, which
same, I now come to the facts. Take first the is more often quoted wrongly than rightly, on account of the very mis. leading headnote in Harlston and Norman's reports, decides the negative proposi- tion that a principal is not liable in an action for deceit for the fraud of his agent if it was beyond the scope of his authority. This was laid down by the so-callel dissenting Judges, whose opinion however prevailed to maintain the non-suit, the rule for a new trial being discharged. With the greatest respect it is very difficult to appreciate what the true proposition is which the Chief Justice and Wylde J. really laid down. It seems to me batter to take the law as stated by Willes J. in Barwick's Cise, which is really the leading case on the subject, as the foundation of the law as to the principal's liability for the fraud of his agent and this, as already considered in a recent case, I take to establish the following proposi- tion: The principal is not liable because he has put a person in the position of agent which enables him to commit frauds: for any agent may commit any fraud, and there would be no limit to the principal's liability: but because he has authorised him to do certain acts, which acts he has done fraudulently. Then in order to preserve the time-honoured reference to Udell 7. Atherton, we may take it to be an illustration of the kind of excess of authority which will absolve the principal from liability either in tort or in contract. In order to put the matter on
the firmest possible basis, I think nothing could be more lucid than Bramwill's L.J.'s statement of the law in Weir v. Bell (3 Ex. D. at p 245), which i shall adopt "Every person who authorises another to act for him in the making of any contract, undertakes for the absence of fraud in the execution of the authority given, as much as he undertakes for its absence in himself when he makes the contract." There are other inci- dental points which it will be as well t♬ deal with
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But
simple case:-Wing Kee, the plaintiff's broker, WOS instructed to enter iuto preliminary negoliations with Chinese buyers of sugar. Ha establishes relations between such a merchant and his principal. Now, if the contract had been then and there concluded, and Wing Kee had caused it to be concluded with erroneous conditions included in it, I cannot doubt that his principal would be liable, on the s mple application of the rule in Weir v. Bell. those are not the facts in the present case, Haring brought the plaintiff and defendant together Wing Kea was given specific instruc- tions to cuclude the contract with the defendant 88 written down од the contract note by the plaintiff. This term i more accurate than enter into the contract," aud, as will be seen, something turns on it. Now, in an ordinary case between two English firms, if an agent were to take a contract written out by his principal to the other party, and were as the result of conversations to alter a term of it, alleging that he had authority to do so, which he in fact had not, the principal would not be liable. His character of broker has vanished: his employment is only to take a written contract from his principal to the other party for signature: that party accepts his statement that he has authority to vary it. If he makes no further enquiry, he must accept the evident excess of authority at his owa risk, and if it is ia fact beyond the scope of his authority the pria- cipal could not be held liable within the principle now under discussion. But here the language question comes in, aud it is at this point that the case assumes sach importance to the com. munity. Wing Ke has ceased to be broker; but his position differs from that of the agent in the case just cousidered. He is something more than a mere agent employed to get a contract duly prepared by his principal signed by the other party; he has a new capacity, that "of interpreter of the terms of the contract.
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On the application of Mr. Slade, his Lordship granted a stay of execution, pending appeal, until January 3rd, 1907.
Tuesday, December 18th.
IN BANKRUPTCY,
BEFORE SIR FRANCIS PIGGOTT
(CHIEF JUSTICE).
CHUNG SHUN-KOO'S AFFAIRS, Ra Chung Shua-koo ez parte Sam Che-chuen Mr. H. W. Lookor (of Messrs. Deacon Looker and Deacon) appeared for the Officia 'rustee and Me. Ho Tang, while Mr. M. W Slade, instructed by Mr. F. X. d'Almada e Castro appeared for certain creditors whose claims were challenged.
Mr. Looker stated that the Trustee advised, as the estate was not a very rich one, that he would not be justified in employing counsel any longer. His Lordship would remember that in one of his judgments he directed the Trustee to call a second moeting of creditors. At the original meeting a scheme was put forward which differed in certain respects to the scheme subsequently put forward by the debtor and creditors. The chief point of difference was that in the original soueme dealt with at the first mesting, a sum of money was proposed to be put at the disposal of the estate by the debtor's brother. In a later scheme it wa proposed to sell the equities of redemption which his Lordship subsequently held were attached by Ho Tang. His Lordship having held that Ho Tang was entitled to the beneất of the execution regarding the properties, the solicitors in the case were written to and asked if, in view of his Lordship's judgment, they were prepared to persist in the scheme. Messrs. Johnson. Stokes and Master wrote-=-=- We think that having regard to the Chief Justice's decision the scheme proposed on
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