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something quite different. He is to give back all that he has received from the beginning, without getting credit for anything which he has paid away. That, no doubt, seems now not to be insisted in; and, indeed, I cannot conceive anything more preposterous. Was it ever heard of that an account was drawn which had one side only to it? At the same time, I have great difficulty in saying that anything less is concluded for. A different plea from any in the summons is now urged, which seems to be this, that the case is to be decided on the principle of melior est conditio possidentis. It is said that Munro was in possession, and, as the contract was quite illegal, he was entitled to retain pos. session, and no one could interfere with that possession. Then the action was brought before the Sheriff, under which possession was given to Howden; and he having got that, the case came to be changed in his favour. But then it is said to be the legitimate conclusion from what was done in the House of Lords, that we are to hold things to be in the same position in which they were before the Sheriff's judgment, and that Munro is still in possession. If you are to reinvert the possession, it may be 80—it may be that we ought to hold that the possession is still in Munro's hands. But then Howden says, You may be entitled so to hold, but there is a part of the property to which Munro is not entitled, that which Munro must have paid if I had not paid it. The pursuer answers, No; the contract was illegal, and the possession was ours; we shall disallow even what you paid to a company debt. Now, first, I doubt as to whether we can try the case at all on this summons, and whether we should not dismiss the summons; but perhaps we need not carry the matter so far. But I cannot see how Howden is not to be allowed anything for what he actually paid. The property was in his hands as a partner; he paid as such; how, then, can it be assumed that he did not pay it out of the company's funds ? Independently of that, I cannot get over the equity of the case, for this was a debt of Munro. If there was no company, Munro was, in truth, the only debtor. It may be that Howden, having dabbled illegally with this business, is liable to the onerous creditors of the company; but surely he can plead, as against Munro, that this was a debt of Munro, which was paid by Howden to Munro's relief; and, on the maxim nemo debet locupletari, if any one pays another man's debt, if he pays that out of debts of his in his own possession, you cannot take that out of his hands, without allowing for what has been so paid, however tortious that possession may have been. On the whole, I think the decision of the Lord Ordinary ought to be sustained, unless we are to go farther and find that the action must be dismissed al. together; but I think it is better to take the ground which thie Lord Ordinary has taken.
Lord Fullerton.-I am much of the same opinion; at the same time, if the defender had chosen to plead the objection to the summons as a reason for not going into the case at all, I should have thought it a perfectly sufficient reason, for the conclusions of count and reckoning are not at all appropriate to the case before us. The summons states that the defender refuses to hold count and reckoning, because he conceives himself entitled to a certain share of the property. Then come the conclusions of reduction, and that the defender is to be ordained to make production and so forth, and to make payment as shall be found due. It is an action calling on him to account for all his intro. missions, not from the date of the account, but for all sums as "shall be found to be due to the pursuer, with the legal interest thereof from the respective terms of the defender's intromissions ;" that is, from the commencement of the partnership. Now, the illegality of the contract is just the reason why he could not be called on to do that. I agree that the proposition of the pursuer's minute is rather too late. I am not inclined to trouble the Court with objections to that conclusion. In the whole circumstances of the case, I am not disposed to differ from the Lord Ordinary. It would be a very hard case were we to hold other. wise. This man had no idea that this was not a legal contract, and he goes on relying on it. The only point the Lord Ordinary has decided is as to M'Leod's debt; but I think he would have been quite justified in holding that he was entitled to retain all the sums he claims in deduction. Howden beld the funds, and he paid these debts; and I think it would be very hard, when he comes to this accounting, that he should not be entitled to credit for what he so paid. For though it was not a binding contract as between the partners, it was perfectly binding as regards the liability of the partners to the public. Nor do I see any hardship on the other side. On the whole, I think there are good grounds, both in equity and in law, for the Lord Ordinary's judgment.
Lord Jeffrey.--I am of the same opinion. I agree with your Lordships that there were originally good grounds for holding that the action was improperly laid, and ought to be dismissed, but I think we may now-though undoubtedly it is an indulgenceallow this minute to amend the summons. Therefore, I am not inclined, after so much expense has been incurred, to turn the pursuer out of Court, and leave him to try the case on the merits in some other form. After so much procedure has taken place, and the other party has admitted his liability under this summons, it is better to wink at the irregularity; and, on the whole, the objection may be held to have been waived by the defender, and passed over by us in respect of this minute. On the merits, I feel considerable hesitation. I think the grounds of our judgment should be, that Howden does not rest his defence on the contract, or the validity of it, but on the broad principle of law and justice, and matter of fact, that he only paid a just debt with funds of the proper debtor placed in his hands for that purpose by lawful authority; and this defence I think irresistible. His plea is, that, de jure and de facto, he was administering in a way which every one then took to be unexceptionable, and that optima fide he made this payment, and is willing to account most strictly for the whole of his intromissions. Then this objection was raised to the legality of the contract, which was decided in the negative by the House of Lords. But the business itself was not illegal. Howden's management was not in mala fide or tortious; it was sanctioned by the judge-ordinary, and was in bona fide. He does not therefore come under the purview of a person knowingly acting illegally. Now, the proper debtor to M.Leod was the conjunct company; the individual partners, if there had been any, were only liable subsidiarie ; and the pursuer himself, in his statement of facts, has chosen very curiously to maintain this very proposition.
That is the nature of M.Leod's claim. Therefore, what injury has Munro, or any one in his right, suffered by being denied access to the funds ? Is not that a debt paid on account of the pawnbroking firm ? That that concern turns out not to be a partnership, is of no consequence. There is notwithstanding a right to attach the preferable funds of the company. This debt was got out of them; and then it is impossible to maintain in foro poli that the proper debtor should have it paid, a second time, to him. Then Howden says to the trustee, you should pay something towards this from Munro's estate ; and the trus. tee's only argument is, that he has no funds. But no such statement was made then as is n ade now, that the contract was not legal. Then the Sheriff puts him in possession of funds, but still he was only the administrator of them. None of the principles stated in defence are in the least applicable to the circuinstances.
Lord Justice-General. Since the objection to the competency did not strike your Lordships formerly, and more particularly, as the defender himself has not stated it, I think, on the whole, it would be better not to go back on it now. Therefore, the only consideration now is, whether the interlocutor under review is right; and, on the same grounds as those already stated by your Lordships, I am for adhering. The defender says, I paid this debt, but it did not belong to me only, and I was compelled to pay it. In my opinion, the Lord Ordinary has done nothing but justice, and Howden is entitled to take credit for this payment. I think there are good grounds, both in equity and law, for the decision.
The Court adhered. Lord Ordinary, Robertson.- Act. Deas, Shand; Shand and Farquhar, W.S. Agents.- Alt. Dean of Faculty (M'Neill), More; Pollock and Stewart, W.S. Agents.-L. Clerk.-W.G.T.]
5th December 1849.
way shares instructed his broker, on 3d March, to sell them next day at the highest market rate, “if the market was languid, and not likely to go up.” The broker sold on 4th March at 178. 6d. premium, subject to the approval of his employer, to whom the sale was intimated. Before receiving the scripholder's answer to this intimation, the broker cancelled the burgain, and concluded a new sale on the same day, to the same purchaser, at 208. premium--that
being shown by the evidence to have been the highest market rate at that hour of the day, without any likelihood of a farther rise. The stock, however, did rise in value that evening, and for some months following. The scripholder having repudiated the transaction, and refused to deliver up his scrip so as to enable the broker to fulfil his bargain with the purchaser-Held that the conditional sale at 17s. Ed. did not exhaust the broker's mandate ; but that the unconditional sale at 20s. was covered by it, and was
therefore binding on the scripholder. Agreement-Non-Implement-Damages—A broker sold fifteen
shares of railway stock on 4th March. His employer wrongfully failed to deliver his scrip so as to enable him to fulfil his bargain with the purchaser. On 9th July, following, the purchaser bought, at the then existing market rate, fifteen shares of the same stock, which had greatly risen in value during the interval, and debited the broker with the difference. The broker having paid il-Held that the full sum so paid by him was the proper measure of damage as between him and his employer—the purchaser having refrained from “buying in” at an earlier period (when the stock might have been obtained at a lower rate) at the request of the broker, who had been induced to rely on his employer's proposals for a compromise.
On 3d March 1845, the defender, who beld scrip for fifteen shares of the Glasgow, Barrhead, and Neilston Direct Railway, instructed the pursuer, who was a stockbroker, to sell the shares on the following day, at or about the highest market rate that could then be obtained, provided the market was "languid, and not likely to go farther up."
On the following day, there were, as usual, two meet. ings of the Glasgow Stock Exchange, one at 11 in the forenoon, and the other at 3 in the afternoon. During the interval between these two meetings, the pursuer sold the defender's fifteen shares, at 17s. 6d. premium, to James Brown, subject to the defender's approval. He immediately sent the following note to the defender :-
“Dear Sir-Send me your fifteen Barrheads. I sold them at 178. 6d. premium this morning."
Before receiving the defender's answer, the pursuer, between 2 and 3 o'clock in the afternoon of that day, cancelled the former sale, and agreed to let James Brown have the shares at £3:10s. each—that is to say, at a premium of 20s. per share. He then received from the defender the following answer to his note :
“I have heard that Barrheads are selling at 25s. premium, and as my instructions to you were only to sell if the inarket was languid, and not likely to go farther up, I must have an explanation before sending up the scrip.”
The pursuer replied as follows on the same day : “ All I can say is, that I offered your Barrheads this morning at 20s.--was offered 15s., and said I would half the difference if my party agreed ; so if you don't agree I will get 20s. as bargained for. Will this please you ?”
The defender refused to deliver up his scrip, so that the pursuer was unable to fulfil his agreement with James Brown. As the value of Glasgow and Barrhead stock continued to rise, Brown threatened to " buy in" against him--that is to say, to buy fifteen shares at the increased market rate, and debit him with the difference. The pursuer communicated these threats to the defender, who proposed a reference to other stockbrokers. Negotiations continued between the parties for a reference of the matter in dispute, during which Brown refrained from “buying in" at the pursuer's request. The exact date at which these negotiations were broken off did not appear. On 9th July, Brown bought fifteen shares at £11:17:6 per share, the market rate on that day, being a difference of £8:7:6 per sbare in excess above the rate at which he had bought them from the pursuer--in all, £125 : 12:6.
The pursuer having paid this sum to Brown, raised an action before the Sheriff to recover it from the defender, together with 78. 6d. as brokerage on the transaction.
The defence was, that the sale to Brown at a premium of 20s. was beyond the pursuer's mandate - Ist. Because, in point of fact, at the time the transaction was closed, the market was not "languid, or unlikely to go up,”---a much higher premium than 20s. having been obtained by various parties in the course of that day; 2d. Because, in point of law, the pursuer's mandate was exhausted by the conditional sale at 17s. 6d. premium, so that the subsequent sale at 20s. was withi out authority from the defender.
With regard to the question of fact, it appeared from the evidence that, on 4th March, when the sale at 20s. was concluded with Brown, no sale at a higher rate had been effected, and only one sale at that rate had taken place, although much higher rates were obtained at the afternoon meeting of the Stock Exchange. It also appeared that the pursuer had a reason to antici. pate this rise at the moment when he closed the transaction in question,
The following rules of the Glasgow Stock Exchange were referred to in the argument:
15. “ All members of the association shall be individually responsible for the due fulfilment of their respective contracts with each other, if the principals are not named within four days from the date of the contract.'
19. “ The shares not delivered within ten days after the sale may be bought in against the seller, provided the purchaser gives a written notice of such his intention to the seller, not less than four lawful days previous to such repurchase, and all loss incurred thereby shall be paid by the sellers.”
The Sheriff-substitute (Skene) assoilzied the defender; but the Sheriff (Alison) altered the judgment, and decerned in terms of the libel.
In an advocation at the defender's instance, the Lord Ordinary pronounced the following interlocutor:
" 20th July 1848.—The Lord Ordinary having resumed consideration of the closed record and minutes of debate, relative minutes, list of prices-current therein referred to, proof, productions, and whole cause, finds it admitted by the defender that, on the 3d day of March 1845, he generally authorized the pursuer to sell the railway shares in dispute next day, at or about the highest market price that could then be obtained, with this explanation, that the said authority was accompanied by the qualification, if the market was languid, and not likely to go farther up: Finds that the defender did, accordingly, on the following day, sell said shares at a premium of 20s. per share, and that this sale was effected between the hours of two and three P.M., at which time, as appears from the proof, no sale at a higher rate had been effected by any one, and only one sale even at the same rate : Finds that, although somewhat later in the day, and at the afternoon meeting of the Exchange, which took place not earlier than three o'clock, there does appear to have occurred a start in the price of said stock, and perhaps a greater activity generally in the market, it has not been proved (but rather the contrary) that this was either known or anticipated at the time of the pursuer's completing the sale aforesaid for behoof of the defender; and, therefore, on the whole, as there is no imputation against the pursuer's good faith, and keeping in view the discretion necessarily implied in the somewhat vague terms of his employment as admitted, finds that the said sale was suficiently covered by the mandate or authority under which he acted: Finds that there is nothing in the circumstances connected with the previous conditional sale proposed to have been gone into, at a premium of only 178. 6d. per share, to vitiate or render invalid the said subsequent sale at a premium of 20s., or to with draw or cancel the authority under which the pursuer malle the saine: Finds, accordingly, that the defender was bound to have at once enabled the pursuer to implement the sale so made, by transmitting the scrip when demanded, and that, having refused to do so, he is liable for all the legitimate consequences of the breach of contract entered into in his behalf; and, as regards the measure of this damage, finds that the pursuer having made the defender aware of the deinand for delivery made upon himself by the party to whom he had sold, and of the notices from time to time given by that party of a purpose to buy in as against him, and the defender having neither taken any steps to enable the pursuer to answer the said demand, nor directed the pursuer to close with any of the said proposals to buy in, but, on the contrary, having held off and left the pursuer to protect himself as he best could until the 9th day of July 1845, when at last stock to the necessary amount was bought in by the said purchaser at a premium of £11:7: 6 per share, the Sheriff has properly assumed this rate of premium as the proper and regulating element in fixing the amount of damages: Therefore, upon the whole, repels the reasons of advocation, and reinits the cause simpliciter to the Sheriff: Finds expenses due, and remits the account thereof for taxation by the auditor.
“ Note. The only point in the interlocutor which may require perhaps an additional word of explanation, is that which regards the date at which the damage has been fixed. Now, on that head, it has weighed very much with the Lord Ordinary, that the question here arises, not as between buyer and seller, but as between principal and agent. In the former case, where å party having the price still in his own hands, has only to go to the market to supply himself from another quarter with the article as to which there has been a failure to deliver, it may (in many instances) be held that the date of this breach of contract, or at least as soon thereafter as the party miay reasonably be supposed to have had it in his power to make a new purchase, is also to be taken as the proper date for fixing the damage. Even as to this, however, the Scotch and English authorities are not entirely at one. But in a question not between buyer and seller, but between principal and agent, the latter, where he sells for his employer, has no funds in his hands with which to go to the market, and is, besides, not bound to lay out his own mea order to provide against his principal's failure to deliver. In such a situation, therefore, the latter has himself to blame if he do not in his own person come forward; and if he leave his agent liable to damages, he must just be content to indemnify such agent from whatever extent of injury the latter actually suffers. In some peculiar cases, where the principal takes his ground at once, and, absolutely repudiating his agent, gives the latter to understand that he is determined at all events not to deliver, it may occasionally offer itself for equitable consideration, how far the agent would afterwards be justified in applying for indulgence or delay on his own account. And it was with a view to some such possible shape of the question that the Lord Ordinary formerly ordered minutes as to the precise date when the parties here broke off their negotiations for a reference, &c. The con. tradictory statements, however, made by the parties, leave this matter quite as wide as before. And the Lord Ordinary has, in consequence, been compelled to seek elsewhere for more satisfactory grounds on which to go. Now, 1. He is satisfied, from the whole real evidence of the case, that the defender's statement is not a candid one. 2. He finds it proved by the witness Baird that it was not until the 15th March (the day after the defender says all treaty for a reference was broken off') that the document No. 36 of process (see the date indorsed) was placed in Baird's own hand, expressly with a view to negotiations on the point. Then, 3. Baird adds that the negotiations and communings were continued for a considerable time. Putting all this together, the Lord Ordinary has arrived at the conclusion, that there is nothing from which he can satisfactorily or legitimately presume that matters were brought to a point at any date earlier than the 9th July, when the shares were actually bought in. And so concluding, he has of course seen no reason for altering the Sheriff's interlocutor, which adopts this as the ruling date for deciding the question.'
The defender and advocator reclaimed. At advising,
Lord Medwyn.—The point for consideration is, whether the Lord Ordinary's interlocutor is well-founded, which finds that the sale of this scrip at 20s. was sufficiently covered by the mandate to sell ; and whether the circumstances of the conditional sale at 17s. 6d. cancelled that authority, or rendered the sale invalid. Now, the case presented to the Lord Ordinary was one which naturally called for a careful examination of it. The Sheriff-substitnte and Sheriff-depute had differed in the views
they took of this case, and the Lord Ordinary, on consideration of it, adopted the view of the Sheriff. He states so in his interlocutor of 26th November 1847, and gave out a draft of the interlocutor he would have then pronounced, if he had not con. curred in the wish of both the parties, to exhaust the case by a single interlocutor, disposing of the other point also, as to the quantum of damage. Accordingly, he does so in the interlocutor 20th July 1848, remaining still of his opinion on the main point of the case. This is obviously a well considered judgment, and I am now called upon to see if anything has been shown to us that leads to an alteration of it. There is no dispute as to the instructions by the defender for a sale next day, at or about the highest market price, if the market was not likely to go up. This authorized a sale at the forenoon Exchange. A sale was made before the afternoon Exchange, between two and three o'clock. Now, we must place ourselves exactly in the situation of the pursuer when he made this sale, and not consider even the subsequent events of that day, still less the state of the market which occurred afterwards. Now, I think it proved that the highest price got that forenoon was 20s., and that there was nothing to indicate that the market would rise. No party anticipated at that time the event which came to be known in the afternoon, and affected subsequent prices so much. The 4th March was the day the pursuer was to fulfil the instructions of the defender. Mr. Brown called upon him about half-past one, and wished to buy the stock. The one asked 20s.--the other first proposed 15., and then agreed to give 178. 6d., without any condition. The pursuer sent his boy with the note, which is first of the correspondence, to the defender. Brown remained in conversation with the pursuer, and then he stipulated with Brown that the sale at 178. 6d. was to be conditional, and only if the defender was satisfied with that price. Brown returned between two and three o'clock. The pursuer mentioned that he had received no answer from Dickson. Brown then agreed to give 20s., and the bargain was concluded at that price. Before coming to the farther correspondence which took place between the parties, was there anything, in having referred to the defender whether the conditional price of 17s. 6d. would satisfy him, to prevent the pursuer, when he had not received any answer, to sell it at 20s., the highest price of the market that day, there being only one other sale effected at that rate? I cannot say that I see any. There is no doubt that, if Brown had agreed to give the 20s. at the first meeting, the sale would have been good, in accordance with the instructions. Now, how should the condi. tional sale at a lower rate, which was departed from by the parties for the one at the higher terms, prevent the pursuer from operating on his instructions? He thought it prudent to ask if an inferior price would be satisfactory-he received no answer, and therefore very properly did not close on these terms; but, holding that no answer might imply that it would not be satisfactory, he took the highest market price, clearly within his instructions, supposing he had at once got that price. lle referred nothing to the defender-but would 178. 6d. do. He did not refer generally at what price he should sell; he had no occasion for further instructions, nor asked for them, except as to the 175. 60.; and if he did not act on the conditional sale at that price, both parties holding it given up, there was nothing now, when this was out of the way, to prevent him acting, provided he sold at or about the highest market price, especially as that was a higher price than the conditional one about which he had . consulted his employer.
Now, the only awkwardness arises from the correspondence which took place between the parties, especially the third letter, as printed. In answer to the first note, which was quite accurate when sent to the defender, as the condition was not then men. tioned or agreed to between the parties, the defender declines to send the scrip, as he had heard it had been sold for 25s. This turns out to have been a mistake; he had been misinformed ; but it is the first of the blunders which occurred regarding this transaction between the parties. In reply, the pursuer writes the third letter of 4th March. It is far from a distinct or businesslike letter, and at different times I have been inclined to put different constructions on it. But seeing that there is nothing to satisfy me that there was any want of good faith on the part of the pursuer, and indeed no imputation of such against him, I think it was intended to convey, although it may not have done so to Dickson, that he could get 20s. for him us bargained for; this may apply either to what Dickson bargained for when he gave the pursuer authority to sell, or to the bargain he had made with Brown. This last is the only bargain, pro
perly so called, that was made about this scrip. I do not think it meant to put the bargain at 20s. in the option of Dickson. I cannot read it so, as the bargain was then fixed at 20s. with Brown. I do not know on what sort of terms the pursuer and defender then were ; if they were on a very familiar footing, I would say that, instead of writing to him a business letter to say that he had no occasion to ask for his approbation of 175. 6d., as he had now bargained with the purchaser for 20s., the highest market price, he wished rather to give him a surprise, so that, whether he should say he was satisfied or not satisfied, he would then be able to say he bad actually got for him 20s.—will that please you? It is unlucky, I must think, that the letter did not state this more explicitly, because I think that, if Dickson had become satisfied that he was mistaken in supposing that any higher price than 20s. had been got before the afternoon Exchange, he would have been satisfied with the 20s. But I believe him when he says that it was not till Brown's letter of 5th March to the pursuer, which the pursuer sent to him enclosed in his own of same date, eleven A.M., that he learned that the sale was made at 20s. I cannot hold that the pursuer had no authority to sell at 20s., although Dickson may have thought so, as appears by his letter of 5th March he did, when he thought stock had sold at 25s. This false information probably made him niisunderstand the letter of Henderson, and think he referred the price of 20s. to him also. The market was then rising ; Brown would not give up the bargain; and the same reason induced Dickson to refuse to implement it. The pursuer, in his subsequent letter at four P.M., again informs him of the sale at 20s.; although he is incorrect in saying it was after receiving Dickson's answer to the first note, which Dickson says was not written till a quarter to four of that day. Now, from these two letters there is no appearance of any intention to conceal the bargain he had subsequently made at 20s. On the contrary, they are in accordance with the proof as we have it from Brown in his oath, and the letter which he writes to the pursuer on 5th March, half past 10 A.M. I see nothing in the pursuer having applied to Brown to give up the bargain, since Dickson thought they had been sold at an under price. This was quite natural, and would have been the most satisfactory way of getting rid of what was now becoming a very disagreeable, and, it might be, a very expensive discussion. I cannot see grounds for altering this part of the interlocutor.
Lord Moncreiff.--I am of the same opinion. I think the bona fides of the transaction manifest throughout. The broker was authorized to sell at any price he could get between 15s. and 20s. premium, provided the market was languid. When Brown offered to buy from him the fifteen shares at 17s. 6d. premium, that price was one which his instructions and the state of the market justified him in taking. But he wished to sell higher, and therefore would not complete the sale at 178. 6d. till he obtained the approval of his constituent. Before any instructions came from the constituent, Brown came back and offered to buy the shares at 20s. premium, and at this price the pursuer concluded the bargain with him. I have already said the pursuer was in perfect bona fides; and if so, he had power to use his discretion in selling, and a sale at 20s. premium was within the limits of his authority. I do not understand the doctrine, that an unanswered reference back to a constituent exhausts a broker's mandate. That is a perfectly novel doctrine to me.
But the defender has unfortunately perplexed his case by his correspondence-(reads first letter of 4th March, respondent to advocator.) Undoubtedly this was not in accordance with the facts, and it is difficult to understand with what motive that letter was written. Then comes the second letter of 4th March by the respondent to the advocator--(reads)--the terms of which are undoubtedly very loose and ambiguous, but which, as I read it, means this" As you don't agree, I have got 20s.” For, at the date of that letter, the bargain was already concluded, and the advocator cannot turn against the respondent his own mis. taken assertion, that he had received the advocator's letter at four o'clock. This correspondence, therefore, though it perplexes the case, does not, I think, change its bona fides. Henderson had no conceivable interest to sell too cheap, for, if I am not mistaken, the rate of brokerage rises with the price at which the shares are disposed of. I am, therefore, for adhering.
Lord Justice-Clerk.-I have very great difficulty in this case, and if the reference back by the broker to his principal had been clearer, I should feel even more disposed than I now am to differ from your Lordship. I am distinctly of opinion that the pursuer erred in his duty as a broker in selling after having re
ferred back to his principal and so far I entirely differ from your Lordships. But it does not necessarily follow from that that he should be subjected in all the loss arising from his selling the shares, because he did not get his principal's letter till the evening.
The instructions given to Henderson were, to sell on the 4th of March. The authority to sell was limited to that day, and he was authorized to sell at a certain price, but only if the market was languid. It was no part of his mandate to sell on 4th March at any rate, because the principal wanted to get rid of his shares, but the sale was to be made in a languid market, but in no other case. Now, on the morning of the 4th, there had certainly been a start in the market. In the forenoon Mr. Brown offered to purchase the shares at 15s. premium, which having been refused by the broker, he immediately offered 178. 6d., which was entertained, though not conclusively accepted by Henderson, who at the same time told Brown that his principal expected 20s. premium. Henderson's whole conduct after this is very singular; for he writes to his principal to say that the sale had been completed, contrary to the fact, and this he does while Mr. Brown, who evidently thought it a good bargain, was waiting for the principal's approval of it as a couditional sale. Thus, in consequence of Henderson's conduct in representing the transaction to Dickson as a concluded sale, the latter might, if he had been at hand, have bound himself to transfer the shares at 178. 6d. I hold, that whenever a broker, instead of using his discretion, refers back to his principal, he is bound to wait for a reply, unless he is desired to sell at any rate. If he pursues any other course than this, he does it at his peril.
Then comes Henderson's letter of 4th March (reads.) I cannot read this as meaning that Brown had already given 20s, for the shares, and that his offer had been accepted. I read it as meaning this-_“I have a purchaser who is willing to give 20. for the shares--will this please you ?"-A statement undoubtedly contrary to the fact, and the letter containing which was only received in the evening of the 4th, when all the sales of the day were over.
Generally, it may be laid down, that if a broker conceals a fact from his principal, the principal cannot be bound to act on that fact.
I regret, considering the nature of the correspondence in this case, that it did not go to a jury, who might better have been able to say whether the circumstances of the case were such as justly to fasten the loss on the broker. I do not think that the evidence of reference back by the broker is sufficiently clear to make him liable for the loss incurred, but I think he failed in his duty as broker. Sitting alone, indeed, I should have been disposed to assoilzie the defender; but in deference to the opinion of your Lordships and the Lord Ordinary, I shall only say that it is with the greatest possible hesitation that I can bring myself to concur in the judgment about to be delivered.
Lord Cockburn. It is impossible to deny that this case is attended with great difficulty. The Sheriffs have differed upon it, and there has been also a difference upon the bench here, and my own mind has been impressed with different views of it during the course of the discussion. If I could read the letter of 4th March, about which so much has been said, as a general reference back of the whole commission, then I would be forced to conclude that the broker did wrong in selling the shares at any price till he received instructions from his principal. This is no doubt a plausible view, and one for which much can be said ; but on looking more into the case, I have come, with much hesitation, to agree with Lords Medwyn and Moncreiff, being of opinion that their view of the case, though not unattended with difficulties, is less beset with them than the opposite view.
On advising the case again on 1st February 1849, as to the date with reference to which the damages for breach of agreement were to be fixed,
Lord Justice-Clerk.- This is an action by a broker against his principal, claiming repayment from the latter of the price at which railway stock sold by the former for the latter, but not delivered, had been bought in against the broker by the party who acted as broker for the buyer, that being the ordinary mode of obtaining the article in the event of the constituent, the real seller, not fulfilling the contract. The Court has now found that the defender, the constituent of the broker, was bound by the sale, and ought to have delivered the scrip when demanded on the 4th of March, being the day on which the contract of sale was made, and the day of delivery.
The pursuer was clearly employed as a broker doing business in the Glasgow Stock Exchange, and the purchaser, or at least the party who concluded the purchase, was also a broker in that Exchange. It is quite clear that both parties transacted, and were bound by the rules and understanding on which such business was at that time regulated and carried on in the Glasgow Exchange. That point, indeed, was not disputed, and is abundantly proved by the correspondence.
Now, the Glasgow Exchange adopted a rule very closely conformable to the ordinary rule of law applicable to a breach of a contract of sale of an article as to which there is no preference in regard to how the sale is fulfilled; and, when in the market, the same article can be got very easily from one person as well ay from another. A sale of fifteen shares of a railway is fulfilled equally well by the acquisition of fifteen shares, whether from A, B, or C, all being alike at the same time, and all being liable in the same increments to, or fall in value. It was therefore provided, that if a broker cannot fulfil such a sale, owing to his constituent refusing to fulfil, or any other canse, the buyer so disappointed, if he wishes still to have the stock, shall be entitled, within ten days, to buy in shares against the broker who sold, after giving him four days' notice. This, or some similar rule, is a very proper arrangement for such transactions. There is no difficulty, in general, in getting the article required. If still wished, and if the party believes that the sale was duly concluded, and that it ought to be fulfilled, he can supply himself at once, or at a time specified, as by this regulation; and the loss, if he is right, and if prices bave risen, will fall on the seller, who refused to fulfil the sale made for him by his broker.
I certainly never understood from the case of Mitchell, or the recent case of Howie v. Anderson, or any of the cases, that the Court intended to lay aside the important fact, that the buyer could, at the time, for the fulfilment of the contract, easily and at once supply himself with the article sold, in such a case as railway shares. On the contrary, in Howie v. Anderson, I expressly said, that the day of delivery was the proper period to choose, because the party could on that day have obtained shares if he still wished them,
Of course, the rule for damages is affected by a variety of considerations, and by circumstances occurring in the particular transaction. The case of Howie v. Anderson, an opinion delivered by me in which was so strongly founded on by the pursuer, has no application whatever to this case. It was a case of a time bargain, i. e. in October the party bought, at a certain rate, shares to be delivered on the 8th January. That was the day of delivery. The buyer was bound to do nothing in the interval. He was not bound to be out of pocket before that time, in order to get other shares. He was not bound to run the risks of another time bargain, in which there is always risk. When the period of delivery came was the time for him to proride himself, if he wished shares; and the prices of that day were the proper measure for his damage. Accordingly, I said that was the proper day to take, as he could then buy inwithout meaning, however, to exclude a day or two for deliberation.
In this case, the shares were deliverable forthwith on the 4th of March, or next morning certainly, in order to be at the command of the buyer for the market of next day. Had there been no rule acted upon on the Glasgow Exchange known to all parties, and in reference to which it must be held that this sale was made, I do not think that, in regard to such a matter as railway shares, the buyer would have been entitled to wait even for ten days, and then buy in, the prices in the market having been rising greatly every day. On the contrary, as to such an article, I should hold that he ought to have bought in on the 6th or 7th at the latest-certainly not later than the 10th.
I do not say that any such rule should be applied to articles in which the quality is of importance, or in which the name and character of the manufacturer is of value, or in which there may be dificulty in making a large transaction with new houses, and much derangement of the buyer's own business in being obliged to go to new parties for purchases on credit. For instance, in the case of the large quantity of iron sold by Dunlop and Company to an English house accustomed to be supplied with them, and to furnish their iron of known quality to others, I think the rule adopted was clearly applicable in justice, and was confirmed by Lord Cottenham. But it would be, I think, a great mistake to view in the same light a sale by a broker of shares in a local railway in the town where the speculation originated, and of which the party could supply hiniself with an equal number on
the next day, or within a very short period. For general convenience, the brokers in Glasgow, at the time in question, fixed the period of ten days, with four days' notice; and this certainly had many advantages.
Now, that being the case, the broker who bought, Mr. Brown, gave notice accordingly, that on such a day he would buy in against the pursuer, i.e. against the pursuer's constituent. He had no notion of waiting and demanding the particular numbers of the scrip held by the defender. That would have been absurd. At all events, he, the buyer, did not do so, and never thought of it; and he was the person to decide on that matter. Like a man of sense, he resolved to supply himself by other shares. The pursuer apprised the defender that he had received that notice, and again, on the expiration of the four days, and on the tenth day, informed him that shares were to be bought in against him on that day.
This was the regular and proper termination of the matter. The time for delivery was past. The defender had failed to fulfil the contract at the proper time. The buyer was ready and desirous to supply himself with the article in the market, and announced his resolution to do so. The article could have been got at the time, and on the day the buyer thus announced. If it was decided on reference, or in a court, that the defender bad been in the wrong, then the pursuer would have been relieved of any loss, and the defender would have had to pay the difference. The time for fixing the damage or loss, and the manner of it, was thus fixed by the principal party, the buyer, who had thus, as he was entitled, announced his resolution to buy in against the seller and his broker. The matter was thus fixed by the buyer, who was the party to decide what was to be done.
In this state of things, the seller's broker, without his authority, or even communication with him, and knowing that his constituent altogether repudiated the sale as not made according to instructions, took upon himself, being very desirous to avoid any discussion of the matter, to request the buyer-the opposite party-not to buy in; and although the market price continued to rise, yet frequently urged and induced bim to de. lay buying in until the beginning of July.
This was an unauthorized act. It was an act which the broker could no longer pretend was done as agent for the seller. His mandate was over. The relation of principal and agent no longer subsisted between them. It had existed but for one day. The principal was not at a distance, but on the spot.
There was no doubt as to the principal's determination not to acknowledge the sale. Hence the act of the broker, in inducing the buyer to delay for four months buying in while the price was daily and rapidly rising, was entirely an act on the part of the broker himself, which cannot in any way affect the defender. The buyer was the party to decide on wliether he was to buy in or claim the specific shares which the defender held. Tlie buyer, like a regular man of business, never hesitated for a moment.
As the defender failed to perform the contract, and as he had not the least intention of claiming these specific pieces of paper, he at once, and at the right time, declared his resolution to buy in. Now, the buyer was the party to decide on all this, not the seller's broker. The latter says, " But though I prevented, by my solicitations, the buyer purchasing in for four months, yet I proposed to you in July to give up the shares, and I would suffer a loss."
But the broker had no right whatever to put the seller in that new predicament. Right or wrong, the seller had disowned the sale at the time of delivery. The buyer was entitled to supply himself, as the defender had failed to perform his contract, and the buyer so declared. Hence, as between seller and buyer, it was made, in the common course of such matters, a mere question of the difference of price as on the 14th of March, and this was announced to the defender as the result. And if the seller was wrong, he was to bear that loss.
The broker, then, after the buyer had thus terminated the affair, had no right whatever to interfere, and to induce the buyer to delay buying in, or speculate, or consider for the seller at all. The loss thence arising he clearly must suffer. He had no right to alter, or affect in any way, the situation of the seller, as that was fixed by the act of the buyer.
I think this a very clear point as between the defender, the seller, and the party who acted for him as broker on the 4th of March, but was not entitled to interfere in any way whatever after his authority was disowned.
Lord Meduyn.-Both the Sheriff and the Lord Ordinary have