Headnote:
This was an advocation from the Sheriff-court of Glasgow. The respondent Baird, corn-factor in Glasgow, acted for some time as agent and broker in Glasgow for Wright, a grain merchant at Boston, in England, and sold for him large quantities of grain. In 1864 Baird brought an action against Wright for £123 of commission. Wright defended, and raised a counter action against Baird for £1272 as loss sustained by reason of culpable negligence and breach of instructions on Baird's part in carrying through a certain sale to Bedgar, Neilson, & Co., who had failed shortly after the sale, and who, Wright alleged, were previously known to Baird to be of notoriously bad credit, and on the eve of bankruptcy.
After a proof, the Sheriff-substitute (Mubkay) held that Baird ought to have communicated to Wright certain material circumstances of which he was aware unfavourable to the credit of Bedgar, Neilson, & Co., and, not having done so, had committed a breach of his duty as agent, and was liable for the sum sued for by Wright, under deduction of the amount of the charges sued for by Baird, as to which there was substantially no dispute.
The Sheriff (Bell) reversed, and found in favour of Baird.
Wright advocated.
Lord Advocate (Gordon) and Scott for advocator.
Mackenzie and Ceichton for respondent.
At advising—
Judgment:
Lord Barcaple thought, with others of the Court, that this case ought to have been sent to a jury. He then, after narrating the facts of the agency and sale, said that the course of business between Baird and his employer was peculiar. It was not left to the broker in the present case to carry through the sales in the usual way; for Baird's duty was to find purchasers, and make an offer, and inform Wright of the offer, the sale being subject to Wright's approval. Looking to the general course of transactions, there was no evidence that Bedgar, Neilson, & Co. were in such bad repute as to prevent a broker from dealing with them. Baird was certainly not liable simply because he dealt with Bedgar, Neilson, & Co. The action against him was rested on various other grounds, on some of which Wright had been quite unsuccessful. It was said that Baird had entered into a corrupt and collusive contract with Bedgar, Neilson, & Co. There was no evidence of that at all, nor was there any ground for holding that Baird had been guilty of negligence in looking to the credit of persons with whom he dealt. He knew very well, perhaps better than most persons, the true position of Bedgar, Neilson, & Co. That position did not put them out of the market, although no doubt they were not a strong or wealthy house. But Baird, in his correspondence, rather stepped out of his province to inform Wright that Bedgar, Neilson, & Co. were a first-class house, paying ready money. Now, there were two classes of people who paid ready money—one class who had so great a command of capital that they declined to accept credit, and another class who found cash the only terms upon which they could deal in the market; and Bedgar, Neilson, & Co. seemed rather to be of the latter class. In that state of matters Baird undertook a responsibility he was not called on to undertake. If he made a representation calculated to produce in Wright a confidence in Bedgar, Neilson, & Co. for which there was not ground, then he did what took him out of that protection which belonged to a broker acting under a
del credere commission. But the great point to look to was what took place in reference to the last transaction. It came to this, that when he had created this confidence in Bedgar, Neilson. & Co., he intimated to Wright, on 21st March 1864, that Bedgar, Neilson, & Co. had made an offer for 600 quarters of wheat—cash at fourteen days. Wright accepted by telegram, and plainly did so on the footing that he had got a full and sufficient account of what passed. A broker must not withhold anything that passes, if his constituent is to judge of the transaction. Now, Mr Neilson's evidence is that he told Mr Baird at this time that his firm could not pay at the same time that they were paying some bills granted to Wright for previous transactions, and that he fully expected from what Mr Baird said to get additional credit beyond the fourteen days, otherwise he would not have made the bargain. Now that was very important. And that being a material part of the communing, and not communicated to the principal, the broker thereby made himself responsible. The case might have been different if nothing had previously been said as to the house. No doubt Wright had before taken bills of this house, but in this new transaction he was entitled to know the whole facts. It was plain that be was at this time a little more scrupulous in his transactions than usual, as the times were bad, and probably he would not have assented to the transaction if he had been informed that additional time was required besides the fourteen days.
The other Judges substantially concurred.
The judgment of the Sheriff was therefore recalled.
