Scottish Court of Session Decisions

This was an action brought by Francis Edwards, iron merchant in Glasgow, against William Aiton, contractor there, in which he sought for payment of commission due to him under an agreement entered into between them. Mr Edwards had had large business transactions with the French Company formed in order to construct a canal across the Isthmus of Suez; and, knowing they were in want of contractors to perform the necessary dredging operations, directed his assistant, M. Castel, to make inquiries in Glasgow for a suitable person. Mr Aiton was recommended; and he, approving of the proposal, came to Paris at Mr Edward's suggestion. He was introduced to the directors of the Company, and his offer being approved of, a contract for the work was signed by him and M. Lesseps, president of the Company. In consequence of Mr Edward's having thus benefited Mr Aiton, an agreement was entered into which contained the following stipulations]:— “Mr Edwards having introduced and recommended Mr Aiton to the managers of the Suez Canal Company for the purpose of enabling Mr Aiton to contract for the dredging of the whole or of part of the Suez Canal, and Mr Edwards hereby engaging to continue his endeavours to that effect, and also to act, during all the period of Mr Aiton's works in the Suez Canal, as his agent for all the transactions which he may have with the Company in Paris, and to forward and to defend Mr Aiton's interests by all the means in Mr Edwards' power, Mr Aiton hereby binds himself, in case he contracts alone or with any one else, at any time, for dredging in the Suez Canal, to pay to Mr Edwards a commission of one per cent, upon all the sums which he will receive from the Company for the work accomplished by Mr Aiton in connection with the Suez Canal. One-half of that commission of one per cent., that is to say, one-half per cent., will, with Mr Aiton's assent, and as a part of his contract with the Company, be paid to Mr Edwards by the Company itself upon all the sums due to Mr Aiton. The other half of the commission, that is to say, one-half per cent., will be reserved, and paid only to Mr Edwards after the completion of the contract, and the final settlement with the Company, provided the contract has been advantageous to Mr Aiton, according, in case of dispute, to the judgment of three arbitrators, two of whom are to be named respectively by Mr Aiton and Mr Edwards, and the third to be named by the two first. If it is decided by the arbitrators that Mr Aiton has derived 'no benefit from his contract with the Company, from circumstances which were unforeseen at the date of the contract, Mr Edwards will have no claim whatever to the second part of his commission, one-half per cent., which will thus remain in suspense until the completion of the contract.”

Mr Aiton went to Egypt, and for six months carried on operations under the contract; but, finding it a dead loss, he sought permission to give it up. This eventually was agreed to; and an agreement was entered into between the Company and Mr Aiton, by which they agreed to pay him all the expenses he had incurred, the value of all the materials he had in Egypt, £8000 as an indemnity, repay him the money he had deposited as a security, undertake the contracts he had made, and take up his bills. He accordingly gave up the contract, and esteemed himself well treated by the Company. The pursuer now claimed one per cent, on all the work done by the defender, £2000 in consequence of his having 'given up the contract, and £2000 for services rendered by the pursuer to him in procuring the contract for him, acting as his agent, and sending M. Castel out to Egypt with him. The above circumstances were disclosed in the proof led; and also that Mr Edwards' agency was objected to by the Company, and that there had been no reference to arbiters. The Lord Ordinary ( Okmidale) found that the pursuer was only entitled to £90, being one-half per cent, upon the sum of £18,000 paid to the defender for work accomplished.

The pursuer reclaimed.

Giffoed and Gloag for him.

Watson and Campbell in answer.

At advising—

Lord President—I have come to be very clearly of the same opinion with the Lord Ordinary. The pursuer asks for production of the defender's accounts with the Canal Company, and for payment of the commission due to him under their agreement. This is a conclusion based entirely on the agreement. The next conclusion is for damages over and above, by reason of the defender having failed to complete his contract with the Suez Canal Company. And lastly he asks for £2000 as remuneration for services rendered by him to the defender. The Lord Ordinary is of opinion that the sum on which a commission is allowed is £18,000; but he refuses the additional half per cent asked for by the pursuer.

There are thus two questions that must be determined; first, on what sum is a per centage to be allowed? and second, is that per centage to be a half or one per cent? By the agreement Mr Aiton binds himself— (reads). It is upon these words the first question turns—viz., upon what sum the commission is given. All the dredging contracts of the Company were so framed that the contractor was to be paid by the amount of excavation, and not by the amount of stuff put out. Mr Edwards therefore knew quite well that Mr Aiton was to be paid on the amount of cubic space excavated. But then Mr Aiton, finding that this contract with the Company was most unremunerative, entered into

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a new contract with the Company, in the way of compromise, whereby he was to be paid a much larger sum for his excavations. He says lie was very handsomely treated by the company; and there is no doubt that he was. They took over all his standing plant, paid him his outlay, and took up all his bills in the circle. This is the effect of the agreement, or resiliation, as it is termed. It may be presumed, however, that they received value for the bills. And the Company in addition give him £8000 as an indemnity. That, the pursuer says, is profit. But the answer to it falls under the second question. We are therefore driven to the statement by the defender, as a witness for the pursuer, that the whole sum be received for his work was £18,000.

In regard to the second question, one half of the commission is to be paid for the work done; and one-half if the three arbiters to be appointed shall say the contract was remunerative to the contractor on its completion. The Lord Ordinary has allowed the first half per cent, and, as the defender says he was all along willing to pay it, I say nothing further in regard to it, save that if the point had been raised, I have grave doubts whether even it should have been allowed. In regard to the second half per cent, it was only to be paid if the contract was completed and in the opinion of the arbiters remunerative. Their opinion was never taken. I will not say that their decree was a condition precedent of the commission being allowed. But I certainly say it was the pursuer's duty to shew the contract was an advantageous one. We have every reason to believe from the defender's statements that the contract was a losing one to him. And I therefore have no doubt as to the correctness of the Lord Ordinary's refusal of this claim.

As to the claim for damages for Mr Aiton's having broken off the contract, little has been said; and such a claim is perfectly unreasonable.

But, lastly, the pursuer claims payment for services rendered. I think the pursuer was undoubtedly for a short time the agent of the Company. He employs his clerk, M. Castel, to seek out a contractor; and he fixes on Mr Aiton. In all this Mr Edwards was an agent of the Company. But M. Castel goes out to Egypt as his servant or assistant. I have some doubts whether under the circumstances, M. Castel, i.e. Mr Edwards, is entitled to payment for these services. The Company objected to Mr Edwards acting as agent for Mr Aiton. I think his position was improper. He was agent on both sides; and he was receiving payment on both sides. It is not to be doubted that the payment be received, and the claim he made, included remuneration for the services of M. Castel and himself. He only got decree for £240; but having got this sum by decree of a French Court, he now seeks to get payment for the same services from the other side. On the whole matter, I am for adhering to the interlocutor of the Lord Ordinary.