Scottish Court of Session Decisions

This was an action by Donald Morrison against John Calder and Thomas Statter for damages for breach of a contract to buy certain sheep at a certain price. The defender Calder denied that any such contract had been made. The defender Statter, who was employer of Calder, and for whom the pursuer alleged the purchase was really made, also denied the contract.

Statter was tenant, among other farms, of the farm of Knockie, Invernesshire, and he was at that farm a few times in each year. His evidence as to Calder was that he was his servant at Knockie; that he was a gamekeeper, and also looked after the shepherds and all upon the farm, and made a weekly report to him (Statter); that for any other duties he got special instructions; in particular, that he only bought and sold on special instructions, Statter usually buying himself; that at the time in question he had special instructions to buy, if he could, sheep of a different age and at a much lower price than those which were the subject of this action, the place of purchase being immaterial, but had no authority to buy the sheep the pursuer alleged him to have bought, or to go to the price he was alleged to have agreed to pay, but that he was “tied to a price.”

The pursuer produced a missive of which Calder denied the authenticity, but which was held proved to be his. It was signed by Calder, and bore that he had bought the sheep in question, and at the price sued for. Statter was not mentioned in it. Delivery not being taken, the pursuer had re-sold the sheep by auction, and the action was for £87, 6s. 2d. as damages thereby suffered.

The Sheriff-Substitute ( Blair) found Calder liable for failure to implement the contract, and that the measure of his liability — Warin and Craven v. Forrester, 30th November 1876, 4 R. 190, aff. 5th June 1877, 4 R. (H. of L.) 75—was the difference between the contract price and the market price at the date when delivery was tendered and refused, being £37 in all. He further found that Calder had no authority as Statter's agent to enter into any such contract, that Statter had not consented to or ratified it, and therefore assoilzied Statter.

“ Note.—… The pursuer contends that, though the defender Calder was the original party to the contract, he is entitled to demand performance from the defender Statter, in respect that the defender Calder was the authorised agent of the defender Statter, and that the contract was made on behalf of Statter.

But a contract made by an agent can only bind the principal by force of a previous authority or subsequent ratification, and the burden of proving this authority or ratification lies on the pursuer.

I think, on the evidence, there can be no doubt that the pursuer has failed to prove that Calder had this authority, or that Mr Statter subsequently ratified the contract entered into between the pursuer and Calder. The power to bind his master to such a contract as this was not within his usual employment, for Mr Statter says he buys his own sheep, and does not allow Calder to buy for him, except under special instructions. If, then, Calder was Mr Statter's agent, Calder was his instrument to make a contract only within the limits of the authority given him, and Mr Statter expressly states that he did not and would not have authorised Calder to make such a contract. The defender Calder also states that he had no authority from Mr Statter to make the contract in question. Now, when a principal could not have authorised the contract, then it is plain that the contract from the beginning can have no operation at all against him. Accordingly, the proper course for the other contracting party is to sue the agent as principal on the contract itself. It is obvious that the contract itself was a contract between the pursuer and the defender Calder, and therefore the defender Calder is liable on the contract itself; but even if it were to be held that he acted as unauthorised agent for another, he would be still liable on an implied warranty of his authority to bind his principal; in short, the professed agent must be treated as principal.” ….

The pursuer appealed, and argued—Calder was in the common position of almost every grieve in

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Scotland. He had general instructions to buy stock for his master's farm, and the circumstances showed that the pursuer could not have supposed that Calder bought for himself. He was in fact an institor—Ersk. Inst. iii, 3, 46, where the illustration of the subject-matter in the text is a farm servant; Bell's Prin. sec. 231. His purchases, then, were binding on his master, for whom he acted as general agent in such matters— Brady v. Tod, January 29, 1861, L.R., 9 C.B., N.S. 592, and 30 L.J., C.P. 233. But even assuming that he had received instructions from his master not to go beyond a certain price, that made no difference in the question whether he bound his master as in a question with the seller. Mr Justice Byles in Meddick v. Marshall, April 16, 1864, L.R., 16 C.B., N.S. 387, had exactly defined his position on this assumption when he said that such a person although he had transgressed the actual limits of his authority, had “acted within the apparent limits of his authority, where those apparent limits had been sanctioned by his principal.” Statter was then liable in the sum sued for.

Statter replied—The sale was neither authorised nor was it within the scope, whether general or special, of Calder's employment. Calder was not a general servant, but had special instructions on each occasion on which he was sent to make such purchases. There was no evidence that it was notour that he had such authority as was alleged by the pursuer. As he had on this occasion transgressed his express instructions, he could not bind his master.

Authority—Story on Agency, sec. 126.

At advising—