Scottish Court of Session Decisions

This was an action under the Debts Recovery (Scotland) Act 1867, raised in the Sheriff Court of Lanarkshire by Thomas Kennedy, architect in Greenock, against Peter Glass, 19 Armour Street, Glasgow, for payment of £50. The statement of account annexed to the summons was as follows—“To commission, as arranged, on the price of old machinery and buildings bought from the Glebe Sugar Refining Company, Greenock, by the defender through the agency and introduction of the complainer, £250—restricted to £50.”

The following plea was noted for the defender—“The defender denies that he is due the pursuer the commission sued for or any commission.”

Proof was allowed from which the following facts appeared—The defender was a dealer in old material and old machinery. The pursuer was an architect by profession, but was in the habit of occasionally doing business on commission. On several occasions he had introduced the defender to persons who had old material for sale, and been paid a commission. In 1883 he introduced the defender to Mr Kerr, managing partner of the Glebe Sugar Refining Company, who had a large amount of old machinery for sale, and negotiations were entered into for the sale of the machinery to the defender. It was not, however, till the year 1888 that any agreement was entered into between the defender and the company, but in October of that year the defender entered into a contract to buy the machinery at the price of £7250. This contract the defender subsequently failed to carry out.

Mr Kerr deponed—“I cannot tell when the subject as to a sale was first discussed between pursuer and myself. It was over a course of years. He said he thought he could introduce me to a person who might buy it. He introduced me to defender. Negotiations were going on for three or four years, but they were completed by a letter which I received, dated 16th October 1888. In dealing with defender I dealt with him entirely as a principal in the transaction. (Q.) And was it through pursuer's intervention that this sale took place? —(A) Well it was pursuer who introduced defender to me, (Q) Was pursuer in frequent communication with you during the period you have referred to?—(A) Yes; I saw him on several occasions both in the

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office and on the street, sometimes alone and sometimes with defender…. (Q) May I take it that negotiations were suspended from time to time, but that they were never broken off?—(A) I never can say they were broken off. They were afterwards brought to a point by the letter of October; we decided to sell the plant at the best price obtainable. We were not very minding about selling it before that. (Q) I suppose if it had not been for pursuer you would never have had anything to do with defender?—(A) I could not say if we would ever have met Mr Glass otherwise or not. It was pursuer who introduced him to us.”

Several telegrams from the defender to the pursuer were produced, directing the latter to do certain work for the defender with regard to the purchase of the machinery, and the evidence otherwise showed that throughout the negotiations the pursuer had acted as the representative of the defender, and had taken a good deal of trouble in promoting the transaction. The pursuer failed to establish that it had been arranged that he should receive a commission of £250.

On 26th December 1889 the Sheriff-Substitute ( Balfour) decerned against the defender as libelled.

“ Note.—… Under these circumstances it is difficult to see how the defender can shake himself clear of his liability for commission to the pursuer. He seems to hold himself morally liable for it, and I think he is legally liable as well. It is always difficult for a man who has been introduced by a third party to another man, and where business ensues after that introduction at a longer or shorter period, to shake himself clear of liability for commission to the third party. There are three recent cases on the subject, viz.— Moss v. Cunliffe and Dunlop, 2 R. 657; Mansell v. Clements, 9 L.R., C.P. 139; and Walker, Donald, & Co. v. Birrell & Co.,11 R. 369. I will only specially refer to the first case, as it negatived the claim for commission, and the other two cases allowed the claim in circumstances which are not at variance with the present case. The case of Moss was decided upon the ground (first) that the party who ultimately have an order for a steamer was not identical with the party to whom the builder was introduced, and (second) that the original negotiations had been for a small steamer and the ultimate contract was for a large steamer.

We are dealing with no such distinctions here. The parties remained the same, and the subject-matter remained the same, and the transaction was closed, as the result of an introduction given some years before, but the negotiations between the parties had never really been closed, and about the time when the contract was closed we find the three parties—seller, purchaser, and broker—in communication with one another, and the broker receiving instructions regarding the purchase from the purchaser.

I have therefore given decree for the sum sued for, which is a reduction on the amount which the pursuer says the defender agreed to pay.

The defender having appealed, the Sheriff on 26th March 1890 adhered.

Note.—It is unnecessary to consider what might have been the rights of parties if after the failure of negotiations in 1883 the fresh negotiations which ended in the transaction of October 1888 had been continued without any intervention in the meantime on the part of the pursuer. It appears from the proof that there was a renewal of negotiations in the early part of 1888, and although they were not successful at the time, as Mr Kerr says, they were never broken off, and in the course of them the pursuer's offices were again employed… .

If then there was a concluded contract, the fact that it was abandoned on account of the defenders being unable to raise the money did not affect the pursuer's claim to commission. That he had a valid claim to commission, if there was a concluded contract, must be taken to have been the case. He has acted previously in a similar way for the defender, and has been remunerated by payments, not apparently of a fixed kind, but varying with the circumstances of each transaction. The sum he claims in the present case is reasonable, and I think that he is entitled to it.”

The defender appealed to the Court of Session, and argued—There was no proof of the arrangement asserted by the pursuer, but on the contrary the evidence showed that the defender had only promised the pursuer commission if the contract turned out profitable.

The pursuer argued—The only defence to the pursuer's claim was the improbable assertion that the pursuer's remuneration was made conditional on the transaction being a profitable one. The onus lay on the defender to prove this improbable agreement, and it had not been discharged. The pursuer had introduced the defender to the refining company, had taken trouble in promoting the negotiations, and a contract had been completed between them, he was therefore entitled to the remuneration sued for— Petrie v. Earl of Airlie, November 21, 1834, 13 Sh. 68.

At advising—