Hichens, Harrison, Woolston & Company v Jackson & Sons
| Jurisdiction | UK Non-devolved |
| Judge | Lord Atkin,Lord Thankerton,Lord Russell of Killowen,Lord Wright,Lord Romer |
| Judgment Date | 04 December 1942 |
| Judgment citation (vLex) | [1942] UKHL J1204-2 |
| Date | 04 December 1942 |
| Court | House of Lords |
[1942] UKHL J1204-2
House of Lords
Lord Atkin
Lord Thankerton
Lord Russell of Killowen
Lord Wright
Lord Romer
After hearing Counsel as well on Friday, the 30th day of October last, as on Monday, the 2d day of November last, upon the Petition and Appeal of Hichens Harrison Woolston & Co., of Gresham House, 24 Old Broad Street, in the City of London, praying That the matter of the Order set forth in the Schedule thereto, namely, an Order of His Majesty's Court of Appeal, of the 3d of July 1941, might be reviewed before His Majesty the King, in His Court of Parliament, and that the said Order might be reversed, varied, or altered, or that the Petitioners might have such other relief in the premises as to His Majesty the King, in His Court of Parliament, might seem meet; as also upon the printed Case of Jackson & Sons, lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:
It is Ordered and Adjudged, by the Lords Spiritual and Temporal in the Court of Parliament of His Majesty the King assembled, That the said Order of His Majesty's Court of Appeal, of the 3d day of July 1941, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of the Right Honourable the Lord Chief Justice of England, of the 12th day of March 1941, thereby set aside, be, and the same is hereby, Restored: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellants the Costs incurred by them in the Court of Appeal, and also the Costs incurred by them in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the King's Bench Division of the High Court of Justice, to do therein as shall be just and consistent with this Judgment.
My Lords,
This is a case arising out of a sale of shares by the Appellants (the Plaintiffs), a firm of stockbrokers, members of the Stock Exchange, London, who allege that they were employed by the Defendants to make the sale, that by reason of the Defendants' default in completing the sale they have incurred liability to the ultimate purchaser, and they seek indemnity accordingly. The amount concerned is relatively small, £396; but in the result the case has come to involve issues important to all persons who buy and sell shares, and it is well that it should have come up for consideration by this House. The facts require to be stated in some detail: they are not in dispute, and once fully appreciated they seem to lead to an inevitable result.
The Respondents, the Defendants in the action, are a firm of solicitors practising at Ringwood, in Hampshire, and in 1939, acting for a client, Etchells, had obtained judgment for £186 and costs in a claim for mesne profits against a Mrs. Lucas, a tenant of the then Plaintiff. Execution was levied and the goods were about to be removed for sale when Miss Lucas, a daughter of the then Defendant, by letter of April 25, 1939, surrendered a certificate in her name of £250 ordinary stock in the Bristol Waterworks Company on the terms that the stock should be realised and the balance, after paying the amount due on the fi. fa., should be returned to her. At the request of the Defendants she signed a blank transfer of the stock, and on April 25 the Defendants sent written instructions to sell the stock to the Plaintiffs, whom they had frequently employed before both for themselves and for clients. With the instructions they enclosed the blank transfer and the certificate for the stock. As one of the questions in the case is whether the Defendants became personally liable as principals of the Plaintiffs in this transaction, it is desirable to set out the letter.
| Jackson and Sons, Solicitors, Commissioners for Oaths. Philip H. Jackson, E. H. P. Letcher, Li.D. Tel. Ringwood 400 (2 lines). | 2 encl. registered. | Ringwood, Hants (and at Fordingbridge and Ferndown). 25th April, 1939. |
Dear Sirs,
We enclose herewith Certificates for £250 Consolidated Ordinary Stock in the Bristol Waterworks Company together with blank transfer duly executed. We shall be obliged it you will realise the stock for the best price obtainable and let us have cheque in due course.
Yours faithfully,
Jackson and Sons.
Messrs. Hichens Harrison & Co.,
Gresham House,
24, Old Broad Street, E.C.2.
On receiving these instructions the Plaintiffs made inquiries and found that the only effective selling market at the time was Bristol, and accordingly arranged with Messrs. E. J. Evans and Co., a firm of brokers, members of the Bristol Stock Exchange, to sell the shares for them, which they did at 147½, realising a net sum of £368 5s. od. Being advised by telegram of this sale, the Plaintiffs on April 20 wrote to the Defendants a letter headed A/c Miss E. A. Lucas, acknowledging their letter of April 25. and enclosing contract note for the sale. The contract note, so far as is material, is in these terms:
Sold for account of Messrs. Jackson and Sons.
Commission divisible with the above firm.
Miss E. A. Lucas.
| 250 Bristol Waterworks Co. Consolidated Ordinary Stock at £147 6 0 | 368 | 5 | 0 |
| Commission 1 16 10 | |||
| Contract Stamp 1 | 1 | 17 | 10 |
| To a Non-Member. Settlement, 11.5.39. | 366 | 7 | 2 |
Subject to the Rules and Regulations of the London Stock Exchange.
Hichens, Harrison, Woolston and Co.,
Members of the Stock Exchange, London.
Messrs. Evans on their part had sold the shares to Messrs. Grace Darbyshire and Todd, a firm of chartered accountants, who appear to have been acting for Mr. R. J. Fry. On April 26 they rendered bought and sold notes to Messrs. Grace Darbyshire and Todd and Messrs. Hichens Harrison and Co. respectively in ordinary form. The sold note was addressed to Messrs. Hichens Harrison and Co. "We beg to advise having sold on your account, subject to the rules of the Stock Exchange," and was signed,
"Brokers contract.
"E. J. Evans and Co.,
"Members of the Stock Exchange, Bristol."
On May 11 the Plaintiffs, having apparently received from Messrs. Evans the name of R. J. Fry as the purchaser, sent to Messrs. Evans the transfer completed with the purchaser's name, together with the certificate. The next day Messrs. Evans sent the purchase price to the Plaintiffs, who on May 11th had sent their cheque to the Defendants in a letter headed "A/c Miss E. A. Lucas". They received an acknowledgment from the Defendants dated May 12th in a letter headed "Etchells v. Lucas", Account Miss E. A. Lucas.
On May 12 the Defendants sent an account to Miss Lucas with a cheque for £148 11s. 2d., the balance of the proceeds of the stock after deducting judgment debt, costs and charges. On May 15, however, Mrs. Lucas wrote to the Defendants returning the cheque in favour of her daughter in a somewhat incoherent letter. "You have not sold my daughter's shares. I am making her return this cheque. You will be good enough to send her the script back at once." On May 19th trouble began. On that day Miss Lucas wrote to the Bristol Waterworks:
"I am writing to ask you to hold up the sale of my shares till you hear from my solicitors";
and Mrs. Lucas wrote to the Defendants:
"I have stopped the sale of my daughter's shares until the case against Etchells comes into Court."
On May 24 Miss Lucas wrote to the Waterworks Co.:
"I shall be obliged if you will return the script of my shares. The matter has been settled out of Court, and there remains nothing but for me to ask you to return this to me personally."
And on June 4 Miss Lucas writes a letter to Mr. Picken, apparently the registrar of the Waterworks Co.:
"My signature on the transfer deed is authentic, but it was obtained under fraud and compulsion."
This letter was sent to Mr. Picken under a covering letter from Mrs. Lucas. As a result the company wrote to Messrs. Evans on June 6, saying that with reference to their letter of May 17th enclosing transfer Lucas to Fry and certificate, a letter purporting to be signed by the transferor had been received containing objection to registration and that the directors would probably decide to decline registration until any doubts concerning the transfer had been disposed of. On receipt of this Messrs. Evans naturally write to Messrs. Hichens asking them to put the matter right by return of post; Messrs. Hichens pass this on to the Defendants: the Defendants are sorry that the Plaintiffs have been troubled; they give an account of their possession of the certificate and transfer and trust that this will be sufficient to enable the transfer to be proceeded with in the usual way. The Plaintiffs pass this on to the Waterworks Co., who write on June 12 that in view of the objections which the transferor had made to registration, registration must be deferred until all doubts concerning the matter had been dispelled. This is passed on by the Plaintiffs to the Defendants "for your attention." In the meantime Messrs. Evans had received a similar instruction from the company, which they pass on to the Plaintiffs:
"We shall be glad, therefore, if you will take steps to put the matter in order immediately."
Some delay was arranged between the parties on the footing that the Defendants were taking steps to have the matter put right, but the Defendants failed to induce Miss Lucas to withdraw her objection. Counsel's opinion was being obtained by the Defendants, and on June 24 Messrs. Evans write to the Plaintiffs that they will allow this matter to stand over for one week further, but cannot let the matter remain unsettled beyond that date. Eventually on July I the Defendants write...
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