Ryan v Pilkington

JurisdictionEngland & Wales
JudgeLORD JUSTICE HODSON,LORD JUSTICE MORRIS
Judgment Date04 March 1959
Judgment citation (vLex)[1959] EWCA Civ J0304-1
CourtCourt of Appeal
Date04 March 1959

[1959] EWCA Civ J0304-1

In The Supreme Court of Judicature

Court of Appeal

Before:

Lord Justice Hodson

Lord Justice Morris and

Lord Justice Wlllmer

Ryan
and
Pilkington and Another

MR A. G. De MONTMORENCY (instructed by Messrs J. Tickle & Co.) appeared as Counsel on behalf of the Appellant, Mr Richard Gem, second Defendant below.

MR R.N. BIBBY-TREVOR (instructed by Messrs E.E. Pugh & Co.) appeared as Counsel on behalf of the Respondent Ryan, Plaintiff below).

LORD JUSTICE HODSON
1

This is an appeal by the second Defendant, Mr. Richard Gem, from an order of His Honour Judge Block at the Mayor's and City of London Court, dated 24th October, 1958. The proceedings relate to events which took place as long ago as the year 1956.

2

In June, 1957, the Plaintiff, who was the proposed purchaser from Mr. Gem, the second Defendant, of a property called "Ferndale", Queen's Drive, Finsbury Park, issued a writ against the first Defendant, Mr. Pilkington, who is an estate agent, claiming the return of £200 deposited, as it was said, with Mr Pilkington as stake-holder. The Defendant Pilkington, who was at first the only Defendant, was refused leave to defend by the learned master, but subsequently the learned judge at Chambers gave him leave to defend upon the affidavit of Mr. Pilkington that he was employed as agent of the second Defendant. His contention was that he received the money deposited as the agent of Mr. Gem.

3

The action was remitted to the County Court and the Plaintiff, Mr Ryan, became aware, after a study of the documents, that when these payments were made, they having been paid in two sums of £100 each, the second on the 1st November, 1956, and the first a little earlier, probably in October, 1956, a receipt had been given in these terms by Mr Pilkington: "Received of P.F. Ryan £100 cash deposit on the private hotel business and lease of Mr and Mrs Gem, 157, Queen's Drive, Finsbury Park, N.4. Lease of approx. 964 years at £10 per annum and furniture, etc. Sale price £9,000 all at. Subject to contract". That is signed by L. Pilkington "as agent for Mr. and Mrs. Gem". The subsequent payment is acknowledged on the same piece of paper, "Received further payment of £100 (by cheque) 1.11.56, L. Pilkington as agent". Then "P.T.O.", and on the back is written: "Purchase price reduced to £8,800. L. Pilkington. 1.11.56".

4

The learned judge took a note of the evidence which he received from Mr. Ryan, the Plaintiff, from Mr. Pilkington, the first Defendant, and from Mr. Gem, the second Defendant. He dismissed the claim against the first Defendant, finding that the first Defendant did not hold the £200 as claimed in the writ as stakeholder; there was no claim against the first Defendant for breach of warranty of authority. The position of Mr. Pilkington is not very clear, but it was stated in the evidence that he had been convicted of the fraudulent conversion of deposits and we were told that he was a bankrupt. In this Court the Plaintiff has not sought to pursue his claim further against him.

5

With regard to the second Defendant, the learned judge found in favour of the Plaintiff, finding the £200 had been received by Mr. Pilkington as agent for his principal, Mr. Richard Gem. It is against that finding that Mr. Gem has appealed. I think the finding of fact that Mr. Pilkington had purported to receive this sum of money as agent is unassailable. That is exactly what he did. But, of course, that does not conclude the matter, because, in order to make a principal liable, the agent must have been acting within the scope of his ostensible authority.

6

The rule is stated in paragraph 82 of the 9th and 10th edition of Boustead on Agency as quoted by Lord Justice Somervell in a case of the name of Navarro v. Moregrand Limited, reported in 1951 Weekly Notes, page 336, and reads in this way: "Every act done by an agent professedly on the principal's behalf and within the scope of his actual authority, is binding on the principal with respect to persons dealing with the agent in good faith, even if the act be done fraudulently in furtherance of the agent's own interests, and not in the interests of the principal. Every act done by an agent in the course of his employment on behalf of the principal, and within the apparent scope of his authority, binds the principal, unless the agent is in fact unauthorised to do the particular act, and the person dealing with him has notice that in doing such act he is exceeding his authority".

7

Mr Gem, who was the vendor and legal owner of the property in question, had instructed Mr. Pilkington, who was, as I have said, an estate agent, to find a purchaser. That is the extent of Mr. Gem's evidence as to the arrangement which was made by him with Mr. Pilkington. No doubt it would follow from that arrangement that, if a purchaser were found and the necessary work was done by the agent so that he fulfilled the terms of his employment, he would be entitled to commission on the usual scale.

8

Before referring further to the facts of this case, it is useful to remember what was said by Lord Russell in Luxor (Eastbourne) Limited v. Cooper, 1941 Appeal Cases, page 108, at page 124, which is often quoted in commission contract cases. "A few preliminary observations occur to me. (1) Commission contracts are subject to no peculiar rules or principles of their own; the law which governs them is the law which governs all contracts and all questions of agency. (2) No general rule can be laid down by which the rights of the agent or the liability of the principal under commission contracts are to be determined. In each case these must depend upon the exact terms of the contract in question, and upon the true construction of those terms. And (3) contracts by which owners of property, desiring to dispose of it, put it in the hands of agents on commission terms, are not (in default of specific provisions) contracts of employment in the ordinary meaning of those words. No obligation is imposed on the agent to do anything. The contracts are merely promises binding on the principal to pay a sum of money upon the happening of a specified event, which involves the rendering of some service by the agent. There is no real analogy between such contracts, and contracts of employment by which one party binds himself to do certain work, and the other binds himself to pay remuneration for the doing of it".

9

It is to be observed that Mr. Pilkington was under no obligation to do anything, but, as I see it, once he set about finding a purchaser, as he did, he would do so as agent for his principal, Mr. Gem. The vital question in this case is whether he was acting within the scope of his apparent authority.

10

The difficulty in this case has arisen because, as I read the judgment of the learned judge, he did not make any sort of finding on that. He contented himself by making reference to the document which I have read which contains the receipt for the two sums of £100, making £200, and relying upon the fact that Mr. Pilkington was indeed acting as agent. He did not go on to say that he found as a fact that he was acting as an agent within the apparent scope of his authority.

11

It is right to say that, since there are no specific findings as to this matter, and the Defendant, Gem, is the Appellant here, the evidence ought to be taken in his favour and any doubts which may present themselves as to the effect of the evidence should be resolved in his favour also, because there are some passages in the evidence which might throw doubt on the accuracy of his recollection as to what in fact took place a long time ago. This trial took place in 1958 and these people were being asked to remember, events of 1956, so, in dealing with the facts, where there is a disagreement between Mr. Ryan and Mr. Gem, or between Mr. Pilkington and Mr. Gem, I have taken it that Mr. Gem's recollection was accurate. It is not in dispute that an advertisement appeared in a newspaper and that Mr. Ryan was interested in the subject-matter of the advertisement and that it was Mr. Pilkington who arranged an appointment with Mr. Gem. Mr. Ryan went to look at the place and saw Mr. and Mrs. Gem there. There was an agreement, it was said, to pay £8,800, in the first instance, but it is clear now that one sees the documents that the agreement was originally for £9,000, which subsequently was reduced to £8,800. According to Mr. Gem, it was made perfectly clear to Mr. Ryan that he would sell "subject to contract" at £8,800. Then one has the evidence of Mr. Gem that he knew nothing about the deposits until Mr. Ryan told him much later about them. But one knows from the document - it is not suggested that it is a forgery - that these deposits were paid, and I do not thin I need follow further the sequence of events. The first deposit must have been made in October, because the Plaintiff's first visit to this place took place in October and the second one was made on the 1st November, 1956. The only question is whether Mr. Pilkington, in taking that money as agent, was acting within the scope of his authority.

12

The way in which the case was put in this Court by Mr. De Montmorency for the Appellant, Mr. Gem, was this. He said, as I understood him, that, as a matter of law, an estate agent cannot do that. An estate agent who takes money on deposit takes it as a stake-holder and in no other manner. He does not take it as an agent. The first answer to that is that he did take it as an agent. So far as Mr. Pilkington is concerned, that was the capacity in which he said he was to act. I cannot see how it can possibly be said that he took it as a stake-holder. He could not take it as a stake-holder unless he had agreed to be a stakeholder. The term "stake-holder" involves that a person falling into that capacity would act as agent for both parties and not solely as agent...

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11 cases
  • Sorrell v Finch
    • United Kingdom
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    ...having acted on his behalf and as his agent in receiving the £550 claimed. The fons et origo of asserting that such was the case is Ryan v. Pilkington [1959] 1 W.L.R. 403, where, unknown to the prospective vendor, the estate agent obtained two sums by way of deposit from the prospective pur......
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    ...and by the statement of Lord Justice Sachs in 1971, 2 W. L. R. at page 946. 21 So the auctioneer cases are altogether different. 22 II. RYAN v. PILKINGTON 23 In Burt's case, the majority thought that Ryan v. Pilkington (1959) 1 W. L. R. 403,was an authority which they ought to follow. But i......
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