Smith v Lindo
| Jurisdiction | England & Wales |
| Judgment Date | 20 April 1858 |
| Date | 20 April 1858 |
| Court | Court of Common Pleas |
English Reports Citation: 140 E.R. 1138
IN THE COURT OF COMMON PLEAS AND IN THE EXCHEQUER CHAMBER
[395] smith v. lindo. April 20th, 1858. [Affirmed in Exchequer Chamber, 5 C. B. N. S. 587.] A dealer (in London) in shares in a public company, (whether British or Foreign) is a "broker" within the statute 6 Ann. c. 16, and incapable of suing for commission, unless duly licensed.-But, where an unlicensed person had assumed to act as a broker in the purchase of such shares,-Held, that he might recover from his principal the price which pursuant to a usage of the share-market he had been obliged to pay,-the statute of Anne not making the contract void, but merely preventing the unlicensed broker from recovering any remuneration for his services in making it. This was an action for money payable for work done by the plaintiff for the defendant, at His request, as a broker, and for fees due and of right payable by the defendant to the plaintiff in respect thereof ; and for scrip and shares sold and delivered by the plaintiff to the defendant; for money paid ; and for money found to be due oh accounts stated. The declaration also contained a count stating that the defendant retained and employed the plaintiff, as such broker as aforesaid, to purchase for the defendant certain scrip certificates of shares on the London Stock-Exchange, to be paid for by the defendant on the then next settling day on the said exchange, for reward to the plaintiff; and the defendant, on such retainer, authorized and requested the plaintiff to purchase the said scrip according to the usual terms of the said exchange, one of such terms being, that, in the event of the shares not being paid for at the time fixed for payment by the contract of purchase, the purchaser's broker shall be liable to indemnify the seller in respect of such default; that the defendant, on such retainer, agreed to save the plaintiff harmless in respect of such liability ; that the plaintiff accepted such retainer, and did purchase the said scrip for the defendant on the said exchange, to be paid for on the said day, and on the terms aforesaid; and that the defendant did not, when the said day of payment (which had elapsed) arrived, save harmless, nor had he since saved harmless the plaintiff in the premises, but the defendant made default in the payment for the said scrip, whereby the plaintiff became liable to the said seller as aforesaid, and the said seller had sued and re-[396]-covered judgment against the plaintiff in respect of the plaintiff's said liability, and the plaintiff had thereby been put to heavy expenses and liabilities. The defendant pleaded,-first, to the common counts, never indebted,-secondly, to the last count, that the defendant did not agree with, or retain or employ, or authorize or request the plaintiff as in that count alleged,-thirdly, to the last count, that the plaintiff did not purchase the said scrip for the defendant in manner or on the terms in the said last count alleged,-fourthly, to the last count, as to so much of the residue of the declaration as relates to work alleged to have been done, and money alleged to have been paid by the plaintiff for the defendant, that the said work alleged to have been done by the plaintiff for the defendant was done by the plaintiff within the city of London, as a broker for the defendant, that is to say, in and about the purchasing and bargaining and making contracts for the purchase for and on behalf of the defendant of divers scrip certificates purchased by the plaintiff for the defendant in a certain public company; that the said money alleged to have been paid by the plaintiff for the defendant, was money paid by the plaintiff within the said city of London, as such broker as aforesaid, as the price of the said scrip certificates, in fulfilment and performance of the said contracts; that the plaintiff made such payments in his own wrong, and without any express request whatever'from the defendant to pay the same; and that, except and by way of implication from the said retainer and employment of the plaintiff to purchase the .said scrip certificates thereinbefore mentioned, and from the usage and custom of the trade and business relating thereto (a), there never was any request whatever to the plaintiff [397] to pay (a) Inserted on amendment of the plea. 4 C. B. (N. S.)m SMITH V. LINDO 1139 the said price of the said scrip certificates ; that the said retainer and employment of the plaintiff in the last count mentioned was a retainer and employment of the plaintiff to act within the city of London as a broker, and to purchase as such broker the said scrip certificates in the said last count mentioned for the defendant; that the said alleged purchase of the said scrip for the defendant in the said last count mentioned, was made by the plaintiff within the city of London as a broker; and that the plaintiff was not at the several times of the doing of the said alleged work, and the payment of the said money alleged to have been paid, and of the said retainer, employment, and purchase in the said last count mentioned, or either of them, a broker duly licensed, authorized, or impowered to act or practise as a broker in the premises, or any of them, within the said city of London, contrary to the form of the statute in such cases made and provided. The plaintiff joined issue on the first three pleas, and took issue on the last. The cause was tried before Byles, J., at the first sitting at Westminster in Hilary Term last. It appeared, that, in the early part of the year 1857, a company was formed in London called the Hungarian Land Company; that prospectuses were issued, an office taken, and shares issued, and that the defendant was the solicitor to the company. The plaintiff, who was called, stated, that, in the beginning of August, he called upon Lindo, and suggested to him that it would be for the interest of the company to employ some person to go into the market to buy shares, and requested that he might be employed to perform this operation; that Lindo " acquiesced;" that he thereupon went into the market and bought three lots of shares, which were described in the con-[398]-tract note as bought "on account of Lindo;" and that these notes were from time to time as the shares were bought (the 4th, 5th, and 6th of August) handed by him to Lindo. He admitted that he was not a member of the Stock Exchange, nor a licensed broker, but that he was a "dealer in shares." It was further" proved, that, by the usage of the share-market, the broker, and not the principal for whom he buys, is the person looked to by the seller of the shares for payment on the settling-day. It appeared that the plaintiff had been compelled to pay 2101. to the sellers of the shares ; which sum, together with 71. 3s. 9d. for commission or brokerage, he now sought to recover from the defendant. The defendant who was called as a witness, stated that he had never authorized the plaintiff to buy the shares for him ; that, on seeing his name in the contract-notes, he asked the plaintiff why he had put it in, and told him he would have nothing to do with the shares; and that the plaintiff thereupon said he had been authorized by Nunez, the stock-broker of the company, to do as he did. Nunez, who was also called, denied that he had ever given the plaintiff any instructions as to the purchase of the shares; but that, on the contrary, he distinctly told him he had no authority. It further appeared, that the plaintiff had first made this claim upon Nunez, whom he had called before the committee of the Stock-Exchange, to compel him to pay the money ; that Lindo appeared as a witness before the committee; and that the committee dismissed the complaint. On the part of the defendant, it was submitted, that the fourth plea was proved, the plaintiff having according to his own account acted as a broker in the purchase of the shares, charging commission as a broker; and that, upon the authority of Cope y. Rowlands, 2 [399] M. & W. 149, Pidgeon v. Bwslern, 3 Exch. 465, and Jessopp v. Lutwyche, 10 Exch. 614, the plea, if proved, was a good answer to the plaintiff's claim. The case being left to the jury upon the credit of the witnesses, they found a verdict for the plaintiff for 2171. 3s. 9d. : and leave was reserved to the defendant to move to enter a verdict for him on the issue on the fourth plea, if the court should b'e of opinion that it afforded an answer to the action: and leave was also reserved to amend the plea, if necessary. Collier, Q. C., accordingly obtained a rule nisi to enter a verdict for the defendant, on the fourth plea, on the ground that that plea was proved,-the plaintiff to be at liberty to contend, upon the argument of the rule, if it should be necessary, that judgment should be entered for the plaintiff on that plea non obstante veredicto, on the ground that the plea was bad, aiid that it did not shew an acting as broker within 1140 SMITH V. LINDO 4 C. B. (N. S.) 400. the act (6 Ann. c. 16); that scrip-certificates in a public company are not within the statute; and that it would not defeat the claim for money paid. Bovill, Q. C., Geary, and Laxton, now shewed cause. The question is whether the plaintiff is a " broker " within the 6 Ann. c. 16, s. 5, which enacts, " that, if any person or persons from and after the determination of this present session of parliament, shall take upon him to act as a broker, or employ any other under him to act as such, within the said city (London) and liberties, not being admitted as aforesaid (a)1, every such [400] person so offending shall forfeit and pay, to the use of the said mayor and commonalty and citizens of the said city, for every such offence, the sum of 251., to be recovered by action of debt," &c. A stock-broker has been held to be a broker within that act: Janssen v. Green, 4 Burr. 2103; Clarice v. Powell, 4 B. & Ad. 846, 1 N. & M. 492 ; Cope v...
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