Wilcock v Pinto & Company

JurisdictionEngland & Wales
Judgment Date20 February 1925
Date20 February 1925
CourtCourt of Appeal

No. 554.-HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).-

COURT OF APPEAL.-24TH AND 25TH JULY, 1924, AND

(1) WILCOCK (H.M. INSPECTOR OF TAXES)
and
PINTO & COMPANY (in the name of F. KUMMER)

On the drawing up of the Order of the Court of Appeal in this case (reported at 9 T.C. 111), a question arose as to whether the Order for costs should be made against the resident agent, Kummer, or the non-resident merchants, Pinto & Company.

The matter came before the Court of Appeal (Bankes, Scrutton, and Sargant, L.JJ.) on the 20th February, 1925, when their Lordships held unanimously that the Order for costs must be made against the resident agent, Kummer.

JUDGMENT

Bankes, L.J.-I think the very serious point which Mr. Latter has raised is not in issue in this particular application. All we have got to say is, who in fact, in our opinion, was the Appellant upon the Case which was stated by the Commissioners. It seems to me quite plain on the face of that Case that Kummer was the Appellant, and therefore he is the only person we can deal with in respect of that Case, and the only person we can order to pay the costs in respect of that Case.

Scrutton, L.J.-I agree.

Sargant, L.J.-I agree.

1 The decision here printed is not elsewhere reported.

NO. 501.-HIGH COURT OF JUSTICE (KING'S BENCH DIVISION).-

COURT OF APPEAL.-

(1) WILCOCK (H.M. INSPECTOR OF TAXES)
and
PINTO & COMPANY (in the name of F. KUMMER)

Income Tax, Schedule D - Non-resident firm - Exercise of trade within the United Kingdom - Income Tax Act, 1853 (16 & 17 Vict., c. 34), Section 2, Schedule D - Finance (No. 2) Act, 1915 (5 & 6 Geo. V, c. 89), Section 31.

A firm of cotton merchants in Egypt appoint an agent (not described as their sole agent) in Manchester for the sale of their cotton there. Although the agent carries on no other business, he is at liberty to do so. From time to time he receives from the Egyptian firm authority to sell specified quantities of cotton on terms as to price, &c., separately fixed by them on each occasion, and he also obtains offers to purchase cotton which he transmits to them for acceptance or rejection. In both forms of business, if the bargain is carried through, the contract is made by the agent in England.

The agent keeps no stock of cotton; the goods are shipped by the Egyptian firm, c.i.f. in Alexandria (and the invoices are sent by them) direct to the purchasers. The bills of lading are passed to the purchasers through the ordinary commercial and banking

channels in exchange for acceptances of bills drawn by the Egyptian firm which are discounted in Alexandria. The agent is not concerned in any way with the payment, nor is he responsible for bad debts. He is remunerated by a commission on sales, out of which he meets his own expenses

The Egyptian firm were assessed to Income Tax in the name of the agent in respect of the profits of a trade exercised by them in the United Kingdom, but the assessment was discharged by the Special Commissioners on appeal.

Held, that the Egyptian firm were exercising a trade within the United Kingdom and were properly assessed in respect of the profits of that trade in the name of their Manchester agent, who must be regarded as an authorised person carrying on their regular agency.

CASE

Stated under the Taxes Management Act, 1880, Section 59, by the Commissioners for the Special Purposes of the Income Tax Acts for the opinion of the High Court of Justice.

At a meeting of the Commissioners for the Special Purposes of the Income Tax Acts held at York House, Kingsway, London, for the purpose of hearing appeals, on 4th April, 1922, Mr. F. Kummer of 27, Barton Arcade, Manchester (hereinafter referred to as the Appellant) appealed against an assessment made on Pinto & Co. (in the name of F. Kummer), for the year ended 5th April, 1918, under the provisions of the Acts relating to Income Tax by the Additional Commissioners of Income Tax for the division of Manchester.

I. The Appellant has since the autumn of the year 1919 been in partnership with Mr. Leigh. Prior to Mr. Leigh joining him in his business, he carried on business on his own account, which business has since 1915 consisted in acting for Pinto & Co. under the circumstances hereinafter set out.

II. Pinto & Co. are cotton merchants in Alexandria in Egypt, and sell cotton to, or in, every part of the world. In September, 1915, they arranged with the Appellant that he should be their agent for the sale of their cotton in Manchester, and be remunerated with a commission of 1 per cent. on the sales, out of which he should meet his own expenses. Pinto & Co. sell some of their cotton in Liverpool through a broker.

III. The business conducted by the Appellant as agent for Pinto & Co. takes two forms. He either-

  1. (a) sells cotton for Pinto & Co. upon their instructions as to limits of price fixed by them, such sales being only of specified quantities cabled by Pinto from time to time, the price and terms of each of which is separately fixed by Pinto when cabling permission to offer any quantity, or

  2. (b) obtains offers to purchase cotton the terms of which offers are transmitted by him to Pinto & Co. for their acceptance or rejection. On receipt of instructions from Pinto & Co. the acceptance or rejection of the offer is carried out by the Appellant either making the necessary contract, as hereinafter appears, or refusing the offer as the case may be.

The following series of copies of documents illustrates the second of these two forms of business. Similar documents, mutatis mutandis, would be used for the first form, but the first three of the following series of documents would not be necessary.

  1. (2) Letter by Appellant to A.B. acknowledging the receipt of an offer to buy cotton:-

  2. (3) "To A………B………

  3. (4) 12th October, 1917.

  4. (5) Dear Sirs,

  5. (6) I am obliged for your order for 25 Bales Sakell equal type EZI @ 271/2d. c.i.f. prompt shipment to Manchester or Liverpool former preferred with reimbursement on……………………Bank, Limited, Bolton, pble. London 3 m/d and have cabled same to my Alexandria friends for prompt reply. It may be Monday or Tuesday till I hear, cables are often delayed.

  6. (7) Believe me, dear Sirs,

  7. (8) Yours faithfully,

  8. (9) pp. FRED KUMMER

  9. (10) CHARLES KUMMER."

  10. (11) Cable to Pinto by Appellant:-

  11. (12) "To Messrs. Pinto & Co.,

  12. (13) Alexandria.

  13. (14) 12th October, 1917.

  14. (15) To A………B………

  15. (16) Empuerco. We make you a firm bid for 25 Bales EZI. 50

  16. (17) 271/2.

  17. (18) C.i.f. prompt.

  18. (19) Baobab. Draw as before."

  19. (20) Cable from Pinto to Appellant:-

  20. (21) "To Kummer Manchester

  21. (22) 25b. c. 50.

  22. (23) Accept A………B………empuerco 271/2 Pinto."

  23. (24) (i) Letter to A………B………by Appellant accepting offer, and enclosing Contract:-

  24. (25) "To Messrs. A………B………

  25. (26) 27, Barton Arcade Chambers,

  26. (27) Manchester.

  27. (28) 15th October, 1917.

  28. (29) Dear Sirs,

  29. (30) I have pleasure in confirming sale to your account Messrs. Pinto & Co. of 25 Bales Sakell type EZI @ 271/2 c.i.f. prompt shipment and herewith hand you contract. Please return the counterpart duly signed to

  30. (31) Dear Sirs,

  31. (32) Yours faithfully,

  32. (33) pp. FRED KUMMER

  33. (34) CHARLES KUMMER."

  34. (35) (ii) CONTRACT.

  35. (36) "27, Barton Arcade Chambers,

  36. (37) Manchester.

  37. (38) 15th October, 1917.

  38. (39) Dear Sir,

  39. (40) I have this day sold to you on behalf and for account of Messrs. Pinto & Co., Alexandria (25) Twenty Five Bales Egyptian Cotton quality EZI type Prompt shipment per Str and/or Strs from Alexandria to Manchester or Liverpool, former preferred, at (271/2)Twenty seven one half pence per lb., Cost, Freight and Insurance, to be invoiced at Alexandria gross weight less usual allowance for tare, War risk excluded but to be covered by Shippers and charged to your account. Marine Insurance to be provided by shippers for 10 per cent. in excess of invoice cost covering risk to Mill or Warehouse. Reimbursement by Shippers' Draft on Williams Deacons Bank, Ltd., Bolton, pble. London at three months from date of Bill of Lading and you agree to protect said draft on presentation. Any dispute arising out of this Contract to be settled by mutual agreement or failing which to be submitted to arbitration in Liverpool. In the event of shipment impracticable during the period contracted for cotton to be shipped as soon as possible afterwards. No penalty nor cancelment.

  40. (41) Yours faithfully,

  41. (42) pp. FRED KUMMER

  42. (43) CHARLES KUMMER."

  43. (44) Letter from A………B……… to Appellant being counterpart detached from contract:-

  44. (45) "15th October, 1917.

  45. (46) To Mr. Fred Kummer,

  46. (47) Manchester.

  47. (48) Dear Sir,

  48. (49) We herewith confirm purchase through you from Messrs. Pinto & Co. Alexandria of Twenty five bales Egyptian Cotton quality EZI at 271/2 per lb. c.i.f. prompt shipment to Manchester or Liverpool former preferred.

  49. (50) Yours truly,

  50. (51) A………B………"

  51. (52) NOTE.-For the contract (4) (ii) which is prepared and signed by the Appellant a printed form is used with form attached also for the counterpart mentioned in (4) (i) which is this document (5). A blank form of such contract with counterpart attached is annexed hereto and made part of this Case.

  52. (53) Telegram from Pinto & Co. to Appellant notifying shipment:-

  53. (54) Telegram.

  54. (55) "6th November, 1917,

  55. (56) 10.40 a.m.

  56. (57) To Kummer Manchester

  57. (58) Shipping steamer Bavarian twentyfive EZI A………B……… insuring two thousand four hundred.

  58. (59) Pinto."

  59. (60) Appellant's letter informing A………B………:-

  60. (61) "To A………B………

  61. (62) Bolton.

  62. (63) Dear Sirs,

  63. (64) Messrs. Pinto advise shipping per S.S. Bavarian 25 b. EZI for your account. The insurance will be covered for £2,400.

  64. (65) Believe me, Dear Sirs,

  65. (66) Yours faithfully,

  66. (67) pp. FRED KUMMER

  67. (68) CHARLES KUMMER."

  68. (69) (i) Letter from Pinto & Co.:-

  69. (70) "Alexandria,

  70. (71) 13th October, 1917.

  71. (72) Mr. Fred Kummer,

  72. (73) Manchester.

  73. (74) Dear Sir,

  74. (75) A………B……… We accepted your offer of the 12th inst. of 25 Bales EZI at 271/2d. c.i.f. reimbursement as before. Enclosed sale note No............."

  75. ...

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