DATE DOWNLOADED: Tue Dec 12 08:22:18 2023

SOURCE: Content Downloaded from HeinOnline

Citations:
Please note: citations are provided as a general guideline. Users should consult their preferred
citation format's style manual for proper citation formatting.

Bluebook 21st ed.

The Implied Authority of Agents, 30 CAN. L. TIMES 243 (1910).

ALWD 7th ed.

, The Implied Authority of Agents, 30 Can. L. Times 243 (1910).

APA 7th ed.

(1910). The implied authority of agents. Canadian Law Times, 30(3), 243-246.

Chicago 17th ed.

"The Implied Authority of Agents," Canadian Law Times 30, no. 3 (March 1910): 243-246

McGill Guide 9th ed.

"The Implied Authority of Agents" (1910) 30:3 Can L Times 243.

AGLC 4th ed.

'The Implied Authority of Agents' (1910) 30(3) Canadian Law Times 243

MLA 9th ed.

"The Implied Authority of Agents." Canadian Law Times, vol. 30, no. 3, March 1910,
pp. 243-246. HeinOnline.

OSCOLA 4th ed.

'The Implied Authority of Agents' (1910) 30 Can L Times 243 Please
note: citations are provided as a general guideline. Users should consult their
preferred citation format's style manual for proper citation formatting.

-- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and
Conditions of the license agreement available at
https://heinonline.org/HOL/License
-- The search text of this PDF is generated from uncorrected OCR text.
-- To obtain permission to use this article beyond the scope of your license, please use:
Copyright Information
 THE IMPLIED AUTHORITY OF AGENTS.

THE IMPLIED AUTHORITY OF AGENTS.

There were reported in the Times of December 28th, two

cases concerned with the law of the implied authority of
agents. There are Russo-Chinese Bank v. Li Yau Sam,
decided by the Judicial Committee of the Privy Council, and
Yonge v. Toynbee, decided by the Court of Appeal. In each
case the appeal from the lower Court was allowed. In one
case the principle was,sued on a contract made by the lagent
without authority, and was held not to be liable by reason of
that want of authority. In the other case, the agent was
held to be liable as on an implied contract that he had au-
thority, the fact being that he had not authority. T he facts
of these two cases differ as widely as their locus-Hong-
kong and London-but they both illustrate the circum-
stances under which the doctrine of "holding out" will or
will not be applied. The first case may be dealt with more
briefly than the second. The second case has also special
importance for solicitors.
Rtsso-Chinese Bankh v. Lt Yau Sam, was an appeal from
tile Supreme Court of Hong-Kong. The respondent was a
Chinese banker, who had paid a sum of money to the agent
of the bank to be transmitted by telegraph. The money was
not transmitted, and the respondent sought to make the ap-
pellants liable as on a breach of contract. The arrange-
ments of the bank were that business with native Chinese
was conducted on their behalf by a special agent called a
I, c l)npradoI'c." 'lime authority of the compradore was strictly
liuited to receiving app-ications from customers who de-
sired to do business with the bank, and he had no authority
to receive ironey for transmission. A sum of money hav-
ing been handed to the compradore by the respondent for
transmission, one question at the trial left to the jury was:
"Did the bank put the compradore in such a position that
he could pretend to the plaintiff that he had the necessary
authority to receive the money; and if so, did the plaintiff,
believing he had that authority, hand over the money to the
compradore in that belief? The jury answered this question
in the affirmative and found for the plaintiff. The Supreme
Court refused to disturb the verdict. The judgment of
the Jidicial Committee was delivered by Lord Macnaghten
 THE CANADIAN LAW TIMES.

and the decision of the Supreme Court was reversed, and

judgment in the action was ordered to be entered for the
appellants. The Board were of opinion that there was no evi-
dence to support the finding of the jury on the question auove
stated. They also thought that "the bank had not by any
negligent or improper act on their part allowed the compra-
dore to be apparently invested with any authority beyond
or greater than the limited authority which the plaintiff knew
him to possess. . . There could not, therefore, be any es-
toppel against the bank." Lord Macnaghten went on to
point out how inapplicable the doctrine of "holding out"
is to a case in which the agent's authority is, to the know-
ledge of the person dealing with him, of limited scope.
Yonge v. Toynbee is of great practical importance to
solicitors who are conducting litigation for a client under a
retainer which they have no reason to believe has been with-
drawn. The case took the shape of an appeal from the
order of a Judge at Chambers, the question being whether the
defendant's solicitors were liable and should be ordered to
pay the plaintiff's costs. The plaintiff brought an action for
libel against the defendant. The defendant's solicitors in
August, 1908, undertook to accept service of the writ of
suninons. Eventually the action proceeded up to delivery
of a statement of defence in February, 1909, and notice of
trial was given in March. In April the defendant's solicitors
discovered for the first time that their cient had in the pre-
vious October become of unsound mind, and was duly certi-
fied and detained as being of unsound mind. Subsequently
an order was made by the master, and affirmed by the Judge.
striking out the appearance and subsequent proceedings in
the action, but the master declined to make an order that
the defendant's solicitors should pay the costs. From this
order of the Judge at Chambers, the plaintiff now appealed,
and the appeal was allowed by the Court of Appeal
(Vaughan Williams and Buckley, L.JJ., and Swinfen Eady,
J.).
The principal judgment was delivered by Buckley, L.J.,
who began by saying: "TThe interesting and important ques-
tion in this case is as to the extent to which the principle of
Sinovt v. I/bery (10 M. & W. 1), remains good law after the
decision in Collen v. Wright (8 E. & B. '647). In Smout v.
IPbery (decided in 1842), the agent, the wife, had been held
by the Court of Exchequer not to be personally liable for
 TILE IMPLIED AUTHORITY OF AGINTS.

nioney representing the price of goods supplied to her as

her husband's agent, after the date of his death, where neither
she nor the creditor knew of the death; the wife originally
had authority, and the fact of a previously existing authority
having come to an end, was held to differentiate the case
from cases where there never had been any authority, and
so to relieve the agent from the liability which would have
resulted from an implied warranty, that she had authority
at the time of entering into tile contract. Collen v. Wiright
(decided in 1857) was a decision of the Exchequer Chaniber
on appeal from the Queen's Bench. There was no question
of the revocation of any previously existing authority. An
agreement for a lease had been entered into by an agent on
behalf of the owner, and the latter refused to ratify the
contract; the agent having, in fact, no authority to make
the contract. The plaintiff (the intending lessee) was held
entitled to recover damages from the defendant (the execu-
tor of the agent), on the footing of his testator having er-
roneously stated that he had authority to make tli contract.
h'lhese two cases are carefully compared by Buckley, L.J.,
who added: "I can see no distinction in principle between
the case where the agent never had authority and the case
where the agent originally had authority, but that authority
had ceased without his knowledge or means of knowledge."
The Lord Justice went on to say that the language used by
Willes, J., in his judgment in Collen v. Wright, was not con-
sistent with maintaining what S m out v. ibery had laid down
as the true principle-that there must be some wrong or
omission of right on the part of the agent in order to make
him liable. "The question is not as to his honesty or bona
fides; his liability arises from an implied undertaking or
promise made by him that the authority which he professes
to have does in point of fact exist.".
In the result, the defendant's solicitors were held liable
to pay the plaintiff's costs. In the words of Buckley, L.J.,
"they are liable upon an implied warranty or contract that
they had an authority which they had not." The appel-
lant was, therefore, entitled to "an order against the soli-
citors for damages, and the measure of damage is, no doubt,
the amount of the plaintiff's costs thrown away in the ac-
tion."
 THE CANADIAN LAW TIMES.

S m out v. Ilbery is, therefore, overruled. With it also

goes down (so far as relates to this point), the case of Salton
v. New Beeston Cycle Co. (1900), 1 Ch. 43), a decision of
Stirling, J., and closely resembling Yonge v. Toynbee.
Stirling, J., held, on the authority of Smout v. Ilbery, that
a solicitor, who originally had authority to represent a com-
pany, was not liable for acting on that authority after it had
been revoked by the dissolution of the company, until lie
knew, or, by the exercise of due diligence, might have known
of the dissolution.
Different as are the two cases-the one before the Judi-
cial Committee, the other before the Court of Appeal-they
have this in common, that in both the doctrine of "holding
out" has received some further refinement. This doctrine
is really neither more nor less than one of those beneficent
fictions, of which there are so many in our law, by the aid
of which substantial justice is secured. A warranty or con-
tract is "implied" and the parties' rights are regulated in
the same manner as though there were an actual or express
warranty or contract. In the Hong-Kong case, the applica-
tion of the doctrine was restricted, for the benefit of the
principal, in the English case, the doctrine was extended,
to the prejudice of the agent.
The Court ot Appeal have also now made it clear that
even a solicitor, or other special agent, cannot escape the con-
sequences of acting on a supposed authority which, from
whatever cause, does not exist, any more than he can ascape
the consequences of relying on a forged power of attorney.