Stinus Depuichaffrey v Pickering Berthoud [1922] SLSC 8 (14 February 1922)

21 STIXUR & DEI>UICITA1<'J•'RAY - Appellants v. JliCKERIXr:- & BER'rHOCD, LTD. - .lction for balance of account for sen.:ices 1'f'J!dered by Plaintiffs a.~ shipping a,qents and money1s paid lr!J Plainh"ff.~ for the Defendants at their reqHrst-[Tndi.~clo.~ed profits of agents: The facts of this case a.re sufficiently set out in the judgment. Appeal from n judgment of Pur<·ell, C . .J., in ihe Supreme Court of Sierra Leone. Thompson fm· ~\ppellnnts cites:- Order !18, Hule !1 (Annual Prnrtirr, 1805). Order flO, Tiule la, T .. oeal Rules of Rupreme Court . Order 3;). Rule 1:~. J,oc·al Rules of Sllpreme Court. Order :1:-1, Rules 4 ancl :-,, Loenl Rules of Supreme Comt. A.nbby 1·. Prnetoriuc;, f'li I.~ .. T., Q.H., p.

281. Vint 1•. lh1dspith, J,.R., 29 Cl1. D., p.

322. Smith 1'. S~·dne:·, :1!) T,.J .. Q.B., p.

144. Cash 1'. Wells, I.R. & .\., p.

875. Uraham for the Respondents. SAWREY-COOKSON, J. This is a case which, for rea.,ons which it is not nPcessary to gi'e here, was ordered by this Court to be re-tried b~· itself, and it has now been so re-tried at considerable length. The Plaintift's are the well-known braneh in this Colony of a firm with its headquarters in :\fanchestt>r and acted as agents for the Defendant!<, a firm canying on hn~int>ss in this Colony as :Men·hants. in tht> matter (so far a-; it is material to consider here) of shipping the Defendants' produce to England. The statement of claim as shown on a ~pt><'iall~, endorsed writ is " for a sum of £238 9s. 9d. being the balm1ce of an nc·c·o\mt for services ren dered and work clone b, the Plaintiffs as shipping agents and for money.:; paid h~· the Plaintiff<: for the Defendant.- at their rl'queo;t" ·and the particulars of that <'him show the manner in whic·h that balance remains clue and owing to the Plaintiffs . The evidence is mninly doc•umpntnry apart from that of the two witnesses, Phillips and Stinus, as local managers of the Plaintiffs' firm and head of the Defendants' firm respectively. 14th February, 1922. STems&. DF.I.'UICTTAF- 11- PICK"RISO & Bf:RTHOI:D, LTD. SAWRRV COOK!'<l~. J. 22 The Defendants deny that a.ny portion ot th(• bal::mce claimed is uue to the Plaint ilts a111l nlleg1• tln\t such b.tlan('e is made up of sums OYercharged them by tlw l)laintitt .... ancl, i£ I undl.'rstand them correctly, would e>eu go so f;~t· as to maintain that inas much as these sumto~ were profits made by the J>luintiJl's without disclosure to them as prinripals the~·, the Defendanb, are <mtitled to ha>e them paid over. · 'l'hat couuterdaim need not, however, be considered as it lS only to be gathered from certain expressions of learned eoun:;el for the defendants when l'iting certain c·a~es in support of the fraud which he alh•ge" has been pradi;;ed ltpon his clients. In substance the defence is that c·onsiuerable overd1arges have bee11 made and an ac·count is asked to he taken in order that the mamH•r in whic·h even the sum of .£1,627 7s. 4o. shown in th~ partic·ular'l of the Plaintiffs' c·laim to have been due us far back as J anuar~· 1st, 1918, may be gone in to. This, I take it, menns that it is desired to re-open th( whole of the a<:c·ount betwe(.'n the parties from the ~-enr J!JH, when the bu~iness relations material to this C'ase :fir,_t existed. Jlowever, there was nothing to be gathered from the l>e fenclants' e,-i<' cnc·c which suggested any more than that the :mm C"bimed was made up of overcharges and that he woulrl he satisfied if thi-. Court w·ould hold that the Plaintiff~' claim thrrefore failed. Ho that the proper issue for this 0ourt to determine should he-Is the Plaintiff entitled to the balanc·e c-laimed atHl is that balance eoustituted by charges of a nature whic·h the', as D(•fen<lants' agents, hacl no right to make? Xow it is not, of course, in dispute that the Plaintiffs were (•ntitlecl to, and did, <'harge C'onunission at >ariou~ and in c-reasing ratr:-. from time to time, the increase being due to and doubtless. to some <•xteut, justified by the stre"s of war; henre mainl~· the Defendants' content ion that any other profits the Plaintiffs might make out of them were suc·h as they were not entitled to make as their agents. Bnt what was the nature of those profits and were they -<uch as fall within the scope of either of the two main c·ases upon which the Defendants' counsel has reliecl, viz ., "Morrison 1·. 'l'hompson (18i4) 43 L .. J.Q.B. at p. 210, or 'Williamson 1·. Rarbour (1877), 50 L .. J., Ch. p. 147? The Plaintiffs have not attempted to conceal the fact upon whirh dul'ing- a grt>ater part o£ ihe re-hearing it was uncler~tood that Defendants' co1msel relied in order to Ahow that the whole of the transactions -were so tainted "ith fraud that ...-irtually none of those transactions were free from the gravest suspicio n , viz ., the fact th0v had actually overcharged hy way of insmmwe premiums to the extent of £482 odd; but it is perfectly clear as was again and again pointed out, that the moment the Defendants repudiated lhose overcharges the Plaintiffs accepted that repudiation, admitting that they ·were not. justified because no notice had been given o£ the increased rates and that steps were taken to rectify the matter, with the result that the whole of this amount was refunded to the Defendants. The result of such acceptance of the repudiation and refunding is naturally that the matter is at an end and nothing remains for which the intervention of the Court can be sought. But the effect produced upon this Court by the stressing of this factor in the case has been the feeling that nothing that could be said should be left unsaid in order to besmirch the business probity of the Plainti.ffs It remained, howe>er, open to the Defendants to satisfy this Court that the balance of the £238 odd should similarly ha>e been admitted to be an overcharge. So that we may now con sider how this sum of £238 is to be accounted for according to the Defendants, and eYen slightly over-accounted for, according to ~Ir . Stinus, with the result that, if justice were done on an account being taken, there would actually· remain a small balance due to his firm. Finally, tl1ere is the item o£ some £24 lOs. Od. which the Plaintiffs quite freely admit was charged in the acconnt for a certain considerable number of cables at a rate whieh it would have cost the Defendants to send those cab1es had each <'able been sent by the Defendants themselves-the charge in this respect for well over 95 per cent. of the cables sent and so charged for, being 8s. 4d.-and they equally freely admit that they charged each o£ their customers or clients in the same manner, i.e., that they did not divide the cost of each cable although it might have been sent on behalf of, say, 10 such clients into ten parts. This division the Defendants say, ought to have been made, and as it was not made, the profit thereby accruing to the Plaintiffs "·as such as no agent is allowed by law to make out of his principal. This is a f'Ontention with which this Court cannot agree for two reasons- (1) because the Defendants are shown to have been charged only with the cost of so much of each such cable as affected their interests, and (2) because the two case~ already mentioned are clearly no authority for saying that the profit which admittedly did result from sending clients' cables in this manner was such as oould be recovered by the Defendants as principals from the Plaintiffs as their agents. The facts and circumstances in those two cases are, indeed, to be clearly distinguished from those found here. It would STINUS & DEl'UIO!iAl?· FRAY v. PICKERING & BERTHOUD, .[JrD. SAWllEY• COOKSON, J. STTNt'S & DEl'UICHA¥• li'RAY tl. PICKERING & BERTHOUD, LTD. SAWREY· COOKSOI<, J. 24 haw been well if Yr. Thompson had rend (for presumably he cannot have read) the length~- note preceding the Judgment of Jpssel, :ll.R., setting out the facts upon which the allegation of fraud was based, such as for example that the Plain tiffs (who "·ere asking that the whole a_ceounts between them and the Defendants be opened oYer a period of nearly 20 years of the dealings beb·reen them) had not allowed them eertain con siderable clisrom1ts recei1ed from the hleaehers of c-ertain grey linen goods bought h: the Defendants for them as well as hom the vendor of those goods, hut had also added for themselYes a sum OYer and aboYe the gross charge for the bleaching as a separate profit for tl1em~ehes "ith whi<·h they l1ad 11ot cre dit ed the Plain tiffs : I bat, being ordered h~· thE:' Plaintiffs to insure the goods sent to India in some reliable public office they often did not do so at all, «ending them at their own risk, or else only insured to an amount smaller tlHtn that represented to the Plain tiffs, at the same time charging the Plaintiffs with the premiums for the full amount whic·h were often higher than ''ould h ave bee11 rhnrg e1l by the office: that the Defendants had frequently im·oiced the goods ns haYin~ been paid for before the~ had been, and ch::ngecl the Pl nint iffs with interest on such alleged pay ments from the alleged dale of pa~ment. Is it to be wondered at in such cirrumstances as these that the learned Master o£ the Roll i! said (inter aha) in his judgment " wl1en we find an agent buying goods, paying one price and inv-oicing them at a higher, we must take him to know that he is committing a breach of his duty as an agent and that he has taken out of the pocket of his emplo~er a sum whic·h hPlongs to that employer, and unless it "·ere done on a single oc·casion by accident or mista ke he cannot treat thal ov<'rcharge as being properly described by any other term than a fraudulent ov-ercharge." H e then went on to hold that there was no defence or excuse for the cha rges made in regard to the insmance. Tiow, indeed, could the learned -T udge in that case hav-e held otherwise? Dut is it not abundantly clear that what the Plaintiffs are alleged to have clone, indeed admit the~ did. in the case before us. is as unlike as possible the fade; in that case? The other ease . )!ol'rison v. Thompson, was one in which the Defendant acted as agent for the purchase of a ship on the hnsiR of an offer of £9,000 ot· as Ul\H'h more t'henply as possible, hut h~ some kind of C'Olluc;ion with the v-endor's broker who was authorised to ret a in anv- "Hill OYer £8,!)00 for himself. purchnsecl the ship for £9,250 ancl retained £22;) for l1imsel£. In such circumstanees it wns of course fo•tnd as n well established principle of luw, lhaL the principal could recover that sum o£ £2:2G inasmurh as it was a profit flcquired by an agent in connec tion with ~is agency. .And Cockburn, C.J ., quoted a dictum of Lord Justice James (as he then was) in regard to the danger of allowing even the smallest departure from the rule that a person who is dealing ·with another ma:p's money ought to give the truest account of what he has done and ought not to receive anything in the nature of a present or allowance without the full knowledge of the principal that he is so acting. In both these cases there was such a :fiduciary relationship as certain!~' cannot be found in the present case, and they are as little of auth()rity for finding fraud in regard to the cabling transaction complained of as they are for finding it in the " Memnon " transaction, indeed considerably less so if possible . .All that the Plaintiff did in that trans act ion was to charge £55 lOs. Od. as their commission for work done by them and as v.·hat they would have been entit led to on the gross sale pric~ of the shipment had it arrived safely at its destination instead of goiu~ down with the " Memnon." It is manifest that the Defendants Cflmwt be heard to say that such commission was never earued . by the Plain tiffs, and as was poiJlted out severa l times during the re hearing, this Court attaches no importance whatsoever to the point made with considerable mgency by the Defendants that this charge is described as for " collecting commission ." There remains only the question of overcharges constituted by the insuring of the freight against, as it is alleged, the wishes and ·without any authority express or implied of the Defendan ts, the mutter of 4s. lld. claimed in respect of " sweepings " being fl Yery fair instance in which to apply the legal maxim, de 1m:nimis non cu1·at lex. There appeared at one stage of the re-hearing to be a gooll deal to be said £or the contention o£ the Defendants in this regard viz., that they never desired or did or said anything justif ying this insurance of the freight which no doubt would never have been insured but for certain action taken by the \\,. ar Risk and Marine Insurance authorities in England. The point as to whether or not the Defe ndants understood and agreed to the charge in this respect being made, would probably have remained in such a state of doubt that this Court might well have held that the Plaintiffs' claim to this considerable part o£ the balance had not been made out. For so it might well htwe been held but for the £act that account sales in wl1ich such charges appeared were actually rendered to the Defendants from time to time . Hence it is imp:)ssible, in view of the length of time that ela,psed STINUS & DEPUICHAF· FRAY tl. l?ICKElUNG & J3E:GTHOUD, LTD. S.I.WllEY · COOKSON, J. I . ST:U~US & DEPUICIIAF· FRAY v. PICKERl~G & BERTHOUD, LTD. i-lAWREY· CoOKJ;O!'i, J. 26 between these being- rendered anu any sort of protest coming hom the Defendant;;, and in view of tlw fad tl1at the Defendant Stinus (though " only a Frenehman " as he appeared to the Court to protest too much) has been in business O\er 20 years in this Uolouy, it is impo:ssiulc to l'Ome to nny other condusion than that the Defendants knew o£ those charges to au extent at any rate which estops him from now coming to this Uourt and ~ettiug up that the Plaint[.tts knew of his ha,ing repudiated them. Such delay in protesting (in addition to being such an estoppel h~· conduct) lends in itself considerable colour to the Plaintiffs' version that they were justified in belie' ing that he approvt'd of those charges; and t·ertaiuly it is remarkable that if, as ])t'fen tlants allt'ge, it was made c1uite dear al the inter>iew (o£ which so much was heard) following- as it did considerahle correspondence on the subject, that 1he Defendantt> declined to insure the freight, lhat they should nol have been at pains as business men to state that faet in writing. The result, therefore, is that there must be j udgrneut for the Plaintiffs and with co:;ls in a(·cordance with the terms of the order o£ this Court remitt i11g this case for re-trial. PURCELL, C.J. I concur. )JcDON~ELL, Acting J. I concur .