This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
An agent may be authorised by word of mouth to sign a memorandum within s. 40 of the L. P. Act, 1925, which takes the place of the provisions relating to contracts for the sale of land contained in s. 4 of the Statute of Frauds (a); nor is it necessary that he should be authorised to sign the memorandum as a record of the contract (b). Neither of the parties to the contract can sign the memorandum as agent for the other (c); nor can the vendor's agent, other than an auctioneer, sign on behalf of the purchaser without express authority from the latter (d). But if an agent, with authority to sign on behalf of the vendor, signs the memorandum as "witness," the vendor will be bound (e).
Agent, appointment of.
(x) As to the nature of the liability of the auctioneer in such a case, see Heatley v. Newton, (1881) 19 Ch. D. 327; 51 L. J. Ch. 225.
(z) Gilliat v. G., (1869) 9 Eq. 60; 39 L. J. Ch. 142.
(a) Clinan v. Cooke, (1802) 1 Sc. & L. 22; Coles v. Trecothick. (1804) 9 Ves. 250; Mortlock v. Buller, (1804) 10 Ves. at p. 311; Emmerson v. Heelis, (1809) 2 Taun. 48; Deverell v. Bolton, (1812) 18 Ves. 509; Cave v. Mackenzie, (1877) 46 L. J. Ch. 564; Rosenbaum v. Belson, 1900, 2 Ch. p. 271, at end of judgment.
(b) Griffith's Cycle Co. v. Humber, 1899, 2 Q. B. 414; 68 L. J. Q. B. 959; Rosenbaum v. Belson, 1900, 2 Ch. 267; Daniels v. Trefusis, 1914, 1 Ch. 788; Grindell v. Bass, 1920, 2 Ch. 487; Farr, Smith & Co. v. Messers, Ltd., 1928, 1 K. B. 397.
(c) Durrell v. Evans, (1861) 7 Jur. N. S. 585; (1863) 1 H. & C. 174; 31 L. J. Ex. 337; and see Graham v. Musson, (1839) 5 Bing. N. C. 603; 8 L. J. N. S. C. P. 324.
(d) Wright v. Dannah, (1809) 2 Camp. 203; Farebrother v. Simmons. (1822) 5 B. & Ald. 333; Sharman v. Brandt, (1871) L. R. 6 Q. B. 720; 40 L. J. Q. B. 312.
The authority of an agent, either for sale or purchase, may be revoked at any time before he has entered into a binding agreement (f).
Authority may be revoked at any time before agreement concluded.
An agent cannot adopt the contract for his own benefit. If he attempts to do so, his principal may prove the agency by parol evidence (g), and insist on a conveyance to himself (h). Even if the agent pays the purchase-money, and succeeds in getting a conveyance to himself, he will hold the land as trustee for his principal (i). Sect. 53 of the L. P. Act, 1925, replacing s. 7 of the Statute of Frauds, is no defence, since it is established that the Statute of Frauds would not prevent the proof of a fraud (k).
Cannot adopt a contract for his own benefit.
A general authority given to an agent includes a right to do all subordinate acts incident to and necessary for the execution of that authority, and if notice is not given to the person with whom the agent deals that the principal has limited the authority, the principal is bound (l). Thus, where a principal entrusts an agent with securities and instructs him to raise a certain sum upon them, and the agent borrows a larger sum and appropriates the difference, the principal cannot redeem the securities without paying all the money advanced (m). Similarly, parties dealing with an agent on the faith of a written authority are unaffected by undisclosed (restrictions (n).
Private instructions to.
(e) Wallace v. Roe, 1903, 1 Ir. R. 32.
(f) Farmer v. Robinson, (1810) 2 Camp. 339, n.; Blagden v. Brad-bear, (1806) 12 Ves. 466; Mason v. Armitage, (1806) 13 Ves. 25; Manser v. Back, (1848) 6 Ha. 443; Smart v. Sandars, (1846) 3 C. B. 380; 5 ib. 895; 16 L. J. C. P. 39; 17 ib. 258.
(g) Taylor v. Salmon, (1838) 4 My. & C. 134; Dale v. Hamilton, (1847) 2 Ph. 266; 16 L. J. Ch. 397; Lees v. Nuttall, (1834) 2M.&K. 819; 4 L. J. Ch. 124; and see Austin v. Chambers, (1837) 6 C. & F. 1.
(h) Heard v. Pilley, (1869) 4 Ch. 548; 38 L. J. Ch. 718; Chattock v. Muller, (1878) 8 Ch. D. 177.
(i) Rochefoucauld v. Boustead, 1897, 1 Ch. 196; 66 L. J. Ch. 74.
(f) Collen v. Gardner, (1856) 21 Beav. p. 542; Watteau v. Fenwick, 1893, 1 Q. B. 346; Fry v. Smellie, 1912, 3 K. B. 282; Rosenbattm v. Belson, 1900, 2 Ch. 267.
An agent instructed to find a purchaser or tenant has no authority to sign a contract on behalf of his principal; his duty is to communicate offers to the owner (o). In other words, prima facie, an estate agent as such has no authority to enter into a contract on behalf of his employer: his authority for such a purpose must be proved (p). Thus an advertisement stating that applications "to treat and view " were to be made to the agent (q), a written request to procure a purchaser for a house and to advertise it at a certain price (r), an authority to act as agent "in and about the purchase " of a colliery (s), have all been held not to imply an authority to sell. But it is within the scope of the authority of an estate agent to describe the property and to state any fact which may affect its value (t), such as restrictive covenants affecting the property (u); hence the contract will be vitiated by any misrepresentations made by him (x).
Scope of his authority.
Authority to an agent "to sell" authorises the agent to make a contract for sale and to sign it on behalf of the vendor (y). But a mere authority to sell will only justify an agent in entering into an open contract, and not one with epecial conditions (z).
(m) Brocklesby v. Temperance Building Soc., 1895, A. C. 173; 64 L. J. Ch. 433; Rimmer v. Webster, 1902, 2 Ch. 163; 71 L. J. Ch. 561; Fry v. Smellie, 1912, 3 K. B. 282.
(n) Neeld v. Duke of Beaufort, (1841) 5 Jur. 1123; Duke of Beaufort x. Neeld, (1845) 12 Cl. & F. at p. 290; National Bolivian Co. v. Wilson, (1880) 5 A. C. 176, 209; Miles v. Mcllwraith, (1883) 8 A. C. at p. 133; 52 L. J. P. C. 17.
(o) Lewcock x. Bromley, 1920, W. N. 346.
(p) Thuman v. Best, (1907) 97 L. T. 239; Lewcock v. Bromley, sup.
(q) Godwin v. Brind, (1868) L. R. 5 C. P. 299, n.; 39 L. J. C. P. 122, n.
(r) Hamer v. Sharp, (1874) 19 Eq. 108; 44 L. J. Ch. 53; Wilde v. Watson, (1878) 1 Ir. L. R. 402; Prior x. Moore, (1887) 3 T. L. R. 624; Chadbum x. Moore, (1892) 61 L. J. Ch. 674.
(s) Vale of Neath Colliery Co. v. Furness, (1876) 45 L. J. Ch. 267.
(t) Mullens v. Miller, (1882) 22 Ch. D. 194; 52 L. J. Ch. 380.
(u) Wauton v. Coppard, 1899, 1 Ch. 92; 68 L. J, Ch. 8.
(x) See cases cited in last two notes.
Where a contract for sale has been verbally come to, and a solicitor or other agent of one of the parties has authority to sign a letter or other document which in fact contains the requisites to satisfy the Statute of Frauds (a), such signature will bind the principal, notwithstanding that the agent was not authorised or intended to bind his principal by a contract (b).
A power of attorney to sell any property belonging to the principal does not authorise the attorney to sell, under a mortgagee's statutory power of sale, property held by the principal as mortgagee. The words "any person for the time being entitled to receive and give a discharge for the mortgage money" in s. 106 (1) of the L. P. Act, 1925 (taking the place of s. 21 (4) of the Conv. Act, 1881), refer to the executors, administrators, and assigns of the mortgagee, and not to an agent (c).
An agent, employed to bid for an estate, and not limited as to price, can bind his principal to any amount; if, being limited, he exceeds the limit, and his want of authority is unknown to the other party, he himself is bound (d), and his principal, it seems, is free (e); upon the general ground that he cannot bind his principal beyond the extent of his authority (f); but the production of written instructions authorising him to give a specified price, does not preclude parol evidence of his having had a general discretionary power (g).
Agent for purchaser, how far he can bind his principal.
(y) Rosenbaum v. Belson, 1900, 2 Ch. 267; 69 L. J. Ch. 569; Keen v. Mear, 1920, 2 Ch. 574.
(z) Keen v. Mear, 1920, 2 Ch. 574.
(a) Now replaced by a. 40 of the L. P. Act, 1925.
(b) Darnels v. Trefusis, 1914, 1 Ch. 788, 798; and see North v. Loomes, 1919, 1 Ch. 378; Grindell v. Bass, 1920, 2 Ch. 487.
(c) Re Dowson and Jenkins' Contract, 1904, 2 Ch. 219.
(d) See Jones v. Downman, (1843) 4 Q. B. 235, n.; 7 ib. 103.
(e) Hicks v. Hankin, (1802.) 4 Esp. 114; East India Co. v. Hensley, (1794) 1 Esp. 112; Daniel v. Adams, (1764) Amb. 498; Ex p. Bennett, (1805) 10 Ves. at p. 400; Sug. 14th ed. 47.
(f) Oldnig v. Smith, (1852) 16 Jur. 497.
After the contract is entered into, an agent for sale, if and so long as his principal is undisclosed, may, within the limits of his original authority, vary the terms of payment (h); he cannot, without special authority, receive the purchase-money (i); if authorised to receive it, a direction from his principal to pay it to a third party cannot, if given for valuable consideration (k), be revoked without the consent of such third party. An agent is not bound to pay over to his principal money received by him under a contract, if the contract has been rescinded on the ground of fraud (l).
Powers of agent.
The principle underlying the law as to commission has been stated by Mr. Heber Hart (m) as follows: "An agent will be entitled to commission, or to an equivalent amount in the form of a quantum meruit or damages, when, as the result of his action, a person qualified to be a purchaser becomes willing, or can be compelled, to buy substantially upon the terms which the proprietor has, expressly or impliedly, intimated to the agent as those upon which he is able and willing to sell." In every case there are two main questions to be determined: - First, was the sale directly or indirectly the result of the ,agent's actions (n) ? Secondly, was the agent employed to bring about the transaction in respect of which the claim to commission arises (o)?
(g) Hicks v. Hankin, (1802) 4 Esp. 114.
(h) Sug. 14th ed. 46, 47; Blackburn v. Scholes, (1810) 2 Camp. 343.
(i) Mynn v. Joliffe, (1834) 1 Mo. & R. 326; Pole v. Leash, (1868) 28 Beav. 562; on appeal, 9 Jur. N. S. 829.
(k) Metcalfe v. Clough, (1828) 2 Man. & R. 178; 6 L. J. (O. S.) K. B. 281; Yates v. Hoppe, (1850) 9 C. B. 541; 19 L. J. C. P. 180; see in Equity, Rodick v. Gandell, (1851) 1 De G. M. & G. 763; 19 L. J. Ch. 113; L'estrange v. L'e., (1850) 13 Beav. 281; 20 L. J. Ch. 39; Riccard v. Prichard, (1855) 1 K. & J. 277.
(l) Murray v. Mann, (1848) 2 Ex. 538; 17 D. J. Ex. 256; Stevens v. Legh, (1853) 2 C. L. R. 251.
(m) Auctioneers and House Agents, by Hart, 2nd ed. p. 322.
(n) Green v. Bartlett. (1863) 14 C. B. N. S. 681; 32 L. J. C. P. 261.
A secret commission received by the vendor's agent from the purchaser, or by the purchaser's agent from the vendor is in the nature of a bribe (p). It is immaterial to inquire what effect the bribe had on the agent (q); and the agent must not only account for the profit thus obtained to his principal, but loses his right to a commission from his principal (r). An agreement for payment of a secret commission is bad on the ground of public policy, and cannot be sued on (s). Such an agreement may, under certain conditions, render the agent liable to criminal proceedings (t).