J. S. Sagoe V. John Walkden & Ors (1931)

LawGlobal Hub Judgment Report – West African Court of Appeal

Contract—Principal and Agent—Unsatisfied Judgments against Agent’s Brokers—Not a Bar to Action against Agent on Contract– Joint and Several Liability.

The plaintiff, as agent of the defendants, was advanced sums for the purchase of produce under a written agreement. The plaintiff made advances out of these sums to brokers with the permission of tte defendants. A number of brokers defaulted and the defendants sued and obtained judgments against them. but the judgments remained unsatisfied. –

In the present suit the plaintiff claimed a certain sum due him by the defendants. This was admitted by the defendants, but the latter counterclaimed under “a clause in the agreement which made the plaintiff liable for all advances to brokers in excess of £1,500.

The Court below gave judgment for the plaintiff on the claim and counterclaim, on the ground that the defendants, having sued and obtained judgment against the brokers, could not now turn round and sue the plaintiff because those judgment* had not been satisfied.

On appeal this judgment was set aside and judgment was entered for the defendants on the counterclaim on the grounds that,—

1. The causes of action against the brokers and the plaintiff were not h e same, that against the former being for money had and received and that against the latter being as a clause in the contract.
2. The relation between the plaintiff- and the brokers was not that of principal and agent, and the defendants were not therefore debarred from suing first one and then the other.
3. The liability of the plaintiff and the brokers was not joint but joint and several.

K. A. Korsah for the Defendants-Appellants. W. E. G. Sekyi for the Plaintiff-Respondent. The following judgments were delivered :–

DEANE, C. J. THE GOLD COAST COLONY.

In this action the plaintiff sued the defendants for the sum of £381 17s. 8d. which he alleged was due to him by them for monies deposited with them and for commission on cocoa purchased by him as their agent. The defendants denied indebtedness of the sum claimed or any part thereof, and alleged that the plaintiff, as their agent, having in breach of an agreement with themadvanced a sum of £880 for which under the agreement he was personally liable, he was indebted to them on balance in the sum of £498 2s.- 4d. for which they counterclaimed.

Counsel for the defendants states thal at the trial he applied for an amendment of the writ by inserting after the words John Walkden & Co.” the word ” Limited,” but that the learned Judge refused to entertain the application on the ground that it w►c too late. As, however, it appears from the agreement which has been

put in evidence that the defendants are therein described as John Walkden & Co. Ltd., and it is agreed that this is their proper description, we think that the writ should be amended so that the defendants may be sued under their right name and accordingly order that the word ” Limited ” he inserted in the writ after the words ” Walkden & Co.”

At the trial the learned Judge ruled that the defendants should begin, and counsel appearing for them in this Court has asked us to say that his ruling was wrong. He argues that inasmuch as there was a total denial of indebtedness by the defendants the onus was on the plaintiff to begin as it was for him to prove his case. On persual of the counterclaim filed by defendants, however, it will be found that they allege that there is due to them a balance of £498 2s. 4d. after giving plaintiff credit for the sum of 381 17s. 8d. which he claims, and although as a general rule when indebtedness is denied by defendant the plaintiff must begin 1 am of opinion that in the circumstances of this case the learned Judge was justified in treating the credit in the counterclaim as an admission that plaintiff was entitled to that sum, and that no injustice was done by his calling upon defendants to begin.

The facts in this case which were proved and which are really not in controversy are as follows :—The plaintiff was employed by defendants who carried on business as merchants and produce dealers in the Colony as their agent to buy produce under a written agreement dated 1st October, 1929. This agreement provided (inter alia) by paragraph 4 • as follows :-

“Subject as hereafter provided the agent shall be at liberty to sell goods on credit and /or to give out on credit moneys for the purchase o produce provided that the amount owing for goods so sold and /or for moneys so given out on credit are secured to the Company by mortgage or mortgages of house or landed property of substantially greater present market value than the amount secured or by the guarantee of a person or persons of means and standing or some other sufficient security to be approved by the Company. The aggregate amounts owing to the Company for goods sold on credit by the agent shall not at any time exceed the sum of £1,000 (One thousand pounds) and for moneys given out on credit for the purchase of produce the sum of £1,500 (One thousand five hundred pounds) or such larger or smaller amounts respectively as the Company or the senior agent may from time to time notify in writing to the agent. Should the aggregate amount or amounts so owing at any time exceed the above mentioned respective figures or such larger or smaller amounts respectively as the Company or the senior agent may from time to time authorise, the agent shall be personally liable for the excess notwithstanding that the Company may have waived its rights in respect of a prior infringement or infringements.”

Then by paragraph 15 of the agreement it was further provided

” The Compa,ny shall have power to deduct and retain any sum or sums for which the agent shall be responsible or which may become due from him to them under any of the provisions hereof from any salary or commission due to the agent hereunder or from the proceeds of any security which may from time to time be vested in them as security for any such sum or sums.”

Plaintiff carried on under the agreement advancing sums to various brokers or sub-buyers for the purchase of produce, and was urged from time to time by the Company to keep his advances within the limits prescribed by his agreement ; but on 30th April,

1930, when the agreement between himself and the Company save was terminated, i t appeared that as from 18th October, 1929, the widen & date of the agreement, there was due to the defendants for moneys Co.

advanced for the purchase of produce, and for which they had_c,

received no produce, no less a sum than £2,914 14s. 10d. Plaintiff*

had prior to 30th April, 1930, instructed the Company’s solicitor to take legal steps against the brokers for the recovery of these moneys, and everything possible by way of realising the securities and obtaining judgments had been done, but there was still due to the defendants when the writ was filed a sum of £2,380, which the defendants had been unable to recover, representing monies advanced by the plaintiff for the purchase of produce. The defendants therefore pleaded that they had a right, under paragraph 15 of the agreement, to deduct the sum of £381 17s. 8d. which they owed the plaintiff for commission, from the £880 which represented the excess of monies over the £1,500 allowed: for advances for produce, and for which under the agreement he was personally liable to them, and they counterclaimed for £498 2s. Ad. the balance of £880 due to them after such deduction.

On these facts the learned trial Judge gave judgment for the plaintiff on both the claim and counterclaim with costs. He stated ” the Company sued several of the brokers in their own name to recover these advances, and in all cases obtained judgments many of which are unsatisfied, and it is upon the amount of the unsatisfied judgments that the counterclaim is based.

” It is established law that the defendants could have adopted two courses to recover these monies : they could had they chosen, have sued the plaintiff as their agent for monies had and received for their use, or they could, as they did in fact do, sue the several brokers for the several amounts as the agent was at all times acting for a disclosed principal, but they cannot, having elected to sue the several brokers and obtained judgment even if unsatisfied, turn round and subsequently claim against the agent as there is only one cause of action. The case of Isaacs & Sons v. Salbstein, (1916) 2 K.B. 139, is in point.”

The learned Judge has, if I may so respectfully, in my opinion entirely misconceived the law. It was not open to the defendants, as he states, to sue either the plaintiff or the brokers ; on the contrary in suing the brokers they took the only course open to them to recover the advances made by the plaintiff to the brokers with their permission, since an agent acting within the scope of his authority incurs no liability vis-a-vis his principal. It is true that if a person having a right to elect which of two parties to sue—principal or agents—sues one to judgment he cannot recover against the other, but that was not the case here since the relation of principal and agent did not exist between the brokers and the plaintiff so as to give the defendants the right to elect which of them to sue. This relation of agency existed only between the plaintiff

and the defendants, and the brokers, had they been aggrieved in the course of the business transactions with the plaintiff as agent of the defendants, would have had to elect which of them they should sue.

There was thus no relation of principal and agent between the debtors so as to preclude the defendants, having sued one of them to judgment, from afterwards suing the other. Nor did their liability arise out of one cause of action as stated by the learned Judge. The liability of the brokers was for the monies advanced to them in the ordinary course of business to purchase produce, and was thus for monies had and received by them from the defendants ; the liability of the plaintiff arose out of his failure to keep within the limits of advance prescribed in his agreement, so that he became liable for any sums due- to the defendants by the brokers in excess of 0,500. To say, therefore, that there is one cause of action is manifestly to misconceive the position, since the plaintiff could not be sued like the brokers for monies had and received. He kept none of the money but passed it to the brokers in his capacity as agent of the defendants. The brokers, on the other hand, could not be sued like the plaintiff for exceeding the amount of advances allowed under his agreement since they had nothing to do with it.

There was, in short, neither a joint contract nor the relation of principal and agent between the brokers and the plaintiff on one side as debtors and the defendants on the other. But the very case of Isaacs & Sons v. Salbstein quoted by the learned Judge, lays it down that where there is no joint contract or relation of principal and agent, an unsatisfied judgment against one person for the price of goods sold is not a bar to a subsequent action against another for the price of the same goods. So in this case, as there is no joint contract or relation of principal and agent between the plaintiff and the brokers, unsatisfied judgments against the brokers are no bar to a subsequent action against the plaintiff with respect to his indebtedness.

But it may be argued that even granting that the liability of the brokers to the defendants arose out of the advance of monies to them by the plaintiff as agent of the defendants while the liability of the plaintiff arose under the agreement which made him liable for advances in excess of £1.500, yet to the extent of the £880 the plaintiff and the brokers were jointly liable to the defendants, and therefore the latter, having got judgment against the one, could not sue the other afterwards. The answer to that, of course, is that the liability was not only joint but also several, and in that case there is no rule precluding a joint and several debtor from being sued. As was stated in Lechmere v. Fletcher 1 C. & M. pages 623 and 535 by Bayley B , ” There are many cases in the books as to joint and several bonds from which it appears that though you have entered judgment on a joint and several bond

against one obligor, you are still at liberty to sue the other ; unless indeed the judgment has been satisfied : but so long as any part of the demand remains due you are at liberty to sue the other notwithstanding you have obtained judgment against one.”

Paragraph 4 of the agreement was in fact in my opinion devised to meet the very circumstances of the present case : the plaintiff had to guarantee to the defendants any sum in excess of £1,500 advanced by him in breach of his agreement in order that, so long as there was a shortage, the defendants who had failed to recover it from the brokers might be able to come upon him.

For these reasons I think that the judgment in the Court below was wrong and should be set aside, and that judgment should be entered for the defendants on the claim with costs in the Court below, and on the counterclaim for £498 2s. 4d also with costs in the Court below.

The defendants are also entitled to the costs of this appeal assessed at £70 8s.

The Court below to carry out.

TEW, C.J. SIERRA LEONE. I concur.

MICHELIN, J.
I concur.