A. Moyer & Co. v. Smith & Goldberg Ltd.

(PlAITIFF)RESPONDENT.

(PLAINTIFF)........

....

ON APPEAL FROM THE APPELLATE DIVISION THE SUPREME OF ONTARIO

C.J.C.-In this action, begun on the 26th of January, 1928, the plaintiff (respondent) claimed $900 as a balance due it on account for goods sold and delivered to the defendants (appellants).

Subject to their counterclaim for $2,500 as damages for breach of contract, which forms the sole subject of the present appeal, the defendants admitted owing the $900 claimed; and the plaintiff at present holds a judgment for that amount, the judgment at the trial in the defendants' favour on the counterclaim having been unanimously reversed by the Second Appellate Divisional Court (1), from whose judgment the present appeal is taken.

The counterclaim is based on a breach of an oral contract for the sale of a specific lot of hides to the appellants, alleged to have been made by one Goldberg, as salesman of the respondent company, on the 30th of December, 1927. The Appellate Divisional Court has upheld the respondent's plea of the Statute of Frauds in answer to this counterclaim in so far as it rests upon the oral con- . .' tract of the 30th of December, 1927, and its plea of lack of authority in so far as the counterclaim rests on an alleged settlement in writing of the appellants' claim for damages, which Goldberg purported to make on behalf of the respondent on the 14th of February, 1928.

On the short ground that at the time he signed a so-called confirmation note, relied upon by the appellants to meet the requirements of s. 5 of R.S.O., 1927, c. 163 (Statute of Frauds, s. 17), Goldberg was not the " agent in that behalf" of the respondent company, we would affirm the judgment in appeal, in so far as the appellants' claim depends on the enforcement of the original oral contract. Thirkell v. Cambi (1).

We assume, in the appellants' favour, that Goldberg actually made a verbal contract for the sale to them of the goods in question, and that he had, on the 30th of December, 1927, the date at which the oral contract is said to have been made, authority to sell and that this included authority to sign a memorandum evidencing such sale (Rosenbaum v. Belson (2) ). Subject to two definite exceptions, within neither of which the case at bar falls, the authority conferred by an agency contract is, from its very nature, revocable at any time at the will of the principal. It may be effectively revoked, when writing is necessary, " even after a verbal contract has been made by the agent," at any time before he has signed the statutory memorandum. Lord Ellenborough, applying this doctrine, so held, as early as 1805, in Farmer v. Robinson (3), which is cited in Bowstead, Agency, (1924),

7th Ed., p. 470, as authority for this proposition. See also Warwick v. Slade (4), cited with approval in Xenos v. Wickham (5). The only question in such a case is one of notice of the revocation to the third party dealing with the agent. The admitted facts in evidence put it beyond doubt that the & appellants had such notice from the 10th of January, 1928. &' They had actual knowledge that the president of the respondent company, Smith, repudiated the contract on behalf of the company and that the hides in question had in fact been sold to another purchaser.

CJ.C.

The evidence of the broker, McNeillie, who was accredited by the learned trial judge, clearly establishes that he was exclusively the agent of the appellants in the transaction; that he knew on the 10th of January, 1928, that the president of the respondent company had refused to sign the confirmation note, sent him by Mr. McNeillie in the usual course for signature to bind that company, and was in fact repudiating any obligation on its part to carry out the contract sued upon; that the hides, the subject matter thereof, had already then been sold to another purchaser; and he, McNeillie, then communicated these facts to his principals. There is no suggestion of any subsequent authority having been given to Goldberg " to confirm " the contract in question.

McNeillie, nevertheless, procured Goldberg to sign a socalled confirmation note (dated back to the 30th of December, 1927) at some later time-within three weeks after the 10th of January, 1928, is his best recollection of the time, though he will not swear that it was not signed in February-with the obvious purpose of furnishing to the appellants an answer to the defence of the Statute of Frauds, should the respondent invoke it, and with the clear intent of rendering the respondent company liable to them for damages for breach of contract. These circumstances rebut any suggestion that Goldberg had ostensible authority to sign the confirmation note and that McNeillie took it in good faith from Goldberg, relying upon the latter having authority thereby to bind the respondent as his principal.

As to the alleged settlement of the appellants' claim, against the respondent for damages for breach of contract at $2,500, signed on February 14, 1928, by Goldberg at Fort Wayne, the difficulties in the way of the appellants' attempt to maintain Goldberg's authority to bind the reepondent are even more formidable. Upon the evidence of Gurofsky, a witness for the appellants, to contend for any actual authorization of Goldberg by the respondent company to make such settlement is impossible; and the antecedent circumstances preclude the view that the appel- & lants dealt with him on any footing of ostensible authority, were it possible to support an agreement so far out of the course of a salesman's or secretary's ordinary powers c.j. and duties on the footing of mere ostensible authority. The attempt to prove that Goldberg went to Fort Wayne on the 14th of February to make a settlement with the appellants with the knowledge and tacit approval of the president of the respondent company, in our opinion, wholly fails.

Goldberg's own evidence, when carefully read, does not support it; and the evidence of Smith is distinctly against it. All the surrounding circumstances render it incredible that anything of the kind occurred. It is, perhaps, not without significance that within eight days afterwards, i.e., on the 22nd of February, 1928, Goldberg sold out all his interest in the respondent company. There is no evidence whatever that the respondent company, or its president, had any knowledge or notice either of the so-called confirmation note or of the agreement for settlement signed by Goldberg until the 23rd of March, 1928, the date of the appellants' statement of defence and counterclaim, which set them up, and that they had not notice or knowledge of them prior to that time is the proper inference from all the circumstances in evidence.

We are not presently concerned with the ethics of the respondent's repudiation of the oral contract of the 30th of December, 1927. It is not setting up an equitable defence; it pleads, by way of legal defence, a purely statutory right to have the contract alleged evidenced in writing; and it must not be forgotten, as Scrutton L.J., says, in Thirkell v. Cambi (1), that:

S.C.R.]