Campbell v Kitchen and Sons Limited and Brisbane Soap Company Limited [1910] HCA 50

Campbell v Kitchen and Sons Limited and Brisbane Soap Company Limited [1910] HCA 50 - HCA 1910 case summary — Zoe

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Barton J. he first question is as to the true meanin stipulation in Article 7 of the agreement of 30th Ju The argument is chiefly as to the terms " Amounts due inr of such goods" and "Amount of such sales." These wo to be accepted in their literal sense unless some strong: appears to the contrary. I have heard no such reason ady Each party alleges that they are clear and unambiguous each interprets them differently. What then is their li meaning? "Amounts due" are surely sums which have bi owing under contract express or implied, and "Amount o! sales," as it was generally agreed, means the same thi " Amounts due in respect of such sales." A sum " due in r of a sale" cannot ordinarily mean more or less than the pri be paid, and that is the " amount of the sale." Does that the figure placed in an invoice? Yes, when it is exp) impliedly agreed with the seller or his agent to pay that No, when it is not so agreed. It all depends on the bargain 1 whether expressly or by usage "so well known and acquie in that it may be reasonably presumed to have been an ing tacitly imported by the parties into their contract." Juggo Ghose v. Manickchund (1). If there is a bargain for diseo a certain rate, or if discount is allowed at such a rate by without actual words, then the price bargained for is e "the amount due in respect of the goods," and "the amoun such sale." The terms, if they did not occur in a writi be judicially interpreted, would not cause hesitation as to tl meaning on the part of lawyer or layman. What is i buyer has to pay? That is the amount of the sale to whether quoted higher or not before the bargain is struck. Owing to the circumstances of this case I own th have struggled somewhat against this conclusion, but I there is no escape from it. It follows that the sum the has finally to pay, and no larger sum, is guaranteed by the eredere agent. "The commission imports, that if the v does not pay, the factor will: it is a guarantee from the facto the principal against any mischief to arise from the vend insolvency. But it varies not an iota the rights subsi

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treated as the common case of money paid to B. under a mis' the law on the subject was exactly the same in the old Court Chancery as in the old Courts of Common Law. 'There were more equities affecting the conscience of the person receiving th money in the one Court than in the other Court, for the actio for money had and received proceeded upon equitable consider- ations." And Mellish LJ. said (1) : - * Nothing, in my opinion would be more mischievous than for us to say that money pi for instance, under a mercantile contract, according to the con struction which the parties: themselves put upon that contr: might, years afterwards, be recovered, because perhaps som Court of Justice, upon a similar contract, gave to it a different construction from that which the parties had put on it. think there is no doubt that the rule at law is in itself an eq able and just rule which is not interfered with by Courts Equity ; but, on the other hand, I think that, no doubt, as said by Lord Justice Turner, in Stone v. Godfrey (2): 'Tl Court has power (as 1 feel no doubt that it has) to relieve ag: iistakes in law as well as against mistakes in fact'; that is say, if there is any equitable ground which makes it, under the' particular facts of the case, inequitable that the party who received the money should retain it." I may also refer to th case of In re Webb; Lambert v. Still (3) and particularly to judgment of Davey LJ. (4). If this action were by a principal against an agent to re-open a settled account furnished by the latter and to recover moneys paid.him under it, a slighter case might suffice to entitle the principal to relief than is nece: in the converse case. It is needless to multiply authorities, for_ nothing to my mind could more clearly and conclusively eluci- date the principles which apply in the present case than thi judgments of James and Mellish LJJ., from which I hi quoted. There is no legal or equitable consideration which, i my opinion, entitles the respondents to demand a re-opening these accounts of theirs and a repayment of the moneys whi they have voluntarily paid upon the footing of them. As to the counterclaim, I agree that it cannot be sustained,

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discounts. Indeed, it is difficult to see how sales could be cessfully conducted in the face of trade competition, if s discounts were not allowed. The controversy between the ties, stating it broadly, is whether the agents or the princij are to be at the loss of the amount allowed for this cash diseo The plaintiffs' case is that the defendants must bear the los 'They contend that as agents they fully discharge their duty handing over to their principals on the fourteenth day of th month the amount which the purchaser would have to pay on that day if he paid the principals themselves, that is, the inv sale price, less discount for cash. The defendants' contentioi that the agents are bound to pay their principals the invoice price in full, and that the amount lost in allowing cash diseor must be borne by the agents out of their del credere commissio It is common ground that from the beginning of the agency until October 1908 - a period of seventeen years - the plaintiffs acted 0 the latter view, retaining out of the proceeds of sales 5 per only on the amount thereof, they themselves bearing the loss of th discount, which they took as amounting to 24 per cent. Uj that basis the plaintiffs had accounted to the defendants month by month, and, on the assumption that that basis was correct, both parties had settled their accounts during all -those year: The plaintiffs now claim a return of that discount, taking up th position that, in accounting as they did to the defendants, the: were acting under a mistake which the Court will relieve against, é and that their mistake can give the defendants no right to retain moneys which under the terms of the agreement they had no right to receive. The defendants answer that after a course of dealing, acquiesced in and acted on by both parties for so ian} years, the Court will regard the moneys claimed as_ bein, covered by a settled account, which under the circumstances it - will not allow to be re-opened, whatever view it may take of t! : meaning of the agreement. The rights of the parties will depen therefore, upon the answers to two questions. First, what is the meaning of the agreement of 1891? Secondly, should the Court permit the accounts up to October 1908 to be re-opened'? %

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the plaintiffs' liability as guarantors comes into operation, contract of guarantee is a contract of indemnity, and pay not having been made on the day fixed, the plaintiffs are to put the defendants in the same position financially as if purchaser had paid the defendants on that day the amount in respect of the goods delivered. The amount due in res the goods delivered is the amonnt which a purchaser pay' the fourteenth day wauld be bound to pay in accordance his contract which must be taken to embody generally recogn commercial usages. The purchaser paying on that day woul entitled to deduct the appropriate discount for cash from ti amount shown to be due by the invoice. That is the "ami due," payment of which on the fourteenth day the plaintiffs guranteed. It is always open to the guarantors to indemnify t creditor immediately upon the happening of the default, be he is entitled to protect himself against increasing liability. having indemnified the creditor, he becomes at once entitled stand in the creditor's shoes as to all securities and as to % remedies for recovery of the debt. As to all sales, therefore, respect of which the plaintiffs under their guarantee paid defendants the amount due, the right of obtaining payment from the creditor passed to the plaintiffs. And if the latter did n obtain payment until the time for cash discount had passed, ai then received from the creditor the full amount of the invoi price, they were entitled to retain the full amount, although th were thereby getting 24 per cent. more than they had paid ov the defendants. The contention of defendants' counsel that, wi the circumstances last stated, the plaintiffs as agents were bout to account to their principals for the money they actually received as the proceeds of sales, entirely loses sight of the pl tiffs rights as guarantors, which can be given effect to only construing the contract in the way I have mentioned. In the result, the agreement, taken as a whole, must therefore, in my opinion, be interpreted as entitling the plaintiffs to their f il commission of 7} per cent. on a sum which represents in month the total amount of sales at the invoice price, less in # case of each sale the discount for cash which the customer wi entitled to be allowed on or before the fourteenth day.

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Court

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Before

Source

Judgment (140 paragraphs)