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

An action was brought by Kitchen & Sons Limited against The Brisbane

Soap Company Limited for a declaration of rights, for the return of moneys . alleged to have been paid under a mistake of fact and for accounts to ascer- tain the amount recoverable, The plaintiff company was formed in 1901 to acquire the business of a company called J. Kitchen & Sons and Apollo Candle Company. By an agreement made on 30th of June 1891 between J, 'Connor JJ.

CaMPBELL vw Kircuen & Sons Lrp. AND BrisBaNE Soap Co. Lrp.

Kitchen & Sons and Apollo Candle Company (afterwards called the Company) of the first part, Campbell who by himself or his nominees o half the shares in a proposed new company of the second part, an Donaldson representing the proposed new company (afterwards incorpora as The Brisbane Soap Company Limited, the defendants), of the third it was agreed inter alia: '7. The said Apollo Company shall be the agents in Queensland for the sale of the New Company's soap and othe: factures and they shall guarantee that on or before the fourteenth day of month after that in which the goods shall have been delivered payment be made of the respective amounts due in respect of such goods so de in consideration whereof they shall be paid or allowed by the New Compa a total commission at the rate of seven pounds ten shillings per cent. on the amount of such sales . . . ."

cash on payment within certain periods was allowed to purchasers, but th fall invoice price, less seven and a half per cent., was paid to the defendants In 1908 the plaintiffs claimed that the defendants and not they as del cre! agents should bear the loss of the trade discount, since that time only per cent. was claimed where the sales were for cash on delivery.

they were entitled on the fourteenth day of every month to discharge the d then due by any purchaser to the defendants by payment to the defendants o the amount on payment of which by the purchaser on that day he wo

according to the terms of his contract of purchase discharge his liability the defendants,

Held also that, as to the payments made between 1891 and 1908, ' accounts must be treated as settled and could not be re-opened.

Decision of the Supreme Court: Kitchen & Sons Lud. v. Brisbane Soap Oo. Lid., 1910 St. R. Qa., 301, varied.

Apprat by leave from the Supreme Court of Queensland.

An action was brought in the Supreme Court of Queensland by J. Kitchen & Sons Ltd. against the Brisbane Soap Co. Ltd.,

ture of which is sufficiently stated in the judgments hereunder. action was tried before Chubb J. who gave judgment for the efendants, but, on appeal to the Full Court, judgment was given r the plaintiffs. (Kitchen & Sons Ltd. v. Brisbane Soap Co. td. (1).

From this decision an appeal was now brought to the High Court by Peter Morrison Campbell pursuant to leave. (Campbell _y. Kitchen & Sons Ltd. (2).

Stumm (Henchman and Hobbs with him), for the respondents, Kitchen & Sons Ltd., moved to rescind the leave to appeal. The _ shares in the defendant company are held equally by the plaintiff "company or their nominees and by the appellant or his nominees, d under the articles of association the differences should be referred to arbitration. The Court will not interfere with the internal management of companies except where there is fraud, or where something wltrd vires has been done. [He referred to Gray v. Lewis; Purker v. Lewis (3); Pender v. Lushington (4); Burland vy. Earle (5).|

Gririta C.J. The right of appeal does not depend upon the consent of the respondents. Litigants in the Supreme Court, if the amount at stake is sufficient, are entitled as of right, under it the Constitution Act, to have recourse to this Court, and if there _ is any formal defect in the way it can be got rid of by the leave _ of the Court. We are of opinion that the case comes within the ae rule stated by Lord Davey in Burland v. Earle (6), and that it _ would be a substantial denial of justice to refuse leave to appeal.

' Woolcock and Hart, for the appellant. Even if there were any trade usage to give discount for cash payments or payments __ within short periods, the parties had no such idea in view when the agreement was made; if trade discount must be given to purchasers the agent must pay it; he is entitled on the terms of the agreement to 74 per cent. on the amount of the sales and no more. The Full Court has held that the plaintiffs are entitled to

(1) 1910 St. R. Qd., 301. (4) 6 Ch. D., 70. (2) 12C.L.R., 513. (5) (1902) A.C., 83, (3) L.R. 8 Ch., 1035, at p. 1050. (6) (1902) A.C., 83, at pp. 93, 4.

~ CAMPBELL ®. Kitonen & Sons Lrp. AND BRISBANE Soar Co. Lrp.

CAMPBELL °. Kircnen & Sons Lrp. AND BRIsBaNE Soap Co. Lrp.

have an account taken for six years preceding October when they first made their claim and since when they deducted the trade discounts from the purchase money hand the company; they are not entitled to this: Rogers v. Ingha (1); Skyring v. Greenwood (2); Shaw v. Picton (3). Eustern Railway Co. v. Hastings (4) is distinguishable the present case as there the claim was for money due, not recover money already paid.

This is a case of an account stated, and it cannot be re-opi

[They referred to Story's Equity Jurisprudence, 13th ed. L, p. 544; Pollock's Principles of Contract, 6th ed., p. 432; Seton's Judgments and Orders, 6th ed., vol. 11., p. 1882 ; and the follor : cases : - Shaw v. Dartnall (5); Padwick v. Stanley (6); Dar vy. Sinclair (7); Forbes v. Watt (8); Marshall v. Berridge (! Chapman v. Bluck (10); Hunter v. Belcher (11); Willis v. J negan (12); Mawnd y. Allies (13); Smith v. Leveaua Hornsby v. Lacy (15).]

Stumm, Henchman and Hobbs, for the respondents. The age has implied authority to act according to mercantile usage, wl was then established beyond all doubt: Juggomohun Ghos Manickchund (16). The agreement must be construed acco! to its language, and the conduct and course of dealing of # parties does not affect it. It is a written instrument, an words must be construed according to their natural meanii The plaintiff company was intended to get a full 74 per commission on the net amount received by them as agents sales made for the defendants, and not to pay for any usual ti discounts out of it. They were guarantors that the defendant would get their money on the fourteenth of every month; they were bound to do was to hand over to the defendants t invoice sale price less discount for cash, and from that sum th were entitled to deduct their 74 per cent. commission.

(10) 4 Bing. N.C., 187. (11) 2DeG. J. &8., 194. (12) 2 Atk,, 251. (13) 5 Jur., 860. (14) 1H, & M., 123; 33 LJ.

(15) 6M. & S., 166. (16) 7 Moo. Ind. App., 263, at p.

payments for eighteen years without deducting the trade unt were made by mistake, and the plaintiffs are entitled to an account taken and to recover the sum ascertained to be id, at any rate during the period of six years preceding not for the whole period. (Counsel referred to North stern Railway Co. v. Hastings (1); Houlder Bros. & Oo. Ltd. Commissioner of Public Works (2); Harl of Beauchamp v. m (3); Daniell v. Sinclair (4); Williamson v. Barbour (5); re Webb; Lambert v. Still (6); Kelly v. Solari (7); Blyth v. iffin (8); Padwick v. Hurst (9).]

Grrr CJ. This is an action by the respondents, J. itchen & Sons Ltd., against the respondents, the Brisbane Soap Lid. for a declaration of rights, for the return of moneys

accounts to ascertain the amount recoverable. The plaintiff mpany was formed in 1901 to take over the business of the

will call the old company. The old company were, and the plaintiff company are, by themselves or their nominees, the holders f one half the shares in the defendant company. The appellant by himself or his nominees is the holder of the other half. ____ By an agreement of 30th June 1891 made between the old _ company of the first part, the appellant of the second part, and one J. C. Donaldson representing a proposed new company (the defendants) of the third part, it was agreed, inter alia, as

and they shall guarantee that on or before the 14th day of the _ month after that in which the goods shall have been delivered payment shall be made ofthe respective amounts due in respect of such goods so delivered, in consideration whereof they shall be paid or allowed by the new company a total commission at the

_ (I) (1900) A.C., 260. (6) (1894) 1 Ch., 73. (2) (1908) A.C., 276. (7) 9M. & W., 54, (3) L.R. 6 H.L., 223. (8) 27 L.T., 330.

(4) 6 App. Cas., 181. 9) 18 Beav., 575; 23 L.J. 7, (6) 9 Ch. D., 539. id meeepsetce a: 857.

~ CaMPBELL v Kirenen & Sons Lrp. AND BrisBANE Soar Co. Lap.

CaMPBELL w Krirenen & Sons Lrp. AND BrisBaNE Soap Co.

rate of seven pounds ten shillings per cent. on the amor such sales."

This agreement was adopted by the defendant company v incorporated, and the transactions between the old company the defendant company, and between the plaintiff company the defendant company, have ever since been governed bj By an indenture of 11th September 1908, made between the plaintiff company of the first part, Donaldson of the second the appellant of the third part, and the defendant compam the fourth part, after reciting the above facts, it was for agreed and declared, inter alia, that the agreement of 30th J 1891 was confirmed and should be carried into effect as if plaintiff company had been the original parties to it instea the old company. 'The questions for determination arise 1 the construction of clause 7 above quoted and the cow

Under that clause the relationship between the old com: and the defendant company was twofold. The old company we the defendant company's agents for sale of their manufac' and were also guarantors for the due payment, not later than fourteenth of each month, of the price of all goods delivere during the preceding month. But, in fact, in addition to relationship the old company undertook a further duty, namel; to collect for the defendant company the price of all goods sol by them, and to remit the money collected to the defendant con pany. This relation of agents to collect money was quite distin from that created by the written agreement of 30th June 1891.

The course of dealing between the parties was as follows: - The old company (and after them the plaintiff company) sold goods at fixed rates, with an allowance of what is called t discount to certain purchasers. The amount remaining aff deduction of the trade discount is called the invoice price According to the ordinary course of dealing in the trade, chasers were entitled, on payment within a specified time, to further discount, generally, but not always, amounting to 24. cent. of the invoice price. The usage to allow a discount fo

such prompt payment was established by the evidence beyon doubt.

r them the plaintiff company were in the habit of sending to defendant company on or before the fourteenth of each onth an account of their sales for the preceding month, in hich they debited themselves with the invoice price of the oods sold, whether the price had already been paid or not, and ook credit for a commission of 74 per cent. upon that price. In October 1908, however, they claimed that they were not ound to debit themselves with the full invoice price, but only vith the amounts actually collected by them for the defendant company, that is, the invoice price less the discount for prompt yment. As to payments due by purchasers who had not paid yy the 14th they claimed to be entitled to debit themselves th no more than the amounts on payment of which on that day she purchasers could have discharged their debts to the plaintiff company. They further claimed to be entitled to have the accounts for the previous seventeen years re-opened, and to 'recover the amount which they had overpaid to the defend- ant company ascertained on this basis, 'The defendants counter- laimed for a declaration to the effect that the former practice was the correct one. They support this contention (1) on the

ich, they say, had been put upon it by a long course of dealing, First: As to the construction of the agreement. In my opinion agreement has nothing to do with determining the amount for which the old company and the plaintiff company were liable to account as collecting agents. It is clear that an agent

ay of damages for default) for any greater sum than he actu- lly receives. So far, therefore, as regards payments made by piss purchasers before the 14th of the month the plaintiffs were not bound to account for more than they received.

With regard to the price of goods not paid for by the 14th the

_ in the same position as if the price had been paid on that day, _ but they were not bound to do more. As between the plaintifis and the defendants the purchasers were to be regarded as having

failed to pay ; but the amount which any purchaser had (notion- VOL. XII. 36

plaintiffs were bound under their guarantee to put the defendants"

or seventeen years after June 1891 the old company, and H. ©. oA.

~ CAMPBELL v Krronen & Sons Lrp. AND BrisBaNE Soap Co. Lap.

CAMPBELL v Kircuen & Sons Lrv. AND BrisBaNE Soar Co, Lr.

ally) failed to pay was not more than the amount by paym which he would under the terms of his contract have dischar his debt. The plaintiffs were therefore not bound under tl guarantee to pay the defendants any greater sum. If they the contract would not be one of indemnity or guarant would place the vendors in a better position than if the chaser had himself paid the price. It is clear that if the plain' had failed to pay any such sum by the 14th the measw damages in an action by the defendants on the guarantee wo have been the amount by which they were damnified, that is, more and no less than they would have received if the pur had himself made the payment. If after the 14th the pu paid the plaintiffs, receiving a rebate of discount, they merely receive what they had paid to the defendants. If 1 purchaser did not pay at all the plaintiffs would have to be loss. If he did not pay soon enough to claim the discount plaintiffs would be out of pocket until payment. As betwee plaintiffs and defendants, however, the transaction with resp to each sale was closed on the 14th, and whatever might happen after that day, and whether to the advantage or disadvants of the plaintiffs, was no concern of the defendants. "

It was suggested that the plaintiffs still retained the fiduei position of agents, and could not retain a profit for thems But, as I have shown, the whole transaction as between and the defendants was closed on the 14th of the month. respect of transactions which were not then completed as betw the vendor and purchaser they assumed by the payment position of the vendors, and any money which they re from the purchasers after that date was not received by them agents for the vendors at all.

For these reasons I am of opinion that the contention of the plaintiff company, which commended itself to all the le: Judges who constituted the Full Court, is sound.

In my judgment the plain construction of the agreement affected by the course of dealing between the parties. Ev an ambiguous document may be construed by the light o} course of dealing - a point on which I offer no opinion - unable to find any ambiguity in the contract under considerati

I think that upon the evidence there is any ground for tention that it should be inferred from the course of deal- at a new agreement was substituted for the written one. There was nothing on the face of the accounts rendered by the company or the plaintiffs to the defendants to show that the yunts with which they debited themselves were (although we told that they were in fact) the full invoice prices less trade unts only. The accounts merely represented that the ants stated had been received. In some cases they probably been received, and in others not. A correspondence which place in August 1895 shows that the parties were then in bt how far the agreement applied to certain contemplated les for cash on delivery, in which a guarantee was out of ques- _ tion, and it was agreed to charge 5 per cent. only in such cases. _ For a short time after May 1899 the plaintiffs in their accounts ivided the 7} per cent. between commission 5 per cent. and dis- 25 per cent., and later lumped them together as commission iscount 74 per cent., but afterwards reverted to the original ice. Ido not think that any sure inference can be drawn om these circumstances.

hubb J., who heard the case without a jury, thought that the idence offered to show a practice of allowing discount for npt payment was insufficient to establish it. I am disposed gree with him in thinking that it did not establish that there was a fixed invariable rate of discount. But, with all respect, was not the question. In my opinion the contract between parties was made upon the footing that sales should be made such terms of payment as might be usual from time to time similar mercantile transactions, and the practice to allow dis-

unt for prompt payment was, as I have already said, estab- shed beyond all doubt.

But with regard to the claim to recover the amounts overpaid other considerations arise. This part of the case is, in substance, action to recover money paid under a mistake of fact. Chubb thought that the money was due in law, and that there was therefore no question of mistake in fact, and he did not apply _ his mind to the question now to be decided. In the Full Court,

CaMPBELL v. Kircuen & Sons Lrp. AND BrisBANE Soar Co. Lro.

MH CAMPBELL v Krirenen & Sons Lap. AND BrisBANE Soap Co. Lrp.

» Hastings (1), and thought that as the contract in questic

Cooper C.J. referred to North Eastern Railway Co. v.

plain and unambiguous the rights of the parties were not aff by a temporary erroneous construction of it. In that case th plaintiffs' claim was not to recover money paid under a mis' but to enforce a claim for money due and omitted to be col The case has therefore no application. The only groun which an account could be asked by an agent from his prin in Chancery was that the matter was too complicated investigated at law, and to such a claim the defence of a setth account would be a bar. In my opinion the circumstances in present case establish that defence, except, perhaps, as to accounts for the two or three months immediately before Oct 1908. Regarding the whole claim as being in substance a to recover money paid under a mistake of fact, I am of opi that upon the evidence no case of mistake of fact was estab There is no ground for even supposing that the plaintiff comp and their officers were not fully aware of the relevant facts : every payment which they made to the defendants. It is to my mind clear that they made each payment becau they thought that upon the facts they owed the money and bound to pay it. I respectfully adopt the language of Mel LJ. in Rogers v. Ingham (2) : - " There is no doubt as to the of law that money paid with a full knowledge of all the fs although it may be under a mistake of law on the part of parties, cannot be recovered back ; and I think it is equall, } that, as a general rule, the Court of Equity did not, in such ¢ interfere with the Courts of Law. Nothing, in my opi would be more mischievous than for us to say that money p for instance, under a mercantile contract, according to the

Court of Justice, upon a similar contract, gave to it a diffe construction from that which the parties had put on it. I tl there is no doubt that the rule at law is in itself an equitable just rule which is not interfered with by Courts of Equity ; on the other hand, I think that, no doubt, as was said by

(1) (1900) A.C., 260, (2) 3 Ch. D., 351, at p. 357.

ice Turner in Stone v. Godfrey (1), 'This Court has power feel no doubt that it has) to relieve against mistakes in law ell as against mistakes in fact'; that is to say, if there is any itable ground which makes it, anate the particular facts of

e no doubt taken into account in naan and dividing ir annual profits, I think that the rule of the common law is an equitable and just rule. I think, therefore, that on this part 'of the case the appellant must succeed, and the action so far as it relates to the claim to recover money already paid should be ismissed. I think, however, that the plaintiffs are entitled to a declara- tion of their rights. They do not claim more than 5 per cent.

• commission on sales for cash on delivery. _ In order to obviate any questions as to the construction of the contract I think it is desirable to alter the wording of the declaration as made by the Full Court so as to read as follows :- - eclave (1) that under the contract of 30th June 1891 and the denture of 11th September 1908 the plaintiffs are entitled to a mmission of 7$ per cent. on the net amounts received by the defendants in payment for goods sold by the plaintiffs as their agents other than goods sold for cash on delivery; (2) that the plaintiffs are entitled on the 14th day of every month to dis- charge the debt then due by any purchaser to the defendants by _ payment to the defendants of the amount on payment of which ___ by the purchaser on that day he would according to the terms of his contract of purchase discharge his liability to the defendants, An account of transactions since October 1908 is, of course, unnecessary, ___ As each party succeeds, and each fails, as to a substantial part " of their respective claims I think that there should be no costs on either side, either here or in the Supreme Court. The judgment appealed from will be varied accordingly. (1) 5 DM, &G., 90,

CaMPBELL e Kircenen & Sons Lrp. AND BrisBANE Soar Co. Leo.

CaMPBELL a Kiecuen & Sons Lrp. AND BrisBaNE Soap Co. Lro.

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

ndor and vendee" (Lord Ellenborough C.J. in y v. Lacy (1)). 'Che stipulation is drawn in obvious con- ith this statement of the law; and when the vendor it, as this vendor did, to the del credere agent to fix the which the latter is to guarantee, it is in that respect the ure of the rights subsisting between vendor and vendee. It is said, however, that the accounts and course of dealing een the respondents and the soap company can be invoked ect what, in the absence of an ambiguity, would be, I think, 'not a construction, but a variation of the written contract.

Ido not agree with this contention. There are clear state- ments of the law to the contrary by the Privy Council and by House of Lords. First..in Houlder Bros. & Co. Ltd. v. missioner of Public Works (2), Lord Atkinson, speaking for hadicial Committee, said : - " There is no doubt that the con- tion of the contract cannot be affected by the declarations of arties made subsequent to its date, as to its nature or effect, to their intention in entering into it. But it is equally true here the words of the contract are ambiguous, the acts, duct, and course of dealing of the parties before, and at the time, they entered into it may be looked at to ascertain what was their contemplation, the sense in which they used the language employ, and the intention which the words in that sense eal." Here there is no ambiguity. In North Eastern Rail- yy Co. v. Hastings, Lord Halsbury LJ. said (3): - "The chief ument used to give an unnatural construction of the words that the parties have so acted during a period of 40 years that the only reasonable inference to be derived from their conduct is that they have understood and acted on their bargain in a sense

• different from that which the words themselves convey. Iam of inion that if this could be truly asserted it is nothing to the

pose. The words of a written instrument must be construed ccording to their natural meaning, and it appears to me that no _ amount of acting by the parties can alter or qualify words which are plain and unambiguous." And, in the same case, Lord rampton (4) added, speaking of the stipulation there in ques-

(1) 6M. &S., 166, at p 171. (8) (1900) A.C., 260, at p. 263. (2) (1908) A.C., 276, at p. 285. (4) (1900) A.C., 260, at p. 270.

CAMPBELL Kircuen & Sons Lrp. AND BrisBaNE Soap Co. Lr.

CaMPBELL vw Kitcaen & Sons Lrp. AND BrisBANE Soap Co. Lrp.

tion : - " As it stands, it seems to me to be clear and free fro ambiguity, and incapable of any other construction than assigned to it by the respondents. Certainly there is nothi be found in the rest of the agreement to suggest any other in pretation. But it is said that it must have been differen understood by the parties themselves, and that the omission the plaintiff and his predecessor for upwards of 40 years to cla the rents now sought to be recovered is cogent evidence t such was the case. I grant that if the clause were capable two constructions, one of which would support, the other o} which would defeat the claim, the omission would afford irre: tible proof that the latter was the interpretation intended by parties. No such ambiguity, however, exists, and it seems t fore to me that, in the absence of any proof to the contrary, must be assumed that the parties knew and understood th language they were using, and that in executing the agree r containing that clause they were truly expressing their int tions, and are bound by the writing they have signed."

I am of opinion, having regard to these authorities, that» cannot look to the conduct, the accounts, or the course of dealing of the parties to find in the contract a meaning other than tl which its plain terms declare for themselves. There is anotl aspect of the case in which such matters may be important. that is an aspect apart from the construction. I think, thi that clause 7, which stands unaffected by the context, must read according to the view of the respondents. But so far their claim is concerned, that construction does not of itse necessarily entitle them to succeed. .

The next question is that of usage. I much doubt whe there was any necessity for evidence to prove the existence o} mercantile usage to grant discounts for cash or accelerated pi ments, or to show that the concession is larger as the payment

everyone who deals in the market. If, indeed, it were alleged te be the practice of traders to exact the full nominal price in of prompt payment, one would expect very strong evide indeed in proof of such an usage. But that would be the e verse of the present case. The credit system prevalent in

countries, and almost invariable in some, has led to eral understanding that prices merely quoted are primd redit prices, unless the trade is notoriously conducted upon is or the parties have themselves stipulated for cash. 2 question of the rates of discount generally allowed for nent within 7 days, within 30 days, or at any other length e is not material. It is sufficient for the purposes of this ut the practice of allowing discounts for payment at dates than those at which full prices were exacted, was a of common knowledge. then aie Becondetis entitled to recover fue mney they

it case the aan differs Pe fii upon eit in rth Hastern Railway Co. v. Hastings (1), the claim was nforeeable. 'There the money claimed had never changed Rent under a deed had been left unclaimed for a number and it was held to be payable nevertheless, for the which appear in the quotations nmde above. Here ioney has been actually paid to the Brisbane Soap Co. g seventeen years on the footing of accounts rendered by spondents, as agents to their principals, as if they were ound to pay it; and it has been accepted on that footing by the mdent company. It is said that the parties acted under a ike. The money was paid voluntarily and without the htest pressure on the part of the Brisbane Soap Co. The unt sales were made up from the respondents' books by their bookkeeper and accepted by the appellant. This gentle- , Mr. Fry, who gave evidence on behalf of the respondents, ys that cash deductions were not shown on the face of the unt sales which he rendered to the soap company. Probably, he says, he understood the 74 per cent. to cover cash discounts. customers were taking the cash discounts which the respon- ents allowed. He " presumed" he got his original instructions to charge the 74 per cent. from Mr. Donaldson, and (he " pre- ," from instructions), divided it into 5 per cent. commission Apet cent. discount. He would not have done so without

tions. Though Mr. Donaldson very rarely saw the books,

CAMPBELL v. KircHEen & Sons Lrp. AND BrisBANE Soar Co. Lrp.

CAMPBELL v. Kircuen & Sons Lrp. AND BrisBaNE Soar Co. Lr.

Mr. Fry " put the account sales before him from the beginr and he signed them. I naturally took it," he says, "that included the cash discounts. After getting my instructio says, "Mr. Donaldson left the keeping of the accounts Mr. Fry says, "he knew the respondents were bearing the counts." Mr. Donaldson, on the other hand, says, " We ded the 7} for commission, and I did not know the discounts not being deducted." It was about October of 1908, he : that his company first discovered that they had not dedu from the amounts paid to the soap company by them the an which the purehasers had taken for cash discounts. Th began to charge these deductions, and. the appellant Car for the company, objected.

As to the account sales themselves, they are signed f respondents, some by Fry, including the earlier ones, and soi Donaldson. None of those rendered before October 1908 ap

to have charged the appellant with more than 74 per

commission and discount upon prices which, according evidence, were the full invoice prices, less of course the tra apart from the cash, discounts. Up to May 1899, the el was made in one line, thus: "Commission, 7} per cent." - account sales for the month signed by Donaldson charge mission and discount separately - the former at 5 per cent the latter at 24 per cent. Afterwards, commission and count are both always mentioned, either in one line, "Commission and discount," with one sum opposite rep) ing 73 per cent. on the sale prices shown, or with comm' and discount separately shown. Of these later accounts that the respondents produced bore Donaldson's signat There are two Bundaberg account sales, signed by Donald representing transactions in October and Noyember 1908, bu not rendered till February 1909. One of them shows " mission and discount" as a combined charge at the r: 74 per cent., the other "discount off to customers" de from the amount of sales, and a charge of "commission 7} cent." on the amount after deduction of discount. There ai

1908 rendered by the respondents, They are signed by G.

the first of them shows "commission 5 per cent." and it 24 per cent." as separate lines, and the second shows count 24 per cent." and "commission 7} per cent.," also dis- hed. The evidence is that the respondents fixed the prices hrough, and Fry says, "I kept the books as I intended to them."

n this evidence the respondents, as plaintiffs, have not estab- da case of mistake of fact. But they say they mistook the y misconstruing the agreement; and they appear to have That, however, does not in my opinion entitle them to in this action the money they have paid during seventeen

| the facts have been open to both parties; the balances wly paid over have appeared to be due on the footing of ts they have themselves prepared and rendered, and these nts have been accepted and no doubt expended on the ff the correctness of those accounts. The Brisbane Soap re justified in accounting for these balances to their share- 's, such as the appellant, and must repeatedly have done so, good faith, and each monthly sum received must have found ay into a large number of hands. The action for money had and received, and that is the gist of this action, depends largely

'for the defendant to retain the money. Here I think such a and distinctly inequitable, and I see no moral or equitable d uty in the defendants to repay it. Skyring v. Greenwood (1)

d Shaw v. Picton (2) are strong authorities in favour of the pellant on this, which I take to be the main question in this Another, and a strong one, is Rogers v. Ingham (3), where umes LJ. said (4) : - * No authority whatever has been cited to in support of the proposition that an action for money had and sived would lie against a person who has received money from another, with perfect knowledge of all the facts common to both,

rely because it was said that the claim to the money was not well founded in point of law. . . . . And really when it is

(1) (2) 4B. & C., 715. (4) 3 Ch. D., 351, at p. 355.

CAMPBELL v. Kitcnen & Sons Lrp. AND BrisBaNE Soar Co. Lr.

the question whether it is equitable forthe plaintiff to demand -

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,

(1) 3 Ch. D., 351, at 357. (3) (1894) 1 Ch., 73. (2) 5D.M. & G.,'90. (4) (1894) 1 Ch., 73, at p. 83.

'on a reading of the contract which we cannot accept. It therefore be dismissed.

a consequence of the opinions above expressed I assent to leclaration proposed by the Chief Justice and to the course sed with regard to costs.

Connor J. read the following judgment : - -Before the begin- of this litigation J. Kitchen & Sons Ltd. were sole agents the sale of the Brisbane Soap Co.'s goods, and the action Court below was brought by them to obtain a declaration rights as agents, and to recover certain moneys alleged to een overpaid by them to the defendants in respect of sales

e was a counterclaim by the defendants for moneys retained laintiffs out of the produce of sales since that date. In

e rights in controversy depend upon an agreement made in between the plaintiffs, the defendants, and other persons, ich has been adopted and acted upon as regulating the rights he plaintiff and defendant companies for many years.

wanteed that, on or before the fourteenth day of the month x that in which goods sold were delivered, payment should be le to the defendants of the respective amounts due in respect such goods. It was conceded on the argument that a dis-

rehasers and deducted on the face of the invoice, the nett mt being the sale price of the goods. The plaintiffs, how- ver, contend that there was another discount, the discount for h which, by usage of trade, purchasers were entitled to deduct rom the sale price,on payments made within a certain period

iter delivery, 3 per cent., 24 per cent., or 1} per cent., according

usage, and in my opinion the plaintiffs must be taken to ve had authority from the defendants to allow these cash

CAMPBELL. v Krrcnen & Sons Lrp. AND BrIsBaNE Soap Co, Lrp.

CAMPBELL vw Krrcnen & Sons Lrp. AND BrisBaNE Soar Co. Lr.

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'? %

Defendants' counsel contended that in the construction of th agreement the sense in which the parties acted on it may

as a guide to its meaning. That cannot, in my opinion, be this case. There are no doubt instances in which the mean- which the parties themselves have acted on will be adopted e Court, even though it is not the meaning of the agreement rding to its legal interpretation. But those are all cases in ich there has been some ambiguity in the language of the ment. Lord Halsbwry L.C. in the North Eastern Railway Co. . Lord Hastings (1), concisely sums up the result of the decisions follows: - "The words of a written instrument must be con- ued according to their natural meaning, and it appears to me at no amount of acting by the parties can alter or qualify rds which are plain and unambiguous.

«So far as I am aware, no principle has ever been more univers- ally or rigorously insisted upon than that written instruments, if are plain and unambiguous, must be construed according to e plain and unambiguous language of the instrument itself." e language of this agreement is, to my mind, entirely free om ambiguity. Interpreting the words of Clause 7 in their ordinary meaning, the plaintiffs undertake two sets of duties towards the defendants, correspondingly they become entitled to two sets of rights against them. They are guarantors of pay- ment on or before a stipulated day by defendants' customers ; _ they are also agents to account and pay over the moneys of their principals that come to their hands in the course of the agency. Full effect must be given to both provisions. The plaintiffs do not lose any of these rights as guarantors because they happen also to be agents. "The fourteenth day of the month after that in which the goods shall have been delivered" marks an important boundary line in the working of the agreement. The guarantee has no operation as to sales in which payment is made before that day. In those cases where payment is to the plaintiffs they incur merely the ordinary responsibility of agents. They are bound to hand over to their principals the sum received and no more, that is to say, the invoice sale price, less discount for cash, and from that sum they are entitled to deduct their Ts per cent. commission. Where payment is not made either to the defendants or to the plaintiffs on or before the fourteenth day

CAMPBELL v. Kircnen & Sons Lap. AND BrisBANE Soae Co, Lr.

CaMPBELL v. Kircuen & Sons Lrp. AND BrisBaNE Soar Co. Lrp.

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.

e at the loss of the cash discount. Upon that view of ghts the plaintiffs have acted since October 1908. They therefore justified in declining to pay over to the defendants \oneys representing discounts for cash which the defendants seeking to recover by the counterclaim. I am of opinion, efore, that on that issue the defendants must fail.

propose now to deal with that portion of the plaintiffs' claim quiry into which would involve the re-opening of the accounts bween the parties, accounts which have been regularly rendered the plaintitis,accepted by the defendants and considered by both ties as made out on a proper basis for the last 17 years. I agree there is nothing in the circumstances of the ease to indicate the plaintiffs acted under a mistake of that kind which a urt of Equity would treat 'as a ground of interference. I shall, ever, assume that in rendering their accounts as they did, the tiffs acted under a mistake which under some™cireumstances ty would relieve against and that they debited themselves moneys which the agreement entitled them to treat as its. The defendants are nevertheless in my opinion entitled ) resist the claim for return of the moneys on the ground that whole account must now be treated as a settled account ich, under the circumstances proyed, the Court will not allow be re-opened. The plaintiff company's rights were embodied a written agreement always accessible to them. The accounts the agency were kept as directed by the plaintiffs' manager. onth after month the plaintiff company sent in their accounts id retained their commission on the view of the agreement 'ich they are now contending is not its meaning, 'The accounts ave been approved of and accepted by both parties for a period many years during which the defendants conducted their usiness, distributed their profits, and made up their balance heets in the belief naturally induced by the plaintiffs' conduct that the plaintiffs' remuneration was being settled month by month in accordance with the agreement. Under these cireum- _ stances very strong grounds indeed would be needed to justify the Court in permitting the plaintiffs to undo these closed trans-

actions, and as a result impose upon the defendants this new and 'VOL, XII, 37

vords, it is the principal and not the del credere agent who H- 0. or A.

CaMPBELL v Kronen & Sons Lrp. AND BrisBaNE Soap Co. Lro.

CaMPBELL v Krrewen & Sons Lrp. AND BrisBANE Soar Co. Lr.

unexpected liability. There are some observations of Lord tice Mellish in Rogers v. Ingham (1), which though used reference to a state of facts somewhat different from those under consideration, lay down as it seems to me a very so principle : - " There is no doubt as to the rule of law that mi paid with a full knowledge of all the facts, although it may under a mistake of law on the part of both parties, cannot recovered back ; and I think it is equally clear that, as a ge rule, the Court of Equity did not, in such cases, interfere the Courts of Law. Nothing, in my opinion, would be more chievous than for us to say that money paid, for instance, w a mercantile contract, according to the construction which parties themselves put upon that contract, might, years a wards, be recovered, because perhaps some Court of Justice, up a similar contract, gave to it a different construction from th which the parties had put on it. I think there is no doubt h the rule of law is in itself an equitable and just rule which is interfered with by Courts of Equity; but, on the other hand, think that, no doubt, as was said by Lord Justice Turner it Stone v. Godfrey (2): 'This Court has power (as I feel no dor that it has) to relieve against mistakes in law as well as agai mistakes in fact'; that is to say, if there is any equitable grow which makes it, under the particular facts of the case, inequit that the party who received the money should retain it."

So far from there being anything in this case which wo make it inequitable for the defendants to retain the money n claimed, the equity of the matter, using the expression in ) broad sense, is all the other way - and certainly on any consid: ation of common fairness and justice this attempt of the pl tiffs to re-open these transactions, closed and done with so m years ago, must fail. In my opinion the defence of settled account is a complete answer to that part of the plaintiffs' clai which relates to sales before October 1908, and as to that ju ment must be entered for the defendants. With respect to after that date the plaintiffs are entitled to the declaration claim as to their rights under the agreement. On the defendan counterclaim they are therefore entitled to succeed. As to t

ion of the claim covered by the settled account, judgment H- ate A. ; be entered for the defendants. I agree, therefore, that with Pea:

variations the judgment of the Supreme Court should be Campsere. d, I concur in the form of order suggested by my learned pee &

x the Chief Justice, and in his judgment as to costs. ose Bee:

olicitors, for appellant, Flower & Hart. O'Connor J. licitors, for respondents, Foxton, Hobbs & Macnish.

Bd [HIGH COURT OF AUSTRALIA.) ICHARD ARMSTRONG CROUCH . ._ PrrrrionEr; AND LFRED THOMAS OZANNE . i e . RESPONDENT.

CORIO ELECTION PETITION. COURT OF DISPUTED RETURNS.

Parliamentary election - Liability of candidate for acts of his agent - Canvassing H.C. or A. "at entrance to polling booth - Scrutineers - A voiding election - Evidence that 1910. result of election was affected - Commonwealth Electoral Act 1902-1909 (No. 19 ~ of 1902 - No. 19 of 1909), secs. 1824, 198a. MELBOURNE,

Sept. 15, 16, Where a candidate at an election is sought to be made responsible for illegal ©?" yy" 1% acts done during the election by his agent, it must be proved that the candidate

either countenanced or directed the doing of those acts. O'Connor J.

Semble, that canvassing for votes on or at the top of the steps leading to a polling booth, is within the prohibition in sec. 1824 of the Commonicealth Hlectoral Act 1902-1909 against canvassing for votes at the entrance to a polling booth, but canvassing between the gate of the land on which the polling booth is and the building itself is not within that prohibition.