Christie v Robinson [1907] HCA 19

rane rg, Vendor and purchaser - Deposit paidl to agent of ventor - Rescission 30, 31. | - --Recovery of deposit from vendor - Shareholier.

Came By the conditions of a contract in writing for the sale of land

Ve was provided that a deposit of £500 should be paid by the p

Higgins JJ. "'asagent for the vendor." By another condition it was provid

." 'The £500 was paid by the purchasers to A. and was never paid by n to the vendor. Subsequently in writing the contract was "cancelled by consent" of the vendor and purchasers' title never having been accepted.

"Held (Isaacs J. dissenting), that the purchasers were entitled to recover '£500 from the vendor,

"Decision of the Supreme Court (Hodges J.) reversed. from the Supreme Court of Victoria.

plaintiffs, Archibald John Christie and Walter Henderson on, brought an action in the Supreme Court of Victoria Edward Oswin Robinson for money had and received, the amount paid on 24th January 1905 by the plaintiffs " iam Good, the agent of the defendant, as and for a deposit der a contract in writing, dated the 24th day of January 1905, between the defendant and the plaintiffs, for the sale and se of certain leasehold Jand, and which contract was can- in writing by the plaintiffs and defendant by mutual consent the 2ist day of March 1905, whereby the said deposit became rable to the plaintiffs."

contract in question, so far as material, was as follows : -

ieulars - All those portions of Crown land situate in e of South Australia, known as the Northern Territory

(0, 2,224, and Vol. 25, Fol. 54, No, 2,225 respectively and zed under the Northern Territory Land Act 1890 to Edward n Robinson, together with all the buffaloes thereon. '1, The purchase money shall be the sum of £3,000 and the ' s shall on the signing hereof pay a deposit of £500 to Wm. Good as agent for the vendor and pay the balance by stalments as follows, viz. : - £500 on acceptance of title as herein- ulter provided and the balance by four promissory notes of £500 c h interest at the rate of £5 per centum per annum added | promissory note and to be respectively dated at six, twelve,

the purchasers had accepted title 'the deposit shall be paid over to the H. C. or A.

eighteen, and twenty-four calendar months from the date and shall sign the subjoined contract.

"2. The purchasers shall complete their purchase upon ment of the last of the said promissory notes but they s entitled to the possession of the land purchased by them their acceptance of title to such land and if from any cause soever their purchase shall not be completed at the time al specified the purchasers shall pay interest on such of their i ments of purchase money as shall become overdue at the £8 per centum per annum without prejudice however to right of the vendor under the 7th condition. ,

«3. Upon or at any time after payment of the said depo £500 on account of the purchase money the vendor will si y proper transfer of the property to the purchasers such tran to be lodged in eserow as hereinafter provided. ;

"4, The titles to the property sold shall be produced to an copy thereof may be made by the purchasers or their solicite application in that behalf to the vendor or his solicitor } W. C. Simpson Equitable Building Collins Street Melbourne a the purchasers shall within ten days from the date hereof to the vendor or his solicitor a statement in writing of all tions or requisitions (if any) to or on the title or concerning ¢ matter appearing on the particulars or conditions and in respect time shall be of the essence of the contract. All ob tions or requisitions not included in such statement to be de iver within the time aforesaid shall be deemed absolutely waived the purchasers and in default of such objections and requisil (if any) and subject to such (if any) and subject to the pureha rights under clauses 12, 13, 14 and 15 hereof the purchasers | be considered as having accepted title.

"5, In case the purchasers shall within the time aforesaid m any objection to or requisition on the title or otherwise wh vendor shall be unable or unwilling to remove or comply and such objection or requisition shall be insisted on it shall lawful for the vendor or his solicitor (whether he shall hs attempted to remove such objection or to comply with | requisition or not, and notwithstanding any negotiations or li tion in respect of the same) at any time by notice in v it

much thereof as shall be paid in full satisfaction of all claims nd demands whatsoever by the purchasers but without any t costs or damage of any description.

not pay the whole of the deposit as aforesaid or shall not pay the said instalments of purchase money and interest or

and such other purchase money as shall have been paid be actually forfeited to the vendor who shall be at liberty it notice to rescind the contract

10,000 buffaloes on the Island, also that the Island is not ively swampy inland and that the native inhabitants upon sland are not more than ordinarily fierce as compared with tive inhabitants on the mainland of Northern Australia.

}. The vendor agrees that he will be ready at Port Darwin Northern Territory aforesaid on or about the Ist March to give the purchasers a full inspection of the Island and buffaloes thereon, The vendor and purchasers will each pay and their own expenses or share of the expenses in relation journey to Port Darwin and the inspection of the Island.

| The purchasers agree that they or one of them will dto Port Darwin so as to be there on or about the Ist prox. so as to make the said inspection and they will itely after such inspection subject to their rights here- accept the title to the land sold and pay the said further um of £500 on account of the purchase money and make the

promissory notes for the balance thereof and interest in of the vendor.

the deposit shall be paid over to the vendor and upon of the further sum of £500 to the vendor and the g of the said promissory notes the said leasehold titles and

mul the sale and within one week after giving such notice H. ©. oF 4.

• tralian Bank Limited Collins Street Melbourne or wher o

the vendor and purchasers may in writing agree escrow pending the payment to the vendor of the bala purchase money and interest represented by such p notes." On this document was- endorsed : - "'The above a cancelled by mutual consent 21st March 1905," and this ment was signed by the parties to the contract : By his defence the defendant denied that he had receiv £500, and said that it was verbally agreed that the £500 F be paid to Good as stakeholder merely. He also denied th contract was cancelled, but said that the endorsement was on the contract merely to enable him to get back the document title to the land from the English Scottish and Australian Limited. The defendant then counterclaimed for rectificatio the contract, if, on the construction of the contract as writ! should be held that Good received and held the deposit as of the defendant, so as to accord with the true agreement the parties, viz., that the deposit should be held by d stakeholder merely. The defendant also counterclaimed rectification of the memorandum of 21st March 1905 so

or rescinded, and/or that, for the purpose of enab defendant to obtain the titles to the land from the &

had been deposited, there should be endorsed on the contra memorandum of cancellation of the contract.

The action was tried before Hodges J., who gave judg the defendant with costs. From this judgment the plai appealed to the High Court.

Hayes, for the appellants. The £500 paid as a deposit of the purchase money: Whitbread & Co. Ltd. v. Watt ( having been paid to Good as agent for the vendor is reeov' from the vendor. Apart from clause 15 of the conditions t no doubt that is so. ,

In that case the money was wrongfully received by the agent, | at most it shows that the agent might be liable for money ceived on behalf of his principal, not that the principal would tbe liable. Good was not in the position of a stakeholder. e 15 of the conditions makes no difference. It was not consistent with Good's position as agent for the respondent that was to hold the deposit until the happening of a particular nt. The money once paid over to Good was the respondent's

fly K.C. and Cohen, for the respondent. The intention of ie parties was that the deposit should be held by Good as a holder, and, if the written contract does not carry out that tion, it should be rectified. The £500, which was in fact ed by Good, was not received by him under the contract so make the respondent liable to repay it. In fact a cheque -accepted by Good instead of cash, as was provided by the That cheque was at first dishonoured but was after- rds paid. On dishonour of the cheque there was an end of conditional payment, and Good had no right to take a new ent without reference to his principal, who might have en to put an end to the contract. There was a breach of the ct by the appellants before the alleged cancellation, and had the effect of giving the respondent a right of action and ight to treat the deposit as forfeited. The cancellation did not evest any right to the deposit in the appellants. 'The contract as it stands entitled Good to hold the deposit as a holder. The contract is adapted from Table A to the Zrans- of Land Act 1890, the whole scheme being that the appellants ll go and look at the property before either party is bound. All provisions are consistent with Good being a stakeholder. Pay- to an agent is not in fact payment to his principal, but the ipal is estopped from denying that he has been paid - it is a fiction. If money is paid toa person, who nominally receives at p. 751. (2) (1893) 1 Q.B., 350.

acs J. referred to La parte Edwards; In re Chapman (1).] H- ©. oF A.

H.C. or A. it for certain parties, and no contract eventuates, the mon

found in the hands of that person may be recovered h Wells v. Birtchnell (1); English v. Gibbs (2); Abrahams y. son (3). The costs of the commission were made costs in the ei and there was no jurisdiction to give those costs to the app

Hayes in reply. The meaning of costs in the cause they shall follow the event unless the Judge otherwise Urquhart v. Macpherson (4); Lund vy. Campbell (5); WI v. Read (6), and Groom v. Parkinson (7) are opposed to We I Birtchnell (1).

[The following authorities also were referred to during ment : - Farebrother v. Prattent & Aitcheson (8); Gadd y. ton (9); Williams on Vendor and Purchaser, p. 659 ; Wi Principal and Agent, pp. 301, 459; Paice v. Walker (10); I vy. Day (11); Harington v. Hoggart (12); Holland vy. Russ Powell v. Smith (14); Samuel v. Newbold (15); Mackenzie y. ( son (16); Bentley v. Mackay (17); Cogan v. Duffield (18) ; Jo in y. Donaldson (19); Hampden v. Walsh (20); Furtado vy. (21); Edwards v. Hodding (22); Smith v. Jackson & Lloyd (: Annesley v. Muggridge (24); Duke of Norfolk v. Worthy Norton on Deeds, p. 75; Leake on Contracts, 4th ed., p. Smith on Master and Servant, 5th ed., p. 349; Brumer vy. (26); Earl of Lonsdale v. Church (27); Lord Salisbury v. son (cited by Lord Eldon LC. in Lord Chedworth v. Bawa (28); Koosen v. Rose (29).]

) 2Ch. D., le 6 V.L.R. ee i) o Vile (31) oteRe, 108 (7) 10 (L), 14; 5 AL.T., (21) VL (22) 5 Taunt., 815; 1 Marsh, (8) 5 Price, 303. (23) 1 Madd., 618. (9) 1 Ex. D., 357. (24) 1 Madd., 593. (10) L.R. 5 Ex., 173. (25) 1 Camp , 337. .P., 80. (26) (1904) 1 ch. 305. , 577; 9LJIK.B., i (27) 3 Bro. C.C., 41. 424, at p. 436. (28) 8 Ves., 46, at p. 48. , 85, at p. 91. (29) 76 LE, M5.

the respondent for the recovery of a sum of £500 paid as sit upon a contract for the sale of a certain property by the ondent to the appellants. The property was a large area of rown land situated in the Northern Territory of South Australia, Melville Island, and estimated to contain 2,400 square miles, under Crown leases, with a herd of buffaloes. The price £3,000, and the terms of payment of the purchase money et out in the first clause of a contract in writing, dated th January 1905, as follows: - *'The purchase money shall the sum of £3,000 and the purchasers shall on the signing pay a deposit of £500 to Mr Wm. Good as agent w the vendor and pay the balance by instalments as follows, . : - £500 on acceptance of title as hereinafter provided and the nce by four promissory notes of £500 each with interest at the rate of £5 per centum per annum added to each promissory ote and to be respectively dated at six, twelve, eighteen and twenty four calendar months from the date hereof and shall sign ubjoined contract." Then followed conditions as to title under hich the vendor undertook to make a good title with liberty to e purchasers to rescind under certain circumstances, in which they were entitled to have the deposit repaid. The pur- s were to go to Port Darwin and thence to Melville Island inspect the property, and the vendor guaranteed that there

d be at least 10,000 buffaloes on the island, that the island 8 not excessively swampy inland, and that the native inhabit- were not more than ordinarily fierce. On the purchasers g satisfied on all these points they were to accept the title. By clause 15 of the conditions it was provided that : - " As soon

the said purchasers have accepted the title as aforesaid the sit shall be paid over to the vendor and upon payment of the her sum of £500 to the vendor " the instruments of title were

That rescission was effected in that part of the coun- ty on the 21st March 1905, when these words were written on

writH C.J. This is an action brought by the appellants H. ©. oF 4.

the original agreement : - * The above agreement cance mutual consent," and that was signed by the parties, ' The appellants contend that, the contract being rescinded, i became entitled to get back their £500. So much is not by the respondent. The appellants also contend that, rescission of the contract, the person to whom they should for the repayment of the deposit is primd facie the re because, if money is paid to an agent, his principal is p responsible for that money. No doubt that is the general ru law. In this contract Good is described as the agent for vendor, and it is provided that the money is to be paid to agent for the vendor. The appellants say that that is si that the vendor has received the money, that he is no lo entitled to keep it, and that their cause of action is comy The answer made by the respondent to that is that under e 15 it was the duty of Good not to pay over the money te respondent until the title was accepted, and that that clause controls the statement in clause 1 that Good is the agent of | vendor, that it transmutes Good's position from that of agent the vendor to that of a stakeholder, who did not hold the m in the capacity of agent for one party rather than the other. that be so, the respondent's contention is sound, and that
commended itself to Hodges J. The general rule that a principal is the only person who ea sued, and that the agent cannot, is established by the of Lillis vy. Goulton (1), and in accord with the decision. in case are two decisions of the Supreme Court of Victoria: J lan vy. Read (2) and Groom y. Parkinson (3). That w subject to some exceptions. In the case of an auctioneer it) been settled for a long time that, if a deposit is paid bag tioneer, though paid to him as agent for the vendor, he is p ally liable. But it has never been suggested that in such the vendor is not also liable. So that the answer to the qt whether Good is liable to repay the £500 does not conch question whether the respondent is liable or not. 'That that ordinary rule as to an auctioneer needs no authority. He

$93) 1 Q.B., 350. (3) 10 V.L.R. (L.), 14 LR. (L.), 284. Vik.

in Smith vy. Jackson (1). He said : - " A deposit is peculiarly tanced. If the auctioneer pays it to the vendor, he does it his peril; and if the purchase is not completed, the purchaser y recover it from the auctioneer, as appears from Burrough v. mner (2) and Maberley vy. Robbins (3). If. then the auctioneer nnot pay over the deposit to the vendor, is he to be considered his agent? The vendor is responsible for the loss, if any, by the auctioneer ; that was determined in Fenton v. ywne (4), in which case, the Master of the Rolls says : - ' Upon a sale by auction the vendor determines who is to receive the posit. The auctioneer is not a stakeholder of the purchaser ; at not of his choice. If he were a stakeholder for both parties, ither would have a right to propose to change such stakeholder nd the party refusing takes upon himself the risk.'" And again afterwards the same-learned Vice-Chancellor in Annesley , Muggridge (5) said : - * Pending the dispute as to the title, all the risk respecting the deposit rests with the vendor : - For

ough the auctioneer is, to a certain degree, a stakeholder for dor and vendee, yet so far as respects any risk as to the it, the auctioneer is considered as the agent only of the rw. I lately had oceasion to consider this subject, on a on made, as to interest upon a deposit: (Smith v. Jackson ). The deposit is the vendor's money ; and the risk belonging sis his." So that the fact that an auctioneer may be sued return of a deposit in no way concludes the question so as how that the vendor cannot be sued. The ease of an auctioneer one of the rare cases in which an agent is personally liable as as his principal. The question, then, is whether the words clause 15 so far control the general rule that the principal is able, as to show that in this case Good was not really the agent -of the vendor, but was a stakeholder standing in an independent 'ition, and holding the money paid as a deposit to be paid by him either to the appellants or to the respondent according as the event should happen. The words of clause 1 are clear and

| 1 Madd., 618, at p. 620. (4) 14 Ves., 150. Burr., 2639, (5) | Madd., 593, at p. 596.

hard position, as was pointed out by Sir Thomas Plumer H. ©. or A.

unambiguous, and the matter appears to me a mere qui construction. Iam unable to say that in any view of th the words in clause 15 are such as to put Good in a position from that of an auctioneer under ordinary cireumsta If the effect of clause 15 were that Good was the agent of b x parties and not the agent of the vendor to receive the mon y stated in clause 1, a different result would follow. But all clause 15 says in express words is what happens under the in regard to an auctioneer in ordinary circumstances, and I not think Good is in any stronger position than that of auctioneer. I am therefore of opinion that, whether Good is is not liable to repay the £500 to the appellants, the responi el is. There is another way, perhaps, of arriving at the same Clause 15 may be regarded as a collateral promise by the that he will leave the deposit in the hands of a designated resident in Victoria for a specified time. Or possibly it may | regarded as a term of the agency between the vendor and agent to whom the money is paid that that agent shall not called upon to pay the money over to his principal until # happening of a certain event. Possibly it also imports an impli promise by the agent on his own behalf to the purchaser that will not do. But all that is quite consistent with the agent be the agent of the vendor. The value of such a promise as su gested made by the vendor may be great or little. The damag for the breach of it would be quite different from the amount the deposit. If, instead of the thing deposited being money it h been a valuable security, this would be obvious. I am of opinion, therefore, that the words in clause 15 do not qualify unambiguous words of clause 1, and that the maxim of respond superior applies.

Another defence to the action was set up by the respor way of counterclaim. He claims to have the contract by getting rid of the words "as agent for the vendor" in ¢

1. It is not necessary to go into detail with regard to this

of both parties; they were the exact words they inte d use, Whether they had an exact knowledge of the legal

ollow from those words, is immaterial. Apart from that, I there is nothing whatever, even on the respondent's own ersion, to raise a shadow of a claim to rectification. 'There is also a claim for rectification of what is called the ' ation of the agreement, that is, the memorandum of can- ation or rescission, by substituting another agreement which 'it is said the parties entered into. It is said that the original agreement was to endorse the memorandum of cancellation on e contract as a sort of fictitious document, to be used to enable e respondent to get the instruments of title back from the bank in which they had been lodged under the contract. 'That a suggestion which is not supported by any evidence whatever. In the course of the argument I suggested the case of an dinary sale of land by an auctioneer with a deposit paid to Afterwards, the sale goes off, or the contract is rescinded by utual consent of the vendor and purchaser without reference to 'the auctioneer. I suggested that in a case of that kind the pur- would clearly be entitled to recover the deposit from the I do not think any answer has been given to that ition, and I think the position here is the same. I am there- re of opinion that this appeal should be allowed.

O'Connor J. Iam of the same opinion. The case differs in ho way, except for the special provisions of clause 15, from the ordinary case of a contract for the sale of land with stock upon 'it, which has been rescinded, and in respect of which a deposit has been paid to the vendor. In this case the deposit was paid

Good, who brought the parties together, and who is described 'in clause 1 of the conditions of sale as agent for the vendor. It 'not denied that, in the circumstances that have arisen, the mts having paid £500 to Good for which they have ved no consideration, and the contract having been rescinded, e entitled to recover their money from some one. But the dent, the vendor, contends that it is not from him the money to be recovered, but from his agent. Now, that is a result contract and its cancellation which does not ordinarily occur; itis said that that result must occur in this case because

of the special nature of this contract. The first express language provides that the deposit of £500 shall be p to Good as ageat for the vendor ; as to the legal effect of provision there can be no doubt. It is hardly necessa cite authorities upon the question, but it may be worth ) to refer to some words of Bowen LJ.'s judgment in Goulton (1) which describe very concisely the position money is paid under the circumstances specified in He says: - ' When a deposit is paid by a purchaser und contract for the sale of land, the person who makes the p ment may enter into an agreement with the vendor that th money shall be held by the recipient as agent for both y and purchaser. If this is done, the person who receive becomes a stakeholder, liable, in certain events, to return money to the person who paid it. In the absence of such a ment, the money is paid to a person who has not the char a stakeholder ; and it follows that, when the money reaches h hands, it is the same thing so far as the person who pays it concerned as if it had reached the hands of the principal." is to say, in such a case the ordinary rule of principal and ag applies, and the money which has been received by a man's ag is treated as if it had been received by himself. Such must

the effect of clause 1 of the contract unless its operation has beer modified by clause 15. The latter clause provides that as so "the deposit shall be paid over to the vendor and upon paym of the further sum of £500 to the vendor and making of the promissory notes" the documents of title and the promi notes shall be lodged in a certain bank. The words "as so the purchasers have accepted title" is explained in the e to mean "as soon as the purchasers have inspected the prop and satisfied themselyes that it is up to the guarantee in 12." On the face of it there is no obligation thereby imp the agent to pay over the money, nor anything inconsistent the legal position brought about by his receipt of the mo agent for the vendor under clause 1. But, it is said, that clause 15 a contract must be implied under which Good is te the money as agent for the purchasers as well as for the

t and the purchasers is that the agent shall not pay over the sit to the vendor until title has been accepted. That is a very nt thing from an agreement that the agent shall hold it for purchasers. If it is to be taken that that clause does create a actual relation between Good, the agent, and the purchasers, e only contractual relation that can be spelled out is that Good akes that he will not pay over this money to the vendor til a certain event has happened. The only damages that could recovered for the breach of a contract of that kind would be e amount of loss if any which could be shown to have occurred reason of the payment of the money to the vendor. In fact money had never been paid over to the vendor, and it is rd to see how a cause of action such as I have mentioned yuld arise upon the facts. In regard to any implication from 15 of a contract between the agent and the purchasers he should hold the money for them, I am entirely unable ) agree with the learned Judge of the Court below. Clause therefore does not give the purchasers any right of action it the agent. Their rights are against the principal. Other- they would be placed by the contract in the extraordinary

of the contract falling through, would be unable to recover deposit either from principal or agent. It can hardly be

is of course necessary, in construing the contract, to endeavour bring about some kind of agreement and coherence between e two clauses. Hodges J. has endeavoured to do so. He sees if any meaning is to be given to clause 1, Good must treated as at some time holding the money on behalf of vendor, and his decision is that that time does not arrive the acceptance of title by the purchasers. Not until then, 'Says, does Good hold on behalf of the vendor. The difticulty n the way of that construction is that it does not give full value ) clause 15, because, during the whole period from the time money is paid to Good until acceptance of title, including

utmost that can be implied by way of contract between the H.C. oF A.

the period of inspection of the property during which the o tract might come to an end, the purchasers are in the posi having nobody from whom they can recover their deposit in t event of the contract falling through. That cannot be the mi

ing of the contract. There is one way only of construing contract so as to harmonize both clauses. It is this. The y

stipulates in clause 1 that the money shall be paid into the of his agent. As soon as it is so paid it becomes the money. But he stipulates by clause 15 that he will leave tl money of his in the hands of the agent until after acceptance title. That binds him to leave its in his agent's hands operated upon for the purchasers' benefit in any way the | enables it to be dealt with. One way suggested in argum by writ of foreign attachment. Another way in which it be reached is by garnishee proceedings. If judgment recovered against the vendor for the amount of the deposit, money could be attached in the hands of the agent. It is necessary to inquire what the parties had in their minds as

the mode in which the money might be used to the pu ; advantage. It is beyond doubt that leaving the money in

hands of the agent pending the completion of the contract wou be a substantial benetit to the purchasers, and I think it is benefit which this contract intended to confer upon them clause 15. The words of the clause imply, not only a prohibit against the agent paying over the money to the vendor un certain event happens, but it equally prohibits the vendor re ing the money from his agent until that event happens. By construction the operation of every part of the contract secured. The money is paid by the purchasers into the of the vendor's agent. It becomes the vendor's money and vendor is responsible for it. In the event of the contract to an end, the vendor must return it to the purchasers.

the vendor undertakes that that money of his in the hands o his agent shall remain there, and shall not be dealt with y himself. That, I think, is the meaning of the contract, id, the events that have happened, reading the contract as a it leaves the vendor liable to the purchasers for the deposit w

or it in the form of an action for money had and received. With regard to the claim for rectification, I shall only say that [entirely concur with the judgment of my learned brother the ef Justice. I think there is nothing, either on the facts or on the construction of the agreement, to bring the vendor within rule which entitles the Court to interfere by rectifying con- tracts. On these grounds I am of opinion that the appeal should e allowed.

Tsaacs J. read the following judgment. The defendant's ous claims for rectification are not in my opinion sustained

Thave, however, the misfortune to differ as to this part of the from my learned colleagues, and I regret that [ have not been to come to the same views on a question of such general importance as the common form of contracts for the sale of land. in my opinion, the judgment of Hodges J. was correct and d be affirmed.

'The plaintiffs' claim is for money received and nothing else. reasons to be presently stated, it appears to me impossible, msistently with justice, to substantially transform the claim at

'stage into an action of a totally different character.

order to enable the plaintiffs to succeed in an action for ey received it is essential to prove the defendant's receipt of money. He may have received it personally or by an agent.

,as I understand, be shown that the money was under the trol or direction of the principal so that he either had, or could lemand have had the money or its equivalent. On this ground Ellenborough decided the case of the Duke of Norfolk v. y (1). contract in the present case was a private sale made y by the plaintiffs as purchasers and the defendant as The only material clauses are the first and the fifteenth.

his agent has received, and they are entitled to sue the vendor H. C. or A.

sum of £3,000 and the purchasers shall on the signing h pay a deposit of £500 to Mr. William Good as agent for vendor," &e. a If that clause stood unqualified as to the terms upon which h deposit was paid, it would fall within the case of Hillis v. Goull (1). In that case the sale was by auction, but the conditions. sale required the purchaser to pay a deposit to the solicitor "as agent for the vendor and on account of the vendo There was no word in the conditions, nor any cireums modify the condition of payment referred to, and it was the plai duty of the solicitor to pay over or account for the money to! principal the instant he was called upon to do so. Lord Ey M.R. pointed out in the Law Reports (2) that there was nothi in the circumstances to raise any trust between the plaintiff the solicitor, and he said : - *" There was no relation of prineij and agent, and no bailment as between the plaintiff and Jackson In the same report Bowen LJ. said (3): - *It is the same thin so far as the person who pays it is concerned as if it had reae the hands of the principal. If so, it is impossible to treat mon paid under these circumstances and remaining in the hands agent as there under any condition or subject to any relation to the payer." It is apparent that, if the money had been held by the under some condition in relation to the payer, the opinion learned Lord Justice would have been different. His o more fully reported in the Law Jowrnal, which differs not in stance, but is more explicitly, and, perhaps, more clearly expres 'The importance of the case justifies me in quoting his words (4) "When upon a sale of land a deposit is paid by the purchas which is to be returned if the sale goes off, the purchaser m stipulate that the person to whom the deposit is paid shall it, not merely as the agent of the seller, but subject to te regards the purchaser himself; and where that is done, verts the person to whom the deposit is paid into a sta But where no such special agreement, express or implied, ism

(1) (1893) 1Q.B., 350; 62 L.J.Q.B., (3) (1893) 1 QB, 350, 232. le a (4) 62 L.J.Q.B., 232, (2) (1893) 1 Q.B., 350, at p. 352,

ndor, he is not a stakeholder at all, but merely the agent of 'seller ; and it follows that the moment the money reaches his it is the same thing, so far as the person who pays it is cerned, as if it had reached the hands of the principal - that say, the vendor - and the payment is in law payment to the w. If so, it is impossible to treat the money which remains the hands of the agent as there under any condition, or ject to any trust as regards the purchaser. The counsel for plaintiff was unable to resist the stress of authority that the 'solicitor to the vendor, unless the contrary is agreed upon, is the agent of the vendor to receive the deposit on his behalf, and is a stakeholder." But that case, which is strenuously relied for the plaintiffs, seems to me to have no relevancy except asacontrast to the present case. What was absent from the tract in Hillis v. Goulton (1) is expressly made part of the act here. Clause 15 says: - As soon as the purchasers have cepted the title as aforesaid the deposit shall be paid over to

r provision. Until title is accepted, the deposit is to remain in the hands of Good, and then, and not till then, is it to be paid er to the vendor. Upto the moment of acceptance of the title, vendor had no vestige of right to get that deposit into his he could not control its possession, he could not recover _ Any arrangement between him and Good by which it should into the vendor's hands would have been a distinct fraud the purchasers. Whatever Good's agency meant, it clearly 'not extend to handing that money over to Robinson except in »event. Robinson then wasin this position. He never in fact ved a penny of the money ; in the events which happened he became entitled to receive a penny of it. How then can he eated as having received it? Duke of Norfolk v. Worthy (2) not support such a claim; nor does Ellis v. Goulton (1). ell v. Day (3), also relied upon for the plaintiffs, is essentially

ent from this case. The conditions there baldly provided

(1) (1898) 1 Q.B., 350. (2) 1 Camp., 337. ; (3) LR. 1 C.P., 80.

the deposit is simply paid to the agent or solicitor of the H. C. or A.

that the deposit should be paid to the defendant "as agent vendor." The vendor's executrix claimed to have the deposit p over to her; the defendant refused on the ground that he w; entitled to retain it until completion of the purchase. The tract contained no provision for retention, and on this ground th plaintiff succeeded. Hrle C.J. said (1): - *He (the defendan clearly owes no duty to the purchaser." Willes J. said the dition was "the same as if it had been provided that the d should be paid into some bank to the account of the ve His Lordship's simile meant, of course, that the vendor cou have immediately deawn out the money and spent it. That case also seems to stand in marked contrast to the now under consideration. But there are other cases which a strong analogy to the present instance in point of principle. In Edwards vy. Hodding (2), an auctioneer received a depo on property sold by auction, and actually paid the deposit over to his principal. But he paid it over with knowledge that there were objections to the title, and was held liable to repay deposit to the purchaser. Chambre J. said (3) : - * This is not absolute payment by the plaintiff to the defendant as th vendor's agent, but a conditional payment; or, as it is properly called, a deposit. The defendant receives it, knowin the condition, that there should be a good title; and he kno that that condition is not performed: he nevertheless takes | 7 himself, with this knowledge, to pay over the money, which h was not warranted in doing; and therefore the judgment mu be for the plaintiff" In the report of the same case, but on th application for the rule nisi, Gibbs C.J. says (4) : - * Has it ev been decided that an auctioneer is at liberty to pay over th money immediately? It is not paid to him for the use of the principal, but it is placed in his hands as a deposit, to be p over, when his principal shall have made out a good title. W situation would the purchaser be in, if this were otherwise ? goes to the auctioneer, as to a solvent person, often y knowing who is the vendor, on the faith that a good title wil be made: and if the auctioneer might pay over the depo

(1) L.R. 1C.P., 80, at p. 85. (3) 5 Taunt., 815, at p. 820. (2) 5 Taunt., 815. (4) 1 Marsh., 377, at p. 379.

diately, great fraud would be practised." So also per Erle H.C. or A. in Holland v. Russell (1). When this contract is looked at, et ery word uttered by these learned Judges seems applicable. Cyrisrie island at the other end of this Continent is purchased, as to)... cov. important representations are made, verifiable only after

ction and at a considerable distance of time ; specific direc-

uecessfully demanded it from the depositary. It may be observed in Horsfall vy. Handley (2), the ground on whieh Edwards v. fodding (3) was decided was approved.

It therefore seems to me that Good received the money -

J, in Ellis v. Goulton (5)), and upon the express condition it was to be held until title was accepted; that he obtained by a tripartite arrangement between the plaintiffs, the nt and himself; and whether his relation towards the tiffs in this regard be called a contract, a bailment, or a st, is immaterial, because it certainly created a duty in him to n the deposit until the event happened which would entitle defendant to have the money, a duty in the plaintiffs to leave there in the meantime, and a corresponding duty in the fendant not to demand it before the plaintiffs had accepted Lord St. Leonards states the rule thus : - *" Where a man is pletely the agent of the vendor, a payment to him is in law payment to the principal": Sugden's Vendors and Pur- s, 14th ed., p. 53. Title never was accepted. The contract s cancelled by mutual consent. No fault of either the ntiffs or the defendant can be looked upon as the cause of the itract going off, and therefore it becomes in this action a simple as to whom the depositary should hand the money. is his duty when that moment arrives? It is manifest the y is not the agent's, and he cannot retain it for himself. The

H.C. or A. vendor's conditional right to it has ceased, for, if it wo

been improper to pay it over to him while the contract it must be unquestionably wrong to hand it to him after the tractual obligation is dissolved. Justice leaves no other course oy than to return it on demand to the payer whose condition of de has become impossible. Good was, by the express words of contract, precisely in the same position as by implication of the auctioneer was in in Harington v. Hoggart (1), of Parke J. said: - 'It appears to me that the situation

bound to keep it, and pay it over, upon either of those evel immediately." It is not that he is arbitrarily styled "s holder," and then that certain obligations attach to him, because the law first attaches certain just obligations to him, a then by force of these he is for convenience termed a stake ld The same obligations attach here to Good, in my opinion, b reason of the very words of the bargain, he, like the ai is agent for the vendor for one purpose, but only conditi and by reason of clause 15 he becomes conditionally agent or bail for the purchaser. Until payment over to the vendor clau and 15 both deseribe the £500 as a "deposit" only, and no purchase money. This construction gives effect to both the fi and the fifteenth clauses of the agreement. The p argument ignores the latter.

Edwards vy. Hodding (2) is an authority that the plain could recover the money from Good. Story on Agency, see. * lays down the doctrine as follows : - «If a party, who has money to an agent for the use of his principal, becomes ent to recall it, he may upon notice to the agent, recall it, provide the agent has not paid it over to his principal, and | provided no change has taken place in the situation agent since the payment to him, before such notice."

No change by payment or accountancy has in fact taken plac

nor, as I view the situation, could it honestly and lawfully have H. ©. or A.

place. cannot therefore see how any claim for money received could been successfully opposed by Good or can possibly be main- d against Robinson. But it is said that, conceding a claim for the deposit as money received could be sustained against Good, the claim can equally maintained against Robinson. 'There are certain well known circumstances in which a vendor y be called upon to repay to a purchaser the amount of his

it, although paid to a stakeholder. The subject is con- ered and dealt with by Sir John Romilly M.R. in Rowe v. y (1). His Honor said : - « Where a purchaser pays a deposit his purchase money to the auctioneer, and it is lost, on whom the loss fall? If the matter goes off, because the vendor cannot make a good title, it is the vendor's duty to repay the it, and the loss occasioned by the non-completion ; and in an action were brought against him for breach of the tract, the amount of the deposit not repaid would be part of loss, and the purchaser would be entitled to add it to the s; so if the contract be completed, and the deposit cannot recovered from the auctioneer, who for this purpose is the ent of the vendor, it will be the vendor's loss, and not that of the purchaser."

'This passage indicates that the law does not in such a case the deposit as money received by the vendor soas to be verable as such ; and that it is only recoverable, if at all, as of damages where the purchase goes off through the vendor's It, and that loss of the deposit must be proved. Even then if title is only doubtful, the purchaser, though he may rescind, cannot, it seems, get back his deposit: See per Lindley LJ. in lottingham Patent Brick and Tile Co. v. Butler (2). nce to the earlier cases of Smith v. Jackson (3); Annesley Muggridge (4); and Fenton v. Browne (5) will show that the \dor's responsibility for the deposit in the case of an auctioneer

• (1) 18 Beay., 613, at p. 616, (4) 1 Mada., 593. 16 Q.B.D., 778, at p. 789. (5) id Ves., 144, at p. 150. |, 618.

H.C. or A. depends on the fact that the depositary was his selection, ;

that where a party is offered the opportunity of obtaining a stakeholder and refuses to accept him, but insists on retai one originally chosen, he must bear the responsibility in case , loss. Lord St. Leonards thus states the rule in his Vendors an Purchasers, 14th ed., at p. 52 : - *" And a loss by the insolvene y the auctioneer will, it seems, in every case, fall on the vendor, wl nominates him, and whose agent he properly is." . But these considerations give rise to issues of fact that never been raised, and require for their determination te: that has never been thought necessary to adduce. 4 It seems to me unfair to the defendant now to depart from one clear cut issue upon which the plaintiffs' case was rested an denied, and, applying the rule in Annesley v. Muggridge (1) other cases of that class, or even construing the contract wii view of holding the defendant responsible for the mere failure Good to restore the plaintiffs' deposit on demand, independer of insolvency (as to which latter construction I offer no o to treat the action as one for damages, fixing the amount at th sum represented by the deposit, without any issue as to de upon or refusal by Good, or his financial ability, or as to other of the elements of liability considered essential in the ea referred to. Upon the facts as they appear outside the written contract objections I have alluded to are more than technical, because Goc was apparently the selection of the plaintiffs, and therefore th defendant, to whom he was a stranger, should at least have tl opportunity of testing the facts and forcing the plaintiffs t satisfy the Court why they did not press the gentleman s chosen by them to retain their deposit, and why he did not it. '9 Some reliance was placed upon clause 5 of the agreement aiding the plaintiffs' construction that the money was to be regarded as already in the defendant's hands. In addition to th reasons already given, it appears to have been framed to limit t defendant's liability as laid down in Rowe v. May (2).

appeal should be allowed. 'The principal difficulty is in the iterpretation of the contract between the plaintiffs and the ndant, dated the 24th January 1905. Under condition 1, it ;provided that "the purchasers shall on the signing hereof w a deposit of £500 to, Mr. William Good us agent for the and pay the balance by instalments." But under con- 15 it was provided that, "as soon as the said purchasers e accepted the title as aforesaid the deposit shull be paid over e vendor." The contract was (as it was termed) " cancelled"

argued on the assumption that "cancelled" is equivalent to scinded," the vendor and purchasers being remitted to their ginal positions - (see also In re Jamieson and Newcastle hip Freight Inswrance Association (1) ). The purchasers, erefore, sue the vendor for the £500, as money had and

ved and repayable to the plaintiffs as on a failure of con- i The claim is not for damages. The defendant urges he did not receive the money - that he was not entitled to ceive it - as title was not poses and that the Ld

dant would be liable as Good's wiridefoal: Ge the payment is de to Good, "as agent for the vendor " - Ellis v. Goulton (2); nv. Parkinson (3). But the defendant relies on the pro- on in condition 15, that " the deposit shall be paid over to the " on acceptance of title. There are no negative words ling an earlier payment over ; but it may be assumed, for it purpose, that such a prohibition is implied. At first there is no inconsistency between these conditions. Under tion 1 the payment to Good is a payment to the vendor;

posit out of Good's hands until title has been accepted. There be a receipt of money and responsibility for the money eived, coupled with a stipulation that the money shall not A vendor may surely authorize the payment of purchase into a certain account at a certain bank, but agree that he

1. 2Q.B., 90, at 93, 95. (3) 10 V.L.R. (L.), 14; 5 ALT, {tne 7350. PP i.

'1aGiNs J. read the following judgment. I am of opinion that H.C. or A.

will not draw on that account till a certain event hap action to rescind the contract, or even in an action to contract, I see no difficulty in enforeing such a stipu the withdrawal of money by an injunction. Condition 5, which enables the vendor to annul the contract if the pu

persist in an objection to title, preseribes that the vendor "repay" the purchase money already paid. This must deposit ; it assumes that the vendor has received the depo it) he " repays," and that he has received it before title is The learned Judge of the Supreme Court, however, regard condition 1 as making Good agent of the ven in the event of the contract going on, being carried is obvious that the mere insertion of the words suggester the contract goes on " - would not fit this construction, as would qualify not only the agency of Good, but also the pay to Good. The provision is that the purchasers shall, " on th ing hereof" pay a deposit of £500 "to Mr. William Good a for the vendor," and pay other sums at other times. I cam no sufficient reason for refusing to give to condition 1 its m meaning - the meaning that Good is, on the signing of n tract, to take the £500 as the vendor's agent - that he vendor's agent on receipt of the money. Moreover, I difficult to make out what effect is given, on the constr adopted by Mr. Justice Hodges, to the words, "as agent vendor." If Good were a mere neutral stakeholder, it wou his duty, if the contract were carried out, to pay the de vendor; and if the contract failed for want of title, &., be his duty to pay it to the purchasers: Harington v. (1); Hampden v. Walsh (2); Gaby v. Driver (3). e "as agent for the vendor," are not an idle formula. deposit were profitably invested by the agent, the profits a as the deposit, would belong to the vendor; whereas, if Go a mere stakeholder, the profits would not belong to the v Harington v. Hoggart (4). Tt will be noticed that I h to my conclusion on the construction of this particular ¢ which prescribes that Good shall receive the deposit " as ag

(1) 1B. & Ad., 577, at pp. 586, 588, (3) 2. &J., 549. 589. be (4) 1B & Ad., 87. (2) 1 Q.B.D., 189, at pp. 194, 195.

vendor." I desire not to commit myself to any opinion with

ard to the liability of a vendor in the case of the deposit being to a mere stakeholder.

for the counterclaim to rectify the contract, it was not neces-

ike any order. This counterclaim seems to be based on a mis- ption of the jurisdiction of equity to rectify contracts. It that, "if, on the construction of the said contract as written, d be held that the said William Good received the deposit

nal agreement between the plaintiffs and the defendant is not ectly stated therein," and he counterclaims " to have the said

ies, that the said deposit should be received and held by William Good as a stakeholder only." Equity does not y a contract because one party - or both parties - misunder- its effect. In ordinary cases of rectification, some word or has been omitted or inserted by mutual mistake - a mistake as to omission or insertion, not a mistake of law as to con- on: Johnson vy. Donaldson (1). In this case, also, there is no

appear to be as to the effect of the words on which he now in condition 15. Or, on another possible construction of e, the defendant did not understand that Good was to e the deposit at all - even as stakeholder; and yet the

right to receive, but to receive it as stakeholder. The of fact in the judgment - that the provision that the was to be paid to Good was inserted at the plaintiffs' and in spite of opposition on the part of the defendant - to be irrelevant to any issue; and the finding that both meant Good to hold the money until title was accepted, not entitle the defendant to any order on the counterclaim.

Appeal allowed. Judgment for the plaintifis. (1) 6 V.L.R. (E.), 121; 2 A.L.T., 12. °

im is for a rectification of the contract so as to affirm :