International Paper Company v Spicer [1906] HCA 75

International Paper Company v Spicer [1906] HCA 75 - HCA 1906 case summary — Zoe

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words were : - International Paper Company of New York, Head Australasian Office, 24 Bond Street, Sydney," with, in the margin, " Australasian Division, Carmichael, Wilson & Company Limited," 24 Bond Street being Carmichael, Wilson & Co.'s address. This, it was urged, was some evidence that the defend- ants knew that Carmichael, Wilson & Co. were holding them- selves out as their agents. It was also proposed to prove that the defendants had received the price of the paper supplied under that contract. Now that, in my opinion, was evidence that tended to establish, first, that Carmichael, Wilson & Co. held themselves out as agents for the defendants, and, secondly, that the defendants were aware of that fact, and took the benefit of the contract made by their ostensible agents. 'That was, of course, only one instance, and perhaps would not of itself go very far, but I think that evidence of the transaction was admissible. Another piece of evidence tendered was a contract made about the same time by the same Carmichael, Wilson & Co. who signed it "International Paper Company of New York, Managers Australasian Division, Carmichael, Wilson & Company Limited, Bond Street, Sydney," with Messrs. Wilson and Mackinnon, pro- prietors of the Melbourne Avgus and other papers in Australia, for deliveries of paper extending over twelve months, and it was sought to show that this contract, having been made by the alleged agents, had been performed by the defendants, that invoices relating to the transaction were sent from the defend- ants' New York office with the paper, some of which bore printed headings indicating that the paper was supplied by the defend- ~ants under the contract made by Carmichael, Wilson & Co. And it was also sought to show that the price paid for the paper was received by the defendants. In my opinion, that evidence also was admissible as evidence that the defendants on their part knew that Carmichael, Wilson & Co. were holding themselves out as their agents to make contracts of that sort. It is true that the evidence that the defendants performed these contracts with the Brisbane Newspaper Co. and Wilson & Mackinnon relates to a period subsequent to the making of the contract now in question. But the material point is whether they were admissible as evi- dence that the defendants, when they were made, allowed

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in this respect is that the plaintiffs have no greater rights than if they had known the exact terms of this document. I do not think that that is a sound view to take of the position, but, assuming it to be so, how does the matter stand? Those words are at best ambiguous. They may mean either that the agents are not to have authority to enter into contracts at all, but only to submit offers to their principals, or that they may make pro- visional contracts binding the principals unless they think fit to notify that they will not perform them. The case of Ireland v. Livingston (1) is authority for the proposition that where the words of such an authority are ambiguous they must be con- strued in favour of the party who has acted upon them according to a reasonable construction of the language used. If that is the case in the interpretation of a contract as between principal and agent, it is so w fortiori as between the principal and a third party who has dealt with the agent; because, even if the plain- tiffs had no greater rights than those given by the document, they are at any rate entitled to the benefit of any reasonable construction that is open on the language used. Further, it is quite consistent with such a restriction having been inserted in the document in 1901 that two years afterwards the course of dealing between the principals and the agents had altered, and that the defendants no longer insisted upon contracts being sub- mitted for their approval before being completed. There is a third answer, that if this document means that every transaction entered into in the name of the principals by the agents is to be submitted to the principals for approval, then if the principals, having notice, or being informed, that such a contract has been entered into by their agents in their name, do not within a reasonable time inform the person with whom the agents have made the contract whether they approve or disapprove the con- tract, the jury may infer from their silence that they assented to it. The authority being in this view only conditional, the con- dition is to be taken to have been performed. I think that the passage read by Cohen J. from Story on Agency is ample authority for that proposition; so also is the case of Prince v. Clark (2). I think, therefore, that this document of 1901 was, (1) L.R., 5 H.L., 395. (2) 1B. &C., 186.

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the arrangement of 29th December 1903 could in strictness be called a contract or not, at all events it was a dealing between parties which might be thought as between business men to raise a reasonable expectation of an answer. In Lucy y. Mouflet (1), Pollock C.B., says : - * Now though it is true that if a stranger were to write and say to a person, 'If I do not hear I will send goods,' the omission to reply would be no evidence of a contract, yet it is different where two persons are actually engaged in dealing or under contract with each other. Then, if a proposal is made to which assent might be reasonably expected amongst men of business, and no answer is sent to it, acquiescence may be presumed." In Sutton & Co. v. Ciceri & Co. (2) it was con- sidered by Lord Watson that reticence in mercantile correspond- ence may under some circumstances be irrebutably assumed to be equivalent to admission. Consequently, putting the best possible interpretation on the words for the defendants, namely, that without actual approval there was no contract, it is still open for the jury, in my opinion, under the cireumstances of this case, to find as a fact that there was approval. The construction of these words, however, is not necessarily so favourable for the defendants as that. Taken together with the rest of the agree- ment they appear to me to be at least ambiguous and to be reasonably capable of meaning that they are only inserted for the protection of the principals if they choose to avail themselves of the power. I think, looking at the document as a whole, according to well established rules of construction (see North Eastern Railway Oo. v. Lord Hastings (3)), that this is their true signification. But looking at them as merely ambiguous how does it stand? The learned Chief Justice referred to Ireland y. Livingston (4), as an authority for the legal point in such a case. The Privy Council has acted upon the same prin- ciple in United Inswrance Co. vy. Cotton - of which the only report of the judgment, so far as I know, is found in the South Australian Law Reports (5). Referring to certain instructions to an agent their Lordships intimate their opinion as to their

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Judgment (128 paragraphs)