Taylor v Smith
[1926] HCA 16(Judgment by: Isaacs J)
Taylor
vSmith
Judges:
Knox CJ
Isaacs JHiggins J
Rich J
Starke J
Subject References:
Principal and Agent
Authority to sell land for net sum
Right to retain excess over that sum
Authority in writing to sell for certain sum and to retain excess
Signature obtained by misrepresentation
Principal not able to read without glasses
Non est factum
Action for money had and received
Money paid away by solicitor under mistake of fact
Recovery from payee
Ratification
Judgment date: 10 June 1926
Melbourne
Judgment by:
Isaacs J
On the first branch of the case I agree that the special contract relied on fails. Notwithstanding the weighty circumstances to the contrary, the finding of the trial Judge cannot, having regard to well recognized principles, be displaced. Even the obvious danger of allowing a man to assert that what appears to be his clear and simple contract is void because he could not read without spectacles, although he acted as if he could, does not in this case overcome Colbert's misleading description of the document he invited Smith to sign.
As to ratification-dealt with in the County Court as waiver-I have the misfortune to be unable to agree with my learned brethren. Assuming no prior obligation justifying Serle in paying the £500 commission to Taylor and Colbert, every essential circumstance appears to me to exist in order to establish ratification. Smith knew from the beginning that 2 1/2 per cent was the ordinary commission; he knew that £500 far exceeded it, and he knew on receipt of the letter of 28th April that the £500 had been paid out of £4,500. He certainly had not, and I entirely disclaim having myself, so much simplicity as to imagine there was any other reason than remuneration for paying the £500 to the selling agents. He knew that Serle claimed for outpockets £38 15s. 11d. on the basis that the £500 was properly expended. Under threat of legal proceedings and after two months space for consideration, during which he referred Serle to Rodda, his own solicitor, and apparently Rodda wrote to him for instructions, he paid that sum of £38 15s. 11d. with apologies for the delay. That was in itself a complete and unqualified assent to Serle's disbursement. Besides that distinct act, he took up from time to time positions with respect to other transactions inconsistent with dissent from the payment of the £500. Only after six months had elapsed did he, by his present solicitors, challenge the payment. It was a complete change of front and without further knowledge. Serle, whatever other precautions he might originally have taken, acted honestly throughout. So I believe did Taylor. Serle apparently accepted the assurance of Taylor that Smith had agreed to allow the £500 as commission, and Taylor had no reason, so far as appears, to doubt that Smith fully understood what he signed and what he must have appeared to Colbert to understand. At the settlement Smith was represented by his own banker. I personally feel no doubt that Smith fully understood the position. He told Serle in September, long after seeing the settlement statement, that Taylor should pay Serle's costs as he Taylor had had "a fine commission." What was that but the £500? I know of no feature absent from the circumstances known to Smith which was necessary to establish his free assent to Serle's disbursements. Smith's memory, if not his veracity, to a considerable extent must be held at fault in view of the later findings of the learned County Court Judge. Smith's denial that he knew that Cotton, the purchaser, had paid £4,500 until September is astounding in view of the documents he signed and saw, including the perfectly full and frank information contained in Serle's statement of the settlement.
In my opinion Smith assented to the payment of the £500 with all its consequences; and his conduct, quite apart from its strong reflective light on his understanding of the special arrangement, assures me that it ought not now to be open to dispute. In legal terms, he retrospectively adopted Serle's payment of the £500 ab initio, and therefore Taylor received it without any implication of a promise to pay it over, and so the claim should fail.