Thornley v Tilley [1925] HCA 13

Thornley v Tilley [1925] HCA 13

A broker instructed to purchase shares and 'carry at 8 per cent' acts as an agent and is bound to hold the shares or equivalent for the client, not to deal in them for their own benefit, and to account for any profits made by such dealings; no relevant custom or natural meaning excludes this duty in the circumstances of the case.

Parties
Appellant/plaintiff: John Brooks Thornley; Respondents/defendants: William Tilley, Frank Turny, Edward Tilley and Herbert Vivian Hordern (trading as William Tilley & Co.)
Jurisdiction
Australia
Judgment Date
07 May 1925
Procedural Posture
Appeal / Appeal From Supreme Court of New South Wales to High Court of Australia
Outcome
appeal allowed
Legal Topics
Sharebrokers' Duties, Purchase and Carrying of Shares, Implied Terms of Agency Contracts, Stock Exchange Usage
Principal and Agent Equity Commercial Law Sharebrokers' Duties Purchase and Carrying of Shares Implied Terms of Agency Contracts Stock Exchange Usage

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Parties

John Brooks Thornley

Appellant/plaintiff

William Tilley, Frank Turny, Edward Tilley and Herbert Vivian Hordern (trading as William Tilley & Co.)

Respondents/defendants

Procedural Posture

Appeal / Appeal From Supreme Court of New South Wales to High Court of Australia

Legal Issues

  1. 1 Whether a sharebroker instructed to purchase shares and 'carry at 8 per cent' may, without express authority or proven usage, deal with the shares for their own benefit and retain any profit.
  2. 2 Whether evidence of Stock Exchange usage is admissible to construe the contract.

Ratio Decidendi

A broker instructed to purchase shares and 'carry at 8 per cent' acts as an agent and is bound to hold the shares or equivalent for the client, not to deal in them for their own benefit, and to account for any profits made by such dealings; no relevant custom or natural meaning excludes this duty in the circumstances of the case.

Court Disposition

appeal allowed

Orders

  • Decree of Supreme Court of New South Wales (Harvey J.) discharged.
  • Decree made in terms of first and second paragraphs of statement of claim (account and inquiry as to profits, repayment if overpaid).