International Sponge Importers Ltd v. Watt & Son [1911] UKHL 515 (31 March 1911)

International Sponge Importers Ltd v. Watt & Son [1911] UKHL 515 (31 March 1911)

The House of Lords held that the property in the goods passed to the defenders upon delivery and payment to Cohen, who was acting within the apparent scope of his authority. The defenders had no notice of any limitation on Cohen's authority to receive payment in cash or by open cheque, and acted in good faith. The pursuers' claim failed because the payments made to Cohen discharged the defenders' obligation, and there was no negligence on the part of the defenders sufficient to require them to pay again.

Citation
[1911] UKHL 515
Parties
Pursuer: International Sponge Importers Ltd; Defender: Watt & Son
Jurisdiction
United Kingdom
Judgment Date
31 March 1911
Procedural Posture
Civil / Appeal (house of Lords)
Outcome
Appeal dismissed; judgment for the defenders (Watt & Son) affirmed.
Legal Topics
Principal and Agent, Authority of Agent, Sale of Goods, Fraud by Agent, Passing of Property, Payment to Agent, Negligence in Commercial Transactions
Commercial Law Agency Law Principal and Agent Authority of Agent Sale of Goods Fraud by Agent Passing of Property Payment to Agent +1 more

Case Brief

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Parties

International Sponge Importers Ltd

Pursuer

Watt & Son

Defender

Procedural Posture

Civil / Appeal (house of Lords)

Legal Issues

  1. 1 Whether property in goods passed to the purchaser when sold and delivered by an agent who embezzled the price
  2. 2 Whether payment made to the agent in cash or open cheque, contrary to usual practice, discharged the purchaser's obligation to the principal
  3. 3 Whether the purchaser was negligent in making payment to the agent in a manner outside the ordinary course of business

Ratio Decidendi

The House of Lords held that the property in the goods passed to the defenders upon delivery and payment to Cohen, who was acting within the apparent scope of his authority. The defenders had no notice of any limitation on Cohen's authority to receive payment in cash or by open cheque, and acted in good faith. The pursuers' claim failed because the payments made to Cohen discharged the defenders' obligation, and there was no negligence on the part of the defenders sufficient to require them to pay again.

Court Disposition

Appeal dismissed; judgment for the defenders (Watt & Son) affirmed.

Orders

  • The Lord Ordinary's interlocutor recalled.
  • Defenders assoilzied (absolved) from the conclusions of the summons.