(COURT OF APPEAL) *

THEODORE H. APOSTOLOU vs. ALBERT A. NAHMIAS

AC-Revision-184-59

Revision

Principles

  Agency—Remuneration of auctioneer in absence of express agreement or custom or usage

  Evidence—Evidence of custom or usage

     An auctioneer sued the vendor for his commission after having received such payment from the purchaser. No express agreement for the payment of commission was made between the auctioneer and the vendor, nor was there any custom or usage fixing such payment.

    Held: An auctioneer is an agent for both vendor and purchaser and is there fore, in absence of an express agreement as to commission, entitled to remuneration under an implied contract for quantum meruit from both purchaser and vendor. The measure of damages in the absence of a custom or usage depends upon what is just and equitable in the circumstances, having regard to the dealings that took place between the parties. In this case the payment of nominal damages of £S. was just and equitable.

Judgment

Advocates: Ahmed Mitwalli El Atabani……………….. for applicant

                   Ali Mohammed Ibrahim……………………for respondent

* Court: M. A. Abu Rannat C.J., Abdel Mageed Imam J.

 21st December 1959. Abdel Mageed Imam J.: —This is an application for revision of the order of the Judge of the High Court, Khartoum, dated 2nd June 1959 awarding respondent (and plaintiff) a sum of £S.773.500m/ms. including costs, being his auctioneer’s charges against applicant (and defendant), and thereby reversing the judgment and decree dated 1st September 1959 of the District Judge (High Court), Khartoum, dismissing the action with costs.

       The facts of the case are as follows:—Respondent (and plaintiff) Albert

A. Nahmias is a practicing auctioneer. By a letter dated 13 November

1956, applicant (and defendant) Theodore H. Apostolou, requested the said

Nahmias to sell by public auction the assets of a dissolved partnership of

Messrs. G. N. Stamatopoulos and T. Z. Zaferellis and Company, of Khartoum.

Respondent (and plaintiff), in compliance with this request, advertised the

auction, the time, place and conditions of sale and reserve price.

       On 17 and 23rd November 1956, respectively, the auction was conducted by respondent (and plaintiff). The assets were accordingly sold to the highest bidders, Boxall and Company, at £S.14, 000 He received a sum of £S.700 from the said buyers, being per cent. Commission of the proceeds. The proceeds were delivered over to applicant (and defendant).

    It is admitted, by respondent (and plaintiff) that there was no agreement between him and applicant (and defendant) as to payment of commission, and for that matter, as to any fixed rate payable. He (respondent and plaintiff) had originally claimed 5 per cent., being “the usual market rate from seller and same from buyer —see his plaint filed at page 2 of Civil Suit No. 67/1957, District Court (High Court), Khartoum. The applicant (and defendant) on the other hand denied the very existence of such “usual market rate” or usage of calling, and contended that in the absence of an express agreement to the contrary, respondent (and plaintiff) would be entitled to nothing.

    On the application for revision, the learned Judge of the High Court, Khartoum, put forward the following propositions:-

    “To my mind this application for revision may be correctly deter mined upon ascertaining two points of law, viz: —

    First, in the absence of an agreement oral or written between the

vendor and auctioneer, is such an auctioneer entitled to remuneration? Secondly, if the auctioneer is entitled to remuneration, can he collect from both vendor and purchaser and if so at what rate?

    Before dealing with the above two propositions, let us brush aside the lengthy, though interesting legal discussions, viz., whether the written agreement between the parties could be varied or altered by a purported oral agreement between them and oneStamatopoulos to the effect that the said Stamatopoulos would pay respondent (and plaintiff) a lump sum of £S.100, provided he, the latter, would take nothing from applicant (and

 defendant); for it can be seen that the said agreement, if any, was conditional on the said Stamatopoulos being the highest bidder and the ultimate buyer of the lot. This condition precedent not having been fulfilled, by the lot being knocked down in favor ofBoxall and Company, the agreement would not, therefore, be binding on the parties. It may be of some relevance, however, as will be shown hereunder.

      Now to consider the above two points, it can be said that it is established law that an auctioneer who undertakes to sell by public auction is, by the very nature of his engagement, an agent for both vendor and purchaser, and should therefore be entitled, certain circumstances existing, and in the absence of an express agreement, because of this duplicate capacity, to remuneration under an implied contract for a quantum meruit from both purchaser and vendor.

   The actual position of an auctioneer of goods is regulated by the Sale of Goods Act, 1893, s. 58, which requires certain formalities to be fulfilled in auction sales. The general principle can be stated as follows: —

“When selling as agent, he is the agent of the vendor only, except for the purpose of signing, as a contemporary part of the transaction, the contract, or memorandum of the contract, for which purpose he is also the agent of the purchaser.” (Halsbury, Laws of England, Volume 2, 3rd edition, p. 71.)

    By statute the remuneration of an auctioneer is payable by the vendor. The law in this respect can be found in the same authority—p. 84—and reads:—

   “The remuneration payable to an auctioneer by a private vendor may be fixed by express agreement as to both its amount and the events on which it is to be paid.

In the absence of express agreement, the remuneration is determined by custom, or, failing custom applicable to the particular circumstances, the auctioneer will be entitled to a fair and reasonable amount.

    In most instances, where the services of the auctioneer have been fully performed, a customary rate of payment calculated by percentage will be adopted as the measure of such payment.”

    From the facts of this case we are satisfied that respondent (and plaintiff) did carry out that which he had bargained to do, i.e., he published the notices for sale, conducted the sale and actually sold to Boxall and Company, and handed over the proceeds to applicant (and defendant). He is therefore entitled to remuneration under an implied contract for a quantum meruit.

  But what is the measure of damages? According to law it must be fair and reasonable. Custom or usage is adopted. But there must be one in existence to be so adopted, in which case it may provide for a ready percentage. The existence of such custom or usage must be proved by evidence. Such evidence must be admissible evidence. The Court has no

 power to take judicial notice of a custom or usage which has not been so proved.

    Applying the above principles to the facts of the case we find that the evidence put forward in proof and disproof of the existence of usage was found by the Court of first instance to be contradictory and therefore dropped.

     The High Court also found that that evidence was unreliable. It was open to both Courts to weigh that evidence and accept this and reject that. But this was not done and it is our duty not to interfere with these findings of fact unless there are exceptional circumstances. The Court below was under the same duty. The Court below was therefore not right in accepting a purported letter of a former Administrator-General to tip the scales in favor of the evidence produced by respondent (and plaintiff). Such document is inadmissible in evidence.

    Now that we are left with no usage or custom or a fixed percentage to be incorporated, what is the measure? The general rules of the law of agency in this respect are: — “An agent has no right to receive remuneration from his principal unless there be a contract, express or implied to that effect.

In the absence of an express contract on the subject, a contract to pay remuneration may be implied from the circumstances of the case. In fixing the basis of such remuneration the Court may have regard to previous negotiations between the parties. But where the commission is left to the discretion of the principal, the Court cannot determine either the basis or rate of commission and therefore in the absence of payment by the principal, no commission will be recoverable.”

     No hint is contained in the record that the commission was left to the discretion of applicant (and defendant); for he, applicant (and defendant) says emphatically that he had an intention not to pay anything, and respondent (and plaintiff) rests his claim on usage and not discretion. But by the agreement with Stamatopoulos, respondent (and plaintiff) agreed to take £S.100 in all and nothing from applicant (and defendant). Though this agreement has been rendered abortive because of the fact of Stamatopoulosfalling out and not becoming the buyer, yet the Court gives regard to it in fixing the basis and assessing remuneration. Instead of £S.100 respondent (and plaintiff) got away with £S.700. In our considered opinion, therefore, we think that his damages should only be nominal.

    The present state of usage in the auctioneering world in the Sudan, or at least in Khartoum, is watery, perhaps a usage is in the process of formation, and until it becomes a crystal-hard fact it would always be foolish on the part of a practicing auctioneer not to safeguard his interest by an agreement, oral or written, as to the quantum of his remuneration.

         For the above reasons explained, we think that this application should partly succeed and that respondent (and plaintiff) succeeds in obtaining only nominal damages which we assess at £S.5 He, respondent (and plaintiff) is awarded costs taxed at £S.54.500m/ms.

     M. A. Abu Rannat C.J.: —I concur.

                                                                                                (Revision allowed)