Principles

·  AGENCY.-... Undisclosed principal’., breach of Condition of Contract with third party.. Agent  not liable.

Defendants, agents for an undisclosed foreign shipping firm, entered into a contract with plaintiffs for the shipment of plaintiff’s  gum arabic to Marseilles. Due to blockage of the Suez Canal, the contract called for shipment via the Cape, at a higher. freight rate, Which plaintiffs duly paid. The Canal however was cleared and the shipment went through directly. Plaintiff brought this action for recovey of the difference in freight charges, alleging breach of a condition of the contract.
Held: The agent for an undisclosed principal is not liable for the principal’s breach of the contra or a condition thereof.

Judgment

Advocates :

Amin El Taher El ShibIi, for Mamoun Sinada……………………. for Appellant

Abdel Aziz Safwat, for Abdel Rahman Yousif... for Respondeng

M. Imam, J., May 9, 1960: — This is an application for appeal against the judgment and decree of the Province Judge, Kassala Circuit, dated June 14, 1959, dismissing the claim of plaintiff for damages for an alleged breach of a condition of a Contract of carriage of goods by sea amounting to £S.660.960m/ms being difference in freights wrongfully received by defendants respondent

The facts Contended on behalf of the plaintiffs.appelant, Gordon General Stores, are as follows.

They are general merchants in Port Sudan dealing, inter alia, in the export of gum arabic to Europe. The defendants, The Red Sea Shipping Co. (S.) Ltd., are Steamers’ agents. On or about January 31, 1957 the defendant agreed to ship for plaintiffs 720 bags of gum arabic weighing 3,44O kilos gross from Port Sudan to Marseille on board S.S. San Dennis,

*Court: M A. abu Rannat C.J.A. imam J and A.R. El Nur P.J.

But owing to the blockade of the Suez Canal it was agreed that plaintiffs would pay extra freight, as S.S. San Dennis would sail via the Cape of Good Hope. They accordingly paid an enhanced freight at the rate of £S.16.500m/ms. per 1000 kiLos. They further contend that the said ship fatted to take the route agreed upon and, after two months spent in Port Sudan in anchorage set forth to the port of destination through Suez after it had become again navigable. The defendants therefore, by changing the route agreed upon. have committed a breach of the said contract.

The freight fixed at the opening of the Suez Canal was £S.7.500m/ms per 1000 kilos. They have therefore claimed recovery of the sum of LS.660.960m/ms difference in freight.

The defendants admitted the said contract of carriage in respect of the goods, weights, freight. etc., but denied liability in toto  main grounds they seem to have put forward were:

(a) that they were acting as mere agents and as such they are under no primary obligation towards plaintiffs; that they received the freight as agents of the shipowners. the Compania de Navigation Olissipo Ltd. of Lisbon; and that the liability, if any, to pay the difference in freight, if at all, lies with their principals;

(b) that even if they were to be held liable in their capacity as agents. they deny the existence of any agreement to sail via the Cape, and even if such an agreement existed, they are absolved from liability  by force of a clause in the Bill of Lading that gives the right of deviation.

Extensive issues were framed, Upon which the case was determined by the Court below by dismissing the plaintiffs’ claim. The reasons seem to be:

(a) As to defendants’ liability as agents:

It seems that the Court below, though no clear reasons are mentioned in the record, found that the defendants were agents and therefore not liable.

(i) Referring to their agency of the ship_owners the Court below states:

it is established that these Bills of Lading were issued in the BilLs of the defendants as the shipmaster of the S.S. San Dennis was not carrying on board a stock of the owner’S Bill of Lading Forms and so he authorised the defendants to issue  Docs. 2, 3 and 4 on behalf of the owners. The Bills of Lading were issued on January 31, 1957 subject to charter party signed at London On January 9, 1957 (see bottom part of Bills of Lading). The ship was owned by Compania de Navigation Olissipo Ltd. of Lisbon and was chartered to Messrs. tsakiroglou and Co. Ltd.”

(ii) Referring to defendants’ agency of the Charterers, the Court below continues:

“The defendant company was only handling the stevedoring at the request of Tsakiroglou as these had not got the necessary agent’s licence. Messrs. Tsakiroglou authorised defendants to accept this cargo on their behalf as there was some space in the ship The freight collected by the defendants was paid by them to Messrs. Tsakiroglou by the defendants’ Khartoum office. If the plaintiffs had any claim, it might have been against Messrs. Tsakiroglou and not the defendants.”

(b) As to the existence of an agreement to sail via Cape, the Court below states:

“It is clear from the Documents produced by the plaintiff that the buyers of the gum. arabic, Iranex of Marseilles, gave them (plaintiffs) clear shipping instructions that the destination of the goods was Marseilles via the Cape. It is alleged by the plaintiffs that they had agreed with the defendants (through a Mr. Constan datos, one of the Khartoum directors) that the ship would sail via the Cape and so they, they allege, have paid the bigger rate of £S.16.500m/ms. per ton. The onus was on the plaintiffs to establish this, and, in my view, they have failed so to do. The Bills of Lading produced by the defendants show that the destination of the goods was Marseilles without stating any route whether it is via Cape or otherwise.”

Now to deal with the first point, we agree with the learned Province Judge that defendants cannot be made liable, presuming that civil liability does exist, in their capacity as agents. The law in this respect is clear, for the general principle of the law of agency lays it down that an agent is a a mere conduit pipe and once a contract is concluded between the parties, the agent drops out. Hanbury, Agency 154 (1952) states:

“... the main rule, indeed one of the most fundamental rules of the law of agency, is that, if the agent makes clear the fact of his agency, he is personally immune from action....”

Though there is no direct evidence that defendants made clear the fact of their agency, yet strong circumstantial evidence establishes the fact that this was made sufficiently clear. Their agency in respect of both the ship-owners and the charterers was one for an unnamed principal; for at the time they entered into agreement, plaintiffs knew that there was a principal though they did not know or could not accertain, at the time, the identity of this principal. See Powell, Agency 126 (1952). This is vividly shown by the fact that defendants were known ship agents and by the fact, which is admitted, that they had filled in the shipping documents for and on behalf of the shipmaster.

The mere fact that A (the agent) does not name his principal does not make him liable on the contract. His liability, therefore, is governed by the rules which apply where he does name his principal” Powell, Agency, 217 (1952)

These, with certain exceptions which are irrelevant in this case, exempt the agent from liability. Powell, Agency 215, 217 (1952)

Before finishing off this point we should like to mention that an endeavour was made b advocate for applicants to clothe, respondents with liability as agents for a foreign principal. We affirm that this is no longer the law, and the crucial point in this connection is the intention of the parties, i.e., that both the foreign principal and the agent intended that the latter would be held responsible, and that the nationality of the principal is just one factor to be taken into consideration by the Court in arriving at such an intention. As we see it, and as was explained above, we do not see any such circumstances to lead us to presume any such intention.

Before dealing with the second point, let us brush aside the plea of mistake that was made at the last moment before this Court and which we think is irrelevant, and anyway ought to have been raistd before the Court of first instance.

Now to come to the point, we think that the issue in respect thereof was unsatisfactorily framed. The material point is not whether there was or there was not an agreement that the ship should sail via the Cape. For this might have gone to determine the primary liability of the principal and consequently that of the agent. If this were the case this issue ought to have been looked into first, because its determination in favour of the principals, i.e., that they were not liable under the original contract of carriage either because the Bills of Lading did not mention the route alleged or because no stipulation in respect of such route could be incorporated in the said Bills, would have dispens with looking into the agent’s liability. Had the Court below clearly seen the points at variance, it would have been driven into some indulgence into the laws of carriage of goods by sea to see whether a bill of lading could be qualified, in the absence of anything contained therein, in so far as the route to be taken is concerned; and it would have discovered that these laws contain provisions defining, under such circumstances, the routes to be taken by ocean ships and to which the bills under which they sail are subject.

However, it seems that the Court below satisfied itself by determining the defendants’ liability as agents as a preliminary issue. Admitting that there was a binding contract to sail via the Cape, could the defendants be held liable in their capacity as agents? 1t determined this issue in favour of defendants and, we think, correctly.

The material question which was lost sight of, perhaps because of confused pleadings, was whether the defendants were liable, apart from any contract of shipment, on their representation that the ship would sail via the Cape, which under the law of agency constitutes a separate and distinct cause of action, to wit, a cause of action in assumpsit for breach of warranty of authority. See Powell, Agency 208 (1952). Had this been made clear to the trial Court and issues framed thereon, the Court might well have found in favour of plaintiffs. For apart from their direct evidence that Mr. Constandatos did make such representation, which was not rebutted by Mr. Constandatos, who was not called as a witness, it is sub- ported by very strong circumstantial evidence well arranged by the 1earned  advocate for plaintiffs. I mention but a few allegations:

(a) that the Suez Canal was blocked at the time;

(b) that plaintiffs paid an enhanced freight above that usually payable for voyages through Suez;

(c) that S.S. Sai: Dennis lingered for a considerable time before it set sail;

(d) that it actually set sail towards the Cape and then deviated when the Suez Canal was open.

That was plaintiffs’ cause of action. They did not plead it in the Court below and we cannot do anything for them here. We can only say that this was a case which could have been made by good pleadings.

For the above reasons this appeal is dismissed.

M.A.Abu Rannat, C.J., May 9, 1960 :— I concur.

 A.R. El Nur,P.J.  May 9, 1960:—           I concur.