Principles

·  AGENCY — Apparent authority — Agent, manager oF principal’s shop, bought goods on principal’s credit — outside his authority — Principal liable when seller reasonably believes in agent’s powers.

Principal, defendant-applicant, owned a shop managed by agent under an agree ment whereby goods were not to be purchased by agent on principal’s credit but in cash, and then not without principal’s consent. Agent purchased goods from plaintiff-respondent on principal’s credit. Plaintiff did not know the terms of the contract of agency between principal and agent, but knew defendant was agent’s principal. Agent had made similar purchases on principal’s credit from plaintiff before, and paid for the goods. Plaintiff sued principal for the price of goods sold, and principal claimed his agent had no authority to contract for him.
Held: Where an agent is authorized to manage his principal’s shop, keep goods of his principal in his possession, buy goods through his principal, and had pre siously contracted sales with seller on principal’s credit which agent timely honoured and where the goods purchased on credit from seller were such, as agent regularly dealt in, the seller, plaintiff, reasonably believed from the nature of agent’s employ ment and duties that agent had authority to purchase on principal’s credit, and the orinc shall therefore be held liable for his agent’s representation of authority to contract sales on principal’s credit. “It makes no difference that the agent may be disregarding his principal’s directions, secret or otherwise, so long as he continues in that larger field measured by the general scope of the business entrusted to his care

Judgment

El Fatih Awouda, Acting P.J., July 8, 1961:— This is an application revision against the decree of District Judge, Juba, dated June 7, 1961 his CS-173-1960.  The claim is based on price of goods sold and delivered.

 Applicants are the owners of a shop of general merchandise at Kapoeta. the said shop was run by a certan Salim Boulos, who by virtue of a written agreement, was appointed by applicants as agent thereat. The said agent s to receive 40% according to the written agreement, or 50% according to the  statement of applicants, out of the net business profits by way of ineration. The said written agreement included, inter alia, that the agent  might come to Juba once every two or three months to buy goods for the shop through his principals and that the said agent should not buy goods either in cash or on credit except with the consent of his principal and that even if such consent is given he should buy in cash. Salim was, contrary to the express terms of’ the agreement. in the habit of buying goods for the shop from respondent on credit since 1957 in his capacity as agent for applicants and paying for them. In 1960 the agent purchased from respondent goods on credit which included bicycles and.textiles to the valuc of £S.584.O3OmImS. He was made to sign two promissory notes for the value of the goods. Tht date on which the promissory notes were drawn is not entered, nor is it clear in the record whether they were drawn on the same day the goods were supplied or at a subsequent date.

Applicants contended that Salim had no authority to buy on credit and hence they are not to be held liable for the debt, the subject matter of this claim.

Halsbury, Laws of England 161 (3rd ed. 1952) reads as follows:— “As between the Agent and his principal, the authority may be limited by agreement or special instructions, but as regards third persons the authority which the agent has is that which he is reasonably believed to have, having regard to all the circumstances, and which is reason ably to be gathered from the nature of his employment and duties.”

Salim is authorised to keep goods of his principal in his possession, to sell the said goods and receive the price, to buy goods through his principal, and is put solely  in charge of Kapoeta shop. Thus he falls within the category of general agents. He, prior to the last incident, did on several occasions buy goods from respondent and from others on credit in his capacity as applicants’ agent, and paid ,for them. The goods, the subject matter of claim, are amongst the kind of goods applicants’ Kapoeta shop normally deals in. In these circumstances I do think that respondent rea sonably believed that Salim had authority to buy goods on credit for his principal’s shop, of which he is manager. It is true that as between agent and principal the agent acted outside the scope of authority given to him by the written instrument. Respondent had no knowledge of the written agreement which limits the ostensible authority of the agent of the disclosed principal. To him that agreement is secret and his right to recover from the principal is not affected by the terms of that secret agreement.

I should like to add that respondent is not suing on the promissory notes but on the ground of price of goods sold and delivered, and that is why the question of the agent’s authority to make a promissory note and bind his principal thereby was not discussed by the learned District Judge, nor shall I discuss it here.

Application for revision is summarily dismissed.