The point is, however, much connected with another, on which there is some authority, namely, whether a principal has in general a right to refuse to receive, or be bound by, a contract delivered to him by a broker whom he has employed. in the ordinary manner. If the principal has a right on receipt of the note to return it and repudiate the contract altogether, it is manifest that there is no absolute contract until he has either adopted the contract by retaining a note delivered to him, or waived his right to have an opportunity to return the note, and so repudiate the contract. The objection in such cases is not that there is no sufficient memorandum of the contract, but that there is no contract at all, for the authority of the broker in such cases is merely to negotiate a bargain and propose it to his principal, who is to be bound by it unless he dissents. Until, therefore, the proposal is expressly or tacitly accepted, the contract is not made.

Proof has in some cases been given of a usage in London, by which the principals have a right to return the broker's note within twenty-four hours, and so to refuse to be bound by the contract.

In Heyman v. Neale (a), in 1809, the defendant seems to have relied on this usage as a part of the law merchant, not requiring proof. In that case the broker seems to have had express authority to make the contract, and Lord Ellenborough is reported to have used terms that may have borne reference to the peculiar circumstance of the broker's express authority, but which certainly seem to have been expressed generally to the effect that no such custom was part of the law.

In Hodgson v. Davies (b), in 1810, there had been bought and sold notes delivered for the sale of tobacco, payment to be by bill. Five days afterwards the defendant, who was the seller, refused to proceed with the contract. The defence was, that the person who sells goods by a broker

(a) Heyman v. Neale, 2 Camp. 337, ante, p. 96.
(b) Hodgson v. Davies, 2 Camp. 531.

reserves to himself the power of ratifying or rejecting the contract, as he shall be satisfied with the credit of the purchaser. The special jury said, that unless the name of the buyer had been previously communicated to the seller if the payment is to be by bill, the seller is always understood to reserve to himself the power of disapproving of the sufficiency of the buyer and annulling the contract, but that he must exercise that power more promptly than the defendant in this case had done.

This finding of the jury, it is to be observed, is limited in terms to the case of a seller upon credit, and seems to give him a reasonable but uncertain time to exercise his option.

In Humphries v. Carvalho (a), in 1812, it is said that evidence was given that it was the custom of trade for either party to return the contract note if he disapproved of it within twenty-four hours. This custom, if it existed, would have had some bearing upon the merits of that cause, but as it was irrelevant to the point on which the case is reported, the accuracy of the reporter's statement cannot be depended

upon.

In Hawes v. Forster (b), at the second trial, in 1834, evidence was given by some eminent merchants " that if the "broker's bought or sold note, as the case might be, were "not consonant with their directions to the broker they "returned it." This seems to be nearly the same thing as the statement in Humphries v. Carvalho (a), and is open to the same remark. It had a bearing on the question then at issue, and is therefore of some weight; but as it was rather collateral to it, there is not any reason to look upon either the evidence or the report as minutely accurate.

In Thompson v. Gardiner (c), in 1876, a broker was employed by the plaintiff to sell for him. He delivered notes. to both buyer and seller, but he signed the one given to the seller only. The defendant kept his note for two or three

(a) Humphries v. Carvalho, 16 East, 45.
(b) Hawes v. Forster, 1 M. & R. 368.
(c) Thompson v. Gardiner, 1 C. P. D. 777.

weeks and then repudiated the contract. Brett, J., delivering the judgment of the Court upholding the verdict for the plaintiff, said, "The authorities are conclusive to show that "the broker acting for one of the contracting parties, making "a contract for the other, is not authorized by both to bind "both. But the broker who makes a contract for one may "be authorized by that person to make and sign a memo"randum of the contract. That has frequently been held. "The question here is whether there was any evidence that "the broker was so authorized." And Brett, J., was of opinion that there was ample evidence that the defendant had recognised the broker's authority to sign for him (a).

In all cases to which such a custom applies it is evident. that the broker has no prima facie authority to make a contract, and when there is but one contract note delivered there must be something proved beyond the mere existence of the relation of broker and principal between the broker and the party who has not received and retained the note, or else there is no proof of a contract on his part. And when there is independent proof that the principal did in fact enter into a parol contract to the same effect as that contained in the note, it would seem to require extraneous proof to show that he authorized the broker to sign a contract for him without delivering a note to himself. And at all events he could not be taken to give the broker primâ facie authority to sign anything but a memorandum of the contract actually made, and consequently it would be open to him to show that the note was not a memorandum of the true contract. In the case of Pitts v. Beckett (b), in the sittings after Trinity Term, 1845, the Exchequer is said to have decided on these principles, but giving them rather a more extensive application. That was an action for not accepting goods. The parties had been brought together by a Liverpool broker and had made a bargain personally. The broker

(a) See also Moore v. Campbell, 26 L. J. Ex. 310; 10 Ex. 323.

(b) Pitts v. Beckett, 14 L. J. Ex. 358; 13 M. & W. 743. See also Sievewright v. Archibald, 20 L. J. Q. B. 529; 17 Q. B. 103; Heyworth v. Knight, 33 L. J. C. P. 298; 17 C. B. N. S. 298.

afterwards rendered the plaintiff a sold note signed by the broker, describing the sale as unqualified. He did not render any bought note. The defence was, that the real contract was one with a warranty which was not complied with, and the jury found that such was the fact. The case took a double shape. Was there evidence to satisfy the Statute of Frauds, there being only one note, and was that note a written contract, so as to preclude the parties from giving evidence of terms not contained in it? Cresswell, J., at Nisi Prius, at Liverpool, directed the jury to find for the defendant, but reserved both points, and the plaintiff obtained a rule nisi to enter a verdict for him, which was afterwards discharged (a).

The

It had previously been decided at Nisi Prius, once by Lord Kenyon (b), in 1794, and once by Parke, J. (c), in 1830, that a broker employed to purchase at an auction had no apparent authority from his principal to do anything more than purchase the particular article mentioned by his principal on the terms brought to the principal's notice. decision in Pitts v. Beckett (d) seems to extend the principle of these cases. But it cannot extend to cases where the broker is entrusted with any token of authority to make a contract as for instance, when he is entrusted with the custody of the goods or delivery orders: or perhaps, where he is permitted to have the samples, though that must depend on the light in which merchants view the possession of the samples.

In the case of Heyworth v. Knight (e), in 1864, which was an action for not accepting a cargo, the defendant had by letter authorized his brokers to buy for him on certain terms:

(a) Lord Blackburn, in the original edition of this work, adds: "I was not 'present at the argument in banc, but I am informed that the Court said that a "broker had in no case prima facie authority to do more than to negotiate the "contract and write down the terms of the contract actually made; and that, con"sequently, at all events this note signed by him was not within his authority." (b) The East India Co. v. Hensley, 1 Esp. 112.

(c) Horsfall v. Fauntleroy, 10 B. & C. 755.

(d) Pitts v. Beckett, 14 L. J. Ex. 358; 13 M. & W. 743.

(e) Heyworth v. Knight, 33 L. J. C. P. 298; 17 C. B. N. S. 298.

his brokers then wrote to the plaintiff's brokers making an offer in terms which differed from their authority, but which the Court considered to be in substance the same. This offer was accepted. The bought and sold notes which were then drawn up did unquestionably differ from the accepted offer. The declaration was founded on the terms of the authority and not on the notes. The Court upheld the verdict for the plaintiff, being of opinion that it was competent to him to bring an action on the contract disclosed by the letters. Erle, C. J., said: "Something was said by Mr. Mellish about "the letters not constituting a binding contract between the parties, because a more regular and extended contract was contemplated (a). That notion, however, is totally at "variance with the law as laid down by many cases in the “Court of Queen's Bench, where the broker's book has been "allowed to be resorted to for evidence of the contract, though the parties INTENDED to contract by means of bought "and sold notes, where there has been a variance between "these documents" (b). Perhaps it Perhaps it may be suggested that in the above important passage the expression "intended to contract" may be read as "intended to evidence the contract."

It would seem from these very conflicting authorities that it is still a matter in doubt whether any document can be said to be the memorandum of the contract. Mr. Benjamin (in the second edition of his work) deduced (c) certain propositions from them, the first one being that the signed entry in the book constituted the contract, the second one that the notes did not constitute the contract, the third and fourth ones. being that both or either note might satisfy the statute. But in the last (fifth) edition, published in 1906, it is pointed out that when the cases above referred to were decided, a broker was bound by law to enter the terms of the contract in his book, and that fact was regarded by the Courts as very

(a) See Lewis v. Brass, 3 Q. B. D. 667.

(b) Willes, J., in this case dissented from the opinion of the majority of the Judges in Cowie v. Remfry, 5 Moo. P. C. C. 232.

(c) Benjamin on Sale, 2nd ed. p. 221.