Case Briefing | The Thomas G Case
Leo Lines Limited
Shipbrokers—Sale of ship—Commission—Sale effected through two different channels— Effective cause of sale—Rate of commission— Whether expressly or impliedly agreed— Normal practice as to rate and payment of commission.
Motor vessel Thomas G offered for sale at price of £80,000. Offer circularized by defendant owners by their agents (J.) among shipbrokers (including plaintiff). Particulars of Thomas G and Alba (sister ship under different ownership also offered for sale) passed on by plaintiff’s agents to Yugoslav company (S. L.) as possible purchasers. Independent surveyor (R.) appointed by S. L. to inspect both vessels Alba inspected at Gothenburg, where R. was introduced by M. (managing agents of Alba) to G. (Swedish shareholder in defendant company owning Thomas G)R. told by G. that R.’s principals (S. L.) should deal direct with G. Recommendation made by R. to S. L. that they should make an offer of £60,000. Offer of £60,000 made by S. L. to plaintiffs, who submitted an offer to defendants of £60,000 less 5 per cent, commission. Counter-offer by G. to S. L. of £65,000 less 5 per cent, commission. Further offer by S. L. (made direct to G. and also through plaintiff) of £62,500. Further counter-offer of £63,750 made by G. direct to, and accepted by, S. L. One per cent, commission paid to J. and. half per cent, commission to M. (in belief that M. effected introduction). Claim by plaintiff for £3187 10s. (5 per cent, commission on £63,750). Contention by defendants that sale was effected upon R.’s introduction to S. L. by M. and that in any event there was no agreement that 5 per cent, commission would be paid. Whether plaintiff effective cause of introduction. Evidence of normal practice as to rate and payment of commission.
———— Held, (1) that plaintiff was the effective cause of the introduction and his efforts were the effective cause of the sale; and that accordingly he was entitled to commission on the sale; (2) that the dealings between the parties, if not amounting to an express agreement, came so near to it as to justify a finding that 5 per cent. was accepted as the rate of commission. Judgment for plaintiff for £3187 10s.
The following case was referred to: Way v. Latilla,  3 All E.R. 759.
In this case, Mr. William James Allan, shipbroker, of Newcastle upon Tyne, claimed £3187 10s. commission on the sale of the motor vessel Thomas G, owned by Leo Lines, Ltd., of London, E.C., to Slovenia Linije (now trading as Splosna Plovba), of Yugoslavia, for £63,750, in July, 1954. Mr. Allan contended that he was requested by defendants’ agents to introduce a prospective purchaser of the vessel, and that, having done so, he was entitled to 5 per cent, commission.
Defendants denied that it was agreed that Mr. Allan should be paid commission, but said that if it was it was only if he succeeded in obtaining a purchaser for £65,000. They also said that the purchasers were introduced to them by Mr. C. R. Manne, of J. E. Manne & Co.
Plaintiff’s case was that in this transaction United Trading Company, Ltd. (Utraco) acted as his sub-agents, and he claimed that it was the custom of the shipping and shipbroking trades that if a vessel was sold through the efforts or introduction of a shipbroker to a purchaser found by him, the owner paid him commission at the rate agreed, or, if no rate was agreed, at a reasonable rate.
Plaintiff said that defendants, in 1953, instructed John I. Jacobs & Co., Ltd., to find a purchaser and Messrs. Jacobs sent Mr. Allan particulars of the vessel. This, it was claimed, implied that Mr. Allan was requested to introduce the vessel to prospective purchasers and that if the vessel was sold to a person introduced by the plaintiff, the defendants would pay him commission. In May, 1954, the buyers (Slovenija Linije) wished to buy a vessel of about 1500 tons, and, through Utraco, asked Mr. Allan to supply particulars of such vessels for sale. The plaintiff, through Utraco, supplied the buyers with particulars of certain vessels, including the Thomas G and ‘her sister ship Alba. The vessels were inspected by Mr. Rotter, the buyers’ Consulting engineer, the Alba in Sweden on June 10, 1954, and the Thomas G in England on June 14, 1954. On June 14, 1954, plaintiff ascertained from Messrs. Jacobs that although the defendants’ “asking price” was £80,000, they would consider an offer of £70,000, or even £65,000, and plaintiff passed on this information, through Utraco, to the buyers.
An offer of £60,000 for the Thomas G was received by Mr. Allan on June 22, 1954. He passed it on to Messrs. Jacobs, to whom he made it clear he was acting on the terms that if the sale was affected, the defendants were to pay 5 per cent, commission. The offer was rejected and plaintiff was requested to submit a counter-offer of £65,000, on which he would be paid commission. Mr. Allan submitted the counter-offer to the buyers, who then offered £62,500. The defendants were not prepared to accept this. Shortly after- wards the vessel was sold to the buyers for £63,750.
Defendants claimed that Messrs. Jacobs were appointed as exclusive brokers for the sale of the Thomas G. They admitted that Mr. Rotter, on behalf of the buyers, inspected the Alba on June 10, 1954, and the Thomas G on June 14, 1954, but they denied that such inspection was made as the result of any action by the plaintiff. They admitted that by telegram on June 22, 1954, and by telephone and letter on June 23, 1954, the plaintiff submitted an offer to Messrs. Jacobs for the purchase of the Thomas G for £60,000, but plaintiff did not specify on whose behalf the offer was made; and defendants denied that plaintiff made it clear, or that any agreement was made, that he was acting on terms that if a sale was effected defendants would pay him 5 per cent, or any commission. Defendants admitted that plaintiff on June 30, 1954, submitted to Messrs. Jacobs an offer to purchase the Thomas G on behalf of undisclosed purchasers for £62,500, and that Messrs. Jacobs on behalf of the defendants refused to accept such offer; but they denied that Messrs. Jacobs on behalf of defendants on July 2, 1954, offered to sell the vessel to plaintiff’s principals for £65,000 or any sum. On July 3, 1954, defendants sold the vessel to the buyers for £63,750. Defendants further said that if (which was denied) they agreed to pay to plaintiff any commission in respect of the sale, such agreement was to pay him 5 per cent, on the purchase price if he was successful in obtaining a purchaser at the price of £65,000. They also said that the buyers wore introduced to defendants by Mr. C. R. Manne, of Messrs. J. E. Manne & Co., of Gothenburg.
Mr. T. G. Roche, Q.C., and Mr. Andrew J. Bateson (instructed by Messrs. Maples, Teesdale & Co., agents for Messrs. Bram- well, Clayton & Clayton, of Newcastle upon Tyne) appeared for plaintiff; Mr. T. Humphrey Tilling (instructed by Messrs. Ingledew, Brown, Bennison & Garrett) represented defendants.
The further facts and arguments are sufficiently set out in his Lordship’s judgment below.
Mr. Justice DEVLIN: This is a claim for commission on the sale of a ship. The plaintiff is a shipbroker and he carries on business in Newcastle upon Tyne. His claim is that he is entitled to be remunerated at the rate of 5 per cent, upon the figure of £63,750 for which the defendants, Leo Lines, Ltd., the owners of the motor vessel Thomas G, sold that vessel to a Yugoslav firm of shipowners known as Slovenija Linije whom the plaintiff claims to have introduced. The channel of communication at the beginning between Leo Lines, Ltd., and the ultimate buyers, Slovenija Linije, was a quite complicated one. Leo Lines, Ltd., having got this vessel for sale instructed their own brokers or agents, John I. Jacobs & Co., Ltd., to deal with the matter on their behalf, and John I. Jacobs & Co., Ltd. (who are London shipbrokers and who were remunerated with one per cent, on the price for their Services) sent out circulars to, among other people, the plaintiff, who, as I say, carried on business in Newcastle. The plaintiff had connections with a Swiss concern named Utraco, f and he gave particulars to Utraco. Utraco passed them on to another Swiss concern named Colcommerce and through Colcommerce they reached the Yugoslav shipowners, who, as I say, ultimately bought the vessel. Colcommerce and Utraco had been trying for some time in 1954 to find a vessel which was suitable to the Yugoslav shipowners and they had submitted a number of names, some of which came through Mr. Allan. On May 27, 1954, Mr. Allan gave them the names of some vessels and also sent them particulars of two vessels, the Alba and the Thomas G. I think the Alba was a Swedish vessel. He had had particulars some time before from Messrs. Jacobs. I think they had been sent to him about a year before, namely, June, 1953. He had not done anything with them so far as is relevant to this case until May 27, when he sent them to Utraco, who carry on business at Basle. He wrote in his letter:
I have noted your remarks and would remind you of motor vessel Alba particulars sent you on 22nd April last try £70,000, available Swedish port. She is under Swedish flag. I take this opportunity of enclosing particulars of m.v. Thomas G British flag, a sister ship [— that is, sister ship to the Alba —] built 1947 by same builders and he then gives further particulars.
These owners are open to an offer and their indication is £80,000 but I should be pleased to submit best firm offer, delivery U.K. or Continent between which she is presently trading.
The Yugoslav shipowners received those particulars and as a result they decided to employ a Mr, Rotter, a Yugoslav gentle- man who is a Consulting engineer and who is independent, and send him to inspect both the Alba and the Thomas G. They had an interview with him in Yugoslavia on June 7, when a Mr. Snudrl, who was a director of the Yuogslav concern and the director dealing with the matter, gave him his instructions. He was given the particulars which had been sent by the plaintiff and which bore the plaintiff’s name at the head. He was told to go and inspect the ships and to give a report so that his principals might agree or not to buy. He was told that the Alba was to be inspected at Gothenburg. He was not told where the Thomas G was, except that she was in England. The arrangement was that he was to ring up when he got to Gothenburg and they would then be in a position, Mr. Snudrl hoped, to give him some more detailed information about where the Thomas G was. The Thomas G was in fact. at a small port in Devon in England. Mr. Rotter arrived in Gothenburg on the evening of June 9, and he telephoned to Mr. Snudrl. Mr. Snudrl told him that the Thomas G was in effect owned by Mr. Glucksman, who actually lived in Gothenburg. Where Mr. Snudrl got that information from has not appeared in the course of the evidence, but it was not through Mr. Allan. I suppose it would be easy enough to find out the name of the owners of the Thomas G or the name of the registered owners, but Mr. Snudrl evidently ascertained further information, which was in fact true, that the real owner—I suppose Leo Lines, Ltd., was a subsidiary company—was a Swedish company named Rederiaktiebolaget Ruth. Mr. Glucksman was a director of Rederiaktiebolaget Ruth and, I think, also a director of Leo Lines, Ltd. For the purposes of this case he was the person who gave all the instructions and decided what offers were to be accepted, and so forth. All the matters were referred to him. Mr. Rotter having gone to Gothenburg, he was told that Mr. Glucksman was also in Gothenburg, but he was not given his address. I suppose Mr. Snudrl did not know the address.
On the next day, June 10, Mr. Rotter set about inspecting the Alba, and he was not satisfied with what he saw. The owners would not let him open up the engines, and he made it clear enough to the owners’ managing agents, a firm named J. E. Manne & Co., and to Mr. C. R. Manne with whom he was dealing, that he was not going to give a favourable report. He also asked Mr. Manne about the Thomas G and Mr. Glucksman. Mr. Manne was able to tell him that Mr, Glucksman was his friend and I think he gave him Mr. Glucksman’s address. On the next day, June 11, Mr. Rotter went to see Mr. Glucksman.
There is some conflict of evidence about the interview between Mr. Rotter and Mr. Manne and it is very understandable that it should be so. Mr. Rotter’s evidence differs slightly from that of Mr. Manne and also from that of Mr. Glucksman regarding the conversation I am about to record. I prefer Mr. Rotter’s evidence. He seemed to me to be a very careful witness. He had made careful diary entries, no doubt for the purpose of his report, and he was able to refresh his memory in relation to then and therefore to give positive answers, -and I think his evidence is to be credited. Of course, I do not mean that either Mr. Manne or Mr. Glucksman were inventing things that did not take place, but I do not think their recollection is so reliable. As I say, it is very easy to see how misunderstanding might have arisen. Mr. Manne was under the impression (I am quite sure honestly) that it was he who first mentioned the Thomas G to Mr. Rotter and that he did so because, when it became plain that the Alba sale was not going to go through, I suppose he felt himself free to discuss other ships, and he says he mentioned that the Thomas G was a sister ship and that her owner, Mr. Glucksman, was in Gothenburg and was a friend of his. It is common ground that there was this discussion about the Thomas G. As I say, I am satisfied that Mr. Rotter mentioned it first in the way he said. But Mr. Manne, being honestly, I think, under the impression that he had put the idea into Mr. Rotter’s head, telephoned to Mr. Glucksman and, he says, he arranged an appointment. At any rate, he must have told him, no doubt, that Mr. Rotter was coming along. He never saw Mr. Rotter again, but he and Mr. Glucksman, I think, were quite honestly under the impression that the introduction had been effected by Mr. Manne. Indeed, Mr. Manne has been paid a small commission of a half per cent, for his Services in making that introduction.
On the 11th, Mr. Rotter, as I said, went to see Mr. Glucksman and he simply introduced himself by saying—and this is perhaps a little significant—that he had come from Yugoslavia and wanted to inspect the ship. Mr. Glucksman, he says, did not ask him how he had heard about it, and he said he wanted to inspect the ship “because we would like to buy it.” Mr. Glucksman is not sure whether Mr. Rotter told him the name of his principals or whether they were Slavs or Swiss; but Mr. Glucksman was under the impression that the introduction came through Mr. Manne, because Mr. Rotter did not produce the particulars he had with Mr. Allan’s name on them. If he had, then no doubt the misunderstanding would have been cleared up. But he did not, so they discussed the matter. Mr. Glucksman arranged for the inspection in Englarid, as he was obviously in a position to do. At the end of the interview, I think, Mr. Glucksman and Mr. Rotter exchanged cards, so to speak. Mr. Rotter got Mr. Glucksman’s address in Gothenburg and Mr. Glucksman told him that it would be better for his principals to deal direct. (Mr. Rotter, of course, was taking no part in the buying or selling: he was merely there to inspect and to report). Mr. Rotter said that he would tell his principals that in his telegram. I gathered from Mr. Glucksman in the witness-box that he would not have taken that course had he supposed or realized that the introduction came through Mr. Allan; he would have thought it right to leave the business in Mr. Allan’s hands. But thinking, as he did, that the introduction came through Mr. Manne, and Mr. Manne being a friend of his and he knowing that he could put the matter right as far as Mr. Manne was concerned, he made this proposal.
Mr. Rotter went to England, and he inspected the ship on June 15 and 16. Meanwhile, Communications had been going on through the rather long, elaborate channel via Switzerland, Colcommerce and Utraco. Word had gone through the pipe- line that the buyers were sending Mr, Rotter to inspect, and Mr. Allan did not hear of this until June 14, apparently. He then telephoned to Mr. Jacobs asking where the vessel could be inspected. He was told where it could be inspected and he said that he cabled his people abroad to see if they were interested. Of course, in fact the whole thing had been short- circuited through Mr. Glucksman and the inspection took place on June 15 and 16.
On June 17, Mr. Rotter sent a telegram to his principals reporting on the condition of the ship. It was his only report; he did not give a further written report. It was evidently a satisfactory one so far as the condition of the ship was concerned. He appears to have recommended to his principals an offer of £60,000 (£80,000 was at that time being asked) and he passed on to them either then or in a ‘conversation later what Mr. Glucksman had told him about negotiating direct. However, the Yugoslav shipowners continued to deal through Mr. Allan and they submitted their offer of £60,000 to him. Mr. Allan passed that offer on to Mr. Jacobs. Nothing so far had been agreed about the rate of commission Mr. Allan was to receive if the deal went through, and there is not any fixed rate or customary rate that governs the matter. The way in which it is dealt with normally—and I take this from the evidence of Mr. Cook—is that & rate is not agreed at the beginning when particulars are sent out. I think a convenient stage is probably as it was done here. When the broker submits his first offer from the prospective purchaser, he states then what his commission is going to be by submitting the offer less so much per cent. I suppose what he has in mind in fixing it is the number of people who have to participate in it, because Mr. Cook’s evidence was that a normal rate, unless there were very heavy expenses, would be one per cent, per broker, that is, to everybody in the chain. If Colcommerce and Utraco are to be counted in the chain, that one per cent. would become three per cent. Utraco had in fact in passing on the offer been stipulating for two and a half per cent, for themselves. That is, T suppose. two and a half for themselves and beyond, Colcommerce included, which would have left only half per cent, for Mr. Allan. At some later stage they evidently agreed to take two per cent., which would leave one per cent, for Mr. Allan. However, there is no restriction on what a broker may ask. The figure of one per cent. was given to me as being, if not quite a minimum figure, somewhere near it, and there is nothing to prevent a broker asking for more. Mr. Allan did ask for more. Whether he did it because he thought his Services were exceptionally valuable, or whether he did it because he thought there might be more people in the pipe-line who would have to be given a share of the commission, or whether he did it with the idea, as so often happens to agents, that he might be asked to reduce his commission to get the parties together, I do not know, and it does not matter for the purpose I am considering at the moment. He submitted his offer of £60,000 less five per cent. I shall have to come back later to consider how far that five per cent. was an agreed or reasonable figure; but that is what he submitted. It was not acceptable, and, the matter having been referred to Mr. Glucksman, the answer came back with a counter-offer of £65,000 less five per cent. The offer of £60,000 was made on June 22 and the counter-offer was made not very long afterwards, but that does. not matter.
The Yugoslav buyers, having got the counter-offer, were not disposed to pay £65,000. What they did was to take Mr. Glucksman at his word, so to speak, as being engaged through Mr. Rotter and they got into touch with him direct. They sent a cable to him direct offering to pay £61,000 subject to certain conditions about putting a cylinder block in order. Mr. Glucksman replied, not through Mr. Allan, refusing that offer, but offered again £65,000 on conditions which may or may not be different from those which went before. At any rate, he was standing on his figure of £65,000. Mr. Glucksman when he did this either knew or strongly suspected that the Yugoslav concern were now communicating with him direct, and he knew or suspected that whoever had instructed Mr. Rotter was in fact the same concern as the one which was making offers through Mr. Allan. He knew that Mr. Rotter was the only person who had inspected at all recently. But it has not been suggested that there is any sort of bad faith in this case, or that any deliberate attempt has been made to take away from Mr. Allan commission to which he is manifestly entitled. I cannot see myself that Mr. Glucksman was acting otherwise than correctly. He honestly thought that the introduction had come through Mr. Manne. No doubt the situation is not unusual where the same buyer gets introduced through two different channels and in the end the matter has to be sorted out and it has to be ascertained which one of them is the effective cause of the sale. That is agreed to be the test. Although Mr. Glucksman knew or suspected that they were one and the same, he did not know and could not know until the matter was investigated whether it was Mr. Allan or Mr. Manne who had really effected the introduction. It was always possible that Mr. Allan’s clients were different and it might be a different offer and I do not think in the circumstances that he was doing anything incorrect in dealing with the matter as he did.
Of course, in the end, the way it has to be tested is not whether Mr. Glucksman was doing anything incorrect or not, but who, in the light of all the facts as now known was really the effective cause of the sale, either Mr. Manne or Mr. Allan or possibly neither of them but Mr. Glucksman himself. As I say, Mr. Glucksman took that course and he replied direct. The buyers were still unwilling to offer £65,000, but they were willing to make an increase on their offer of £61,000, and they put it up to £62,500. This time they submitted the offer both to Mr. Glucksman direct and through Mr. Allan. So that they were both notified of the offer of £62,500. Mr. Allan, of course, passed this on with a strong recommendation that it should be accepted. Mr. Glucksman did not accept it, but he decided to make another counter-offer and he telegraphed back direct to the Yugoslavs offering £63,750. While that offer was being considered by the Yugoslavs, he kept Mr. Allan waiting through Mr. Jacobs, Mr. Allan being told that Mr. Glucksman or the owners were in direct negotiation with other clients or what Mr. Allan supposed were other clients, and were not going to give a definite answer to the offer he submitted until they knew what the position was. Finally, on July 3, the buyers in Yugoslavia accepted the com- promised figure of £63,750 and the deal went through on that basis. The question I have to determine is whether in those circumstances Mr. Allan is entitled to any commission, and if so what commission. One per cent, has been paid to Jacobs and half per cent, to Manne, but no other commission has been paid by Mr. Glucksman. There was at one time a plea of custom on the record, but it is not now disputed that the test is the ordinary and familiar one as to whether the agent was the effective cause of the sale.
To my mind, there can be no doubt at all that Mr. Allan was the effective cause of the introduction. It was the particulars which he sent to the Yugoslav shipowners that caused them to instruct Mr. Rotter and which took Mr. Rotter to Gothenburg, and, if it had not been for the chance, if I may so put it, that the true owner of this apparently British-owned vessel happened to reside in Gothenburg, would no doubt in due course have taken him to England on information supplied through Mr. Allan as to where the vessel could be inspected. Mr. Manne was not in any sense the cause of the introduction, on the facts that I have found. That, I think, is a very important consideration in determining who is the cause of the sale, because in these matters the introduction is perhaps very often the main difficulty. A broker has to keep a wide channel of connections and his work consists very largely and mainly in finding a person who happens to want a ship of that sort at about that particular price. But it is not, as Mr. Tilling rightly submits, the whole point.
The negotiations went on. Mr. Tilling submits that the negotiations were not in fact conducted by Mr. Allan in two respects: first, that he did not in fact arrange the inspection—that was done through Mr. Glucksman; secondly, that he was not the person who brought about the agreement of the figure of £63,750. He had been unable to get anything better than £62,500. I do not think that either of those matters are of the first importance in this case. I think the inspection is quite unimportant. It just so happened that it was conveniently arranged through Mr. Glucksman rather than through Mr. Allan, but if matters had taken their course then the inspection would have been arranged just as simply and effectively through the rather longer channel, no doubt with more delay, that Mr. Allan had opened up. I think there is nothing in that at all. With regard to the second point, again I think there is very little in it. It is not as if negotiations had come to a complete deadlock and Mr. Allan had exhausted all his powers of persuasion or anything of that sort. It is not a case in which Mr. Glucksman had to make any personal efforts in order to bring about a deal which Mr. Allan had failed to bring about. Negotiations were conducted by telegram, and all that was necessary was to find a compromised figure which Mr. Glucksman was willing to accept. Mr. Glucksman, having got the offer of £62,500, was prepared to take £63,750, and he cabled to that effect and the offer was accepted. I have not the slightest reason to suppose that it would not have been equally acceptable to the Yugoslav buyers if it had come through Mr. Allan. There was no room here for personal efforts. It was simply a question of negotiations, after the initial introduction had been made, taking what was a quite normal and ordinary course by means of correspondence until the parties arrived at a compromised figure. I think on the facts of this case it was the introduction which was the effective cause of the sale. Mr. Allan’s further contributions, for what they were worth, receiving offers and passing them on, may not add very much. I think it was the introduction which was the effective cause of the sale, bringing together the two parties who wanted a particular ship of that sort at that price, and that Mr. Allan’s efforts were therefore the effective cause of the sale.
I think one can view the matter from another angle by way of alternative. If a broker effects an introduction and is willing to go on with the usual business negotiation, it hardly lies in the mouth of an owner who takes it out of his hands to say that he has made no further contribution. As I say, it was not taken deliberately out of his hands, but I do not think that makes any difference. I can quite see that an owner and a prospective buyer; particularly at the last stage of the negotiations, may want to short Circuit matters and get to close quarters. If an owner feels that he does not want to use the Services of his agent who effected the introduction, as I say, it hardly lies in his mouth to say that the agent did not do anything that was of any very great value thereafter.
That was what happened in this case. Mr. Tilling has said (and I think Mr. Glucksman has said, too) that if Mr. Rotter had produced the particulars bearing Mr. Allan’s name then the matter would have gone through the usual channels and Mr. Glucksman would not have thought it right to displace Mr. Allan as a source of negotiation. Quite innocently, he did displace him. In my judgment, he did nothing which Mr. Allan could not have done just as well except that he was able to communicate much more swiftly by cutting out the pipe-line, and it can hardly be brought up as a point against Mr. Allan that he did not do two things: that is to say, either arrange the inspection or clinch the final deal, because he was not given the opportunity to do so.
The other point Mr. Tilling relies upon is this. He says that the question is, in effect, not who is the effective cause of the sale, looking at the sale broadly, but who is the effective cause of the sale at £63,750? Undoubtedly that was Mr. Glucksman. Mr. Tilling submits that it is a irrelevant that it was by accident that Mr. Glucksman took the matter out of Mr. Allan’s hands, and that the only question I have to ask myself is: who caused the sale at that figure, not who caused the sale generally.
In my judgment, that is not right. One cannot look at the final end. of the negotiations and see which was the more effective force in bringing about a particular figure. If it were otherwise it would make an agent’s position hopeless. It is well known that in these matters there is a term to be implied that a Principal will not do anything which might prevent his agent from earning commission. Therefore, if Mr. Glucksman had deliberately decided to take the matter out of Mr. Allan’s hands, the position would be much the same, and I cannot believe it to be the law that if an agent works very hard at bringing the parties close together so that only S, thousand pounds or two separates them, the Principal is entitled to say, “ I propose to deal with the matter myself because I think I should be more effective than you in. clinching the final figure,” and when he has done that to say, “No, you never arranged a sale at this figure. The best you could do ‘was £1000 less than I was willing to take.” All these points, in my Judgment, therefore fail, and I hold that Mr. Allan was the effective cause of the sale.
The remaining question to be determined is: What is the amount of the commission to which Mr. Allan is entitled? I have said a little about that already. It is pleaded on his behalf that either there was an express or implied agreement to pay him five per cent., or alternatively he is entitled to a reasonable commission. Mr. Tilling submits that there was no express or implied agreement and concedes on this hypothesis that he is entitled to a reasonable commission. I think he is prepared to admit that on the evidence of Mr. Cook a reasonable commission would be two per cent. That is, one per cent, for Mr. Allan and one per cent, for Utraco, who must take care of Colcommerce. That would be the reasonable thing to do, and he disputes the remaining three per cent. I have indicated that as far as the making of an agreement is concerned matters pursued their usual course. When the first offer was submitted it was submitted less five per cent. I can conveniently take what happened from the letter of June 23. When they received this offer, this is the reply by Messrs. Jacobs, who it is agreed had authority to deal in these matters for their principals:
We confirm subsequent telephone conversation when we advised you that the owners did not agree to this owing to the high commission and low price, but had authorized us to come back to you as follows.
Then they set out their counter-offer of £65,000 less five per cent. It will be observed that although the owners give us their reason for turning down the £60,000 the high commission and the low price, they do not say that they will not agree to the commission. They do not say, as one might suppose they would, at the start of the business when this figure is put forward, “Whatever figure you get you must realize that five per cent, commission is quite unreasonable,” which is now their case. They comment upon it as being high, but return their offer of £65,000 less five per cent. I think that any person receiving that cable would take it that the figure of five per cent., although said to be high, and perhaps so that the owners could reserve their right, as it were, to try to knock it down a bit if the parties got near, was being accepted on figures within the £60,000 to £65,000 range. Mr. Tilling submits that that is not so and that it was only being accepted and agreed for the purpose of an offer of £65,000. Mr. Roche rightly points out that that is not the way in which Mr. Jacobs looked upon it. When the offer of £62,500 was submitted by Mr. Allan he did not mention the five per cent. He apparently, rightly or wrongly took it for granted that, having stated nis figure and it having been accepted for the purpose of £65,000, he need not mention it specifically again when he offered £62,500, or passed on the offer of £62,500. Messrs. Jacobs seem to have shared that view. When they write about this on July 2, they refer to “Your offer of £62,500, less five per cent.” They read “less five per cent” into it as a matter of course, and they went on to say “is definitely unacceptable.” Then they say:
Nevertheless, if his negotiations do not materialize [— that is the owners’ independent negotiations —] and you can come back at £65,000 on the terms already agreed, we are almost certain we can confirm but, we may tell you, anything under this figure with 5% commission looks pretty hopeless.
I do not read that, as Mr. Tilling would invite me to read it, as saying, “We are not agreeing to your five per cent, commission for anything under £65,000.” I read it in the contrary sense, namely, that they are saying “the five per cent, commission for which you stipulated and on the basis which you are submitting these offers means that any offer under £65,000 is not likely to be acceptable.” But I think Messrs. Jacobs would have written very differently if their attitude had been, “We are going to allow the agent to go on working, but the figure of five per cent, as a reasonable commission is too high and will not be agreed on any view.” If the evidence were that this commission vas something that was left in abeyance to the last moment so that no agent knew where he stood until the figure had been finally agreed, when he might be told he could only have half per cent., I could under- stand it; but I do not think the evidence is that at all. As I understand it, Mr. Cook’s evidence is that with the first offer the agent puts forward his stipulation for commission and he then is unwise if he goes on without getting it agreed. I think, therefore, that if there was no definite agreement in this case it comes so near to it that when considering what would be a reasonable sum, I cannot really do otherwise than take the figure the parties themselves were talking about, and the only figure they were talking about, which is the figure of five per cent. That one has to have regard to what the parties are considering’ is shown by the case of Way v. Latilla,  3 All E.R. 759, which Mr. Roche cited to me.
Apart from that, I cannot see any reason why a figure for a rate of commission that is suitable for £60,000 or £65,000 should not be equally suitable for £63,750. So far as the parties’ intentions were concerned, if their intention was to accept five per cent, on £65,000, I can see no other figure which I could reasonably take as representing their intention on £63,750. I accept for this purpose that the figure was higher than that which might normally be expected to be asked for, but that is of minor importance, although I do not say of no importance, in fixing a reasonable sum as compared with the figure the parties were talking about and might have been expected to agree as matters came to a conclusion. I cannot accept the view that Messrs. Jacobs’ telegram is to be construed as accepting the five per cent, only for £65,000. That would mean that if Mr. Allan came back with an offer of £64,400 they could have accepted it and then turned round and said to Mr. Allan, “How many brokers have you? There is only yourself and Utraco. Two per cent, is the right figure.” I do not think that anybody would consider that fair and reasonable dealing. In my judgment, the right way of fixing the figure is to have regard to what vent on between the parties, which, as I say, if it did not amount to an express agreement, came so near to it as to justify them accepting five per cent, as the right figure. It may well be that if matters had gone through Mr. Glucksman could have brought pressure to bear on Mr. Allan and said to him “Five per cent, is very high. I am going to counter-offer through you £63,750, but I am only doing that on the basis that I have not got to pay five per cent. Either you reduce your commission or this deal is off.” If he had taken that course he might have had to pay less, but he did not, for reasons which seemed right to him. If in the end it turned out to be wrong to take that course, I cannot speculate as to what might have happened.
I shall therefore allow the claim and give judgment for the sum asked.
Mr. ROCHE: I ask for judgment for £3187 10s., my Lord, with costs.
Mr. Justice DEVLIN: Yes.