Day 190 - 23 Nov 95 - Page 19


     
     1             account of the price of the works, until after
     2             the completion of the same. The contractors
     3             applied to the plaintiffs for an advance upon
     4             the security of retention moneys under the
     5             contract.  The defendants' secretary, in answer
     6             to inquiries made by the plaintiffs, erroneously
     7             represented to them that there was a certain
     8             amount of retention money in the defendants'
     9             hands which would be payable after the
    10             completion of the works, whereas in fact it was
    11             not so.  The plaintiffs thereupon advanced money
    12             to the contractors on the security of an
    13             assignment of the retention money.  There was no
    14             evidence to shew that the secretary had
    15             authority to make the representations which he
    16             had made.
    17                  Held, that it was not within the scope of a
    18             secretary's authority to make such
    19             representations, and, therefore, in an action by
    20             the plaintiffs as assignees of the retention
    21             money, the defendants were not estopped from
    22             denying that such money was due."
    23
    24        My Lord, the judgments (which are again quite short) start
    25        at page 817, with the judgment of Lord Esher M.R..
    26
    27             "The question in this case is whether, upon the
    28             mere fact that the person making these
    29             representations..."
    30
    31   MR. MORRIS:  Sorry, I cannot find it.
    32
    33   MR. RAMPTON:  817, top right-hand corner; it is two pages on
    34        from the one we were looking at.
    35
    36             "The question in this case is whether, upon the
    37             mere fact that the person making these
    38             representations was the secretary of the
    39             company, and, in the absence of evidence of any
    40             express authority or of any course of business
    41             from which authority might be inferred, we ought
    42             to hold that the secretary was a person upon
    43             whose statements the plaintiffs were entitled to
    44             rely as having authority thereby to bind the
    45             defendants.  I am content to give my judgment in
    46             the same terms as I employed in
    47             Newlands v. National Employers' Association.
    48             A secretary is a mere servant; his position is
    49             that he is to do what he is told, and no person
    50             can assume that he has any authority to 
    51             represent anything at all; nor can any one 
    52             assume that statements made by him are 
    53             necessarily to be accepted as trustworthy
    54             without further inquiry, any more than in the
    55             case of a merchant it can be assumed that one
    56             who is only a clerk has authority to make
    57             representations to induce persons to enter into
    58             contracts.  For these reasons I think the appeal
    59             must be dismissed."
    60

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