REPORTS OF CASES

HIGH COURT OF AUSTRALIA1911-1912.

[HIGH COURT OF AUSTRALIA.]

LANODEFEND.u.'T,

ApPELLANT;

AND

JAMES MORRISON &; COMPANY LTD.PLAINTIFFS,

RESPONDENTS.

ON APPEAL FROM THE SUPRE:dE COURT OFVICTORIA.

Orllllth O.J.,Barton aIId

O'Connor II.Inan action by the plrtintill'e to recover dt.m.... for breaob ~f oontl'iloCt fromthe lihl'M defeDuaat.. who, it WAll alleged....re partners. and .. .uoh had_tend iato a joint ad~entllre..ith the plaiDtill'1 :

Held. on the nideoC8. that the UUWlDC8 of t.he prtoersllip WN' not ..tab·li,hed, aDd thitt. even if the partnenhip 81tuted. it bad not been formed at thetime wheD the coatract '11'&1 &1l~ to kave heeo made.

Deal8loD of &heSg~ eo.art of Victoria (NIICicltfIC.J.) reversed.

~OTeV'-AteqllJw:e-Orer lfIGde to one lind _pkd "" otMr.- Ulldir· B. C. 01' A.elomI prifldpol-P"rl7wruap. IIH I.

'-..-'AD ot!er from A. to B. accepted by B. and C•• or _pted by B. u ageat ior MllLlloUJUm.

B. Ii; C., i. not &II &OCtSptaace of the original oll'er, but U & DIlW offer by B. and 8.,. 20. 21.C. to mr.ke a OOIltraot 00 the ter1D8 of the original offer, and non.e of the 22,27.partiee are boaDd bV tbe new a«er oatil it i. &OOlIpted.

2 mOB COURT [1911.

He C. 01' A. ApPEAL from the Supreme Court of Victoria.1811. An action was brought in the Supreme Court of Victoria by'-..-'

L&NG James Morrison & Co. Ltd., an English company carrying on

J II. business as merchants in London, against John Walter McFar-AlliES ,

MOlUUSON &; land, Thomas Selwyn Lang and. William James Keates, who, itCo~D. was alleged, were at all material times partners carrying on busi­

ness under the names or styles of Thomas McFarland & Co. andMcFarland, Lang & Co. The nature of the action and the materialfacts are set out in the judwnents hel'eunder. Before the actionwas heard J. W. McFarland and Keates became insolvent, andthe action proooeded against t.heir &88ignees 8:ld Lang. Theaction was heard before Madden C.J., who gave judgment forthe plaintiffs for £2,292 2s. 7d. Against this judgment Lang nowappealed to the High Court.

Oohen (with him Hogan), for the appellant. The letter fromthe respondents to Thomas McFarland & Co. of 12th Julyamounts to an acceptance of the offer made by the letter of 17thApril, and at that time there is no suggestion that the appellantwas a member of the firm of Thomas McFarland & Co. At thelatest the offel' made by the letter on 17th April was accepted bythe respondents' letter of 19th July. Even if 0. concluded bar­gain was not made until 26th August, when the word "Forward"was cabled to the respondents, the evidence does not support afinding that the appellant was then a partner in Thomas McFar­land & Co. or was a principal on whose behalf that bargain wasentered into. If the letter of 19th July constitutes 0. new offermade by the respondents to J. W. McFarland, who alone wasthen Thomas McFarland & Co., and if the cablegram of 26thAugust is to be regarded as havin~ been sent on behalf of J. W.McFarland, Lang and Keates, no contract is thereby constituted.Boulto}'/, v. Jones (1); Kemp v. Bam'selman (2). If the appellantbecame 0. pal·tner of J. W. McFarland after the contract wosentered into, there was no privity of contract between the appel­lant and the respondents: Beale v: MotUs (3); Young v. Hunter(4); Hardman v. Booth (5). In the case where the personal

(I) 2 R. & N., 564. (4) 4 T"'Ullt., ~'2.

(2, (1006)2 K.B., 604. (3) 32 L.J. Ex., 106,(3) 10 Q.B., 976

13 C.L.R.] OF AUSTRALIA. 3

qualifications of one of the parties is relied on, an offer to that H. C. 01' A.

parly can only be accepted by him. At most the &ppellant had ~an interest in J. W. McFarland's share in the ventures, but he was LAJlQ

in no contractual relation with the respondents. (He also referred J~E8

to Lindley on Partller8hips 7th ed., pp. 234, 236; Leake on Con- MORBI80N &Co. LTD.

tracts 5th ed., p. 17; Helsby v. Mear8 (1). _

Schutt (with him Braham), for the respondents. There was noconcluded contra.ct until 26th August. The evidence supportsthe finding that there was a partnership between J. W. McFar­land, Lang and Keates, and that the contract was made by J. W.McFarland on behalf of the partnership. The case is then one ofa contract made on behalf of undisclosed principals; and a con­tract made by an agent on behalf of an undisclosed principalcan always be enforced against that principal. At"7I18trong v.Stol~eB (2); Kendall v. Hamilton (3); Leake on ContractB 5thed. p. 338; Beckham \T. Drake (4).

[GRIFFITH C.J.-An offer of personal services c&,nnot have anundisclosed principal behind it.]

If in a conti'act for personal services another person hasauthorized the pel'80n who is to ~ive the services to enter into thecontract, the other person is liable on the contract. The servicesmight still be rendered. The rule as to undisclosed principalsapplies to contracts which involve personal skill: Spu,..,. v. CaB8(5). [He referred to Cothay v. Fennell (6); Phelps v. Prothe,'o(7); Robson v. Drummond (8).] Even if the appellant wasnever a partner he is still liable if he authorized the contract tobe made on his behalf. If he became a partner after the offerWlLS made and before it was a.ceepted he is liable.

Cohen, in reply.

Our. adv. vult.

GRIFFITH o.J. This is an appeal from a judgment of the llepU7.

leamed Chief Justice of Victoria in favour of the respondents in

(1) 5 B. & C.• 60'. (6) 10 B. & C.• 671.(2) L.R. 7 Q.B., 598, at p. 603. (7) 24 L.J.U.P., 226, 16 C.B., 370,,:1) 4 App. Cal., 504, at p. 514. at p•.390.(4) 9 M. & W., 79. at p. 91. (8) 2 U. & Ad•• 303.(5) I..R.5 Q.B., 656, at p. 658.

HIGH COURT [19U.

B. O. 01 A. an action brought originally by them against three persons,Un!. J. W. McFarland, T. S. Lang (the appellant), and one Keates.--LA.1fG McFarland and Keates became insolvent, so that the effectiveJ~ judgment is against the appellant. The plaintiffs, who were

110..1901' a: merchants in London can'ying on the business of receiving andCo. LTD. disposing of frozen meat from abroad, by their Iltatement of

Qrlflltli C.J. claim alleged that the three, McFarllmd, Lang and Keates, dur­ing the period materia.l to be considered, CH1Tied on business inMelbourne under the name or style of Thomas McFarland & 00.and also under the name or style of McFal'land, Lang & Co.lt appears that in the year 1891 the firm of Thomas McFarland& Co. was regist.ered in Victoria under the Regist"ation ofFirmtJ Act 1892, which requires the registration of firm Dames,as carrying on the business of stock and station agents and meatexporters, the oole member of the firm being Thomas McFarland.On 13th Sept. 1905 a change in the constitution of that firm w&&registered by J. W. McFarland, who was registered 8S the Bolemember of the firm. The plaintiffs had some dealings with himwhile he carried on that business. On 10th June 1907 J. W.McFarland, Lang & Keates entered into partnership. An inden­ture of partnership was drawn up which provided, amongst. otherthings, that the business of the partnership should be that ofstock and station agents, live stock exporters and general com­mission agents. The business of exporting meat was not part ofthe business of the partnership, and it appeared that Lang andKeates had refused to have anything to do with that business.Lang was to bring in all the capital of the firm, £1,500, and thepartners were to share equally in the profits and losses. That­partnership wa.s duly registered under the Registration of FirmsAct on 28th August 1907.

The statement of claim, after setting Gut that the three defend­ants carried on busines.'1 under the two firm names, alleged anagreement in writing constituted by a letter of 17th April 1901from the defenda.nts to the plaintiffs, a letter of 19th July 1907from the plaintiffs to the defendants, and a ca.blegram of 26thAugust 1907 from 'the defendants to the plaintiffs, by which it wasagreed, in brief, that the defendants should during the ensuingexporting season-that is, I believe, the spring and summer

13 C.L.R] OF AUSTRALIA.

months-engage in the business of buying cattle, sheep and lambs H. C. 01' A.

in Melbourne, freezing their careases, and shipping them to Ifm.-London to be sold by the plai~tifF8, that for those purposes the ~G

plaintiffs should open a credit at the Union Bank in Melboume J~a

to be operated upon by the defendants to the extent of £10,000, MORauo••

and that, after allowing r.ertain charges to the plaintiffs and the Co. LTD.

defendants respectively, any profits or losses arising from the Orlllltho.J.

business should be equally divided.Before referring to the letters I would remark that the plain­

tift's had had dealings with J. W. McFarland, as Thomas McFar­land & Co.; in the busine88 of meat expol'tin~, and knew hehe was still a member of that firm.

The letter of 17th April, the first one relied upon, contained aproposal from Thomas McFarland & CoO., that is, J. W. McFarlandalone, to the plaintiffs, giving in outline the way in which he8uggested that the pro~ business should be carried on. On12th July the plaintiffs acknowledged that letter in these terms:-" Be your letter dated April 17th we have agreed to give thep!'Op08&l mentioned a trial but as there are one or two points wewish to go into fllrther we must delay writing you full particularsuntil next mail." It was suggested by Mr. OQlLen that that wasan &Ct'...eptanee of the terms of T. McFarland & Co:s proposal. Ido not construe it in that way. It seems to me that the words"we have agreed to give the proposal mentioned. a trial" meanwith the context" we, the directors of the company, have agreed.mon~t ourselves to take up your proposal, but we have notnot yet settled the terms." Then on 19t.h July followed a letterfrom the plaintiffs in which they diseUBBCd the matter at lengthand $aid: "Referring to your letter dated 17th April, as advisedin our last, we are quite willing to give the proposal a fair trial,i.e., to go on equal risks for a season and see how it worke." Theproposal made by J. W. McFarland as T. McFarland & Co. didnot limit the matter to one season, but proposed an a.rrangementof indefinite duration. The plaintiffs then went on to prescribea number of conditions necessary for the working of the contract,to which it is not necessary to refer in detail, and concluded bysaying-" Upon receipt of this letter, if in order, kindly wire usthe word • Forward' when we will start eabling you and also

6 HIGH COURT [1911.

B. C. 01' A. establish a credit as you desire." It was contended that that1911. letter of itself constituted a complete acceptance of the offer made'-.-'LANG by T. McFarland & Co. It is clear that it did not. It proposed

Jfl. various modifica.tion8, and the eoncludin!! words I have )'U8t read

AllIES ~.

MORRISON & show clearly that it was not intended to be an acceptance untilCO. L'rn. the word" Forward" had been cabled.Grllllth C.J. On 27th August J. W. ~cFarland sent by cablegram in the

name of l'homlls McFarland & Co. the word" Forward." Thatwas entered by the plaintiff'! in their bookl'l, and with it whatthey understood to be the translation of it, thus-H

• Forward'means that he has received our letter of 19th July and we ('anstart working." The result was that on those documents therewas on that day a complete contract between J. W. "McFarlandtrading as Thomas McFarland & Co. and the plaintiff'i the termsof which were to be collected from those three documents.

Some discussion took place as to whether the relation betweenJ. W. McFarland, trooing as Thomas McFarland & Co., and theplaintiffs was that of partners, or that of principal and agents.It is not necessary to assign the transaction to any particulllrformal category, but the real sub§tance of the tram·action wasthat the plaintiffs and Thomas McFarland & Co. agreed to enterinto a joint adventure. They were not partners as against thirdparties, but allch party had certain rights against the other. Sofar the case is clear.

The plaintiffs cont.end that, before the cable~ram of 27thAugust was sent, J. W. McFarland had taken Lang and Keatesinto partnership with him, and that he sent the word" Forward "on their behalf as well as his own. Upon that point. there wasa great conflict of evidence, to which I will refer later. Suppose,however, that fact were established, it would not establish thecontract alleged. An offer from A. to B. accepted by B. and C.,or accepted by B. as agent for B. and C., is not an acceptance ofthe original offer, but is a new offer, an offer by B. and C. tomake a contract on the rerms of the original offer, and neitherparty is bound by the new offer until it is accepted. That isclearly established by Boulton v. Jones (1). Now it is notsug~ested that the plaintiffs were ever informed of Keat.es' in-

(1) 2 H. & N., 564.

13 C.L.R.] OF AUSTRALIA. 7

elusion in this new firm. It is suggested that they were informed H. C. OJ' A.

of Lang's inclusion by a letter dat-ed 13th August 1907 from J. 1911.

------W. McFarland to them. He said in the name of Thomas McFar- LANG

land & Co. "We wish to inform vou that we have taken Mr. T. J tl.~ AMES

S. Lang into partnership, but that we intend continuing the MORRISON &

export business under the old name." That statement, so far as Co. UrD.

it was relevant, wa.'l untrue. J. W. McFarland had taken Lang Griffith C.J.

and Keates into partnership with him in another branch ofbusiness and under another firm name, but they had nothing todo with Thomas McFarland & Co. as meat exporters. On 20thSeptember the plaintiffs acknowledged that letter in this way" We note that you have taken Mr. T. S. Lang into partnership,but that the export department will be carried on under the oldname." Nothing was said about Keates. It seems to me thatthose two letters are ambiguous. They are not, at any rate,enough to establish a case of substitution, even if the facts wereas they are alleged. When J. W. McFarland said" We have takenMr. T. S. Lang into partnership,': he says he meant he had takenLang into partnership in another business. He said he meantwhat he said in one sense, and, if the plaintiffs understood it inanother sense, curious questions might arise. But the letters arestill ambiguous, and not enough to establish a ease of substitu-tion; certainly not in any contract made on 26th August, for atthe earliest the pillointiffs would not have assented until the dayon which the letter of 13th August was received by the plaintiffs,about a month after it was sent. Moreover, the conti'act supposedto have been substituted was a contract with different persons,and not with the three persons now sued. So that the plaintiffshave not established the case made in the statement of claim.

But a contract may be implied from a course of dealing. Ithink that if, for instance, J. W. McFarland had died and hisbusiness had been carried on by his executors or by persons whohad bought the business, and they had accepted orders from theplaintiffs intended to be carried out on the terms of the contractmade with Thomas McFadand & Co., a contract of agency wouldbe implied to be performed on the terms of those letters. Thatwould cover some but not all of the transactions in question inthis action, but the damages would be quite different from those

8 HIGH COURT [19U.

R. C. 01' A. awarded. Then the form oC action would have been for damages~ arising out of breach of the express directions, and there couldLANG not have been any cla.im a.gainst the persons who can-ied on that

Jt1.. buainesa founded on the want of skill which J. W. McFarland

AXESMORRISON &; was understood to have, and which undoubtedly was the basis of

Co. L'rD. the contract between him and the plaintiffs. Moreover, the caseGrlftlth C.J. made for the plaiiltiffs wa.s not that there was a series of implied

contracts, but that there was one continuous contract extendingthroughout the exporting season or until the £10,000 credit wasexhausted. There is no case of holding out by Lang himself.

I will assume, however, that a new case is open and that theplaintiffs are entitled in this action to eBtablish that at sometime,no matter when, J. W. McFarland. was, in performance of hiscontrnct with the plaintiffs, acting as agent for the defendants insuch a sense as to make them liable. Then it is necessa.y toconsider wh!lt the evidence was. There was a weat conflict ofevidence. 'rhe sto!."y told on behalf of the plaintiffs was flatlycontradicted by Lang. On an ll.ppeal from a Judge of fir.st in­stance on a question of fact a Court of Appeal is in a somewhatdifficult position. The rules are weH known and are laid downin Coghlan v. C-umberlanrl (1) in the Court of Appeal in Englandand in this Court in McLaughlin v. Daily Telegraph Newspape1'00. Ltd. (2~ When a case depends entirely upon the credit dueindividual witnessas who contradict one another, a Court ofAppeal is very reluctant to differ from the Judge of first instancewho had the advantage of seeing and hearing them; but whenthe evidence is in writing a.nd there is no question of the cred­ibilityof witnesses 01' of the weight to be ~iven to their state­ments, then a Court of Appeal is bound to exercise its ownjudgment, and the test is not whether there was any evidence togo to a jury, but whether, on consideration of the whole evidence,the plaintiff has established his C8..'Ie.

Now the Court is, of course, not bound by any errors of factinto which the learned Judge of first instance hns fallen. Thecase that is set up is that before 26th August 1907 McFarland,Lang and Keates fOl1lled a new partnership, or, in other words,a~eed to become members of the firm of Thomas McFarland &

(I) (1888) 1 Cb., 70'. (2) 1 C.L.R., 243, ~t p. 2&7.

13 C.L.R.] OF AUSTRALIA.

(".10. of which Lang and Keates were not previollsly members. J. H. C. 01' A.

W. McFarland was called M a witness, and he said that. when he 1811•.....-received the plaintiffs' letter of 19th July he discussed the matter L.urawith J...ang and Keates, either at the same time or at different J~

times. He said :-" I think it WM at different times. I am sure MOBlU8OH ..

I did diseuss it with Lang. He said-' Do you think it a safebusiness? ' I-' After years of experience in it, I think it is.'He-' What is the most you can lose?' 1-' I hope to make:£1,000.' He-'If the worst comes to the worst :£500 ought tocover &11 the 1088C8.' We agreed to cable that we would go onwith the business on the plaintiffll' terms. I cannot rememberanything else about it," It appears that about that time J. W.McFarland WM very ill and was 80 for several days. It does notappear where the conversation took plllce, at his office or whe1'ehe was lyinlt in bed. The whole matter is extremely vague, anddepends on the statement" we agreed to cable tha.t we would goon with the business on the plaintiffs' terms." It is suggested,of course, that the word "Forward"wM sent by J. W. McFarlandas agent for Lang &lld Keates, but it would appear from wha.t Ihave already read that the three partners never even met todidCuSEI the tenns of the contract, which is very singular. It isalso singular that no one knows what the terms of the new part­nership were to be, except what could be conjectured from thatconversation. The point, however, is not that it does not appearwhat the terms of the new partnership were, but that it does notappear from the evidence that they ever were settled at aU.This alleged eha.nge in the constitution of Thomas Mclt'arland &Co. was never registered. It appeared further that J. W. McFar­land had sworn in the Court of Insolvency that Lang W&8 nevera partner with him in Thomas McFarland & Co. As to the way inwhich business was carried on after this new partnership wasformed, these three persons occupied the SIlme room, but the~r keptseparate banking &ccounfa. Neither Lang nor Keates operatedon the account of Thomas McFarland & Co. They kept separatebooke, and the books were kept by different persOlls, except a presscopy book which was used to keep copies of letters and invoices.Neither Lang nor Keates ever took any part in the business ofthe new finn except that on two oceaeions Lang signed letters in

Co. LTD.

GrIlIItil 0.1.

10 HIGH COURT [1911.

H. C. OJ' A. the name of 'rhomas McFarland & Co. He says they were1911. dictated to a typewriter by J. W. McFarland who had to go away-...-...'LANG and requested him to si~n them. Lang also signed a cablegram

Jf). with the firm name under the same circumstances. The business

AMESMORRISON & carried on between Thomas McFarland & Co. and the plaintiffs was

CO. LTD never discussed with Lang or Keates. Only one transaction wasGrinlth C.J. the subject of discussion, and that is one which took place durin~

the absence of J....ang from Victoria, when J. W. McFarland had mis­appropriated £279 of the moneys UpOl1 which he could drawunder the contract with the plaintiffs, and applied it to the pur­poses of the firm of McFarland, Lang & Co. The defendantLang denies the whole story. He says he never entered into thepartnership and never had anything to do with it. A~ainst allthose facts I have referred to there is one solitary bit of evidencewhich can be relied upon to corroborate the present story ofJ. W. McFarland, not that which hp. swore to in the Court ofInsolvency. That is, that it appears that on lOth SeptemberJ. W. McFarland went to the Union Bank, which was the bankof both firms, and entered his name in the signature book. Itwas already there and why he went then does not appear. Whatwas written in the book on that occasion, as appears from anexamination of the book itself, which we have seen, is "ThomasMcFarland & Co., Frozen Meat Exporters, 12 Temple Court,Collins Street, Melbourne" with the ordinary signature" Thos.McFarland & Co." j whether" J. W. McF." now in the book wasthen there or not does not appear. The next entry in that bookwas made on 16th September. On 28th September Lang wentto the bank and signed his signature" Thos. McFarland & Co."under J. W. McFarland's signature, and on 8th October Keateswent and did the oame thing. No explanation of thistransaction is given by J. W. McFarland; why it wasdone, 'why Lang and Keates respectively signed the book, whyJ. W. McFarland signed on lOth September, if the partnership,as we are told now, was fOl1ned in August, is nowhere explained.Lang said in his evidence :-" I went to West Australia on 30thSeptember 1907. Before I left, I went to the Union Bank and Isigned my name as McFarland, Lang & Co. on 28th September.I also signed one as for Thomas McFarland & Co. McFarland

13 C.L.R.] OF AUSTRALIA. 11

told me to go there and sign as the bank wanted my signature. H. C. ow A.

I went alone. I do not remember anything said or read to me. ~When I signed I did not observe that it was stated opposite the LANG

signature that I Wll.8 a partner in Thoma8 McFarland & Co." J II••o\MBS

The nameR of the three persons now alleged to be membel's of MORRISON &-

the firm of Thoma,s McFarland & Co. are now written in the Co. LTD.

bank's book, but it is clear that they were not written there Griltlth C J.

when J. W. McFarland went and signed his name there on 10thSeptember. When they were written does not appear. Langsays they were not put there when he signed opposite to wherethey now are. That is the only isolated fact I can find to cor-roborate the story told by J. W. McFarland &S against the courseof dealing between the parties and the sworn testimony of theappellant.

Now in order to establish that there was a partnership it isnecessary to prove that J. W. McFarland carried on the businessof Thomas McFarland & Co. on behalf of himself, Lang andKeates, in this sense, that he was their agent in what he didunder the contract with the plaintiffs--not that they would getthe benefit, but that he was their agent. That appears fromEx parte Tennant; In re Howard (1), particularly thejud~llIent

of Ootton LJ. (2). Upon the evidence in the case it appears tome that at best, taking the plaintiffs' version of it, it is equallyconsistent with a partnership, and with a subsidiary a~reement,

namely, to give La.n~ and Keates an interest in J. W. McFarland'sshare in the joint venture. It is analo~ous to a sub-partnership,but that is not sufficient to establish privity of contract betweenLang and Keates and the partners in the joint venture. Onthat su~ject the decision of Je88el M.R. in Alfaro v, De La Tm're(3) may be read with advantage. Upon the whole I am ofopinion that the great weight of the evidence is that, if anyagreement was made, that was the agl'eement, and not an agree­ment for another partnership. But I think it right to say thatthe great preponderance of the evidence is that there was nocomplete agreement at all.

For these reo.sons I think the plaintiffs failed to establish theirclaim, and that they must have redress against the person to

(I) 6 Ch. D., 303. (2) 6 Ch. D., 303, at p. 317. (3) 34 L:l'., 122.

HIGH COURT12

B. C. OJ' A.1911.'-.-'

LANafl.

JAKES)lO:&JUSON &;

Co. VrD.

llMtonJ.

[19n.,

whom they ~ave credit, and not against persons with whom they,subsequently though.t they could establish a contract.

BARTON J. read the following judgment :-The first question raised on the a.ppeal is at what date there

came into existence a complete contract between the respondentcompany and the finn of Thomas McFarland &; Co. As to this Ifeel no difficulty. It is quite clear that the appellant's contentionthat a contract arose on the respondents' letter of 12th July 1907cannot be sustained. Thomas McFarland & Co.'s offer of 17thApril no doubt included most of the essentillols of the subsequentagreement; but that it contemplated contractual relations extend­ing over more seasons than one is evidenced by its last par&graph;" profit or loss to be equally divided between us at the close ofeach season." Now the respondents' short letter of 12th Julysays: "Re your letter <la.ted April 17th we have agreed to givethe proposal mentioned a trial, but as there are one or two pointswe wish to go into furLher we must delay writing you full parw

ticulars until next mail." To give the proposal a trial certainly doesnot mean the making of a contract to extend o\'e1' several se&.'Jons.'rhe expression of a desire to go further into one or two pointsshows that the proposal as a whole was not finally accepted, andthat there were ml\tt~1'l:l on which an understanding must precedenne.lity. Emphasis was laid in argument on the words" we ha\'eagreed." If the appellant's construction of them were correct, therest of the letter would so restrict their effect as to render themof small consequence. But I think their real meaning is, "we asu. company have agreed among ourselves to give your proposal atrial," and this does not carry the matter any further.

Then the a.ppellant sa;}'s, if the letter of 12th July does notclinch the bargain that of 19th July does. Here. again, I fail toagree with the appellant. This letter explains that of 12t,h Julyt.hus: "As advised in our last, we are quite willing to give theproposal a fair trial, i:e. to go on equal rieks for n. season and seehow it works." 'I'his of itself is enough to constitute 0. counter­offer. But t.he letter of 19th July contains severllJ. points onwhich the respondents require an understanding before finalagreement. Of th~se it is enough to mention three. One is that

13 C.L.R.] OF AUSTRALIA. 13

quantities of frozen meat &hipped lC must be within 5 pel' cent. of H. C. OF A.

the quantity stated "-i.e., stated in the respondents' Monday ~cables (see letter of 17th April). Another is (.hat in offering LANG

28/42 lambs, if it cannot be arranlZed to make them half of each J ,...~ .UiES

grade, that is, half 28/36 and half 37/42, "an average of the MORRiSON &

1 be d " b . l.' 1 I .. f tl t Co, LT\).parce must state ; an 0 VIOUS essen~la to t Ie glvmg 0 lR ,__

information to prospective buyers without which successful sales BArtoli J.

could not be expected. A third ia that in offering weights of42/50, which must be sold separately from others, " the averagemust always be cabled, as it is the first thing the buyers askwhen parcels are put, before them"; a step as plainly necessaryas the last. It is clear that the respondents were not willing t.ocome to terms unless these and other stipulations were aecepted,and it is futile to say that these wer~ merely proposed methodsof carrying out a eontra.et already concluded. The letter winds upthus: "Upon receipt of this letter, if in order, kindly wire us theword' Forward,' when we will start cabling you-and also establisha credit as you desire." The cabling of the wotd " Forward" wasclearly laid down &8 the signal of the $CCeptance by Thomas~IcFarland &; Co. of II. contract embodying their own proposals of17 th April together with those on the part of the respondents con-tn.ined in their letter of 19th July. The word was cabled by ThomasMcFarland &; Co. on the 26th Au~ust; and it is from that datethat the contract must be taken &8 established. This is none thele8l:l the position because the respondents translate the word" Forward" as intimating that he, i.e., McFarla.nd, who as far asthey knew then constituted the firm of Thomas McFarland &; Co"had received their letter of 19th July, and that they could sUt,rtworking. In that sense the word amounts to an acceptance. Noris it any less the position because, in anticipation of an assentby cable, the respondents on the 9th August wrote that on the8th they had mailed to Thomas McFarland & Co. through theUnion Bank a fresh credit for £10,000. The contract, then, isconstituted by the communications between these parties up toand including the cable of t.he 26th August, which must be takenl\8 the date of the contract.

The appellant contended, however, that the communicationsreferred to amounted to an agreement for II. partnership between

14 HIGH COURT [1911.

H. C; OJ!' A. the respondcnt company 3-nd thc tirm of 'rhos, McFarland & Co"1911. and that therefore the pl'el:lcnt procecding's were misconceived,'-..-'

LANG nnd the claim should have bcen for a dissolution of partnership

J II. and an account. I am unable Lo say that the writings disclose a.UtES

MORRISdN & partnership, '1'hc agreement waH for the periodical purchase inCo, LrD. Victm'ia by '1'hos, McFarland & Co., with moneys of the respon-

Ba"toll.l, clents crcdited to them fOl' the purpose, of Ii vc stock to beexported as frozcn mel1t to the respondents in London, ThercspolldcntH wcrc to Rell the meat. For troublc and cxpense tobe illcnlTcd, Thos. l\IcFnrlllnd & Co. were to draw 1~% on theproccedH of Hales, and the respondents on their part 1%, andHubject to these allowanccs thc protits and losses were to beequally divided at the close of the season. It is not because ofthis eqnal division that we arc to say thcre was a partnership.The cntire capital to he employed belonged to the respondents,amI thc livc stock to be purchased, slaughtercd, frozen andshippcd, and sold in England, was, whcn bought, the property ofthe I'espondents. In such Cil'culllstances the mere fact thatprotits and losses were to be divided did not carry the transac­tion beyond the sphcre of a joint adventure, '1'hos. McFarland& Co, I'eckoned on bcing sufficiently rcmullcmted for theil'1l1bours by the anticipated half of the sUl'plus expected on thesales.

Apart from these two points, which. were raiscd by the appel.lant at the outset, thc case for the respondents as plaintitt~ isbased on the contention that, by ccrtain conversations betwecnMcFarland and Lang and McFarland and Keates in Melbournebcfore the Hending of thc cabled word "Fol'ward," a partnel'shipin the busincss of frozen mcat exportcrs was constituted, byreason of which the appellant became lia.ble as a partncr for thedamages consequent on the breach of the contract for onc seasonbetwcen the respondents and '1'hos. ~lcFarlllnd .?. Co. Theleal'lled Chief Justice of the Supreme Court, who tried the case,has found that the appellant became a partner in that tirm beforethe date of the sending of the cabled word" FOI'ward," despatchedon 26th August 1907. In a conflict of evidence between McFar­land, who was called for the respondents, and the appellant,his Honor has lV.:cepted the version of McFarland, and has

13 C.L.R.] O)j' AUSTRALIA. 15

held that it establishes the partnership contended fol'. The H. c. OJ'A.

f 1911.appellant contends here that, even if the finding of act be '--"accepted, it does not warrant the conclusion of law. He says LANG

that thou!!h he was from the 10th of June 1907 a membel' of the J v.~, A:\IKS

firm of McFal'1l1.nd, Lalll' & Keates, who were stock and station MORRISON &

t I· I e. t d I . . t Co. LTD.agen s, lye stoc { expol' ers an genera commiSSIOn agen 8,

according to their partnership deed, yet that firm had nothing to Barton J.

do with the business of export,ing frozen meat, and made no con-tract with the respondents. So far the evidence supports him.But he goes on to say that there is nothing in the conversationsrelied on to establish that he was on 26th of August 1907, orindeed at any time, a partner of McFarland in the firm of Thos.McFarland & Co., irozen meat exporters, or that he became inany way liable under the contract between that firm and therespondents.

The gist of the conversations, as deposed to by McFarland, isthat on or shortly after the receipt of the respondents' letterof the 19th July he showed it to the appellant at the office, noone else being present, as he thinks. He told Lang that it wasin answer to a letter written to the I'espondcnts before the appel­lant came into the business (meaning presumably the business ofMcFarland, Lang & Co.) In that letter, he said, he had statedthe outlines he would work on, and the respondents had agreedto give the plan a trial in the manner proposed. 'l'here was adiscussion as to the prospects of profit or of loss. McFarlandexpected to make £1,000 alIt of it-that is no doubt fOI' theseason. McFarland said he would have of course to control" the frozen meat branch." He said" I will have to handle thisborrowing business, I Rm the only one in the firm who under­stands that" : and the appellant replied, "I agree to that." Healso said" I will have to carryon under the old firm's IHtllle, it isthe only llame it can be carried on under, as my brands areregistered under that lliune and the nallle being kuown on theLondon market,." The upshot of this conversation is stated by.McFarland in these won18: "\Ve agl'eell to cable that we wouldgo on with the business on the plaintifts' terms," And the cablenwss;tge " Forward" was sent on 26th August.

McFarland thinks his conversations with Lang and Keates

16 HIGH COURT [1911.

H. C. or A. were at different times. Still he says he did not formally invite-11m. Lang to take part in the frozen meat venture till 2300 August.

-----WNG He seems to believe that he spoke to Lang firut. His conversa-

Jfl. tion with Keates, as he describeH it, is even less definite than his-

AllES

MOBBISON & outline of the interview with Lang. He says the appellant Wa.&

Co. LTD. not then present, it W&""l at Keates's home at Essendon. He tolde.rton J. Keates he had received the letter from respondents, and as the

"horse business" (no doubt the business of McFarland, Lang &

Co.) was not going to "pan out" as they hoped, they had bettergo into thi", affair. Keates said he would look into the matter inthe morning. The next morning Kealee saw the letter at the­office. McFal'iand says-" I explained the frozen meat business­to him and asked WI1.8 he agreeable. To the beat of my knowledgeand belief he said he was. This would be about the 22nd or23l"d of August. At any rate it was before the sending of thecable message.

McFarland does not "enture to say that the matter was everdiscussed by the three of them together, nor is there any evidencethat it was ever discussed between the appellant and Keates.He admits haying previoualy sworn in the Insolvency Court," Idon't think Lang was in the firm when the th'St arrangement wasmade with Morrison & Co." Still, the learned Chief Justice,who heard both his evidence and that of the appellant, and hadmuch ~tter opportunities of comparing them 8.'i witnesses thanwe have, accepted McFarland's vel'Sion and rejected that of theappellant, and I do not suggest that we should be justified ininterfering with his t.'Onclusion of fact. McFarland is on the faceof the notes of his evidence an unsatisfactory witness, but in thebox the appellant may for aught we know luo.ve been less satis­factory still. But the question remains whether McFarland'sevidence, bein~ accepted, is sufficient to warraut the conclusionthat before 01' on 26th A\lgust there was 1\ partnership ofThos. McFarland & Co., consisting of himself, the appellant andKell.lell? That is the partnership on which the respondents reI:)".I do not now consider the question whether, if Lang had become3 p:.ortner on 231'd August, he would hl\ve been bound underthe contract between McFa.rland and the respondents. 'rhat maybe 80. But I cannot reach that point because the evidence doe~

not wear the complexion of a partnership,

13 C.L.R.] OF AUSTRALIA. 17

There is an entire absence of proof that the three even met H. C. o. A.

d I ]911.together to discuss such a proposal. McFarlan seems to lave '-__proposed to each of the others separately that he should join in LANG

the venture. Neither b" conversation nor by inference from any J fl.J AMES

fact in the cllse is it shown that the appellant and Keates agreed MOBBISOlf 4;

together, o.nd with McFarland, to join him in the firm of Thos. Co. LTD.

McFarh\nd & Co. Had a consensus of the three been proved, yet BArtoD J.

it is not in respect of a partnership in relation to the respondents.rl'here is not a word of evidence to show that there was anysettlement of the terms of the suggested partnership. As toLang, the gravamen of the matter is, "We agreed to cable thatwe would go on with the business on the plaintiffs' term!!." ('I'hat,by the way, is not the messa~e sent, for the cable telegram doesnot disclose Lang either as a partner of McFarland or 0.8 t\

co-contractor with him.) As to Keates, the substance is, "Iexplailled the frozen meat business to him and asked was heagreeable. To the best of my knowledge and belief he said hewas." I certainly do not find it possible to infer a partnershipfrom such evidence as was given. What it proves is no morethan this, that McFArland agreed with the appellant that heshould join him in the risks of the venture as regards McFarland'sown intere8t in the contract with the relolponclents, and that asimilar arrangement was made separately with Keates. As theappellant and Keates are not shown to have made any agreementwit.h each other, it is not easy to sa.y in what proportion eitherihe appellant 01' Keates was to share profits and losses withMcFarland in respect of that person's interest in the main con-tract. As an agreement for 0. joint adventure but not a partner-ehip the case olosely resembles in principle that put by Gibbs J.in Young v. Hunter (1) in these words :-" I am by no means ofopinion that there may not be a case where two houses shall beinterested in goods from the beginning of the purchase, yet notboth be liable to the vendor; &8 if the parties agree amongst them-selves that one house shall purchase the goods, and let the otherinto an interest in them, that other being unknown to the vendor:in such a case the vendor could not recover against him, althougbsuch other person would hs.ve the benefit of the goods." The

(I) 'T&unt., 681, at p. 58"2.VOl•• XIII. 2

18 HIGH COURT [1911.

H. C, OJ' A. plain position appears to me to be this. On the facts, apart from1911. any implication of law, the respondents made their bargain with-..-..LANG McFarland and with him alone. That is what they understood.

Jfl. See, e.g., the meanin2: they put upon the word "Forward." Did

AMES ~

MORRISON & what passed between McFarland and the appellant give theCo. LTD. respondents the right to sue the appellant when thoy discoveredBarton J. it? I think not. 1.'he appellant cannot under the circulllstances,

ann in the absence of a partnership, be regarded as an undisclosedprincipal. It iR not a case of principal and agent at all. Thatbeing the position, there is no privity of contract between thepresent parties entitling the respondents to recover from theappellant, who contracted only with McFarland and in respect ofMcFarland's interest only.

There was much discussion as to the appellant's action insigning his naII\e in the bank's signature book as a member ofthe firm of 'rhomas McFarland & Co. He appears to have beena man of no business capacity or experience-a mining prospectorbefore he joined the firm of McFarland, Lang & Co., in which hesoon lost all his capital. He says that in signing the book he didnot suppose that he was representing himself to be a member ofThomas McFarland & Co., and that he signed because ~IcFarland

asked him to do so; and that when he signed he did not observethat opposite the signature his name was inscribed fiS a memberof the firm of Thomas McFarland & Co. However that maybe, the signature was not inscribed until 28th September, andis not evidence that he was a partner before 26th August.Young v. Hunter (1), alreaoy cited, was a ca.se in which some ofthe defendants, a firm. who had not originally been parties to thecontract, which was one for the purchase of goods for shipment,had been afterwards allowed by the original purchasers to havea share in the venture. The plaintiffs knew nothing of thesedefendants who contested the action, but sold only to the originalpurchasers, who had suffered judgment by default; and it wascontended (unsuccessfully) that the defendants who re$isted weresleeping partners of the defendants who succumbed. On thisH~ath J. said, and it is his entire judgment (2) :-" The proposi­tion of the plaintiffs' counsel, that if it be shown that at anyone

(1) 4 Tauut., 681. (2) 4 Ta.l1ut., 581, a.t p. 582.

13 C.L.R.] OF AUSTRALIA. 19

period of the transaction there were a partnership subsisting, it 11. C. OJ' A.1911.was therefore to be inferred that there had been a partnership --in the particular Ol'iginal purchase, is wholly unfounded." LANG

There is one more matter to which I ought to refer. It was JA~'ES

argued, though rather faintly, by the respondents that some MORRISON &. f h' I . I Co. LTD.strength was gIVen _to the case or a partners Ip at t Ie matena _

time by two passages in the correspondence. The first is in a Bo.rton J.

letter from Thomas McFarland & Co. to the respondents, dated13th August 1907, and is as follows :-" We wish to inform youthat we have taken Mr. T. S. Lang into partnership, but that weintend continuing the export business under the old name." Theother passage is in the respondents' letter of 20th September1907, which is in answer to the letter just quoted. It is in thesewords :-" We note that ;rou have taken Mr. T. S. Lang intopartnership, but that the export department will be carried onunder the old name." McFarland says as to this that it meantmerely that he had taken the appellant into the firm of McFar-land, Lang, & Co., and that Lang had not at that time anythingto do with the frozen meat trade. I do not see how the twoextracts can help the respondents. If McFarland is believed, hewas not referring to the firm of McFarland & Co., but if hemeant to do so, his statement was a misrepresentation. But,however intended, if it misled the respondents, they cannot relyon it, in the face of the rest of the evidence adduced by them, asshowing that the appellant was a member of Thomas :McFarland& Co. on 13th August or before 23rd August; nor can it beargued to amount to a communication to them of the existenceon 26th August of a certain fact relevant to this case, sinceat the time the statement was made to them it was not a fact inrespect of the firm of Thomas l'IcFarland & Co., arid it is notpretended that McFarland was on 13th of August the agentof the appellant to bind him by any statement i~ respect of thatfh·rn.

I am of opinion fOl' the reasons given above that the appealmust be allowed.

O'CONNOR J. I agree.

HIGH COURT20

He C. 01' A.lIUL'--'"Lura

e.J.a....

lIoUJllO. AICo. LTD.

[1911.

~ppeal allowed. Jud{}menta~d ffYY11l,reve-I'sed 80 far as it is adverse to tkeappellant. J1ldgmrnt fO'r thedefrnd­ant Lang with COBtB, includi'Rg cOBts ofdiscO'Very. Omit order to deliver u.ptlte lxYnds. RespontWnts to pay tILe cOBisof tke appeal.

Solicitors, for the appellant, Lamrock, Brown &: HaU.Solicitors, for the rcspondente, Braham & Pirani.

B. L.

[HIGH COURT OF AUSTRALIA.]

HOLLINOSWORTHPLAINTIFF,

AND

HEWITT

ApPELI.ANT ;

RESPONDENT.

A plaintUf is 1I0t eDtitled u of coone to be supplied by the proprietor of aDe_paper with the Dame and addr_ of the writer of an &rticle under seo. 1J

ON APPEAL FROM THE SUP~EME COURT OFNEW SOUTH WALES.

H. C. 01' A. DefA_eiMI-Dt,/fIaation (.dmendl'llClle) .dd 1909 (N.S. W.) (Xo. 22), IICC. ll*-1911. Ordr:r lJf1a.ilUt RllllltJPllper proprietor eo mpply nallle of 1n'ieer of defa'fUleory'--'" Article.

SYD5I:Y,Aug. 17.

Grlftlth 0.1..IIanon and

O'COIIoor II..Sec. II of the J)ifa,,,ation (Amtnd­

-'I Ad 1903, is a follows :--.. The proprietor of any newspaper

may upon the writteD request of anypenon who has commenced aD ac~ion

10 respect of any defam&tory article,le'lier, report, or writing in aDy news­paper lupply to loch penon alfectedthereby U1e lIame and addre.. of the

penon who supplied such article, letter,report, or wl'iting to luch Dewlpaper,and ill defl/oult of compliance with sochrequelt any person alfected therebymay apply to a Judge of the SupremeCourt who may if he _ fit, afterbellfing Buch proprietor, direct thatIllch name and addr_ be so lupplied."