CLAIM FOR COMMISSION.

Taranaki Daily News, 7 March 1922, Page 6

CLAIM FOR COMMISSION.

ACTION BY LAND AGENT. SUPREME COURT APPEAL. The question of a land agent’s right to commission was the subject of a case heard by Mr. Justice Chapman in the Supreme Court at New Plymouth yesterday. The action was an appeal by Joseph J. Allen, land agent, of Hawera, from the decision of Mr. A. M. Mowlem, S.M., at Hawera, on plaintiff's claim for commission from. Bernard A. Fama and Josephine Fama. Mr. P. O’Dea appeared for appellant, and Mr. F. C. Spratt for respondents. The facts related by Mr. O’Dea were that Allen had been the plaintiff in an action in the lower court at Hawera, when the Magistrate decided against him in a claim for £62 10s commission. The respondent (Mrs. Fama) was tlie owner of a house and land, and through her husband authorised Allen to sell the dwelling and 1J awee for £3200. The authority, which was dated September 30, 1920, also intimated that Mrs. Fama would consider selling half an acre, and the house or one acre, for a less amount than the above sum. Allen got into touch with a man named Burt, who wished to dispose of a mortgage of £1383. It was really a third interest in a third mortgage of £4OOO. Allen brought Fama and Burt together, and as a result of the negotiations an agreement was eventually signed whereby Fama agreed to sell the house and a quarter-acre for £2500, Fama to accept a transfer of Burt’s mortgage, the balance of the purchase money to itjg, arranged. The agreement was signed by both .parties on August 16, 1921. Later on the agreement was cancelled, because Burt would not guarantee the mortgage. It was stated that, in addition to securing from Burt an authority to transfer, Allen was also given power to effect a straight-out sale of the mortgage for £9OO. The Magistrate’s judgment, counsel said, was really to the effect that because Allen had not told Fama of the fact that the mortgage was for sale for £9OO, that he omitted some part of his duty. An attempt had aU.o 'been made at the hearing to prove that the mortgage was not worth its face value. However, Burt stated that the mortgage was worth the money to “hang on” to it, and there was no intention of misrepresentation. The point was that Burt needed. the cash. He was evidently in need of money, for he had previously offered the mortgage to a co-owner for £llOO. A statement to this effect was on the table in the lawyer’s office where the agreement was signed. The mortgage was eventually sold for £650. Fama was acquainted with the fact that it was a third mortgage. Although other points of defence were raised, the Magistrate decided the case on the point that Allen did not disclose to his principal all the facts with which he was acquainted, and which were likely to affect the decision of the principal. Argument by counsel dealt with the question of whether the omission of Allen to tell Fama that the mortgage was for sale at a certain price was sufficient to deprive him of his commission. He also dealt with the question raised for the defence that the deal was an exchange, and that, as Alien’s authority was for a sale, he could not recover commission. Counsel contended that the terms of the authority entitled Allen to commission on the deal, and he quoted previous cases dealing with this point. For respondents, Mr. Spratt said that four points of defence were raised before the Magistrate, two as to facts, and two on questions of law. Firstly, Allen as the agent was under a duty to disclose something that he knew, and ha did not disclose this fact; secondly, that the defendant was induced to enter into the contract by misrepresentations as to Burt’s position. The third issue for the defence was that the land agent was precluded from suing for_ a commission by reason of his failure to comply wth section 13 of the Land Agents Act, for the transaction actually brought about was an exchange, and the authority only related to a sale. Fourthly, it was urged that if the agent had authority he must fail to recover because of the terms of his authority. Proceeding with argument, Mr. Spratt urged that from Fama’s point of view it'"was purely an exchange; that the Magistrate’s decision was right when he said there was a duty to disclose facts, and that the failure to perform this duty disentitled the plaintiff. Continuing, Mr. Spratt referred to the statement that the fact that the mortgage was for sale at a certain price could be seen by the parties when they were at the solicitor’s office. He said Fama did notice this, but he was given a false explanation. Misrepresentations were also made as to Burt’s standing and Fama was told that he was a substantial man. Counsel next dealt with the question of authority. He pointed out that Allen was given power to sell, not to exchange, and the Question was whether the authority was sufficient to enable him to maintain an action. Counsel submitted that if an agent was given authority to lease and afterwards 'sold a property he would not -be entitled to recover commission under his authority. Tn most of the cases that had been decided the Court had made a distinction between a sale and an exchange. The fourth issue was that the transaction had never been carried into effects His Honor reserved decision.