*395]

*SMITH v. LINDO. April 20.

A dealer (in London) in shares in a public company (whether British or Foreign), is a "broker" within the statute 6 Ann. c. 16, and incapable of suing for commission, unless duly licensed. But, where an unlicensed person had assumed to act as a broker in the purchase of such shares, -Held, that he might recover from his principal the price which pursuant to a usage of the share-market he had been obliged to pay,-the statute of Anne not making the contract void, but merely preventing the unlicensed broker from recovering any remuneration for his services in making it.

THIS was an action for money payable for work done by the plaintiff for the defendant, at his request, as a broker, and for fees due and of right payable by the defendant to the plaintiff in respect thereof; and for scrip and shares sold and delivered by the plaintiff to the defendant; for money paid; and for money found to be due on accounts stated.

The declaration also contained a count stating that the defendant retained and employed the plaintiff, as such broker as aforesaid, to purchase for the defendant certain scrip certificates of shares on the London Stock Exchange, to be paid for by the defendant on the then next settling day on the said exchange, for reward to the plaintiff; and the defendant, on such retainer, authorized and requested the plaintiff to purchase the said scrip according to the usual terms of the said exchange, one of such terms being, that, in the event of the shares not being paid for at the time fixed for payment by the contract of purchase, the purchaser's broker shall be liable to indemnify the seller in respect of such default; that the defendant, on such retainer, agreed to save the plaintiff harmless in respect of such liability; that the plaintiff accepted such retainer, and did purchase the said scrip for the defendant on the said exchange, to be paid for on the said day, and on the terms aforesaid; and that the defendant did not, when the said day of payment (which had elapsed) arrived, save harmless, nor had he since saved harmless the plaintiff in the premises, but the defendant made default in the payment for the said scrip, whereby the plaintiff became liable to the said seller as aforesaid, and the said seller had sued and recovered *396] judgment against the plaintiff in respect of the plaintiff's said liability, and the plaintiff had thereby been put to heavy expenses and liabilities.

The defendant pleaded,-first, to the common counts, never indebted, -secondly, to the last count, that the defendant did not agree with, or retain or employ, or authorize or request the plaintiff as in that count alleged,-thirdly, to the last count, that the plaintiff did not purchase the said scrip for the defendant in manner or on the terms in the said last count alleged,-fourthly, to the last count, as to so much of the residue of the declaration as relates to work alleged to have been done, and money alleged to have been paid by the plaintiff for the defendant, that the said work alleged to have been done by the plaintiff for the defendant was done by the plaintiff within the city of London, as a broker for the defendant, that is to say, in and about the purchasing and bargaining and making contracts for the purchase for and on behalf of the defendant of divers scrip certificates purchased by the plaintiff for the defendant in a certain public company; that the said money alleged to have been paid by the plaintiff for the defendant, was money paid by the plaintiff within the said city of London, as such broker as

aforesaid, as the price of the said scrip certificates, in fulfilment and performance of the said contracts; that the plaintiff made such payments in his own wrong, and without any express request whatever from the defendant to pay the same; and that, except and by way of implication from the said retainer and employment of the plaintiff to purchase the said scrip certificates thereinbefore mentioned, and from the usage and custom of the trade and business relating thereto, (a) there never was any request whatever to the plaintiff *to pay the said price of the said serip certificates; that the said retainer and employment of the [*397

plaintiff in the last count mentioned was a retainer and employment of the plaintiff to act within the city of London as a broker, and to purchase as such broker the said scrip certificates in the said last count mentioned for the defendant; that the said alleged purchase of the said scrip for the defendant in the said last count mentioned, was made by the plaintiff within the city of London as a broker; and that the plaintiff was not at the several times of the doing of the said alleged work, and the payment of the said money alleged to have been paid, and of the said retainer, employment, and purchase in the said last count mentioned, or either of them, a broker duly licensed, authorized, or empowered to act or practise as a broker in the premises, or any of them, within the said city of London, contrary to the form of the statute in such cases made and provided.

The plaintiff joined issue on the first three pleas, and took issue on the last.

The cause was tried before Byles, J., at the first sitting at Westminster in Hilary Term last. It appeared, that in the early part of the year 1857, a company was formed in London called the Hungarian Land Company; that prospectuses were issued, an office taken, and shares issued, and that the defendant was the solicitor to the company.

The plaintiff, who was called, stated that, in the beginning of August, he called upon Lindo, and suggested to him that it would be for the interest of the company to employ some person to go into the market to buy shares, and requested that he might be employed to perform this operation; that Lindo "acquiesced;" that he thereupon went into the market and bought three lots of shares, which were described in the *contract note as bought "on account of Lindo ;" and that these notes were from time to time as the shares were bought (the 4th, [*398 5th, and 6th of August) handed by him to Lindo. He admitted that he was not a member of the Stock Exchange, nor a licensed broker, but that he was a "dealer in shares."

It was further proved that, by the usage of the share-market, the broker, and not the principal for whom he buys, is the person looked to by the seller of the shares for payment on the settling day.

It appeared that the plaintiff had been compelled to pay 210l. to the sellers of the shares; which sum, together with 77. 38. 9d. for commission or brokerage, he now sought to recover from the defendant.

The defendant, who was called as a witness, stated that he had never authorized the plaintiff to buy the shares for him; that, on seeing his name in the contract notes, he asked the plaintiff why he had put it in, and told him he would have nothing to do with the shares; and that the

(a) Inserted on amendment of the plea.

plaintiff thereupon said he had been authorized by Nunez, the stockbroker of the company, to do as he did.

Nunez, who was also called, denied that he had ever given the plaintiff any instructions as to the purchase of the shares; but that, on the contrary, he distinctly told him he had no authority.

It further appeared that the plaintiff had first made this claim upon Nunez, whom he had called before the committee of the Stock Exchange, to compel him to pay the money; that Lindo appeared as a witness before the committee; and that the committee dismissed the complaint.

On the part of the defendant it was submitted, that the fourth plea was proved, the plaintiff having, according to his own account, acted as a broker in the purchase of the shares, charging commission as a broker; and that, upon the authority of Cope v. Rowlands, 2 *M. & W.

*399] 149,† Pidgeon v. Burslem, 3 Exch. 465,† and Jessopp v. Lutwyche, 10 Exch. 614,† the plea, if proved, was a good answer to the plaintiff's claim.

The case being left to the jury upon the credit of the witnesses, they found a verdict for the plaintiff for 2171. 38. 9d.: and leave was reserved to the defendant to move to enter a verdict for him on the issue on the fourth plea, if the court should be of opinion that it afforded an answer to the action and leave was also reserved to amend the plea, if neces

sary.

Collier, Q. C., accordingly obtained a rule nisi to enter a verdict for the defendant, on the fourth plea, on the ground that that plea was proved, the plaintiff to be at liberty to contend, upon the argument of the rule, if it should be necessary, that judgment should be entered for the plaintiff on that plea non obstante veredicto, on the ground that the plea was bad, and that it did not show an acting as broker within the act (6 Ann. c. 16); that scrip certificates in a public company are not within the statute; and that it would not defeat the claim for money paid.

Bovill, Q. C., Geary, and Laxton, now showed cause.-The question is whether the plaintiff is a "broker" within the 6 Ann. c. 16, s. 5, which enacts, "that if any person or persons from and after the determination of this present session of parliament, shall take upon him to act as a broker, or employ any other under him to act as such, within the said city (London) and liberties, not being admitted as aforesaid, (a)

every such person so offending shall forfeit and pay, to the use *400] of the said mayor and commonalty and citizens of the said city, for every such offence, the sum of 251., to be recovered by action of debt," &c. A stock-broker has been held to be a broker within that act: Janssen v. Green, 4 Burr. 2103; Clarke v. Powell, 4 B. & Ad. 846 (E. C. L. R. vol. 24), 1 N. & M. 492 (E. C. L. R. vol. 28); Cope v. Rowlands, 2 M. & W. 149.† [BYLES, J.-The judgment in Clarke v. Powell is almost a plagiarism on that of Best, C. J., in Gibbons v. Rule, 12 J. B. Moore 539, 4 Bingh. 301, where a ship-broker was held not within the act.] All the cases are noticed in those two judgments. [CROWDER, J.-Are stock-brokers, dealing in foreign stocks, brokers within the

(a) By s. 4, it is enacted that "all persons that shall act as brokers within the city of London and liberties thereof, shall from time to time be admitted so to do by the court of mayor and aldermen of the said city for the time being, under such restrictions and limitations for their honest and good behaviour as that court shall think fit and reasonable," &c.

statute of Anne ?(a) In Milford v. Hughes, 16 M. & W. 174,† where it was held that a person who hires or procures for another persons to be employed by him in the laying out and surveying of a line of railway, is not a broker within the act, Alderson, B. says: "The Law Dictionary defines brokers to be those that contrive, make, and conclude bargains and contracts between merchants and tradesmen, for which they have a fee or reward."" In Wilkes v. Ellis, 2 H. Bl. 555, an auctioneer who sells goods by auction within the city of London, was held not to be a broker within the act. So, this plaintiff who was employed to buy and sell shares in an estate in Hungary, cannot be within the act. The statute imposing a tax, ought not, by its general words, to be held to impose that tax upon persons who were not known at the time, and have only come into existence since its passing. [CROWDER, J.—*Does

not this plaintiff come within the definition in the 57 G. 3, c. [*401 IX. ?] The legal construction of the 6 Ann. c. 16, is not to be affected by what the legislature in the 57 G. 3, c. IX. assume to be its intention. These shares are clearly not "goods, wares, or merchandise," within the statute of frauds: Tempest v. Kilner, 3 C. B. 249 (E. C. L. R. vol. 54); Bowlby v. Bell, 3 C. B. 284. [CROWDER, J.-That is fully settled.]

Assuming that the plaintiff is precluded from recovering the commission, there can be no reason why he should not recover back the money paid. He was employed by the defendant to purchase; and, by the custom, he becomes personally liable to pay: the purchase and the payment are two separate and distinct acts. The statute of Anne does not make the contract void: it merely says that the broker shall not recover for making it. In Pidgeon v. Burslem, 3 Exch. 465, 470,† Parke, B., says: "It is not disputed that the plea in this case would have been a good answer, if pleaded to so much of the plaintiff's demand as consisted of a remuneration for his services as a broker; the case of Cope v. Rowlands, 2 M. & W. 149,† being a decisive authority that such remuneration could not be recovered. But the plea is pleaded to the whole declaration, including the bills of exchange, and these are said to have been accepted on account of 3197. 16s. 4d. due and owing from the defendant to the plaintiff, for his, the plaintiff's, having as such broker made contracts of purchase and sale of shares, &c., and for his having paid for the use of the defendant such sums as aforesaid, that is, sums paid as incidental to his retainer and employment, upon and by virtue of and in and about the making or completing the said contracts. The words as incidental' are ambiguous, and it is difficult to say what is their precise meaning in this plea. In Johnson's Dictionary, the word incidental is said to mean incident, casual, &c., not necessary

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to the chief purpose.' In Webster's, the word incident has, [*402 among other meanings attributed to it, appertaining to or following the chief or principal.' It by no means follows from the use of this term in the plea, that the payment of these sums was a necessary part of his duty as broker. It may mean, and probably does, that, because he was employed as broker, it happened that he was also employed to pay the whole or part of the purchase-money of the shares for the defendant:

(a) Time bargains in foreign funds are not within the prohibitions of the stock-jobbing act, 7 G. 2, c. 8: Wells v. Porter, 2 Scott 141, 2 N. C. 722 (E. C. L. R. vol. 29); Oakley v. Rigby, 2 Scott 194, 2 N. C. 732; Elsworth v. Cole, 2 M. & W. 31.†

but, if so, the plaintiff's disability to act as broker not rendering the contract void, but only disentitling him to any recompense for his services, there is no reason why he should not recover from the defendant the money he has paid at his request, express or implied. The case differs altogether from those in which the contract is forbidden, as, under the acts against stock-jobbing, or where the purpose for which the money was paid was illegal, as in De Begnis v. Armistead, 10 Bingh. 107 (E. C. L. R. vol. 25), 3 M. & Scott 511 (E. C. L. R. vol. 30), cited on the argument." So, in Jessopp v. Lutwyche, 10 Exch. 614,† where, to a declaration for money paid and on accounts stated, the defendant pleaded, first, that the causes of action accrued after the passing of the 8 & 9 Vict. c. 109, under and by virtue of certain contracts made between the plaintiff and the defendant by way of gaming upon the market-price of shares,-secondly, that the causes of action accrued to the plaintiff as a broker in the city of London, about the purchasing and selling for the defendant in the city of London, of shares, and that the plaintiff was not duly licensed in pursuance of the statute, it was held, on demurrer, that the pleas were bad: Parke, B., saying: "Pidgeon v. Burslem, 3 Exch. 465,† is precisely in point. It is consistent with the pleas that the defendant requested the plaintiff to pay *403] over the money for him to a third party, and that in *fact it was so paid; in which case the defendant has no defence." [WILLES, J.-The gaming act does not create any illegality. BYLES, J.-It was assumed in that case that "share-brokers" are within the statute.] Knight v. Cambers, 15 C. B. 562 (E. C. L. R. vol. 80), and Knight v. Fitch, 15 C. B. 566, were also referred to.

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Collier, Q. C., and Archibald, in support of the rule.-Neither the 6 Ann. c. 16 nor the 57 G. 3, c. IX., gives any definition of the term "broker." In the argument in Clarke v. Powell, 4 B. & Ad. 849, Follett says: "In popular language, a broker is a person who makes contracts for others. One of the definitions given of the word broker in Johnson's Dictionary is, one who does business for another.' In Jacob's Law Dictionary, brokers are described 'those who make bargains in matters of money or merchandise;' and he enumerates exchangebrokers, corn-brokers, brokers of stock, and pawnbrokers. In Blunt's Law Dictionary are mentioned exchange-brokers, mediators in any contract of buying and selling, or contracts of marriage, and pawnbrokers.' In Cowel there is a similar enumeration. The statute 1 Jac. 1, c. 21, gives the city of London the power of admitting brokers, and describes them as persons who make contracts between merchants and tradesmen." The definition given in the 10 Ann. c. 19, s. 121, seems to be large enough to embrace this plaintiff. By that section, a penalty is imposed on every person "who shall be employed as a broker in the behalf of any other person, to make any bargain or contract for the buying or selling of any tallies, orders, Exchequer Bills, Exchequer tickets, bank bills, or any share or interest in any joint-stock erected by act of parliament, &c., who shall take or receive, directly or indirectly, any sum of money or other reward exceeding 28. 9d. per cent." *404] principle of the decision in *Clarke v. Powell seems to be this, that the statute of Anne is to be construed with reference to the exigency of the times and the expansion of commerce. Littledale,

The