70. Universal Steam Navigation Company, Limited v James Mckelvie And Company [1923] AC 492

Voyage charterparty – effect of qualifying signature “as agent”.

The facts

Signatories to a voyage charterparty, described in the beginning of the charterparty as “charterers” qualified their signature at the foot of agreement by the words “as agents”. They had sold a shipment of coal to consignees in Italy FOB and evidence was led that the signatories to the charterparty had acted as agents on behalf of the consignees in Italy.

Demurrage was incurred at the port of discharge which the owner sought to recover from the signatories on the basis that they were party to the voyage charterparty as charterers.

Findings

The court of first instance (Bailhache J) found in favour of the owners.

The decision was overturned in the Court of Appeal (Bankes and Atkin L.JJ – Scrutton, LJ dissenting).

The House of Lords confirmed the decision of the Court of Appeal. The reasoning of the House of Lords was that the signatories had actual authority to act on behalf of their principals in Italy. There could be no question of ostensible authority because, not only did the signatories qualify their signature by the words “as agents”, there was evidence that the owners were aware of the existence of the agency.

Commentary

The case is an example of the orthodox application of the law of agency which maintains the distinction between actual and ostensible authority.

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