Barnabas Plein & Co v Sol Jacobson & Son

• Jurisdiction: South Africa
• Citation: 1928 AD 25

Barnabas Plein & Co Applicant v Sol Jacobson & Son Respondent
1928 AD 25

1928 AD p25

Citation	1928 AD 25
Court	Appellate Division, Bloemfontein
Judge	Solomon CJ, Wessels JA and Stratford JA
Heard	October 11, 1927
Judgment	October 17, 1927

Flynote : Sleutelwoorde

Principal and agent — Agent to sell — Amount of commission — Trade usage — Tariff of estate agents — Reasonable remuneration.

Headnote : Kopnota

Applicant, an estate agent, had, on the instructions of respondents, found a purchaser for their business and stock in trade. A discussion took place between applicant and J, a member of respondent firm, as to the amount of commission to be charged by applicant. At that time B, the purchaser, was not prepared to pay the price which was eventually obtained from him, and applicant was asked to charge a small commission in view of the price then contemplated. Applicant told J that his ordinary commission on the figures mentioned would be approximately £700, but he agreed to charge less in view of the circumstances. J offered £100, and applicant eventually agreed to accept £250. On subsequent negotiations between B and respondents, unknown to applicant, the purchase price of the business and stock in trade was increased. When applicant heard of this increase, he contended that the basis of the agreement as to commission had fallen away, and demanded his full commission based on a tariff framed by the Real Estate Agents Institute, of which applicant was a member. That Institute had a limited membership and a very large number of its members in a great number of cases departed from their own tariff, and there were a number of estate agents who were not members of the Institute. The respondent tendered £40 as additional commission calculated on the same basis as the commission originally agreed upon. Applicant, in an action for

1928 AD p26

increased commission in a magistrate's court, contended that he was entitled to the full amount of commission under the tariff on the whole of the purchase price, and alternatively claimed the balance of commission on the amount by which the purchase price had been increased at the rate laid down in the tariff. The magistrate gave judgment for the defendant, and this decision was upheld on appeal to the Transvaal Provincial Division. In an application for leave to appeal.

Held, that on the assumption that the agreement as to commission was not applicable to the sale actually concluded, the fact that the agreement was; made preceding it and the reasons for making it were all pertinent to the enquiry as to whether or not an implied term to pay commission in accordance with trade usage was to be imported into the contract of employment and that under the circumstances an agreement to pay the tariff rate of commission, could not be implied.

Held, further, that applicant was entitled to reasonable remuneration for his services; that, though the existence of a tariff rate could be invoked as evidence in deciding what is a reasonable remuneration, the evidence as to the tariff was not strong enough to justify its being invoked in the present case; that, as the only guide as to what would be a reasonable reward for applicant's services was the agreement, there was no sound reason for saying that the court below had erred in fixing the amount of the commission at £290, and that the application should accordingly be refused.

Case Information

Application for leave to appeal from a decision of the Transvaal Provincial Division (TINDALL, J., and FERRIS, A.J.), on appeal from a decision of the magistrate's court at Johannesburg.

The facts appear from the judgment of STRATFORD, J.A.

Rosenberg, for the applicant: The authorities draw a distinction between professional and non-professional agents. As to professional agents there are two rules - namely, first, where there is a special agreement, there is only a claim under that agreement and the question of use or what is reasonable does not arise; secondly, in the absence of a special agreement there is an implied term in the mandate that the agent will be entitled to commission based on the usual or customary amount payable in the trade in which the agent is engaged, and it is only in the absence of a special agreement and in the absence of a customary or usual rate of commission that the question whether the rate claimed is reasonable arises. See Halsbury's Laws of England (vol. 1, para. 412, p. 193) Bowstead on Agency (6th ed., p. 192, art. 62); Story on Agency - (sec. 326); Berman v Binder (16 C.S.C. 443), in which the distinction between a professional and non-professional agent is drawn.

The same tariff as is now relied on was applied in Macdonald v Boulding (1921 W.L.D. 124). See also de Zwaan v Nourse (1903,

1928 AD p27

T.S. 814), followed in Power v Simonsen (1923 T.P.D. 77), and Kirshner v Fitzgerald (1927 T.P.D. 48). A tariff framed by private persons is not prima facie proof of its reasonableness. I am not reeving on the tariff, but on the observance of the rat e for twenty years, and, as estate agents are licensed, any person who contracts with an estate agent must be taken to know the usual rate of commission. Once it is admitted that there is a usual rate, if Story is right, it is implied that commission is not to be regulated by the work done.

For a distinction between custom and a particular usage, see...