on his own account. the agency stances which have come to his own knowledge on the subject, the principal may repudiate the transaction” (†): the Indian Act goes on to add, "if the case show either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him," but these qualifications are not recognized in English law (u). "If an agent without the knowledge of his principal deals in the business of the agency on his own account instead of on account of his principal, the principal is entitled to claim from the agent any benefit which may have resulted to him from the transaction" (x). These rules are well known and established and have been over and over again asserted in the most general terms. The commonest case is that of an agent for sale himself becoming the purchaser, or conversely: "He who undertakes to act for another in any matter shall not in the same matter act for himself. Therefore a trustee for sale shall not gain any advantage by being himself the person to buy." "An agent to sell shall not convert himself into a purchaser unless he can make it perfectly clear that he furnished his employer with all the knowledge which he himself possessed" (y). "It is an axiom of the law of principal and agent that a broker employed to sell cannot himself become the buyer, nor can a broker employed to buy become himself the seller, without distinct notice to the principal, so that the latter may object if he think proper" (≈). If the local usage of a particular trade or market countervenes this axiom by "converting a broker employed to buy into a principal selling for himself," it cannot be treated as a custom so as to bind a principal (t) I. C. A. s. 215. (u) See Story on Agency § 210; Ex parte Lacey, 6 Ves. 626. (x) I. C. A. s. 216. (y) Whichcote v. Lawrence, 3 Ves. 750; Lowther v. Lowther, 13 Ves. 95, 103; and see Charter v. Tre velyan, 11 Cl. & F. 714, 732. (2) Per Willes, J. in Mollett v. Robinson, L. R. 5 C. P. at p. 655. Cp. Guest v. Smythe, 5 Ch. 551, per Giffard, L. J.; Sharman v. Brandt, L. R. 6 Q. B. 720. dealing in that trade or market through a broker, but himself ignorant of the usage (a). The rule is not arbitrary or technical, but rests on the principle that an agent cannot be allowed to put himself in a position in which his interest and his duty are in conflict, and the Court will not consider "whether the principal did or did not suffer any injury in fact by reason of the dealing of the agent; for the safety of mankind requires that no agent shall be able to put his principal to the danger of such an inquiry as that." It is a corollary from the main rule that so long as a contract for sale made by an agent remains executory he cannot re-purchase the property from his own purchaser except for the benefit of his principal (6). A like rule applies to the case of an executor purchasing any part of the assets for himself. But it is put in this somewhat more stringent form, that the burden of proof is on the executor to show that the transaction is a fair one. This brings it very near to the doctrine of Undue Influence, of which in a later chapter. It makes no difference that the legatee from whom the purchase was made was also co-executor (c). Another branch of the same principle is to be found in the rules against trustees and limited owners renewing leases or purchasing reversions for themselves (d). Again: "It may be laid down as a general principle that in all cases where a person is either actually or constructively an agent for other persons, all profits and advantages made by him in the business beyond his ordinary compensation are to be for the benefit of his employers" (e). For (a) Robinson v. Mollett, L. R. 7 H. L. 802, 838; and further as to alleged customs of this kind De Bussche v. Alt, 8 Ch. D. 286. the special application of the rule to the duty of directors of companies, Hay's ca. 10 Ch. 593; Albion Steel Wire Co. v. Martin, 1 Ch. D. at p. 585, per Jessel, M. R.; as to promoters, New Sombrero Phosphate Co. v. Erlanger, 5 Ch. D. 73. (b) Parker v. McKenna, 10 Ch. 96, 118, 124, 125. (c) Gray v. Warner, 16 Eq. 577. (d) Notes to Keech v. Sandford, in 1 Wh. & T. L. C. The last case on the subject is Trumper v. Trumper, 14 Eq. 295, 8 Ch. 870. On the general rule see also Marsh v. Whitmore, (Sup. Court, U. S.) 21 Wall. 178. (e) Story on Agency $211, adopted Nature of remedies "If a person makes any profit by being employed contrary to his trust, the employer has a right to call back that profit" (f). And it is not enough for an agent who is himself interested in the matter of the agency to tell his principal that he has some interest: he must give full information of all material facts (g). Even this is not all: an agent, or at any rate a professional adviser, cannot keep any benefit which may happen to result to him from his own ignorance or negligence in executing his duty. In such a case he is considered a trustee for the persons who would be entitled to the benefit if he had done his duty properly (h). In this class of cases the rule seems to be that the applicable. transaction improperly entered into by the agent is voidable so far as the nature of the case admits. Where it cannot be avoided as against third parties, the principal can recover the profit from the agent. But where there are a principal, an agent, and a third party contracting with the principal and cognizant of the agent's employment, and there are dealings between the third party and the agent which give the agent an interest against his duty, there the principal on discovering this has the option of rescinding the contract altogether. Thus when company A. contracted to make a telegraph cable for company B., and a term of the contract was that the work should be approved by C., the engineer of company B., and C. took an undisclosed sub-contract from company A. for doing the same work; and further it appeared that this arrangement was contemplated when the contract was entered into; it was held that company B. might rescind the contract (i). by the Court in Morison v. Thomp- (f) Massey v. Davies, 7 Ves. 317, (g) See authorities collected, and observations of the Court thereon, Dunne v. English, 18 Eq. 524, 534. (h) Bulkley v. Wilford, 2 Cl. & F. 102. Cp. Corley v. Lord Stafford, 1 De G. & J. 238. (i) Panama & S. Pacific Telegraph Co. v. India Rubber &c. Co. 10 Ch. 515. 7. The rule as to settlements "in fraud of marital Settleright" was thus given by Lord Langdale (4) :— "If a woman entitled to property enters into a treaty for marriage and during the treaty represents to her intended husband that she is so entitled, that upon her marriage he will become entitled jure mariti, and if during the same treaty she clandestinely conveys away the property in such manner as to defeat his marital right and secure to herself the separate use of it, and the concealment continues till the marriage takes place, there can be no doubt but that a fraud is thus practised on the husband and he is entitled to relief" (7). Moreover-"If both the property and the mode of its conveyance, pending the marriage treaty, were concealed from the intended husband, as in the case of Goddard v. Snow (m), there is still a fraud practised on the husband. The non-acquisition of property of which he had no notice is no disappointment, but still his legal right to property actually existing is defeated" (n). ments in fraud of marital right. In order to have such a settlement set aside the husband Conditions must prove for setting them (i) That he was the intended husband at the date of the aside. settlement-i.e. that there was then a complete contract to marry which continued until the marriage (o). (ii) That the settlement was not known to him till after the marriage (p). What if the intended husband knows that some disposition has been or is to be made, but not its contents? The doctrine as far as it has gone seems to be that such knowledge makes it the duty of the husband to inform himself, and if he omits inquiry he cannot afterwards complain (7); but if he does inquire, and incorrect information is given, this is equivalent to total concealment (). According to the modern doctrine no difference is made by collateral (1) Cp. on this subject Dav. Conv. vol. 3, pt. 2. 707. (1) England v. Downs, 2 Beav. 522, 528. (m) 1 Russ. 485. See the earlier authorities there discussed. (n) 2 Beav. 529. (o) England v. Downs, supra. Cp. Downes v. Jennings, 32 Beav. 290, 294. (p) St. George v. Wake, 1 My. & K. 610, 625. (a) Wrigley v. Swainson, 3 De G. & Sm. 458. (r) Prideaux v. Lonsdale, 4 Giff. 159. The Court of Appeal (1 D. J. S. 433, 438) declined to say anything on this part of the case, affirming the decision on the ground that the settlor herself did not understand the effect of her act. Semble, the principle is wider. circumstances, "such as the poverty of the husband-the fact that he has made no settlement upon the wife-the reasonable character of the settlement [which is impeached], as in the case of a settlement upon the children of a former marriage" or the like. Nevertheless relief may be refused on the ground that the husband's conduct before the marriage has been such as to "put it out of the power of the wife effectually to make any stipulation for the settlement of her property": as where there has been previous seduction (8). It is said that if the husband discovers the settlement before the marriage takes place, he may rescind the contract to marry, and will have a good defence to an action for breach of promise of marriage (t). This seems only reasonable, but we do not know of any direct authority for it. Finally we venture to suggest that the doctrine might well be put on a broader ground than appears in the cases. The contract to marry gives rise to a new status between the parties, to which mutual duties are incident beyond the simple performance of the contract by marriage at the time expressed or contemplated (u). Among these may fairly be reckoned the observance of the utmost good faith in all things, and in particular the duty of not making without the other party's consent any disposition of property of such a permanent and considerable kind as might affect the order and condition of the future household. Such conduct shows a want of confidence which the other party is entitled to treat as incompatible with the marriage contract. Looking at it in this way, there seems no reason why the rule should not apply to both parties equally. (s) Taylor v. Pugh, 1 Ha. 608, 614-6. In Downes v. Jennings, 32 Beav. 290, no importance was attached to the parties having lived together before marriage. But the circumstances were such as to show that their conduct was deliberate. The husband's right to set aside the settlement, like all rights of setting aside or rescinding voidable transactions, may be lost by acquiescence or delay amounting to proof of acquiescence: Loader v. Clarke, 2 Mac. & G. 382. (t) By Sir John Leach, M. R. in St. George v. Wake, supra. (u) Frost v. Knight, L. R. 7 Ex. 111, 115, 118. |