De Bussche v Alt
An agent may delegate his authority only with the express or implied consent of the principal, and a sub agent who was properly appointed owes fiduciary duties to the principal.
Facts
Mr De Bussche employed Mr Gilman as his agent to sell a ship in China or Japan, at a minimum price. With Mr De Bussche's consent, Mr Gilman appointed Mr Alt as a sub agent in Japan. Mr Alt bought the ship himself at the minimum price, and then resold it shortly afterwards at a much higher price. Mr De Bussche sued Mr Alt for the profit.
Legal principle
The Court of Appeal held that Mr Alt must account for the profit. Thesiger LJ said that, as a general rule, an agent cannot delegate his authority, because of the principle delegatus non potest delegare, but that the principal may authorise delegation, either expressly or by implication from the circumstances. Since Mr Alt had been appointed with Mr De Bussche's consent, there was privity of contract between them, and Mr Alt owed fiduciary duties to Mr De Bussche. He was not entitled to buy the ship himself without full disclosure.
Related cases on agency
- Armagas Ltd v Mundogas SA (The Ocean Frost) [1986] AC 717
- Bolton Partners v Lambert (1889) 41 Ch D 295
- Collen v Wright (1857) 8 E & B 647
- First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd's Rep 194
- Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
- Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
- Hippisley v Knee Brothers [1905] 1 KB 1
- Imageview Management Ltd v Jack [2009] EWCA Civ 63, [2009] Bus LR 1034
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