Lord Chancellor.-

This is an appeal from a judgment of the Supreme Court of Newfoundland (Horwood, C.J. and Higgins, J.) dated 1st March 1929, affirming a judgment of Kent, J., dated 5th December 1927. These judgments were pronounced in an action of account brought by the plaintiffs appellants against the firm of C.F.Bannett and Co. now represented by the defendants respondent and the issue in the action with which the present appeal is concerned is as to the alleged liability of the plaintiff to account to the defendants for the balance of the proceeds of 720 casks of Labrador codfish consigned by the defendants to Genoa in November 1921 for sale. With regard to this consignment which was made by the steamship "Kriton,” the defendants' case is that it was sent to Genoa to be sold by the plaintiffs' sub-agents there. These sub agents, Messrs. -urlo and Co. by name, in fact disposed of the fish and acknowledged to the plaintiffs that they had received in respect thereof 38s. a hundredweight. For this sum at the least (for the actual sum received by -urlo and Co. at the most) the plaintiffs are, the defendants say, responsible to them. To this the plaintiffs reply that Massrs. -urlo and Co. were not their sub-agents and that they, the plaintiffs, are not liable to account to the defendants for the moneys received by that firm on a true construction of the letters passing between the parties which formed the basis of the contract. Messrs. -urlo and Co., they say, were the direct consignees of the defendants, and the plaintiffs are not liable for any receipts by Messrs. -urlo and Co. which have not in fact reached their hands.

The Court of first instance and the Court of appeal in Newfoundland both held that Messrs. -urlo and Co. were the sub-agents of the plaintiffs, Kent J., laying:

"On the whole evidence and correspondence I have come to the conclusion that -urlo and Co. were in this transaction sub-agents at Genoa of the plaintiffs, and that the plaintiffs are responsible to the defendants for moneys received by -urlo and Co."

The Chief Justice said:

"The rights and liabilities of the parties have to be determined in accordance with the contract contained in the proposal to the appellants beginning with their telegram and letter of 21st October 1921, and including their telegrams of 7th and 15th November and the acceptance of C. F. Bennett and Co. in their telegraphed reply of 16th November. Nothing in the correspondences or conduct of the parties is effective to vary the terms of this contract or capable of being construed as an abandonment or waiver of rights acquired under it. No privity was created between C.F. Bennett. and Co. and -urlo and Co. They were unknown to one another. They knew only the appellants. The account rendered by -urlo and Co. to the Appellants acknowledges that -urlo and Co. held to the credit of the appellants the proceeding of the fish sold by them. The appellants as agents for the respondents have therefore to account to them for the money received by their agents, -urlo and Co., for the sale of respondents' fish and credited by -urlo and Co. to appellants' account"

Higgins, J., said, after setting out the correspondence and the facts:

"In these circumstances the plaintiffs became at once liable to the respondents for this sum which their sub-agents held in their credit."

At the trial the plaintiffs endeavored to make out a further case, namely that the defendants had elected to accept Messrs. -urlo and Co. as their debtors in the transaction and to look to them for payment. Both the trial Judge and the Court of appeal rejected this contention. It was not pressed at the hearing before this Board; if it had been, their Lordships, with reference to it, would have been of the same opinion as the Court", in Newfoundland and for the same reasons.

The short question therefore upon this appeal is:

"Were Messrs. -urlo and Co. the plaintiffs sub-agents as the defendants contend, or were the defendants and Masses. -url