SPROULE, A.C.J. Plaintiffs are rubber dealers, Defendants "non-guarantee" rubber brokers. This means that Defendants do not guarantee the solvency of their clients nor the performance of completed contracts, as the 'guarantee brokers", in consideration of a higher rate of commission, do.

On 4th August, 1925, their Chinese assistant Chuah Cheng Kee reported to Defendants that he had received by telephone an order from Lee Chong & Co. to buy Singapore Flat Bark at $1.03 for delivery in September, 1925, to Messrs. Dunlop and Co.

Green, a partner in the Defendant firm, was on his usual morning rounds that day when he met the manager of the Plaintiff firm, a regular customer of his, at Chop Tye Hin. Plaintiff's manager said he had 15 tons of Flat Bark for sale at $1.04 cents. Green submitted to him a number of prospective buyers. The most favourable offer appeared to be that of Lee Chong & Co. But Lee Chong & Co. was known by Plaintiffs to be rather a slippery customer. Plaintiffs manager therefore wised to know if Lee Chong and Co. would agree to (a) raising of their price, (b) payment to the sellers direct by Dunlop & Co. Green telephoned from Tye Hin to his own office to Chuah Cheng Kee, accordingly, but Cheng Kee was unable to get into telephonic touch then with Lee Chong & Co. Green returned to his office, whilst Plaintiffs' manager at Tye Hin awaited developments. Green made Chuan Cheng Kee try again at the telephone. Cheng Kee did so and purported to get in touch with someone at Lee Chong & Co.'s place of business whom he addressed as "towkay". Green heard the conversation over the 'phone and thought he understood it. I think it is clear that he did not.

Chuah Cheng Kee, however, reported to Green that Lee Chong & Co. agreed to the stipulation for the seller's direct delivery to and payment by the last buyer, Messrs. Dunlop & Co. but would not pay more than $1.031 1/4 cents. per lb. Green communicated this report to Plaintiff's manager at Tye Hin, and Plaintiff's manager agreed to these terms.

I state at this first opportunity a possible theory of what may have happened. The "towkay" to whom Chuah Cheng Kee spoke on the telephone may have been Lee Chong & Co.'s manager or weighing clerk, Ah Choon, who in fact had no authority to bind his principal, Lim Yam Hong, over rubber contracts. Lim Yam Hong was in bed with fever. Cheng Kee probably knew that this manager or weighing clerk had no power to bind Lee Chong & Co.; but he may have hoped that it was Lim Yam Hong who instructed Ah Choon to make the terms offered; or if not, that he himself, Cheng Kee, could afterwards persuade Lim Yam Hong to accept these terms. It is reasonably clear upon the further evidence before me, and upon the admission of Mr. Braddell of Counsel for the Plaintiff, who called Chauh Cheng Kee as his witness in the former suit against Lee Chong and Co., and who is therefore in rather an awkward situation when Cheng Kee's good faith is in question, that the suspicions of Reay J. in the Court of Appeal, for instance were unfounded, and that Chuah Cheng Kee was certainly not dishonestly buying on speculation on his own account or for his own profit.

It may also have been by reason of his hope of persuading Lim Yam Hong that Cheng Kee himself took the letter of confirmation from Green & Collier to Lee Chong & Co., leaving it to a tamby to deliver a duplicate to Plaintiffs. Mr. Braddell for Plaintiffs admits that there was nothing sinister in this act, as suspected by Reay J.

At any rate, Plaintiffs acknowledged their letter of confirmation, but Lee Chong & Co. did not. Despite that, Green & Collier sent out contracts to each party. These contracts had a perforated portion intended to be torn off and returned, signed, in token of acceptance. The contracts were sent to Plaintiffs by hand, and to Lee Chong and Co. by post, on 5th August. Plaintiffs accepted, but Lee Chong & Co. did not reply.

In the vast majority of cases the rubber broker bring