Adamson v Jarvis (1827) 4 Bing 66

Adamson v Jarvis is a landmark English law case from 1827 that defines the contract of indemnity. The case involves an auctioneer, Adamson, who purchases livestock from Jarvis. Adamson sells the livestock after following instructions from Jarvis, but it is later discovered that Jarvis was not the real owner. The court ruled that Jarvis was liable and had to indemnify Adamson for his losses.

Facts of Adamson v Jarvis

In the case of Adamson v Jarvis, the plaintiff (Adamson) was an auctioneer who was instructed by the defendant (Jarvis) to sell certain cattle and other goods. Jarvis represented to Adamson that he was the owner of the goods and had the authority to sell them. Relying on this representation, Adamson proceeded to sell the goods. However, it later emerged that Jarvis did not have the right to sell the goods, as he was not the true owner.

Issue Raised

The true owner of the goods sued Adamson in the tort of conversion (unlawful interference with the owner’s possession of property) and was awarded damages of £1,195. Additionally, Adamson incurred legal costs of £500 in defending himself. Adamson then sought an indemnity from Jarvis, arguing that he had acted in good faith and based on Jarvis’s representations.

Adamson v Jarvis Judgement

The court held that Adamson, as an innocent party who acted in good faith without knowledge of the unlawfulness of the act, was entitled to be indemnified by Jarvis for the losses incurred. This included both the damages awarded to the true owner and the legal costs incurred in defending himself.

Significance

The case of Adamson v Jarvis is significant in the context of agency law and contract of indemnity, as it establishes the principle that an agent who acts in good faith based on the representations of the principal is entitled to indemnity from the principal for any losses incurred as a result of those representations, provided that the agent was not aware of any wrongdoing. This principle protects innocent agents from bearing the financial consequences of their principals’ wrongful acts.