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The origins of the doctrine of necessitous intervention by someone who is in a legal relationship with the defendant lie in the principle of agency of necessity, where an agent went beyond his or her authority by intervening on behalf of the principal in an emergency. Because of the circumstances of necessity, particularly the impracticability of the agent communicating with the principal, the courts were prepared to treat the agent as though he or she had the necessary authority to do what was reasonably necessary to save the principal's property. If an agency of necessity was established, the agent would be reimbursed for the expense incurred in rescuing the principal's property. The doctrine of agency of necessity was initially relevant only in respect of the carriage of goods by sea, where the master took action to save the ship or cargo in an emergency. It was then extended to those cases which concerned the carriage of goods by land.
This is illustrated by The Great Northern Railway Co. v. Swaffield where the plaintiff railway company had transported a horse to a station on behalf of the defendant. When the horse arrived there was nobody to collect it, so the plaintiff sent it to a stable. A number of months later the plaintiff paid the stabling charges and then sought to recover what it had paid from the defendant. The plaintiff's claim succeeded even though this involved the extension of the doctrine of agency of necessity to include carriers of goods by land.
There was an agency of necessity because the plaintiff was found to have had no choice but to arrange for the proper care of the horse. The doctrine of agency of necessity was then extended beyond cases involving carriage of goods to other cases in which the plaintiff had been forced by an emergency to act beyond his or her existing authority. This extension of the principle was recognised in Prager v. Blatspiel, Stampand Heacock Ltd. and Heacock Ltd. , although the element of emergency was not established on the facts. In Prager the defendant, who was a fur merchant, bought and dressed skins on behalf of the plaintiff to be delivered to Romania.
The outbreak of the First World War made it impossible for the defendant either to send the skins to Romania or to communicate with the plaintiff. The defendant then sold the skins. When the plaintiff eventually asked the defendant to transport the skins to him, the defendant argued that it had been forced to sell the skins because they were deteriorating, making it necessary that the skins were sold forthwith. On the facts of the case it was held that the defendant was not an agent of necessity, simply because, since the skins were dressed, they were in no danger of deteriorating.
But it was accepted that if the skins had been deteriorating rapidly the defendant would have been authorised to sell them by virtue of an agency of necessity. Mc Cardie, J. , showed that the doctrine could apply to this kind of situation and might, for example, have entitled the defendants to reimbursement of storage charges and other precautions to preserve the furs. But on the facts there was no compulsion on the defendants to sell -- that is, there was no danger, as deterioration, to create a commercial necessity for this sale -- and, which is a separate point, the defendants had not been motivated by their honest conception of the best interests of the owners but rather by considerations of their own convenience and advantage. This case shows not only that the doctrine extends to land-based bailments but also that it serves purposes other than restitution. In particular, if he has been compelled to sell the goods, an agent of necessity has a defence to an action in tort; if he has had to make a contract (as for repair or storage or even to borrow money) the outsider will be in direct contractual relationship with the agent's principal; and, if he expends money on the safety of the goods, he will have a claim for reimbursement.
Our concern is with this third consequence, the agent of necessity's right to reimbursement of his outlay. We have already seen that in Prager, Mc Cardie, J. , would have allowed recovery of storage charges. He relied for that on Great Northern Railway v. Swaffield. The railway was to deliver a horse to Sandy station for the defendant. There was nobody to collect it when it arrived.
The defendant's servant did not appear till after the railway had incurred a stabling charge of 1 s. 6 d. He refused to pay the charge and finally left without the horse. Over the following days the defendant took an increasingly intransigent position. The stabling charges rose to 17. The railway then decided to pay the bill and deliver the horse.
It then reclaimed the sum paid. The claim was upheld on the analogy of the maritime cases, especially Gaudet v. Brown, Cargo ex Argos. The railway had had to take these reasonable steps to see that the defendant's horse was safely looked after. The principle underlying the doctrine of agency of necessity has now been extended beyond those cases where there was a pre-existing relationship of principal and agent to where there was any form of pre-existing legal relationship, such as the relationship of bailor and bailee. This was recognised in The Wilson, where the plaintiff, who was a professional silver, had entered into an agreement to salvage the defendant's cargo of wheat after its ship had been stranded on a reef.
The cargo was salvaged and taken to Manila where it was stored under cover to ensure that it did not deteriorate. The plaintiff informed the defendant that it was going to put the wheat into storage and the defendant did not object. The plaintiff then sought to recover the storage expenses from the defendant. Since the storage was not covered by the salvage agreement, the plaintiff could not sue under the contract.
However, once the wheat had arrived in the Philippines the relationship between the parties was one which was founded on a gratuitous bailment. Consequently, the plaintiff argued that, in storing the wheat, it was acting as an agent of necessity. The plaintiff's claim for restitution of the storage expenses which had been incurred succeeded before the House of Lords, because the plaintiff's conduct was considered to have been reasonable. But Lord Diploma, who gave the leading judgment, stressed that the plaintiff should not be characterised as an agent of necessity, since he considered that the notion of agency should be confined to where the agent was deemed to have authority to create contractual rights and obligations between the principal and a third party. He did not regard the term as being appropriate where the plaintiff's claim was for reimbursement...
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