Agency; grant of authority; apparent authority; estoppel.
Facts: Laws was the licensee of a hotel and his name appeared as such above the door to the hotel. However Laws was not actually involved in the business that was being carried on in the hotel by a person called Kinchela. Tooth and Co supplied liquor to the hotel. When they were not paid, they sued Laws on the contract. Kinchela had no actual authority to act as Laws' agent.
Issue: In the circumstances, should Laws be estopped from denying that Kinchela acted as his agent when buying liquor to be sold at the hotel?
Decision: Laws should be estopped from denying that Kinchela acted as his agent.
Reason: The court asked what could reasonably be inferred from Laws' conduct (that is, allowing his name to remain above the door of the hotel). It was held that in such circumstances, and since Tooth had not been informed to the contrary, it was reasonable to infer that Laws was the licensee and that the person operating the hotel was his agent.
The court said (at 156-157):
"If a man holds a licence for an hotel, and leaves his name upon the premises, then, in the absence of evidence that any intimation to the contrary has been given, a jury ought to find that the occupier of the premises is the agent for the licensee, both for buying and selling, in the usual way of business."