Adamson v. Jarvis

Jarvis was in possession of some cattle and goods. He told Adamson, an auctioneer, that he had the right to sell them and asked him to auction them. Adamson sold them in good faith and paid the proceeds to Jarvis.

In fact, Jarvis had no right to sell. The true owner sued Adamson for conversion, that is, for dealing with his goods as if they were his own, and recovered heavy damages. Adamson then sued Jarvis to be indemnified.

Can a person who, at another's request, honestly does an act that turns out to be wrongful against a third party claim indemnity from the person who requested the act?

Is such a claim barred by the rule that one wrongdoer cannot claim from another?

Jarvis argued that Adamson was himself a wrongdoer, because he had dealt with the true owner's goods, and one wrongdoer cannot claim from another.

Adamson claimed indemnity from Jarvis because he had acted honestly at Jarvis's request.

In 1827, the Court of Common Pleas, speaking through Chief Justice Best, rejected Jarvis's argument. It held that every man who employs another to do an act which the employer appears to have a right to authorise undertakes to indemnify him for all such acts as would be lawful if the employer had the authority he pretends to have.

Since Adamson had acted honestly at Jarvis's request, he was entitled to indemnity from Jarvis.

Indian Contract Act, 1872 – Section 124 (definition of contract of indemnity, described in the lecture as a narrow definition); Indian Contract Act, 1872 – Section 145 (implied right of surety to indemnity against the principal debtor); Indian Contract Act, 1872 – Sections 222 and 223 (principal's duty to indemnify agent)

The case is the classic authority for implied indemnity arising from a request. Indian students need it to understand that, although the Contract Act's definition of indemnity is narrow, the Act is not an exhaustive code. Indian courts apply wider principles of justice, equity and good conscience where the Act is silent, and so recognise implied indemnities. The Act itself contains implied indemnities in Section 145 and Sections 222 and 223.

The Privy Council later applied the same idea in The Secretary of State for India v. The Bank of India Limited (1938).

Hypothetical: Prince tells Farhan, an auctioneer, that a tractor in his yard belongs to him and asks Farhan to auction it. Farhan honestly sells it and gives the money to Prince. The real owner, Zoya, sues Farhan and recovers damages. Even though Prince never expressly promised to cover any loss, Farhan can claim indemnity from Prince. Prince's request carried an implied promise to protect Farhan for acts that would have been lawful if Prince really owned the tractor.