Separately stipulated office allowance continues until lawful termination, but no implied duty to carry on business for the full term.

A managing agency agreement with a separately stipulated office allowance entitled the agents to that allowance until lawful termination by winding up, even though the company had ceased business and the agents were kept out of management. The suspension resolution did not amount to lawful termination, and the allowance was not treated as disguised minimum remuneration. However, no implied covenant required the company to carry on business for the full fixed term, so the agents could not recover future office allowance as damages for the unexpired period of the twenty-year term. Recovery was therefore limited to office allowance up to the date of winding up, with no prospective compensation.

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Issues: (i) Whether the managing agents were entitled to office allowance under the agreement up to the date of winding up notwithstanding that the company had ceased business and the agents had been kept out of management. (ii) Whether the managing agents were entitled to damages for premature termination of the managing agency on the footing that office allowance was payable for the unexpired period of the twenty-year term.

Issue (i): Whether the managing agents were entitled to office allowance under the agreement up to the date of winding up notwithstanding that the company had ceased business and the agents had been kept out of management.

Analysis: The agreement contemplated a distinct office allowance apart from remuneration based on profits. The statutory scheme recognised office allowance as separate from minimum remuneration, and the allowance could not be treated as a disguised minimum payment. The suspension resolution did not amount to lawful termination of the managing agency, and the agents were prevented from acting by the respondents' own wrongful conduct. The allowance was fixed by the agreement and was payable during the continuance of the agency until lawful termination by winding up.

Conclusion: The managing agents were entitled to the office allowance up to the date of winding up.

Issue (ii): Whether the managing agents were entitled to damages for premature termination of the managing agency on the footing that office allowance was payable for the unexpired period of the twenty-year term.

Analysis: A contract appointing an agent for a fixed term does not, in the absence of special stipulation, imply a covenant that the principal must continue the business for the whole term. That principle applies with greater force to a managing agency where the company is compelled to cease business by winding up. Since the company was not bound to carry on business for twenty years, no implied right arose to recover future office allowance for the whole unexpired term as damages. The claim for prospective compensation on that basis could not be sustained.

Conclusion: The claim for damages for premature termination was disallowed.

Final Conclusion: The appeal succeeded only to the extent that the office allowance was recoverable up to the date of winding up, but no recovery was allowed for prospective damages based on the unexpired contractual term.

Ratio Decidendi: A managing agency agreement does not, unless expressly provided, imply an obligation on the company to continue carrying on business for the whole fixed term, but a separately stipulated office allowance remains payable until lawful termination of the agency.

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