JUDGMENT
Arnold White, Kt., C.J.
1. The first question which arises for consideration in this appeal is whether the evidence establishes that Mr. Devarajulu Naidu had authority to sell the house in question on behalf of the defendants-an authority to sell either at the price for which he purported to sell it or the best price that could be obtained or at any proper price. In other words, does the evidence establish that he had a general authority to sell the house without a further reference to his clients or principals on whose behalf he purported to be acting ? Then there is the further question, which is to a great extent a question of law, as to whether, assuming that the evidence does establish that Mr. Devarajulu Naidu had authority to sell on behalf of certain principals, he had by virtue of that general authority also an authority to receive the purchase money on behalf of the principals so as to bind the principals by that receipt.
2. With regard to that second question, I will dispose of it at once before I proceed with the facts of the case. We find the law to be thus stated in Dart on Vendors and Purchasers on page 213 : “He,” (that is the agent), ” cannot, without special authority, receive the purchase money.” One case which is cited by the learned author in support of that proposition is the case of Mynn v. Joliffe, which is now to be found reported in 43 Revised Reports, page 802. There it was held that “an agent employed to sell an estate has not, as such, authority to receive payment.” It was suggested that that decision had only reference to the facts of that particular case where apparently the agent was an auctioneer and it is suggested in one of the Text Books-Wright on Agency-that that was the effect of the decision. But there is nothing in the decision itself to suggest that its application is to be limited to cases where the agent is an auctioneer. So far as I know, it has never been so suggested in any of the later cases in which this question has been discussed. I also find in the case of Viney v. Chaplin (1858) 27 L.J. Ch. 434 the following observation of the Lord Chancellor Cranworth on page 437:-” It is quite clear that if a purchaser pays his purchase money to a person not authorized to receive it, he is liable to pay it over again; and it may, I think, be considered as established, that the possession of the executed conveyance, with the signed receipt for the consideration money indorsed, is not, in itself, an authority to the solicitor of the vendor to receive the purchase money.” There were authorities cited by the learned vakil who argued this case on behalf of the respondents, and argued with great ability, but it seems to me none of them is in point with regard to this particular question. None of them displaces the authority of the cases to which I have referred. If it became necessary for me to express an opinion on the point, I am prepared to hold that a mere general authority to sell land does not carry with it an implied authority to receive the purchase money for the land on behalf of the principal.
3. Now let us see how the evidence stands in regard to the first question, i.e., does it establish a general authority in Mr. Devarajulu Naidu to sell this house on behalf of the defendants? Mr. Devarajulu Naidu is a Vakil of the High Court. The property in question is owned by two brothers who form an undivided family. Their mother is also alive. On the 20th February 1906 Mr. Devarajulu Naidu wrote the letter Exhibit A. That is the first document which has reference to this transaction. In that letter he acknowledged the receipt of Rs. 2,000 in respect of the sale of the house in question, the price settled according to the letter being Rs. 3,500. The balance, the letter goes on, would be paid in the course of a month. Then the letter says : “I will give you the title-deeds of the house on my return from Nellore which will be on or about the 8th March when you can inspect them.” There is not a word in that letter to suggest that Mr. Devarajulu Naidu was acting on behalf of clients. Any one reading the letter, it seems to me, would at once form the impression that he was selling this property on his own behalf.
4. What is the evidence of any antecedent authority given by the defendants to Mr. Devarajulu Naidu to sell this house ? The 2nd plaintiff gives evidence. He speaks of a writing, of an advertisement on the wall of the house : ” This house for sale, intending purchasers should make enquiries of Devarajulu.” Then he goes on “I went inside and saw the house. I then saw defendant 1 and defendant 2 and their mother and asked them. They said the house was for sale, also that Rs. 3,000 or Rs. 3,200 had been offered, and if I wanted the house I should go to Devarajulu Naidu.” Later on in cross-examination he says : “When I visited the house all three told me Devarajulu was the person to settle with” Later on again : “Both of them told me to go to Devarajulu and told me to settle everything with him.” It is to be observed that this witness, one of the plaintiffs, does not suggest that Devarajulu Naidu ever represented to him that he had authority to sell this house on behalf of the defendants, still less does he suggest that Devarajulu Naidu stated that he had authority to receive the purchase money of the house on behalf of the defendants.
5. Going back for a moment to Exhibit A, one cannot help observing that the method of payment adopted is of an unusual character, The contract apparently was made on the 20th February. In the ordinary course of business, I take it, the purchase money would have been paid when the conveyance was signed. What happened was that payment was made by the plaintiffs of no less than Rs. 2,oco out of the Rs. 3,500. Further, the payment was not made in cash; it was made by the endorsement of a cheque, which the plaintiff happened to have, to Mr. Devarajulu Naidu. That is a very curious feature of the case and at once, to my mind, gives rise to doubts as to whether this was an ordinary bona fide transaction in which Devarajulu Naidu was acting in the interests of his clients or whether it was not a transaction by which he hoped to obtain immediate command of a considerable sum of ready money. Passing on to the 1st plaintiff’s evidence, he says:-“I made enquiries of the senior man, the junior man and the mother. They told me to settle everything with Devarajulu.” Now I pass on to the evidence of Mr. Devarajulu Naidu himself. Here again, so far as I recollect his evidence, he does not say that he represented to the plaintiffs that he had authority from the defendants to sell this house. At any rate, he does not state that he had authority to sell the house and receive the purchase money. He does not say so in so many words. What he says is: “The house was for sale. A sale was put up. I was to arrange for the sale The defendants and the mother authorized me to sell the house and invest the money and purchase a small house for Rs. 1,000. They put up the notice that people were to enquire of me.” That is what he says in examination-in-chief. In cross-examination he says : “I was to consult them after I got an offer. The plaintiff made the offer a week before I gave the receipt for Rs. 2,000. The price was fixed then. The 2nd defendant was present when I fixed Rs. 2,000. When I communicated it to the mother, I had not communicated with the 1st defendant before giving the receipt. I took the consent of the mother for the receipt of the advance. I did not know what the advance was to be.” Then he.says: “I wanted money then and I used the money for my own purposes with the consent of the mother and the 2nd defendant.” That portion of the evidence has reference to another aspect of the case. Then there is another witness called for the plaintiff, Sundara Chariar. He says, “The house was for sale. There was a notice on the wall. I offered Rs. 3,200 for a friend Srinivasa Chari. I made the offer to defendants and they referred me to Devarajulu Naidu.” There is also the evidence of Rangasawmy Naidu and Manavala Moodelly. That, I think, is all what I may call the antecedent evidence with reference to the alleged authority to Mr. Devarajulu Naidu to sell the house in question. The defendants and their mother deny that any authority was given to Mr. Devarajulu Naidu to sell the house on their behalf.
6. Then we have to consider whether there is evidence which shows that the defendants ratified what Mr. Devarajulu Naidu did so as to make them liable for his action in entering into the contract and receiving the purchase money. The document Exhibit C is relied upon by the plaintiffs as evidence of ratification. This document to my mind raises a strong suspicion as to the bona-fides of this transaction. The plaintiffs’ case is that they were in treaty with Mr. Devarajulu Naidu as vakil for the defendants for the purchase of the property, and on the 20th February they in good faith paid him Rs. 2,000 as part payment of the purchase money. We find that by Exhibit C the signature of the 2nd defendant is obtained to a somewhat extraordinary document which states that the consent of the 2nd defendant and his elder brother the 1st defendant is given for the sale of this house, that the plaintiffs had paid Rs. 2,000 by cheque and a further sum of Rs. 25 on the date of Exhibit C to the 2nd defendant, and that the 2nd defendant had received in cash Rs. 2,025. I cannot help asking myself : If this was an ordinary business transaction in which the plaintiffs relied upon Devarajulu Naidu’s representations that he was selling on behalf of the defendants, what was the necessity for obtaining this document Exhibit C from the younger of the two brothers? Then we find that the document purports to be signed by the 2nd defendant on behalf of his elder brother. The document itself to my mind gives rise to suspicion, especially when we consider the fact that neither in Exhibit D, the draft conveyance, nor in Exhibit E, the sale-deed, although other payments of sums of money in part payment of the purchase money are recited, is there any reference to this alleged payment of Rs. 25 to the 2nd defendant. It is suggested that Exhibit C may have been antedated. I express no opinion about that. But, apart from any question of the possibility of its being antedated, it seems to me the document in itself is of a character which cannot but give rise to a considerable amount of suspicion.
7. Then what is the evidence with regard to the circumstances in which this document was given ? The evidence on behalf of the plaintiffs with reference to this document is quite general. I do not think Devarajulu Naidu refers to it at all. The 2nd defendant’s evidence is as follows: “I cannot read or write English or Tamil. I received Rs. 25 from plaintiff as a hand loan. Neither my mother nor my brother authorized me to receive Rs. 25. I took it for some business as a hand loan to pay debts. They said you must affix your signature on something like a receipt * * * I do not know in what language it was.” Then in cross-examination he said: “I signed C as a Voucher for Rs. 25.” That is the second document upon which the plaintiffs rely as a ratification of the conduct of the alleged agent in entering into this contract to sell.
8. Then they also rely upon Exhibit E which is the conveyance signed by the 2nd defendant. It is an instrument dated the 20th July 1906 and it is signed by the 2nd defendant. It purports to be attested by the mother as a markswoman. Let us see what is the evidence of the 2nd defendant with regard to the circumstances in which he signed this document. The evidence adduced on behalf of the plaintiffs is merely general that the document was signed by the 2nd defendant and attested -by the mother. Mr. Devarajulu Naidu says in regard to this : “I was present. 2nd defendant knew what the sale deed was. It was not represented to him that it was a final or stamp paper for Rs. 25. It was read over to him.” That is what he says with reference to Exhibit E. In cross-examination, speaking of the 2nd defendant, he says : ” Defendant 2 does not write English. He can read Telugu. I have not seen him read or write Tamil.” In examination-in-chief the 2nd defendant says: ” I signed E. It was not read out and explained to me. Devarajulu Naidu was present. I asked him what it was. He kept quiet. Alwar Chetty kept quiet” (I will refer to him later). Then there is a passage which is not quite clear-“But the plaintiffs said you borrowed 25 being 5 on the first occasion and 20 on the second. This is an ” on demand ” for that. My mother was downstairs. She was not present when I signed.” In cross-examination he says: ” I signed E in plaintiffs’ house. My mother was downstairs. I first went to the plaintiffs’ house and then went back and fetched my mother. The plaintiffs said I had to give my signature for the 5 and the 20 and that my mother should also be brought for that purpose. Although I took my mother she was not present when I signed. * * * I wrote the statement that ‘ this is the mark of S. Ranganaikammal.’ I did not see my mother there when I signed it. They wanted her to affix her mark. She refused and went downstairs.” ” My mother enquired what the document was about and they said it was about the Rs. 25. It was in reply to her they said that. It was in reply to me and not to my mother.” Then the mother with reference to this Exhibit E says : “My son came and called me and I went to plaintiffs’ house with my son. The plaintiffs said there was a paper for 5 and a paper for 20, and that as they were on two papers, now as only one paper is required, you need not be afraid. They asked me to put my signature. I refused.” That I think is the evidence with regard to the circumstances in which, according to the case for the plaintiffs, this document, Exhibit E, was signed by the 2nd defendant. Again I have to point out that it seems unusual if it was a transaction on behalf of the family that the plaintiffs would be content with the signature of the 2nd defendant. The 2nd defendant was at that time a youth of 18 or 19 years and Mr. Justice Wallis observes in his Judgment that neither he nor his brother, the 1st defendant, appear to be ‘of a high order of intelligence.’
9. With regard to the oral evidence as to the alleged ratification by the principals, the two defendants, of what was clone by their agent, Mr. Devarajulu Naidu, the case put forward by Mr. Devarajulu Naidu is that he retained the whole of this purchase money and that he used it for his own purposes and that he did this under the authority of the defendants and their mother. The evidence of the 2nd plaintiff, if true, would show that the defendants authorized the retention of this money by Mr. Devarajulu Naidu. That authority to retain of course would be a ratification of the receipt by him of the money on their behalf. The 2nd plaintiff says; “I paid by cheque on the National Bank for Rs. 2,000-0-0, in my favour which I endorsed in blank. I offered it to 2nd defendant but he told me to give it to his brother-in-law.” The witness is apparently speaking to what took place on February 20th. In chief examination, Mr. Devarajulu Naidu says: “On the 20th I received Rs. 2,000-0-0. The 2nd defendant and his mother knew subsequently.” I do not say these two statements are mutually contradictory : but the statement that the 2nd defendant and the mother knew subsequently, i.e., subsequently to the 20th February, is certainly inconsistent with the statement by the 2nd plaintiff that he offered the cheque to the 2nd defendant on the 20th February and that the defendant then told him to give it to his brother-in-law, i.e., Mr. Devarajulu Naidu. What does Mr. Devarajulu Naidu say with reference to the suggested ratification? I have read a portion of his evidence. He said : “The 2nd defendant was present when I fixed Rs. 2,000-0-0 * * *. I wanted money then and I used the money,” i.e., the money which he received from the plaintiffs, “for my own purpose with the consent of the mother and the 2nd defendant. The 1st defendant was saying that the money was to remain wjth me. It had been settled that the sale proceeds was to be invested with me.” That certainly is a very curious story-it is a general statement that he had a general authority to retain the money which he was to receive on the sale of this property and to use it for his own purposes. Mr. Devarajulu Naidu was in a somewhat delicate, position and it beloved him, it seems to me, to be particularly careful to see that the sale proceeds of this property reached the hands of his clients-two young men not particularly ‘bright’ who were his connections or relations. After the money had safely reached their hands, it was open to him of course to come to a fair arrangement with them for the purpose of getting the money back for his own purposes. It seems to me if he was not prepared to pay the money over to his clients-I take it they were his clients-then he could have obtained precise and specific written authority from his clients before he proceeded to appropriate the money to his own purposes : and if he chose to act in the way he did act, all I can say is that it is necessary carefully to scrutinize the statements which he makes in the witness-box seeing that he was not only an interested witness in the sense that he wanted to support the sale but also an interested witness in the sense that he got and used the money. In these circumstances, I say it is necessary to scrutinize his evidence with the greatest care. Now the two defendants and the mother deny that he had any authority to sell the house at all. The question is : Which story is one to accept?
10. There is another somewhat curious feature in connection with this case. One would have thought that Mr. Devarajulu Naidu, a Vakil, would have taken the earliest opportunity in his examination-in-chief to explain that, although he was acting for these parties in connection with the sale of this house, it had been arranged that he was to use the money for his own purposes. There is not a word of this in examination-in-chief, and it is not until we come to his cross-examination he says: “I wanted money. I used it for my own purposes with the consent of the mother and the 2nd defendant.” Of course it is an unusual story but it is a possible story, and if there had been something in the nature of evidence to corroborate it, one might be prepared to accept it, notwithstanding the denial given by the defendants and their mother. Mr. Devarajulu Naidu apparently saw the desirability of this story receiving some corroboration because he says in his cross-examination : “It was at that time I gave a promissory note in favour of the mother for Rs. 2,500 of my own accord.” That Rs. 2,500 is the amount of the purchase money. ” I gave it to Alwar Chetty at her request.” Now the mother denies that she ever asked Devarajulu Naidu to give to Alwar Chetty. The person to speak of this transaction is of course Mr. Alwar Chetty himself. Mr. Alwar Chetty was not called as a witness by the plaintiffs. The learned Judge in coming to the conclusion at which he arrived attached a good deal of importance to the fact that there was no immediate repudiation of the allegations in Exhibit F which is a letter sent on the 2nd July 1906 by Mr. Doraisamy Iyengar, who was acting for the plaintiffs, to the defendants. In that letter the part payments of the purchase money are stated and a tender is made of the balance of the purchase money Rs. 975. It is admitted that the 1st defendant refused to accept the Rs. 975 which was then tendered as the balance of the purchase money. And, although no doubt weight is to be attached to the fact that there was not an immediate repudiation, seeing that the tender was refused by the 1st defendant, speaking for myself I do not know that I am prepared to attach as much importance to that fact as the learned Judge apparently thought should be attached to it.
11. I always hesitate to differ on a question of fact, where the Court of first instance had the great advantage of hearing the witnesses and seeing their demeanour in the box, and so it is not without some hesitation that I differ from the conclusion of fact at which Mr. Justice Wallis arrived. But after giving the best consideration I can to the evidence and having had the benefit of a full argument on behalf of the respondents, the conclusion at which I have arrived in this case is that the plaintiffs have not discharged the onus which rests upon them and that they have not shown that the 2nd defendant gave to Mr. Devarajulu Naidu a general authority to sell this house at the price at which he purported to sell it without any farther reference to the defendants or to their mother; and that being the finding of fact which I feel myself on the evidence compelled to arrive at, I think we must set aside the decree of the learned Judge in favour of the plaintiffs and dismiss the suit with cases here and in the Court of first instance. And one word with regard to Mr. Devarajulu Naidu. My learned brother and myself have consulted together in the matter and it seems to us that there is a prima facie case for enquiry into Mr. Devarajulu Naidu’s professional conduct (see page 494) in connection with this transaction and the necessary steps will be taken with a view to holding an enquiry.
Abdur Rahim, J.
12. This appeal is from a judgment of Wallis J. in a suit instituted by the plaintiffs to enforce specific performance of a contract to sell a house belonging to the defendants Nos. 1 and 2. The contract to sell the house was entered into by Mr. Devarajulu Naidu, a Vakil of this Court, and the first question is whether Mr. Devarajulu Naidu had authority in that behalf from the defendants. All that is proved in this connection is there was a notice put up on the outer wall of the house that the house was for sale and that enquiries were to be made of Mr. Devarajulu Naidu who was then acting as vakil of the defendants. Then we have the evidence of the two plaintiffs that on enquiry being made of the defendants they were referred by them to Mr. Devarajulu Naidu who would settle everything. There is also the evidence of another intending purchaser who was similarly referred to Mr- Devarajulu Naidu. This is all the evidence of authority relied upon on behalf of the respondents. They do not appear to have made any proper enquiries as to the nature and extent of Mr. Devarajulu Naidu’s authority. It seems to me it will be going too far to say that the notice on the outer wall of the house and what was said by the defendants shows that Mr. Devarajulu Naidu had authority to sell on their behalf. All that it amounts to is that the defendants referred to their vakil who was authorized by them to treat with the purchasers and to negotiate with them regarding the sale of the house; and this is made still clearer by the fact which Mr. Devarajulu himself admits in his cross-examination that he was to consult the defendants as regards the price of the house. But it has been contended by the learned vakil for the respondents that, if there was no authority to begin with, there has been ratification of the act of Mr. Devarajulu by the conduct of the defendants; and for this purpose he relies upon Exhibits C and E. Exhibit C, as pointed out by his Lordship the Chief Justice, is a most curious document, and I agree with him in regarding it as a most suspicious feature in the case of the plaintiffs. Immediately after the contract was entered into Rs. 2,000 was paid to Mr. Devarajulu as an ‘ advance’, but it appears that some time afterwards, the plaintiffs paid Rs. 25 to the 2nd defendant who at the time was about 18 years of age, and got him to sign Exhibit C. It is absolutely clear that the design of Exhibit C was to get an acknowledgment of the authority of Mr. Devarajulu from the 2nd defendant and there can be little doubt that the plaintiffs felt the need of such a document as they were not sure at the time that Mr. Devarajulu Naidu had authority to sell the house. The 2nd defendant says that he received the Rs. 25/-as a loan and he understood that the document which he signed only related to the loan. Exhibit C is written in Tamil. It is not proved that the 2nd defendant knows Tamil, and if he did read and write Tamil, Mr. Devarajulu Naidu, who was a witness for the plaintiffs, was in a position to prove it. The 2nd defendant has had no independent advice and, having regard to the circumstances under which Exhibit C was executed, I am altogether unable to rely upon it as evidence of ratification. I should also like to point out that the existence of this document, Exhibit C, is. not mentioned either in Exhibit D or Exhibit E. Exhibit D is a draft conveyance and Exhibit E is the sale-deed purporting to have been signed by the 2nd defendant. Both these documents recite the sums of money which had been paid; but most curiously make no mention of the Rs. 25. I find it, I must admit, difficult to conceive that a purchaser of property who had paid even a small sum like Rs. 25 under circumstances which would make the receipt obtained for Rs. 45 of the greatest importance to him, should have forgot the fact of the payment or the existence of the document. A suggestion was made by the learned vakil for the appellants that Exhibit C must have been antedated. In the absence of any explanation as to why it is not mentioned in Exhibits D and E, I am not prepared to say that the suggestion is without foundation.
13. Exhibit E is signed by the 2ud defendant. It is a document in English and the 2nd defendant does not know English; he can only sign his name in that language. The evidence as regards its execution is that the document was read out to the 2nd defendant and he signed it. But I do not see the use of reading out a document written in a language which is not known to a person without explaining what it is all about. The plaintiffs or their legal advisers could not have failed to realize the importance of the execution by the 2nd defendant of this document; and if the 2nd defendant executed it with knowledge of its contents, proof of this ought to have been forthcoming.
14. It has been contended by the learned vakil for the respondents that the 2nd defendant having signed the document, the burden is thrown upon him to show that he signed it without knowing its contents. Undoubtedly that is so. In ordinary circumstances, one would expect that the person who alleges that he signed a document without knowing the nature of its contents, must satisfy the court to that effect. But, having regard to the circumstances of this case, it is impossible for us to regard the signature of the 2nd defendant to Exhibit E as having been put with the knowledge of the contents of that document.
15. Now I come to the evidence of Mr. Devarajulu Naidu himself. The learned Judge in the Court of first instance has accepted his evidence and relied upon it. We are bound, on a pure question of believing or not believing the evidence of a particular witness, to attach the greatest possible importance to the opinion of the learned Judge who fow the witness while giving his evidence regarding the credibility of his evidence; but there are facts in this case bearing upon the conduct of the witness which, if unexplained, are of greater materiality as affecting the weight to be attached to his words than his mere demeanour in the witness box. It appears that, at the time of the transaction, this witness was in considerable pecuniary difficulties. There were decrees against him and he was pressed for money. It is possible there was some talk at that time among the defendants and their mother of
partitioning their property. If there was such a proposal, Mr. Devarajulu seems to have seized the opportunity of suggesting the sale of the house with the result that the entire sale proceeds went to his pocket. He was their professional adviser and a distant connection. He dots not tell them, and there is no evidence in the case from which we might infer, that these two young men knew anything about his embarrassed circumstances. In the witness box he gives out that he owns certain mica mines worth I lakh of rupees; but all the same he was in great monetary difficulties. Without apprising his clients of his real pecuniary position, he advises them to sell the house, and when he manages to sell the house he appropriates the money to his own use. He says he gave a pro-note in favour of the mother of the defendants for Rs. 2,500 which he says he borrowed from them with their authority. But that pro-note is not produced and no attempt has been made to produce it. Alwar Chetty, to whom the pronote is said to have been handed over, was not examined. These are the facts which should be borne in mind in examining Mr. Devarajulu Naidu’s evidence; and I must confess that these circumstances weigh with me considerably in not accepting his evidence unless corroborated by other evidence.
16. As regards the authority to sell the house, knowing, as I think he did, that he intended to appropriate the proceeds of it, I should have expected that, having regard to his professional relation to the defendants, he would have taken every precaution to secure a proper authority from them. He does nothing of the kind.
17. Then as regards his statement that he had authority further to invest the money with himself “, I should have thought that having regard to the facts already mentioned, he would have been still more careful not to leave the fact of his having such authority a matter for debate. He was a most interested witness in the case, perhaps in some respects even more interested to support the transaction than the plaintiffs; and there being no corroboration of his evidence as I read the record, I regret, I cannot agree with the learned Judge that the word of Mr. Devarajulu Naidu should be accepted on the question of authority.
18. As regards the question of law that has been discussed, whether authority to sell, supposing there was such authority in this case, would include an authority to receive the purchase money, it seems to me there can be hardly any room for doubt that, when the authority to sell is with respect to immmoveable property, it does not ordinarily imply an authority to receive the purchase money. The learned vakil for the respondents has relied on the cases of Capel v. Thornton and Howard v. Chapman reported in 33 Revised Reports, page 678 and 34 Revised Reports, page 814, respectively, in support of his contention to the contrary; but those were all cases of sale of goods. It seems to be quite evident that if an agent, for instance, an assistant in a shop, has authority to sell goods, it is to be presumed that he should have authority to receive the price of those goods. But the case of a sale of immoveable property is not governed by similar considerations and, as has been pointed out by the learned Chief Justice, the authorities show that a person having authority to sell immoveable property does not, by necessary implication, have the authority to receive the purchase money. I agree in the order proposed by the learned Chief Justice.