Posted On by &filed under High Court, Madras High Court.

Madras High Court
Immudipattam Vijaya Gandipa … vs S. Annasawmy Aiyar on 10 September, 1912
Equivalent citations: 17 Ind Cas 106
Bench: R Benson, Offg., S Nair


1. Plaintiff sues to recover a sum of Rs. 37,500 with interest which he claims as commission due to him under a contract with the defendant by which the latter authorised him to sell a mitta. He claims to have performed his part of the contract. Wallis, J., who tried the case, found that the plaintiff brought about a contract of sale between the Court of Wards and the defendant which the latter could have enforced against the Court of Wards, but the defendant wilfully made default in complying with certain requisitions made by the Court of Wards and made them a pretext for withdrawing from the contract, and afterwards sold the property to one Veerappa Chetty for the amount for which the Court of Wards had agreed to purchase the property. He was of opinion that when the plaintiff brought about the contract of sale, he had performed his promise and become entitled to recover his commission, and accordingly passed a decree in his favour for the amount claimed.

2. In appeal, it is contended before us:

(1) that under the agreement, if any, between the plaintiff and the defendant, the former was only entitled to recover any commission on his obtaining the purchase-money for the zemindar; and that his right to commission did not arise on his concluding the contract ot sale;

(2) that there was no concluded contract of sale as the Court of Wards imposed certain conditions with which the defendant was unable to comply;

(3) that the plaintiff was bound to have effected a sale before the 31st December 1906 and that as he did not carry out his promise before the stipulated period, he was not entitled to any commission.

3. We have, therefore, first of all to determine what the contract was between the parties. The question depends upon the construction of the documents (Exhibits A, B and E).

4. The defendant is the zemindar of Ayakudi. Under a decree of the High Court, confirmed by the Privy Council, he was entitled to redeem his zemindari which was under mortgage on payment of certain sum of money before the 31st December 1906. He had been making various unsuccessful attempts to raise the necessary sum for the payment of the mortgage-debt. The plaintiff was also one of the agents employed by him to raise the money. In August 1906, the defendant executed a power-of-attorney in favour of the plaintiff authorising him to raise a loan of 4 1/2 lakhs of rupees on the security of the zemindari, or to sell the Rettiambadi Mitta which is a portion of that zemindari for that amount. The reasons for giving this power-of-attorney are set out in paragraph 10 of Exhibit A. The chief reasons are stated to be: (1) “The non-payment of money due to the usufructuary mortgage of the aforesaid zemin, the time limited for the payment of the amount of the said debts approaching very fast.” (2) The non-payment of the debts incurred for our household expenses, the creditors giving trouble on that account and there being “no means for the present household expenses. The creditors giving trouble on that account and there being no means for the present household expenses.” The loan was to be raised within a period of two months. On the same day, Exhibit B was executed in favour of the plaintiff fixing the amount of the commission at Rs. 50, 000. The following is the material part of the instrument: “We are by this bound to pay you a commission of Rs. 50,000 as remuneration for the trouble you take, out of the amount that may be realized either by means of sale of by debt which you may effect, either by obtaining a loan of 4 1/2 lakhs against our zemindari or by effecting a sale of our Rettiambadi Mitta for 4 1/2 lakhs within the limited time of two months mentioned in the power-of-attorney executed by us in your favour on this day, in pursuance of conditions therein. The aforesaid commission amount shall be paid out of the “amount which you may obtain and give for us.” This contract is modified later by Exhibit E, in which the amount to be raised was settled at not less than Rs. 3 1/2 lakhs in accordance with the above conditions, and the commission was fixed at 10 per cent on the amount.

5. The question that has been argued at length before us is, whether under this agreement, the plaintiff became entitled to get his commission when, as he alleges, he concluded the contract or whether he was to get his commission only after the defendant received the purchase-money.

6. Exhibits B and E, of course, must be read together. The plaintiff proceeded to take steps to effect the sale immediately after the agreement. The 1st petition which he presented on behalf of the defendant was on the 24th August 1906. Within the period of two months, the time fixed by the – original agreement B, he was not able to raise the money. It was for that reason that the time to raise the loan was extended by the Exhibit E, up to 31st December 1906. The zemindar, according to the decree, had to redeem his property before that time. It appears, however, that nothing was finally settled up to that date. The proposals made by the zemindar were then under the consideration of the Court of Wards. The Court accordingly asked the zemindar on the 4th January to obtain an order from the High Court for the extension of time for the redemption of the estate. An application was accordingly made by the zemindar to the High Court, and on the 25th April 1907, the time for redemption was expended to December 1907. According to the original agreement, Exhibit A, if the matter was not settled with-in the time limited the time might be “extended by letter” at the discretion of the zemindar. So ON the 29th and 30th December 1906, plaintiff submitted to the defendant two draft letters (Exhibits IV and V) to extend the time for the completion of the agreement. There was no reply. On the 17th January, the plaintiff again wrote a letter Exhibit VI, in which he complained of the zemindar’s delay in not replying to his previous letters and requesting him to sign those letters. To this also there was no reply. Though there was thus no extension of time in writing, there can be no doubt but that the plaintiff did a great deal of work in January and February for the defendant to bring about a sale. See Exhibits K, L and M. The evidence is fully discussed in the judgment of the learned Judge and it is not necessary to refer to it in detail as we agree with his conclusions that the plaintiff continued his efforts to effect a sale with the consent of the defendant, the zemindar. Finally, on the 25th February, the Court of Wards declared its willingness to purchase the Rettiambadi Mitta from the defendant for Rs. 3,75,000 “on condition that he furnishes at his own cost a certificate from the Registration Department to the effect that there are no encumbrances on the property prior to the decree now under execution and that he obtains a certificate from the High Court under Section 305, Civil Procedure Code, authorising him to sell the mitta to the Court of Wards.” In reply, the defendant declared his willingness to part with his mitt for the amount named, and said that he would duly apply to the High Court for the required permission and to the Registration Department for the certificate of encumbrance. But he pointed out to the Board that the expenses incurred in connection with a sale are usually borne by the vendee and requested the Board, therefore, to defray the costs themselves, (Exhibit P). In reply, the Court of Wards offered to pay the fee for the drawing up of the conveyance, and stamp under the Registration Act, but informed the zemindar that he should pay the sundry charges, if any, connected with the transaction, such as the cost of having release deeds by the previous mortgagees drawn up, executed and registered if the Court is advised that such a deed is necessary to secure a complete title for the purchaser.” The certificate required from the High Court was obtained and produced and no question arises upon that. The certificate from the Sub-Registrar was also produced but it is not filed in this case.

7. There is no doubt that it was the plaintiff who took steps in order to obtain the encumbrance certificate. Then on the 29th March 1907, in reply to a letter from the plaintiff, in which he styled himself the agent of the zemindar, the latter in Exhibit Y repudiated the plaintiff’s agency. He said: “You are already well aware of the fact that you yourself being unable to complete the loan in accordance with the power letter written and given to you only in respect of settling the loan to us before, the aforesaid power letter has become cancelled (see Exhibit Y).”

8. The plaintiff did not accept the repudiation and he replied to the zemindar to inform him, that if the business be not completed, I request you will take notice hereby I was not in the least responsible therefor.” The plaintiff swears that even after this repudiation, the zemindar and his sister requested him to go on with the business; and though we have only the plaintiff’s own evidence on the point, and it may not be safe to rely upon his uncorroborated testimony, there is very little doubt that he must have been again working in the interest of the zemindar and at his request because we find that, on the 15th May, in Exhibit AA, a communication from the zemindar to the Court of Wards, forwarding High Court order and the encumbrance certificate, there is a postscript in the handwriting of the plaintiff. Farther, he wrote to the Court of Wards on the 26th May, on the 8th June and on the 23rd June, requesting the Court to complete the contract was soon as possible. According to his own evidence, in July he became ill, and he continued in that state for six months and did not know what passed afterwards. There were various communications between the zemindar and the Court of Wards (See-Exhibits GG-, HH, JJ, and LL.) and finally, on the 8th November, the Court of Wards informed him that he must furnish, the Government Solicitor with registration copies of certain documents, and also with certain release-deeds giving up all claims against the mitta from certain persons whose names appear in the encumbrance certificate and that he must also agree to the Court of Wards paying off or retaining the amount sufficient to pay off all the encumbrances, subsequent to the decree, in their hands. To this last condition, the zenindar had no objection; but he said that it was not possible” to comply with the other conditions stated in that letter and the contract thus came to an end. Neither the Court of Wards nor the defendant apparently cared to enforce it.

9. The question arises whether, on these facts, the plaintiff became entitled to the commission, when, according to him, the contract was concluded on the 25th and 26th February by the letters Exhibits O and P. We have already pointed out that it is impossible to believe that all that he did up to the 29th June was done without the knowledge of the zemindar and against his will. We agree on this point with Wallis, J., in holding that though the time limited had expired, the defendant certainly allowed the plaintiff and probably requested him to continue to negotiate for him and to bring about the sale while, at the same time, there can be no doubt the zemindar continued deliberately to refuse to give the plaintiff any letter similar to Exhibits B and E. The plaintiff is entitled to his commission if he did carry out what he contracted to do. If, under the contract, he was bound to effect only the sale of the property he became entitled to his commission as soon as he had completed his portion of the bargain by bringing about a contract of sale between the Court of Wards and the defendant, which it was in the power of the defendant to enforce against the Court of Wards irrespective of anything that might take place subsequently between the defendant and the Court. But, if the contract was that the plaintiff should obtain the money for the defendant from the intending purchaser and that he was to get his commission only after he obtained such money, then it cannot be said that the plaintiff became entitled to his commission before the defendant obtained the money or, at any rate, before the plaintiff had removed all the obstacles to the defendant receiving the amount.

10. It is necessary to consider in this case the circumstances under which the contract between the plaintiff and the defendant was entered into.

11. As we have already pointed out, the agreement was entered into with the plaintiff on the 80th August 1906 to enable the zemindar to redeem the mortgage before the 31st December 1906. What the zemindar required was, not either a sale of his mitta or mortgage of his zemindari, but the required sum of money to redeem the mortgage before that date. The sale or mortgage after the expiration of the period would be absolutely useless to him. That there were two alternative courses allowed, i.e., either to sell a portion or to mortgage the whole zemindari, is also significant. The essence of the contract thus being the obtaining of the money before a certain date, it would seem to follow that a mere contract of sale before that date, even if it could have been enforced against the Court of Wards, would be of no avail to the zemindar. The other reasons given in Exhibit A, to which we have referred, i.e., the pressure of the creditors for payment of the debts incurred for household expenses, would also seem to suggest that what the zemindar mainly looked to was obtaining the money by some means or other to satisfy his immediate wants. Considered in relation to these circumstances, the words in Exhibit, B. that the commission is to be paid out of the amount that may be realized either by means of sale or by debt which you may effect…within the time of two months and the words that subsequently follow that the commission amount shall be paid out of the amount which you may obtain and give for us indicate strongly that the commission is to be paid out of the loan or purchase-money which may be received by the zemindar. The words “you (plaintiff) may obtain and give for us” seem to show strongly that it was the plaintiff’s duty to receive the loan or the purchase-money. The words in Bringfield v. Kynaston (1887) 3 T.L.R. 279 were very similar. The auctioner in that case was to get his commission out of the purchase-money.” He found a person who agreed to purchase and paid the deposit. He, however, failed to complete it and the estate was sold to somebody else. It was held that, as the commission was payable out of the purchase-money, as in the case before us, the agent was not entitled to commission upon the amount agreed to be paid. Similarly in Green v. Mules (1861) 30 L. 7. G.P. 343 the agreement was that, if the plaintiffs could induce one Newman to make an advance of money to the defendant, the latter would pay them £100 commission. It was held that the employment was to be at an end if Newman did not advance the money, and if he did, the plaintiffs were to have £ 100.

12. These cases show that, where the intention of the parties was that the commission should be paid only after the defendant obtained his money, then effect must be given to that intention. The plaintiff was not entitled to his commission until the defendant had obtained his money, or the plaintiff had put the defendant in a position in which there was no impediment in the way of his getting the money. The facts of this case also strongly support the construction. The zemindar was then practically a man of no means. And the parties would have scarcely contemplated, the payment of the commission to the plaintiff before he received the purchase-money himself. In this view, the plaintiff was bound not only to effect a sale but to do everything that was necessary to enable the defendant to receive the money.

13. Such seems also to have been the opinion entertained by the plaintiff himself For, agreeing with Wallis, J., we find it is proved that, after the offer by the Court and acceptance by the defendant of the terms of the sale (Exhibits O and P), the plaintiff sent to the zemindar from Madras a sum of Rs. 25 for obtaining the encumbrance certificates. He was also bound to see that the information asked for by the Government Solicitor and by the Court of Wards was supplied to them and that release-deeds were obtained from the persons indicated and given to the Court. Or, if he considered it unnecessary to give the Court the information and these release deeds for any reason whatever, he should have removed their objections by litigation or otherwise and enabled the zemindar to receive the money at any rate before the time for redemption expired. It was not for the zemindar to remove the difficulties himself. The plaintiff admits that from July till December, he was ill and was not able to do anything. If the defendant had neglected or refused to receive the purchase-money due to him, that would have raised a different question. It is not a case of the defendant preventing the plaintiff from earning his commission, nor is it a case of the principal taking the matter out of the agent’s hands; because though there was a repudiation at one time it is clear from the documentary evidence in the case that the plaintiff continued to work for the defendant even after that, and we have already stated our agreement with the finding of the learned Judge that he must have so continued to work at the request of the defendant. We have considered whether any sum quantum meruit should be decreed to the plaintiff in return for the work which he did for the defendant, but we are of opinion that nothing can be decreed to the plaintiff on that account in this suit. The suit is based on the special contract, and there is no alternative claim for remuneration for work quantum meruit. In such a case, there can be no decree on the latter basis, Krishna Prosad Singha v. Purnendu Narain Sinha 15 C.L.J. 40 : 16 C.W.N.753 : 11 Ind. Cas. 820 and Lott v. Duthwaile (1893) 10 L.T.R. 76 nor, indeed, is there material before us on which we could determine the proper remuneration. A question as to the jurisdiction of the Court was raised, but we agree with the learned Judge that the High Court has jurisdiction for the reason stated by him in the last paragraph of his judgment. In the result, the plaintiff’s suit must be dismissed with cost throughout.

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