1. This appeal is directed against a decree of the learned Additional District Judge of Meerut in a suit for recovery of Rs. 1,750 on a contract of brokerage.
2. The plaintiffs are a firm of general merchants, auctioneers and commission agents who carry on their business at Meerut through Mr. Roop Ram, their managing partner. The defendants are a registered company with their Head Office at Solon, and owned a bungalow No. 22 known as 'the Belvedere' situate on the Ordinance Row, near the Mall in Meerut Cantonments. The plaintiffs, having come to know that the defendants intended to sell the aforesaid house, offered their services to the defendants to find a purchaser. The defendants accepted the offer and agreed to pay the plaintiffs a commission or brokerage at the rate of 5 per cent. Originally the defendants had fixed the price at Rs. 30.000, free of all charges, but the price was raised from Rs. 30,000 to Rs. 35,000 at the suggestion of the plaintiffs. The plaintiffs came to know that the Controller of Military Accounts at Meerut was desirous of purchasing a commodious house for locating his office. On 28th August 1924 the manager of the plaintiffs' firm had an interview with an official of the Controller's Office. He wanted to see the Controller but Col. Peacock refused to see him and refused to negotiate through the plaintiffs. He then advised the defendants to write to the Controller direct. On 10th June 1925, the house was purchased by the Controller of Military Accounts from the defendants for Rs. 35,000.
3. The present suit was instituted in the Court of the Subordinate Judge of Meerut on 18th December 1925, for recovery of Rs. 1,750 being the amount of brokerage on the purchase money at the rate of 5 per cent.
4. The defendants contested the suit on the ground that the sale in question was not brought about by the plaintiffs, that there was no agreement for payment of any commission to the plaintiffs for this purchase, that the sale was made by the defendants directly with the Controller of Military Accounts and that the plaintiffs had no hand in it.
5. The transaction has been described by the defendants in paras. 12 and 13 of their written statement.
6. Paragraph 12:
On 29th May 1924, the plaintiffs addressed a letter to the defendants' agents at Meerut suggesting some arrangement for the sale of the defendants' house at Meerut. The defendants wrote back in reply that if the plaintiffs could secure a purchaser at a reasonable price they would gladly pay them 5 per cent commission.
7. Paragraph 13:
The defendants at first put down Rs. 30,000 net as the minimum price free of all charges and subsequently raised the figure to Rs. 35 000 net, free of all charges.
8. The Court of first instance gave the plaintiffs a decree for Rs. 1,500 and dismissed the claim for Rs. 250. The judgment proceeds upon the findings that the plaintiffs were acting as the agents of the defendants in the matter of securing a purchaser, that they had brought to the notice of certain officials in the office of the Controller of Military Accounts that a house of the defendants was for sale, that though the head of the department was not approached, the plaintiffs had approached the officials 'next below him' and that the plaintiffs' intervention led to the purchase of the house, even though the negotiations and the final completion of the sale had not been made through them. The trial Court observed:
I think the plaintiffs did approach the purchaser though not directly to (sic) the Controller Military Accounts but to (sic) the officer next below him, there being evidence to show that the Controller was not approachable by ordinary persons of the plaintiffs' type.... The defendants' theory cannot be accepted that the bargain had cropped up of its own motion and that plaintiffs, getting the scent, were only officious in picking up the business.
9. It may be noticed here that the trial Court disallowed a part of the claim on the ground, that the defendants had agreed to pay commission if the house was sold for Rs. 30,000 and that there was no agreement for payment of commission or brokerage on the additional sum of Rs. 5,000.
10. The defendants appealed and the plaintiffs filed a cross-objection. The lower appellate Court allowed the defendants' appeal and dismissed the plaintiffs' cross-objection. The lower appellate Court was of opinion that the entire case hinged upon the determination of the question as to whether the Controller of Military Accounts purchased the house 'Belvedere' through the plaintiffs or otherwise, and came to the conclusion that the plaintiffs had failed to establish that they had negotiated the purchase with the Controller. Emphasis was laid upon the fact that the plaintiffs had not negotiated directly with Col. Peacock, and that indeed they had no access to him. A letter written by Col. Peacock on this subject was treated as conclusive.
11. We are of opinion that the learned Judge has misread the evidence and has failed to apply the correct law to the facts admitted or proved.
12. The basis of a claim for brokerage must initially be found in a contract of agency. In order to determine the liability of the defendants, the questions which emerge for decision are: What was the contract, if any, between the parties? And whether the terms of the contract had been fulfilled in this case? If the contract has not been fulfilled in its entirety, a further question may arise as to whether the plaintiffs are entitled on an implied contract to recover on quantum meruit?
13. The terms of the contract have to be collected from the letters, which passed between the parties, letters which have not been considered at all or at any rate not sufficiently appreciated by the Additional District Judge. It is abundantly clear from these documents that the contract between the parties was that the plaintiffs should find a purchaser for the defendants. On 11th June 1924, the defendants, in answer to a letter of the plaintiffs dated 29th May, wrote as follows:
Please let us know the particular arrangement made by you with regard to the sale of our Meerut house, We cannot undertake to sell only through your good selves. If you can find us a purchaser at a reasonable figure we will gladly pay you 5 per cent commission.
14. The above would indicate that commission or brokerage at the rate of 5 per cent was payable upon the purchase money, irrespective of the amount, and the amount has not so far been indicated. The plaintiffs wrote back on 12th June 1924:
We have got two, three purchasers in our hand and we think thai they will buy at desirable price, so please let us know how much you want for your building then you will take the offer from buyers because first, owner must give figure,
15. In reply to this letter, the defendants stated that they wanted Rs. 30,000 free of all charges for their property at Meerut.
16. On 23rd August 1924 the plaintiffs wrote the following letters:
With reference to your letter No. 18146 dated 14th June 1924, we have advertised the sale of your bungalow 'Belvedere' No. 22 by our brokers' handbills. So we have got few offers and the purchaser ideas (sic) seem to pay the near amount at present. We have put the price Rs. 35,000 and we hope the sale will complete early. Officer Commanding Office of Military Accounts and Messrs. Kishan Lal Jaini, agent B.O.C. Petrol and Elgin Mills are also purchasers and they might write you direct regarding the same. So please ask them the price quoted above and direct them to have further correspondence with us. Besides them we have some more purchasers but they will return in September or early in October from hills.
17. This was replied to on 27th August:
We are obliged for your letter of the 23rd instant and note therefrom that you have placed a minimum of Rs. 35,000 net on our property at Meerut. We therefore cancel our letter No. 1314G. dated 14th June 1924 placing the minimum of Rs. 30,000 net.,
18. On 28th August 1924 the plaintiffs sent another letter to the defendant:
Our manager had been in the C.M.A. office to-day and they asked him to show the authority for sale and other necessary papers concerning the bungalow, so that they may consult with their legal advisers and satisfy themselves in every respect. We told them that the company will take Rs. 5,000 in advance as soon as the matter is settled and the sale deed will be registered within a month's time. As for vacating the bungalow, we have not said anything to them, but please let us know how long you will take to vacate the bungalow. In your letter No. 1461 G dated 17th August 1924 you mentioned Rs. 35,000 as net amount you require but you have not stated regarding our commission at 5 per cent on sale proceeds, so please confirm now to this effect.
19. On 28th August letters passed between the defendants and the Controller of Military Accounts and eventually the house was purchased by the Controller, on 10th June 1925. In between, two other letters were addressed by the defendants to the plaintiffs. The letters dated 30th August 1924 read as follows:
On receipt of your letter of the 23rd instant we referred the matter to the Controller of Military Accounts, Meerut Cantonments, who, in reply, writes: 'In reply to your letter of 28th August regarding 'Belvedere' I write to say that I have neither seen Messrs. Roopji and Sons nor have they offered me the place on your behalf. Their letter to you, therefore, contained a direct mis statement and I do not propose to have any communication either with or through them.,
You wrote on 28th saying your manager had been in the C.M.A. office on the 28th and yet the Controller writes as above on the 29th.
20. The next latter is dated 15th September 1924:
Your letter of the 12th instant. We regret we cannot accept your claim. The Controller of Military Accounts wrote to us saying that he had never seen your firm nor had he been offered the place by you.
21. The effect of the last two letters was that the plaintiffs were faced with contratemps. The lower appellate Court ignores the previous correspondence and builds its findings entirely upon the last two letters. There was no warrant for this course.
22. Upon a correct reading of the documentary evidence, the following conclusions are forced upon us:
1. The defendants had employed the plaintiffs as their agent or broker that they should find a purchaser.
2. At the suggestion of the defendants the price for the house was raised from Rs. 30,000 to Rs. 35,000.
3. The defendants had contracted to pay the plaintiffs 5 per cent, as commission or brokerage on the purchase money.
4. The plaintiffs had asked the defendants to directly correspond with the Controller of Military Accounts and that negotiations for purchase and sale between the defendants and the Controller proceeded upon the plaintiffs having introduced the Controller of Military Accounts as a possible purchaser.
23. The oral evidence on the record is equally clear and conclusive and shows the exact extent of the plaintiffs' share in the transaction of sale. It has been conclusively proved that the plaintiffs got handbills printed and circulated for the sale of 'Belvedere,' that the manager of the plaintiffs' firm went to the office of the Controller and saw Mr. Sen, the Deputy Controller of Military Accounts, that he had a talk with Mr. Sen who asked him about the price, that Mr. Sen mentioned this fact to the Controller but that the Controller refused to settle the transaction through the plaintiffs. Mr. F.C. Beynen, manager of the defendants' company, states:
I offered to pay the commission to Messrs. Roopji and Sons on condition that he would sell my place as contained in my letter. He wrote to me first. They suggested certain names to us and we wrote to those people.... I came to know from the plaintiffs' letter dated 23rd August 1924, stating that the Controller of Military Accounts was a likely purchaser of the building. Before this letter came to me I had no idea of the C.M.A. Letters dated 28th August 1924 from the plaintiffs' and the letter dated 28th August 1924 from the Controller reached me the same time, 29th August 1924.
24. It appears therefore that immediately upon receiving information from Mr. Sen that 'Belvedere' belonging to the defendants was for sale, an information which Mr. Sen received as the result of his interview with plaintiffs' manager the Controller of Military Accounts wrote to the defendants on 28th August 1924 and that on the same day, the defendants, acting upon the instructions of the plaintiffs, also wrote to the Controller. It is therefore clear that the owner and the purchaser were not brought together by any fortuitous circumstances but through the mediation of the plaintiffs. The plaintiffs were therefore causa causans of the ultimate sale.
25. Mr. Benyen continues:
In the letter Ex. D, I cannot say how the Controller came to know that our premises were for sale. 1 cannot deny on oath that it was through the advertisement of the plaintiff that Lt. Colonel came to know of the sale I knew nothing about it. I got my information all through letters.... I meant that the price fetched should have a sufficient margin to cover all the charges. I put for Rs. 30,000 and I admit that plaintiff suggested me to put it at Rs. 35,000. I agreed to it.
26. The learned Additional District Judge was clearly in error in dismissing the plaintiffs' claim upon the ground that the sale to the Controller had not been negotiated or finished through the intervention of the plaintiffs. This is the only data upon which the judgment proceeds and is manifestly wrong. Where a contract is arrived at between a house-owner and a broker for finding a purchaser, the house-owner agreeing to pay 5 per cent on the purchase money as remuneration the broker is entitled to receive his fee, when the sale of the house has actually taken place in favour of the said purchaser upon his finding the purchaser, even though the negotiation or completion of the sale between the buyer and the seller may not have taken place through the direct intervention of the broker or commission agent.
27. Generally speaking, the broker 'is the middleman or intermediate negotiator between the parties:' Story's Law of Agency, p. 25. But his exact position may be defined or limited by the terms of the contract. His right to remuneration for any work done by him is dependent upon the terms of the contract and upon his fulfilment thereof. In order that the agent be entitled to receive remuneration from the principal for any work done, it is not absolutely necessary in each case, that the whole of the transaction should be done to a finish by him or through his intervention. Indeed the authorities have gone to the length of holding that the agent may in a proper case be entitled to receive remuneration even though the principal has got no benefit:
Where the remuneration of an agent is payable upon the performance by him of a definite undertaking, he is entitled to be paid that remuneration as soon as he has substantially done what he undertook to do, even if the principal acquires no benefit from his services: Bowstead's Law of Agency, Edn. 6 of 1919, p. 201.
28. The rule of law applicable to this case has been stated in a number of authorities and has been settled beyond doubt:
It is not necessary that the agent should actually complete the transaction, but he must show that it was brought about as the direct result of his intervention: Halsbury's Laws of England, Vol. 1, p. 194.
29. In the leading case of Burchell v. Gourie  A.C. 614 the following observation occurs in the judgment of the Judicial Committee:
In the words of Erle, C.J., in Green v. Bartett  14 C.B. 681, if the relation of buyer and seller is really brought about by the act of the agent he is entitled to commission, although the actual sale has not been effected by him; or in the words of later authorities, the plaintiff must show that some act of his was the causa causans to the sale, Tribe v. Taylor  1 C.P.D. 505, or was an efficient cause of the sale: Miller v. Radford  19 T.L.R. 575.
30. Bramwell, L.J., held in Fisher v. Drewett  48 L.J. Ex. 32 that the current of modern opinion was to the effect that those who bargained to receive commission for introduction had a right to their commission as soon as they had completed their portion of the bargain, irrespective of what might take place subsequently between the parties introduced. In the Municipal Corporation of Bombay v. Cuverji Hirji  20 Bom. 124 it was held that a broker was entitled to his commission, if the relation of buyer and seller was really brought about by him, although the actual sale had not been effected by him.
31. Green v. Bartlett  14 C.B. 681 has been followed by the Indian Courts in a number of oases, which need not be enumerated and the principle laid down therein is clearly applicable to the case in hand.
32. In Wilkinson v. Martin  H.C. 5 in summing up the case for the jury Tindal, C.J., is reported to have made the following observations:
The only question for you to decide on the evidence of both sides is, whether the sale really proceeded in effect from the fact of the plaintiffs' acting as brokers whether it really and substantially proceeded from their act, though they did not complete the contract. If it did, they will be entitled to your verdict but if very far or less than this was done, and there was only a mere introduction and the office of the agent or middleman was never filled by the plaintiffs between the parties, than they will not be entitled to recover.
33. It may be conceded that the mere fact of introduction may not be conclusive. But where the introduction is the foundation on which the negotiation proceeded, and the negotiation eventually ripened into sale, the introducer is entitled to claim the fruit of his labour. The real test is whether the vendor and the purchaser were brought together by the agent acting in the matter either for one or the other or for both. If the ultimate sale could not have taken place but for the introduction made by the agent, the latter is entitled to get his brokerage.
34. It ought to be distinctly stated that the plaintiff's claim is not founded on quantum meruit.
35. Quantum meruit was an action on the case which was abolished in effect by the rules H.T. 1, William 4:
This form of the claim was granted on a promise to pay the plaintiffs for doing a thing as much as they deserved or merited.
36. In view of the case set up in the plaint and the facts admitted or proved, it was not necessary to complicate the trial by introducing the question whether the plaintiffs were entitled to succeed pro tanto on quantum meruit.
37. If the plaintiffs had carried out their part of the contract, they must succeed and a recourse to the fiction of an implied contract to pay, would be wholly unnecessary, and indeed the plaintiffs could not claim on the quantum meruit because they had chosen to tie themselves down by the express terms of the agreement: vide Lord Coleridge, C.J., in Martin v. Tucker  1 T.L.R. 655. A liability by implication is excluded by the contract being express. In Lott v. Cuthwaite  10 T.L.R. 76 Lindley, L.J., is reported to have remarked:
It was said that there was an implied contract to pay the agent a quantum meruit for his services. The answer was that there could be no implied contract when there was an express contract.
38. The lower Courts were therefore not right in treating the claim as based on quantum meruit.
39. We have already set out above that the plaintiffs' claim is not founded on quantum meruit. The plaintiffs had found the purchaser. The bargain was struck at Rs. 35,000 a figure which the plaintiffs had suggested and which the defendants had accepted. It was at the instance of the plaintiffs that the defendants had offered that figure to the Controller of Military Accounts. The plaintiffs were in the circumstances entitled to claim remuneration at Rs. 5 per cent on the entire sum of Rs. 35,000.
40. The result is that we allow the appeal, set aside the decree of the lower appellate Court and restore the decree of the trial Court with this modification that the plaintiffs are entitled to Rs. 1,750 as claimed. Plaintiffs must have their costs throughout, including in this Court, fees on the higher scale.