Kumaraswami Sastri, J.
1. The plaintiffs are a firm of Nattukottai Chetties carrying-on banking business in Singapore and other places. They allege in the plaint that they appointed the defendant as their agent to conduct business in Singapore for a period of 3 years and as his conduct was found not to be satisfactory they sent another agent after the expiry of the 3 years' period and wrote to the defendant to hand over the business with the account books, documents and cash on hand to the new agent, that the defendant refused to hand over charge of the business to the new agent until and unless the accounts between him and the plaintiffs were settled and the letter containing the terms of the agency written by him to the plaintiffs, called the salary chit, was returned to him and a release deed was executed in his favour releasing him from all claims against him with reference to his agency, that as the defendant was obdurate and as the plaintiffs feared that they might suffer heavy loss by the stoppage of business they consented to authorise their new agent to give a release to him, that : the defendant after getting the. release deed and the return of the salary chit handed over the account books, vouchers and cash on hand to the new agent and that the release deed was obtained under coercion and is : therefore voidable at their instance. They further allege that the defendant had improperly debited them with the loss sustained by him in his own private transactions in dollars and that he lent large sums of money without proper security and contrary to orders. The plaintiffs pray that the release deed be declared void as having been obtained under coercion and that the defendant be directed to render an account of the transactions during the period he was their agent. The defendant in his written statement denies that the release deed was obtained under coercion and avers that he acted honestly and diligently in his capacity as agent, that he did not wrongly debit the plaintiffs with his losses, that he did not improperly lend money to the customers and that the plaintiffs are estopped by their conduct from denying the validity of the release deed.
2. Two preliminary issues were framed by the Subordinate Judge:
(1) Whether the acquittance granted to the defendant was done under the circumstances detailed in the plaint and hence voidable; and are the plaintiffs entitled to call for an account of the defendant?
(2) Whether the allegations in paragraphs 29 and 30 of the written statement are true, and does it estop the plaintiffs from doing so?
3. The Subordinate Judge held that the release deed was obtained from the plaintiffs' agent under coercion and that they did not ratify the release deed and directed an account to be taken. The defendant has preferred this appeal.
4. The first question for decision is whether Ex. IV, the release deed, was obtained under coercion and as such voidable at the instance of the plaintiffs. The admitted facts are : the plaintiffs appointed the defendant as their agent to conduct their business at two places in Singapore and the defendant, according to the custom obtaining among the Nattukottai Chetties, executed what is popularly known as 'salary chit' (Ex. K) on 4th March, 1918, setting out the terms on which he undertook to work as the plaintiffs' agent. He went to Singapore and worked as their agent without any hitch till the beginning of 1920. He did not send the kurippu for Masi corresponding to February-March, 1920, as he should have done about the beginning of Panguni. He sent the kurippu for Masi and Panguni on the 3rd of Chitrai corresponding to the 15th of April, 1920. See Ex. H (2). He wrote to the plaintiffs Ex. F on 24th May, 1920, making a special reference to the loss sustained in exchange transactions and promising to make good the loss in some other transactions. The 1st plaintiff on the receipt of Ex. F sent to the defendant the following-telegram (Ex. F-l) on 10th June, 1920:
Deal with money-lending; don't have other transactions, see letter
and wrote Ex. F (2) on 12th June, 1920, charging the defendant with having debited them with losses sustained by him in exchange transactions on his own private account and saying that if he had done the business for the firm he would have taken their permission before embarking upon speculation in the exchange market. The defendant continued to manage the plaintiffs' business at Singapore for more than a year after the date of Ex. F (2).
5. The plaintiffs appointed another agent one Adaikalavan Chetty in the place of the defendant and wrote to the defendant Ex. D-5 on 27th November, 1921 and informed him of their having sent Adaikalavan Chetty to take charge of the business, that he should get the accounts prepared and closed and that he should come away without delay. The following passage in the letter is important:
As soon as he arrives, get the accounts prepared and closed and come without delay.... If there is something more to be collected, better get it collected and make out a copy of the items that can be copied and come away after getting the accounts closed. If in both the said firms any items are not collected and will have to be realised slowly, have them entered as old accounts and come away... Please also intimate to me about the arrival of Adaikalavan Chetty there.
6. From this letter it is clear that the plaintiffs appointed a new agent and asked the defendant to come away from Singapore; in other words, they asked him to cease to be their agent at Singapore as soon as Adaikalavan Chetty went there and took charge of the business. The defendant did not hand over charge to Adaikalavan Chetty and insisted upon the accounts being settled in Singapore contrary to the custom prevailing among the Chettis and contrary to the terms of Ex. K and insisted upon his being given a release deed in respect of any claim that the plaintiffs might make in respect of any of the transactions conducted by him as agent. Ex. C written by Adaikalavan Chetty on 30th December, 1921, to the plaintiffs shows the attitude of the defendant at the time. He writes:
When Muthiah Chetti was asked to prepare and give accounts in the order of dates, he said : 'I cannot prepare and give account. I shall prepare the ayinthogai (balance sheet) as matters stand and give the same. I should be relieved (of my duties) here and my salary chit should be given and the account settled.
7. When he was told that it was not the proper course and that he might prepare and give the accounts as matters stood and that the accounts might be settled on going to the headquarters as usual he said definitely:
It cannot be done. My account should be settled here alone and I should be relieved of my duties.
8. Adaikalavan Chetty appealed to the defendant not to be obstinate and asked the other Nattukottai Chetties to persuade him to hand over charge of the business to him with the account books, etc. The friends of the defendant and the plaintiffs tried to induce the former to hand over the business to Adaikalavan Chetty and to have the accounts settled at the Chetties' place in Madura. The plaintiffs wrote Ex. D-2 on 5th January, 1922, complaining of his attitude as being 'unusual, novel, indecent and improper' and asking him without allowing the business to get spoiled to write up and deliver the accounts and to let them know about it. The defendant wrote Ex. E-l on 19th January, 1922, to the plaintiffs in which he stated:
You should send my salary chit to Adaikalavan Chetty who has come here for the new account together with a letter signed by yourself and P. L. Avergal and directing that the accounts, documents, etc., of our shop and A. R. K. R. shop should be taken charge of in accordance with the balance sheet, my salary account, etc., looked into and a receipt granted (to me) so as not to have any further claim upon me.
9. The plaintiffs wrote Ex. D-3 on 1st February, 1922, complaining of his not having handed over the account books to Adaikalavan Chetty who had been waiting there from 25th Karthigai and informing him that as requested by him they had sent the salary chit to Adaikalavan Chetty and that he should after getting the salary chit deliver to Adaikalavan Chetty the new account, the accounts relating to the firm as well as the cash items, documents, box, packets, etc., and also execute the necessary power, assignment and all other documents without any further delay. The defendant insisted upon a release deed being executed in his favour before he could hand over the charge to Adaikalavan Chetty. From Exs. D, C and E series it is clear that the plaintiffs found themselves in as helpless state and reluctantly consented to do as the defendant wished. Ex. III written by the 2nd plaintiff to the 1st plaintiff on 19th March, 1922, shows the state of the mind of the plaintiffs. Adaikalavan Chetty strongly advised the plaintiffs to consent to give a release deed to the defendant as otherwise the plaintiffs might sustain heavy loss owing to stoppage of business and that if so advised they might take steps against him afterwards. Ex. IV was executed by Adaikalavan Chetty in favour of the defendant on 21st April, 1922, whereupon the defendant handed over the account books, cash, etc., to Adaikalavan Chetty.
10. The question is do the above facts make out that the defendant got the release, Ex. IV from the plaintiffs under circumstances which amount to coercion. He was in possession of the documents, account books and cash belonging to the plaintiffs. After he was asked to hand over charge to Adaikalavan Chetty he had no right to withhold from the plaintiffs' new agent their property. Adaikalavan Chetty remained there for about 4 months before he could get possession of the account books, etc., in order to carry on the business. The stoppage of the business was likely to cause heavy loss to the plaintiffs. Coercion is defined in Section 15 of the Contract Act, as 'committing, or threatening to commit, any act forbidden by the Indian Penal Code or the unlawful detaining, or threatening to detain, any property to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement'. The defendant, having withheld from the plaintiffs their property which they asked to hand over to Adaikalavan Chetty, has brought himself within Section 15 of the Contract Act, and the release deed he obtained under the circumstances is voidable at the instance of the plaintiffs. We therefore agree with the Lower Court in finding the first issue against the defendant.
11. It is unnecessary in this view to consider now the charges made by the plaintiffs against the defendant of having debited the loss sustained in his own private transactions against the plaintiffs in their accounts and of having lent large sums of money to impecunious customers. We may, however, observe in passing that from the correspondence it is not at all clear that the plaintiffs instructed the defendant not to dabble in exchange speculation. On the other hand the letters go to show that some of the Chetty firms including the plaintiffs were speculating in exchange transactions and the defendant also did business in dollars on behalf of the plaintiffs. As regards the loan to one Tirupathi Chetty it is not suggested that the defendant acted with a corrupt motive; on the other hand it is clear from the evidence that he lost about Rs. 18,000 the amount lent by him to Tirupathi Chetty.
12. Issue II.--Though the defendant in para. 31 of his written statement uses the word 'estoppel', what is pleaded is not an estoppel in the ordinary sense, but ratification of the arrangement under Ex. IV. No doubt, even a ratification may amount to an estoppel; but it would be more correct to put the question in the following form : whether the plaintiffs ratified the arrangement under Ex. IV; and, if so, whether they could go behind it. After the execution of Ex. IV the account books, cash on hand and the vouchers were handed over to Adaikalavan ' Chetty by the defendant and he executed a power-of-attorney in Adaikalavan Chetty's favour so as to enable him to collect the loans outstanding on mortgages. Adaikalavan Chetty died in August and the plaintiffs sent a third agent named Arunachalam Chetty. It was necessary that Arunachalam should get a fresh power-of-attorney from the defendant in order to realise the loans outstanding on mortgages. Ex. O was written by the solicitors of the plaintiffs to Muthiah Chetti on 5th April, 1923, in which they informed him of the death of Adaikalavan Chetty in August, 1922 and asked him whether he was 'willing to execute a fresh power-of-attorney in favour of the present agent to enable him to deal with the mortgages and any other matters that may arise'. The defendant's solicitors wrote Ex. Q on 13th April that their client had no objection to executing transfers of the mortgages in the names of the proprietors meaning the plaintiffs and that before agreeing to do so he required the plaintiffs to personally execute a release deed in his favour and that he was not satisfied with the release executed by Adaikalavan Chetty in his favour. The plaintiffs' solicitors answered Ex. Q on 14th April that everything had been done at the defendant's request and there was no reason why he should require a fresh release and that their clients were unwilling to accede to that request. The defendant's solicitors wrote to say that their client regretted that he could not see his way to execute a transfer of the mortgages unless the proprietors personally executed a release in his favour. An originating summons was then taken out by the plaintiffs' solicitors for a vesting order in respect of the mortgages standing in the name of the defendant, and the vesting order Ex. V was made by the Supreme Court of the Straits Settlements.
13. A difficulty arose as regards the mortgage property within the State of Johore as according to the law of Johore a mere vesting order would not entitle the plaintiffs to sue on the mortgages obtained in the name of their agent, the defendant. The plaintiffs' solicitors wrote to the defendant's solicitors on 15th August, 1923:
We find that there are certain difficulties in connection with the making of a vesting order in Johore and that it would therefore be necessary to sue for a declaration and an order to execute the transfer.
14. The defendant's solicitors replied:
that in view of the position he (the defendant) has taken up with regard to the Singapore property he regrets he is unable to execute transfers of the mortgage properties in Johore, and that he will not oppose any order in the action if they undertake not to ask for any costs.
15. The defendant seems to have changed his mind as is clear from the letter of the plaintiffs' solicitors to his solicitors dated 24th September, 1923. He seems to have insisted that the counsel for the plaintiffs should make a statement that the plaintiffs ratified the arrangement under Ex. IV before he could undertake not to contest the claim and to facilitate the passing of a decree in plaintiffs' favour. As a mere vesting order on originating summons would not satisfy the requirements of the law obtaining in Johore the plaintiffs' solicitors filed Suit No. 817 of 1923 in the Supreme Court of the Straits Settlements at Singapore praying
for an order directing the defendant to execute in the name of Moona Etana Toona Kana Roona Ahana Roona Moothiah Chetty in manner conforming with the law in Johore such memoranda or other documents as may be necessary according to the laws of Johore to transfer each of the said charges to the plaintiffs or their present agent Moona Etana Toona Kana Ahana Roona Arunachalam Chetty, son of Annamalai Chetty.
16. The defendant through his solicitors agreed to accept service of notice and the stipulation was that the draft judgment should be approved by the defendant's solicitors. In accordance with the arrangement the draft judgment was submitted to the defendant's solicitors as appears from the correspondence printed on page 102 of the printed papers. The defendant's solicitors made certain alterations and the plaintiffs' solicitors approved of the alterations. This was on 28th September, 1923. On 10th October, 1923 they sent the transfers in duplicate to the defendant's solicitors for his signature. The plaintiffs' counsel ratified the arrangement under Ex. IV as appears from the order of the Supreme Court of the Straits Settlements of Singapore, dated the 2nd October, 1923. The relevant passage is as follows:
and the plaintiffs by their counsel acknowledging that the said release was and is in full force and of full effect and by consent, it is this day adjudged and ordered by consent, that the defendant do execute in the name of Moona Etana Toona Kana Roona Ahana Roona Muthiah Chetty.
17. The question is whether this statement amounts to a ratification of Ex. IV by the plaintiffs and whether the plaintiffs are bound by the statement of their counsel that the release was and is in full force and of full effect. The defendant knew or had reason to believe that the plaintiffs would challenge the validity of Ex. IV and he evidently consulted his solicitors as to the best course to be adopted and on their advice he insisted upon a second release deed from the plaintiffs failing which upon a clear statement that the plaintiffs ratified the arrangement evidenced by Ex. IV. It is clear from the correspondence that it was finally arranged that the defendant should not contest the suit and that the plaintiffs' counsel should make a statement ratifying the release deed Ex. IV and that the draft judgment should be approved by the defendant's solicitors and thereupon the plaintiffs' counsel made the statement above extracted.
18. It is contended by Mr. Krishnaswami Aiyar for the plaintiffs that the counsel had no authority to make the statement that 'the plaintiffs acknowledge that the said release was and is in full force and of full effect' and that it is for the defendant to show that the counsel was specially authorised to make it. The Subordinate Judge has dealt with this point in an unsatisfactory manner. He observes in para. 60:
From the correspondence to which I have referred above Ex. O series, it was seen that first defendant wanted to have Ex. IV established by the execution of a fresh release deed by the principals in person. That was not agreed to and the 1st defendant, I think, has been able to get reference made to the release deed somehow
and he holds that the admission contained in the judgment does not affect the plaintiffs as an affirmance of the transaction of release.
19. That the plaintiffs' counsel made the statement contained in the order of the Supreme Court cannot be seriously disputed. The only question is whether he had authority to bind his clients by the statement he made. Mr. Krishnaswami Aiyar contended on the authority of Digbijoy Roy v. Shaikh Ata Rahman 17 CWN 156, Nundo Lal Bose v. Nistarini Dassi I.L.R. (1900) C 428 and Swinfen v. Swinfen (1856) 1 CBNS 364 : 140 ER 150, that the counsel had no authority to make the statement and that the statement would not bind the plaintiffs. In Dig-bijoy Roy v. Shaikh Ata Rahman 17 CWN 156 it was held that although a pleader has no power to compromise a suit unless he is specially authorised in that behalf he can bind his client by an admission of a question of fact provided that question of fact falls within the scope of the suit in which he has been retained. In Nundo Lal Bose v. Nistarini Dassi I.L.R. (1900) C 428 the counsel retained in one case consented to a compromise which affected other suits in which he was not retained. The compromise was objected to and before the decree was drawn up one of the parties applied for an order to stay the drawing up of the compromise decree and to have the alleged compromise set aside and the suit retried. Stanley, J., dismissed the application; and on appeal Maclean, C.J., and two other Judges allowed the application. The learned Chief justice observes at page 438:
There cannot, I think, be any reasonable doubt at the present day that counsel possesses a. general authority--an apparent authority which must be taken to continue until notice be given to the other side by the client that it has been determined--to settle and compromise the suit in which he is actually retained as counsel, and in the exercise of his discretion to do that which he considers best for the interest of his client in the conduct of the particular case in which he is so retained. Here, however, the compromise extended to collateral matters, to matters quite outside the scope of the particular case in which Mr. Mitter way retained as counsel, and, in order to bind the client, it must be shown that Mr. Mitter had, from his client, a special authority to compromise, and compromise upon the definite terms which are set up by the present respondents
and refers to Strauss v. Francis (1866) LR 1 QB 379, Swinfen v. Swinfen (1856) 1 CBNS 364 : 140 ER 150 and Matthews v. Munster (1877) LR 20 QBD 141 for the authority of a counsel to compromise on behalf of his client. This case is distinguishable on the facts. Here, there was no settlement of collateral matters. It was necessary to prove to the Court that the mortgages which were standing in the name of the defendant were taken for the benefit of the plaintiffs, that the defendant was a trustee of the plaintiffs and that the agency having terminated he was bound to make over the mortgage deeds to the plaintiffs. It cannot therefore be said that the ratification of the release deed, Ex. IV was a matter collateral to the subject-matter of the suit in which the statement ratifying the deed was made. The defendant insisted upon his being given a full discharge as regards the agency and he was not satisfied with the release executed by the agent of the plaintiffs, and it was necessary for obtaining the order prayed for to make out that the defendant . had ceased to be the plaintiffs' agent; and if for obtaining the relief therein prayed the statement insisted upon by the defendant with reference to the agency during the currency of which the mortgage deeds were obtained is made, it cannot be said that the counsel settled a matter collateral to the suit. In Swinfen v. Swinfen (1856) l CBNS 364 : 140 ER 150 the power of a counsel for compromising matters in dispute was considered at length. These are some observations of Crowder, J., which may be taken as lending support to Mr. Krishnaswami Aiyar's contention. He observes at p. 461:
I am not aware that any counsel engaged in making terms ever supposed for a moment that his opponent had power to bind his client without express instruction.
20. There are a number of cases which take a liberal view of the authority of a counsel to compromise suits in which he is engaged. In Elworthy v. Bird (1824) Tamlyn 38 : 48 ER 16 Sir John Leach, M. R., observes:
In the absence of evidence a Court will conclude that he had authority, for it is not to be presumed that counsel would enter into an agreement without authority. There is in this case evidence on both sides, but after duly considering it I come to the conclusion that counsel had authority which would bind his client.
21. In B.N. Sen & Bros. v. Chuni Lal Dutt & Co. I.L.R. (1923) C 385 the plaintiffs instituted a suit for the recovery of the price of goods sold and delivered to the defendants and for damages in respect of goods, of which it was alleged the defendants had refused to take delivery, making a total claim of Rs. 25,508. The defendants admitted that there was due from them to the plaintiffs a sum of Rs. 12,611 in respect of goods sold and delivered but claimed that there was due to them from the plaintiffs a sum of Rs. 58,000 in respect of various transactions between the parties. At the hearing of the suit the defendants' counsel in the absence of the defendants and without their express authority assigned a decree in favour of the plaintiffs for Rs. 22,117, without prejudice to the right of the defendants, if any, to proceed with their claim in their own suit. It was admitted that the attorney for the defendants who was present in Court never asked the learned Counsel to settle the suit, nor did he put any limitation on the authority or discretion of the learned Counsel in any respect to compromise the suit. Sanderson, C. J, and Richardson, J., held that the settlement was a matter within the apparent general authority of the counsel and was binding on the defendants. The following observation of the learned Chief Justice may well be applied to the present case:
In my judgment there is no evidence in this case that there was any limitation placed upon the authority of the learned Counsel.... I have a strong suspicion that the course which the learned Counsel took on behalf of the defendants was a wise one, having regard to the nature of the suit and the admissions which the defendants made in the suit. At all events I am satisfied that the settlement was made within the authority of the learned Counsel.
22. There are numerous cases, English and Indian, on the question of a counsel's power to make admissions in, or to refer to arbitration or compromise, suits in which he is instructed. A mere reference to the following cases would be sufficient as it is neither profitable nor necessary to consider them all in detail, Bhut Nasth Sircar v. Ram Lall Sircar (1900) 6 CWN 82, Swinfen v Lord Chelmsford (1859) F & F 619 : 29 LJ Ex. 382, Chambers v. Mason (1858) 5 CBNS 59, Strauss v. Francis (1866) LR 1 QB 379, Dwar Bux Sirkar v. Fatik Jali (1898) 3 CWN 222 and Berry v. Mullen (1871) 5 IR 368 goes the length of laying down that
the compromise made by a solicitor or counsel is binding on the client though it may have been made against his express directions unless the client has revoked the authority of the counsel or solicitor to compromise on his behalf and communicated the revocation to the other side. This must be done before the decree or order is sealed.
23. The following propositions are deducible from the authorities:
(1) A counsel has authority to make admissions in Court on behalf of his client on matters of fact relevant to the issues in the case in which he is engaged. Admissions on questions of law would not bind the client.
(2) A counsel has authority to confess judgment, withdraw or compromise, or refer to arbitration the suit in which he is instructed if his doing so is for his client's advantage or benefit even though he has no express authority from his client.
(3) A counsel cannot without express authority agree to compromise or refer to arbitration matters unconnected with the subject-matter of the suit in which he is instructed
(4) Where in the course of a suit a counsel makes an admission as to a collateral matter or gives up a doubtful claim which is not a subject-matter of the suit, there is a presumption that the counsel acts under instructions if the admission or the giving up of the doubtful claim is for the benefit of the client.
(5) It is a question of fact in each case whether the counsel acts under instructions when he compromises or refers to arbitration matters not involved in the suit and the Court on a consideration of the probabilities and the circumstances of the case can find that the counsel acted on instructions even though there is no direct evidence on the point.
(6)A counsel has no power to make an admission in, or compromise or refer to arbitration, a suit if he is instructed not to do so, without express authority from his client.
24. The plaintiffs were anxious to have the mortgage deeds in order to enforce the right under them without delay as the fall in the price of rubber made the securities doubtful and they probably acted upon the principle of the apothegm 'a bird in the hand is worth two in the bush' and consented to ratify the release deed and thereby secure the mortgage deeds without delay rather than pursue a doubtful remedy against the defendant. All the circumstances of the case and the evidence on record, the non-examination by the plaintiffs of their agent, Arunachalam, who instructed the counsel in the proceedings before the Supreme Court of Straits Settlements, the absence of any statement in the 2nd plaintiff's deposition that he or his brother, the 1st plaintiff, did not empower Arunachalam to make the statement as to ratification contained in the judgment of the Supreme Court of Singapore, the urgency with which the mortgage deeds were required by the plaintiffs and the speedy manner in which the suit was decreed in plaintiffs' favour owing to the defendant's consent to accept service and remain ex parte and the readiness with which the defendant executed the transfer deed within a fortnight of the approval of the draft judgment by his solicitors lead to the irresistible conclusion that the plaintiffs' counsel was specially authorised to make the statement that the plaintiffs acknowledged that the said release was and is in full force and of full effect. Even if the counsel was not specially instructed, to make the statement, we hold that the circumstances of the case and the evidence on record fully justify the conclusion that he acted within his authority in making the above statement. A decree has been passed embodying the statement by the Supreme Court of Singapore and in pursuance of that decree the defendant signed the transfer deeds. But for the statement the plaintiffs would not have got speedily, and in the manner they got, what they wanted. We have therefore no hesitation in holding that the plaintiffs by their counsel ratified the arrangement evidenced by Ex. TV and they cannot now sue to set it aside.
25. In the result, the appeal is allowed and the plaintiffs' suit dismissed. But considering the conduct of the defendant we think he ought not to get his costs. We therefore direct that each party do bear his costs throughout.
26. I agree and have nothing useful to add.