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K. Appa Rao Vs. Gopal Doss and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported inAIR1946Mad42; (1945)2MLJ363
AppellantK. Appa Rao
RespondentGopal Doss and anr.
Cases ReferredChadburn v. Moore
Excerpt:
- - this offer holds good for three hours (i......given by him to the second defendant because by the 5th november, 1941, he himself had agreed to sell the property to another person for rs. 32,000. in a letter written on the 8th november, 1941, through an advocate, to the second defendant's advocate the first defendant stated that he had cancelled the letter of authority given to the second defendant because the latter had stated that the. property was to be purchased by a charitable institution and had promised to get a minimum advance of rs. 1,000. we can only regard this letter as an unscrupulous attempt to avoid the contract which the second defendant had entered into with the plaintiff.7. in holding that the letter of the 22nd october, 1941, signed by the first defendant and delivered to the second defendant, did not authorise.....
Judgment:

Alfred Henry Lionel Leach, C.J.

1. The question in this appeal is whether the second defendant was authorised to sell a house owned by the first defendant. The plaintiff, who is the appellant, sued on the original side of this Court for damages for the breach of a contract to sell to him a house. He says that the first defendant gave full authority to the second defendant to sell the house on his behalf and that the second defendant entered into a contract with him within the scope of this authority. The first defendant refused to honour the contract, and sold the property to a third party for the sum of Rs. 32,000. The suit was for recovery of damages in the sum of Rs. 5,000 being the difference between the price at which the plaintiff agreed to buy the property and its true value, as shown by the sale to the third party. The plaintiff asked for a decree against both the defendants for a sum of Rs. 5,114. It is now admitted that the figure should only be Rs. 5,000. The learned trial Judge (Chandrasekhara Aiyar, J.) dismissed the suit against both the defendants on the ground that the second defendant had not authority to contract with the plaintiff. We find ourselves unable to share the opinion of the learned Judge.

2. On the 22nd October, 1941, the first defendant wrote this letter to the second defendant:

I hereby agree to give you brokerage of two per cent, that is Rs. 540 for negotiating and completing the sale of my bungalow No. 3, Vasu Street, Poonamallee High Road, Kilpauk, Madras, the same to be paid only on completing the transaction and as soon as the sale deed is registered provided the offer is for Rs. 27,000 nett, that is, all expenses to be borne by the purchaser. Time for this is up to 6th November, 1941, after which date this letter will be null and void.

3. There is here clear authority given to the second defendant to negotiate and complete the sale of the property on behalf of the first defendant provided that (1) the contract of sale was entered into by the 6th November, 1941 (2) that the purchaser bore all the expenses of the sale, and (3) that the vendor received Rs. 27,000 without any deduction.

4. On the 5th November, 1941, the second defendant wrote to the plaintiff in these terms:

As authorised by the owners I offer your firm the abovesaid property for Rs. 27,000 nett, all expenses to be borne by the purchaser. This offer holds good for three hours (i.e. till 12 a.m. to-day), If you accept please send some advance. I herewith enclose my authorisation letter.

5. Within the three hours the plaintiff replied:

We accept your offer of No. 3, Vasu Street, for Rs. 27,000 nett, and on terms indicated in your authorisation letter and herewith give you a cheque for Rs. 101 as advance. Please kindly have the documents sent for inspection and drafting the sale deed.

6. It is obvious that the first defendant was determined to repudiate the authority given by him to the second defendant because by the 5th November, 1941, he himself had agreed to sell the property to another person for Rs. 32,000. In a letter written on the 8th November, 1941, through an advocate, to the second defendant's advocate the first defendant stated that he had cancelled the letter of authority given to the second defendant because the latter had stated that the. property was to be purchased by a charitable institution and had promised to get a minimum advance of Rs. 1,000. We can only regard this letter as an unscrupulous attempt to avoid the contract which the second defendant had entered into with the plaintiff.

7. In holding that the letter of the 22nd October, 1941, signed by the first defendant and delivered to the second defendant, did not authorise the latter to complete the sale Chandrasekhara Aiyar, J., relied on Hamer v. Sharp (1874) 19 Eq. 108 and Chadburn v. Moore (1892) 61 L.J. (Ch.) 674. The learned Judge did not regard Rosenbaum v. Belson (1900) 2 Ch. 267 as being in point. Here we respectfully differ from the learned Judge. We consider that the case does fall within the judgment of Buckley, J., (as he then was) in Rosenbaum v. Belson (1900) 2 Ch. 267. As we have pointed out, the authority in the present case was not to negotiate and refer back but to negotiate and complete the contract, provided that the terms entered into were those stated in the letter.

8. In Rosenbaum v. Belson (1900) 2 Ch. 267, the authority to the agent was couched in these terms:

Please sell for me my houses 75, 77, 79, 79-A, 81, 83 Wellesley Street, Stepney Green and I agree to pay you by way of commission the sum of 2 1/2 per cent, on the purchase price accepted.'. It was held that this gave authority to the agent to make a binding contract, including an authority to sign an agreement for sale. In so holding Buckley, J., examined the judgment of Hall, V.C. in Hamer v. Sharp (1874) 19 Eq. 108, where the learned Vice Chancellor said:

The question is whether, when an owner of an estate puts it into the hands of an estate agent for sale, stating a price for and giving particulars of the property to enable him to inform intending purchasers, but giving no instructions as to the absolute disposal, and none as to the title of the property, and mentioning none of those special stipulations which it might be proper to insert in conditions in reference to the title, that is sufficient authority to the agent to sign a contract for the sale of the property for the price stated in the instructions, without making any provision whatsoever as to title.

9. It is this passage which impressed Chandrasekhara Aiyar, J. But it is important to remember, as was pointed out by Buckley, J., that in Hamer v. Sharp (1874) 19 Eq. 108, the authority was not to sell, but to find a purchaser and that there is a substantial difference between the two expressions. In the words of Buckley, J., ' authorising a man to sell means an authority to conclude a sale; authorising him to find a purchaser means less than that--it means to find a man willing to become a purchaser, not to find him and also make him a purchaser.

10. In the judgment under appeal reference was made to Chadburn v. Moore (1892) 61 L.J. (Ch.) 674, because Kekewich, J., had pointed out that an agent for sale of real estate must be more formally constituted than a seller of stocks and shares and securities of a similar nature. Each case must, of course, depend on the nature of the authority, but when an agent is authorised to negotiate and complete a sale for a specified price within a particular time, it gives him authority to enter into a contract for sale, whether it be for immoveable or moveable property. The second defendant was so authorised and the contract which he entered into fell within the terms of his authority.

11. The appeal must be allowed. There will be a decree against the first defendant for Rs. 5,000 with interest at the Court rate from the date of the judgment of Chandrasekhara Aiyar, J., namely the 16th November, 1944. The plaintiff will have his costs here and below against the first defendant who has not contested the appeal. It will be dismissed with costs against the second defendant.


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