Richard Garth, C.J.
1. The questions which have been raised on appeal, and which we have to determine, are: 1st, whether the transaction entered into between Messrs. Nicholls & Co., and the defendant was of such a nature as was justified by the power-of-attorney? and 2ndly, whether it was entered into for and on behalf, and in the name of, Major Eckford within the meaning of the power
2. I think that both these questions should be answered in the negative.
3. It seems to me that the transaction in its nature was neither a sale nor purchase of the shares in question. It was either an actual loan, or a transaction in the nature of a loan, for the purpose of raising money.
4. This appears, I think, very clearly from the evidence of Ramrutton Danye, the broker, who acted for Messrs. Nicholls on the one hand, and of Daidraj Argurwallah, the gomashta of the defendant, on the other. Ramrutton, although necessarily called by the plaintiff, was by no means a favourable witness to him. His object evidently was, and naturally would be, to make out that the transaction was one which Nicholls & Co. had a right under the power-of-attorney to carry out for the plaintiff. He was himself the broker employed by Nicholls & Co., and had seen the power-of-attorney before he entered upon the transaction. He says that, on several previous occasions he had obtained advances of money for the plaintiff upon transactions very similar to the present one; and it is probable that the form in which this transaction was carried out was only somewhat different from those which preceded it, in consequence of Ramrutton having observed that the power-of-attorney did not authorize a loan.
5. Ramrutton and Daidraj both say, that the sale and purchase of the shares was intended to be one transaction. Ramrutton expressly says, that, whatever the defendant might have offered him for the shares, he had no authority to sell them, except upon the terms of re-purchase. He had no authority, he says, to make an out-and-out sale. And it is obvious, on looking closely into the transaction, that this must have been so. The defendant was not a dealer in shares. He was simply a money-lender, and was only in the habit of taking shares by way of security. He knew nothing, nor did Daidraj, of the value of these shares, and he evidently took the statement of their value from Ramrutton, with reference, not to their price in the market, but to the sum which he was to receive on the re-purchase.
6. The price in the market, so far as we can judge from the evidence, was Rs. 250 or thereabouts,--certainly not less than that sum; and it is not likely, under these circumstances, that Ramrutton would have sold the shares to the defendant at Rs. 200, except upon the terms of re-purchase; or that the defendant would have sold them back again, unless he had been obliged to do so, at Rs. 205. The additional price of 5 rupees upon the re-purchase exactly represented interest at 15 per cent, per annum. I think it clear, therefore, that the transaction was not a bona fide sale or purchase, properly so called, but merely a device by Nicholls & Co. to obtain a temporary advance of money by a so-called sale and re-purchase.
7. I confess, I strongly suspect, from the evidence of Daidraj and Bhimraj, that the transaction was not entered in their books in the same way as previous transactions, because they had beep informed by Ramrutton that, for some reason or other, the transaction was not to be called a loan; and it is admitted that this was the first purchase which the defendant has ever made.
8. The defendant himself dared not present himself in the witness box, and I strongly suspect, that he or his gomashtas knew more about the fraud that was being practised upon the plaintiff than could be extracted from them in cross-examination.
9. Taking the transaction, however, as it is represented by the witnesses on either side, I consider that it was certainly not a sale or purchase or transfer of shares within the meaning of the power-of-attorney.
10. Thus far I have assumed that the transaction was one entered into for and on behalf of the plaintiff. But the next question which we have to determine should also be answered, in my opinion, against the defendant. It was upon this point that Mr. Justice White decided the case in the Court below. He considered that whatever the real nature of the transaction was, it was not authorized by the power-of-attorney, because it was not carried out for or on behalf or in the name of the plaintiff.
11. It is clear from the evidence on both sides, that, at the time when the bargain was made, the name of the plaintiff was never mentioned, and the defendant's own case is, and his witnesses say distinctly, that they never knew the plaintiff in the transaction. From beginning to end they considered they were dealing with Nicholls & Co., and although they received the transfers, they did not look at them, and they were never aware, until after the insolvency, that the plaintiff's name appeared on the transfers. So far, therefore, as the defence was concerned, it is clear that the bargain was not made with the plaintiff; and it is equally clear that, so far as the partners of Nicholls were concerned, they were dealing for themselves and for their own benefit, and not for that of the plaintiff.
12. The transaction was carried out by bought and sold notes, which are as follows: (reads bought and sold notes).
13. Now it is an admitted fact in the case, that the firm of Nicholls consisted of four persons, Mr. Thompson and Mr. Nicholls to whom the power-of-attorney was given, and Mr. Locke and Mr. Hawes who had nothing to do with it; and therefore the contract was made with the defendant by four persons to whom the plaintiff had given no power-of-attorney, and whom he had not authorized to make any such bargain.
14. So far as I can see, if the plaintiff had chanced to hear of the transaction, and had applied to the defendant to re-sell to him the shares at Rs. 205 per share, on the day when the re-sale was to take place, the defendant might have refused to make the re-transfer upon the ground that the bargain was not made for the plaintiff' or by his authority; and on the other hand, if the defendant had applied to the plaintiff to re-purchase at Rs. 205, be would have had no power to compel the re-purchase.
15. It is true, that the transfers of the shares were in the plaintiff's name, but those transfers were made in a transaction which was clearly unauthorized by the power, and which was not made for or on behalf or in the name of the plaintiff.
16. One very fair test, as it seems to me, whether the plaintiff ought to be bound by the transaction, is this. If the defendant had looked at the transfers, as he ought to have done, and had seen that they were transfers made of the Muir shares and on the plaintiff's behalf, and if he had then asked to see the power-of-attorney, ought he not, and should he not, at once as a reasonable man have seen, on looking at the power, that the transaction into which he was entering was one which the power-of-attorney did not warrant.
17. I think that this appeal should be dismissed with costs on scale 2.
18. I agree in the conclusion at which the Chief Justice has arrived. I have had the advantage of seeing his judgment, but I prefer to rest my own decision upon somewhat narrower grounds than those relied upon in that judgment.
19. The plaintiff gave to two members of the firm of Nicholls & Co. a joint and several power-of-attorney, authorizing them, amongst other things, 'for me, and in my name, and on my behalf, to purchase, sell, assign, and transfer shares in any public company.' The firm of Nicholls & Co. consisted of four parties.
20. The attorneys or one of them, or Nicholls & Co., entered into a contract with the defendant, in the name of Nicholls & Co., embodied in bought and sold notes, whereby Nicholls & Co. agreed to sell to the defendant a certain number of shares in a company at a named price, and the defendant agreed to sell back a like number of shares in the same company at a future day to Nicholls & Co., at a enhanced price, the whole transaction being one transaction. In pursuance of this contract, one of the attorneys, professing to act as attorney, transferred the shares of the plaintiff to the defendant and received the agreed price.
21. I think the defendant took no title to the shares for two reasons.
First.--A power to sell is, I think, only a power to sell in the ordinary course of business,--that is to say, for a money-price. But the sale here was partly for a money-price and partly in consideration of the sale of like shares at a future day. On this ground, I think, the transaction was not within the power.
Secondly.--Assuming that, after a contract had been made between Nicholls & Co. and the defendant, for the sale of shares, the plaintiff's attorneys might properly sell his shares in satisfaction of that contract (and if there were no other objection in the way I am inclined to think they might), still it was the duty of the defendant, when he found that the shares sold to him were the plaintiff's shares and were transferred only under a power-of-attorney executed by him, to see that he paid the price to the plaintiff or his attorneys. But the price consisted in part of money, in part of a contract to re-sell similar shares, and that contract was not with the plaintiff nor with his attorneys, but with Nicholls & Co. It was, therefore, a contract of which the plaintiff could not, so far as I can see, claim the benefit in any way.