Back
1950 Supreme(Raj) 28
Supreme Court
Kania C.J., Fazl Ali, Patan-jali Sastri, Mahajan and Das, JJ.
Abdulla Ahmed - Appellant
Versus
Animendra Kissen Mitter - Respondents
Civil Appeal No. 44 of 1949
Decided On : March 14, 1950
Mr. M.C. Setal-vad, Senior Advocate, Supreme Court (Mr. A.K. Sen, Advocate, Supreme Court, with him, for Appellant; Mr. B. Sen, Advocate, Supreme Court, for Respondent
Headnote:Contract Act, Ss. 188 and 219—Agents authority to bind principal.Contract Act, S. 188—Estate agent— Authority to complete sale.Contract Act, 8. 182—Commission agent, contract with necessity to ascertain precise terms.Deed—Construction—Extrinsic evidence to determine effect—Evidence Act S. 92.Deed—Construction — Reference to interpretation of another document.
"I do hereby authorise you to negotiate the sale of my property, free from all encumbrances at a price not less than Rs. 1,00,000. 1 shall make out a good title to the property. If you succeed in securing a buyer for Rs. 1,00,000 1 shall pay you Rs. 1,000 as your remuneration. If the price exceeds Rs. 1,05,000 and does not exceed Rs. 1,10,000 I shall pay you the whole of the excess over Rs. 1,05,000 in addition to your remuneration of Rs. 1,000 as stated above. In case you can secure a buyer at a price exceeding Rs. 1,10,000 I shall pay you 25% of the excess amount over Rs. 1,10,000 in addition to Rs. 6,000 as stated above. This authority will remain in force for one month from date."
The respondent, by a letter, authorised the appellant to arrange the sale of certain property. The letter ran as follows: —
The appellant found two persons who were ready and willing to purchase the property for Rs. 1,10,000 and purporting to act under the authority he negotiated the contract with them and communicated the same to the respondent. Thereafter, however the parties ignored the appellant and the respondent executed a conveyance in favour of the same parties, directly, for Rs. 1,05,000.
Held (Per Patanjali Sastri J.) that the letter could not be read as authorising the appellant to conclude a binding contract with the purchaser on behalf of the respondent. But the appellant having secured a potential buyer who made a firm offer to buy for Rs. 1,10,000 had done everything he was required by the respondent to do and acquired a right to the payment of the commission on the basis of that price, subject only to the condition that the buyer should complete the transaction of purchase and sale. That condition having been fulfilled the appellants right to commission on that basis became absolute and could not be affected by the circumstance that the respondent "for some reason" of his own sold the property at a lower price. (paras 7 & 11).
Held (Per Mahajan J.) that the letter authorised the appellant to enter into a binding contract on behalf of the respondent and he entered into such a contract and thereby earned the full commission on Rs. 1,10,000/-. But even if this construction of the letter was not correct, the appellant earned his commission in full inasmuch as he had secured a buyer who was ready, able and willing to buy the property for Rs. 1,10,000. (paras 38 and 44)
House or estate agent is in a different position from a broker at the stock exchange owing to the peculiarities of the property with which he is to deal,which does not pass by a simple instrument as stock shares do but has to be transferred after investigation of title as to which various special stipulations, which might be of particular concern to the owner may have to be inserted in a concluded contract: relating to such property. The parties, therefore, do not ordinarily contemplate that agent should have the authority to complete the transaction in such cases. (Para 8)
Per Mahajan J. Contracts with commission agents do not follow a single pattern and the primary necessity in such instance is to ascertain with precision what are the express terms of the particular contract under discussion. (para 22)
Per Mahajan J. Extrinsic evidence to determine the effect of an instrument is permissible where there remains a doubt as to its true meaning. Evidence of the acts done under it is a guide to the intention of the parties in such a case particularly when acts are done shortly after the date of the instrument. (para 23)
Per Mahajan J. Unless the language of two documents is identical, an interpretation, placed on one document is no authority for the proposition that a document differently drafted, though using partially similar language, should be similarly interpreted. (para 25)
2. The appellant who is carrying on business as an estate broker in Calcutta was employed by the respondent on the terms mentioned in a commission letter dated the 5th May, 1943, to negotiate the sale" of premises No. 27, Amratolla Street, Calcutta belonging to him. In pursuance of this contract the appellant found two persons who were ready and willing to purchase the property for Rs 1,10,000, and by letters exchanged with them on 2nd June, 1943, he purported to conclude a contract for the sale of the property and communicated the same to the respondent by a letter of even date. The respondent, however, entered into an agreement on 9th June, 1943, with a nominee of the said persons for the sale of the property for Rs. 1,05,000 and eventually executed a conveyance in their favour on 8th December, 1943.
3. Thereupon the appellant brought the suit alleging that the contract concluded by him with the purchasers for Rs. 1,10,000 on the 2nd June, 1943, was binding on the respondent and claimed that he was entitled to the payment of Rs. 6,000 as remuneration in accordance with the terms of his employment as he had done all that he was required to do on behalf of the respondent. In the alternative he claimed the same sum as damages for breach of contract. In defence to the suit the respondent pleaded, inter alia, that the appellant had no authority to conclude a binding contract for sale with any one, that the purchaser refused to complete the transaction alleging that they had been induced by the fraudulent misrepresentation of the appellant to agree to a price of Rs. 1,10,000, that the subsequent sale was effected independently of the appellant and that the appellant was not therefore entitled to any remuneration or damages.
4. Gentle J. who tried the suit found that the terms of the appellants employment did not authorise him to conclude a contract of sale and that the letters of 2nd June, 1943, did not effect a contract of sale binding on the respondent. The learned Judge, however, rejected the respondents case that the purchasers refused to purchase on the ground of any fraudulent misrepresentation by the appellant and that the negotiations were later resum-ed afresh directly between the respondent and the purchasers, and came to the conclusion that the agreement to sell of the 9th June, 1943, and the subsequent conveyance of 8th December, 1943, were due solely to the efforts of the appellant in bringing the parties together as potential buyers and seller. The learned Judge refused to accept the suggestion that the sale was in fact effected for Rs. 1,10,000 as not being supported by any evidence but found that the reduction of the price by Rs. 5,000 from Rs. 1,10,000 for which the purchasers were ready and willing to buy the property, was made only for the purpose of depriving the appellant of his legitimate remuneration of Rs. 6,000. He accordingly held that the appellant, who had performed his part of the contract by finding two persons who were ready, able and willing to buy at Rs. 1,10,000 was entitled to the commission claimed.
5. The Division Bench, (Harries C. J. and Mukherjea J.) which heard the appeal of the respondent, agreed with the trial Judge that the appellants authority did not extend to the concluding of a binding contract for sale of the property, but differed from his view that all that the appellant was required to do was to introduce a purchaser who was ready and willing to buy for Rs. 1,10,000 and that he was entitled to his commission whe-ther or not the property was sold at that price or at all. They held following certain observations of Lord Russell of Killowen and Lord Romer in the case next mentioned, that the appellant,
