The main legal point established in the judgment is the authority of an agent to enter into a contract on behalf of the principal, the liability of the principal for the actions of the agent, and the entitlement of the agent to receive the price of the property sold by him.

Abdur Rahman, J.

1. This appeal arises out of a suit for refund of Rs. 8,700 stated to have been advanced by the 3rd defendant as an agent of the plaintiff to the 1st defendant at the time of the execution of the agreement (Ex. J) on the 9th November, 1936. Under the terms of this agreement, the 1st defendant. who held a general power of attorney, dated the 24th March, 1936 from the 2nd defendant, agreed to sell to the 3rd defendant as an agent of the plaintiff 30 tons of sandalwood that may be got ready by the former out of the two estates (Benhope and Killiard), belonging to his principal in a period of one year at Rs. 800 per ton and any further quantity of wood that may be available out of the aforesaid estates at Rs. 780 per ton. The sum. of Rs. 7,800 was acknowledged to have been received by way of an advance in Ex. J and was agreed to be adjusted at the time when the goods were delivered to the 3rd defendant on behalf of the plaintiff at the rate of Rs. 100 per ton. The agreement also provided for a liquidated damage at Rs. 150 per ton if either of the parties failed to deliver or take the goods mentioned in the agreement. On the same date another varthamanam letter (Ex. J-2) was executed by the 3rd defendant as an agent of the plaintiff in favour of the 1st defendant as the power of attorney agent of the 2nd defendant under which six tons of sandalwood (not covered by the agreement Ex. J) were sold at the rate of Rs. 810 per ton and were agreed to be delivered before the 30th November, 1936. The 3rd defendant communicated the terms of the agreement Ex. J to his principal in Bombay the very next day (Ex. F-14) in which he referred to a sum of Rs. 8,700 haying been paid by way of an advance to the 1st defendant towards this contract. A sum of Rs. 5,000 was stated to have been paid in cash and the balance of Rs. 3,700 that was due by the 1st defendant to the plaintiff in respect of certain previous dealings was said to have been taken into account towards the advance. The plaintiff sent a telegram (Ex. F-15) in reply on the 13th November, 1936, in which he expressed his surprise at the 3rd defendants failure to act in accordance with the instructions contained in the formers letter (obviously referring to the letter, dated the 3rd November, 1936--Ex. F-11), refused to accept the terms communicated to him in Ex. F-14 and asked the 3rd defendant to cancel the agreement. The 3rd defendant was also forbidden by the plaintiff to pay Rs. 5,000 to the 1st defendant. But the sum of Rs. 5,000 or, as it really transpired later, the sum of Rs. 4,600 had already been paid to the 1st defendant on the date on which Ex. J was executed. On the receipt of the telegram Ex. F-15, the 3rd defendant wrote to the 1st defendant on the 15th November, 1936, Ex. H in which the plaintiffs refusal to abide by the agreement was duly communicated and the sum of Rs. 5,000 alleged to have been paid to the 1st defendant was asked to be adjusted towards the price of the six tons of sandalwood covered by the agreement, Ex. J-2. This letter was not acknowledged by the 1st defendant. The 3rd defendant was thus constrained to write another letter on the 30th November, 1936, (Ex. V) in more or less the same terms. This was taken by the 1st defendant to Mr. Ramamurthy, an Advocate at Ootacamund who sent a reply to the 3rd defendant (Ex. K). In this letter the sum of Rs. 5,000 was acknowledged to have been received in cash and the 3rd defendants contention that the agreement Ex. J, had been entered into subject to the condition of its being ratified by the plaintiff was repudiated. The 1st defendant expressed his readiness and willingness to abide by the terms of the agreement and threatened to make the 3rd defendant and his principal (the plaintiff) liable if they persisted in committing a breach of the agreement. On the same date a copy of the reply sent to the 3rd defendant was sent to the plaintiffs lawyer at Bombay (Ex. K-l) in which a copy of Ex. K