The main legal point established in the judgment is the duty to mitigate damages in the context of wrongful dismissal and the concept of a continuing contract despite misconduct or breach of duty by the employee.

Alfred Henry Lionel Leach, C.J.

1. The appellant was the defendant in the Court below. He had served the respondent as the chief agent of the respondents money-lending business at Madras. The contract of service commenced on the 19th November, 1925, the appellant having executed what is known as a salary chit. Under the terms of the contract he was to serve the respondent in the capacity of chief agent of his Madras business for a period of three years at a salary of Rs. 7,175. The respondents business in Madras did not prove as successful as he anticipated, and on the 5th January, 1928, he terminated the appellants employment and appointed another agent at a lower salary. The suit out of which this appeal arises was filed by the respondent for an account of the appellants agency. He calculated that there would be due to him on the taking of accounts a sum of Rs. 11,923-6-0. A preliminary decree for accounts was passed in due course, and on consideration of the Commissioners report a decree for Rs. 4,952-13-6 was passed in favour of the respondent. The appellant appeals against the final decree on three grounds. In the first place he says that he has been disallowed his salary for 10 1/2 months whereas he is entitled in law to payment for this period. In the second place he contends that he has been disallowed three months salary, wrongly on the ground that he had absented himself from Madras on private affairs. In the third place he says that a sum of Rs. 982-9-6 was wrongly debited to him in respect of certain piece goods transactions.

2. With regard to the appellants claim that the lower Court was wrong in disallowing his salary for 10 1/2 months the learned advocate for the respondent has taken the Objection that the suit was not a suit for wrongful dismissal and consequently no allowance can be given to the appellant in respect of this period. This point was not taken in the pleadings or in the course of the trial. It is manifest that all questions at issue between the parties in respect of the agency were gone into acid decided in the course of the trial. The respondents complaint was that the agent had overdrawn his salary when he should not have done so and evidence was given on this question. The trial Court on the case presented by the parties held that the appellant, had wrongly overdrawn his salary for 10 1/2 months, and he challenges this finding in this Court. We consider that he is entitled to do so. The nature of the objection is obviously one which the Court should not take notice of at this late stage.

3. The learned trial Judge disallowed the appellants salary for 10 1/2 months on the ground that the respondent was entitled to dismiss the appellant when he found that his business was not proving profitable. This is an erroneous view of the law. The respondent had entered into a contract with the appellant under which the appellant was to serve him in Madras for a period of three years certain, and the appellant was always ready and willing to carry out his duties. The real reason why the respondent dispensed with the appellants services after a little over two years was that he found he could get another agent at a lower salary. Where a person has agreed to employ another he is not entitled to put an end to the employment simply because he finds his business is not proving as profitable as he anticipated or because he finds "that he can get somebody to perform the duties at a smaller salary. If the contract provides for termination of employment by notice the employer can lawfully terminate the employment on giving the required notice. In a case like the present where the employment was for a definite period the employer is bound to pay the stipulated salary, unless he shows that the discharged servant had an opportunity of other employment, but refused to avail himself of it. In other words, the principle that a person must do what he can to mitigate damages, applies to a contract of service just as it