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SIMPSON & CO v. SOYZA
NLR4V90
SIMPSON & CO. v. SOYZA.
C. R., Colombo, 11,063.
Action by broker for commission-Negotiation of loan for borrower-Finding a lender-Rejection by lender of title deeds offered as security.
A having requested B to raise a loan on the mortgage of certain property belonging to A, B found a lender who, however, after examining the title, refused to advance the money, alleging that the title was defective. B sued A for his commission.
Held that, if A's- title deeds were not in order, B should succeed in his action.
Per Bonser, C.J.-The rule is that if an agent does all that he is expected to do, according to the terms of the contract, and finds a person able and willing to lend the money, then the agent has earned his commission; and it matters not what happens afterwards, whether the lender capriciously refuses to complete his bargain, or the bargain, falls through from any other cause, for in that case the agent has done all that he was required to do.
But where the plaintiff found a person able, ready and willing to lend the money, but that person entered into no binding agreement to lend the money, the rule is that if the would-be lender was prevented from lending the money by the fact that the owner of the property, the defendant, was unable to make out a good title to the property which was to be the security for the loon, the plaintiff would be entitled to his commission, for he has done all that he was expected or was bound to do, and the failure of the loan was due to the fault of the defendant.
THE plaintiff, as a duly licensed broker and commission agent, alleged that the defendant on the 4th July, 1899, requested the plaintiff to negotiate for the defendants a loan of Rs. 10,000 on the mortgage of property belonging to the defendant; that the defendant agreed to pay to the plaintiff a commission of 2 per cent, for the same; " that in pursuance thereof the plaintiff " obtained the said loan for the defendant, whereby the defendant " became liable to pay the plaintiff the sum of Rs. 200, being money " payable by the defendant to the plaintiff for work done by him " as broker and agent for the defendant at his request, and for " commission and reward due from the defendant to the plaintiff " in respect thereof."
The defendant admitted the agreement, but denied his liability to pay the amount, claimed, as the plaintiff did not obtain the loan, in question for the defendant.
The Commissioner found that the plaintiff did secure a lender in Mr. F. C. Loos, who was willing to lend the defendant Rs.10,000 on the mortgage of his property; but that as defendant's title deeds were not in order, the lender did not see his way to accepting
them as security. The Commissioner therefore gave judgment for plaintiff.
Defendant appealed.
H. J. C. Pereira, for appellant.-The lender, Mr. Loos, was not introduced to the defendant, the borrower. Mr. Loos said he would lend the amount only if he was satisfied with the title deeds. No loan was arranged in fact, and defendant's liability for the commission does not arise if the loan falls through, as it did fall through in the present case. Fisher v. Drewett, (L. J. 48 C. L. (1879) 32; 2 Ruling Cases, 527). [Bonser, C.J.-Do I understand you to say that, if the lender was introduced to the borrower, and the lender afterwards declined to lend, the plaintiff could recover his commission?] Yes; the plaintiff can recover if the parties were brought together, and only according to the contract. [Bonser, C.J.-Mr. Loos said he would lend.] That was so, but for want of introduction Mr. Loos could not be compelled to carry out his promise. [Bonser, C.J.-Should it be in writing?] No. [Bonser, C.J.-Then you mean, unless there is a binding contract between the would-be lender and borrower, the commission is not earned ?] Yes; the moment the lender and the defendant entered into a contract, whatever happened afterwards, the plaintiff has earned his com
