Sithambaram Chetty V. The Kelani Valley Rubber

1922 Present : De Sampayo and Schneider J.J.

SITHAMBARAM CHETTY v. THE KELANI VALLEY
 RUBBER CO., LTD.

39-D. C. Colombo, 727.

Principal and agent-Authority of superintendent of estate to borrow money on behalf of the estate.

The superintendent of an estate as such has no authority to borrow money on behalf of his employer, or to pledge his credit, even for the purposes, of the estate, unless such authority is expressly given, or can be implied from the recognized coarse of dealing with third parties.

THE facts appear from the judgment.

Hayley, for defendant company, appellant.

R. L. Pereira (with him M. W. H. de Silva), for plaintiff, respondent.

September 7, 1922. DE SAMPAYO J.-

The plaintiff is a Chetty trader of Sea street, Colombo, having a branch establishment at Yatiyantota. The defendant is the Kelani Valley Rubber Co. and proprietor of Hathmathe estate, situated at Ruwanwella. At the time of the transactions, on account of which this action is brought, the superintendent of the estate, under the defendant company, was one E. H. Grigson, who has since been dismissed from his employment.

The plaintiff alleged in his plaint that at the request of the defendant company he agreed to advance to and on account of the defendant company such sums of money as the defendant company might from time to time require, which sums the defendant company undertook to repay to the plaintiff, together with a commission of I8 per cent, per annum. But, as a matter of fact, there was no such agreement, express or implied. The allegation is purely imaginary, and, except in connection with the present action, the parties never came in contact with each other. The plaintiff goes on to say that in pursuance of the alleged agreement, the plaintiff between October 1, 1920, and February 28, 1921, advanced to the defendant company various sums of money, which with the agreed commission or interest, and after deducting certain sums paid on account, amounts to Rs. 6,929.10, and which accordingly is claimed in this action.

The plaintiff's case is that in the months of October, November, and December, 1920, he paid on cash orders of the superintendent
various sums, which, after crediting the defendant with certain

sums paid on account, amount to Rs. 3,303.92, and that he had further to get from the defendant a sum of Rs. 3,425, being the amount of a cheque issued to the plaintiff by Grigson, and dishonored on presentment. The plaintiff's representative at Yatiyantota was one Krishnapillai, and he was also the plaintiff's principal witness in this case He was obliged to admit that the cheque for Rs. 3,425 Ltd. ' includes Rs. 2,000 which was a private debt of the superintendent, and although he attempted to explain that the balance Rs. 1,425 was represented by cash orders on account of the, estate, he was not able to do so satisfactorily, and finally plaintiff's counsel admitted that the plaintiff's claim in respect of the amount of the cheque could not be supported. That part of the claim being disallowed, the District Judge has given the plaintiff judgment for the other sum of Rs. 3,303.92. But the improper, and what must be characterized as the dishonest, inclusion of Rs. 3,425 in the claim against the defendant company has a serious effect on the bona fides of the plaintiff in respect of the whole action.

The case turns upon the question whether Grigson had the defendant company's authority to borrow money. The superintendent of an estate as such has no authority to borrow money on behalf of his employer or to pledge his credit, even for the purposes of the estate, unless such authority is expressly given or can be implied from the recognized course of dealing with third parties. In the present case Grigson was regularly supplied by the defendant company with all the funds necessary for the estate, and was prohibited from obtaining money elsew

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