De Silva V. Forbes,Walker& Co.,

1931

Present: Macdonell C.J. and Garvin S .P. J.

DE SILVA v. FORBES, WALKER & CO.

291-D. C. Colombo, 32,238

Broker-Offer to purchase property-Agreement to share commission-Acceptance of offer subject to ratification-Completion of transaction-Payment of purchase price- Cause of action.

The plaintiff, on behalf of an undisclosed principal, asked the defendants to make an offer for the purchase of certain .estates to H. & Co., as agents of the owners, the Negombo Estate Company, Ltd. The plaintiff at the same time obtained from the defendants the promise of a commission, if the purchase was completed, to be divided equally between them, and also obtained from H. & Co. and undertaking to pay the commission, subject to the approval of the company.

The offer was accepted, subject to certain other conditions, one of which was ratification at a general meeting of the company. Eventually, the company accepted a higher offer and the transaction fell through.

Held' (in an action by the plaintiff for the recovery of a half share of the commission), that the plaintiff had no cause of action against the defendants till the transaction was complete, viz., by confirmation of sale and payment of purchase price, and the defendant had received his commission.

THE plaintiff sued the defendants for the recovery of a half share of a commission alleged to have been earned by the defendants on a transaction relating to the sale of certain estates belonging to the Negombo Estate Company. The plaintiff on behalf of a client asked the defendants to make an offer for the purchase of two estates for a sum of £72,500 belonging to the company through their agents, Messrs. Harrisons & Crosfield, Ltd. The plaintiff stipulated for the payment of a commission to be divided equally between the defendants and himself, and also obtained a promise from Harrisons& Crosfield, Ltd., to pay the same subject to the approval of the company

The offer was communicated to the company, who accepted it, subject to other conditions, viz., notarial agreement to be entered into forthwith and the sale to be subject to confirmation at a general meeting of the company. Eventually the company accepted a higher offer and the transaction fell through. The plaintiff's case was that he had found a purchaser willing to buy at the figure named and on the conditions of the vendors, and that having done so, the transaction was complete and he had earned the commission -
The learned District Judge gave judgment for the plaintiff.

Hayley, K.C. (with him Ferdinands), for defendant, appellant.-The evidence discloses no cause of action against the defendant. At the most the plaintiff could only sue the Negombo Estates Co., Ltd., as an undisclosed principal of the defendants. No commission was earned as the deal was not completed. There was only a tentative offer, and this offer had to be ratified subsequently by the shareholders. " Until the deal has been completed " means until the purchase price has been paid in full. The conditions further provided that the offer should be ratified by the company. Moreover, the defendants were never employed by the vendors as brokers.

De Zoysa, K.C. (with him E. G. P. Jayatileke), for plaintiff, respondent- The question of tentative offer was never adopted in the lower Court. As to the point of there being no cause of action, my learned friend conceded that if a commission had been paid to the defendant, he was liable to pay half to the plaintiff. We submit that the defendant was liable to pay not only if he received the com-mission. but also if he had earned it and chose to forego it perhaps for some business reason which is no concern of ours. The plaintiff found a purchaser willing to " accept the terms of the company's counter offer and did all he was bound to do, but the company refused to abide by their counter offer. There was no notarial

agreement through the defaul

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