1934 Present: Macdonell C. J. and Drieberg J.

MARSHALL v. SENEVIRATNE.

263-D. C. Colombo, 47531.

    Power of attorney-Authority to recover and receive debt-no right to delegate authority-Letter to proctor to recover money-No authority to receive- Action on mortgage bond-Payment by defendant to proctor-Fraud of proctor-who should bear the loss ?

Plaintiff, a primary mortgagee, authorized the holder of his power of attorney to call in from the first defendant, the mortgagor, the money due on the mortgage bond and the attorney gave instructions to a proctor to recover the money.

The proctor, having a client, the fourth defendant, willing to leave money with him for investment took from that client certain moneys,, not quite sufficient to pay off plaintiff's mortgage, and induced the first and second defendants to execute a mortgage bond securing the same properties contained in the plaintiff's mortgage, the first and second defendants believing that the full amount thereof would be paid over to the plaintiff in discharge of his claim. The proctor later paid to the plaintiff's attorney moneys amounting to half the sum due on the bond but not any part of the balance and he could not obtain a discharge of the plaintiff's bond.

The proctor became insolvent and it was discovered that he had embezzled the money paid to him by the fourth defendant. It was in evidence also that the attorney had written a letter to the proctor in the following terms: " Should the loan be not repaid by the due date, please take steps to recover it".

Held (in an action brought by the plaintiff to recover the balance due on the mortgage), that the proctor had no authority to receive money on behalf of the plaintiff so as to constitute the payment to the proctor, a payment to the plaintiff.

Where a power of attorney authorized a person to ask, demand, sue for, recover, and receive all debts owing to the grantor, the attorney has no power to delegate his authority to another.

An authority to delegate may be implied only where the act to be done was purely ministerial and did not involve any confidence or discretion.

Where a party is aware that he is dealing with an agent under a power of attorney, he acts at his peril in not knowing the extent and limit of the agent's power.

THE plaintiff brought this action, through his attorney, on a mortgage bond No. 4,949 of May 24, 1928, executed in his favour by the first defendant to secure a sum of Rs. 70,000 lent to him. The plaintiff alleged that first defendant had repaid Rs. 35,000 and claimed a sum of Rs. 37,483.36, balance principal and interest. By deed No. 5,079 of February 21, 1929, first defendant transferred the lands mortgaged to his wife the second defendant. The first defendant and his wife by bond 1 D 6 executed on October 15 and 23 mortgaged the lands to the fourth defendant.

The first defendant pleaded that the plaintiff received payment as a result of the execution by him of the bond 1 D 6 in favour of the fourth defendant. It was alleged that on the suggestion of de Vos, a proctor

and notary employed by plaintiff's attorney, the first defendant executed bond 1 D 6 for Rs. 70,000 the arrangement being that de Vos should pay the money to plaintiff's attorney and his bond to the plaintiff discharged. It was contended on his behalf that de Vos had sufficient authority to receive the money and that the attorney had power to authorize de Vos to receive payment.

The learned District Judge gave judgment for the plaintiff.

H. V. Perera (with him de Zoysa, K. C., D. W. Fernando, and D. S. Senanayake), for first and second defendants, appellants.-The attorney's letter to de Vos dated September 24, 1934, authorized de Vos to receive money in payment of the amount due on plaintiff's bond No. 4,949. The words in that letter, " should this loan not be repaid by due date, please take the necessary steps to recover the princ