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DENIS et al. v. WARREN et al.
NLR44V488
1943 Present: Hearne and de Kretser JJ.
DENIS, et al, Appellants, and WARREN, et al, Respondents.
201-D. C. Colombo,
14,426
Principal and agent-Obligation of agent to pay over moneys to principal- Absence
of express or implied authority to the contrary-Liability for interest.
An agent is under an obligation, in the absence of an express or implied
authority to the contrary, to pay over to his principal on request, moneys
received in the course of the agency to the use of the principal.
An agent who improperly refuses to pay over money on request is chargeable with
interest from the date of the request.
APPEAL
from a judgment Of the District Judge of Colombo. The facts appear from
the judgment.
H. V. Perera. K.C. (with him Ananda Pereira), for defendants, appellants.
E. F.
N. Gratiaen (with him I. Misso), for plaintiffs, respondents.
Cur. adv. vult.
September 16, 1943. HEARNE J.-
The plaintiffs are the owners of Nagrak estate in Ceylon. John K. Gilliat & Co.,
Ltd., hereinafter called Gilliats, are the mortgagees of the property. The
plaintiffs had executed four mortgage bonds in their favour-(1) Bond No. 1,230
dated November 20, 1936, (2) Bond No. 2,202 dated July 5, 1937, (3) Bond No.
1,265 dated February 28, 1938, and (4) Bond No. 2,329 dated December 7, 1939.
Action was filed on bond No. 1,265 and judgment obtained.
The property charged in the four bonds included the plantation and premises, the
buildings thereon and all the crops and produce thereof.
In all the bonds the plaintiffs undertook " so long as any monies are due by
them " to ship or cause to be shipped to the mortgagees for sale by the latter
the whole of the crops and produce.
They also agreed " that they shall and will at the direction of the mortgagees
but at the expense of the mortgagors appoint such person, firm or company as the
mortgagees may from time to time nominate
to act as agents of the mortgagors with respect to the mortgaged premises and
shall and will also at the direction of the mortgagees remove and cancel the
appointment of such agents and appoint another or others in their place ".
The plaintiffs appointed the defendants as their agents by a writing (P 1) dated
November 20, 1936. The latter were authorised (P 1 reads " You shall have the
powers") to manage and control the working, cultivation and maintenance of the
estate and the gathering and curing of the crops and produce and " to ship the
whole of the crops and produce to John K. Gilliat & Co., Ltd., for sale or to
such person or persons as they may from time to time direct ". This seems to
imply that it was in the contemplation of Gilliats, so far as the plaintiffs
were aware, to require the whole of the crops and produce to be shipped to them
or to a nominee of theirs. Para 2 (c) of P 1, however, reads " we shall pay you
(the defendants) a commission of one per cent, on the gross proceeds of sales of
all crops and produce if effected in Ceylon ".
The primary mortgage was dated November 20, 1936, and the secondary mortgage
July 5, 1937. Prior to the execution of the latter, viz., on March 1, 1937, the
plaintiffs wrote to Gilliats a letter marked P 4 : "In consideration of your
providing, up to the maximum limit of £2,000 (including interest) at any one
time outstanding and the necessary finance for (a) running the estate, (b)
carrying out such of the recommendations contained in Mr. Irvine Stewart's
report of the 18th January, 1937, as you think proper, (c) paying the first
mortgage interest, (d) paying to the undersigned Mr. E. Warren the sum of £300
down and £60 monthly from the 1st March, 1937, we agree as follows : -
(1) To leave the management of the estate in your hands as long as any money is
owing to you hereunder ;
(2) To authorise you to retain the proceeds of sales of tea towards the above
purposes or in reduction of any sums that may be owing to you hereunder ;
(3) To repay
