dedol-hf/india-case-legal-rag huggingface dataset:
This  phrase similarly is not without ambiguity.   The  evi-
dence of conduct of the parties in this situation as to  how
they  understood  the  words to mean can  be  considered  in
determining the true effect of the contract made between the
parties.  Extrinsic evidence to determine the effect  of  an
instrument is permissible where there remains a doubt as  to
its  true meaning.  Evidence of the acts done under it is  a
guide  to  the intention of the parties in such a  case  and
particularly  when acts are done shortly after the  date  of
the  instrument.  (Vide para. 343 of Hailsham Edn. of  Hals-
bury, Vol. 10, p. 274).
    So  far  as the conduct of the agent  is  concerned,  he
accepted  the  offer and under his own  signature  sent  the
letter of acceptance to the purchasers. In the letter  writ-
ten  by him to his principal he specifically refers  to  his
authority. The correspondence above mentioned clearly  shows
that  both  the  purchasers  and the agent  thought  that  a
concluded  contract had been made. Information of  this  was
given to the vendor and though he did not speak, his silence
in the circumstances of the case seems as eloquent as speech
would have
47
been.   He never repudiated the contract made by  the  agent
but  behind his back entered into a fresh contract with  the
same persons who had been secured by the agent in a  surrep-
titious  manner.  In the witness box he assumed a  dishonest
and untruthful attitude.  The learned trial Judge pronounced
him a liar and rightly too.  He asserted complete  ignorance
about the subsequent contract of sale and fixed all blame on
to  his son When asked about the sale price on the  contract
of 9th June, 1943, his answer was that he knew nothing about
this  and  said that because his son asked him to  sign  the
deed  he  did sign it and that was all that  he  knew.  When
faced with the sale deed, he said that he did not know  what
his son had told him as to what was written in the deed.  He
added  that he did not know what consideration was  paid  to
him  for the sale. He further professed not to know  whether
the  sale  price went into his banking account or  was  even
entered in the account books. After a great deal of prevari-
cation he was made to accept the document of 5th May,  1948,
and its terms. He admitted that on 3rd June he had a conver-
sation  with  the purchasers and was informed by  them  that
they had entered into a bargain with the broker and that the
broker had deceived them about the commission and  therefore
they  would not buy the house. He admitted that he  got  the
letter sent by the plaintiff, but gave no explanation as  to
why  he sent no reply to that letter. With great  difficulty
he  was made to accept his signature on the postal  acknowl-
edgment  about the receipt of the letter sent by the  broker
to him informing him of the concluded bargain made with  the
purchasers, and he had to admit that he got that letter from
the  broker. He also admitted that he took no  objection  to
the letter written by the broker before Kishoribabu had told
him  the  story about the commission of two  per  cent.   In
further  cross-examination he admitted that what was  stated
by  the  broker in the letter of the 2nd June  was  correct.
The  whole evidence given by the defendant consists of  eva-
sive  statements  and his ultimate resort was in  lapses  of
memory.   It  is quite clear from his  deposition  that  the
respondent  accepted the contract made by the agent and  was
clearly under the
48
belief  that  the agent had not exceeded  his  authority  in
entering  into a binding contract with the purchasers. I  am
therefore  of  the opinion that the authority given  to  the
agent in this case was an authority to enter into a  binding
contract of sale and this he did and he was therefore  enti-
tled to his commission of Rs. 6,000.
    The  learned single Judge and the learned Judges of  the
Court of Appeal found otherwise on this part of the case  in
view  of certain decisions of English Courts and a  decision
of  a  Division  Bench of the Calcutta High  Court.   In  my
opinion, none of those cases touch the present case.  Unless
the  language of two documents is identical, an  interpreta-
tion placed on one document is no authority for the proposi-
tion  that  a  document differently  drafted,  though  using
partially similar language, should be similarly interpreted.
    In Hamer v. Sharp(1) Sir Charles Hall, V.C.,  considered
the  case of an authority of an agent for sale appointed  by
the  owner of an estate.  The document in that case  was  in
these terms :--
    "I request you to procure a purchaser for the  following
freehold property, and to insert particulars of the same  in
your  Monthly Estate Circular till further notice, viz.,  my
beer house and shop No. 4 and No. 6 Manchester Road,  Tenant
No.  4, William Galloway, gilder, and No. 6, Albert  Vaults,
Henry Holmes, beer retailer, and work rooms above.   Present
net rent, pound 150, price pound 2800, when I will pay you a
commission  and expenses of fifty pounds.  About six  years'
lease unexpired."
The Vice-Chancellor observed as follows :--
    "The  question  is whether, when an owner of  an  estate
puts it into the hands of an estate agent for sale,  stating
a price for and giving particulars of the property to enable
him  to inform intending purchasers, but giving no  instruc-
tions as to the absolute disposal, and none as to the  title
of the property, and mentioning none of those special stipu-
lations which it might be proper to insert in conditions  in
reference to the title,
(1) L.R. 19 Eq. 108,
49
that is sufficient authority to the agent to sign a contract
for  the  sale of the property for the price stated  in  the
instructions, without making any provision whatsoever as  to
title.  In considering whether the instructions of  October,
1872,  were  a sufficient authority to the  agent  for  that
purpose,  I cannot help expressing an opinion that  such  an
authority  to  an  agent on the part of a  vendor  would  be
highly imprudent, as the purchaser would then be entitled to
require, on completion, attested copies of all documents  of
title, and the expense of them would swallow up, to a  great
extent,  the  purchase money.  This estate agent  must  have
known  that  if this property had been offered for  sale  by
public auction there would have been conditions to guard the
vendor  against  being subject to certain expenses,  and  to
prevent  the contract becoming abortive by reason of a  pur-
chaser  requiring  a strictly marketable  title.   Could  he
suppose  that he was invested with authority to sign a  con-
tract without considering what it should contain as  regards
title  ?   As an intelligent and well  informed  person,  he
could not suppose that he was properly discharging his  duty
to  his  principal  when he signed  the  contract  which  he
signed; such a contract was not one within the scope of  his
authority to sign."
The case therefore stood decided on the construction  of
the  document.  It was remarked that in those  circumstances
it was not necessary to decide what words would confer  such
an authority.  Having said so, the learned   Vice-Chancellor
proceeded to observe as follows :--
    "but  I nevertheless state my opinion to be,  that  when
instructions  are given to an agent to find a  purchaser  of
landed  property, he, not being instructed as to the  condi-
tions  to  be inserted in the contract as to title,  is  not
authorized to sign a contract on the part of the vendor.
    This case can hardly be said to be an authority for  the
construction  of  the agreement that we are called  upon  to
construe in the present case. Considerable emphasis was laid
in  that  case on the point that no  instructions  had  been
given as to the conditions that had to be
50
inserted in the agreement as to title.  In the present  case
the agent was told that the principal guaranteed  marketable
title.  He was further told that the sale should be free  of
encumbrances.  All the material conditions of sale were thus
contained in the present agreement.
     The next case on which considerable reliance was placed
in  the courts below is the case of Chadburn v.  Moore  (1).
In  this case an advertisement appeared in the  Daily  Tele-
graph in these words :--
     "Forced  sale by order of the  mortgagees--thirty  four
well  built houses, situated at Grays, close to the  station
on  the London, Tilbury, and Southend Railway,  within  easy
reach of the docks, all let to respectable tenants at  rents
amounting to pound 620 per annum. Held for about ninety-five
years  at ground rents amounting to pound 146;  price  pound
3500,  of  which  pound 3000 can remain  on  mortgage.   For
further  particulars  apply to Messrs. Pinder,  Simpson  and
Newman, 33 and 34, Savilerow, London, W."
     In response to this advertisement the plaintiff in that
case, James Chadburn, called on Messrs. Pinder, Simpson  and
Newman,  a firm of surveyors and estate agents, for  further
information.   He then went to see the houses and came  back
and  made  an offer to purchase them, which was  reduced  to
writing.   It appeared from the evidence that the offer  was
to  be submitted by Mr. Newman to his client the  defendant,
and the plaintiff was to return the next day for an  answer.
Newman  saw  the  defendant, who gave  him  instructions  to
withdraw  five of the houses, and fixed the price,  but  did
not, according to the evidence given in court, give instruc-
tions to Newman to enter into a binding contract.  Later  on
the  plaintiff called on Messrs. Pinder, Simpson and  Newman
and  two  letters were exchanged between  them,  which  were
letters  of offer and acceptance for the twenty-nine  houses
at  Grays.  The offer and acceptance were forwarded  by  the
defendant to the estate agents.  The defendant on  receiving
this offer wrote a letter saying inter alia:-
(1) 67 L.T. 257
51
    "I  think you were, as you usually are, a little  prema-
ture  in  actually  entering into what might  be  a  binding
contract.  It is always best to have an offer and acceptance
subject to a formal contract being entered into... "
To this Newman replied:-
"The  offer for the above was accepted under  your  definite
instructions and is a very good get out for you."
Kekewich  J.,  who  decided this case,  gave  the  following
judgment :--
    "Having  heard  Mr. Newman, who was called  without  the
plaintiff knowing what he was going to say, and having  read
the  correspondence,   I have little doubt that I  have  the
real transaction--which is a mere transaction between  prin-
cipal  and agent--before me.  It might be' that a  different
colour would be put upon the matter by the cross-examination
of  Mr. Moore, but this was not done, and he is entitled  to
have  judgment  upon  the point of  law.  Moore  undoubtedly
authorized Newman to find a purchaser for the houses. It  is
true the expression does not come out on the correspondence.
On the second occasion Newman appears to have been instruct-
ed  to negotiate a sale. Whatever else he did do, Moore  did
not  in  express.  terms authorize Newman to  enter  into  a
contract.Newman was to find a purchaser, and to negotiate  a
sale.   Is  that sufficient ? No evidence was  given  as  to
custom; no evidence was brought to show that the position of
a  house or estate agent resembles that of a broker  on  the
Stock  Exchange  or any other exchange. A  house  or  estate
agent  is in a different position, owing to the  peculiarity
of  the property with which he has to deal, which  does  not
pass by a short instrument as stocks and shares do, but  has
to  be transferred after investigation of title and  in  ac-
cordance with strict laws.  An agent fox sale of real estate
must  be more formally constituted than a seller  of  stocks
and  securities of a similar nature.  There is  no  definite
authority; in Hamer v. Sharp (1), Hall, V.C., does not
(1) 19 Eq. 108.
52
go  so far as to say an estate agent cannot enter  into  any
contract, and does not decide the question of authority, but
only states his opinion.  I must perforce refer to Prior  v.
Moore (1), where I indicated my own opinion distinctly, that
instruction  to a house agent to procure a purchaser and  to
negotiate  a sale does not amount to authority to the  agent
to  bind his principal by contract.  Here  the  circumstance
must not be forgotten that Moore on the second occasion told
Newman  what  he was prepared to take  for  the  twenty-nine
houses.   Newman then jumped at the conclusion that  he  had
power at that price to enter into a contract. That is in  my
opinion  not  sufficient, and unless  express  authority  is
given  to the agent to sell, and for that purpose  to  enter
into  a binding contract, the principal reserves  his  final
right to accept or refuse. "
    In  this case there was no written document between  the
principal  and  the agent.  From the correspondence  it  was
inferred  that the principal had asked the agent to  find  a
purchaser or to negotiate a sale and it was held that within
these  words  an authority to sell could not be  spelt  out.
Not  only is the language of the document with which we  are
concerned  different, but the evidence in the case  particu-
larly about the conduct of the parties is materially differ-
ent.  The  observations made by the learned  Judge  must  be
taken to be limited to the facts found by him.  The  expres-
sions "find a purchaser"  "procure a purchaser" "negotiate a
sale"  standing  by  themselves may not  'be  sufficient  to
confer  authority on the agent to enter into a binding  con-
tract  on behalf of the principal; but as I  have  indicated
above,  the words in the present case are such as by  neces-
sary implication conferred authority on the agent for making
a binding contract.
    The  next case is Durga Charan Mitra v. Rajendra  Narain
Sinha (2), a Bench decision of the Calcutta High Court.  The
document  considered in that case bears considerable  resem-
blance with the document in the present case.
(1) 3 T.L.R.624.            (2) 36 C.L.J.467.
53
It was in these terms :--
    "I  hereby  authorize you to negotiate the sale  of  the
lands  at Tolligunge I have recently purchased  from  Messrs
Martin  and Co.  If you can secure a purchaser  to  purchase
the  same at the gross value of Rs. 16,000, I shall pay  you
Rs.  200 as your remuneration. If you be able to raise   the
price  to any amount above Rs. 16,000, you will be  entitled
to  the excess amount fully and I shall be bound to  mention
the whole amount in the conveyance.
    Please note that this letter of authority will remain in
force  for  a fortnight only to  complete  the  transaction;
after that this letter will stand cancelled."
    The agent acting on this authority sold the property. On
receipt of this letter the vendor informed the agent that he
would  not sell the land.  On the acceptance of the agent  a
suit  was  brought  for specific  performance.  Sir  Asutosh
Mookerjee  who delivered the judgment of the Bench  referred
to  the  cases of Hamer v. Sharp (1), Prior  v.  Moore  (2),
Chadburn v. Moore (3), and also Rosenbaum v. Belson (4), and
observed  that it was well settled that an estate or  house-
agent,  authorized  to procure a purchaser, has  no  implied
authority  to enter into an open contract of  sale,  because
the  transaction  mentioned is as specified in  the  letter,
viz., to negotiate a sale after securing a purchaser.  There
is  similarity in the language employed in the letter  dealt
with in this case and the letter of authority with which  we
are  concerned; but read as a whole, the two  documents  are
drafted with 'different intents and the true effect of  both
is  not the same.  There was no mention of the  title  being
guaranteed  by the vendor or of the sale being made free  of
encumbrances  in  that case. There was no evidence  of  sur-
rounding circumstances or of the conduct of the parties.  On
the  other hand, the plaintiff who was himself  a  solicitor
realized  the difficulties of the situation and  endeavoured
to alter the foundation of his claim.  He conceded that as a
broker he had no authority to sell the property and that he
 (1) 19 Eq. 108.            (8) 67 L.T. 257,
 (2) 3 T.L.R. 624           (4) (1900) 2 Ch. 267.
54
could  not have taken a conveyance of sale of the  plot.  In
the  present  case the attitude adopted by the  parties,  as
already  pointed out, was entirely different.   Sir  Asutosh
Mookerjee  also cited the case of Rosenbaum v.  Belson  (1).
In  this case the learned Judge made the following  observa-
tions:-
    "  To my mind there is a substantial difference  between
those  expressions.   Authorizing  a man to  sell  means  an
authority  to  conclude a sale; authorizing him  to  find  a
purchaser  means  less  than that--it means to  find  a  man
willing to become a purchaser, not to find him and also make
him a purchaser."
    In Saunders v. Dence (2), Field J.  distinguished  Hamer
v.  Sharp(s), saying that 'all that Hall, V.C.,in that  case
decided, as I understand it, was that if you go to an estate
agent,  and tell him you have a property to sell,  and  that
you want a purchaser, and you tell him what you have made up
your  mind shall be the price, and to a certain extent  what
shall  be  the conditions, and you instruct him to  try  and
find  a purchaser, that is not sufficient, under those  cir-
cumstances, to authorize the agent to make a contract  with-
out any conditions whatever with regard to the title'.
    I have been unable to find any case in which it has been
held  that  instructions given by A.B. to sell for  him  his
house, and an agreement to pay so much on the purchase price
accepted, are not an authority. to make a binding  contract,
including an authority to sign an agreement.
    In  my opinion, on the terms of the instrument  in  this
case  and in view of the relevant evidence the correct  con-
clusion  to  draw is that the agent had authority  to  enter
into  a binding contract with the purchaser and that he  did
and is therefore entitled to succeed in the case.  Reference
in this connection may be made to Wragg v. Lovett (4), where
Lord Greene, M.R., put the proposition in these words :--
"Whether or not the agents were authorized (or, what  in
law is the same thing, reasonably understood
(1) (1900) 2 Ch. 267.               (3) 19 Eq. 108.
(2) 52 L.T. 644.                    (4) [1948] 2 A.E.R. 969.
55
themselves  to be authorized) to make this  particular  con-
tract",
    and  it was held that the proper inference from all  the
facts  of the case was that the defendant was  satisfied  to
allow  his   agents to make whatever contract  they  thought
best  and relied on them to protect his interests  provided,
and provided only, that they obtained the desired  statement
from  the  plaintiff as to his intention to  remain  in  the
house.   The answer to the question depends on the facts  of
each individual case and though authority to make a  binding
contract has not to be lightly inferred from vague or ambig-
uous  language  but from substantial grounds,  that  however
does not mean that in express words it should be stated that
the agent is authorized to sell the property.
    The  learned Chief Justice in the judgment under  appeal
observed that "the agent had undertaken to negotiate a  sale
and  secure  a buyer.  He could not be said to  have  either
secured a buyer or negotiated a sale unless a sale  actually
took  place or at least a contract of sale had been  entered
into".   If  that is the correct construction of  the  note,
then  in  my judgment, the true implication of the  note  is
that  the agent was authorized to enter into a binding  con-
tract, because otherwise he could not have secured a  buyer.
Later  on, the learned Chief Justice while referring to  the
case of Rosenbaum v. Belson(1), took the view that authoriz-
ing  a man to sell meant  an  authority  to conclude a  sale
and  authorizing a man to find a purchaser meant  less  than
that.  It meant finding a man willing to become a purchaser,
not to find him and also make him a purchaser.  If that  was
the  duty entrusted to the agent, then he had  clearly  per-
formed his duty and was entitled to his commission.
    For the reasons given above I am of the opinion that the
plaintiff had authority to enter into a binding contract  on
behalf of the defendant and he entered into such a  contract
and  thereby earned the commission which he has  claimed  in
the suit and he is entitled to a
 (1) [1900] 2 Ch. 267.
    8
56
decree  in  the sum of Rs. 6,000 which the trial  Judge  had
given to him, with all costs throughout.
    Conceding for the sake of argument that the construction
that I have placed on the agreement entered into between the
principal and the agent is not the correct one, the question
arises .whether in that event the decision under appeal  can
be  maintained.  I am inclined to the opinion that  even  on
the construction placed by the trial Judge on the commission
note the view taken by him was the correct one and the court
of  appeal arrived at a wrong conclusion by giving too  much
importance to certain obiter observations of Lord Russell of
Killowen and Lord Romer in Luxor (Eastbourne) Ltd. v.  Coop-
er(1).   In  this very case it was pointed out  by  Viscount
Simon L.C. that there were at least three different  classes
of  cases  in which the question of a  right  to  commission
could arise.  He states the first of them in these terms :--
    "There  is  the class in which the agent is  promised  a
commission by his principal if he succeeds in introducing to
his principal a person who makes an adequate offer,  usually
an offer of not less than the stipulated amount. If  that is
all that is needed in order to earn his reward, it is  obvi-
ous that he is entitled to be paid when this has been  done,
whether this principal accepts the offer and carries through
the  bargain  or not.  No implied term is needed  to  secure
this result."
    In my opinion, the present case falls within this  class
of case and commission became payable on the introduction of
a willing buyer by the agent to the principal.
    In Burcheil v. Cowrie & Blockhouse Collieries Ltd.(2) it
was observed by their Lordships of the Privy Council that if
an agent brings a person into relation with his principal as
an  intending purchaser, the agent has done the most  effec-
tive, and, possibly, the most laborious and expensive,  part
of  his work, and that if the principal takes  advantage  of
that work, and, behind the back of the agent and unknown  to
him, sells to the purchaser thus brought into touch with him
on terms
(1) [1941] A.C. 108.          (2) [1910] A.C. 614.
57
which  the  agent theretofore advised the principal  not  to
accept,  the  agent's act may still well  be  the  effective
cause  of the sale and that there can be no real  difference
between  such  a case and those cases  where  the  principal
sells  to the purchaser introduced by the agent at  a  price
below the limit given to the agent.
    In  Inchbald v. Western Neilgherry Coffee etc.  Co.  (1)
Willes J. thus lays down the rule of law applicable to  such
cases :--
    "I  apprehend that wherever money is to be paid  by  one
man  to another upon a given event, the party upon  whom  is
cast the obligation to pay, is liable to the party who is to
receive the money if he does any act which prevents or makes
it less probable that he should receive it."
The  rule has been stated by Story on Agency at page 404  in
the following terms :--
    "The general rule of law, as to commissions, undoubtedly
is, that the whole service or duty must be performed, before
the  right to any commissions attaches, either  ordinary  or
extraordinary; for an agent must complete the thing required
of him, before he is entitled to charge for it.  In the case
of brokers employed to sell real estate, it is well  settled