Source: https://www.lawnet.gov.lk/1977/12/31/fernando-v-themis-appuhamy/
Timestamp: 2019-04-19 07:35:27+00:00

Document:
1940Present: Howard C.J. and Keuneman J.
Power of attorney—Power to manage and transact business—Termination ofbusiness—Cancellation of power—Recitals control the operative part.
Held, that the purpose for which the power was given was the manage-ment of the business as a timber merchant and that with the cessation ofthe business the power of attorney was automatically cancelled.
N. E. Weerasooria, K.C. (with him E. B. Wikremanayake and H. A.Koattegoda), for the first defendant, appellant.
V. Ranawake, for the second defendant, appellant.
H. V. Perera, K.C. (with him Dodwell Gunawardena), for the plaintiff,respondent.
defendant by virtue of a registered power of attorney No. 1000, exhibitP 3 dated May 6, 1933, and executed by the plaintiff in favour of thesecond defendant. By P 3 the second defendant was appointed by theplaintiff to act for him and on his behalf and in his name or otherwise inrespect of his business as a timber merchant. In paragraph 6 of his plaintthe plaintiff pleaded that he ceased to carry out his said business in orabout February, 1935. In paragraph 1 of his answer the first defendantadmitted the averments contained in paragraphs 1 to 7 of the plaint. The’second defendant who was added as a party on the application of the. first defendant did not in his answer deny the averment contained inparagraph 6 of the plaint. The only question, therefore, for decision bythe District Judge was whether, having regard to the fact that thebusiness of the plaintiff had come to an end, the second defendant hadauthority to execute the two deeds in favour of the first defendant. Itwas argued by Counsel for the defendants that even if the business of theplaintiff had come to an end the second defendant was justified inexecuting the deeds of transfer in order to raise money to pay for debtstransacted whilst the business was being carried on. The only witnesscalled was the second defendant and his evidence with regard to suchdebts was of the vaguest character. The amount of such debts has notbeen established nor has it been proved that any debts were in fact owingby the second defendant’s principal, the plaintiff. The question, there-fore, as to whether the second defendant was justified in making thetransfer by the existence of business debts owing by the plaintiff wasin my opinion rightly resolved by the District Judge in favour of theplaintiff.
It was further contended by the defendants that the power of attorneybeing registered and not having been cancelled still supplied the authorityfor the second defendant to execute the two deeds of transfer. It hasbeen held in a series of cases that the recitals in a power of attorneycontrol the generality of the operative part of the instrument. Thus inDanby v. Coutts & Co.1 the operative part of a power of attorney appointedX and Y to be the attorneys of the plaintiff without in terms limiting theduration of their power, but it was preceded by a recital that the plaintiffwas going abroad and was desirous of appointing attorneys to act for himduring his absence. X and Y both before and after the plaintiff’s returnto England purporting to act under the power of attorney borrowedmoneys from a Bank on mortgage upon the security of charges on theplaintiff’s property. It was held that the charge given after the plaintiff’sreturn was invalid. In Attwood v. Munnings’, it was held that generalwords in a power of attorney were not to be construed at large, but asgiving general powers for the carrying into effect the special purposes forwhich they were given. In Lewis v. Ramsdale3, A gave a power ofattorney to B to manage real estate, recover debts, settle actions, also to‘ sell and convert into money ” personal property and to execute andperform any contract, agreement, deed, writing, or thing that might inB’s opinion be necessary or proper for effectuating the purposes aforesaidor any of them. It was held that the general words were limited by the* 29 Ch. D. 500.* 108 B. R. 727.
• 55 L. T. 179.
special purpose of the power of attorney, and did not authorise a mortgageof his personal property. In Harper v. Gadsell &apos;, P, a partner in the firmof B. W. & Co., gave A a power of attorney “ for the purposes of exercisingfor me all or any of the powers and privileges conferred by an indentureof partnership constituting-the firm of B. W. & Co.”, and the powerafterwards went on “ and generally to do, execute, and perform any otheract, deed, matter or thing whatsoever …. in or about myconcerns, engagements and business of every nature and kind whatso-ever ”. It was held that the former words restrained the generality ofthe latter words and consequently that A could not under this powerexecute a deed in P.’s name dissolving the partnership of B. W. & Co., andassigning over P’s share of the partnership property.
“ And whereas, inter alia, I am carrying on business as a timbermerchant ”.
“And whereas I am unable to carry on the said business as a timbermerchant personally ”.
“ And whereas I am desirous of appointing some fit and properperson as my attorney to manage and transact all my business andaffairs in the said Island of Ceylon in respect&apos;of my said business as atimber merchant ”.
The operative part of the power also states that the plaintiff nominatesthe second defendant his true attorney to act for him and on his behalfand in his name or otherwise “ in respect of my said business ”. Thephraseology of the recitals indicated, therefore, that the purpose forwhich the power was given was the management of the plaintiff’s businessas a timber merchant and restrained the generality of the operative part.With the closing down of that business the authority of the seconddefendant to act under the power of attorney was automatically cancelled.In these circumstances I am of opinion that the learned Additional DistrictJudge v/as right in the conclusion at which he arrived.
The second defendant claims that as he had no interest in the actionand was an added defendant no order for costs should have been madeagainst him. It must, however, be borne in mind that the seconddefendant filed answer and participated in the action as a party. He tookan active part in it and cannot be heard to complain if an order is madeagainst him for costs. In these circumstances the order for costs againstthe second defendant was properly made.
For the reasons given both appeals are dismissed with costs againstboth defendants.
» L. R. 5 Q. B, 422.

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