GOVERDHANDOSS TOKERSEY Vs. MABDUL RAHIMAN

JUDGEMENT

(1.) This appeal arises out of a suit for refund of Rs. 8,700 stated to have been advanced by the 3 defendant as an agent of the plaintiff to the 1 defendant at the time of the execution of the agreement (Ex. J) on the 9 November, 1936. Under the terms of this agreement, the 1 defendant. who held a general power of attorney, dated the 24 March, 1936 from the 2nd defendant, agreed to sell to the 3 defendant as an agent of the plaintiff 30 tons of sandalwood that may be got ready by the former out of the two estates (Benhope and Killiard), belonging to his principal in a period of one year at Rs. 800 per ton and any further quantity of wood that may be available out of the aforesaid estates at Rs. 780 per ton. The sum. of Rs. 7,800 was acknowledged to have been received by way of an advance in Ex. J and was agreed to be adjusted at the time when the goods were delivered to the 3 defendant on behalf of the plaintiff at the rate of Rs. 100 per ton. The agreement also provided for a liquidated damage at Rs. 150 per ton if either of the parties failed to deliver or take the goods mentioned in the agreement. On the same date another varthamanam letter (Ex. J-2) was executed by the 3 defendant as an agent of the plaintiff in favour of the 1 defendant as the power of attorney agent of the 2nd defendant under which six tons of sandalwood (not covered by the agreement Ex. J) were sold at the rate of Rs. 810 per ton and were agreed to be delivered before the 30 November, 1936. The 3 defendant communicated the terms of the agreement Ex. J to his principal in Bombay the very next day (Ex. F-14) in which he referred to a sum of Rs. 8,700 haying been paid by way of an advance to the 1 defendant towards this contract. A sum of Rs. 5,000 was stated to have been paid in cash and the balance of Rs. 3,700 that was due by the 1 defendant to the plaintiff in respect of certain previous dealings was said to have been taken into account towards the advance. The plaintiff sent a telegram (Ex. F-15) in reply on the 13 November, 1936, in which he expressed his surprise at the 3 defendant's failure to act in accordance with the instructions contained in the former's letter (obviously referring to the letter, dated the 3 November, 1936--Ex. F- 11), refused to accept the terms communicated to him in Ex. F-14 and asked the 3rd defendant to cancel the agreement. The 3 defendant was also forbidden by the plaintiff to pay Rs. 5,000 to the 1 defendant. But the sum of Rs. 5,000 or, as it really transpired later, the sum of Rs. 4,600 had already been paid to the 1 defendant on the date on which Ex. J was executed. On the receipt of the telegram Ex. F-15, the 3 defendant wrote to the 1st defendant on the 15 November, 1936, Ex. H in which the plaintiff's refusal to abide by the agreement was duly communicated and the sum of Rs. 5,000 alleged to have been paid to the 1 defendant was asked to be adjusted towards the price of the six tons of sandalwood covered by the agreement, Ex. J-2. This letter was not acknowledged by the 1 defendant. The 3 defendant was thus constrained to write another letter on the 30 November, 1936, (Ex. V) in more or less the same terms. This was taken by the 1 defendant to Mr. Ramamurthy, an Advocate at Ootacamund who sent a reply to the 3 defendant (Ex. K). In this letter the sum of Rs. 5,000 was acknowledged to have been received in cash and the 3rd defendant's contention that the agreement Ex. J, had been entered into subject to the condition of its being ratified by the plaintiff was repudiated. The 1 defendant expressed his readiness and willingness to abide by the terms of the agreement and threatened to make the 3 defendant and his principal (the plaintiff) liable if they persisted in committing a breach of the agreement. On the same date a copy of the reply sent to the 3 defendant was sent to the plaintiff's lawyer at Bombay (Ex. K-l) in which a copy of Ex. K was enclosed. This was taken or sent by the plaintiff to Messrs. Payne & Co., Solicitors of Bombay for reply. They wrote Ex. L and Ex. L-l on the 23 December, 1936, to the 1 and 2nd defendants respectively. In these letters, the 3 defendant's authority to enter into "any contract with any person" without the plaintiff's express authority and sanction was denied and the agreement was said to have been brought about under some kind of pressure and coercion to which the 3 defendant was alleged to have been subjected. In the end it was asserted that the agreements were conditional on the plaintiff's approval and as he had repudiated them on the 15 November, 1936, they were no longer binding. The allegations contained in these letters were denied by the defendants in the letters written by their lawyer on the 23rd January, 1937, (Ex. L-2 and Ex. L-3).

(2.) The present suit was instituted by the plaintiff on the 16 February, 1938, with the allegations that the 3 defendant was not entitled to enter into any agreement on behalf of the plaintiff and that in doing so, he had not only acted beyond the scope of his authority but in direct contravention of the plaintiff's instructions. The 2nd defendant was attempted to be made liable for the refund of the amount of Rs. 8,700 which formed the consideration of Ex. J as the 1 defendant held a power of attorney from the 2nd defendant and had acted within the scope of his authority.

(3.) The 1 defendant in his reply contended that the 3 defendant had been for a long time acting on behalf of the plaintiff in such matters and that the agreement was fully within the scope of his authority. And since the breach of the contract by the plaintiff and the 3rd defendant was alleged to be unjustified and the 1 defendant's readiness and willingness to abide by the terms of the contract reaffirmed, the whole of the advance of Rs. 8,700 was claimed to have been forfeited. A sum of Ha. 1,715-8-0 was claimed on behalf of the 1st defendant in the alternative as having been suffered by him in consequence of the breach by the plaintiff and the 3 defendant.