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Present : Lascellea C.J. and Pereira J.
CAEIMBHOY v. MOHAMAD TAMBY.
22—D. C. Colombo, 36,070.
Negotiation for purchase of land—Commission to be repaid if sale notgoing through—Default cf would-be purchaser.
The defendant ascertained from the Owners of a land that theywere prepared to sell the estate to Mm for Bs. 105,000. He thenreceived Bs. 7,600 from the plaintiff and gave him the benefit of thenegotiations with the owners, but undertook to return the Bs. 7.500“ in the event of the sale cot going through for any reason what-soever other than the default of the said J. (plaintiff).” Theplaintiff subsequently found that many of the tenements on theland were built by the occupants! who were liable to pay onlyground rent. He offered a smaller sum, which was refused, andthe sale went off. In an action by plaintiff claiming a refund ofthe sum of Bs. 7,500,—
Held, that plaintiff was entitled to recover the sum.
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1914. . 1 pHE facts are fully set out in the judgment.Cctrimbhoy ^
v*Bawa, Z.C., for defendant, appellant.
A . Drieberg, for plaintiffs, respondents.
Gut. adv. tnttt.
May 14, 1914. Lascelles O.J.—
On the findings of the Court below, which are not controverted,the right of the plaintiffs to recover the Bs. 7,500 depends on theconstruction of the document P 7, which sets out the conditionson which this sum was paid by the plaintiffs to the defendant.This document is as follows :—
Received from Messrs. Davoodbhoy Jafferjee the sum ofRs. 7,500, being my fees for services rendered to themin arranging the sale of Bridge End estate from thepresent proprietors. In the event of the sale not goingthrough for any reason whatsoever other than thedefault of the said Messrs. Davoodbhoy Jafferjee, Iagree to return to them the said sum of Rs. 7,500 ondemand/’
The position of the parties when this document was signed by thedefendant was as follows. The defendant had ascertained fromthe owners of Bridge End estate that they were prepared to sell theestate to him for Rs. 105,000. It is not shown, and I do not thinkit very likely, that the defendant ever intended to buy the estatehimself. But, however that may be, he had received nothing inthe shape of a firm offer ; no agreement which was enforceable atlaw had been executed. Then, after some negotiation, he agreed,for a consideration of Rs. 7,500, to give the plaintiffs the benefit ofhis negotiations with the proprietors of the estate. The Rs. 7,500were paid, and the document P 7 was signed by the defendant asa record of the consideration and the terms on which the Rs. 7,500was paid to him. The sale which was contemplated by P 7 did notgo through. The Bridge End estate consisted principally of smalltenements in the town of Nawalapitiya, and the plaintiffs, whennegotiating for the purchase, counted upon being able to raise therent of these holdings. On inquiry it was found that many of theholdings had been built by the occupants, and were liable to payonly ground rent. It is not clear whether the tenants had acquireddefinite rights as superficiarii, or whether by putting up buildings,with the consent of th.e owner, they had acquired rights to com-pensation, which practically secured them in the position of ground.tenants. But there is no question that these ground tenants worein such a position that a purchaser could not raise their rent. Forthis reason the plaintiffs refused to complete the sale. They offereda less sum, which was refused, and the sale went off. Under the
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document P 7 the defendant was obliged to return the Rs. 7,500,1914.
“ in the event of the sale not going through for any reason whatso- r…mr.r.Mever other than the default of the said Messrs.. Davoodbhoy Jafferjee.” C.J.
For a definition of what must be understood by the term ” default ” Garimbhoyin a contract of sale we were referred to In re Young and Hurston's v‘Contract,1 and no better authority could be cited. In that case LordJustice Bowen said: “ ‘ Default ’ is a purely relative term, just like‘ negligence. ’ It means nothing more, nothing less, than notdoing what is reasonable under the circumstances—not doingsomething which you ought to do, having regard to the relationswhich you occupy towards the other persons "interested in thetransaction.”
Applying this definition, can it be said that the plaintiffs' actionin refusing to buy the property was unreasonable in the circum-stances ; that it was improper, having regard to their relations withthe defendant ?
Putting aside for a moment the plaintiffs’ relation with thedefendant, there was plainly nothing unreasonable in their refusalto accept the property. The existence of these ground tenants wasa serious blot on the title, and one which might well have deterredany prudent investor from buying the property except at a reducedprice. The relations between the plaintiffs and the defendant did notin any way alter the situation. There is nothing in these relationsfrom which it can be implied that the plaintiffs were obliged to accepta title which would not have been acceptable to a prudent man of:business. It is not as if the defendant had entered into any contractwith the vendors and had assigned that contract to the plaintiffs.
Tn that case we should have had to consider the effect of an agree,ment to sell under the Roman-Dutch law (vide Jamis v. Sup-paUmma et al.2).
It is only by a figure of speech that the defendant can be saidto have assigned “ an option ” to the plaintiffs. He had no rightwhich was capable of being assigned, and his position, as is shownby the terms of P 7, as well as by the transaction itself, was simplythat of a commission agent, who claims remuneration for negotiatinga sale. It is, I think, quite clear that the sale did not fall throughby reason of any default on the part of the plaintiffs, and 1 woulddismiss the appeal with costs.
Pebeika J.—I agree.
131 Chan. Division 169.
[1913) 17 N. L. B. 33.