SOERTSZ J.—De Silva v. Don Carolis & Sons, Ltd.
1937Present: Soertsz J.
DE SILVA v. DON CAROLIS & SONS, LTD.
134—C. R, Colombo, 18,130.
Principal and Agent—Sale of goods in shop—Authority of salesman to receivepayment.
A salesman who sells goods in a shop has authority to receive paymentfor goods sold by him as agent of his employer, where he has actual orostensible authority or customary authority to receive payment byreason of the fact that payment is made to the salesman in the course ofbusiness followed in the shop.
Mandy v. Galie Face Hotel Company, Ltd. (4 N. L. ft. 191) referred to.^^PPEAL from a judgment of the Commissioner of Requests, Colombo.
N. E. Weerasooria (with him E. B. Wikremanayake), for defendants,appellants.
Croos da Brera (with him Nevil Perera), for plaintiff, respondent.March 12, 1937. Soertsz J.—
The question involved in this appeal is which of the two innocent parties,the plaintiff or the defendants, should suffer for the fraud of a third party,namely, the defendants’ salesman.
The question must be examined and answered on the basis that theplaintiff did pay the sum of Rs. 128.25 into the hands of the salesman.The Commissioner has so found, and the evidence is overwhelmingly insupport of that finding.
The defendants’ case is that payment to the salesman was not paymentto them because the salesman had no authority to receive payment, andthe defendants had taken the precaution of exhibiting in a prominentplace in their shop a notice (D 4) to the effect—“ All payments should bemade to cashier and firms’ receipt obtained for same ”. In regard to thefirst matter, the trend of recent decisions has been to reduce to certainlimits the general proposition which appears to have been laid down insome early cases, that “ he who has power to sell has power to receivemoney”. In Butwick v. Grant Horridge and Sankey JJ. followed the• L. R. (.1924) 2 K. B. 483.
SOERTSZ J.—De Silva v. Don Carolis & Sons, Ltd.
ruling in Drakeford' v. Piercy and held that the proposition that “ anagent authorized to sell has, as a necessary legal consequence, authority toreceive payment is utterly untenable and contrary to authority
Sankey J. said, “In an action by the seller of goods against the buyerfor the price it would be open to the buyer who had paid the seller to show,and in the absence of any reason to the contrary he would be entitled tosucceed on showing either that the agent had actual authority to receive pay-ment, or that he had ostensible authority to receive payment or that hehad customary authority by reason of the fact that the payment was madeto him in the ordinary course of the business of agencies of the kindin question Applying this test to the facts of this case, there is evidenceto show that William Perera had authority to and- did receive money fromcustomers in order to hand it himself to the cashier. A. E. H. Mendis,the Accountant of the defendant’s firm, said, “ The salesman took themoney from the customers to the cashier ” and Jayasinghe, the cashier,corroborated Mendis when he stated “ Customers’ money is alwaysbrought to me by the salesmen According to this evidence the firsttwo conditions laid down by Sankey J. are satisfied, namely, that thebuyer should show that the salesmen had (a) actual, (b) ostensible authorityto receive money. In my opinion, in this case, the third condition is alsosatisfied that the buyer should show that the salesman had customaryauthority to receive money. It is notorious that it is the salesmen inshops who receive payments from customers for goods purchased by them.They, of course, usually take it to the cashier. But the point is that theyhave authority actual or ostensible to receive money and, therefore, whenthey receive it, they receive it as agents of their employers. I do notthink it makes any difference on this question of the responsibility of theprincipals for the money so received by salesmen, whether the salesman,directly he received the money, ran out at the door, to use the words ofMr. Croos da Brera’s submission, and the money was lost to the parties inthat way, or whether the money was lost to them, because the salesmangave a sufficiently probable explanation for his not giving the customerthe cashier’s receipt as the salesman in this case did, to satisfy the customerthat everything was right and in order. The salesman, when he took themoney and offered the explanation he did, was acting within the apparentscope of his employment. It would be very irksome indeed to customersif they were required or expected to act on the assumption that salesmenemployed in firms like these were more probably thieves than honest men,and to keep them in constant view, and follow them about to make surethat they actually took the money to the cashier, or to verify that thecashier is actually not in his seat, when the salesman says he is not, asthe salesman in this case did. It will be, least of all, in the interests ofshopkeepers if that degree of meticulous observation and inquiry isdemanded of their customers. But it is urged in this case, that theshopkeeper had taken the precaution of displaying a notice' to informcustomers that they should make payments to the cashier and obtain thefirm’s receipts. The evidence of Mendis and Jayasinghe shows that thisis a requirement that is honoured in the breach, not in the observance.But quite apart from that, there is no evidence to show that the plaintiff.
' 7 b. <t s. sis.
Suppiah Pillai v. Ramanathan.
in his case was aware of this notice, or that that he could not but beaware. The evidence is that “the defendant firm has a very extensivebusiness place. In each floor there are six or seven halls. The cashieris in one of the halls. And all we are told of this notice is that it “ isdisplayed in the show room in a prominent place It appear to be amatter of pure luck whether a particular customer sees this notice or not.It depends on whether or not he enters the showroom. There is nothingon record to show that the plaintiff entered the show room. In Mandy v.Galle Face Hotel Co.' an attempt on the part of the hotel to avoid liabilityfor the bicycle of a guest which was lost from the premises on the groundthat a notice was displayed that “no responsibility shall attach to thehotel for any property lost, unless previously placed in the Manager’scharge for safe custody ”, was respected. Lawrie J. contented himselfwith saying “ It was not proved that the plaintiff saw or read this notice ”.In my opinion, the defence based on this notice fails. The locus classicuson this question of the incidence of the loss between innocent parties is,I believe, Lickbarrow v. Mason % where Ashurst J. held “ that wherever oneof two innocent parties must suffer by the acts of a third, he who hasenabled such third party to occasion the loss must sustain it ”, In thiscase, the defendants enabled the salesman to occasion the loss bypermitting him to receive money. I am not suggesting that they shouldnot have permitted him to receive money. Business of this kind canhardly be carried on conveniently and expeditiously without investing sales-men with such authority. But employers must take the risks involved.
In my opinion the appeal fails and must be dismissed with costs.
DE SILVA v. DON CAROLIS & SONS, LTD