NAGALINGAM S.P.J.—Sarnelia Appuhamy v. Ram Is war a
1954Present: Nagalingam S.P.J.
P. SARNELIS APPUHAMY, Appellant, and H. V. RAMISWARA, Respondent
S. G. 75—C. R. Colombo, 40,917
Condictio indobiti—Auction sale of immovable property—Notarial fees—Exorbitantsum charged—Payment made under mistake of fact—Remedy of purchaser.
A purchaser at a public' auction of immovable property is entitled to sue anotary for the refund of exorbitant fees paid under a mistake of fact to thenotary for attesting the conditions of sale. The obligation in such a casearises out of quasi-contract.
J^.PPEAL from a judgment of the Court of Requests, Colombo.
After a public auction of immovable property had been concluded,the purchaser was presented a bill by the auctioneer setting out theamount due from him. The purchaser, without scanning the bill, paidthe full amount, assuming that he had been charged reasonable sumsunder the various heads set out in the bill. On the following day he wasinformed by his clerk that he had been charged no less than a sum ofRs. 500 as notarial fee for attesting the conditions of sale. In the presentaction he sought to recover what he regarded as the unconscionableexcess of the notarial fee charged.
II. IV. Jayeivardqne, with P. Ranaainghe, for the plaintiff appellant.
H. W. Tambiah, with S. Sharvananda and H. L. de Silva, for thedefendant respondent.
Cur. adv. vull.
December 15, 1054. Nagaxjngam S.P.J.—
This appeal involves a question of some importance relating to therights and obligations of a purchaser at a public auction of immovableproperty in regard to the notarial fees payable by him for having theconditions of sale attested.
The appellant was declared the purchaser of certain premises whichwere put up for sale by public auction at the instance of the owner by afirm of auctioneers, and at the sale the appellant was declared thepurchaser thereof at or for the price of Rs. 90,000.
That the auctioneer did, before the commencement of the sale, read outthe conditions of sale, Pi, is common ground. Of those conditionsonly two need be noticed. One is that where the purchase price exceedsa sum of Rs. 100, the purchaser should pay one-tenth of the purchaseamount to the auctioneer at the conclusion of the sale ; the other is
NAGALINGAM S.P.J.—Samelie Appuhamy v. Sam Iewara
that the purchaser should also pay to the auctioneer his commissionfixed at 2J per cent, and all advertisement and other charges “ as alsothe notary’s fees and value of stamps for conditions of sale, the costs ofdrawing conditions and the clerk’s fee
The auctioneer’s evidence is that before the auction the conditionsof sale were read out “ and the charges were left on the table for thewould be purchasers to see But he significantly adds that at thatstage not only could he not specify the one-tenth of the purchase money,the reason for which is obvious, but also the amount of the notary’s fee,the reason not being so obvious in this case. He amplified this evidenceunder re-examination and expressly stated that if a purchaser saw himbefore the sale he would not have been able to tell him what the notary’sfees would amount to. He again makes an enigmatic statement thathe would not have found out from the notary either. Why he couldnot have found out he does not say. He however says that “ after thesale whatever the notary asks I pay ”.
On the auctioneer’s evidence it is difficult to resist the conclusionthat prior to the commencement of the auction he had no knowledge ofwhat fee the notary would charge to attest the conditions of sale andconsequently no would-be purchaser could have obtained that informa-tion even if he had made inquiries directed to that end.
The plaintiff’s case is that after the sale had been concluded he waspresented a bill setting out the amount due from him, which it is admittedcontained the several items such as 1 /10th purchase money, auctioneer’scommission, advertisement charges, notary’s fees, &c., but the plaintiffsays that he did not scan the bill for one reason that he had no knowledgeof the English language, for another, that he assumed that he would becharged reasonable amounts under the various heads set out therein.He adds that he asked the auctioneer what the amount of the bill wasand on being informed it was Rs. 12,086'50, he drew out a cheque forthat amount and handed it to the auctioneer. On the following dayhe gave the bill to his clerk to make the necessary entries in his books ofaccount, when he was informed and became aware for the first time thathe had been charged no less than a sum of Rs. 500 as notary’s fees forattesting the conditions of sale. Promptly, he says, he came to his proctorin Colombo and entrusted the matter to him asking him to take stepsto recover what he regarded as the unconscionable excess of the notary’sfees charged.
Mr. Vanderemagt who conducted the sale and Mr. McHeyzer, anotherauctioneer of standing, both expressed the view that a sum of Rs. 500for attesting the conditions of sale in question they considered exorbitant.The learned Commissioner has accepted that evidence and thoughlearned Counsel for the respondent has sought to challenge the findingof the Commissioner that a sum of Rs. 500 was in fact exorbitant, noadequate grounds have been adduced for differing from the view takenby the learned Commissioner.
The appellant, with a view to confer jurisdiction on the Court ofRequests, claimed a refund of only Rs. 300 while he has averred in hisplaint that a sum of Rs. 157-50 would be more than a reasonable fee
NAGALINGAM 8.P.J.—Sarnelia Appuharny v. Ram Iawara
for the notary and that under the Notaries Ordinance the notary wouldhave been entitled to much less. When the appellant came to Courthis case was that he paid the sum of Rs. 500 on account of notary’s feesunder protest. That averment the plaintiff at no time sought to sub*stantiate. In fact his case was, as set out earlier, that in ignorance ofthe fact that he was charged as much as Rs. 500 and assuming thathe had only been charged a reasonable figure for the notary’s services,he paid that amount which was included in the total amount of thebill. The learned Commissioner does not reject the evidence of theplaintiff but has taken the view that “ if the plaintiff chose to pay the billlike a Duke without scrutinising the items, he has only to blame himself ”.
I do not think that there is any principle of law which precludes theplaintiff from recovering money paid under these circumstances ; on theother hand, I think ample authority may be found for the contraryproposition. First and foremost is the principle of Roman Dutch Dawthat where money has been paid under reasonable error of fact to aperson not entitled, an action lies for its recovery 1. Grotius deals withthe topic under the broad heading that one person should not enrichhimself at the expense of another and states that under this head falls :“ the recovery of what one has ignorantly paid as a debt without beingreally indebted ” (condictio indebiti). Nathan2, dealing with what is orwhat is not a reasonable mistake, says, “reasonable ignorance is as ageneral rule ignorance of what has been done by another or of the existenceof a state of tilings which is of such a kind that a very careful man maylabour under it. In the case of such ignorance the burden of proof liesupon the person who denies it, who must show the full knowledge of theparty alleging ignorance. This is in full accordance with the generalprinciple that reasonable ignorance of fact, or mistake as to fact, excusesthe ignorant or mistaken party from performance of a contract or afterhe has already performed it, entitles him to relief ". Can it be said thatwhere a man does not scrutinize a bill presented to him because he assumesthat in accordance with the normal standards of professional proprietya reasonable amount would have been charged as fee and pays it that heis exposing himself to the criticism that he has committed an unreasonableerror of fact? The standard to be applied is set out by Voet and is to befound in the note to the passage already cited from Nathan :
“ An ordinarily careful person …. is not required to maketoo scrupulous an investigation with reference to a fact not immediatelyapparent iuuI will in case of a mistake be entitled to relief. ”
The case of the plaintiff is not different from that of a guest at a hotelwho pays a bill presented to him without entering upon a detailedscrutiny, for conduct of such nature, it is unnecessary to say, would bringhim down in people’s estimation ; but where later on examination of thebill he finds either the total or some of the items are incorrect, and claimsa rectification of the bill and a refund of any excess paid by him, I do notthink that opinion could be divided on the question whether he was
1 Lee, Introduction to Roman Dutch Law, 4th ed., page 346.
* Common Law of South Africa, lal ed., Vol. II, p. 560, section 774.
NAG AUNG AM S.P.J.—Samelia Appuhamy v. Barn lawara
guilty of a lack of reasonable diligence, and all will be agreed that suchconduct is above criticism. The conduct of the plaintiff is no differentfrom that of the hotel guest. His behaviour is not different from thatof any other reasonably prudent and honourable man. I do not thinkthe law requires that when a man deals with another that it should beon the footing that the man with whom he deals is other than an honour-able man. I am therefore of the opinion that on these facts the plaintiffis entitled to succeed.
Learned Counsel for the respondent however raised the question as towhether it was competent for the plaintiff to sue the defendant or whetherthe plaintiff’s rights were not in fact to be pursued against the ownerwho had put up the property for sale. In support of that propositionthe case of Ismail v. Ralnapala 1 has been cited. That is a case wherean action was instituted by a purchaser at an: auction sale against therefund of the commission paid to him after the sale had been sot asideby Court on the ground of misdescription of the property. It was heldthere that the action did not lie against the auctioneer, who was entitledto retain the fee paid for services rendered by him, but as the sale provedabortive the purchaser had to look to the person at whose instance theproperty had been put up for sale and to him alone. That proposition,I do not think, can be doubted, but it has no application to the facts of thepresent case. This is not a case where the claim is for the recoveryof the legitimate fee charged by a notary on the basis of damages sus-tained in consequence of the sale proving abortive—but the action hereis to recover what was improperly charged and paid under a reasonableerror, the sale itself being a valid one. I need only add that this actionis not based upon a breach of a contract entered into between the plaintiffand the defendant but, as sufficiently indicated already, it is basedupon the very wide principle of obligations arising out of quasi-contracts.
Another line of argument put forward on behalf of the respondentwas that as the notary had been employed by the owner of the propertyand as by the conditions of sale already referred to the purchaser agreedto pay the notary’s fees and as the owner had agreed to pay to the notaryUs. 600 for attesting conditions of sale, the plaintiff was properly chargedthat sum.
First of all, in regard to the question of fact as to whether there was apromise by the owner of the property to pay the defendant a sum ofUs. 500, I entertain grave doubts though the learned Commissionerhas answered this question in the affirmative. The owner, it is true,gave evidence and categorically stated that he had agreed to pay Rs. 500.It is not pretended that the notary examined the title or prepared anabstract of title for the benefit of the intending purchasers, or that hosearched the encumbrances or that he even drew up the conditions ofsale. The conditions of sale, according to the auctioneer, had beenprepared by him in his own office. Those conditions consist of a printedform. The only task the notary had to perform was to explain theconditions, which had already been explained by the auctioneer at thecommencement of the sale, attest the signature and prepare the attesta-tion required under the Notaries Ordinance. The conditions of sale
1 (1920) 22 N. L. B. 374.
NAGALINOAM S.P.J.—Samelia Appuhamy «, Ham Iswara
were not even sent for registration. In these circumstances, it would bestraining one’s sense of propriety and fairness to accept the evidenceofethe owner of the property that he had agreed to pay such a large sumas Rs. 500 for attesting the conditions of sale. The defendant himselfgave no such evidence. The owner’s evidence, if examined, reveals that,according to him, he had not only agreed to pay the notary Rs. 500but had also instructed the auctioneer to recover that amount and payto the notary. The auctioneer, on the other hand, who was croBs-examined in detail on behalf of the defendant, was not put a singlequestion suggesting that the owner had given such instructions. Onthe other hand, his evidence, as stated earlier, completely destroysthat suggestion for, according to him, he could not have informed thepurchasers before the conclusion of the sale what the notary’s fees weregoing to be.
I have therefore reluctantly come to the conclusion that the evidenceof the owner on this point should be rejected, but the position neverthelessrequires examination on the assumption that there was such an agree-ment between the owner and the notary. It has not been suggested—and indeed the contrary is established—that any intending purchaserwas informed that a sum of Rs. 500 would be charged by way of notary’sfees.
In these circumstances, one might even go further and say, as learnedCounsel for tho respondent was forced to admit, that at the conclusionof a sale thoro would be nothing to prevent a dishonest owner frommaking a secret gain by announcing that he had agreed to pay somefabulous figure to tho notary by way of his fees. One answer to thatis that the purchaser would dispute that amount and the sale may fallthrough. Another answer would be that if the purchaser agreed to pay,there will be nothing more to be said about it.
It seoms to me, however, that where a sum which would not ordinarilybe regarded as arfair charge on the part of a notary is intended to beclaimed, such amount should be stated before the commencement of thesale and the purchasers apprised as to the extent of their liability inregard to those fees ; in fact it would be far more satisfactory if thenotary’s fees were in all cases announced—the reason for the contrarypractice that the sale may not go through appears to me to be unsound.Had it been established that at the conclusion of the sale it was pointedlybrought to the notice of the plaintiff that he was being charged Rs. 500as notary’s fee and thereafter he proceeded to complete the transaction,without protest, there can. be little doubt that he would be bound by thepayment ho made. But the circumstances here are different. It wason the reasonable hypothesis that the amounts charged were inaccordance with the usual and normal rates adopted by the members of theprofession and in ignorance of the fact that he was being called uponto pay a sum of Rs. 500 that the plaintiff gave the cheque inclusive ofthat sum to the auctioneer. The condition that the purchaser was topay the notarial fees cannot mean, in the absence of the amount beingspecified, anything more than that the purchaser would have to payonly a reasonable amount, if not indeed the fee prescribed by the NotariesOrdinance.•
SWAN J.—Suppiah v. Btvarajah
In these circumstances there can he little doubt that the plaintiffhas made out his case. I would therefore set aside the judgment of thelearned Commissioner arid enter judgment for the plaintiff as prayed forwith costs both of appeal and in the lower Court.
P. SARNELIS APPUHAMY, Appellant , and H. V. RAMISWARA, Respondent
NAGALINGAM S.P.J.—Sarnelia Appuhamy v. Ram Is war a