023-NLR-NLR-V-50-CADER-Appellant-and-NICHOLAS-APPUHAMY-Respondent.pdf
NAGALINGAJM J.—Coder v. Nicholas Appuhdmy.
93
1948
Present: Nagalingam J.CADER, Appellant, and NICHOLAS APPUHAMY, Respondent
S. C. 147—C. R. Colombo, 10,874
Landlord and tenant—Agreement with owner to collect rent—Attornment bytenant—Termination of agreement—Right of tenant to refuse payment toagent—Estoppel—Evidence Ordinance, Section 116.
Plaintiff entered into an agreement with the owner of the premisesin question to possess and manage her property and collect her rentsand the defendant, in consequence, attorned to the plaintiff and paidhim the rent. Thereafter the owner determined the agreement andnotified the defendant of that fact.
Held, that file defendant was not liable thereafter to pay rent to theplaintiff and was not estopped under section 116 of the Evidence Ordi-nance from showing that the plaintiff had since the attornment lost histitle.
Ar
'PEAT, from a judgment of the Commissioner of Requests, Colombo.
B. WikramanayaTce, K.C., with S. P. Wijewickreme and S. Kula-tiUelce, for plaintiff, appellant.
M. M. K. Subramaniam, with C. Weeramantry, for defendant,respondent.
Cur. adv. vult.
November 11, 1948. Naoausoam J.—
This is an appeal from a judgment of the Commissioner of Requests,Colombo, dismissing the plaintiff’s action for rent and ejectment againstthe defendant. It would appear that the premises occupied by thedefendant is one of several tenements the admitted owner of which isNoorul Hatheeka. By an agreement (PI) of 1948 entered into between
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NAGAX.X3STGAM J.—Cader v. Nicholas Appuhamy.
Noorul Hatheeka and the plaintiff, it was inter alia agreed that theplaintiff who had been entrusted by Noorul Hatheeka with the possessionand management of the entire premises should continue to occupy andmanage the said premises for a period of three years. The plaintiff inpursuance of the agreement PI obtained from the defendant a “ tenancyagreement” P2 dated August 8, 1947. Noorul Hatheeka purported tocancel the agreement PI and notified the defendant among others not topay rent to the plaintiff by letter PI dated November 15, 1947. Thedefendant refused to pay rent thereafter and the sequel is the presentaction which has been instituted by the plaintiff claiming not onlyarrears of rent but also ejectment after formal notice to quit had beengiven to the defendant.
The contention on behalf of the defendant is that the plaintiff was atno time a lessee of the premises which the plaintiff claimed to be. Thedefendant urges that at best the document PI is an authority conferredon the defendant by Noorul Hatheeka to collect rents on her behalf andthat on the cancellation by Noorul Hatheeka of the authority conferredon the plaintiff the latter ceased to have any rights to demand or recoverrents or even to assert any right to terminate the tenancy of the defendant.
The dispute between the parties centres round the question as to whatis the true legal relationship between the parties to the agreement PI.On the face of the document it does not claim or purport to be a leaseby Noorul Hatheeka to the plaintiff. An indenture of lease is an instru-ment which is vfery well known not only to legal practitioners but to landowners as well. The more one considers the document PI the more isone struck by the studied attempt to refrain from using any wordsfrom which the relationship of lessor and lessee could be inferred. Theusual terms whereby the owner of property lets and demises are whollywanting. The terms lessor and lessee are not used. The premises arenot demised, no rent is reserved as such, nor is there prohibition againstsubletting or assignment, the ordinary concomitants of a lease. It isalso significant that though the agreement says the plaintiff is to beregarded as the landlord in respect of the tenement and has also beenconferred express power to sue for arrears of rents and damages in hisown name, no authority or power has been conferred on him to sue thetenants in ejectment, the necessary and essential right that woulddevolve on a lessee to whom premises are demised. On the other hand,very many of the adjuncts of a lease in substance are incorporated in thedocument. The plaintiff is to have the control and management andcollect the rents of the houses for a term of three years commencingfrom February 1, 1947. It further provides that the plaintiff “ shall beregarded as the landlord by the tenants of the houses and he is to havefull power to collect rents and sue for all arrears of rents and damages' in his own name.” The plaintiff is to pay a sum of Hs. 500 to NoorulHatheeka as collection of rents—be it noted not as rent. Further, theplaintiff was not to give “ the business of collection and control to anyother person on a similar agreement.”
It will be observed that these clauses to which I have drawn attentionare easily identifiable with the recognised counterparts in an ordinaryindenture of lease. While it is true that the Court would not be governed
NARAT.TTJCAM J.—•Coder v. Nicholas Appuhamy.
95
in the construction of a document by the mere label or name attachedby parties to it, where the parties have deliberately chosen phraseologywith a view to prevent well understood legal consequences which wouldotherwise result from attaching to the instrument, it becomes incumbentupon the Court to ascertain from the terms of the document as best itcan the legal relationship intended to be created by the document.From what I have already said it would be manifest that Noorul Hatheekaand the plaintiff were determined that the ordinary relationship oflessor and lessee was not to be created between them. Although theterms “possession and management” and the right to continue “tocollect and manage ” have been used in the recitals, what may be termedthe operative clauses of the document are precise and exact languagehas been used by the draftsman to indicate the extent of the rightconferred on the plaintiff by Noorul Hatheeka. The plaintiff is to have“ full control and management ” and collect all the rents of the houses.These words coupled with the obligation or duty cast on the plaintiffthat he should pay “ as collection of rents only a sum of Rs. 500 ” toNoorul Hatheeka, to my mind establish clearly that nothing more thanthe relationship of principal and agent was to be created between theparties. If, therefore, the plaintiff was merely an agent of NoorulHatheeka to manage the property for her and to collect the rents on herbehalf, it would follow that on the determination of the agency the rightof the plaintiff to manage or to recover rents would cease.
An argument was, however, put forward that even if the agreementPI be considered as constituting nothing more than an agency betweenthe parties, nevertheless, the agency being one coupled with interest, theauthority conferrred on the plaintiff as agent was irrevocable. It istrue that where the agency is created for the benefit of and for securingto the agent an interest or right, the agency would be irrevocable. Afamiliar instance of the application of this principle would be a warrantto confess judgment. Once the mortgagor executes a warrant to confessjudgment which is in reality a proxy in favour of a proctor, so long asthe mortgage remains, the mortgagor would have no right to cancel thewarrant, and any attempt by him to do so would be regarded as nugatory.The question here, however, is whether the agreement PI is one whichwas executed by the principal in favour of the agent in order to secureto the latter rights or benefits. That the agreement was executedprimarily for the benefit of the principal and not in the interests of theagent is obvious on a perusal of the document. The object o 1 the agree-ment was to enable the owner of the land to obtain the income of thepremises herself by employing an agent to attend to the collection of therents on her behalf and for the services the agent was to perform, he wasallowed certain remuneration which consisted in his a.ppropriation of theentirety of the collection from the tenements less the sum of Rs. 500which he was obliged to pay to the principal and in order to ensure thatthe agent should perform faithfully his part of the covenant to makepayment of the sum of Rs. 500 out of the collections, he was called uponto deposit a sum of Rs. 2,500 and he was permitted to recoup himselfthis sum by appropriating a sum of Rs. 50 every month out of the Rs, 5Q0he had to pay to the principal.
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N AG ALIN GAM J.—Coder v. Nicholas A.ppuhamy.
Had the object of the agreement in the main been to secure to theplaintiff the recovery of the sum he had advanced, as would have beenthe case where a lender of money is given authority to recoup the debtby collecting the rents of the premises, then clearly such an agency orauthority conferred would be irrevocable.
In the case of Taplin v. Florence1 it was held that the authority givento an auctioneer to sell goods even after he had incurred expenses inrespect of the sale was not irrevocable by reason of his lien on the goodsfor the expenses incurred by him. I do not therefore think that theagreement PI is one which was irrevocable.
There remains, however, the question as to what is the effect of thetenancy agreement P2 signed by the defendant in favour of the plaintiff.There is little doubt that that document created the relationship of land-lord and tenant betweeen the plaintiff and the defendant. It is commonground that the plaintiff did not let the defendant into occupation of thepremises. The defendant was already in occupation under the owner,Noorul Hatheeka. Without going into the difficult question as towhether the tenant who has not been placed in occupation is estoppedfrom denying the title of the person to whom he has been subsequentlypaying rent, it is sufficient to say that the estoppel of a tenant as enun-ciated in section 116 of the Evidence Ordinance only bars the tenantfrom denying that the landlord had at the beginning of the tenancy atitle to the property. It does not, however, prevent the tenant fromshowing that the landlord has lost title since.
In this case it has been shown that the plaintiff’s right to recoverrent or to continue to assert his rights as landlord had Geased after thecancellation of his authority by Noorul Hatheeka.
The plaintiff, therefore, has no right to institute this action either torecover the rent or to claim judgment. Eor these reasons I wouldaffirm the judgment of the learned Commissioner with costs.
Appeal dismissed.
1 {1851) 10 Q. B. 744.