036-NLR-NLR-V-40-GUNATILEKE-v.-LIPTON,-LIMITED.pdf
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Gunatileke v. Lipton, Limited.
1938Present: Poyser S.P.J. and Koch J.
GUNATILEKE v. LIPTON, LIMITED.
344—D. C. Colombo, 7,082.
Principal and agent—Sale of land—Agent, the efficient cause of the sale—Rightto commission—Land agent not a broker—Ordinance No. 15 of 1889, s. 13.Where an agent brought an intending purchaser of a property intorelation with his principal and was the efficient cause of the sale, he isentitled to the commission, although the actual sale was not effectedby him.
A land agent is not a broker within the meaning of section 13 ofOrdinance No. 15 of 1889.
T
HE plaintiff, a broker and land agent sued the defendant companyfor the recovery of a sum of Rs. 6,500 which he alleged was due to
him in respect of his services in bringing about a sale of an estate belongingto the defendant. The defendant company denied that any commissionwas due to the plaintiff and pleaded that the sale of the estate was effectedby another person. The learned District Judge held that the plaintiff didnot bring about the sale and that he was not the direct cause of thetransaction going through.
Hayley, K.C. (with him A. C. Z. Wijeratne and Barr Kumarakulasinghe),for the plaintiff, appellant.—The law applicable to the subject of agencyis the English JLaw—Ordinance No. 22 of 1866. What has to be provedin this case is that some act of the plaintiff was the causa causans of thesale. Though the causa proximo may have been the act of a third person,the plaintiff will yet be entitled to recover his commission if he canestablish that he was the efficient cause of the sale.’ See Murray v.Curriex; Green v. Bartlett2; Millar, Son & Co. v. Radford3; Tribe et al. v.Taylor *; Burchell v. Govrrie and Blockhouse Collieries, Ltd5.
V. Perera, K.C. (with him F. C. W. VanGeyzel), for defendant,respondent.—This case does not deal with a contract between a brokerand his principal whereby the broker is to find a purchaser. In thepresent case, the defendant was considering offers for the sale of theestate from any person. Each offer should be considered as a separatetransaction. Whoever was immediately responsible for the offer which
» (1836) 1 0. * P. 584.s 11903) 19 T. L. R. 575.
* (1868) 14 C. B. (N. S.) 681.* (1876) 1 C. P. D. 505.
* (1910) A. C. 614; 80 L. J. (P. C.) 41.
POYSER S.P.J.—Gunatileke v. Lipton, Limited..
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was finally accepted was entitled to the commission. There must notonly be a casual, but also a contractual relation between the introductionof the purchaser and the ultimate transaction of sale. Millar, Son &Co. v. Radford (supra) ; Perera v. Soysa1; Tudawe v. Keppitigala RubberEstate Co.'; Brinson v. Davies'.
The plaintiff in this case not being a licensed broker cannot maintainthis action—Section 13 of Ordinance No. 15 of 1889. Non-compliancewith a statutory requirement makes the contract unenforceable—TheMunicipal Council, Galle v. Cassim4; Cope v. Rowlands'; Sockalingam■Chettiar et al. v. Ramanayake et al. *
Hayley, K. C., in reply.—Brokers’ licence is not necessary in this case.See section 1 (c) of Ordinance No. 15 of 1889. A lieence is necessary onlywhere the broker carries on business within the Municipal limits of anytown. There is no evidence that Balapitiya, Iwhere the plaintiff resides,has a Municipality. Further, the plaintiff is* really in the position of aland agent and not of a broker—Chadbum v. Moore Kirkwood v. Gadd *;1 Halsbury 152 (1st ed.) ; Boustead on Agency, p. 4 and p. 156 (4th ed.) ;25 Halsbury 138 ; Leake on Contracts 373 (8th ed.).
Cur. adv. vult.
April 4,1938. Poyser S.P.J.—
In this action the plaintiff, who described himself as a broker and landagent residing and carrying on business at Balapitiya, sued the defendantcompany for a sum of Rs. 6,500 which he alleged was due to him in respectof his services in effecting the sale of an estate known as Eadella Groupto one Ibrahim Lebbe Marikar.
The defendant company denied that they were liable to pay the plaintiffany commission or remuneration and pleaded that the sale of the saidestate was effected by another person who carried on business under thename of VanGeyzel & Company.
The facts briefly are as follows: At the beginning of 1936 it seems tohave been generally known that the defendant firm were prepared toreceive offers for the purchase of the estate known as Eadella Group, and,on February 18, 1936 (P 1), the plaintiff wrote to the defendant firmasking if it was true that they had an idea of selling this estate. OnFebruary 25 of the same year the plaintiff again wrote (P 2) to thedefendant firm asking whether the estate was for sale and, if so, requestingthat particulars of production and a permit to inspect it be given to him.
The defendant firm (P 3) stated they could not provide the informationrequired, but later, on June 5 (P 4), wrote to the plaintiff enclosing aletter of authority to inspect this estate. On July 26 the plaintiff writesthe following letter (P 5) : —“ I am glad to inform you that my clientwishes me to make a firm offer of Rs. 150,000 cash, for the above property.This offer is subject to my commission of 2£ per cent, on the said amount.This offer holds good till August 15, 1936. If you are pleased to cablethis offer I am prepared to pay the cable charges on hearing from you.P.S.—We visited the estate yesterday ”.
1 {1910) 13 N. L. R. 85.« (1838) 2 M. A W. at p. 157.
a (1929) 30 N. L. R. 389.• (1933) 35 N. L. R. 33 at' 42.
* (1911) 105 L. T. 134. ■i (1892) 61 L. J. (Ch.) 674.
« (1906) 9 N. L. R. 108.« (1910) A. C. 422.
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POYSER S.P.J.—Gunatileke v. Lipton, Limited.
The defendant firm replied to this letter on July 30 (P 6) stating thatthe offer of Rs. 150,000 is top low to be of the slightest interest to them.
Subsequently, on September 20, 1936, the plaintiff wrote to the defend-ant firm as follows (P 7) :—“ I have the honour to inform you that myclient, Mr. E. L. Ibrahim Lebbe Marikar, who visited the estate with yourpertnit along with me has made an offer for the above without myknowledge and thereby getting behind me. So I beg you to safeguardmy commission if he were to buy it. Further I got another client who isprepared to make an offer of two lakhs cash subject to confirmation afterhis visit. So I shall be much thankful to you if you would kindly postme a permit of inspection after the 26th instant, as expressed by yourgood selves through the 'phone on last Friday ”.
Subsequently the plaintiff was granted a further permit to inspect theproperty at any time and on October 14 he again wrote to the defendantfirm stating that a client of his, T. A. J. Noorbhai, was prepared to payRs. 200,000 for the property. This offer was not accepted and theplaintiff on December 18, 1936, made a further offer of Rs. 227,000 (P 20),but did not state on whose behalf the offer was made.
On January 13, 1937, the defendant firm wrote to the plaintiff (P 22),stating that they are prepared to consider an offer of Rs. 280,000. Theplaintiff replies to this letter the following day (P 23), stating lhat themaximum his client is prepared to offer is Rs. 250,000. This offer is riotaccepted, and on February 7, 1937, the plaintiff again writes to thedefendant firm (P 28), stating that Ibrahim Lebbe Marikar is his client,that he had taken him to the defendants’ office and that he had learntthat Messrs. VanGeyzel & Company were the brokers in regard to the sale.He also asked that his interests be safeguarded.
Actually the sale of this estate for a sum of Rs. 260,000 was effected inthe month of February through Messrs. VanGeyzel & Company, IbrahimLebbe Marikar being the purchaser.
In regard to the letter P 23, written by the plaintiff offering Rs. 250,000on behalf of an unnamed client, the plaintiff in his evidence stated thatthis client was Marikar. The District Judge, however, does not acceptthat evidence and finds that after the offer of Rs. 150,000 had been made(P 5), the plaintiff had nothing to dp with Marikar and the latter thencommenced negotiations through the* firm of Messrs. VanGeyzel SrCompany.
Mr.. Hayley argued that the evidence, both documentary and oral, didnot justify this finding of fact of the District Judge. However, I do notthink there are sufficient grounds disclosed for setting aside the findingsof the -District Judge on questions of fact and for. the purpose of thisappeal, I propose to take the facts as found bjjr him. In this connection.1 would refer to Marikar’s evidence. Marikar had first stated that hehad an estate adjoining Eadella Group, that he knew that this estate wasin the market before the plaintiff spoke to him and that he visited theestate in company with the plaintiff. He admitted making an offer ofone and a half lakhs tp the defendant firm through the plaintiff.
Subsequently in cross-examination he admitted that the estate heowned was twenty miles away from Eadella Group and he also stated,“ I had not been to Eadella Group before' plaintiff .came and saw me. I
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had no intention of buying it. It is the plaintiff who* induced me to makean offer. He obtained a permit to inspect the place from the defendantcompany. He accompanied me to the estate He further stated thathe made a second visit by himself and after such visit got the plaintiff tomake an offer. He also admitted that he is sharing any commission paidto VanGeyzel & Company by the defendant company.
Mr. Doudney, who is the local manager of the defendant company,stated that the sale of this estate was effected by VanGeyzel & Company,and his opinion was that the plaintiff was not entitled to any commission,but decided that he would refer the matter to his proctors. He deniedthat the plaintiff had brought Marikar to see him but did not seem verycertain about it. He admitted however that the plaintiff asked him tosafeguard his interests both in September, 1936, and after the sale wasconcluded in February, 1937.
The District Judge has held that the plaintiff is only entitled to com-mission on the sale of this estate if he brought about a binding contractbetween Marikar and the defendant company. He also held “ that theplaintiff did not find a purchaser ready and willing to pay the price whichthe defendant firm was prepared to accept; that he did not in fact bfingabout the sale, nor was he the direct cause of the transaction goingthrough. All that is said to his credit is that he made an offer andobtained a permit ”.
In regard to Marikar’s action, he held that he was not called upon toadjudicate on any sly action of his and he “ saw no default on the part ofthe defendant firm in regard to Marikar making an offer, which was^eventually accepted, through another broker, and considered they couldnot be held responsible for Marikar’s conduct ”.
The above are the facts. The law applicable to questions of agency isthe English law. See Ordinance No. 22 of 1866.
We were referred to a number of English authorities, the latest of whichwas Burchell v. Gowrie and Blockhouse Collieries, Limited (supra). In thatcase the Privy Council held that where an agent had brought his principalinto relation with the actual purchaser he was entitled to recover com-mission although the principal had sold behind his back on terms which •he had advised them not to accept. In that case earlier authorities werereferred to with approval, namely, Green v. Bartlett (supra),where Erie C.J.held, “ if the relation of buyer and seller is really brought about by theact of the agent, he is entitled to commission although the actual sale hasnot been effected by him ”.
In later cases it was held that “ the plaintiff must show that some actof his was the ‘causa causans’ of the sale (Tribe v. Taylor'), or was an. efficient cause of the sale (Millar v. Radford) ” (supra).
A passage in the judgment of Lord Atkinson, Burchell v. Gowrie and.Blockhouse Collieries, Limited (supra), which strongly supports theplaintiff’s case is found at page 625, “ The answer to the second contentionis, that if an agent such as Burchell who brings a person into relation withhis principal as an intending purchaser, the agent has done the mosteffective, and, possibly, the most laborious and expensive, part of hiswork, and that if the principal takes advantage of that work, and, behind
' 1 C. P. D. 005, 510.
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the back of the agent and unknown to him, sells to the purchaser thusbrought into touch with him on terms tvhich the agent theretoforeadvised the principal not to accept, the agent’s act may still well be theeffective cause of the sale
None of the other authorities cited are in any way in conflict with thecases above cited. The question therefore is, was the plaintiff theefficient cause of the sale of Eadella estate to Marikar ?
In my opinion, the evidence of Marikar, as accepted by the DistrictJudge, conclusively proves that he was. As previously stated, Marikarstated: “ It is the plaintiff who induced me to make an offer ”, arid theplaintiff in fact did make the first offer on behalf of Marikar. Subse-quently Marikar, who must have made up his mind to purchase thisproperty if possible, went to the firm .of VanGeyzel & Company, the soleproprietor of which is the witness Mansoor, a relation of his, and madehis final offer through Mansoor in order that he might share in the com-mission the defendant firm had agreed to pay. That fact does not, inmy opinion, relieve the defendant firm of their liability to pay the plaintiffcommission if he was responsible, as I hold he was, for bringing Marikarinto relations with them and doing the most effective part of the work.
This case is I think within the principles enunciated in Burchell v. Gowrieand Blockhouse Collieries, Limited (supra), and the plaintiff is entitled tosucceed.
In regard to the amount the plaintiff claims, it was admitted in thelower Court that the plaintiff is entitled to the amount he claims, namely,a commission of 2£ per cent, if the property was sold through hisinstrumentality. As stated before, I think it was sold through hisinstrumentality and he is therefore entitled to the amount he claims. Itis not quite clear whether the defendant firm had in fact paid commissionto VanGeyzel & Company. According to the witness Mansoor, suchcommission had not been paid to them, but it was stated in the course ofthe argument that such commission had been paid after judgment in theDistrict Court. However that may be, the defendant firm is not relievedfrom liability. They were warned in October, .1936 (P 7), that theplaintiff claimed Marikar as .his client, and after the property had beensold the plaintiff also asked that his interests in regard to commissionshould be safeguarded. .
If the defendant firm have paid commission to the wrong person, thatdoes not excuse them from paying what is due to the right person.
There is one further point which arises on the appeal, namely, theDistrict Judge’s adjudication on the fourth issue, which is as follows: —“ Can the plaintiff maintain this action in view of his failure to procure abroker’s licence under Ordinance No. 15 of 1889? ” The District Judgeonly dealt briefly with this issue as he found in favour of the defendanton the other issues. This issue he found in favour of the plaintiff. Inmy opinion he rightly so found.
Ordinance No. 15 of 1889, section 13, requires that any person whocarries on the trade or business of an auctioneer or broker within thelimits of any town in which a Municipal Council is or shall be establishedor shall be brought under the operation of various Ordinances shall obtaina licence to practise as such.
Coder v. Mo homed.
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It was argued on behalf of the defendant firm that as the plaintiff didnot obtain such a licence, he was not entitled to maintain the action. Insupport of this argument the case of Cope v. Rowlands (supra) was cited. Inthat case Baron Parke held that “a broker cannot maintain an actionfor work and labour and commission for buying and selling stock; &c.,unless duly licensed by the mayor and aldermen of the city of London,pursuant to 6 Anne. c. 16”. This case has been considered in many latercases many of which are set out by my brother Koch in a case reportedin 35 N. L. R. at p. 33, and the deductions which may be made from theseeases are that if a contract or transaction is expressly prohibited by law,whether such prohibition was for the protection of the revenue or other-wise, or if such contract was forbidden by implicatipn, for example, bythe infliction of a penalty, the contract is void and cannot be enforced.
I think, however, that this point may be decided’ without reference toany of these authorities.
In the first place, as the Judge points out, the plaintiff describes himselfin paragraph 1 of his plaint as a broker and land agent carrying onbusiness at Balapitiya. The defendant firm admitted that averment.It has not been proved that there was a Municipal Council established forBalapitiya, or that it was brought under the operation of the Ordinancesreferred to in section 13 of Ordinance No. 15 of 1889. Consequently itwas not proved that a broker in Balapitiya requires a licence.
Further, the plaintiff effected the contract between Marikar and thedefendant company in his capacity as a land agent and not as a broker.A broker is a person who executes contracts in such a way as to be legallybinding on both parties for whom he acts. A land agent is not such aperson and a land agent need not be licensed. There is consequently nostatutory provision to bar the plaintiff maintaining his action.
The appeal will be allowed and judgment entered for the plaintiff asprayed. The plaintiff is entitled to costsy in both Courts.
Koch J.—I agree.
Appeal allowed.