083-NLR-NLR-V-26-HADDEN-&-CO-v.-IBRAHIM.pdf
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Ennis A.C.J. and Dalton J.
HADDEX A CO v. IBRATTTM.
1923.
194—1). C. (Inly.) Colombo, A«*Z.
Principal and agent—Insolvency of agent—Proof of debt in insolvency—
Action, against undisclosed principal—Election—Ordinance No. 7of 1853, .v. 109—*Evtdcn7c A c-t. s. *53.^
Where the plaintiff proved a claim in respect of certain short-fall on moneys advanced against a consignment of rubber in theinsolvency proceedings of the firm which ship the rubber andNsubsequently withdraw the claim and sued the defendant as theUndisclosed principal of the insolvent firm.—
Held, that such proof was no bar to the present action.
An entry made in n rubber register book, kept in pursuance, ofsection 0 of Ordinance No. 21 of 1908. is admissibly iu evidence.
A
PPEAL from U judgment of the District* Judge of Colombo.
The facts appear from the argument and the judgment.
' tjamarawickremc (with him Keutveman and, Canakeratne), fordefendant, appellant.—The plaintiff company sues the defendantin this action for certain shortfalls on moneys advanced to A. H.
Ismail & Co. against Rubber consigned to plaintiffs in London; Thedefendant i* now* sued as the undisclosed principal for whoni A. H.
Ismail A Co. were the agents in pursuance of the direction in thejudgment in Ramanathan v. Ebrahim Lebbe.1
The. plaintiff company lias admittedly proved in the insolvencyproceedings of A. H. Ismail for this amount and actually received adividend, which they have refunded. The proof of a debt in insol-vency proceedings jind the adjudication thereon is in the nature ofa judgment, and the principle in 'Kendal o. Hamilton – applies, viz.,that where a party has sued the agent and obtained a judgment hecannot later seek to sue the undisclosed principal.
[Ennis- A.C.J.—But that- has been annulled as it were by theSupreme Court' judgment. ]
Once the bar has been created it cannot be removed, and in thisconnection reference may be iiiade to section 109 of the InsolvencyOrdinance on the effect of proof in insolvency proceedings.
This is on the assumption that A. H. Ismail were agents for thedefendant. But in point of fact the evidence ’that has been leddiscloses no such agency. The sales by defendant to Ismail wereout-and-out sales, and not for shipment, as appears from the booksproduced. The words “ for sale M appearing in document P 5 da not1 {192$) U N. L. R. 321.2 {1879) 4 A. C. $14.
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1926.
sf'.tdden <9Co. o.Jbrahim
go to prove that the rubber was left at tbe stores for sale on accountof the defendant. Furthermore, it is only a formal documentdrown up by the clerk and signed by the defendant.
Even conceding thajt the proof in insolvency is no bar, and that*agency has been established, there has been no evidence, or at thebest, insufficient evidence, of the claim itself- The books producedin support of the claim are the books of Ismail & ('a. Books of athird party are no evidence under section 34. Nor have these booksbeen properly produced, as no witness, who'can speak to theiraccuracy or explain items contained in them, has been called.
The rubber register is not evidence, and was not properly admittedin evidence.
|Ennis A.C.J.—Is not the rubber register a public documentwithin the meaning of section 35 of the Evidence Act ?]
No.. It is a document kept by a private party, and hence cannotbe a public document. The public have no access to it.
Haylcti. (with him Chol'8y)t for plaintiffs, respondents, not called,upon.%✓
May 5, 1925. Exxis 'a.C.J.—
This was an action by a firm of London merchants for tbe recoveryof Bs. 29,845.70, being the balance of an account. This sumrepresents the sum of £2,114. Is. 6d, the plaintiffs claimed againstthe present defendant on the ground that the4 present defendantthrough his agents, A. H. Ismail & Co., consigned to the plaintiffscertain parcels of rubber. Against the consignment Ismail &Co.drew against the plaintiffs. The rubber market fell, and in theresult the consignment failed to realize the amount which Ismail ACo. had drawn from the plaintiffs. In consequence the plaintiffsclaimed in respect of certain shortfalls the amount which is thesubject* of this action. The defendant denied the transactionaltogether, and said that he had sold.liis rubber outright to A. H.Ismail < *o.. who were, therefore: not his agents*-in the matter ofthe consignment with the plaintiffs.
It appeai-s that A. H. Ismail Sc Co. were declared insolvents inAugust, 1920, and the plaintiffs claimed and proved in the insolvencyproceedings for the amount in question. They also received adividend in respect of their claim. The assignee in bankruptcyappears to have written* to the plaintiffs' lawyers the letter D 2asking their assistance to enable them to take action against thedefendant to indemnify them against the plaintiffs' claim inbankruptcy. Thereafter the assignee brought an action againstthe present defendant—action No. 1,175 of the District Court ofColombo. There was an appeal from the judgment in that action,and the appellate judgment- is reported in llamanathan o. EbrahintEd(sujnv). It was there held that it was unsatisfactory to give
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a decision in the circumstances of. tliat case, anti the matter was 19&&postponed for four months to enable the English buyers to take
some definite action in the matter of an election whether they would
proceed against the agent or the undisclosed principal. Thed
plaintiffs took the opportunity mentioned in that judgment and. Ibrahimbrought the present action. But before doing so they withdrew•their claim in the insolvency proceedings, and returned to thejissignee the dividend they had received. This course was taken inpursuance of the suggestion made in the course of the judgmentreferred to.
At the hearing of the case the learned Judge pointed out that the.defendant had nothing but his own word to support his contentionthat then* was an out-and-out sale, and further that the defendant■had failed to produce his own books of account, alleging that theyhad been destroyed by fire. He failed also to call any evidence insupport of his contention. The learned Judge held in favour of theplaintiffs, and the defendant appeals.
On appeal it was urged that the plaintiffs had not succeeded inproving that Ismail & Co. were merely agents. This point is reallya matter at. fact. A point of law was. also raised, namely, that theplaintiffs’ proof of their claim in the insolvency proceedings was abar to this action. On the question of fact l see no reason whateverto. interfere with the finding of the learned Judge. It was contendedon appeal that the plaintiffs’ case rested entirely .on the books ofaccount of the insolvent company, and it was urged that these accountbooks were not sufficient to charge the defendant with liability asspecified in section #4 of the Evidence Ordinance. It appears,however,- that, the books of account do not stand alone. There aretwo other books- in the-ense, and the evidence of the clerk of IsmailX Co. The clerk was unable to speak with regard to the transactionsin question. But he produced the books, and swore that they hudbeen kept in the regular- course of business. He also produced thebool: P 2. On appeal it was urged that this document* should nothhve been admitted in evidence. In my opinion, however, it wascorrectly admitted. The document is a register of rubber purchased,oiid is a register prescribed by Ordinance No. 21 of 1008, section 9.
The .entries show that, the rubber received from the defendant wasreceived for shipment shown in a column' *1 if nQt purchased, howacquired.” Moreover, the ships are named in the coluinp “howdisposed of ”, and the column beaded “ price paid" for lb. M is left-blank. -This book is not a book of account, and is admissible Undersection *85 of the Evidence Ordinance.. In my opinion it is anofficial book. Section 0 of the Ordinance No. 21 of 1008 shows thatit is a book supplied by the Government Agent, in which rubberiealers are required by law to make entries. Any entry, therefore,in. this book is a relevant, fact- under section 85 of the EvidenceOrdinance, and the book was properly admitted, in evidence. The
1925.
EmusA.C.J.
Hadden dtGo. v.Ibrahim
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account books* of the Ann of Ismail & Co. support the fact deduciblefrom the document F 2, namely, that Ismail & Co. were there actingas agents and not as principals in the matter of the consignmentto the plaintiffs. There is one other piece of evidence apart from P 2.and that is the document P 5. The original of this document waslost in the course of the trial of action No. 1,175, and P 5 is producedhv the clerk of Ismail & Co. as his recollection of the originaldocument. It is the document which was signed by the defendantwhen sending rubber to Ismail & Co. It was the* document requiredby the Rubber Ordinance, No. 39 of 1917, to be handed in whenvubber was brought to the licensed premises. That documentcontained a printed form of question to be answered by the persondelivering 'the rubber. The- question was whether the rubben wasfor sale or otherwise. This question was filled in “ for sale.” Thedefendant contended that he was wholly unaware of the contents ofthis document ; that he did not know English ; that it was filled inby his clerk, who is not called ; and that in fact, the rubber wasbrought to Ismail & Co. “ on sale v and not “ for sale.” I see' noreason to go behind the words of this document in favour of thedefendant. The clerk of Messrs. Ismail & Co. has given. evidencethat they understand this entry as being an intimation to IsmailCo., that the rubber was sent to them for sale on behalf of theperson bringing it, which is the natural interpretation of thedocument. F 2 and F 5, therefore, constitute .evidence that Ismail& .Co. were merely agents of the defendant in tlie matter of this,rubber transaction, and the books of account bear out this findingof fact.
The main interest -on this appeal centres round a point of lawwhich has been raised as to whether proof in the insolvency proceed-ings of a claim was a bar to the action. Our attention was drawnto section 109 of the Insolvent Estates Ordinance, No. 7 of 1853..That section is to the effect that proving or claiming a debt isdeemed to be an election by the creditor not to proceed against theinsolvent by action. It was contended' that, therefore, the proof ofth debt was equivalent to a judgment, and that the principle laiddown in Kendal v. Hamilton (supra) applied. It is to be observed, how-ever, that this case was referred to in the judgment in Bamanathan b.Ebrahim Lebbe (supra), and it was there said that there was only oneconclusive form of election as between the agent and an undisclosedprincipal, and that is the recovery of a judgment against one of-thepersons liable. No authority has been cited to us to show that a'claimin insolvency proceedings has the effect of a judgment, and it wassuggested in the case of Bamanathan v. Ebrahim Lebbe (supra) that theEnglish buyers might withdraw their claim in the insolvency proceed-ings, which, in fact, the present plantiffs did. It was contended onappeal, however, that the plaintiffs had no power to withdraw theirclaim in the bankruptcy, and that having once made it, it had the
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effect of a judgment against one of the parties liable. The Insolvency
Ordinance makes no provision for the withdrawal of claims. When EnnisA.C.T,
we turn to the Civil Procedure Code, we find that in ordinaryproceedings there is ample provision for withdrawal with the leaveof the Court. This Court actually set out the proceeding on whichthe plaintiffs in the present action acted, and the District Courtallowed the withdrawal of the plaintiffs’ claim in the bankruptcyproceedings. As matters stand at present in this particular case,there is now no claim or proof by the plaintiffs in the bankruptcyproceedings, and I see no reason why the procedure adopted by theplaintiffs should be regarded as irregular, as it is consistent with theordinary provision for the withdrawal of suits laid down in theCivil Procedure Code. The case of Curtis v. Williamson 1 is anauthority for the proposition that the mere, filing of an affidavit ofproof against the estate of an insolvent agent to an undiscoveredprincipal after that undiscovered principal is known to the creditoris not a conclusive election by the creditor to treat that agent as hisdebtor. In the present case the plaintiffs filed their claim againstthe estate if Ismail & Co. before they were aware that the defendantwas the principal in the transaction. The first information whichthe plaintiffs appear to have received that there were principalsbehind Ismail & Co. was the letter D 2, and that letter did notdisclose the names of the principals. It was the letter which ledto the proceedings by- the assignee which ultimately disclosed thatthe defendant in this' action was a. principal, and which led to theplaintiffs being put to an election as to whether they would proceedagainst the agent or the principal. I would add that I am unableto see in the case of Scarf v, Jardine 2 that the reference to the caseof Curtis v. Williamson (supra) found in the judgment has any bearingin the present case. The question for our decision is not reallyone of law, but one of fact, as to whether the plaintiffs have properlyexercised an election to proceed against one of the parties liable.
In my opinion they have. They were not aware of the existence ofan undisclosed principal until after the proceedings in insolvencywere well under way. They have acted in this matter on thesuggestipn thrown , out by this Court that they should take somedefinite action in the matter of an election.
In the circumstances I am of opinion that the learned Judge wasright in holding in favour of the plaintiffs, and I would disriliss theappeal, with costs.
Daltox J.—
I concur in the conclusion arrived at. and I have nothing to add –
'(1Z74)L.R. 10.Q.n.57.
Appeal dismissed.* (1332) 7 A. C. 345.