127-NLR-NLR-V-53-JAFFERJEEAppellant-and-THE-ATTORNEY-GENERAL-Respondent.pdf
Jafferjce e. The AUomey-Generat
666
1952
Present : Nagalingam A.G.J. and Swan J.
JAFFERJEE, Appelant, and THE ATTORNEY-GENERAL.,
Respondent
S. C. 501— D. C. Colombo, 19,869
Ageney—Undisclosed principal—Right to sue.
In a contract entered into by the Government of Ceylon with an indenting'agent in Colombo, the latter undertook to indent for the former certain goodsat a price fixed in dollars and ex-factory at Hong Kong.
Held, that the undisclosed foreign principal was entitled to sue an the contract.
Held further, that the question whether at the time the contract was enteredinto the agent had in fact the authority of the principal to act for him was amixed question of law and fact and could not be raised for the first time in
appeal.
• 17 T. L. B. 578.
• 14 T. L. B. 241.
566
NAGAXjXNGAM A.C.J.—Jafferjee e. The Attorney-General
AT, from a judgment of the District Court, Colombo.
Thiagalingam, Q.C., with C. Renganathan, E. Vannitamby, andV. K. Palasunderam, for the plaintiff appellant.
Janszc. Crown Counsel, for the respondent.
Cut. adv. vult.
March 17, 1952. Nag alin gam A.C.J.—
This litigation arises out of a commercial contract entered into bythe Government of Ceylon. The Commissioner of Co-operative Develop-ment placed an order with Jafferjee Brothers of Colombo for 100 piecesof China silk of 19-20 yards of 120-125 ounces (width 27-28") – at 260dollars per piece ex-factory Hong Kong. To this order the followingconditions were annexed:(a) that the shipment must be by the first
available steamer, and (b) that shipment be consigned to the Commissionerof Co-operative Development. The contract was also subject to thefollowing terms: (1) that the bill was to be presented for payment at theoffice of the Commissioner, and (2) that commission as usual at 4 per cent,on cost and freight was payable by the Commissioner to Jafferjee Brothers.The plaintiff who executed the order, sued the Attorney-General asrepresenting the Crown for the recovery of a sum of Rs. 841.08 as balancedue after giving credit for all previous payments received by him. Theplaintiff’s case was dismissed by the learned Additional District Judgeon two grounds. The first ground was that there was no privity ofcontract between the plaintiff and the Commissioner of Co-operativeDevelopment and that therefore the action was not maintainable. Thesecond ground was that the action was barred by prescription.
I do not think there can be any doubt but that the contract itself wasnot made between the plaintiff and the Commissioner. While that maybe true, the rights of parties cannot be adjudicated upon upon a simpleanswer to that question considered in its elementary farm. The casewas presented on behalf of the plaintiff-appellant in the lower Court onthe footing that although the contract was entered into by JafferjeeBrothers with the Commissioner, nevertheless, it was a contract by anagent on behalf of a principal whose name, it was true, had not beendisclosed.
The learned Additional District Judge has properly, in one part of hisjudgment, having regard to all the facts proved, arrived at the conclusionthat “ the plaintiff was entitled to adopt and ratify the contract made byhis agent and sue and be sued on the contract ”. This finding Counselfor the respondent challenges and contends that the terms of the contractdo not indicate that Jafferjee Brothers were acting as agents.
I do not think the contention of learned Crown Counsel is sound. Thereis ample oral testimony which was un contra dieted and which the learnedJudge has accepted which shews that Jafferjee Brothers were carryingon business as indenting agents and export and import agents and thatthey have had previous commercial transactions with the Commissioner,
NAGAUNGAM A.C.J.—Jafferjee v. The Attorney-General
567
that the Commissioner at the time that this contract was arranged wasaware of the fact that Jafferjee Brothers themselves were not to supplychina silk but that they were to indent for them—this fact is clearlydeduoible from the terms that the price was fixed in dollars and was tobe ex-factory at Hong Kong. Further the fact that they were to beindented for from certain undisclosed principles is clear from thecircumstances that one of the terms of .the agreement between the parties-was that the Commissioner was to pay commission as usual at 4 per cent,on cost and freight, that is to say, commission which an indenting agentnormally gets in the trade. An indenting agent is no more than an agentwho is known in law as a del credere agent. It is unfortunate that thelearned Judge used the word “ ratify ” in the passage referred to, whichhas been criticised by Counsel for the respondent as indicating a confusion-in regard to the principles underlying the law of undisclosed principaland agent. Subject to this infirmity, I am of opinion that the learnedJudge’s finding on this part of the case is substantially right.
The learned Judge, however, took the view that the order placed withJefferjee Brothers was nothing more than an offer made to them, andthat there was nothing to shew that Jafferjee Brothers had unconditionallycommunicated the acceptance of this offer eiher orally or in writing tothe Commissioner. Learned Crown Counsel did not attempt to supportthis conclusion of the learned Judge. There can be little doubt butthat there was a completed contract and that the order was not an offer.
The learned Judge then proceeded to hold that as the goods had notbeen consigned to the Commissioner there was a breach of one of theconditions which have been set out at the commencement of thisjudgment. If this view be correct, the Commissioner then should haverejected the goods when they were tendered to him, but on the other-hand without any objection he accepted the documents, cleared the goodsand took delivery of them. If there was a breach of the terms, then theproper course would have been for the Commissioner either to haverejected the goods or, if he accepted them, to have claimed damages.But he has done neither. The position, then is that the plaintiff, anundisclosed principal, sues upon a contract made by . an agent on hjsbehalf. That an undisclosed principal can sue was not challenged atthe argument, and it is only necessary to refer to the judgment of LordLindley in the case of Keighley Matcsted & Co. v. Durant J, where hesets out the reason for permitting a party who is not a party tothe contarct to sue on it: —
•
“ The explanation of the doctrine that an undisclosed principalcan sue and be sued on a contract made in the name of another person-with his authority is that the contract is, in truth although not in form,that of the undisclosed principal himself. Both the principal and theauthority exist when the contract is made, and the person who makesit for him is only -the instrument by which the principal acts. Inallowing him to sue and be sued upon it, effect is given, so far as he iaconcerned, to what is true in fact, although the truth may not be knownto the other party.”
1 (1901) A. C. 240 at 261.
42 – N. L. R. Vol. – Liii
568
Wisirtaloma n. Alapatha
Mr. Jansze, however, attempted to support the judgment on anotherground, namely, that there was no proof that at the* time the contractwas entered into Jafferjee Brother's had in fact the authority of the plain-tiff to act for him. This is not a pure question of law ; it is amixed question of law and fact. The fact was never put in issue in thelower Court as to whether Jafferjee Brothers had authority or not to acton behalf of the' plaintiff at the time they entered into the contract. Infact, in view of the evidence that the plaintiff is a brother of the partnersconstituting Jafferjee Brothers in Colombo, it would have been futileto have raised such a point, and besides the judment of the learnedJudge proceeds on the footing that Jafferjee Brothers were in fact theagents of the plaintiff even at the date of the contract.
The conclusion I reach, therefore, is that the plaintiff is entitled tomaintain this action.
The only other question is one of prescription, and Mr. Jansze concededthat if this view be taken of the first question the plea of prescriptioncannot be sustained.
I therefore set aside the judgment of the District Court and enterjudgment for plaintiff as prayed for with costs both in this Court and inthe Court below.
Swan J.—I agree.
Appeal allowed.