064-NLR-NLR-V-45-JAYASINGHE-Appellant-and-KEELL-&-WALDOCK-Respondents.pdf
SOERTSZ J.—Jayasinghe and Keell & Waldock.
249
1944Present: Soertsz and Wijewardene JJ.
JAYASINGHE, Appellant, and KEELL & WALDOCK,
Respondents.
213—D. C. Colombo, 12,484.
Principal andagent—Brokeremployed to buy rubber coupons—Principal
in default—Right of broker to sell without intervention of Court—Damages.
Where a broker is employed by a principal to purchase rubber couponsin pursuance of an express agreement between them by which the brokeris authorised to sell the coupons for the purpose o! recoupment in theevent of the principal making default,—
Held, that the broker was entitled to sell the coupons without theintervention of a Court of Law.
A PPEAL from a judgment of the District Judge of Colombo.
H. F. Perera, K.C. (with him N. K. Choksy and Kingsley Herat), for thedefendant, appellant.
N. Nadarajah, K.C. (with him D. W. Fernando), for plaintiffs,respondents.
Cur. adv. vult.
May 3, 1944, Soertsz J.—
The plaintiffs, a Eirm of Brokers, are suing the defendant to recoverthe difference between the price they paid for three lots of rubber couponsthey purchased for the defendant on his instructions, and the price theyrealised when they sold those lots, in pursuance of an express agreementbetween them and the defendant, by which they were authorised to sellthem for the purpose of recoupment, in the event of the defendant makingrespondefault.
The matters pressed on this appeal were—
that, notwithstanding the agreement just referred to, the plaintiffswere not entitled in law to sell the three lots without theintervention of a Court inasmuch as such sales amount toparate execution and are void as being contrary to public policy;
250
SOEBTSZ J.—Jayasinghe and Keell S Waldock.
tiiat, in any event, the sale of the coupons involved in the firstcontract P 1 was unlawful because, in respect of these, thedefendant had paid the price.
IFor the first of these contentions reliance was placed on certain Roman-Dutch authorities' which are to be found, collected and summarized, inWille on Mortgage and Pledge pp. 176 et seq and on the local case of HongKong and Shanghai Bank v. Krishnapillai1.
The effect of the writing of the jurists is that, in the absence of anexpress agreement, parate execution is not permissible, but in regardto the question of such execution by agreement, there appears to be asharp conflict of views with, perhaps, a slight preponderance against it.But all the authorities are agreed that an exception is made in the case•of scrip pledged with a bank and of movables of little value. In thecase of Hong Kong and Shanghai Bank v. Krishnapillai {supra) however,n Bench of this Court refused to sanction the right of a bank to sell scripwhich one of its debtors had pledged by way of security expressly agreeingto its sale in the event of his making default in his contract. But, it isunnecessary to examine that view for the purpose of this case and I havetaken occasion to refer to these authorities only because a great deal ofargument was addressed to us on them on the adroit assumption that thetransactions between the defendant and the plaintiffs are of the nature ofa. mortgage or pledge or can be equated thereto whereas, upon analysis,they stand disclosed as nothing more than those familiar instances inwhich a purchaser commissions a broker to buy goods for him anrl at thesame time authorises him to sell them in a certain contingency. Ifin the contingency contemplated the broker himself has an interestit is well established law that the authority to sell is irrevocable. Thisprinciple is stated by Boustead (8th Edition) 466 as follows: —
When an agent is employed to enter into any contract or do any•other lawful act involving personal liability and is expressly or impliedlyauthorised to discharge such liability on behalf of the principal, theauthority becomes irrevocable as soon as the liability is incurred bytthe agent. ”
I would, therefore, hold that in regard to contracts P 2 and P 3 theplaintiffs were within their rights when they sold the coupons coveredby those contracts despite the protests of the defendant and they mustbe paid the difference. In regard to contract P 1, however, the positionappears to be different. Payment was due in respect of it on theApril 5, 1940; P 20 shows that the defendant paid Rs. 1,500 in part settle-ment on the April 17, 1940. P 29 and P 33 show that on instructionsfrom the defendant the plaintiffs sold some of his tea coupons and appliedthe proceeds in payment of the balance due on account of P 1 and trans-ferred to his credit the amount in excess. That contract must, there-fore, be regarded as a completed and closed transaction and the Rs. 15,000coupon pounds as the property of the defendant which the plaintiff athis request held for him pending his instructions for their disposal. Thedefendant gave no instructions for their sale. Indeed he objected to thesale, and when they sold despite objection they sold at their peril. Theyrealised 13 cents a pound.
1 33 N. L. R. 249.
Mohamed Mihvlar and Nalliah.
251
The question then arises how the defendant’s loss or damage has to bemeasured. In the case of Elliot v. Huges 1 referred to in 10 Halsburyp. 334 (note) old edition the rule adopted in a case in which the sellerfailed to deliver the goods sold to the buyer, was that he was liable tomake good not the highest price at which they could have been sold inthe interval but the price at the date of the trial. That rule has beenconsistently followed and might have been fairly applied, in the circum-stances of this case, if there had been any evidence as to the price at thatdate. There is no such evidence, but rather than send the case back andinvolve the parties in further costs and the plaintiffs in greater delayI would fix twenty cents a pound as the basis for calculating damages.That was the amount at which the defendant was willing to sell onJune 11, 1940, as is shown by P 60. The difference is six and three-,quarter cents a pound or Es. 1,012.50 for the whole lot. This sum willbe deducted from the amount decreed in the Court below. The order forcosts in the trial Court wall stand. The defendant will pay two-thirdsof the costs of appeal.
WUEYEWA8DENE J.—I agree.
Judgment varied.