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SIMPSON & CO. v. SOTZA.C. R., Colombo, 11,052.
Action by broker for commission—Negotiation of loan for borrower—Finding a
lender—Rejection by lender of tide deeds offered as security.
A having requested B to raise a loan on the mortgage of certainproperty belonging to A, B found a lender who, however, after ex-amining the title, refused to advance the money, alleging that the titlewas defective. B sued A for his commission.
Held that, if AV-title deeds were not in order, B should succeed in hisaction.
Per Bonser, C.J.—The rule is that if an agent does all that he isexpected to do, according to the terms of the contract, and finds aperson able and willing to lend the money, then the agent has earnednis commission; and it matters not what happens afterwards, whetherthe lender capriciously refuses to complete his bargain, or the bargainfalls through from any other cause, for in that case the agent has doneall that he was required to do.
But where the plaintiff found a person able, ready and willing tolend the money, but that person entered into no binding agreement tolend the money, the rule is that if the would-be lender was preventedfrom lending the money by the fact that the owner of the property, thedefendant, was unable to make out a good title to the property whichwas to bo the security for the loan, the plaintiff would be entitled tohis commission, for he has done all that he was expected or was boundto do, and the failure of the loan was due to the fault of the defendant.
HE plaintiff, as a duly licensed broker and commission agent,
alleged that the defendant on the 4th July, 1899, requestedthe plaintiff to negotiate for the defendants a loan of Rs. 10,000on the mortgage of property belonging to the defendant; that thedefendant agreed to pay to the plaintiff a commission of 2 percent, for the same; “ that in pursuance thereof the plaintiff“ obtained the said loan for the defendant, whereby the defendant“ became liable to pay the plaintiff the sum of Rs. 200, being money“ payable by the defendant to the plaintiff for work done by him“ as broker and agent for the defendant at his request, and for“ commission and reward due from the defendant to the plaintiff“ in respect thereof.”
The defendant admitted the agreement, but denied his liabilityto pay the amount claimed, as the plaintiff did not obtain the loanin question for cbe defendant.
The Commissioner found that the plaintiff did secure a lenderin Mr. F. C. Loos, who was willing to lend the defendant Rs.10,000on the mortgage of his property; but that as defendant’s title deedswere not in order, the lender did not see his way to accepting
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them as security. The Commissioner therefore gave judgmentfor plaintiff.
H. J. C. Pereira, for appellant.—The lender, Mr. Loos, was notintroduced to the defendant, the borrower. Mr. Loos said he wouldlend the amount only if he was satisfied with the title deeds.No loan was arranged in fact, and defendant’s liability for thecommission does not arise if the loan falls through, as it did fallthrough in the present case. Fisher v. Drewctt, (L. J. 48 C. L.(1879) 32; 2 Ruling Cases, 527). [Bqnser, C.J.—Do I understandyou to say that, if the lender was introduced to the borrower,and the lender afterwards declined to lend, the plaintiff couldrecover his commission?] Yes; the plaintiff can recover if theparties were brought together, and only according to the contract.[Bonser, C.J.—Mr. Loos said he would lend.] That was so, butfor want of introduction Mr. Loos could not be compelled tocarry out his promise. [Bonser, C.J.—Should it be in writing?]No. [Bonser, C.J.—Then you mean, unless there is a bindingcontract between the would-be lender and borrower, the com-mission is not earned?] Yes; the moment the lender and thedefendant entered into a contract, whatever happened afterwards,the plaintiff has earned his commission. In the cases cited theparties were brought together and a contract entered into. Inthe present case those two elements are wanting.
Jayawardana, for respondent.—The case of Green v. Lucas,6 Fisher's digest, 18 (33 L. T. 594), is on all fours with thepresent case. Plaintiff has performed his part of the contractwith defendant. He found the lender, who promised to lend ifthe defendant showed a good title. The matter fell through bydefault of defendant to make out a good title. (Bonser, C. J.—At what moment do you say is the commission earned?] As soonas the agent finds the lender. Evans, in his work on Principal andAgent, p. 397, says, “ that if the agent has done everything that“ ought to be done, then it is immaterial in the absence of a contract“ or custom to the contrary, so far as his right to commission is“ concerned, that his services have been fruitless.” He procureda lender, and kept the defendant informed of all that hadoccurred, and defendant is proved to have been in communicationwith Mr. Loos's clerk. Hence there was virtually an introduc-tion. Lockwood v. Levick, (7 Jurist N. S., pt. 1, p. 102).
H. J. C. Pereira, in reply.—If we are made liable to the plain-tiff for the commission, what remedy have we against Mr. Loosfor unlawfully breaking his contract to lend?
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This is an action by a broker who sues the defendant for com-mission which, he says, he has earned. The defendant was theowner of a certain property at Bambalapitiya, and on the 4thJuly, 1899, he wrote and signed a letter addressed to the plaintiffin these terms: —
“ Dear Sir,—I shall thank you to raise me a loan of Rs 10,000“ on the primary mortgage of my property in Bambalapitiya. I“ am prepared to pay you 2 per cent, for raising such loan.”
In pursuance of that authority the plaintiff entered into negotia-tions with Mr. Loos, an Advocate of this Court, who had thatamount of money to lend. Mr. Loos went to see the property,and told the plaintiff that he was willing to lend the money ifthe title was all right. The deeds were produced to Mr. Loos,who, after examination, was not satisfied with them, and declinedto go any further with the negotiations. The plaintiff contendsthat he has earned his commission.
The rule appears to be that if an agent does all that he isexpected to do, according to the terms of the contract, and findsa person able and willing to lend the money, then the agent hasearned his commission; and it matters not what happens after-wards, whether the lender capriciously refuses to complete hisbargain or the bargain falls through from any other cause, forin that case the agent has done all that he was required to do.In this case, although the plaintiff found a person able, ready, and' willing to lend the money, yet that person entered into no bindingagreement to lend the money; but it seems to me that, if thewould-be lender was prevented from lending the money by thefact that the owner of the property, the defendant, was unable tomake out a good title to the property which was to be the securityfor the loan, the plaintiff would be entitled to his commission, forhe has done all that he was expected or was bound to do, and thefailure of the loan was due to the fault of the defendant.
The difficulty in this case seems to me that there was neither abinding contract entered into with the lender, in which case thecondition of the title would bo immaterial, nor is there evidencethat the title was, in fact, defective, although the Commissionerseems to have assumed it was defective. No issue was framed onthe point, and I, therefore, send the case back to enable theCommissioner to try this issue, whether the defendant’s titlewas a good one. If the issue is decided in the affirmative, thedefendant will succeed. If the issue is answered in the negative,then there will be judgment for plaintiff for the amount claimed.
Costs to abide the result.