Present: Dalton and Drieberg JJ.
SINNIAH CHETTY v. SILVA et al.
67—D. C. (Inty.) Colombo, 27,859.
Agency—Authority to sign cheques—Termination of authority—Burdenof proof—Evidence Ordinance, s. 69.
The plaintiff sued the first defendant on cheques drawn by aperson who was alleged to be defendant's agent. In obtainingleave to defend the action, the defendant filed an affidavit in whichhe admitted that the drawer of the cheques was his agent somatime previous to the date at whioh the cheques were issued.
Held, that the burden of proving that the authority of theagent had terminated was upon the defendant.
LAINTIFF sued the defendants on three cheques drawn onthe Mercantile Bank of India, Kandy, for the sums of
Es. 1,500, Es. 1,000, and Es. 2,500, dated January 18, January 25,and January 27, 1928, respectively, and signed " V. Silva & Co.,
A. Ameresekere, Manager.” First defendant asked for leavpto defend the action and filed an affidavit in support of theapplication. There he denied that he made or signed the cheques,but admitted that he carried on business under the name of V. Silva& Co., and that at one time he had a business at Nawalapitiya underthe management of one D. A. Ameresekere, in connection withwhich he opened an account in .'the Mercantile Bank, Kandy.The branch, however, was closed in October, 1926. Leave todefend was granted and at the trial the first issue framed was“Did D. A. Ameresekere sign the cheques sued on ?” Afterargument the learned District Judge held that the burden of provingthe agency of Ameresekere to sign cheques for the firm was on theplaintiff.
Keuneman (with Canekeratne), for plaintiff, appellant.
V. Perera (with Croos da Brera), for defendants, respondent.June 20, 1929. Dalton J.—
The sole question that arises on this appeal is as to where theburden of proof lay.
Plaintiffs sued the defendants on three cheques- alleged to havebeen made by first defendant' and endorsed by the second defend-ant. The cheques were drawn on- the Mercantile Bank of India,
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Kandy, for the sums oi Bs. 1,500, Bs'. 1,000, and Bs. 2,500. anddated January 18, 25, and 27, 1928, respectively, and are signed“ Y. Silva & Co., D. A. Ameresekere, Manager. ”
Defendant asked for leave to defend the action, and filed anaffidavit in support of his application. Therein he denied thathe made or signed the cheques. He admitted, however, that hecarried on business under the name of V. Silva & Co., and that" at one time ” he did have a branch business at Nawalapitiyaunder the management of one D. A. Ameresekere, in connectionwith which branch he opened an account in the Mercantile Bank,Kandy. D. A. Ameresekere as manager was authorized to operateon that account by signing and issuing cheques in the form in whichthe cheques sued on purported to be signed for the purpose ofmaking payments in the ordinary course of business of the branch.The branch was, however, he sets out, closed and that authoritycaine to an end in October, 1926.
Leave to defend was thereon granted and answer was filed.Numerous issues were framed, the first issue being “ Did D. A.Ameresekere sign the cheques sued on ?”
Thereupon argument proceeded as to where the burden of prooflay in respect of the alleged agency of Ameresekere to sign chequesfor the firm. Counsel for plaintiff urged that what he had to do,at any rate at the commencement, was to satisfy the Court on thefirst- issue, apparently relying upon the admissions in the affidavit;upon which leave to defend was granted. The trial Judge heldthat his contention that the burden of proving that Ameresekerehad no authority to issue the cheques in question was on the firstdefendant was wrong. He adds that where the agent has beendismissed and a considerable period of time has elapsed he was ofopinion that the burden of proving “ that plaintiff dealt withAmeresekere. as agent and has had reasonable ground for treatinghim as agent is on the plaintiff.
It has been suggested in the argument before us that the trialJudge can in fact look at no admissions in defendant’s affidavituntil, it has been properly proved. But that affidavit sets outfacts upon which leave to defend, was granted and has to all intentsand purposes been incorporated in the answer, further defencesbeing also added. I must admit I am unable to understand thissuggestion as being a serious one.
On the question of burden of proof I am unable to agree withthe trial Judge. The authority of D. A. Ameresekere to sign chequesas manager up to October, 1926, is admitted. It seems to meon the law that plaintiff’s Counsel’s contention that the burden ofproving that that authority had terminated was on the first defendantwas correct. By section 109 of the Evidence Ordinance when thequestion is whether persons are principal and agent, and it has been
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shown that they have been acting as such the burden of provingthey do not stand or have ceased to stand to each other in thatrelationship is on the person who affirms it. The terms of thissection are explicit- It is admitted this relationship existed hereup to October, 1926, but it is alleged by defendant that it thenceased to exist. In Woodroffe and Ameer Ali’s Law of Evidence,8th ed., p. 744, there is a commentary on this section and twocases are referred to (Smout v. Ilbery 1 and Clark v. Alexander2),neither of which, having regard to the facts, give assistance on thequestion now under consideration. In Smout v. Ilbery (supra) thewife, the agent, had full authority to contract, and continued todo so after the death of her husband but before information hadbeen received of his death on the way to China. As his estate wasinsolvent Smout sought to make her personally liable, but it washeld that he could not do so under the circumstances, the con-tinuance of the life of the principal being equally within theknowledge of both parties. The decision in Brown v. Wren Bros.8cited in the course of the argument supports appellant’s conten-tion. It is a case of partnership in which it was sought to chargeW. Wren as having been a partner in the firm at the date when thegoods were supplied. The only evidence that W. Wren was-evera member of the firm was a letter written by him saying “ Ihave not banked any money this last eight, months, as I havedissolved partnership with my brother last April.” Qn appeal fromthe County Court, the Divisional Courf held that the letter clearlycontains an admission that W. Wren was a partner in Wren Bros,in April, 1892, and it must be presumed that the state of things soadmitted to have existed at that da*fe continued to exist unless thecontrary be proved. The case of Dodwell & Co., Ltd. v. John et al.*does not help on the point now under consideration. I have cometo the conclusion for the above reasons that the learned Judge waswrong on the question of burden of proof in respect of agency.It seems to me clear, however, that plaintiff could no.t properlyconfine the evidence to be led by him at the outset to the firstissue. Taking the admission that Ameresekere was the managerand agent of first defendant up to October, 1926, and so continueduntil the contrary be proved, plaintiff could not expect to succeedif he confined his proof to evidence only of the signing of the chequesby Ameresekere. He has to show the connection between the actsalleged in his claim and the relationship presumed from the admission.
I would allow the appeal, setting aside the Judge’s order on thequestion of burden of proof of authority. The costs of appeal willfollow the event in the Court below.
»10 M. d; W. 1.
« 13 L. J. C. P. 133.
* (1895) 1 Q. B. 390.« 20 N. L. B. 206.
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#929. Drieberg J.—
The question before us has been rendered difficult by the issuesframed in the case, but it appears from the judgment of the learnedDistrict Judge that what Counsel for the appellant contendedwas that in view of the admission of the respondent that Amere-sekere was prior to October, 1926, his agent with authority tosign cheques on account of his buisness, the burden of provingthat Ameresekere’s authority was determined before these chequeswere issued was on the respondent and that the appellant shouldhave the right of leading evidence in rebuttal. This contentionis based on section 109 of the Evidence Ordinance.
The learned District Judge was of opinion that the presumptionof continuing agency could not be drawn in view of the long periodwhich had elapsed, by which, I take it, he meant the period betw.eenOctober, 1926, when the respondent says he terminated the agency,and January, 1928, when the cheques sued on were issued-
I agree, however, that the burden of proving that Ameresekere’sagency was determined before these cheques w!ere issued is on therespondent. There is no authority, aB far as I know, for excludingthe presumption under section 109 where such a period has elapsedas in this case. The appellant is also entitled to use the statementof the respondent in his affidavit regarding the previous agencyin the same way as if that statement appeared in his answer.
I agree with the order made by my brother Dalton.
SINNIAH CHETTY v. SILVA et al