(1950) 1 S.C.R. 30

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30 SUPREME COURT REPORTS

1960 ABDULLA AHMED


l[areh li. v.
ANIMENDRA KISSEN MITTER.
[SHRI HARILAL KANIA c. .1., SAIYID F AZL ALI,
PATANJALI SASTRI, MEHR CHAND MAHAJAN and
S. R. DAS JJ.)
Oontmct-.{gencu-Estate b1"0ker-Authorit11 to ' 11tgotiate a
sale' and '3ecure purcha.se1· '-Whether empower& broker to conclw11
contrnct-Constr"-Otion of contract~Broker finding out purchaur
ready awl willing to buy for pries fixed by principal-Principal
concl,,.ding contract with same purchaser for lower price-Broker'1
right to commission-Powers of e&late agents.
The appellant, •u estate broker, was employed by the
respondent by a letter .dated 5th May, 1943, to negotiate a· sale 4
of a certain property on the terms mentioned_ in a commission
note which ran as follows: "J ...... do hereby authorise yon to
negotiate the sale of my property 27, Amratolla Street, free from
all encumbrances at a price not less than Rs. 1,00,000. I shall
make out a good title to the property. If you succeed in secur-
ing a huyer for Rs. 1,00,000, I shall pay you Rs. 1,000 as your
remuneration. If the price exceeds Rs. 1,05,000 e.nd does not
exceed Rs. 1,10,000, I shall pay you the whole of the excess over
Rs. 1,05,000 in addition to your remunemtion of Rs. 1,000 as
~tated above. In ce.se you can secure a buyer at a price exceed·

ing Rs. 1,10,000 I shall pay you twenty·five · pet cent. of the
excess amount over Rs. 1,10,000 in addition to Rs. 6,000 as stated
1tbove. This authority will remain in force for one month
from !late." In pursuance of this contract the appellant found
two persons rearly and willing to purchase the property for
Rs. 1,10,000 on the 2nd June and by letters exchanged with
them he purportecl to conclude the contract for the sale of the
property, and on the 3rd June communicated the same to the
responrlent. The respondent, however, cancelled the authority
or the appellant on the 9th June and on the same date entered into
an agreement \Vith a nominee of the said persons for a
•ale of the property for Rs. 1,05,000 and eventually executerl
a conveyance in their favour for Rs. 1,05,000. The appel-
lant institutecl a suit against the respondent for Rs. 6,000.
Held, per KANIA C.J., FAZL ALI, PATANJALI SASTRI and
DAS .J.T.-(i) that a house or estate agent is in a different position
from a hroker at the Stock Exchange owing to the peculiarities or
the p1·operty with which he has to deal, and an owner employing
an estate agent should not, in the absence of clear words to that
effect, be taken to have authorised him to conclude a contract or
sale; but the lack of such authority is not inconsistent with an
understanding that the agent is ..not to be entitled to his commis-
•ion unles• the owner and the purchase1· introduced by the agent
S.C.R. SUPREME COURT REPORTS 31
)
carried the transaction to completion; (ii) that even j.f the 191JO
commission note in the present case were to be construed as
making payment of commission conditional on the completion of Abdulla Alimed
the tre.nsaotion, the appellant having "negotiated the sale" and v.
"secured buyers" who made a firm offe1· to buy for Rs. 1,10,000, Animendra
acquired. the right to the payment of commission on the basis of Kis#n Mitter.
that price subject only to the condition that the buyers should
• complete the transaction of purchase and sale ; and as this
condition was fulfilled when the buyers eventually purchased
the property in question; the appellant's right to commission on
that basis became absolute, and could not be affected by the
circumstance that the respondent fo1· some reason of his own sold
the property at a lower price.
MAHAJAN J.-Under the terms of the commission note in the
present case the appellant had authority to enter into a binding
contract on behalf of the defendant, and, as he had entered
i. into such a contract he was entitled to the commission of Rs. 6,000
according· to the terms of the co~mission note. Even conceding
that he had no such authority, under the terms of the commission
note the agent was entitled to his remuneration as soon as he in·
troduced a buyer ready and willing to purchase for the price fixed
by the o'wner, whether the owner completed the transaction or not.
Luxor (Eastbourne) Ltd. v. Cooper ([1941) A.O. 108) distin·
guisbed.
• Chadburn v. 1'rloore (67 L.T. 257), Rosenbaum v. Belson ((1900)
2 Cb. 267), Durga Charan Mitra v. Rniendra Narain Sinha (36
C.L.J. 467), Wragg v. Lovett ([1948) 2 All E.R. 969) referred to.
APPEAL from the High Court of Judicature at Cal-
cutta: Civil Appeal No. XLIV of 1949.
This was an appeal by special leave from a judgment
and decree of the High Court of Judicature at Calcutta
(Harries C.J. and Mukherjea J.) dated 5th January
1948 which varied a judgment passed by a single Judge
l sftting_~m the Original Side of the same High Court
(Gentle J:) dated 11th June, 1945. The facts of the case
and the arguments of the Counsel appear fully in the
judgment.
M. 0. Setalvad (A. K. Sen with him), for the
appellant.
B. Sen, for the respondent.
- - <t. 1950. March 14. The judgment of Kania C. J.,
and Fazl Ali, Patanjali Sastri and Das JJ., was
delivered by Patanja.li Sastri J.: Mahajan J. delivered
a separate judgment.
6
32 SUPREME COURT REPORTS [1950]

19t:O PATANJALI SASTRI J. This is an appeal by special


leave from a judgment and decree of the High Court
Al1f/ulla Ahmed
v.
of Judicature at Fort William in West Bengal dated
A11i111e1Jdra 5th January, 1948, which varied a judgment and
Jlisset? Mitter. decree passed by a single Judge on 11th June, 1945,
on the Original Side of the same Court.
Patanjali
Sastri J,
Th<> appellant who is carrying on business as an es-
tate broker in Calcutta was employed by the respond-
ent on the terms mentioned in a commission letter
dated the 5th May, 194-3, to "negotiate the sale" of
premises No. 27, Amratolla Street, Calcutta, belonging
to him. In pursuance of this contract the appellant
found two persons who were ready and willing to pur-
chase the property for Rs. l,10,000, and by letters
ex<lhanged with them on 2nd June, 1943, he purported
to eoncl ude a con tract for the sale of the property and
communicated the same to the respondent by a letter
of even date. The respondent, however, entered into
an agreement on !lth .Tune, 1943, with a nominee of
the said persons for the sale of the property for
Rs. l,05,000 and eventually executed a conveyance in
their favour on 8th December, 1943.
Thereupon the appellant brought the suit alleging
that the contract concluded by him with the purcha-
se1·s for Rs. I ,I0,000 on the 2nd .June, 1943, was bind-
ing on the respondent and claimed that he was
entitled to the payment of Rs. 6,000 as remuneration
in accordance with the terms <if his employment as he
had done all that he was required to do on behalf of
the respondent. In the alternative he claimed the
same sum as damages for breach of contract. In de-
fence to the snit the respondent pleaded, intei· alia,
that the appellant had no authority to conclude a
binding contract for sale with any one, that the pur-
chasers refused to complete the transaction alleging
that they had been induced by the fraudulent mis-
representation of the appellant to agree to a price of
Rs. 1,10,000, that the subsequent sale was effected ,.
independently of the appellant, and that the appel-
lant was not therefore entitled to any remuneration or
damages.
S.C.R. SUPREME COURT REPORTS .33
Gentle J. who tried the suit found that the terms of 1960
the appellant's employment did not authorise him to
Al1d11lla Ahmed
conclude a contract of sale and that the letters of 2nd v.
,June, 1943, did not effect a contract of sale binding on Anioientlfa
the respondent. The learned Judge, however, rejected [{ i ssen M ittc r,
the respondent's case that the purchasers refused to
.... purchase on the ground of any fraudulent misrepre- Patanjali
Sa>tri J.
sentation by the appellant and that the negotiations
were later resumed afresh directly between the respond-
ent and the purchasers, and came to the conclusion
that the agreement to sell of the 9th June, 1943, and
the subsequent conveyance of 8th December, 1943,
were due solely to the efforts of the appellant in bring-
ing the parties together as potential buyers and seller.
The learned Judge refused to accept the suggestion
that the sale was in fact effected for Rs. l,l0,000 as
not being supported by any evidence but found that
the reduction of the price by Hs. 5,000 from
Rs. l,l0,000 for which the purchasers were ready and
willing to buy the property, was made only for the
purpose of depriving the appellant of his legitimate re-
muneration of Rs. 6,000. He accordingly held that
the appellant, who had performed his part of the con-
tract by finding two persons who were ready, able and
willing to buy at Rs. 1,10,000 was entitled to the com-
mission claimed.
The Division Bench (HarriesC.J. and Mukherjea J.)
which heard the appeal of the respondent, agreed with
the trial Judge that the appellant's authority did not
extend to the concluding of a binding contract for sale
of the property, but differed from his view that all
that the appellant was required to do was to introduce
a purchaser who was ready and willing to buy for
Rs. 1,10,000 and that he was entitled to his commis-
sion whether or not the property was sold at that price
or at all. They held, following certain observations
of Lord Russell of Killowen and Lord Romer in the
case next mentioned, that the appellant, having under-
taken to "negotiate .the sale" and to "secure a buyer'',
- could not be said to have either secured a buyer or
negotiated the sale "unless the sale actually took place
or at least a contract had been entered into". As,
34 SUPREME COURT REPORTS [1950]

1950 however, a sale did take place between the persons in-
troduced by the plaintiff and the defendant, and as
Abdulla Ahm<d
that sale, in the view1also of the learned Judges, was
v.
Ani1nendra
the "direct result of the plaintiff's negotiations", they
Ki1s~n MitU,.. held that the appellant was entitled to commission but
only on the price mentioned in the sale deed, namely,
Ptdanjali
Sastrl /,
Rs. 1,05,000 which, they found was the price actually .
received by the respondent. As.to why the respond-
ent accepted a reduced P,rice, Harries C.J., who
delivered the judgment of the Court, observlld: "All
that is known is that persons who undoubtedly ma.de
a firm offer of Rs. 1,10,000 for this property even-
tually bought it for Rs. 5,000 less. I strongly suspect
that the price was reduced at the defendant's instance
but I cannot find it as a. fact". In support of their •
view that the appellant was not entitled to any aom-
mission above that payable on a. purchase price of
Rs. 1,05,000 the learned Judges relied on the decision
of the House of Lords in Luxor (Eastbourne) Ltd. v.
Cooper('), where it was held tl!.at, in a contract to pay
commission upon the completion of the transaction
which the agent was asked to bring about, there was
no room for implying a term that the principal shall

not without just cause prevent the agent from earning
his commission, and that it was op!m to the principal
to break off negotiations and refuse to sell even after
the agent had produced a customer who was ready and
willing to purchase on the principal's terms. Applying
what they conceived to be the principle of that deci-
sion, the Appellate Bench varied the decree of the trial
Judge by reducing the a mount payable to the appellant
to a sum of Rs. 1,000.

The commission letter runs as follows :
"I, Animendra Kissen Mitter of No. 20-B, Nilmoni
Mitter Street, Calcutta, do hereby authorise you to
negotiate the sale of my property, 27, Amratolla
Street, free from all encumbrances at a price not less
than Rs. 1,00,000. I shall make out a good title to
the property. If you succeed in-securing a buyer for
Rs. 1,00,000 I shall pay you Rs. 1,000 as your remuner- -
a.tion. If the price exceeds Rs. 1,05,000 and does not
(1) (1941] A.C, lOS.
S.C.R. SUPRE!ME COURT REPORTS 35
exceed Rs. 1,10,000 I shall pay you the whole of the 1960
excess over Rs. 1,05,000 in addition to your remuner-
Abdulla Ahmed
ation of Rs. 1,000 as stated above. In case you can v.
secure a buyer at a price exceeding Rs. 1,10,000 I shall Animendra
pay you twenty-five per cent.. of the excess amount Ki ssen Mitter.
over Rs. 1,10,000 in addition to Rs. 6,000 as stated
f. above. This authority will remain in force for one Patanjali
month from date". Sa•tri J•
In the absence of clear words expressing the inten-
tion of the parties it is possible to construe these terms
in three different ways corresponding to the three
patterns into which commission contracts with real
estate brokers may broadly be said to fall. In the first
. place, the letter may be read as authorising the appel-
lant not only to find a purchaser ready and willing· to
purchase the property at the price required but also to
conclude a binding contract with him for the purchase
and sale of the property on behalf of the respondent.
Secondly, the contract may be construed as promising
to reward the appellant for merely introducing a poten-
tial buyer who is ready, able and willing to buy at or
above the price named, whether or not the deal goes
through. And lastly, the commission note may be
understood as requiring the appellant to find such a
purchaser without authorising him to conclude a bind-
ing contract of sale but making commission contingent
upon the consummation of the transaction. As stated
already, the first of these interpretations was rejected
by the learned trial Judge as well as by the Appellate
Bench, but it was pressed upon us by Mr. Setalvad on
behalf of the appel~ant. We are unable to accept that
view. '£he contract specifies only the price required
by the respondent but does not furnish the broker with
other terms such as those relating to the payment of
the price, the investigation and approval of title, the
execution of the conveyance, the parties who are to
join in such conveyance, the costs incident&! thereto
and so on. In fact, the agreement of sale dated the 9th
-, 'L
June, 1943, entered into by the respondent with the
purchasers contains detailed stipulations on all these
and other matters. Mr. Setalvad laid stress on the
statement in the commission note that the sale was to
36 SUPREME COURT REPORTS [1950]
19150 be free from encumbrances and that a "good title"
Abdulla Ah1ned
would be made out, but this is no more than a general
v. indication of the nature of the bargain proposed and is
Aui11iendra perfectly consistent with an understanding that further
Kissen Mitter, details will be subject to negotiation between the res-
pondent and the purchaser when found.
Patanjali
Sastt'i J. As pointed out by Kekewich J. in Chadburn v.
Moore(') a house or estate agent is in a differeu t position
from a broker at the stock exchange owing to the
peculiarities of the property with which he is to deal
which does not pass by a short instrument as stocks
and shares do but has to be transferred after investi-
gation of title as to which various special stipulations,
which might be of particular concern to the owner, •
may have to be inserted in a concluded contract relating
to such property. The parties therefore do not
ordinarily contemplate that the agent should have the
authority to complete the transaction in such cases.
That is why it has been held, both in England and
here, that authority given to a broker to negotiate a
sale and find a pnrchaser, without furnishing him with
all the terms, means "to find a man willing to become
a purchaser and not to find him and make him a pur-
chaser": see Rosenbaum v. Belson(') and Ditrya
Charan 11!/itra v. Rajendra Narayan Sinha(').
Mr. Setalvad next suggested, in the alternative, that
the second interpretation referred to above, which was
favoured by the trial Judge, should be adopted, and
that, inasmuch as, in that view also, the appellant had
done all that he was required to do when he introduced
to the respondent two prospective buyers who were •
ready and willing to bny the premises for Rs. I,I0,000,
he was entitled to commission on that basis. Learned
counsel criticised the view of the Appellate Bench, who
adopted the third cons~ruction, as illogical and incon-
sistent, and argued that, if authority to secure a buyer
were to be taken to mean authority to find one who is
not only ready and willing to buy but also becomes
eventually a buyer in order to entitle the agent to his
commission, then such authority must. of necessity
(1) 67 L.T. 257. 12) [1900] 2 Ch. 267. IS) 86 O.L.J. '67.
S.C.R. SUPREME COU"RT REPORTS 37
extend to the concluding of a contract of sale, as other- 19'50
wise the agent could not possibly accomplish the task
assigned to him. We.do not see much force in this Abdulla Aluned
v.
criticism. As already indicated there are cogent reasons Anifllendrn
why an owner employing an estate agent to secure a K issen Mitter.
purchaser should not, in the absence of clear words to
that effect, be taken to have authorised him to conclude Patattjali
a contract of sale, and we cp.nnot see how the lack of SastriJ,
such authority is iiiconsistent with an understanding
that the agent is not to be entitled to his commission
· unless the owner and the purchaser introduced by the
agent carried the transaction to completion.
In the present case, however, it is not necessary to
decide whether or not the commission note imports
• such an understanding, for a sale was in fact concluded
with the purchasers introduced by the appellant who
has thus, in a;ny view, earned his commission, both
the trial J·udge and the Appellate Bench having found
that the appellant's efforts were the effective cause of
that sale. The only question is whether the commis-
sion is payable on the basis of Rs. 1,10,000 for which
the appellant brought a firm offer from the purchasers,
or on the basis of Rs. 1,05,000 which is the price men-
tioned in the conveyance.
As already stated, the Appellate Bench based their
decision on the ruling in the Luxor case. The learned
Judges reasoned thus: "In that case the principal had
refused to sell in cirQumsta nceswhich afforded no reason-
able excuse. Nevertheless, the House of Lords, revers-
.ing the Court of Appeal, held that no commission was
payable. It appears to me that the principle is applicable
to thi~case. Though the.agent introduced a purchaser
ready and willing to buy for Rs. 1,10,000 the sale
for !JOme reason took place at a lower figure. Even if
the defendant unreasonably or without just cause re-
fused to conclude the sale at the higher figure, never-
theless the plaintiff has no right to commission based
·on that higher figure." We are unable to agree with
i I
thia reasoning. a.nd conclusion. The ground of deci-
sion in -the Luxor case was that, where commission
was made payable on the completion of the transac-
tion, the agent's right to. commission was " a purely
38 SUPREME COURT REPORTS [1950]
1950 contingent right" and arose only when the purchase
materialised. As Lord Simon put it " The agent is
1lbdulla Ahnzcd
v.
promised a reward in return for an event and the
Aniutendra event has not happened". But the position is differ-
/( isst:n l'if itter. ent where the principal, availing himself of the
efforts of the agent, concludes the sale with the pur-
F>atanjali chaser introduced by him, as the respondent did in
Sastri J.
the present case. As observed by Lord Russell of
Killowen in the same case, "where a contract is con-
cluded with the purchaser, the event has happened
upon the occurrence of which a right to the promised
commission has become vested in the agent. From
that moment no act or omission by the principal can
deprive the agent of his vested right". Applying that
principle, (even if the commission note in the present •
case were to be construed as making payment of com-
mission conditional on the completion of the transac-
tion, as it was in the English case) the appellant,
having "negotiated the sale" and "secured buyers"
who made a firm offer to buy for Rs. 1,10,000 had
done everything he was required by the respondent to
do and acquired a right to the paymel)<t of commis- •
sion on the basis of that price which he had success-
fully negotiated, subject only to the condition that the
buyers should complete the transaction of purchas~ and
sale. The condition was fulfilled when those buyers
eventually purchased the property in question, and
the appellant's right to commission on that basis be-
came absolute and could not be affected by the cir-
cumstance that the respondent "for some reason" of
his own sold the property at a lower price. We
accordingly hold that the appellant is entitled to the

full commission of Rs. 6,000.
The appeal is allowed, the decree passed on appeal
in the Court below is set aside and that of the trial
Judge restored. The appellant will have the costs of
this appeal including the costs incurred in the lower
court as well as his costs of the appeal in that court.
Mahajan}. MAHAJAN J.-This is an appeal by special leave from
a judgment and decree of the High Court at Calcutta,
dated 5th January 1948. By that judgment the High
S.C.R. SUPREME COURT REPOR'fS 39

Court va.ried the judgment and decree of Gentle J. 1950


dated 11th June 1945 made in exercise of his original Abd,.lla Ahmed
jurisdiction, decreeing the plaintiff's suit for recovery v.
of a sum of Rs. 6,000. Animendra
The appellant is a broker by profession residing at Kissen Mitter.
Nq. 81/l Phear Lane, Calcutta, and carries on the
Mahajan J.
. f busihess of a house agent. The respondent, Animendra
Kissen Mitter, resides in No. 20B, Nilmony Mitter
Street, Calcutta.
The appellant was employed by the respondent to
negotiate the sale of the respondent's premises, No. 27,
Amratolla Street, Calcutta, on certain terms and condi-
tions on commission and the questio~ raised by this
appeal is whether the appellant is entitled to his com-
mission under the circumstances Jli.ereinafter men-
tioned.
The facts are substantially admitted. By a letter
dated 5th May, 1943, the appellant was employed by
the respondent for arranging a sale of the premises
above mentioned. This letter is in the following
terms:- ·
"I, Animendra Kissen Mitter of No. 20B, Nilmoni
Mitter Street, Calcutta, do hereby authorize you to
negotiate the sale of my above property free from all
encumbrances at a price not less than Rs. 1,00,000.
I shall make out a good title to the property. If you
succeed in securing a buyer for Rs. 1,00,000 I shall
pay you Rs. 1,000 as your remuneration. If the price
exceeds Rs. 1,05,000 and does not exceed Rs. 1,10,000
I shall pay you the whole of the excess over Rs. 1,05,000
.. in addition to your remuneration of Rs. l,OOOas stated
above. In case you can secure a buyer at a price
exceeding Rs. 1,10,000 I shall pay you twenty-five per
cent. of the excess amount over Rs. 1,10,000 in addition
to Rs. 6,000 as stated above. This authority will
remain in force for one month from date."
As recited in the letter, the authority given to the
appellant was to remain in force for one month from 5th
I I
May 1943. Three days before the termination of the
appellant's authority, on 2nd June 1943 the plaintiff-
appellant obtained an offer from two persons, namely,
6
1960
40 SUPREME COURT REPORTS
Kishorilal Mahawar and Ramkumar Mahor, for the
[1950J
. '

purchase of the premises regarding which the plaintiff


Abdtdla A11med
v.
had been authorized to arrange a sale. This letter is in
Animendra these terms:-
Kissen Mitter. "We are willin:g to purchase the above house, land
and premises at and for the price of Rs. 1,10,000 only
Mahajan j. free from all encumbrances.
We hereby authorize you to accept the offer for
sale of the above permises from Mr. A. K. Mitter for
Rs. 1,10,000 on our behalf and send the confirma.tion
to the vendor Mr. A. K. Mitter on our behalf."
On the same date the plaintiff gave a reply which runs
thus:-
"I am in receipt of your letter of date and under
authority from the owner Mr. A. K. Mitter, I hereby
confirm your offer for the purchase of the above permises
at and for the price of Rs. 1,10,000 free from all encum-
brances."
Simultaneously with the issue of this letter he gave
intimation of this contract to the respondent in the
following terms :-
" Under the authority given to me by you I made an
.,
offer for the sale of the above premises to Messrs.
Kishorilal Maha war and Ram KumarMahorof No.27,
Amratolla Street, Calcutta, for rupees on lakh and
ten thousand only and they have accepted the offer
and they have authorized me to send a confirmation
to you of the said offer. I accordingly confirm the offer
made by you for the sale of the above premises for
rupees one lakh and ten thousand orrly. The draft
agreement for sale will be sent to you in the usual
course.
A copy of the letter of Messrs. Kishori Lal Maha war
and Ram Kumar l\Iahor accepting your offer is enclosed
herewith."
The lettel',Was received by Mitter on 3rd June 1943,
two days bo'fore the termination of the plaintiff's
authority. The respondent made no reply and kept \ ;

silent. He did not question the agent's authority in


effecting a binding contract of sale with the purchasers.
He did not repudiate the transaction nor did he
S.C.R. SUPREME COURT REPORTS 41
expressly ratify it. It was the plaintiff's case that he 19li0
had accepted the purchasers' offer after getting express Abdulla Alimed
instructions from the respondent. That case, however, v.
was not accepted in the two courts below. Animendra
On 3rd June, 1943, the solicitor for the purchasers Kissen Milter.
wrote to the solicitor for the agent that as the offer of
Mahajan J.
his client for the purchase of 27, Amratolla Street had
already been accapted and acceptance · communicated
to him, the title deeds should be sent so thata convey-
ance may be prepared. At his request inspection of
the letter of authority was offered by/the plaintiff and
a copy of the letter was sent to him by post. On
receipt of this copy the purchasers' solicitor assumed
a curious attitude. He said that the copy of the letter
sent contained different terms as to commission than
those contained in the letter of authority originally
shown to his client. The plaintiff was charged with
making a secret illegal gain. In spite of these allega-
tions it was asserted that the contract was a concluded
one and that being so, the plaintiff was bound to refund
to the purd10'sers whatever moneys he would receive
'. from the vendor. It appearr:; that the purchasers'
attorney did Qot like the ideaoftheplaintiffpocketing
a sum of Rs. 6,000 out of the purchase price, and this
dislike on the part of the purchasers for the broker's
commission has led to further complications resulting
inthis litigation.
On 9th June, 1943, the purchasers' solicitor wrote
to the plaintiff's solicitor that his client had cancelled
the agreement of purchase. Immediately on receipt
of this communication the plaintiff's solicitor replied
expressing surprise at this attitude and accused the
other party of a change of front with an ulterior
motive. It was said that further instructions wtmld
be given after getting instructions from Mitter to
whom these letters were forwarded. It seems that
the plaintiff was in the dark while writing the
letter of 9th June, 1943, of the negotiations that were
going on behind the scene directly between the pur-
chasers and the vendor who had kept absolutely silent
all this time. On 9th June the date of the alleged
1950
42 SUPREME COURT REPORTS [1950]
cancellation of the bargain already made, an agree-
.

ment was executed between Animendra Kissen Mitter,
Abdulla Ahmed
v.
the vendor, and Makkanlal, a benamidar of Kishorilal
Animendra Mahawar and Ramkumar Mahor (the purchasers) for
K issen Mitter. sale of the premises for a sum of Rs. 1,05,000. The
sale deed in pursuance of this agreement was actually
Mahajan/. executed on 8th December, 1943, in favour of the ori-
ginal purchasers and not in favour of the benamidar.
As pointed out by the learned Chief Justice who de-
livered the judgment of the appellate Bench, possibly
some arrangement was made whereby both the defend-
ant and the purchasers benefited by the insertion of
a lower price in .the contract of sale and the transfer
deed. It seems obvious enough that the defendant
having received a firm offer of Rs. 1,10,000 for this
property could not have parted with it for Rs. 5,000
Jess except on the basis of some arrangement between
himself and th.e purchasers under which both of them
shared the commission instead of paying it to the
broker. It was to the advantage of both of them.
On 14th August, 1943, the appellant filed the suit
out of which this appeal arises for recovery of
Rs. 6,000, brokerage payable under the commission
note. He also claimed relief by way of damages in the
alternative. The defendant resisted the suit and
denied the appellant's claim. Gentle J. who heard
the suit, gave judgment for the plaintiff and passed a
decree for a sum of Rs. 6,000, with interest and costs
in his favour. He held that on a true construction of
the commission note'the appellant's authority was to
find a purchaser, namely, a man ready, able and will- •
ing to buy at a price acceptable to the respondent and
that the appellant had accomplished this when he in-
troduced to the re~;·ondent the purchasers and thathe
had done all that "':1s required of him. It was held
that the appellant I.ad no authorit.y to conclude a con-
tract of sale and no binding contract of sale was made
on 2nd and 3rd June, 1943, that the transaction
effected nominally in the name of Makkanlal and com-
pleted on 8th December, 1943, in favour of Kishorilal
Mahawar and Rarnkumar Mahor, was effected solely
through the intervention of the appellant who brought
S.C.R. SUPREME COURT REPORTS 43
• the parties together in the capacity at least of a 19ll0
potential buyer and seller, that the reduction of the
price by Rs. 5,000 from Rs. 1,10,000 wal.' more than Abdulla Ahmed
v.
peculiar and that this reduction was made for one Animendra
purpose and that was to deprive the plaintiff of his K issen Mitter-.
remuneration.
The respondent preferred an appeal against this Mahajan J,
decree. This was partially allowed by the learned
Chief Justice and Mukherjea J. on the following find-
ings: that the appellant procured two persons, vi~.,
Kishorilal Mahawar and Ramkumar Mahor, on 2nd
June, 1943, who were willing to buy the property for
Rs. 1,10,000, that on a true construction of the con-
tract of agency no commission was payable until at
least a binding contract had been entered into bet-
ween the appellant and the respondent, that the agent
could only be said to have negotiated the sale if he
introduced a person willing to buy who eventually
bought, that the -sale took place between the persons
introduced by the appellant and the respondent and
it was the direct result of the appellant's agency, that
the commission note gave no authority to the appel-
lant to conclude a contract of sale, that Makkanlal
with whom the sale a.greement dated 9th June was
entered into was a benamidar of Kishorilal Mahawar
and Ramkumar Mahor; that the appellant had no
right to commission on a higher price than for which
the sale was actually made and as the sale was act-
ually made for Rs. 1,05,000, his remuneration could
not exceed a sum larger than Rs. 1,000. On the basis
of these findings the appeal was allowed and the
decree granted by Gentle J. was modified and the
plaintiff's suit was decreed in the sum of Rs. 1,000.
No order for costs was made in the appeal.
In this appeal Mr. Setalvad for the plaintiff raised
three contentions: (1) That the finding of the court
below that on a true construction of the commission
note the plaintiff had no authority to make a binding
contract regarding the sale of this property with the
purchasers was erroneous; (2) That even if that find-
ing was correct, the plaintiff was entitled to a decree
44 SUPREME COURT REPORTS [1950]
19ll0 · for the sum of Rs. 6,000, because he had done all that •
he had promised to do for the respondent, viz., he had
Abdulla Ahmett
T,
secured a purchaser for Rs. 1,10,000, who was ready,
Animendra able and willing to buy the property and that if by_
K is sen M itler. reason of his own caprice or in collusion with the pur-
chasers, the respondent did not sell the property for
Mahaj"" J. Rs. 1,10,000 but chose to receive instead Rs. 1,05,000,
the plaintiff could not be made to suffer. (3) That on
the evidence it should have been held that the sale
was made for a price of Rs. 1,10,000 and that the
amount entered in the sale deed was fictitious.
The first thing to see is what the parties have ex-
pressed in the commission note and what is the true
effect of the language employed in it, read in the light
of the material facts. As pointed out by Viscount
Simon, Lord Chancellor, in Luxor (Eastbourne), Ltd.
v. Cooper('), contracts with commission agents do not
follow a single pattern and the primary necessity in
each instance is to ascertain with precision what are
the express terms of the particular contraut ·under
discussion. I have very carefully considered the
terms of this contract in the light of the material
circumstances and with great respect to the Judges
who decided this case in the High Court, I am of the
opinion that the authority given by the principal to
the agent authorized him to enter into a binding cont-
ract of sale on his behalf. It was not a mere authority
authorizing him to find a purchaser willing, able and
ready to buy the premises for a price mentioned in the
document. The note, to begin with, confers authority
on the plaintiff to negotiate a sale free from all encum- •
brances at a price not less than Rs. 1,00,000. Then it
proceeds to say that the principal undertakes to make
out a good title to the property. It further provides
that if the agent succeeds in securing a bnyer for
Rs. 1,00,000, he will be paid a sum of Rs. 1,000 as
remuneration. In the concluding part of the note a
scale of commission proportionate to the price bas been
promised in case a price higher than Rs. 1,00,000 was
secured. In express words it is said that if the price
exceeds Rs. 1,05,000 and does not exceed Rs. 1,10,000,
(1) [19U] A.O. 108,
S.C.R. SUPREME COURT REPORTS- 45
"I shall pay you the whole of the excess' over 1960
Rs. 1,05,000 in addition to your remuneration of Abdulla Ahmed
Rs. 1,000", that if a buyer is secured at a price exceed- v.
ing Rs. 1, 10,000, he will be paid 25 per cent. of the Anime•dra
excess amount over Rs. 1,10,000 in addition to Kissen Mitter.
Rs. 6,000. The authority of the agent was to remain
Mahajan/.
f in force for one month. In my opinion, the terms of
the rrote as regards the property being free from
encumbrances and in respect of the guarantee about
title :indicate that the agent was given authority to
make a binding contract. In a bare authority confer-
ring power on a broker for introducing a customer,
these stipulations would ordinarily find no place: The
words "to negotiate a sale" standing by themselves
may not authorize an agent to make a contract of sale.
But here they do not stand by 17hemselves. They are
followed by two illl.llortant conditions adverted to
above. The agreement further lays down that if the
broker succeeds in securing a buyer, he will get a
certain remuneratiOn. Gentle J. observed that the
word "securing" here had the meaning of "obtaining
a. buyer". I have consulted the same dictionary :as
the learned Judge did and I find that the true meaning
of the expression "securing a buyer" is "to. obtain a
buyer firmly". • It is not possible in business sense to
secure a buyer firmly unless he is bound by an offer
and an acceptance. Otherwise, he is entitled to with-
draw the offer at any time before acceptance and it
cannot in this situation be said that a buyer has been
secured firmly. The word "secure" has not the same
meaning as the word "find" or "procure". It gives an
id-ea. of safety and certainty. If a buyer fa ensured he,
is said to be secured and no buyer can be said to be
ensured till he is bound by his offer and that cannot
happen unless it stands accepted. The agent could
only secure a buyer in the strict sense of the term if he
had authority to enter into a binding contract. The
word "buyer" when used in a strict sense also means
"a person who l: 11os actually made the purchase". The
authority given\ to an agent to secure a buyer there-
fore gives him authority to enter into a ~inding con-
h·act of sale with him. Without such an authority it
46 SUPREME COURT REPORTS (l950J
19150 was not possible to secure a buyer. I am further
supported in this view by the language employed in
AIN"'11aAhmed
the document in respect of the paym•mt of the commis-
••
A.#U..mdra sion. When the price .secured was Rs. 1,10,000, the
Hiuen Mitter. broker was entitled to 25 per cent. of the excess. It is
difficult to think of an excess in relation to price in a
Maloaja" J, stipulatiOn for commission unless the agent has been
given an authority to make a contract of sale.' If the
scope of the authority is only to introduce a customer
ready, able and willing to buy the property with an
option to the principal to accept or to refuse the offer,
then it would have been drawn up in a different
language.
The subsequent conduct of both the parties to the
agreement very str~ngly supports this view The evid-
ence of such conduct is relevant in this case because,
as pointed out by Viscount Simon, L. C., in the case
already referred to, the phrase "finding a purchaser"
is itself not without ambiguity. Here the phrase is
"securh~g a purchaser". This phrase similarly is not
without ambiguity. The evidence of conduct of the
parties in this situ .. tion as to how they understood the
words to mean can be considered in determining the
true effect of the contract made betw~en the parties.
Extrinsic evidence to determine the effect of an instru-
ment is permissibie where there remains a' doubt as to
its true meaning. Evidence of the acts done under it
is a guide to the intention of the parties in such a case
and particularly when acts are done shortly after the
date of the instrument. (Vide p.ara 343 of Haiis·ham
Edn. of Halsbury, Vol. 10, p. 274).
So far as the conduct of the agent is concerned, he
accepted the offer and under his own signature Rent.
the letter of acceptance to the purchasers. In the letter
written by him to his principal he specifically refers to
his authority. The correspondence above mentioned
clearly shows that both the purchasers and the
agent thought that a concluded contract had been
made. Information of this was given to the vendor and
though he did not speak, his silence in the circumstan-
ces of the case seems as eloquent as speech would have
S.C.R SUPREME COURT REPORTS 47
,.,
been. He never repudiated the contract made by the 19!50
agent but behind his back entered in.to a fresh contract
Abdulla Al1mcd
with the same persons who had been secured by the v.
agent in a surreptitious manner. In the witness box Animendra
he assumed a dishonest and untruthful attitude. The K issen Mitter,
learned trial Judge pronounced him a liar and rightly
too. He asserted complete igngrance about the subse- Maha jail j.
quent contract of sale and fixed all blame on to his son .
. When asked about the sale price on the contract of 9th
June, 1943, his answer was that be knew nothing about
this and said that because his son asked him to sign
the deed he did sign it and that W&,S all that he knew.
When faced with the sale deed, he said that he did not
I ,; know what his son had told him astowhatwaswritten
in the deed. He added that be did not know what
consideration was paid to him for the sale. He further
professed not to know whether the sale price went into
his banking account or was even entered in the account
books. After a great deal of prevarication he was made
to accept the document of 5th May, 1943, and its terms.
He admitted that on 3rd June he had a conversation
with the purchasers and was informed by them that
they had entered into a bargain with the broker and
that the broker had deceived them about the commis-
sion and therefore they would not buy the house. He
admitted that he got the letter sent by the plaintiff,
but gave no explanation as to why he sent no reply to
that letter. With great difficulty he was made to accept
his signature on the postal acknowledgment about the
receipt of the letter sent by the broker to him informing
him of the concluded bargain made with the purchasers,
and he had to admit that he got that letter from the
broker. He also admitted that he took no objection to
the letter written by the broker before Kishoribabu had
told him the story about the commission of two per
cent. In further cross-examination he admitted that
what was stated by the broker in the letter of the 2nd
June was correct. The whole evidence given by the
defendant consists of evasive statements and his ulti-
mate resort was in lapses of memory. It is quite clear
from his deposition that the respondent accepted the
contract made by the a.gent and was clearly under the
7
48 SUPREME COURT REPORTS: (1950)
\,
1950 belief that the agent had nof exceeded his authority in
.Ablulla Ahmtid entering into a binding contract with the purchasers .
v. I am therefore of the opinion that the authority given
.AnimenJ,.a to the agent in this case was an authority to enter into
Kissen Milter. a binding contract of sale and this he did and he was
~Iahajan l.
therefore entitled to his commission of Rs. 6,000. •,
The learned single Judge and the learned Judges of
the Court of Appeal found otherwise on this part of the
case in view ot certain decisions of English Courts and
a decision of a Division Bench of the Calcutta High
Court. In my opinion, none of those cases touch the
present case. Unless the language of two documents is
identical, an interpretation placed on one document is
no authority for the proposition that a document differ-
ently drafted, though using partially similar language,
should be similarly interpreted. . · . - · ·· ·
1
In Hamer v. Sharp( ) Sir Charles Hall, V. C., ·con-
sidered the case of an authority of an agent for sale
appointed by the owner of an estate. The document in
that case was in these terms : -
" I request you to procure a purchaser for the fol-
lowing freehold property, and to insert particulars of
the same in your Monthly Estate Circular till further
notice, viz., my beer house and shop No. 4 and No. 6,
Manchester Road, Tenant No. 4, \Villiam Galloway,
gilder, and No. 6, Albert Vaults, Henry Holmes, beer
retailer, and work rooms above. Present net rent,
£150, price £2800, when I will pay you a commission
and expenses of fifty pounds. About six years' lease
unexpired."
The Vice-Chancellor observed as follows :-
"The question is whether, when an owner of an
,.
estate puts it into the hands of an estate agent for sale,
stating a price for and giving particulars of the pro-
perty to enable him to inform intending purchasers,
but giving no instructions as to the absolute disposal,
and none as to the title of the property, and mentioning
none of those special stipulations which it might be
proper to insert in conditions in reference to the title,
(11 L. R. 19 Eq. 1000
S.C.R. SUPREME COURT RE.PORTS 49
>-.
-
that is sufficient authority to the agent to sign a con- 1950
tract for the sale of the property fort.he price stated in
the instructions, without making any provision wha_tso- Atididlav.Alimed
ever as to title. In considering whether the instructions - Animendra
of October, 1872, were a sufficient authority to the agent Kissen Mitter.
I
for that purpose, I cannot help expressing an opinion
that such an authority to an agent on the part of a Maliajan J.
vendor would be highly imprudent, as the purchaser
would then be entitled to require, on completion, attest-
ed copies of all documents of title, and the expense of
them would swallow up, to a great extent, the purchase
money. This estate agent must have known that if
this property had been offered for sale by public auction
there would have been conditions to guard the vendor
against being subject to c('lrtain expenses, and to pre-
vent the contract becoming abortive by reason of a
purchaser requiring a strictly marketable title. Could
he suppose that he was invested with authority to sign
a contract without considering what it should contain
as regards title? As an intelligent and well informed
person, he could not suppose that he was properly dis-
charging his duty to his principal when he signed the
contract which he signed; such a contract was not one
within the scope of his authority to sign."
The case therefore stood decided on the construction
of the document. It was remarked that in those cir-
cumstances it was not necessary to decide what words
would confer such an authority. Having said so, the
learned Vice-Chancellor proceeded to observe as
follows:-
"but I nevertheless state my opinion to be, that
when instructions are given to an agent to find a pur-
chaser of landed property, he, not being instructed as to
the conditions to be inserted in the contract as to title,
is not authorized to sign a contract on the part of the
vendor."
This case can hardly be said to be an authority for
the construction of the agreement that we are called up-
on to construe in the present case. Considerable empha-
sis was laid in that case on the point that no instruc-
tions had been given as to the conditions that had to he
50 SUPREME COURT REPORTS [1950]
1915() inserted in the agreement as to title. In the present
.
Abdulla Ahmed
case the agent was told that the principal guaranteed
marketable title. He was further told that the sale
v.
Animt!ndra should be free of encumbrances. All the material
Kiss~n Mitter. conditions of sale were thus contained in the present
agreement.
Mahajan J. The next case on which considerable reliance was
placed in the courts below is the case of Chadburn v.
Moore('). In this case an advertisement appeared in
the Daily Telegraph in these· words:-
" Forced sale by order of the niortgagees-thirty-
four well built houses, situated at Grays, closa to the
station on the London, Tilbury, and '<ISouthend Rail-
way, within easy reach of the docks, all let to respect-
able tenants at rents amounting to £ 620 per annum.
Held for about ninety-five ·years at ground rents
amounting to£ 146; price£ 3500, of which £3000 can
remain on mortgage. For further particulars apply to
Messrs. Pinder, Simpson and Newman, 33 and 34,
Savilerow, London, W."
In response to this advertisement the plaintiff in
that case, James Chadburn, called on Messrs. Pinder,
Simpson and Newman, a firm of surveyors and estate
agents, for further information. He then went to see
the houses and came back and made an offer to pur-
chase them, which was reduced to writing. It appear-
ed from the evidence that the offer was to be submitted
by Mr. Newman to his client the defendant; and the
plaintiff was to return the next day for an answer.
Newman saw the defendant, who gave him instruc-
tions to withdraw five <3f the houses, and fixed the
price, but did not, according to the evidence given in
court, give instructions to Newman to enter into a
binding contract. Later on the plaintiff called on
Messrs. Pinder, Simpson and Newman and two letters
were exchanged between them, which were letters of
offer a:Qd acceptance for the twenty-nine houses at
Grays. The offer and acceptance were forwarded by
the defendant to the estate agents. The defendant on
receiving this offer wrote a letter saying inter alia :-
(!) 67 L.T, ~61.
S.C.R. SUPREME COURT REPORTS 51

"I think you were, as you usually are, a little pre- 1950
mature in actually entering into what might be a bind-
Ahdulla Ahmed
ing contract. It is always best to have an offer and v.
acceptance subject to a formal contract being entered A11i1ncndra
into .... ". Ii issen Mitter.
I To this Newman replied:--
Mahajan J.
'"The offer for the above was accepted under your
definite instructions anrl is a very good get out for
you."
Kekewich J., who decided this case, gave the fol-
lowing judgment:-
"Having heard Mr. Newman, who was called with-
out the plaintiff knowing what he was going to say,
and having read the correspondence, I have little
doubt that I have the real transaction-which is a
mere transaction between principal and agent-before
me. It might be that a different colour would be
put upon the matter by the cross-examination of
Mr. Moore, but this was not done, and he is entitJed to
have judgment upon the point of law. Moore undoubt-
edly authorized Newman to find a purchaser for the
houses. It is true the expression does not come out on
the correspondence. On the second occasion Newman
appears to have been instructed to negoti:ate a sale.
Whatever else he did do, Moore did not il). express
terms authorize Newman to enter into a contract.
Newman wus to .find a purchflser, and to negotiate a
sale. Is that sirftfoien t ? No evidence was given as to
custom; no evidence was brought to show that the
position of a house or estate agent resembles that of a
broker on the Stock Exchange or any other exchange.
A house or estate agent is in a different position,
owing to the peculiarity of the property with which he
has to deal, which does not pass by a short instru-
ment as stocks and shares do, but has to be transfer-
red after investigation of title and in accordance with
strict laws. An agent for sale of real estate must be
' more formally constituted than a seller of stocks and
securities of a similar nature. There is no definite
authority; in Hamer v. Sharp('), Hall V.C., does not
(1) 19 Eq. 108.
52 SUPREME COURT REPORTS [1950]
1960
go so far as to· say an estate agent cannot enter into
Abdtllla Al1111ed any contract, and does not decide the question of
v. authority, but only states his opinion. I must per•
Aninrendra force refer to Prior v. Moore('), where I indicated my
Kisscn 1'.litter. -0wn opinion distinctly; that instruction to a house
Mahaja.iJ.
agent to procure a purchjl.ser and to negotiate a sale
does not amount to authority to the agent to bind his
principal by contract. Here the circumstance must
not be forgotten that Moore on the J!eccind occasion
told Newman what he was prepared to take for the
twenty-nine houses. Newman then jumped at the
conclusion that he had power at that price to enter In-
to a contraot. That is in my opinion not sufficient, and
unless express authority is given to the agent to -aell,
and for that purpose to enter into a binding contract,
the principal reserves his final right to accept or re-
fuse."
In this case there was no written document between
the principal and the agent. From th'e correspondence
it was inferred that the principal had asked the agent
to find a purchaser or to negotiate a sale and it was
held that within these words an authority to sell could
not be spelt out. Not only is the language of the
document with which we are concerned different, but
the evidence in the case particularly about the conduct
of the parties is materially different. The observations
made by the learned ,Judge must be taken to be
limited to the facts found by him. The expressions
"find a purchaser'', "procure a purchaser'', "nego-
tiate a sale" standing by themselves may not be suffi-
cient to confer authority on the agent to enter into a
binding contract on behalf of the principal; but as I
have in di ca ted a hove, the words in the present case
are such as by necessary implication conferred author-
ity on the agent for making a binding contract.
The next case ia D?trga Oharan Mitra v. Rajendra
Narain Sinha(•), a Bench decision of the Calcutta
High Court. The document considered in that case '
bears considerable resemblance with the document in
the present case.
(1) 8 T.L.B. 69'. (ii) 86 C.L.J. 467.
S.C.R. SUPREME COUR.T REPORTS 53
It was in these terms:- 1980

"I hereby authorize you to negotiate the sale of the Al>d11/lt1 Al11n,·d
lands at Tolligunge I have recently purchased from v.
Messrs. Martin and Co. If you can secure a purchaser Aui111eudra
to purchase the same at the gross value of Rs. 16,000, f{issen Mitto·.
I shall pay you Rs. 200 as your remuneration. If you Mt1ht1jt1t1 J.
be able to raise the price to any amount above
Rs. 16,000, you will be entitled to the excess amount
- folly and I shall be bound to mention the whole
amount in the conveyance.
Please note that this letter of authority will remain
in force for a fortnight only to complete the tran..c;-
action; after that this letter will stand cancelled."
The agent acting on this authority sold the property.
On receipt of this letter the vendor informed the agent
that he would not sell the land. On the acceptance of
the agent a suit was brought for specific performance.
Sir Asutosh Mookerjee who delivered the judgment
of the Bench referred to the cases of Hamer v.
Sharp (1), Prior v. Moore (2 ), Chadburn v. Moore (3 ),

- and also Rosenbaum v. Bel8on ('), and observed that


it was well settled that an estate or house-agent,
authorized to procure a purchaser, has no implied
authority to enter into an open contract of sale, because
the transaction mentioned is as specified in ·the letter,
viz., to negotiate a sale after securing a purchaser.
There is similarity in the language employed in the
letter dealt with in this case and the letter of authority
with which we are concerned; but read as a whole, the
·two documents are drafted with different intents and the
true effect of both is not the same. There was no men-
tion of the title being guaranteed by the vendor or of
the sale being made free of encumbrances in that case.
Therl! was no evidence of surrounding circumstances or
of the conduct of the parttes. On the other hand, the
plaintiff who was himself a solicitor realized the diffi-
culties of the situation and endeavoured to alter the
foundation of his claim. He conceded that as a broker
he had no authority to sell the property and that he
(1) 19 Eq. 108. (S) 67 L.T. 257.
(2) S T.T•. R. 62~. (41 (1900) 2 Oh. 267.
54 SUPREME COURT REPORTS [1950)
19ll0 could not have taken a conveyance of sale of the plot.
In the present case the attitude adopted by the parties,
Abdulla Altmed
as already pointed out, was entirely different. Sir
Animendra Asutosh Mookerjee also cited the case of Rosenbaum v.
l\"issen Mitter. Belson ('). In this case the learned Judge made the
following observations:-
Mahajau }.
"To my mind there is a substantial difference bet- '
ween those expressions .. Authorizing a man to sell
means an authority to conclude a sale; authorizing him
to find a purchaser means less than that-it means to
find a man willing to become a purchaser, not to find
him and also make him a purchaser."
In Saunders v. Dence('), Field J. distinguished
Hamer v. Sharp('), saying that 'all th&t Hall, V.C., in
that case decided, as I understand it, was that if you
·-
go to an estate agent, and tell him you have a property
to sell, and that you want a purchaser, and you tell
him what you have made up your mind shall be the
price, and to a certain extent what shall be the condi-
tions, and you instruct him to try and find a purchaser,
that is not sufficient, under those circumstances, to
authorize the agent to make a contract without any
conditions whatever with regard to the title'.
-
I have been unable to find any case in which it has
been held 'that.Jnstructions given by A.B. to sell for
him his house, and an agreement to pay so much on
the purchase price accepted, are not an authority to
make a binding contract, including an au.thority to
sign an agreement.
In my opinion, on the terms of the instrument in
this case and in view of the relevant evidence the cor-
rect conclusion to draw is that the agent had authority
to enter into a binding contract with the purchaser and
that he did and is therefore entitled to succeed in ·the
case. Reference in this connection may be made to
Wragg v. Lovett('), where Lord Greene, M.R., put the
proposition in these words:-
" Whether or not the .agents were authorized (or,
what in law is the same thing, reasonably understood
(ll 11900) 2 Ch. 267. (8) 19 E:i· 108.
(2) 62 L.T. G4'1. !') [19•SJ 2 A.E.R. 969.
S.C.R. SUPREME COURT REPOR.TS 55
themselves to be authorized) to make this particular 1960
contract", Abdulla Ahmed
and it was held that the proper inference from all the v.
facts of the case was that the defendant was satisfied to Aui111£ n,/ru
/(i,')se.i Mitter.
allow his agents to make whatever contract they
thought best and relied on them to protect his interests Mahaja11 J.
provided, and provided only, that they obtained the
desired statement from the plaintiff as to his intention
to remain in the house. The answer to the question
depends on the facts of each individual case and though
authority to make a binding contract has not to be
lightly inferred from vague or ambiguous l~nguage but
from substantial grounds, that however does not mean
that in express words it should be stated that the
agent is authorized to sell the property.
The learned Chief Justice in the judgment under
appeal observed that "the agent had undertaken to
negotiate a sale and secure a buyer. He could not be
said to have either secured a buyer or negotiated a sale
unless a sale actually took place or at least a contract

- of sale had been entered into". If that is the correct


construction of the note, then in my judgment, the true
implication of the note is that the agent was authorized
to enter into a bin'ding contract, because othewise he
could not have secured a buyer. Later on, the learned
Chief Justice while referring to the case.of Rosenbaum
v. Belson(1), took the view that authorizing a man to
sell meant an authority to conclude a sale and
authorizing a man to find· a puchaser meant less
than that. It meant finding a man willing to become
a purchaser, not to find him and also make him a pur-
chaser. If that was the duty entrusted to the agent,
then he had clearly performed his duty and was entitl-
ed to his commission.
For the reasons gi\;en above I am o"fthe opinion that
the plaintiff had authority to enter into a binding con-
tract on behalf of the defendant and he entered into
such a contract and thereby earned the C61,!;lmission
which he has claimed in the suit and he is entitled to a
(1) [1900] 2 Ch. 267.
8
56 SUPREME COURT REPORTS [1950]
1911() decree in the sum of Rs. 6,000 which the trial Judge ' .
Abdulla Aluned
hadgiven to him, with all costs throughout.
•• Conceding for the sake of argument that the construc-
Animendf'a tion that I have placed on the agreement entered into
I( i.-rsen Mitt~r.
between the principal and the agent is not the correct
Mahajan}.
one, the question arises whether in that event the deci-
sion under appeal can be maintained. I am inclined
to the opinion that even on the construction placed by
the trial Judge on the commission note the view taken
by him was the correct one and the court of appeal
arrived at a wrong conclusion by giving too much im-
portance to certain obiter observations of Lord Russ(lll
of Killowen and Lord Romer in Luxor (Eastbourne)
Ltd. v. Gooper(1). In this very case it was pointed out
by Viscount Simon L. C. that there were at least three
different classes of cases in which the question of a
right to commission could arise. He states the first of f·
them in these terms:-
"There is the class in which the agent is promised a
commission by his principal if he succeeds in introduc·
ing to his principal a person who makes an adequate
offer, usually an offer of not less than the stipulated -
amount. If that is all that is needed in order to earn
his reward, it is obvious that he is entitled to be paid
when this has been done, whether this principal accepts
the offer and carries through the bargain or not. No
implied term is needed to secure this result."
In my opinion, the present case falls within this
class of case· and commission became payable on the
introduction of a willing buyer by the agent to the
principal.
In Burchell v. Gowrie & Blockhouse Collieries Ltd. (1)
it was observed by their Lordships of the Privy Coun·
cil that if an agent brings a person into relation with
his principal as an intending purchaser, the agent has
done the most effective, and possibly, the most labo·
rious and expensive, part of his work, and that if the
principal takes advantage of that work, and, behind
the back of the agent and unknown to him, sells to the
purchaser thus brought into touch with him on terms
(1) [19'1] A.C. 108. l~) (1910] A.C. 614.
S.C.R. SUPREME COURT REPORTS 57
which the a.gent theretofore advised the principal not to 1915()
accept, the agent's act may still well be the effective Abdulla Ahmul
cause of the sale and that there can be no real difference v.
between such a case and those cases where the principal A.nime•ldra
sells to the purchaser intr@duced by the agent at a K isseu Jlfittcr.
price below the limit given -to the agent.
Mahajati J.
In ln¢h/Jald v. Western Neilgherry Coffee etc.' Oo.( 1 )
Willes J,. thus lays down the rule of law applicable to
SUGh cases : -
. -- · u I apprehend that wherever money is to be paid by
oue man to another upon a. given event, the party upon
whom is cast the obligation to pay, is liable to the
party who is to receive the money if he does any act
which prevents or makes it less probable that he should
receive it."
The rule has been stated by Story on Agency at page
404 in the following terms :-
"The general rule of law, ·as to commissions, un-
doubtedly is, that the whole service or duty must be

- performed, before the right to any commissions at-


taches, either ordinary or extraordinary ; for an agent
must complete the thing required of him, before he is
entitled to charge for it. In the case of brokers em-
ployed to sell real estate, it is well settled that they ·are
entitled to their commission when they have found a.
purchaser, even though the negotiations are conducted
and concluded by the principal himself; and also
where there is a failure to complete the sale in conse-
quence of a defect in title and no fault on the part
of the brokers."
In my judgment therefore, Gentle J. was right when
he held on the interpretation placed by him on the
document that the plaintiff had earned his commis-
sion in full iµasmuch as be had secured a buyer
who was ready, able and willing to buy the property
fol'. Rs. 1,10,000.
As l have indicated above, if the word "buyer" is to
be construed in a strict sense, then it must be .held
that the broker had authority to secure a buyer of that
type an~ he could only do so by making a binding
(1) 17 O.B. (N.B.) 788.
58 SUPREME COURT REPORTS [1950)
1911() contract with him. On the other hand, if the word is
taken to mean a potential buyer, such a buyer having
Ab:lulla AJ11ned
v.
been secured, the agent was entitled to the commission
Afiintendra that had been promised to him.
Ki.ssen ,\fitter. It is now convenient to consider the case of Luxor
(Eastbourne) Ltd. v. Cooper(') in some detail because
•.
certain observations made by Lord Russell of Killowen
and Lord Romer are the basis of the decision of the learn-
ed Chief Justice. In this case no commission note was
addressed to the broker and the contract was not contain-
ed in any document. Evidence in support of the commis-
sion agreement was oral and its terms had to be deduced
from that evidence. Viscount Simon L. C., out of the
materials from which express contract had to be pieced (

together, reached the result that the bargain was this:


"If a party introduced by the respondent should
buy the cinemas for at least £1,85,000, each of the two
appellants would pay to the respondent £5,000 on the
completion of the sale."
No such sale took place, and in those circumstances
it was hel~ that there could be nothing due to the res-
pondent on the terms of the express bargain. It was
then argued that since the proposed purchasers intro-
-
duced by the respondent were and remained willing
and able to buy the properties for the minimum price,
while the appellants did not close with the offer, the
appellants were . liable in damages to the res-
pondent for breach of an implied term of the commis-
sion contract. In the statement of claim the implied
term was said to be that the appellants would "do
nothing to prevent the satisfactory completion of the
transaction so as to deprive the respondent of the agreed
commission." The breach pleaded was the failure to
complete the contract of sale with th\) respondent's
client and the disposal of the subject-matter in another
quarter. The Lord Chancellor was of the opinion that
the suggested implied term was not necessary in this
contract and it was observed that in contracts made
with commission agents there was no justification for
introducing a.11 implied term unless it was necessary to
(1) [19U] A.C .. 108,
S.C.R. SUPREME COURT REPORTS 59
do so for the purpose of giving to the contract th'.e 1911tl
business effect which both parties to it intended Abdulla Ahmed
it should have. v.
Lord Russell of Killowen in his opinion said that the Animendra
only right of the plaintiff was to receive his commissi_on Kiss~n Mitter.

out of the purchase moneys if and when received. His J.


_, right was a purely contingent right. He stood to earn
Mahajan

a very large sum at comparatively small pains, taking


the risk of either side withdrawing from the negotia-
tions before any binding contract of sale and purchase
was concluded, or of the contract for any reason not
being carried to completion. In this view of the case
the action was bound to fail and no occasion arose for
pronouncing on the correctness or otherwise of the view
expressed by the Court of Appeal in Trollope & Sonav.
Martyn Brothera(1). Then it was said that as the
question of these commission contracts was discussed
at great length, that furnished an excuse for stating
briefly conclusions which his Lordship's mind, free as it
was from the fetter of previous decisions, reached. In

- dealing with the subject the following observations


were made:-
"I can find no safe ground on which to base the
introduction of any such implied term. Implied terms,
as we all know, can only be justified under the compul-
sion of some necessity. No such compulsion or
necessity exists in the case under consideration.
The agent is promised a commission if he introduces a
purchaser at a specified or minimum price. The owner
is desirous of selling. The chances are largely in favour
of the deal going through, if a purchaser is introduced.
The agent takes the risk in the hope of a substantial
remuneration for comparatively small exertion. In the
case of the plaintiff his contract was made on Septem-
ber 23, 1935; his client's offer was made on October 2,
1935. A sum of £10,000 (the equivalent of the remu-
neration of a year's work by a Lord Chancellor) for
work done within a period of eight or nine days is no
mean reward, and is one well worth a risk. There is
no lack of business efficacy in such a contract, even
(1) [1984] 2 K.B. 486.
60 SUPREME COURT REPORTS [1950)
though the principal is free to refuse to sell to the
Ab4uUo Ah-tl
agent's client.
..,, The position will no doubt be different if the matter
Atlimnsdra has proceeded to the stage of a binding contract having
Kis&m Jl;Uer. been made between the principal and the agent's
client. In that case it can be said with truth that a
M aloaj"" J. 'purchaser' has been introduced by the agent; in
other words, the event has happened upon the occur-
rence of which a right to the promised commission has
become vested in the agent. From that moment no act
or omission by the principal can deprive the agent of
that vested right."
It is the observations last quoted which are the basis
of the decision of the learned Chief Justice in the pre-
-sent case. It seems to me that these observations had
reference to cases visua.Jized by Lord Russell ofKillowen
in the earlier part of this quotation with specific refer-
ence to the facts found in that case and cannot apply to
all cases where the word ' purchaser' or 'buyer' has
been loosely used in a different context.
Lord Romer in his opinion made the following obser·
vations :-
"But supposing that a contract by one person to
pay another a sum of money in the event of the latter
performing an unsolicited service. t6 the former is as
much subject to an implied condition as if the latter
had been employed to perform the s~rvice, the condi-
tion is in general one that merely imposes on the
former a negative and not a positive obligation. If
I employ a man for reward to build a house on my land
I subject myself to an implied condition ·that I will do
nothing to prevent him carrying out the work. But I
am under no implied obligation to help him earn the
reward whether by the supply of building materi11ols or
otherwise. But there are exceptional cases where in
a contract of employment the employer is under a
positive obligation. If, for instance, I employ an artist
to paint my portrait I subject myself to the positive
obligation of giving him the requisite sittings. The
question, then, to be dermined upon the hypothesis
that I mentioned just now is .this : Where an owner of
S.C.R. SUPREME COURT REPORTS 61
property employs an agent to find a purchaser, which 19&0
must mean at least a person who enters into a binding Abdulla Ahmeil
contract to purchase, is it an implied term of the con- v.
tract of agency that, after the agent has introduced a Animenilra
person who is ready, willing and able to purchase at a l(issen MUler.
price assented to by the principal, the principal shall
enter into a contract with that person to sell at the Mahajan J.
agreed price subject only to the qualification that he
may refuse to do so if he has just cause or reasonable
excuse for his refusal ? This qualification must plainly
be added, for the respondent does not contend, and no·
one could successfully contend, that the obligation of
the principal to enter into a contract is an uncondi-
tional one."
The learned Chief Justice relying on the last part of the
above quotation reached the conclusion that in the pre-
sent case as the duty of the agent was to secure a pur-
chaser, it could not be held that the purchaser had been
secured till the contract of sale was concluded by the
vendor with him and that the actual sale having been
concluded for a sum of Rs. 1,05,000, the plaintiff ~9uld
only get his remuneration on the basis of the price for
which the sale was made and not on the basis of the
offer the plaintiff had secured. It seems to me that
when Lord Romer was laying down that a purchaser
in such contracts means at least a person who enters
into a binding contr~ct to purchase, he had in mind
the contract with which he was dealing in that case ..
I am free to think that Lord Romer had not in mind
commission notes ~herein the word "buyer" or
"purchaser" had been employed in a loose sense.
In Jones v. Lowe(1), wherein the instrument was in
these terms-
"In the event of my introducing a purchaser,
I shall look to you for the payment of the usual com-
mission in accordance with the scale fixed by the
Auctioneers and Estate Agents Institute'',
Hilbery J. said that hadhebeenfreeofauthority,he
should have thought that there were strong grounds for
saying that what every owner of a house who desired to
11) [19,ll] 1 K.B. 78.
62 SUPREME COURT REPORTS. (1950]
1960 sell it expected a house agent to do, was to bring the pro-
Abdulla Ahmed
perty fairly to the notice of persons who resorted to
v. him for houses and endeavour to persuade one of them
Anlntendra to buy it. The learned Judge further observed as
Kiuen Mitter. follows:-
"If the agent introduces someone who is perfectly
Mahajan].
willing to go through with the purchase at a price
which will satisfy the vendor, it would seem that the
agent has done everything that the parties contemplate
that he should do, for they do not contemplate that
'the agent should have anything to do with the actual
completion of the transaction. He is to find a person
who will pay the price which is asked for the property,
and the contract is entered into on the basis that the
person so found will be the person to whom the owner
of the property will sell.
It seems to me hard, if an agent has done to the full
extent what the parties contemplated that he should
do, that he should not be entitled to say 'I have done
what I contracted to do because I have introduced
someone willing to purchase although he never, in fact.
became the actual purchaser'. I do not feel, however,
that it is open to.me to put thp.t construction on the
words of the contract in the present case because I
think that the observations made in the House of Lords,
and particularly those of Lord Russell ofKillowen and
Lord Romer in Luxor (Eastbourne) Ltd. v. Cooper('),
ahow that they were clearly of opinion that if an agent is
employed to introduce a purchaser for a house and before
the purchaser has entered into a binding and legal
contract, the house is withdrawn from the market, the
agent cannot say that he has earned his commission."
In a later case, E. H. Bennett v. Millet('), the same
learned Judge had to deal with a case where the cont-
ract was in these terms :-
"We confirm that in the event of our introducing
a purchaser who is able and willing to complete the
transaction, our commission will be in accordance with
the recognized scale .... ".
The plaintiffs introduced a prospective purchaser,
whom the court found to have been at all times able
(l) [19U] A.C. 108, 12) (19<8) 2 All E.R. 929,
S.C.R. SUPREME COURT REPORTS 63
and willing to purchase, but the defendant refused to 19!50
complete. It was argued by the defendant that the AbduJla Ahtned
qualification of the word "purchaser" in the plaintiffs' v.
letter was otiose and therefore should be struck out and Ani11iettclra
the plaintiffs had not performed the contract until they Kissen Mitter.
had introduced a person who actually completed the
purchase, It was held that the expression "a purcha- Mahaja11 J.

~er who is able and willing to complete the transaction"


meant not a person who did, in fact, ultimately pur-
chase the property, but one who was prepared to pur-
chase it at the seller's price, and, as the estate agents
had found suQh a person, they were entitled to their
commission. The learned Judge further stated that
in ordinary parlance we do not use the word "purcha-
ser" as necessarily restricted to a person who actually
completes a transaction of purchase and sale. In my
judgment, therefore, on the alternative interpretation
which has been placed by the two courts below on the
commission note the word "purchaser" cannot be read
in the strict sense in which it was read in Luxor's
case (1), but should be read in the sense in which it is
loosely used in common parlance, and that being so,
the decision under appeal cannot be sustained.
l\Ir. Setalvad cited a number of Indian authorities
where the words "buyer" and "purchaser" had not
been given the strict meaning that had been given in
Luxor' s case (1). Similarly, the words "lender" and
"borrower" had been given the meaning of "potential
lender" and "potential borrower". It is, however,
unnecessary to enter into a discussion of all those cases
as it does not in any way advance the matter beyond
what I have already said. It is unnecessary to go
into the third contention of Mr. Setalvad in view of
the above decision.
For the reasons given above I agree with the conclu-
sion reached by my brother, Patanjali Sastri, in the
judgment just delivered by him, that the appeal be
allowed with costs throughout.
Appeal allowed.
Agent for the appellant: S. P. Varma.
Agent for the respondent: Sukurnar Gho8e.
(1) [1941] A.O. 108.
9

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