Sen and Niamat-ullah, JJ.:— This appeal is directed against a decree of the learned Additional District Judge of Meerut in a suit for recovery of Rs. 1,750 on a contract of brokerage.
The plaintiffs are a firm of general merchants auctioneers and commission agents who carry on their business at Meerut through Mr. Eoop Earn, their managing partner. The defendants are a registered company with their head office at Solon, and owned a bungalow No. 22 known as “the Belvedere” situate on the Ordinance Bow, near the Mall in Meerut Cantonments. The plaintiffs, having come to know that the defendants intended to sell the aforesaid house, offered their services to the defendants to find a purchaser. The defendants accepted the offer and agreed to pay the plaintiffs a commission or brokerage at the rate of Rs. 5 per cent. Originally the defendants had fixed the price at Rs. 30,000 free of all charges, but the price was raised from Rs. 30,000 to Rs. 35,000 at the suggestion of the plaintiffs. The plaintiffs came to know that the Controller of Military Accounts at Meerut was desirous of purchasing a commodious house for locating his office. On the 28th of August, 1924, the manager of the plaintiffs' firm had an interview with an official of the Controller's office. He wanted to see the Controller, but Colonel Peacock refused to see him and refused to negotiate through the plaintiffs. He then advised the defendants to write to the Controller direct. On the 10th of June, 1925, the house was purchased by the Controller of Military Accounts from the defendants for Rs. 35,000.
The present suit was instituted in the court of the Subordinate Judge of Meerut on the 18th of December, 1925, for recovery of Rs. 1,750, being the amount of brokerage on the purchase money at the rate of Rs. 5 per cent.
The defendants contested the suit on the ground that the sale in question was not brought about by the plaintiffs, that there was no agreement for payment of any commission to the plaintiffs for this purchase, that the sale was made by the defendants directly with the Controller of Military Accounts and that the plaintiffs had no hand in it.
[The judgment then set forth the defence in detail, the findings of the trial court, and the manner in which the lower appellate court had dealt with the suit and dismissed it.]
We are of opinion that the learned Judge has misread the evidence and has failed to apply the correct law to the facts, admitted or proved.
The basis of a claim for brokerage must initially be found in a contract of agency. In order to determine the liability of the defendants, the questions which emerge for decision are:—What was the contract, if any, between the parties, and whether the terms of the contract had been fulfilled in this case. If the contract has not been fulfilled in its entirety, a further question may arise as to whether the plaintiffs are entitled on an implied contract to recover on quantum meruit.
The terms of the contract have to be collected from the letters which passed between the parties,—letters which have not been considered at all, or at any rate not sufficiently appreciated, by the Additional District Judge.
[The judgment then discussed the correspondence and summarised the result as follows.]
Upon a correct reading of the documentary evidence, the following conclusions are forced upon us:—
(1) The defendants had employed the plaintiffs as their agent or broker that they should find a purchaser.
(2) At the suggestion of the defendants, the price for the house was raised from Rs. 30,000 to Rs. 35,000.
(3) The defendants had contracted to pay the plaintiffs Rs. 5 per cent, as commission or brokerage on the purchase money.
(4) The plaintiffs had asked the defendants to directly correspond with the Controller of Military Accounts and that negotiations for purchase and sale between the defendants and the Controller proceeded upon the plaintiffs having introduced the Controller of Military Accounts as a possible purchaser.
The oral evidence on the record is equally clear and conclusive and shows the exact extent of the plaintiffs' share in the transaction of sale. It has been conclusively proved that the plaintiffs got handbills printed and circulated, for the sale of “Belvedere”, that the manager of the plaintiffs' firm went to the office of the Controller and saw Mr. Sen, the Deputy Controller of Military Accounts, that he had a talk with Mr. Sen who asked him about the price, that Mr. Sen mentioned this fact to the Controller but that the Controller refused to settle the transaction through the plaintiffs. Mr. F.C Beynen, manager of the defendants' company, states:—“I offered to pay the commission to Messrs Roopji and Sons on condition that he would sell my place as contained in my letter. He wrote to me first. They suggested certain names to us and we wrote to those people…. I came to know from the plaintiffs' letter dated the 23rd of August, 1924, stating that the Controller of Military Accounts was a likely purchaser of the building. Before this letter came to me I had no idea of the Controller of Military Accounts. Letters dated the 23rd of August, 1924, from the plaintiffs and the letter dated the 28th of August, 1924, from the Controller reached me the same time,—29th of August, 1924”.
It appears, therefore, that immediately upon receiving information from Mr. Sen that “Belvedere” belonging to the defendants was for sale—an information which Mr. Sen received as the result of his interview with plaintiffs' manager—the Controller of Military Accounts wrote to the defendants on the 28th of August, 1924, and that on the same day, the defendants, acting upon the instructions of the plaintiffs, also wrote to the Controller. It is, therefore, clear that the owner and the purchaser were not brought together by any fortuitous circumstance but through the mediation of the plaintiffs. The plaintiffs were therefore causa causans of the ultimate sale……”
The learned Additional District Judge was clearly in error in dismissing the plaintiffs' claim upon the ground that the sale to the Controller had not been negotiated or finished through the intervention of the plaintiffs. This is the only data upon which the judgment proceeds and is manifestly wrong. Where a contract is arrived at between a house owner and a broker for finding a purchaser, the house owner agreeing to pay Rs. 5 per cent, on the purchase money as remuneration, the broker is entitled to receive his fee, when the sale of the house has actually taken place in favour of the said purchaser, upon his finding the purchaser, even though the negotiation or completion of the sale between the buyer and the seller may not have taken place through the direct intervention of the broker or commission agent.
Generally speaking, the broker “is the middleman or intermediate negotiator between the parties” (Story's Law of Agency, page 25). But his exact position may be defined or limited by the terms of the contract. His right to remuneration for any work done by him is dependent upon the terms of the contract and upon his fulfilment thereof. In order that the agent be entitled to receive remuneration from the principal for any work done, it is not absolutely necessary in each case that the whole of the transaction should be done to a finish by him or through his intervention. Indeed the authorities have gone to the length of holding that the agent may in a proper case be entitled to receive remuneration even though the principal has got no benefit.
“Where the remuneration of an agent is payable? upon the performance by him of a definite undertaking, he is entitled to be paid that remuneration as soon as he has substantially done what he undertook to do, even if the principal acquires no benefit from his services.” (Bowstead's Law of Agency, 6th edition, 1919, page 201.)
The rule of law applicable to this case has been stated in a number of authorities and has been settled beyond doubt:—
“It is not necessary that the agent should actually complete the transaction, but he must show that it was brought about as the direct result of his intervention.” (Halsbury's Laws of England, volume 1, page 194.)
In the leading case of Burchell v. Gowrie(1), the following observation occurs in the judgment of the Judicial Committee: “In the words of Erle, C.J, in Green v. Bartlett(2), if the relation of buyer and seller is really brought about by the act of the agent, he is entitled to commission, although the actual sale has not been effected by him; or in the words of later authorities, the plaintiff must show that some act of his was the causa causans to the sale, Tribe v. Taylor(3); or was an efficient cause of the sale, Millar Son & Co. v. Radford.” (4).
Bramwell, L.J, held in Fisher v. Drewett(5), that the current of modern opinion was to the effect that those who bargained to receive commission for introduction had a right to their commission as soon as they had completed their portion of the bargain, irrespective of what might take place subsequently between the parties introduced. In the Municipal Corporation of Bombay v. Cuverji Hirji(6), it was held that a broker was entitled to his commission, if the relation of buyer and seller was really brought about by him, although the actual sale had not been effected by him.
Green v. Bartlett, has been followed by the Indian Courts in a number of cases, which need not be enumerated, and the principle laid down therein is clearly applicable to the case in hand.
In Wilkinson v. Martin(7), in summing up the case for the jury, Tindal, C.J, is reported to have made the following observations: “The only question for you to decide on the evidence of both sides is whether the sale really proceeded in effect from the fact of the plaintiffs' acting as brokers, whether it really and substantially proceeded from their act, though they did not complete the contract. If it did, they will be entitled to your verdict, but if very far or less than this was done, and there was only a mere introduction and the office of the agent or middleman was never filled by the plaintiffs between the parties, then they will not be entitled to recover.” It may be conceded that the mere fact of introduction may not be conclusive. But where the introduction is the foundation on which the negotiation proceeded, and the negotiation eventually ripened into sale, the introducer is entitled to claim the fruit of his labour. The real test is whether the vendor and the purchaser were brought together by the agent acting in the matter either for one or the other, or for both. If the ultimate sale could not have taken place but for the introduction made by the agent, the latter is entitled to get his brokerage.
It ought to be distinctly stated that the plaintiffs' claim is not founded on quantum meruit. Quantum meruit was an action on the case which was abolished in effect by the rules H.T 1 William IV. “This form of the claim was granted on a promise to pay the plaintiffs for doing a thing as much as they deserved or, merited”.
In view of the case set up in the plaint and the facts admitted or proved, it was not necessary to complicate the trial by introducing the question whether the plaintiffs were entitled to succeed pro tanto on quantum meruit. If the plaintiffs had carried out their part of the contract, they must succeed and a recourse to the fiction of an implied contract to pay would be wholly unnecessary, and indeed the plaintiffs could not claim on the quantum meruit because they had chosen to the themselves down by the express terms of the agreement: vide Lord Coleridge, C.J, in Martin v. Tucker. A liability by implication is excluded by the contract being express. In Lott v. Outhwaite, Lindley, L.J, is reported to have remarked: “It was said that there was an implied contract to pay the agent a quantum meruit for his services. The answer was that there could be no implied contract when there was an express contract.”
The lower courts were, therefore, not right in treating the claim as based on quantum meruit. We have already set out above that the plaintiffs' claim is not founded on quantum meruit. The plaintiffs had found the purchaser. The bargain was struck at Rs. 35,000, a figure which the plaintiffs had suggested and which the defendants had accepted. It was at the instance of the plaintiffs that the defendants had offered that figure to the Controller of Military Accounts. The plaintiffs were in the circumstances entitled to claim remuneration at Rs. 5 per cent, on the entire sum of Rs. 35,000.
The result is that we allow the appeal, set aside the decree of the lower appellate court and restore the decree of the trial court with this modification that the plaintiffs are entitled to Rs. 1,750 as claimed. Plaintiffs must have their costs throughout.