(1.) In this appeal against a preliminary decree for accounting the defendant challenges the finding of the lower court that he was an agent of the plaintiffs liable to account for the profits received in carrying on business on their behalf. A question also as to whether the defendant is a constructive trustee under S.88 of the Indian Trusts Act liable to account to the plaintiffs also arises for decision. The plaintiffs are the widow and the minor children of one K. S. Raman who died on account of a heart attack on 2nd November 1973. Raman had a prosperous trade in stationery goods at Pattambi. He had also wholesale and retail agencies for sale of the products of various companies such as the Tata Oil Mills, Godrej Soap Company, Kerala Soaps and Oils, Reckitt Coleman of India Ltd., Colgate Palmolive India Ltd., Fargo Sales, Spencer and Company, Western India Match Company, A.S.R. Traders and Agency, Parry and Company, Mahatma Gandhi Perfumery Works etc. Raman had also two cars and a lorry for use in his business. The first plaintiff was only 35 years old at the time of Raman's death. Plaintiffs 2 to 6 were minors even on the date of the suit. The defendant is Raman's elder brother. He was carrying on a piece-goods business at Pattambi. The plaintiffs, a young widow and her minor children, were in a desperate situation on the sudden death of Raman on 2nd November 1973. The defendant undertook to carry on the business on behalf of the plaintiffs and from 3rd November 1973 onwards he was conducting Raman's business until 21st July 1975 when he returned the keys of the business premises to the first plaintiff through a common friend examined in this case as P.W. 2. A general power of attorney (Ext. A-4) was executed by the first plaintiff to the defendant authorising him to represent her in all the business dealings in respect of the trade. Raman was conducting business in a rented building. Shortly after the execution of the power of attorney (Ext. A-4) the defendant shifted the business to his own building retaining also the rented premises for use as godowns. The defendant had received amount due under policies of insurance taken by Raman on the strength of the power of attorney Ext. A-4. He had also sold the cars and the lorry and the amounts received are misappropriated. The liabilities appertaining to the business were not paid. Revenue recovery proceedings were started against the plaintiffs for arrears of tax due to the Government. The plaintiff's were compelled to pay the tax from other sources. It was at this stage that the defendant returned the keys of the godowns and the business premises to the plaintiffs on 21st July 1975. The plaintiffs issued notices Exts. A-1 and A-2 to the defendant calling upon him to account for the profits of the business carried on by him as an agent of the plaintiffs and on his failure to account, the suit was instituted for rendition of accounts and for recovery of the amounts found due from him. The defendant is sought to be made liable to account as an agent of the plaintiffs. He denied his liability as an agent. According to him on the death of his younger brother Raman the business was carried on by his widow, the first plaintiff, and the defendant was only helping her out of humanitarian considerations. He denied having received any amounts on behalf of the plaintiffs and prayed for dismissal of the suit.
(2.) The Trial Court on a consideration of the documentary and oral evidence adduced in the case found that the defendant was carrying on the business as an agent of the plaintiffs and a preliminary decree is passed for accounting relating to the business and other transactions carried on by the defendant on behalf of the plaintiffs.
(3.) Section 182 of the Indian Contract Act defines an agent as a person employed to do any act for another or to represent another in dealings with third persons. S.186 enacts that the authority of an agent may be, express or implied and under S.187 an authority is said to be implied when it is to be inferred from the circumstances of the case. The relationship of agency arises whenever one person called the 'agent' has authority to act on behalf of another called the 'principal' and consents so to act-vide Syed Abdul Khader v. Rami Reddy AIR 1979 SC 553 . In the words of Lord Cranworth: