LILADHAR CHATRABHUJ Vs. MATHURADAS GOKULDAS

JUDGEMENT

(1.) The plaintiffs have filed this suit to recover the sum of Rs. 12,000 for brokerage alleged to be due to them for bringing about the sale of the defendant's property at Bund Gardens Road, Poona, formerly known as "Maneck Park", to the Maharaja of Kolhapur for Rs. 6,00,000. Plaintiffs say that they were engaged as brokers in the transaction in or about July 1925, that the transaction of sale which was ultimately completed in or about June 1926, was brought about through their exertions, but that it was completed behind their backs, and that they are entitled to brokerage at two per cent. on the sale price. Defendant says that in or about May- June 1925, plaintiff No. 1 came and told him that the Maharaja of Kolhapur was a likely purchaser of this property, but he denies that he engaged the plaintiffs as his brokers to bring about the transaction, or that he agreed specifically to pay them brokerage at two per cent. According to his case the brokerage was to be paid to the broker or brokers through whom the transaction was completed, as other persons had also approached him for a sale of the property to the same party. Defendant further says that the negotiations for a sale, so far as the plaintiffs were concerned, terminated on or about August 7, 1925. Thereafter an agreement for sale was entered into on April 22, 1926, between Mr. F.E. Dinshaw, solicitor, the mortgagee of the property, and Mr. Lathe, the then acting Dewan of Kolhapur, and the sale was completed on or about June 2, 1926. A sum of Rs. 12,000 was paid for brokerage to the broker through whom the transaction was completed, and the defendant denies liability to pay to the plaintiffs any brokerage at all.

(2.) The important questions for consideration are whether the plaintiffs were employed as brokers in respect of the transaction of sale of the Poona property ; if so, what were the terms of that employment ; and, thirdly, whether the plaintiffs brought about the contracting mind between the vendor and the purchaser in relation to the transaction that was ultimately completed. I may mention here incidentally that in some cases an estate-broker earns his remuneration without much work or trouble, and his reward is out of all proportion to the work done by him. In other cases he may be regarded as meriting his remuneration for the work which he has actually performed. But these are matters with which the Court is not concerned. The principles governing claims for brokerage have been laid down in numerous decisions, both English and Indian. They were considered by Crump J. in Vasanji V/s. Karsondas in which the learned Judge adopted the dictum of Erle C.J. in Green V/s. Bartlett (1863) 14 C.B.N.S. 681, which in turn was followed by the Appeal Court in The Municipal Corporation of Bombay v. Cuverji Hirji (1895) I.L.R. 20 Bom. 124, viz., that an agent who finds a purchaser and establishes the relationship of vendor and purchaser between the parties, without actually bringing about the sale, is entitled to his commission. This is subject, as the learned Judge pointed out at p. 494, to any contract or any special term in the contract of employment to the contrary. It is necessary, in every case, therefore, for the Court to consider what the particular terms of the employment of the broker are. In that case the contract, as stated at p. 487, was as follows : The plaintiff was to find a party willing to advance up to rupees four lacs on equitable mortgage of the defendant's three properties and the defendant was to pay to the plaintiff a commission at the rate of two per cent. on the amount of the loan so to be made.

(3.) The learned Judge after considering all the evidence held that the plaintiff was entitled to recover his brokerage, though the defendant who had originally engaged him to negotiate the loan actually borrowed the moneys from the same bank through another broker, because it was really the plaintiff who had brought about the contracting mind between the bank and the defendant. It is, however, necessary in order to entitle a broker to earn his commission to show that the transaction is completed, in the absence of any contract to the contrary, or if the transaction is not completed, to show that the non-completion is due to the default of the principal : Mehta V. Cassumbhai. . But the defendant cannot by employing another broker in the midst of negotiations, however innocently, deprive the broker who brought the parties together of his commission: Wilkinson V/s. Martin (1837) 8 C. & P. 1. In that case it was held that the broker had introduced the purchaser to the vendor, and as such introduction was the foundation on which the negotiations proceeded, the broker was entitled to his commission if he was up to a certain time the agent or the middleman between the parties, though the transaction was completed with out his instrumentality or interference. It follows, therefore, that if the negotiations carried on by the broker have completely ceased, and have been abandoned at the time his employment as a broker has ceased, the agency of the broker ceases too, and with it his right to claim remuneration. The test in such cases has been laid down in Burchell V/s. Gowrie and Blockhouse Collieries, Limited [1910] A.C. 614, viz., whether the work of the broker who claims brokerage is the effective or efficient cause of the completion of the transaction. It is not sufficient to show that the transaction would not have been entered into but for the broker's services, if the transaction resulted therefrom only as a casual and remote consequence. There may be cases also in which several brokers are working for the same party at the same time, and in such a case the broker who is entitled to his remuneration is not necessarily the one who has first introduced the business, but the broker whose work is the effective cause of the completion of the transaction, not the causa sine qua non, but the causa causans, of the completion of the transaction: see Halsbury, Vol. I, para. 434. It would, therefore, be immaterial if the transaction in suit was completed through another broker, unless the defendant can show that the negotiations went off completely and were given up by the parties so far as the plaintiffs were concerned, and the transaction was completed as a result of separate negotiations, and through the exertions of another broker. After dealing with the evidence in the case his Lordship proceeded :