BENINSON Vs. SHIBER

JUDGEMENT

(1.) The appellants are the three daughters and sole heiresses of the late Mrs. Menucha Valero, widow of Jacob Valero. Mrs. Valero died on 5 March 1933. At the end of the year 1928 she had entered into an agreement with the respondent, under which he was to build an apartment house for her, and to provide the necessary money to pay for its erection. The obligation which she then incurred had been met only in part at the time of her death and, during her lifetime, the original building contract was followed by a series of complicated transactions culminating in an agreement which purported to settle accounts finally between Mrs. Valero and the respondent. In the result, it is admitted by the appellants that there is due to the respondent the sum of LP1298.416. The respondent claims a much larger sum, but in the District Court did not succeed in recovering more than the amount which was admittedly due. He appealed to the Supreme Court, where it was held that he was entitled to a total amount of LP4560.150, of which LP4500 was to carry interest at 9 per cent. from 7 June 1934. The appeal to His Majesty in Council is against this decision of the Supreme Court and the appellants ask that the judgment of the District Court be restored. The appellants were sued both in their personal capacity and as heiresses of their deceased parents, "representing the estate of their said parents." In both Courts they were adjudged to be liable only in this latter capacity, and it is not now suggested that they are personally liable. Nor does any question now arise as to their indebtedness in the sum of LP60.150 which formed part of the sum awarded in each Court. The respondent founded his claim on the final agreement made with Mrs. Valero, the date of which was 5 October 1932. Mrs. Valero purported to make that agreement both in her personal capacity and as representative of the first-named appellant, "as per general power of attorney executed by her in Jerusalem on 14 March 1930," and also of the other two appellants. Nothing now turns on the question whether the appellants are to be regarded as parties to the agreement, and this is fortunate, since their Lordships have not before them either the original agreement or a complete copy of it. The exhibit with which their Lordships have been supplied is itself an incomplete copy, omitting the names of the parties who set their hands and seals to it as well as those of the witnesses who attested it. These are by no means immaterial omissions, and indeed the respondent made a point of the fact that Mr. Rubin, an architect engaged by Mrs. Valero, was one of the witnesses. There would have been nothing in the record to establish this fact, or to call their Lordships' attention to it, had not one of the Judges of the Supreme Court mentioned it in his judgment. Their Lordships have thought it right to refer to this matter in order to emphasize the importance of putting their Lordships' Board in possession of all relevant documents.

(2.) Although the action was brought on the agreement of 5 October 1932, it is necessary to narrate the earlier history of transactions between the respondent and Mrs. Valero in order that the point on which the Supreme Court differed from the District Court may be appreciated. The story begins on 28 December 1928, when the agreement in writing to which reference has already been made was entered into between Mrs. Valero, purporting to act "on behalf of herself and on behalf of the heirs of the late Mr. J. H. A. Valero," (her deceased husband), and the respondent, described therein as "the architect contractor." The agreement recited that Mrs. Valero was desirous of erecting a five story building on plot No. 12 situated on King George Avenue in Jerusalem in accordance with plans prepared by the respondent, and that the respondent had agreed to execute the work at a named price per square metre. It was agreed that certain further sums were to be paid for the respondent's work as architect and for some extras which had already been agreed by way of departure from the original specification. The building was to be "completed and fit for habitation three months after 1 Moharrem 1348," that is to say by a date in June 1929. Any variations were to be "discussed with and approved by the proprietor or her representative" and such approval was to be given in writing, "or failing which shall be stated in the presence of two witnesses." A further provision which assumed some importance in the course of the hearing was that the majority of artisans and workmen engaged on the building by the architect contractor should be Arabs. Most important, however, for the purposes of the present dispute, were the provisions as to payment, which it seems desirable to set out fully. They are as follows:

(3.) "(3) The architect contractor shall find the money for the building and charge the proprietor for same at the legal rate of 9 per cent. per annum on the total amount discounted in advance. (4) The interest on the total amount shall begin to function 7? months preceding 1 Moharrem 1348, or 1929, i. e. from 23rd October 1928. (6) If the proprietor cannot pay all interests in advance, she shall give instead bills of exchange, the discount on which shall be charged to the proprietor. Bank discount rate shall be taken as a basis. (7) The plot No. 12 situated on King George Avenue on which the proposed five storey building is to be erected and belonging to the said proprietor shall be mortgaged in whole with the architect contractor for a period not exceeding 5 years beginning from the date of this present contract with all and every structure erected on it in the future. No other mortgage shall be made on the said plot of land and buildings while the present mortgage holds good. (8) The said land and buildings shall be mortgaged with the architect contractor for a sum of LP10000.000 (ten thousand pounds) bearing yearly interest as stated above. (9) The balance left over after deducting the mortgage amount shall be given in bills payable within one year from 23 October 1928, and the interest charged as mentioned in cl. 6. (10) Should the proprietor fail to pay the first yearly interest on the amounts due, this shall ispo facto constitute a breach and cause the whole mortgage amounts to fall due. (15) The proprietor shall be at liberty to release the property from mortgage at any time during the five years and the architect contractor shall accept and effect such release immediately provided all amounts and interests whether covered by the mortgage, bills of exchange or any ether outstanding accounts have been fully paid up. (20) All accounts shall be made out and bills signed together with the signing of this agreement, (21) The interest on any amounts paid up before maturity shall be refunded."