P. Ayyannah Chetty vs P.K. Subramania Iyer

Schwabe, C.J.—This is an appeal from a judgment of Coutts-Trotter, J. in which he found in favour of a Commission Agent that he had

earned his commission.

All these cases�and there have been a very great number of them in England-depend, in the first place, on what is the contract between the

parties., Where you have a contract in plain terms stating when commission is payable and when it is not, there is no difficulty: but, where you have

a contract containing terms which may bear more than one interpretation, there have been many cases where difficulties have arisen. Different

Judges have taken different views and have left to some extent the law not as clear as one would wish to find it: but, in my judgment, one gets very

little assistance from examining those authorities. What one has to do is to take the contract and the surrounding circumstances and see what was

the intention of the parties to be-deduced therefrom.

In this case the contract was verbal and it is stated by the plaintiff in his evidence, but the defendant has not the opportunity of stating his version

because he died before the case was heard. The plaintiff says, ""The defendant engaged me for the purpose of purchasing the house. The terms of,

the engagement were that, I should negotiate for the purchaser at a commission of two per cent, on the purchase price."" In the absence of words to

the contrary, ""purchasing, a house"" means the completion of the purchase of that house. It does not mean a conditional contract, or even an

unconditional contract, for the, purchase and sale of it. In the same way, ""the purchase price"" means the price paid and not the price agreed to be

paid conditionally or unconditionally. For that proposition, there is direct authority in the case of Peacock v. Freeman 4 T.L.R. 541, where Lord

Esher, Master of the Bolls said, ""Land could only be said to be sold when the conveyance was complete, not when there was a mete contract to

sell,"" and, interpreting the contract, Lord Justice Lindley said that the meaning of the contract was that if a sale were effected commission should be

payable and that, though there had been acceptance of the terms of the contract itself, the commission being payable on sale, none was payable

where the sale fell through.

In this case the evidence goes a little further, because the plaintiff swears that he asked his principal when he was going to get his commission,

and the principal said. ""It is written in the agreement. Why are you afraid?"" referring to an agreement witnessed by the plaintiff between the

proposed vendor and his principal. It was one of. the terms of that contract that the title to be adduced by the vendor should be submitted to Mr.

Radhakrishnayya and that his decision was to be final as to whether the title was good or bad, and the whole contract between the vendor and the

purchaser was subject to the title being approved by Mr. Radhakrishnayya. That contract also included a term as between the vendor and the

purchaser that the commission payable to the plaintiff should be paid by the purchaser, not by the vendor, and it is quite clear that as between the

parties to that contract that commission was payable after the thing went through and the purchase money was paid over. If we have to refer to

that contract as evidencing the terms of the contract between the plaintiff and his principal, it is impossible to take part of that contract, and it

follows, in my judgment, that that contract too was subject to the approval of the title. I am inclined to the view that it is not necessary to go to that

contract. One has to look at the terms of the verbal contract given in evidence by the plaintiff and to interpret them; and I interpret them to mean

that he was to have commission on the completion of the sale. Any other interpretation would lead to a result which would be most improbable.

Why should the principal agree to pay a heavy commission dependent on the amount of the purchase price for the settling of a price as between

him and somebody who has no title or whose title is such that his Vakils advise him not to become the purchaser? I should want very clear words

in a contract to make me find that the intention of the parties was that the commission should be payable by an intending purchaser whether he

actually became the purchaser or not, and 1 find no such words here.

The learned trial Judge in this case relied on the authority of Fisher v. Drewett 39 L.T. 253. That case purported to follow Green v. Lucans 33

L.T. 584. On an examination of those cases, an examination which has taken place many times since in other cases, it is clear that they were

determined by the interpretation of the actual words of the contracts in those cases, and in both of them it was held that the intention of the parties

was that the commission was to be earned on the introduction of a person who was accepted as a lender or as a purchaser by the principal. One

of them viz., Fisher v. Drewett 39 L.T. 253 is also an illustration of another principle which is of universal application in cases of this kind, namely,

that the principal is bound to pay commission if the agent has introduced some one ready and willing to enter into a contractual relationship with

him but the matter falls through owing to the default of the principal. I agree with the trial Judge that the case in Clack v. Wood 9 Q.B.D. 276 is

distinguishable from this case and does not help the appellant.

This is not, in my judgment, a case of an agreement to pay commission in any event or a case in which there has been any sort of default on the

part of the principal. Under those circumstances, in my judgment, the plaintiff entirely failed >to make out a case for payment to him of the

commission in the events that happened. This appeal therefore be allowed and judgment entered for the defendants, with costs here and below.

Odgers, J.

I agree. As the contract is not in writing and as the defendant is dead, we are left to infer the terms of the contract from the evidence of the

plaintiff alone. I agree with my Lord in inferring from that evidence a contract that commission was only payable on the actual ''purchase'' of the

house in Memorial Hall Street, and that ''purchase'' means a completed conveyance and payment of a purchase price within the meaning of the

decision in Peacock v. Freeman 4 T.L.R. 541. As my Lord has said, these contracts for payment of commission are dependent on the

circumstances and the expressions used in each case. I think, were it necessary to do so, a very strong deduction can be drawn against the

respondent''s case from the fact that he attested exhibit A, the agreement for the sale, in which it is provided that the vendees are to pay his

brokerage of 2 per cent. The words in paragraph 7 of the agreement that ''the commission is to be paid to Mr. P.K. Subramania Iyer who brought

about this agreement are strongly relied upon by the respondent : but, as the agreement makes purchase of the house subject to the title being

approved by the purchaser''s Vakil, it is to my mind perfectly clear that the commission agent knew of those terms being incorporated in the

agreement and that the incorporation of them goes very strongly to show that those were actually the terms upon which, if at all, he is to be paid. I

cannot see any reason for the presence of paragraph 7 in that agreement if the commission agent''s work was all over and done by the time that

agreement was entered into.

For these reasons, I agree that the appeal should be allowed with costs here and below.