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was held (i) that the letter of the 3rd April 1950
and the surrounding circumstances established that
the solicitor was authorised to act as agent for the
bank to receive the purchase money and give a
discharge therefor.
(2) That even if the solicitor
had no such actual authority the plaintiffs with
knowledge of the facts had ratified the receipt of
the purchase money by accepting payments out of
it and by subsequent correspondence.
(3) That the
defendant was entitled to an order for a specific
performance of the contract.
At the trial Budd J. said that the cardinal factor
was
the letter written by the solicitor on 4th
December, 1950 and that it would have to be viewed
in the light of the surrounding circumstances to
indicate whether or not the solicitor purported to
act as the bank's agent in the collection of the
purchase money from the purchaser. He said that
the second sentence and the whole of the second
paragraph were plainly written by the solicitor as
solicitor for the purchaser. There was no indication
that the solicitor purported to act for the bank or to
collect the money on their behalf. He could only
construe it as a demand for the purchase money
by a solicitor from his own client. If the purchaser
had demanded the return oi his money within a
week the solicitor would have had no option but to
pay it back because he could not have been regarded
in law as holding the money as trustee for the bank.
The learned judge also held that on the evidence
before him there was no indication that the bank
were aware of the circumstances surrounding the
solicitor's receipt of the purchase money at any
time prior thereto and that they did not purport to
ratify his act subsequently.
Lavery J., giving the judgment of the court on
appeal, said that the issues were (i) was the sum
paid to the solicitor as agent for the bank authorised
to receive it and give a discharge therefor; (2) if
the solicitor had no actual authority to receive and
give a discharge on behalf of the bank did he purport
to do so, and, if so (3) was his action subsequently
ratified by the bank so as to discharge the purchaser ?
On the first issue the learned judge held that the
instructions given in the first instance to the solicitor
and in particular the instruction to deal with " the
ultimate disposal of the property " and the solicitor's
reply thereto when he said in a letter " I shall be
happy to act for you in disposing of the lands"
gave to him a wider authority than would arise
from his mere appointment as a solicitor with carriage
of sale and in particular would authorise the solicitor
to receive and give a discharge for the purchase
money. Furthermore the correspondence indicated
that the solicitor both prior to the date of instructions
to sell and subsequent thereto was authorised to
act on behalf of the bank generally as executor in
the winding up of the Irish estate, to receive purchase
money and to make thereout such payments as
were necessary. In the view of the court the solicitor
was authorised to act as the bank's agent in all
respects in relation to the estate's Irish affairs and in
particular to receive the purchase money and give
a discharge therefor. The decision of the court on
this issue would have been sufficient to allow the
appellant's appeal but the learned judge dealt with the
two other issues listed above. The court read both
the letter of 4th December, 1950 and the receipt
subsequently given as a demand on behalf of the
bank. Certain payments were made from time to
time out of the money in hands by the solicitor
and at no time did either the bank or the solicitor
demand from the purchaser a release for any of the
money in hands.
The court concluded therefore
that the solicitor did claim to act as agent for the
bank in receiving the money and in giving the receipt
therefor.
On the third issue, that of ratification, the learned
judge pointed out that it was necessary that the
person who was deemed to have ratified an act done
with his authority should have full knowledge of all
the material circumstances in which the act was
done unless he intended to ratify the act and take
the risk whatever circumstances may have been.
The act done in this case was simply the receipt of
certain purchase money and
the only material
circumstance was
the payment. Possibly the sol
vency or otherwise of the solicitor would have
to be considered. Every person who allows another
to receive monyes on his behalf and to retaint hem
must be deemed to have satisfied himself of the
solvency of such a person or to have taken the risk,
if risk there be, that the agent either by original
appointment or subsequent ratification may mis
appropriate the money or when its payment is
demanded prove insolvent.
The correspondence
showed that at various dates between the receipt of
the money by the solicitor and May 1952 various
payments on account were made by the solicitor
out of the purchase money in his hands. The court
could not understand the course ot events in any.
sense other than that if the bank had not in fact
authorised the solicitor to receive the balance of
the purchase money that they afterwards became
aware that he had so received it and that with
knowledge of this fact they ratified his action. Their
receipt from him of various payments from the
purchase money and the correspondence amounted
to such ratification. The appellant was therefore
entitled to claim that the purchase money had been
paid by him in full and the title being in order and
the bank being the registered owners discharged
6?