SUIT FOR ACCOUNT BY AN INSURANCE AGENT AGAINST A COMPANY[CD1]
IN THE COURT OF
THE....................
Suit
No..................... of 19....................
C. D....................................................................
Plaintiff
versus
C.
F................................................................. Defendant
The
abovenamed plaintiff most respectfully submits as under: —
1.
That the plaintiff was appointed by the defendant Company as their Insurance
Agent for the District of.................... The defendant Company agreed to
pay the plaintiff a commission @.................... per cent on all the premia
to be paid on the policies to be effected through the plaintiff.
2.
That the plaintiff acted in pursuance of the agreement
dated..................... from that date to.................... and introduced
the policies described in the Schedule annexed to the plaint.
3.
That the defendant Company paid to the plaintiff during the aforesaid period
only a sum of Rs..................... on account of commission; but has not
rendered any account of premia on the policies detailed in the Schedule annexed
hereto, even at the demand made by the plaintiff through a registered
notice..................... received by the defendant on.....................
4.
That the plaintiff is not aware of the policies lapsed, matured or forfeited,
and as such is ignorant as to how much money is due to him as commission under
the agreement referred to above.
5.
That the cause of action arose on.................... 19....................
within the jurisdiction of this Court when the defendant company received the
notice of demand of the plaintiff, but did not render account.
6.
That the suit is valued at Rs......................................... an
approximate insurance commission due after deduction of Rs.....................
already received by the plaintiff from the defendant company and the court fees
is paid according to the reliefs claimed.
RELIEFS
CLAIMED:
The reliefs
claimed by way of this suit are:
(1)
To have full and true account. of the moneys realised by the defendant company
as premia on the policies detailed in the Schedule and of the commission due to
the plaintiff.
(2)
Payment of the sum found to be due to the plaintiff after deduction of
Rs..................... already received by the plaintiff from the defendant
Company;
(3)
Costs of the suit to the plaintiff.
Plaintiff
Through
Advocate
VERIFICATION
I,
abovenamed plaintiff, do hereby verify that the contents of paras
.................... to.................... of the plaint are true to my personal
knowledge and those of paras.................... and....................
thereof are based on legal advice which I believe to be true.
Verified
on this................. day of.................... 19....................
at....................
Plaintiff
CASE LAW
Section
216
The commission
agent need not disclose name of firm from which he had purchased the goods but
he cannot supply goods at a particular rate.1
PRINCIPAL’S
RIGHT TO BENEFIT GAINED BY AGENT DEALING ON HIS OWN ACCOUNT IN BUSINESS OF
AGENCY.
No agent in
the course of agency can make profit without the knowledge of his principal.2
Where an agent
by utilising money of his principal makes profit he cannot treat that
transaction an independent transaction.3
The Court has
no inherent power to issue Commission for determining liability of agent for
secret profits.4
Section
230
AGENT
CONTRACTING IN THE NAME OF HIS PRINCIPAL AND NOT IN HIS OWN NAME.
Personal
liability of the agent is concluded by Section 230 of the Contract
Act.
In the absence of any contract to the effect, an agent cannot personally
enforce contracts entered into by him on behalf of his principal and conversely
he is not personally liable also except to the extent of the liability as
agent. But a contract in favour of or against the agent entitling him to
enforce the contract or making him liable will be presumed (1) where the
contract is made by an agent for the sale or purchase of goods for a merchant
resident abroad, (2) where the agent does not disclose the name of the
principal, or (3) where the principal, though disclosed, cannot be sued. The
test in such cases is on whom the opposite party gave credit for entering into
the contract or presumed to have given credit. A party cannot be supposed to
rely exclusively on a foreign principal whom the agent’s contract is not
understood to bind, or on a person whom he does not know and whose standing and
credit he had no occasion to verify or on a person who is in the face of the
transaction not legally liable. Ordinarily an agent contracting in the name of
his principal and not in his own name is not entitled to sue, nor can be sued,
on such contracts. When in making a contract no credit is given to the agent,
but credit is given exclusively to the principal, the agent is not personally
liable.5
RIGHT OF
AGENT TO SUE PRINCIPAL NOT STATUTORY BUT EQUITABLE.
The
principal’s right to sue an agent for rendition of accounts is thus recognised
by statute. There is no corresponding provision in favour of the agent. But the
Contract Act cannot be taken as exhaustive. The right of the agent to sue the
principal for accounts is not statutory, but equitable arising under special
circumstances. There are usually exceptions to all rules. Where the principal has
kept the accounts between him and his agent and the transactions in the course
of the agency are within the peculiar knowledge of the principal or the agent
is not having any records with him to quantify the amounts, he may ask for
accounting. The same is the position in cases where the accounts are so
complicated that a suit for a definite sum of money is not possible. In cases
where settlement of accounts alone could do complete justice between the
parties, the agent can sue the principal for accounting even if he is having
some evidence of the transactions with him. The agent’s right to sue the
principal is thus recognised and it is accepted, what has been stated above are
only illustrative and not exhaustive. The right must depend upon the fact and circumstances
of each case.6
If
the agent purports to act as such and in that capacity enters into a
transaction on behalf of the principal he will have to render an account to the
principal if the latter chooses to require him to give an account on the footing
of his being an agent.7
Section
214
AGENT’S
DUTY TO COMMUNICATE WITH PRINCIPAL
Where
the principal effected insurance due to non-communication by agent the
insurance was held to be void.8
It
is the duty of the agent to communicate with his principal in case of difficulty.9
Section
215
RIGHT OF PRINCIPAL WHEN AGENT DEALS ON HIS OWN ACCOUNT IN
BUSINESS OF AGENCY WITHOUT PRINCIPAL’S CONSENT.
Where
the agent obtains any information in the course of his agency he should not use
the same against his principal.10
The
agent must make full disclosure of the nature and extent of his interest.11
Where
a person acts as agent for the principal as also for the contracting party he
cannot obtain remuneration from both without the knowledge of the principal.12
Neither
the broker employed to sell become himself buyer nor seller when employed to
buy without notice to the principal.13
RIGHTS OF PRINCIPAL WHEN AGENT DEALS ON HIS OWN ACCOUNT IN
BUSINESS OF AGENCY WITHOUT PRINCIPAL’S
CONSENT.
The
principal could repudiate the transaction where the agent employed to procure
loan lent his own money.14
When
an agent pays the price to the principal he can become a purchaser.15 An agent
cannot convert himself into principal when employed as broker.16
The
transaction of lease can be avoided where principal is acquainted with facts of
creation of lease in favour of his son.17
RIGHTS OF PARTIES TO A CONTRACT MADE BY AGENT NOT
DISCLOSED.
Under
Section 230 of the Act a partner an agent for an undisclosed principal can
enforce the contract personally.18
Where
before completion of contract the buyer was informed that goods in question
belonged to a third person then in that event he could not set off the debt due
to him from agent.19
Business
done by a commission agent in his own name though for the benefit of an
undisclosed principal who is liable to indemnify the commission agent against
loss is not business done by such undisclosed principal through the agent but
business done by the agent.20
The
second paragraph of Section 231 has to be read in the context of the first
paragraph of Section 231 and the expression " if the principal disclosed
himself before the contract is completed in para 2, " must be read in the
context where the agent made the contract with a person who did not know or had
reason to suspect that he was an agent.21
Section
232
PERFORMANCE OF CONTRACT WITH AGENT SUPPOSED TO BE
PRINCIPAL.
Where
one of the contracting party has principal then that principal has right to
intervene and may even sue upon it.22
The
principal right to require the performance of the contract is subject to rights
and obligations subsisting between the agent and the other party to the
contract. Therefore it has to be read as a qualification of first portion of
para 1 of section 231 of the Contract Act.23
Where
a contract is made with an agent in his own name for an undisclosed principal
either the agent or the principal may sue upon it; the defendant in the later
case being entitled to be placed in the same situation at the time of the
disclosure of the legal principal as if the agent had been the contracting
party.24
A
plaintiff who has a right to sue both an agent and his principal under Section
233 of the Contract Act, is not competent after he has sued one of them to
judgment, to sue the other in a second suit.25
Section
233 of the Contract Act, enacts substantive law, laying down who shall be held
liable and not adjective law, defining the procedure by which the liability may
be enforced. This section merely creates a joint liability so that judgment may
be obtained against both principal and agent.26
1.
A. I. R. 1922 All. 400.
2.
All. 1942 Mad. 634: (1939) 3 All. E. R. 235.
3.
A. I. R. 1927 Mad. 478: A. I. R. 1937 Mad. 810.
4.
A. I. R. 1975 Cal. 303.
5.
1991 (2) C. C. C. 205.
6.
1991 (2) C. C. C. 220: A. I. R. 1967 S. C. 333.
7.
A. I. R. 1961 A. P. 143.
8.
(1867) 2 Q. B. 511.
9.
A. I. R. 1927 M. W. N. 578.
10.
(1913) 2 Ch. 239: (1909) 1 Ch. 413.
11.
(1873) 10 H. L. 180: (1874) 18 Eq. 524.
12.
A. I. R. 1933 Rang. 184.
13.
(1924) A. C. 566: (1844) 8 E. R. 1273: (1940) Ch. D. 359.
14.
A. I. R. 1928 Cal. 727.
15.
A. I. R. 1967 S. C. 181.
16.
1933 Bom. L. R. 703.
17.
A. I. R. 1983 H. P. 32.
18.
I. L. R. 1953 Bom. 110: I. L. R. 1924 Mad. 130.
19.
I. L. R. 1932 Bom. 356: I. L. R. 1924 Cal. 504.
20.
A. I. R. 1929 Sind. 24: 18 Bom. 294 (P. C. ).
21.
A. I. R. 1960 Cal. 752.
22.
L. R. 5 Q. B. 656.
23.
(1879-80) 4 Bom. 447.
24.
A. I. R. 1931 Sind. 4.
25.
A. I. R. 1917 Bom. 268.
26. A. I. R. 1917 Bom.
268.
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