2nd Case OCTOBER 1999 Natrah instructed Meor, her agent, to store 1000 sacks of potatoes, 200 chairs

and 300 desks which belonged to her in Meors warehouse until she could find buyer for them. A few days later, Meor discovered that the potatoes were beginning to rot and were likely to contaminate the other perishable goods kept in the warehouse. He tried to contact Natrah but was informed that she was out of town and could not be reached. Meor later sold the potatoes, desk and chairs to Hazlifah below market price. Advise Natrah ISSUE In this case, Natrah (Principal) instructed Meor (Agent), her agent to store 1000 sacks of potatoes, 200 chairs and 300 desks which belonged to her in Meors warehouse until Natrah can find buyer for them. Then, it is found that the potatoes begins to rot and contaminate other perishable goods that was kept in the warehouse. So, Meor decided to sold the potatoes, desk and chairs to a buyer, Hazlifah below the market price as Meor is not able to contact and inform the problem occur to Natrah. Here, it is found that formation of agency by necessity occur where the agent, Meor take action by selling Natrahs goods to Hazlifah. This action is considered as an emergency act where it can prevent the principal, Natrah from facing bigger loss. So in this case, we are focusing on necessity issue whether Meor can be an agent by necessity, either Natrah can claim or not the expenses incurred by Meor in protecting Natrahs item that is kept in the warehouse and is Meors action selling the items without Natrah permission is allowed under agency by necessity conditions. Based on the above situation, Natrah is the principle whereas Meor act as the agent. Under section 135, agent is defined as a person employed to do any act for another or to represent another in dealings with third person. For principal, the definition can be found under section 136 where it provide Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent. Section 137 also state about principal where it said ..any person may become an agent; but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions in that behalf herein contained. In creating or forming an agency, it does not require any consideration as provided by section 138 which states that No consideration is necessary to create an agency. As in this situation agency by necessity occur, section 142 provides An agent has authority, in an emergency, to do all

PRINCIPLE

such acts for the purpose of protecting his principal from loss as would be done by a person of ordinary prudence, in his own case, under similar circumstances. Under agency by necessity, there is a time that it is impossible for the agent to get principa ls instruction at that time. This is provide under section 167 where it state It is a the duty of an agent to, in cases of difficulty, to use all reasonable diligence in communicating with his principal, and in seeking to obtain his instructions.

APPLICATION

In this case, Natrah act as the principal and Meor act as an agent. Explanation on definition of principal and agent can be refer under section 135, section 136 and section 137. As an agent, Meor must refer to Natrah on taking any action to Natrahs goods that is kept in the warehouse. But when the potatoes start to rotten and as it may contaminate other goods, Meor decided to sell all Natrahs goods which include the potatoes, desks and chairs to a buyer, Hazlifah. Besides that, Meor also was not able to contact Natrah and informed her the problem that occur. Under section 142, it is explain that in certain circumstances, an agent might do something to prevent losses to the principal where in this case, to Natrah. Agency by necessity may happen in 2 situations. Firstly, when a wife is deserted or is justified in leaving her husband and no means of support, a wife is entitled to pledge her husbands credit for necessaries suited to the income and life condition of her husband even against her wishes. However she cannot become an agent be necessity if her husband has provided her with sufficient allowance. Second situation is when a person is entrusted with another persons property, and it becomes necessary for him due to the emergency situation, to do something in order to preserve and protect that property although he has no authority to do so. In this case, it occur under the second situation where Meor, Natrahs agent sell the goods without Natrahs permission even though he has no authority to do so. By taking this action, Meor has prevent the principal, Natrah from losses. Before a person can become an agent by necessity, there are a few conditions to be fulfilled. First, there must be a real and actual emergency. In Natrah and Meor case, there is emergency situation that occur. When Meor realise the potatoes start to rotten, he immediately contact Natrah to inform about the potatoes, but it failed because at that time, Natrah was out of town. If he did not do anything, the rotten potatoes will contaminate and damaged other perishable items in the warehouse. So to prevent this from happen, he decided to sell all Natrahs goods to a buyer, Hazlifah although he did not get

permission from Natrah herself. Here, Meor is said doing action that will protect his principal from loss. Section 142 explain the authority of an agent by necessity when an emergency situation or problems arise and what is the purpose of taking an action during certain circumstances. A person cannot become an agent by necessity if no urgency exist and goods are sold because it is not inconvenience to the agent. If we look the action taken by Meor on selling the goods at half price, it is applicable because he need to sell it quickly to other buyer or else, other items will be affected by the rotten potatoes. Due to this, other items will be damaged and it may become worthless. As a result, the goods may not able to be sold to other buyers. Next condition is the agent was entrusted with the principals property or goods. A person is not entitled or qualified to become an agent by necessity if he or she is not entrusted with the principals property. Under this condition, the agent is given a dominance or is in charge over the goods given where he or she is responsible to look after the goods or to hold the goods on behalf of the owner or to deliver the goods elsewhere. Based on the situation above, Meor is given a responsible to look over Natrahs goods and stored it in Meors warehouse until she can find a buyer for them. Here, it is showed that Meor, the agent is entrusted by Natrah to take care of the items. The third condition is it is impossible for the agent to get the principals instruction at that time. When there is emergency occur, an agent is under duty to inform or communicate with the principal to get some instructions. But sometimes, the agent may failed to reached or contact the principal in order to obtain instruction from them. So if any problem arise, they are allowed to use their own discretion taking necessary steps even though the agent are not informed by the principal on what to do. This condition is explained under section 167. In the case between Meor and Natrah, Meor take necessary action by selling the goods that include potatoes, desks and chairs to a buyer, Hazlifah. Although Meor do not received any instruction by his principal, Natrah but Meor must proceed with what he decided in order to prevent losses to principal. He tried to contact Natrah but was informed that she was out of town and could not be reached. In this condition, Meor is given a freedom to decide and allowed to act under his own discretion in taking required steps. Lastly, agent of necessity has acted in good faith. The act done by an agent might have been done by any other bona fide person in a similar position. Acting in good faith also means that the agent puts the interest of the principal above his own personel interest and the action done is what other reasonable person would have done. We can see that Meor take action not

for personel gain but it is more to protect his principal, Natrah from facing any loss. So Meor decided to sell all the items to Hazlifah. At least, Natrah will get some profit although the items are sold at half price. From this action, it is showed that Meor has acted in good faith by taking reasonable action and puts the interest of his principal above his own personel interest. When all the above conditions are fulfilled, a recognized person may become an agent by necessity. This will result in the following effects. The first effect is an agent will be protected from any claim of the principal. In this effect, it explained if the principal suffered any form of loss as a result of the agents action which was done due to the emergency, the principal cannot claim or sue the agent as the agent is protected since the action was a necessity. When Meor decide to sell all the items to Hazlifah at half price, he is actually protecting his principal, Natrah from facing any loss. Although the items is sold at half price, Natrah will still obtain a sum of profit. They will be a small amount of loss but Natrah cannot claim the loss or imposed a sue to Meor as Meors action is done during emergency condition. Natrah have to realise that Meor is protected since the action taken was a necessity. Moreover, when the problem arise, Natrah cannot be contacted as she is out of town. Second effect is the agent will be entitled to claim whatever additional cost for his effort to protect and to preserve the safety and interest of the principal. This effect clarify that if an agent incurred expenses to protect the principals goods or property, the agent will be entitled to claim from the principal for the expenses incurred. In Meors case, Meor have right to claim any additional cost or extra expenses that is incurred by him in his effort to protect Natrahs items that is kept in Meors warehouse. Natrah cannot argue about this matter or bring it to the court and must pay whatever expenses that is incurred by her agent, Meor. The last effect is a contract exists between principal and the 3 rd party. Where the agent acting in times of emergency had contracted with the 3rd for the safekeeping of the principals goods or to protect the principal is bound by such contract. In above case, Meor did not make any contract with a 3 rd party for the safekeeping of the principals goods where in this case the goods belonged to Natrah. CONCLUSION In conclusion, Meors action on selling the goods to Hazlifah is applicable under agency by necessity rules. Natrah cannot imposed any sue or argue on Meors decision because he did tried to contact Natrah, his principal in order to obtain instruction or information on how to resolve the problem that arise but she could not be reached and was out of town. Meor put his principal interest above his personel gain by making an effort in

protecting his principal from facing any loss. He even sell the goods at half price so that Natrah will obtain a small amount of profit. As for Natrah. she cannot claim the loss as Meor sell the goods at half price. This is because, Meor is protected from any claim by the principal and he also act due to emergency situation. Based on the above case, Meor fulfil all conditions to become an agent of necessity and because of that, he is legally protected any claim of the principal and entitled to claim whatever additional cost for his effort to protect and to preserve the safety and interest of the principal, Natrah. Other cases that can be refer for agency by necessity are James F. T. O'Connor, as Comptroller of the Currency, and Others, Plaintiffs, v. Bankers Trust Company and Others, Defendants, SPRINGER v. GREAT WESTERN RAILWAY COMPANY. [1919 S. 5.], COLONIALGROSSISTFORENING v. MOORE-McCORMACK LINES and THE QUEEN'S MEDICAL CENTER, Plaintiff-Appellant, v. JUNE TOKIYO KAGAWA

COLONIALGROSSISTFORENING v. MOORE-McCORMACK LINES PROCEDURAL POSTURE: Plaintiff consignee brought a libel against defendant carrier seeking the repayment of additional freight paid under protest upon the return of cargo to its original port after the carrier failed to deliver the cargo to its destination port. OVERVIEW: In the United States, a cargo of cane syrup was shipped on board the carrier's ship, destined for delivery to the consignee in Norway. The freight for the cargo had been fully paid in advance. The ship arrived in Norway, but before the cargo could be unloaded, German troops invaded Norway and occupied the destination city. The Germans placed an armed guard on board the ship and ordered it to leave the dock and proceed to an anchorage. The guard was soon withdrawn, but the ship's movements were subject to German naval control. Several days later, the ship was machine-gunned during aerial attacks by allied forces. The ship proceeded to a certain port and anchored. The American Consul ordered the ship's officers and crew ashore for their protection. They were later ordered aboard and returned home with the cargo. The consignee filed an action seeking to recover the freight paid. The court determined that the carrier was unable to discharge its cargo because it had no crew, officers, stevedores, or steam. The court also determined that the consignee discharged another consignee's bulk oil cargo by using its shore gang, pipeline, and pumps, but that it failed to discharge its own cargo. OUTCOME: The court dismissed the consignee's libel against the carrier.

James F. T. O'Connor, as Comptroller of the Currency, and Others, Plaintiffs, v. Bankers Trust Company and Others, Defendants PROCEDURAL POSTURE: Plaintiffs sought to enforce performance of an agreement alleged to have been made by defendants to guaranty certain deposits made to plaintiff for the purpose of preventing insolvency and liquidation. OVERVIEW: Plaintiffs, the Comptroller of the Currency, a bank's receiver, and the bank's president, brought an action against defendants, members banks of the New York Clearing House Association and those individuals who composed the executive of that association, to enforce the performance of an agreement alleged to have been made by defendants to protect the bank's depositors and to prevent the bank's failure. The basis of plaintiffs' claim was that defendants had agreed to guaranty certain deposits made to the bank to avoid insolvency and liquidation. Defendants contended that there was no contractual liability binding them to guarantee the deposits, that there was no authority to contract on behalf of defendants without prior approval, and that there was no ratification by defendants. In its determination, the court summarily dealt with the several defences raised, including that the alleged contract was ultra vires. As to whether there was a contract entered into and whether it was binding on the defendants, the court held that the plaintiffs failed to establish that defendants were bound by contract. OUTCOME: Finding that plaintiffs failed to show that defendants were contractually bound, the court ruled in favour of defendants since plaintiffs failed to establish the causes of action alleged in the complaint. THE QUEEN'S MEDICAL CENTER, Plaintiff-Appellant, v. JUNE TOKIYO KAGAWA, PROCEDURAL POSTURE: Plaintiff hospital appealed from a decision by the First Circuit Court (Hawaii), which denied plaintiff's motion for summary judgment and which found defendant wife was only liable for a portion of her husband's debts. OVERVIEW: After defendant wife refused to pay plaintiff hospital for husband's hospital stay, plaintiff commenced an action to recover payment for husband's medical services plus interest, costs, and attorney's fees. Plaintiff's motion for summary judgment was denied, and the court ordered defendant to pay a decreased sum due to an anticipated divorce between the parties. Plaintiff appealed from the decision contending Haw. Rev. Stat. 572-24, the spousal liability statute, was applicable. Plaintiff argued the statute imposed a mandatory duty on defendant to pay the debts contracted by the husband for medical treatment. Defendant argued she was not liable for the debts because husband and her were on the verge of divorce, husband was not on defendant's insurance policy, and the parties did not support each other financially. The reviewing court stated that defendant's filing of a divorce action did not end defendant's duty to husband or her liability for his debts under the statute. Thus, the court vacated the prior judgment and found defendant was liable for all the expenses incurred by her husband. OUTCOME: The court vacated the prior judgment and found defendant wife was liable, to plaintiff hospital, for all the expenses incurred by her husband. Defendant's

filing of a divorce action did not end defendant's duty to husband or her liability for his debts under the spousal liability statute.

SPRINGER v. GREAT WESTERN RAILWAY COMPANY. [1919 S. 5.] 1920 July 6. SALTER J., BANKES, WARRINGTON and SCRUTTON L.JJ. Carrier - Railway Company - Perishable Goods - Damaged Condition - Sale by Carrier - Agent of Necessity. A quantity of tomatoes belonging to the plaintiff were delivered to the defendants at St. Helier, Jersey, for carriage to Covent Garden to be there delivered to the plaintiff. The tomatoes were put on board the steamship Croham (the rest of the cargo consisting also of tomatoes for a large number of different consignees) on September 20, but the Croham was detained at St. Helier by bad weather until the 23rd. She arrived at Weymouth at 12.45 P.M. on the 24th, and on the morning of that day a strike of the defendants' men broke out suddenly at Weymouth. There were two other vessels in the harbour to be unloaded first, so that the Croham could not be unloaded until the 26th. The defendants' traffic agent at Weymouth, being anxious about the cargo on account of the strike and the length of time the cargo had been on board, sent his head clerk on the arrival of the Croham on the 24th to examine it, and the clerk having removed the hatches and examined the top tiers found them to be in very bad condition. The Croham was unloaded on the morning of the 26th, and the traffic agent decided to sell the cargo as a whole locally, the strike preventing the tomatoes being forwarded by railway. He accordingly did so. The plaintiff's tomatoes were in fairly sound condition, and the plaintiff could have been communicated with before selling. The railway strike ended suddenly in the afternoon of the 26th after the sale had been effected. In an action by the plaintiff for damages for breach of the contract of carriage:Held, that, in the circumstances, the defendants' traffic agent with the knowledge he possessed on the 24th ought then to have communicated with the plaintiff so as to get his instructions as to what he wished to be done with his tomatoes, and the defendants were liable in damages for having sold the tomatoes without first communicating with the plaintiff.

1st Case MARCH 2002 Aman, a security officer had previously arranged a fire insurance policy for his employer, TG Music Hall. Three days before the policy was due to expire, Aman renewed in on their behalf even though he had not received any instructions from them. One week later, the music hall was burnt to the ground. TG Music Hall wished to ratify the contract of insurance which was renewed by Aman and submit their claim for loses to the insurance company. Advise TG Music Hall as to the requirements of a valid ratification ISSUE Based on the above situation, Aman renewed a fire insurance policy on the behalf of TG Music Hall although he had not received any instruction from them. One week later, the music hall burnt to the ground and they submit their claim for the loses to the insurance company using the contract of insurance that is already renewed by Aman. So the issue that we will discuss in this case is whether Amans action is ratified or not, whether the contract of insurance is valid or not as it is renewed without TG Music Hall permission and is ratification occur between Aman and TG Music Hall as Aman is not their authorized agent but he act like one. Definition of agent and principal can be found under section 135 where agent is defined as a person employed to do any act for another or to represent another in dealings with third person. For principal, the definition can be found under section 136 where it provide Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent. Section 137 also state about principal where it said ..any person may become an agent; but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions in that behalf herein contained. In creating or forming an agency, it does not require any consideration as provided by section 138 which states that No consideration is necessary to create an agency. Agency by ratification can be explained under section 149 where it state Where acts are done by one person on behalf of another but without his knowledge or authority, he may elect to ratify or disown the acts. If he ratifies them, the same effects will follow as if they had been performed by his authority. The ratification is also expresses as stated in section 150,Ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done. In section 35 of the Companies Act 1965, it clarify that a company is allowed to

PRINCIPLE

ratify any contract made on its behalf even though the contract is made before the company itself is formed or registered. It also provides that any contract entered into by a company or its agent prior to its information may be ratified by the company after its formation. In section 11 of the Contract Act 1950, a person enter a contract having the capacity to enter into a contract must be the age of majority, sound mind and must not be disqualified by the law. Therefore, a principal must have all those qualities at the time of making the contract and at the time of ratification in order to be able to validly ratify the contract. Under section 151, it is state that No valid ratification can be made by a person whose knowledge of the facts of the case is materially defective. Next is section 152 that define A person ratifying any unauthorized act done on his behalf ratifies the whole of the transaction of which the act formed a part. Lastly we will look under section 153 that provides An act done by one person on behalf of another, without the other persons authority, which, if done with authority, would have the effect of subjecting a third person to damages, or of terminating any right or interest of a third person, cannot, by ratification, be made to that effect. APPLICATION Based on the above case, TG Music Hall is the principal whereas Aman is a security officer for them. Aman is not their agent but he act as if he is an agent for them. Under section 135, agent is defined as a person employed to do any act for another or to represent another in dealings with third person. For principal, the definition can be found under section 136 where it provide Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent. Section 137 also state about principal where it said ..any person may become an agent; but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions in that behalf herein contained. In creating or forming an agency, it does not require any consideration as provided by section 138 which states that No consideration is necessary to create an agency. There is ratification issue occur between Aman and TG Music Hall. Agency by ratification can be explained under section 149 where it state Where acts are done by one person on behalf of another but without his knowledge or authority, he may elect to ratify or disown the acts. If he ratifies them, the same effects will follow as if they had been performed by his authority. Ratification means the certification or acceptance by the principal for an act done without authority or exceeding the authority given. This is where the principal has appointed an agent to act for him but the agent exceeded the authority given by the principal to the agent. If the principal approved of the

unauthorized act of the agent, the principal is said to ratify the action and an agency by ratification is created. This issue can also occur when a person is not appointed as an agent but he or she acts like he is an agent of another person. So what will happen if the principal approves of this action? It is the same when the person is an authorized agent where an agency by ratification is created. As Aman is not TG Music Hall authorized agent, he is said to act beyond the authority given by renewing the fire insurance policy without their permission. But, TG Music Hall is said to ratify Amans action because they wished to ratify the contract of insurance which was renewed by Aman and submit their claim for loses to the insurance company. Here, although Aman is not their agent and he renew the insurance policy without their permission and any order by them, but TG Music Hall, the principal approves of this unauthorized action by Aman. As a result, agency by ratification is created. Agency of ratification may arise in the following situations. First situation is when an agent, who was expressly appointed by the principal, has exceeded the given authority. second situation is when a person, who has no authority to act for the principal, has acted as if he has the authority to act on behalf of the principal. In the above case, agency by ratification is said to be occurred under second situation where Aman, is a person that has no authority to act on behalf for the principal, TG Music Hall. His action on renewing the policy insurance showed that he acted as if he has the authority to act on behalf of the principal. TG Music Hall accepts and confirms the contract which means that they ratifies Amans act as they wished to ratify the contract of insurance which was renewed by Aman and submit their claim for loses to the insurance company. Section 149 and section 150 explain about this situation. In order for a ratification to be valid, some conditions must be fulfilled. First, the act or contract done by the agent was unauthorized. In other word, without authority or exceeds the given authority. Amans act on renewing the insurance without his principal permission is an act that is done without authority. He is said to exceeds the given authority. Second, the unauthorized act done by the agent must be one which is recognized by law, not illegal. Although Amans action is done without authority, but it is recognized by law. Third, the agent must have acted expressly as an agent to the principal at the time of the contract. He must no contract in his own name and must not allow 3rd party to believe he is the principal. Based on the above situation, Aman renew the insurance policy on behalf of TG Music Hall, not under his name. He even had previously arranged a fire insurance policy for his employer. Fourth, when the contract was made the principal must actually be in existence. Being existence here means the company, TG Music

Hall exists when the company is incorporated or ratified. The policy insurance is renewed after the company is incorporated. So, it can be validly ratified by the company itself. When the principal ratifies the unauthorized act of an agent or person, the ratification takes effect from the time the contract was made and principal is bound by the contract respectively. In section 35 of the Companies Act 1965, it clarify about ratification by a company. Fifth, the principal must have contractual capacity at the time when the contract is made and at the time of ratification. This situation is explained under section 11 of the Contract Act 1950. If the principal have all qualities stated, they are able to validly ratify the contract or in this case, the policy insurance. Sixth, the principal must have full knowledge of all material facts at the time of ratification. Section 151 define this condition. Before TG Music Hall ratify Amans action, they must have full knowledge of all facts which are important in the contract as they would be liable for the contract. Seventh, the principal must ratify the whole act or contract. He cannot accept only part of the principal. The company, TG Music Hall must ratify the whole act that is done by Aman. This goes the same for the insurance policy where they cannot approve only part of the contract. Section 152 can be refer for this condition. Eighth, ratification must be made within reasonable time. Here, it means that the principal must ratify the unauthorized act where in this case, TG Music Hall must ratify immediately Amans act on renewing the insurance policy. If it is done in longer period, the policy insurance might not be valid to use if anything happen to the music hall. Lastly, ratification must not injure or effect the interest of a 3rd person. Under Section 153, the principal cannot ratify unauthorized act of the agent or a unrecognized person which lawfully effect the interest of a 3rd party. CONCLUSION In conclusion, Aman fulfilled all condition stated above. Due to this, ratification by TG Music Hall is said to be valid. Amans action is validly ratified although he act beyond the authority given. This goes the same for the insurance policy. As both a validly ratified, the company can submit their claim for loses to the insurance company. TG Music Hall must realized they have choices either to reject or ratify unauthorized act by Aman. If they choose to accept and confirms the insurance policy, it means that they ratify both the act and the contract. It is decided that agency by ratification occur between Aman and TG Music Hall. Other cases on agency by ratification can refer to RAJU RAJARAM PILLAI (T/A DHANVEER ENTERPRISE) v MMC POWER SDN BHD & ANOR[2000] 6 MLJ , BARRS v. ACREE et al. and STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. STEPHANIE B. WEISMAN

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. STEPHANIE B. WEISMAN PROCEDURAL POSTURE: Defendant insurer appealed the decision of the Circuit Court of Montgomery County (Virginia) in a declaratory action ruling that plaintiff was entitled to the higher liability limits imposed under Va. Code Ann. 38.2-2206 because a proper rejection form had not been executed declining the higher limits. OVERVIEW: Plaintiff filed a declaratory judgment action against defendant insurer seeking a ruling that insurer was obligated to provide her with additional uninsured/underinsured motorist insurance coverage. The action arose from injuries sustained by plaintiff as a result of an accident with an underinsured motorist. Plaintiff's parents (husband and wife) carried the policy and insurer contended that the added coverage had been rejected by parents. All declaration pages sent to parents contained the same liability limits, and when an automobile was previously added to the policy, husband signed a form rejecting the higher uninsured/underinsured motorist coverage limits; however, wife did not sign the form. The court returned judgment for plaintiff finding that the added coverage had not been properly rejected. On appeal, the court affirmed upon a conclusion that Va. Code Ann. 38.2-2206 required that the form be signed by each named insured for it to accomplish a proper rejection of the higher liability limits imposed by law. Therefore, both husband and wife were required to execute the form in order for the rejection to be considered valid. OUTCOME: Ruling that plaintiff daughter of insured parents could take advantage of higher liability limits for underinsured motorist coverage affirmed. Defendant insurer did not prove a proper rejection of liability limits because only insured husband had signed the rejection form, not insured wife which did not satisfy mandate that each named insured must sign the form for it to accomplish a rejection of the higher liability limits imposed by law.

RAJU RAJARAM PILLAI (T/A DHANVEER ENTERPRISE) v MMC POWER SDN BHD & ANOR[2000] 6 MLJ Assets belonging to the plaintiff in India were frozen by the Indian authorities The defendants were faulted. It was said that the government authorities in India were not happy with the plaintiff for having cheated those Indian workers that responded to the recruitment drive. The plaintiff blamed the defendants for the predicament in which he was now facing. The defendants' stand were quite simple. It was Ali that had orchestrated the whole thing. It was said that Ali was not authorized to do what he did and that Ali went on a frolic of his own. This was certainly an issue that require a detailed examination of the facts of the whole case. It was not a simple shut and close case. It was a pure question of law as to whether Ali had apparent or ostensible authority to do what he did. It is here that the law of agency comes into play. Bowstead on Agency (12th Ed), art 2 defines agency as: 2000 6 MLJ 551 at 574 ... the relationship that exists between two persons, one of whom, the principal, expressly or impliedly consents that the other, the agent, similarly consenting, should represent him or act on his behalf. Professor Seavey in The Rationale of Agency (1920) 29 Yale LJ 859 at p 868 describes agency as: ... a consensual relationship in which one (the agent) holds in trust for and subject to the control of another (the principal) a power to affect certain legal relations of that other. It is therefore correct to say and I so say that the law of agency is concerned with the powers and liabilities of principal and agent particularly in regard to the powers of the agent and the liabilities of the principal. Ali's role as an agent was challenged by the defendants vehemently. Pure and simple the defendant's stand was that Ali had no authority to do what he had done. The defendants did not ratify the acts of Ali. This was certainly not a case where the defendants gave validity to Ali's unauthorized acts by way of ratification. Tindal CJ in Wilson v Tumman (1843) 6 Man & G 236 at p 242 explained the effect of ratification in these salient words: That an act done, for another, by a person, not assuming to act for himself, but for such other person, though without any precedent authority whatever, becomes the act of the principal if subsequently ratified by him, is the known and well-established principle of law. In that case the principal is bound by the act, whether it be for his detriment or his advantage, and whether it be founded on a tort or a contract, to the same effect as by, and with all the consequences which follow from the same act done by his previous authority. By ratification, the agent is being treated as having been authorized from the very beginning to act in the manner in which he did. So much for the law on agency.

Reverting back to the mainstream of the case, an argument was advanced that in the event the plaintiff wins the case, the government of India would lift the embargo, so to speak, and the matter would come to an end. That would be on the footing that the plaintiff would win and, in any event, if the plaintiff wins the question of the defendants' costs would not arise at all. But, alas, there was no affidavit evidence from the Indian official in India to say that if the plaintiff wins, the Indian Government would lift the sanction on the plaintiff's assets. It was a mere speculation bereft of any evidential value. Indeed, Mr DP Vijandran unabashedly admitted that there was no affidavit forthcoming from the Indian official and he even said that it was also difficult to procure an affidavit from an official from India. So much for the Indian red tape. Mr DP Vijandran submitted that the scales were equally balanced and in the event it tilt, it would tilt in favour of the plaintiff. I beg to disagree. The scales of justice, for the foregoing reasons, tilted in favour of the defendants. Having regard to the circumstances of the case, security for costs should be ordered against the plaintiff.

BARRS v. ACREE et al. PROCEDURAL POSTURE: Plaintiff landowners brought a negligence action against defendants, their neighbour and his brother-in-law, seeking damages resulting from a fire on the neighbor's property. The neighbour moved for summary judgment, contending that a corporation owned the land and also employed the brother-in-law. The trial court (Georgia) granted the motion and denied the landowners' motion to substitute the corporation. The landowners appealed. OVERVIEW: The landowners' property was damaged when a controlled burn conducted by the brother-in-law turned into an uncontrolled burn. The landowners contended that the brother-in-law held himself out as the neighbor's agent based on the brother-in-law's former employment with the neighbour and the neighbor's ratification of the brother-in-law's actions by writing to the landowners and offering to pay for the damage. The court held that there was no evidence establishing an actual agency relationship between the neighbour and his brother-in-law, who was employed by the corporation, under O.C.G.A. 10-6-1, and therefore the neighbour was not liable under O.C.G.A. 51-2-1(a). The neighbour had no right to control the time and manner of the burn. Proof of the brother-in-law's past employment by the neighbour did not support an implied agency; nor did the neighbor's letters expressing regret and offering to pay for the damage. Denial of the landowners' motion to substitute was proper under O.C.G.A. 9-11-15(c) because the landowners had been aware of the corporation's existence and its potential liability for almost five years before seeking to amend, and the statute of limitations had run. PROCEDURAL POSTURE: Defendant owner of an insurance agency appealed the judgment of the Circuit Court of St. Louis County, Missouri, which overruled defendant's motion for a directed verdict and entered judgment in plaintiff's favour following a jury trial in plaintiff's suit against defendant for fraudulent misrepresentation.