Chapman, J.
1. This appeal arises out of a suit in ejectment. The plaintiffs are the Tata Iron and Steel Co. They hold a sub-lease of 21 villages in the district of Singhbhum. One of these villages is named Beldih. From the prodhan of Beldih Mr. Stocking took a lease of 23 bighas odd of land.
2. The case for the plaintiffs was that the prodhan had no right to give Mr. Stocking this lease and that Mr. Stocking had erected buildings upon the land in spite of the protest made on behalf of the plaintiff Company. The plaintiffs, therefore, ask for a decree declaring their right to direct possession of the land and for ejectment.
3. The suit was contested only by Mr. Stocking. He contested the suit upon the ground that the prodhan had the right to lease the land to him. His case was that the prodhan had authorised him to erect buildings upon the land. These buildings were erected close to the factory of the plaintiff Company, and without any objection by the General Manager. That on the contrary the Resident Engineer, Mr. W.O. Ranken suggested to the defendant that he might secure his title by obtaining a confirmatory lease from the plaintiff Company and that he was put in formal possession of the land by Mr. Ranken, and also by Mr. Ghosh, the zamindari Manager of the Company. That this was done with the consent of the General Manager, Mr. R.G. Wells who was fully aware of what the defendant was doing; that the defendant had spent some Rs. 40,000 on this understanding; that he received no notice of any objection by the Company until he had almost completed the buildings, when he received a notice from Mr. Padshah who was officiating as General Manager in March 1911, requesting him to stop further operations. Thereafter Mr. Wells, the General Manager, returned from leave. No further objection was taken on behalf of the Company until the 25th November, when Mr. Darlington who was officiating for Mr. Wells wrote another letter protesting against the erection of the buildings by the defendant. By that time the buildings had all been completed. Mr. Stocking claims that if the plaintiffs were held to be entitled to eject him, he should get compensation for the amount which he expended upon the erection of the buildings with the consent of the plaintiff Company.
4. The suit was decreed in the first Court and Mr. Stocking's first appeal has been dismissed. He now appeals to this Court. The rights of the prodhan depend partly upon a patta for a period which has long expired and partly upon customary rights. The prodhan's lease is proved by the kabuliyat (Exhibit D.) dated the 1st June 1882. It is for a period of 15 years; it expired, therefore, in the year 1897 and it has not since been renewed. It might be held, however, that the prodhan is holding over tinder that lease. The lease recites that the total quantity of land in the villages is 89 bighas, but that certain residential and other lands are excluded from the lease leaving only 64 bighas odd. The land is culturable or cultivated land, whereas it is quite clear that the land let to Mr. Stocking was not cultivated land. The land is, therefore, not included in the land which was specifically leased to the prodhan in 1882. The prodhan's kabuliyat, however, recognises his right to settle land outside the land in his possession. The contention, however, on behalf of the plaintiff Company is that the prodhan had no right to give a lease of any of the valuable forest land and that he has no right in any case to settle land for building purposes. The land which is the subject of the case appears from the Survey Report to be outside of the area which the prodhan could settle. It is entered as "sal jungle," and sal is a valuable timber. For the purposes of determining the customary rights of the prodhan we have been referred only to Mr. Reid's commentary on the Chota Nagpur Tenancy Act, and from that commentary it would appear that the prodhan has no right to settle land for purposes other than cultivation. This would be confirmed by the fact that in the prodhan's kabuliyat the residential part of the village is expressly excluded. The result is that we must concur in the conclusion arrived at by both the original Court and the Court of first appeal that the prodhan had no right to lease these lands to Mr. Stocking for the purpose of erecting buildings upon them, and that these lands were lands which the prodhan had no right to settle at all. The result is that unless there be some equity or estoppel in the way of the plaintiffs they would be entitled to obtain a decree in ejectment.
5. In order to determine the question of estoppel, the relations between Mr. Stocking and the plaintiff Company have to be carefully considered. The Tata Iron and Steel Company appear to have started a construction of their main works in the adjoining village of Sakchi in the year 1909. The plaintiff Company entrusted the construction of their works to a Company named Julian Kennedy Sahlin and Company, Engineers, whose headquarters appear to be in Brussels. The Resident Engineer in charge of the construction work on behalf of the Brussels firm is named Mr. Ranken. Mr. Stocking came to Sakchi at the end of the July 1908 as a contractor under the Brussels firm Jullian Kennedy Sahlin and Co. At that time the plaintiff Company held a sub-lease of several villages including the village of Beldih which adjoins the village of Sakchi. When the main factory was being constructed in October 1909, Mr. Stocking took an informal lease from the prodhan of Beldih of the land which forms the subject of this case. There appears to be no reason to doubt his evidence that in Consultation with Mr. Ranken and Mr. Ghosh, the zamindari Manager of the plaintiff Company, Mr. Stocking selected sites for the erection of buildings in the hope that the buildings would be employed for some purpose connected with the factory in the adjoining village of Sakchi. The buildings were of the nature of store houses, aerated-water factory and so forth. Mr. Stocking continued the construction of the buildings and had apparently practically completed the stores in March 1911. In that month he received a letter from Mr. Padshah, the acting Manager, in which it was suggested that Mr. Stocking should defer further operations until the return of Mr. Wells, the permanent Manager, Mr. Stocking in spite of this letter continued to spend money upon erections on the land until he received in November 1911 an express warning that if he continued to do so it would be at his own risk and that the Company entered a protest. He then appears to have ceased any further construction.
6. The documentary evidence appears to commence with a letter from C.C. Ghosh, the zamindari Manager of the plaintiff Company, dated the 1st October 1910 which supports Mr. Stocking's evidence that the sites of the buildings were selected in consultation with him and Mr. Ranken. There was then a letter from Mr. Stocking dated the 21st October 1910, addressed to Mr. Ranken, the Resident Engineer of the plaintiff Company enclosing a rough sketch of the project of the land you have been so good to give me. The letter suggests that the town which it is proposed to put up should be named after Mr. Ranken. Reference is made to the nature of the building which it is proposed to erect as a store. In this letter Mr. Stocking says that he would like to arrive at a thorough understanding with the plaintiff Company about the rent of the land so that he should not be put to difficulty when Mr. Ranken had left, and informs Mr. Ranken that he intends to finish the buildings immediately. Mr. Stocking's evidence, that Mr. Wells the General Manager was aware of what was being done, is confirmed by the correspondence which passed between Mr. Ranken and Mr. Wells towards the end of March 1911, after Mr. Padshah had warned Mr. Stocking that be had better not proceed further until Mr. Wells returned. In a letter dated the 22nd March 1911 Mr. Ranken, during the latter's absence, says that Mr. Darlington had privately informed him, Mr. Ranken, that the Board of the Company objected to Mr. Stocking building shops without the matter having been put before them. He refers to the fact that he, Mr. Ranken, had talked the matter over with Mr. Wells on several occasions and that Mr. Wells had not given any stop order. We may take it, therefore, that up to the date of the receipt of the letter from Mr. Padshah Mr. Stocking was given to understand that Mr. Wells, the General Manager of the plaintiff Company, did not disapprove of what he was doing, and that the only question which remained to be determined was the rent which Mr. Stocking should pay to the plaintiff Company for the land upon which he was erecting these buildings.
7. Now the powers of Mr. Wells as General Manager were contained in the powers-of-attorney which are on the record of the case. In these powers-of-attorney it is expressly provided that Mr. Wells shall have no power to transfer, assign or otherwise dispose of any of the property of the Company without the consent of the Managing Agents in writing previously obtained, and that such consent in writing should be annexed to the deed of transfer, assignment or lease as the case may be.
8. I have been unable to find anything in the evidence to suggest that Mr. Wells was held out as having the power to dispose of the land of the Company in lease, and the letter written by Mr. Stocking to Mr. Ranken above referred to in October 1910 (Exhibit 6) seems to suggest that Mr. Stocking was aware that the power of settling the terms upon which he should hold the land did not lie in the hands of Mr. Wells, He says in that letter, "I should like to get a thorough understanding with Messrs. Tata Iron and Steel Company about the rent of the land so that I should not be put to difficulty when you have left." If it is permissible to speak of one's knowledge about commercial arrangements in India apart from evidence, there can be little doubt that the power to dispose of landed property of a Company does not usually lie in the hand of the local Manager. No doubt, a principal is liable for all the acts of an agent which are within the authority usually confided to an agent of that character, but it was not suggested that the power to lease land is an authority usually confided to an agent such as Mr. Wells was. So far as Mr. Ghosh the zamindari Manager is concerned, we have no evidence whatever as to what powers he actually had or what powers Mr. Stocking believed that he had. There is nothing in Mr. Stocking's evidence to suggest that he was given to understand that either Mr. Wells or Mr. Ghosh had power to dispose of the lands belonging to the Company. There is another difficulty in the case, and that is this. It is very difficult to ascertain from Mr. Stocking's evidence how much he had spent or what buildings had been erected when he got the first warning from Mr. Padshah. There is reason to believe that the storehouse at least was erected, but even that cannot be said with any degree of certainty.
9. The principle of law upon which the majority of the House of Lords were agreed in the case of Ramsden v. Dyson (1866) 1 H.L. 129 at p. 174 : 12 Jur. (N.S.) 506 : 14 W.R. 926 was as follows:--
"If a stranger build on my land supposing it to be his own and I knowing it to be mine do not interfere but leave him to go on, equity considers it to be dishonest in me to remain passive and afterwards to interfere and take the profit. But if a stranger build knowingly upon my land, there is no principle of equity which prevents me from insisting on having back my land with all the additional value which the occupier has imprudently added to it." Now it has not been made out that Mr. Stocking was led by Mr. Wells' acquiescence to be confirmed in the supposition that the land was his. On the contrary at the very initial stage Mr. Stocking recognised that the Company might claim the land, and with that in view enlisted the services of Mr. Ranken and the zamindari Manager. For these reasons the principle does not apply.
10. The other principle may be stated as follows:--
"If a man,...under an expectation created or encouraged by the owner that he shall have a certain interest in land, takes possession of the land with the consent of the owner and upon the faith of such an expectation with the knowledge of the owner and without objection by him lays out money upon the land, a Court of Equity will compel the owner to give effect to such ...expectation." [Gregory v. Mighell (1811) 18 Ves. (Jun.) 328 : 34 E.R. 341 : 11 R.R. 207 and Plimmer v. Wellington Corporation (1884) 9 A.C. 699 : 53 L.J.P.C. 104 : 51 L.T. 475 : 49 J.P. 116].
11. In the present instance even if it is possible to say that Mr. Wells created or encouraged any expectation, Mr. Wells could not in fact give Mr. Stocking any interest in the land without sanction. That being so, I fear that the case does not fall within the principle.
12. The question whether the knowledge or acts of an agent can be attributed to his principal depends upon the terms of the authority that the agent has received. Blackburn v. Vigors (1887) 12 A.C. 531 at p. 537 : 57 L.J.Q.B. 114 : 57 L.T. 730 : 36 W.R. 449 : 6 Asp. M.C. 216. Having regard to the limitation of Mr. Wells' authority, it is not possible to say that his knowledge or acts with reference to Mr. Stocking's activities can be attributed to the Company.
13. The result is that with some reluctance I feel compelled to say that Mr. Stocking has failed to make out any case of equity or estoppel as against the Company and I would, therefore, dismiss the appeal except in the matter of costs. I would direct that there be no award of costs in any Court. The parties must bear their own costs throughout.
Atkinson, J.--I fully and entirely agree with my learned colleague. I would, however, desire to add a few observations of my own by way of addition to his judgment.
14. In my opinion, having carefully perused the power-of-attorney under which Mr. Wells was appointed Agent and Manager of the Tata Iron and Steel Company, it would be quite impossible for Mr. Stocking to hope that he could successfully resist the plaintiff's claim in this suit.
15. Mr. Wells was appointed, by power-of-attorney duly registered, Agent and Manager of the plaintiff Company with limited powers. Mr. Wells was thus a limited or conditional, as opposed to general, agent of the plaintiff Company. The appointment of Mr. Wells was by deed under seal. The description of Mr. Wells as General Agent and Manager of the plaintiff Company cannot override the express limitation of authority contained in the deed itself. Where a principal gives an agent express authority to do a particular act or class of acts on his behalf, the principal is bound as against third persons by every act done by the agent, who is so expressly authorised, which is necessary for the proper execution of the business, even though the express authority is unknown to the third person; Hambro v. Burnand (1904) 2 K.B. 10 at p. 19 : 73 L.J.K.B. 669 : 90 L.T. 803 : 52 W.R. 583 : 9 Com. Cas. 251 : 20 T.L.R. 398 and Montaignac v. Shitta (1890) 15 A.C. 357.
16. In so far as Mr. Wells transferred, agreed to transfer or acquiesced in Mr. Stooking's occupation of the Company's land in village Beldih as a tenant of the Company, for the purpose of building a town or village thereon, he acted in violation of the authority conferred upon him under the power-of-attorney whereby he was appointed to act. If a person deals with a known agent endowed with limited authority and power, he is bound to ascertain the scope of the agent's authority; otherwise if such a person deals with such an agent and the agent exceeds the limits of his authority, and the person so dealing with him incurs loss or damage by reason of the agent exceeding his authority, then such a person cannot hold the principal liable for the acts of the Agent done outside and beyond the scope of his authority. This, I think, is the settled principle of law and applies with greater force and stringency to a case in which the Agent (as here) is appointed by deed. When an agent is appointed by a deed it is termed a power-of-attorney and such documents are always strictly construed by the Courts, according to well-recognised rules--Bryant v. La Banque Du Peuple (1893) A.C. 170 at p. 177 : 62 L.J.P.C. 68 : 1 R. 336 : 68 L.T. 546 : 41 W.R. 600 and Russo Chinese Bank v. Li Yau Sam (1910) A.C. 174 : 79 L.J.P.C. 60 : 101 L.T. 689 : 26 T.L.R. 203.
17. In the first case cited above, their Lordships of the Privy Council say: "Nor was it disputed that powers-of-attorney are to be construed strictly, that is to say, that where an act purporting to be done under a power-of-attorney is challenged as being in excess of the authority conferred by the power it is necessary to show, on a fair construction of the whole instrument, the authority in question is to be found within the four corners of the instrument, either in express terms or by necessary implication".
18. In the second case cited their Lordships lay down the general law as to the limited authority of an agent in the following words: "If the agent be held out as having only a limited authority to do on behalf of his principal acts of a particular class, then the principal is not bound by any act done outside that authority, even though it be an act of that particular class, because, the authority being thus represented to be limited, the party prejudiced has notice, and should ascertain whether or not the act is authorised."
19. The authority conferred by the power-of-attorney must, therefore, be strictly adhered to. If the authority is exercised in excess of and outside the reasonable scope of its special powers, the third party will be unable to make the principal liable, Jacobs v. Morris (1902) 1 Ch. 816 : 71 L.J. Ch. 363 : 50 W.R. 371 : 86 L.T. 275 : 18 T.L.R. 384.
20. Mr. Stocking admits in his evidence that although he knew that Mr. Wells was the Agent and Manager of the plaintiff Company he made no enquiry at any time as to the nature or measure of his authority. In this state of things it would be impossible to hold the plaintiff Company liable for the acts of its agent in excess of his authority. Now would acts by Mr. Wells which amounted to an acquiescence by him in the granting of the proposed lease to Mr. Stocking, coupled with his use and enjoyment of the land in suit for building purposes, create a right by way of estoppel in favour of Mr. Stocking as against the plaintiff Company
21. No argument was addressed to us on behalf of the plaintiff touching the question of Mr. Wells having exceeded his authority under the terms of the power-of-attorney; but that seems to me to be the real and vital matter in the case and one which renders the defence put forward by Mr. Stocking quite unsustainable.
22. I regret very much that Mr. Stocking has no legal redress, as it appears to me that he has suffered much inconvenience and loss by the acts of the servants of the plaintiff Company for which, however, the Company is not responsible in point of law.
23. I agree, therefore, with my learned colleague that this appeal should be dismissed and I concur with the form of the order as to costs in all Courts.
