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Judgment
In this case the defendant had been held liable on a contract, Exhibit A, which he made with the plaintiff, to purchase a house for T.P.N.P.
Pallaniappa Chetty. Exhibit I is the counterpart executed by the plaintiff, in which he says that the defendant has agreed to purchase this house for
T.P.N.P. Pallaniappa Chetty and undertakes to pay Rs. 5,000, in case he, the vendor, makes default, as damages. By Exhibit A the defendant
binds himself before the 30th of this month to take a conveyance of the house in favour of Palaniappa Chetty for Rs. 23,950, and to pay it through
a Madras hundi, and that ""in case of default by me before the said date, I shall pay you Rs. 5,000."" Now on the face of it, that is a contract by the
defendant on his own behalf. He does not say that he is making this contract on behalf of Palaniappa Chetty, or that Palaniappa Chetty is to be
liable for damages. In a case of this sort, the presumption is that the party is personally liable, unless there are some grounds for showing that he
was contracting as agent. The story of the defendant that this was a sham transaction got up to enable the plaintiff to sell the house to other
purchasers for a higher price has been rejected rightly, we think, by the Subordinate Judge. The real question in the case is from the proper amount
of damages. The defendant bound himself to pay Rs. 5,000. But under the Contract Act, we are entitled to award damages really sustained. Now
the house was to be handed over on the 23rd May 1915 and the defendant was to pay for it through a Madras hundi. A very recent case, which
has been cited before us in Daniel, In re (1917) 2 Ch. 405 : 33 T.L.R. 503, shows that the measure of damages is the difference between the
contract price and the value of the house at the date when the contract ought to have been performed, which, in this case, may be taken to be the
23rd May 1915. See also illustration (c) to Section 73 of the Indian Contract Act. That is a matter to be determined upon all the evidence which
there may be before the Court. In this case the plaintiff might have brought his suit at once and in such case there would have been no question of
what happened on the subsequent sale 10 months later, on which Mr. Ananthakrishna Aiyar for the plaintiff has relied. The plaintiff would, in that
case, have had to find some other evidence to show what other damages he sustained. But he has had no other evidence practically to put before
us, as to the real value of the house before the 23rd May, except the evidence of the price which the house fetched on the re-sale in January. It is
perfectly clear law that the price which is fetched is evidence of damages. There is no other evidence and we must accept that evidence.
We must modify the decree by reducing the damages from Rs. 5,000 to Rs. 1,850 with interest at 6 per cent, from the date of plaint. The
parties will pay and receive proportionate costs of this appeal.