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1909 Supreme(Cal) 413
CALCUTTA HIGH COURT
Satya Priya Ghoshal, Defendant No. 1 - Appellant
Versus
Gobinda Mohun Roy Chowdhury & Ors. - Respondent
Appeals from Original Decrees Nos. 181 and 186 of 1907
Decided On : 10-12-1909
Headnote:
Agency - Principal's Liability - Indian Contract Act, 1872 - Section 233 - [Sections 233, 4, 28] - The court held that the plaintiff could sue both the agent and the principal for the price of the cotton, as the agent was personally liable. The court also held that the illustrations in the Act cannot control the plain meaning of the words of a Statute. The court further held that the defendant was liable on the hand-notes because he promised and held himself wholly liable to repay the sums borrowed.
Fact of the Case:
The defendant, acting as an agent under a power-of-attorney, borrowed money from the plaintiff and executed hand-notes. The plaintiff sued to recover the money, and the defendant argued that he was only liable as an agent and not personally.
Finding of the Court:
The court found that the letters accompanying the hand-notes were written along with the notes of hand, and that the power-of-attorney was delivered to the plaintiff. The court also found that the plaintiff knew the principals for whose benefit the money was borrowed, and that the defendant was acting as executor to the estate of the person most interested in the property.
Issues: Whether the defendant was personally liable for the money borrowed, or whether the plaintiff could only sue the principals. Whether the hand-notes were negotiable instruments.
Ratio Decidendi: The court applied the principle that a person who has made a contract with an agent may, if and when he pleases, look directly to the principal, unless by the terms of the contract he has agreed not to do so. The court also held that the hand-notes were not negotiable instruments, as they did not meet the requirements of the Negotiable Instruments Act.
Final Decision: The court dismissed the appeal and upheld the judgment of the lower court, holding the defendant liable for the money borrowed.
JUDGMENT
1. This is an appeal by the Defendant No. 1, Satya Priya Ghoshal, minor son of Satya-anga Ghoshal, who was one of the live sons of Satya Krishna Ghoshal, at whose death, his widow, Soudamini, became possessed of the one-fifth share of her deceased minor son, Satya Kanti Ghoshal. Two of the other sons sold, each, a one-fifth share, and Soudamini purchased the same, namely, from Satya Bhusan (Defendant No. 2) and Satyeshwar Ghoshal. The remaining son, Satyajit Ghoshal, is the Defendant No. 3 in this litigation. This appeal relates to a five annas fifteen gundas share of Pergunnah Selimabad. On the death of Soudamini, which took place in December 1898, her estate came to be represented by the Defend-ant No. 4, Nabo Gopal Mukerjee, as executor; but this gentleman was also an agent to manage the entire property, that is, the four annas share, each, of the Defendants Nos. 1 and 3, and the 16 gundas share, each, of Apurba Kumari, widow of Satyeshwar Ghoshal, and Satya Bhusan Ghoshal. It is clear, therefore, that with respect to a share of 6 annas 8 gundas, the Defendant No. 4 stood forth, as an executor, independently of the other shares mentioned which he merely managed on behalf of the four co-owners.
2. The Defendant No. 4 was acting as an agent under a power-of-attorney, dated the 16th December 1901, executed in his favour by three of the sons of Satya Krishna, namely, Satya-anga, Satya Bhusan and Satyajit. It is stated in the document that he had authority to borrow money. As a matter of fact, he did borrow money and executed six hand-notes, dated the 27th March 1903 (one hand-note), 13th July 1903 (two hand-notes), and the 25th September 1903 which date is borne by three hand-notes.
3. In conjunction with these hand-notes must be considered the letters of which exhibit 2 may be taken as a specimen. In this letter it is recited by Nabo Gopal : "I have this day (27th March 1903) borrowed from your tahabil at Barisal by executing a note-of-hand, the sum of Rs. 5,000 for paying the Government revenue for the March kist of Hissa 5 annas 15 gundas, Zamindari No. 3840 belonging to Kumar Satya Bhusan Ghoshal Bahadur and others. I deposit with you the Agentnamah showing that I am the agent of the said Ghoshal Bahadurs. You will file the said Agentnamah in Court, if called upon by me to do so, when it will be required by me. I shall take back the original Agentnamah from you after taking out an attested copy from the Court in which it will be filed, and giving the same to you."
4. The Plaintiff, from whom these several sums, aggregating Rs. 27,000 were borrowed, brought his suit to recover the money, and, of the 4 Defendants, the Defendant No. 1 alone contested the claim.
5. The Subordinate Judge of Backergunge has decreed the suit against the Defendants Nos. 2, 3 and 4 and the estate of Satya-anga Ghoshal represented by his minor son, the Defendant No. 1, who is under the Court of Wards.
6. In appeal on behalf of the Defendant No. 1, it has been contended by the learned senior Government pleader that, in terms of the notes of hand, which are identical in all cases, the Defendant No. 4 bound himself to be wholly liable for the several amounts borrowed, and that the Plaintiff, although he knew who were the principals for whose benefit the money was borrowed, elected to treat the Defendant No. 4, Nabo Gopal as his sole debtor, and, in support of this general contention, it has been urged that the letters to which we have referred, were not executed simultaneously with the several hand-notes but were the result of some after-thought whereby the liability might be fixed on the Kumar principals for whom the Defendant No. 4 purported to have acted.
7. The point for determination is a simple one. It has been found by the Subordinate Judge that the letters were written along with the notes of hand. There is nothing intrinsically improbable in this finding, and no evidence has been indicated to us from which we could safely infer that these pap
