The main legal point established in the judgment is the principle of implied authority of an agent, as determined by the relevant Act and bye-laws, and the binding nature of the principal for acts within the usual authority of the agent.

1. These appeals arise from the decrees in O. S.477 of 1955 and 495 of 1955 respectively on the file of the Munsiff's Court, Palghat. Both these cases were tried together and the evidence was taken in O. S.477 of 1955. The Valappad Co-operative Stores Ltd., a Society registered under the Madras Co-operative Societies Act (Act VI of 1932) hereinafter called the Society is the defendant in both cases. The two suits were instituted for recovery of money by the two different plaintiffs for the purchase of goods by the Society from them. The bills on which the claim of the plaintiff in 0. S.477 of 1955 was based are Exts. B 1 to B 3 dated 11-4-1955 and those on which claim of the plaintiff in O. S.495 of 1955 was based are Exts. B-35 to B 37 dated 9 31955. The case of the plaintiffs was that the Society purchased goods from them and was indebted for the amounts claimed in the respective plaints.

2. The substantial defence raised by the defendant was that the Secretary of the Society was entrusted with funds for purchasing the goods, that he had no authority to purchase the goods on credit, that the Secretary had misappropriated the funds entrusted by the Society for purchasing goods and that as the Secretary was not authorised to purchase goods on credit the defendant was not liable for the purchase price claimed.

3. The trial court dismissed the suits finding that the Society did not authorise the Secretary to purchase goods on credit and that the Society had not held out that the Secretary had authority in the ordinary course of his employment, to purchase goods on credit from the plaintiffs. In appeal, the lower appellate court came to the conclusion that the purchases made by the Secretary were within the scope of his authority and that the Society was bound by the act of its authorised representative and therefore decreed the suits. It is against these decrees that the present appeals have been filed by the defendant.

4. The submission made before me by counsel for the appellant was that the Secretary of the Society had no authority to purchase the goods on credit. The practice of the Society, he urged was to entrust the funds necessary for the purchase of goods to the Secretary in advance, and therefore the society was not bound to honour the bills in respect of goods purchased by the Secretary on credit. In order to decide the question raised in these appeals, it is necessary to find out what exactly was the authority of the secretary under the constitution of the society. Ext. B-6 is a book containing the bye-laws of the society, and the material clauses there are Clause.14 and 23. Clause.14 says that the Society is not competent to borrow money except from another co-operative society. Clause.23 (a) runs as follows:

"The Board shall appoint a paid Secretary preferably from among the qualified candidates who have undergone training in any one of the co-operative training institutions and shall fix the condition of his service including the security to be offered by. He shall not be fined or otherwise punished except by the Board. In addition to such powers and duties as may be entrusted to him by the Board he shall be responsible for the carrying on of the day-to-day work of the stores on pound line (B) for checking the stock as often as possible and atleast once in a month. For seeing that the accounts are maintained properly and all the books are written up and posted upto date and for the safe custody of the stock in double lock." The respondent contended that under Clause.23 (a) the Secretary being responsible for carrying on of the day-to-day work of the stores on sound lines, it was open to him

to purchase goods on credit and if he so purchased, it was binding on the defendant. I think that the contention is sound. A person having the responsibility to carry on the business of the Store and its day-to-day work on a sound line and who is also entrusted with the executive business of the Society must be deemed t