The main legal point established in the judgment is that the principles of undue influence as per the Indian Contract Act and Trusts Act were applied to determine the liability of the third Defendant, and it was held that the plaintiffs could not hold him liable due to the undue influence exerted on him by defendants 1 and 2.

1. The plaintiffs - appellants are a family of landlords and money-lenders in Palghat. Defendants 1 and 2 are brothers, and the third Defendant is their nephew. They two owned extensive properties in the neighbourhood of Palghat, but have latterly got into difficulties and 1 and 2 defendants were adjudicated insolvents in 1932. The suit was laid for the recovery of a sum of about Rs. 58,000 due as per account Ex. A. The third Defendant was the only contesting defendant and the question in the appeal relates to his liability. The claim in the appeal has been limited to a sum of Rs. 15,000 on the ground, perhaps, that the third defendant has not assets enough to yield anything more, or on the ground that the balance could be realised from the assets of 1 and 2 defendants. But this makes no difference, so far as the question to be decided is concerned.

2. The point in dispute was embodied in one comprehensive issue, viz., whether the 3rd Defendants signature (to Ex. A), has not been obtained under circumstances mentioned in his written statement and whether if so, he is not liable. The story in the written statement was that the third Defendant had from his infancy been living with and under the protection of defendants 1 and 2 till October, 1930, that though he attained majority in 1928, he was in the habit of affixing his signature to any paper if so directed by the first Defendant and he must have so signed in the plaintiffs book Ex. A, without understanding the matter or making any enquiry whatever, because he feared the first Defendant and believed that there would be no fraud or deception in the matter. It further alleged that he subsequently discovered that he had been defrauded in the matter, and that the plaintiffs who were well aware of the circumstances of the family had conspired with defendants 1 and 2 to get the third Defendant involved in this liability, for their own better security.

3. Exhibit A is an account book beginning from September, 1928. But it is clear from the evidence that the plaintiffs had been lending moneys to defendants 1 and 2 for at least two years before that date. Ex. A is headed as an account of plaintiffs dealings with 1 and 2 defendants. It begins with an entry, dated 29th of September, 1928, whereby 1 and 2 defendants acknowledge liability for a sum of Rs. 13,702-11-0 said to be due for principal and interest under a pro-note of earlier date. Between October, 1928, and February, 1929, there were further borrowings to a considerable extent, but no amount seems to have been repaid. In September, 1929, 1 and 2 defendants wanted a further advance of Rs. 8,000; but as they were heavily indebted to plaintiffs even by that time, the plaintiffs refused to lend more, unless 1 and 2 defendants gave security. According to the evidence of P.W. 1 (who is one of the plaintiffs), the first defendant then said that it was not possible to give security at that time and that he would get his brothers son also (third defendant) to sign. The witness adds, that, as the vakil whom he consulted, advised him that money might be advanced if third defendant also signed, he intimated the same to the first defendant, that accordingly the three defendants came to the plaintiffs shop on the evcening of 22nd September, 1929 and received Rs. 8,000 after signing an entry in the plaintiffs book (Ex. A) in the following terms. - "Having admitted that I am liable for the balance of principal amount and interest and for future credit and debit found under this book, I have signed this". 7 days later, the account for the Malayalam year was struck and the three defendants signed on an one anna stamp below the entry showing the debit balance due on that date. It is on the strength of these signatures of the third defendant in Ex. A that the plaintiffs seek to hold him liable.

4. The evidence shows that the third Defendants father had died in 1913, and the widow and the third defendant, (then an infant) continued to live wit