Endorsements made by partners of a non-trading firm are invalid unless with express authority; mere transfer of interests does not suffice.

1. These seventeen revision petitions arise out of a common judgment given by the District Munsif, Razole on 30th January, 1962 whereby he dismissed seventeen suits filed by the plaintiff on the foot of promissory notes as holder in due course. The essential facts in order to appreciate the contentions raised before me may briefly be stated :
Sri Anantha Lakshmi Commercial Syndicate (hereinafter called the Syndicate) is a registered firm under the Indian Partnership Act. It was constituted solely for the purpose of running a chit fund business. There are two partners of the said firm, one S. Trimurty and the other Bapanayya. It was alleged that on 8-11-58 the firm was dissolved Bapanayya left the firm entrusting the whole business to S. Trimurty. On that date he endorsed the suit promissory notes in favour of S. Trimurty. S. Trimurty, thereafter endorsed all those promissory notes in favour of the plaintiff. The plaintiff therefore, styling himself as holder in due course instituted the present suits on the foot of those promissory notes against several defendants for recovery of the amount due on those promissory notes together with interest thereon.

2. The written statement of all the defendants was that the endorsements made by Bapanayya in favour of S. Trimurty were not valid, that there was no dissolution of partnership and the endorsements made by S. Trimurty in favour of the plaintiff were also not valid, that the plaintiff is the co-son-in-law of S. Trimurty that the chit fund was abruptly stopped by the two partners and in collusion with each other the promissory notes were transferred ultimately to the plaintiff that the partnership firm was not entitled to the entire amount but only to a commission and that therefore, S. Trimurty could not have transferred the promissory notes in favour of the plaintiff.

3. On these pleadings proper enquiry was made. The learned District Munsif dismissed all the suits holding that the endorsements made by Bapanayya in favour of S. Trimurty were invalid. He also held that the endorsements made by S. Trimurty in favour of the plaintiff were invalid. He found that the firm was only entitled to a commission and the entire amount was meant to be distributed amongst the subscribers of the chit fund. It was also held that the dissolution deed Ex. A-19, was brought up into existence subsequently in order to support the endorsements made by Bapanayya on 8-11-1958. It is this view of the learned District Munsif that is now disputed before me in these revision petitions.

4. The first contention of the learned Counsel for the petitioner is that the endorsements made by Bapanayya were valid under the Negotiable Instruments Act . Bapanayya was one of the partners and he could make an endorsement in favour of S. Trimurty. It was also contended that S. Trimurty in any case could endorse and transfer the promissory notes as managing partner of the firm in favour of the plaintiff even if it is held that the firm was not dissolved and that Ex. A-19 was a subsequently got-up document. It was also argued that if the endorsements are not valid under the , they can in any case be treated as transfers of actionable claims under Section 130 of the Transfer of Property Act and the plaintiff would thus get the right to sue for the debt for which promissory notes were taken.

5. In order to appreciate these contentions it is necessary to refer to a few provisions of the Negotiable Instruments Act (hereinafter called Act). It is not in dispute that the promissory note is a negotiable document within the meaning of S. 13 of the Act. Section 14 relates to negotiation. According to that Section when a promissory note is transferred to any person so as to constitute that person the holder thereof