Chinnaramanuja Ayyangar, Sorimuthu Pillai and Others vs Padmanabha Pillaiyan and Others

The question is whether the appellants are liable on the rental agreements executed by four of the defendants, but not executed by the deceased person whom they represent. The plaint alleges that the documents were executed on behalf of the agricultural association of which the deceased was a member. The 13th issue raises the question ""whether the defendants 2 to 5 executed the lease deeds on behalf of the defendants 6 to 18 also;"" but there is no finding on that issue. Admittedly it is not stated in the documents that the executants were acting on behalf of others, nor do they sign in that capacity.

The only questions argued are with reference to the third issue. We see no reason for differing from the Subordinate Judge in his finding as to nonpayment of Rs. 1,700, and in the finding that there was no such extraordinary rain as to make the special clauses applicable. The finding with regard to this point is that there was really no payment and no valid discharge. The appeal is dismissed with costs.

Judgment on memorandum of objections.--It is admitted by the second defendant that a month after the arrangement made between his lessors he became aware of it, and that in February 1892 the defendant had express notice of the same arrangement. The Subordinate Judge also in effect finds that the defendant was aware of it from the outset. But he observes there is no evidence to show that this defendant or his co-lessees assented to the arrangement and agreed to pay the rent to the plaintiff only, and accordingly he holds that payments made to the first defendant are valid notwithstanding the arrangement. The Subordinate Judge is, in our opinion, mistaken in supposing that the assent of the lessees was necessary, that otherwise they were at liberty to disregard the arrangement. A payment made by a debtor to one of two joint-creditors, between whom it has been agreed that the other only shall receive the sum, cannot, when made with notice of the agreement and in defiance of it, be treated as a valid payment in discharge of the debt. See Phillips v. Clogett 11 M. and W. 84. Such a payment may properly be described as made in fraud of the person who was entitled to receive the money. The lessees, other than the second defendant, were his partners and must be held to be bound by the notice which he had. The plaintiffs have in their memorandum of abjections claimed Rs. 4,590. They are entitled to the sum of Rs. 2,965, notwithstanding that on taking accounts between them and the first defendant the latter may prove to be entitled to some part of it. Each party will pay and receive proportionate costs. The memorandum of objections is, therefore, allowed.

JUDGMENT

The question is whether the appellants are liable on the rental agreements executed by four of the defendants, but not executed by the deceased person whom they represent. It is not denied that the deceased was a partner, nor was it argued in the Court below that the executants had exceeded their powers in taking the leases. There is satisfactory evidence that the deceased took part in the management of the affairs of the firm after the leases were taken. By the agreement under which the partners worked any one partner was empowered to take a lease and execute any necessary document, such documents being taken to be binding upon all the partners as if executed by them. In result, therefore, it must be taken that, although the other members of the firm are riot mentioned in the agreements, and did not execute them, it was intended that they should operate as if all the members were parties to them.

We are unable to agree with the opinion expressed by Farran, J., in Ragoonathdas Gopaldas v. Morarji Jutha ILR 16 Bom. 574 . In the case cited by him Walters v. Northern Coal Mining Co. 5 De G.M. and G. 629 it was sought to make the cestui que trust liable upon a covenant in a lease executed by the trustee. There was no remedy at law, because the covenant was contained in a deed, and, according to the rules of English law, no person who is not a party to a deed can be sued upon the covenant contained in it. All that was held was that the landlord could not treat the cestui que trust as liable to him in equity on the ground of the relation between him and his trustee. There is no relation of that character between the executants of the agreement in the present case and the deceased. We know of no authority for the position maintained by Farran, J., that there is an exception in the case of leases from the general rule laid down in Beckham v. Drake 9 M. & W. 79. The suggestion, that in the case of a lease there is a transfer of property, is met by the case of mortgage as to which there is no doubt that, although executed by one person, it may be binding upon the partner or others who have authorized the act see Juggeewundas Keeka Shah v. Ramdas Brijbookundas 2 M.I.A. 487.

There is nothing to show an intention to make the executants only liable and to exclude the liability of the other partners. We must dismiss the appeal with costs.

The memorandum of objections is allowed.