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Ganpat Mahadu Jadhav Vs. Forbes, Forbes Campbell and Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtMumbai
Decided On
Case Number O.C.J. Suit No. 34 of 1928
Judge
Reported inAIR1930Bom569; (1930)32BOMLR1336
AppellantGanpat Mahadu Jadhav
RespondentForbes, Forbes Campbell and Co. Ltd.
DispositionSuit dismissed
Excerpt:
.....dismissal, when they contended that the agreement was signed by them as agents of shire highlands railway nyasaland ltd., and that they were not personally bound by the agreement :-;(1) that it was clear from the opening words of the agreement that the plaintiff intended the agreement to be made with the shire highlands railway nyasaland ltd. ;(2) that there having been nothing in the body of the agreement to raise the implication that the defendants rendered themselves personally liable, the use of the word ' agents ' by the defendants in conjunction with their signature made it plain that they were thereby negativing a personal responsibility : ;universal steam navigation co. v. james mekelvie & co. [1923] a.c. 492, followed ;;(3) that the defendants were, therefore, not..........in papagraph 1 of the plaint, the plaintiff alleges that on october 25, 1926, the shire highlands railway nyasaland limited agreed to employ the plaintiff and the plaintiff agreed to serve as a boiler-maker in their workshop at limbe, in east africa, for a period of three years on a salary of 13 (sterling) per mensem. in paragraph fi of the plaint it is alleged as follows:-the agreement has been signed by the defendants as the agents of the said shire highlands railway nyasaland ltd. notwithstanding this the plaintiff claims to sue the defendants for breach of contract firstly because although the agreement purported to have been made with the shire highlands railway nyasaland ltd., the agreement was made both in intention and effect with the defendants and it is to the defendants that.....
Judgment:

Blackwell, J.

1. This suit is in substance, though not in form, a suit for damages for wrongful dismissal.

2. In papagraph 1 of the plaint, the plaintiff alleges that on October 25, 1926, the Shire Highlands Railway Nyasaland Limited agreed to employ the plaintiff and the plaintiff agreed to serve as a boiler-maker in their workshop at Limbe, in East Africa, for a period of three years on a salary of 13 (sterling) per mensem. In paragraph fi of the plaint it is alleged as follows:-

The agreement has been signed by the defendants as the agents of the said Shire Highlands Railway Nyasaland Ltd. Notwithstanding this the plaintiff claims to sue the defendants for breach of contract firstly because although the agreement purported to have been made with the Shire Highlands Railway Nyasaland Ltd., the agreement was made both in intention and effect with the defendants and it is to the defendants that the plaintiff looked for satisfaction and secondly because the said Shiro Highlands Railway Nyasaland Ltd. cannot be sued owing to its being outside British India.

3. Accordingly, the plaintiff has brought this suit against the defendants, the agents, who are described in the body of the plaint as ' the Agents of Shire Highlands Nyasaland Ltd.'

4. In their written statement, among other defences, the defendants allege that the agreement sued upon has been signed by them as agents of the Shire Highlands Railway Nyasaland Ltd., and they submit that they are not personally bound by the said agreement.

5. By a Judge's order dated July 15, 1929, two issues were ordered to be tried :-

(1). Whether the defendants are personally hound by the contract dated October 2(5, 1920, being Exh. A to the plaint herein, and

(2). Whether the plaintiff is entitled to maintain this suit against the defendants ?

6. It was agreed upon between Mr. M. V. Desai, counsel for the plaintiff, and Sir Dinshah Mulla, counsel for the defendants, that I should determine the first issue first.

7. The agreement in question has been put in before me as Exhibit A. The heading of the agreement is as follows;-

Shire Highlands Railway Nyasaland Ltd.

and/or

Trans-Zambesia Railway Co. Ltd.

Agreement Form.

Stopping there, the document is on the face of its heading' the agreement form for either the one named railway or the other named railway or both as the case may be. The operative part of the agreement begins as follows:-

I, the undersigned, hereby agree ' (it is here to be observed that it is not stated in terms with whom the agreement is made) ' to serve the SHIRE HIGHLANDS RAILWAY, NYASALAND LTD., and the CENTRAL AFRICA RAILWAY COMPANY in Nyasaland, or THE TRANS-ZAMBESIA RAILWAY CO. in Portuguese East Africa, faithfully and to the best of my ability as Boiler maker for a period of three years on the following conditions.

It is unnecessary to detail a large number of those conditions. It is sufficient to draw attention to one or two provisions. Thus 2 (a):-

That I receive free medical attendance and medicines from the company. (b) That if I am reported unfit for duty due to malarial fever, I will be entitled to half pay during such time as I may be absent from duty through malarial fever, and that I undertake to take necessary quantities of quinine as prescribed by the Company's Medical Officer to avoid an attack of malarial fever.

Similarly, in other clauses the rights of ' the Company' are referred to. Clause 4, for example, provides-

that in case of insubordination or misconduct, or further in case of incompetency after trial, which will be decided by the Company, I shall be liable to instant dismissal without three months' wages in lieu of notice bat will receive a free passage to the port of Bombay,

and so on. Similarly, Clause 10 (a) provides ' that the Company at any time desiring to determine the engagement under this agreement may do so by giving three months' notice in writing.' While Clause 10 (6) empowers the plaintiff to terminate the agreement by giving the company three months' notice in writing.

8. The agreement is ' dated at Bombay this 26th day of October 1926'; the thumb mark of the plaintiff is placed thereon together with the signature of the Protector of Emigrants, and then there follow at the end of the document these words:-

For,Forbes, Forbes Campbell & Co., Ltd., J. Jenkins,AssistantAgents : Shire Highlands Railway Nyasaland Limited

Then there are certain initials, ' D. N. D.', and ' Witness:- W Adams.'

9. Mr. Desai for the plaintiff has contended that the defendants are personally liable upon this document as principals. He has submitted that they have not used words which clearly exclude their personal liability, and that accordingly they are liable. He has argued that the agreement is an agreement made by the plaintiff with the defendants whereby he has agreed to serve any one of the three named companies. He has argued that no inference should be drawn adverse to his contention from the heading of the document, and has submitted that that is merely the form of the agreement which the railway companies authorised Forbes, Forbes Campbell & Co. to use in making contracts as principals with various persons, although such contracts were for the benefit of the railway companies as between themselves and Forbes, Forbes Campbell & Co. Mr. Desai has also sought to support his argument by pointing out that the Shire Highlands Railway Nyasaland, Ltd., are a foreign company, and has contended that the agents not having, as he submits, used clear words negativing personal liability, must be deemed to have undertaken personal liability.

10. Mr. Desai drew my attention to Section 230 of the Indian Contract Act, which is as follows:-

In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them.

Such a contract shall be presumed, to exist in the following cases : -

(1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad :

(2) where the agent does not disclose the name of his principal:

(3) where the principal, though disclosed, cannot be sued.

10. Mr. Desai very frankly admitted, notwithstanding the contention in the plaint, that he could not rely upon Sub-section (3) of Section 230, because the Shire Highlands Railway Nyasaland Limited, although a foreign company, could, with leave under Clause 12 of the Letters Patent, be sued by the plaintiff here in Bombay. Mr. Desai also conceded that he could not rely upon Sub-section (2) of Section 230. He further admitted that Sub-section (1) is inapplicable to the present case inasmuch as this is not a contract made by an agent for the sale or purchase of goods for a merchant resident abroad. He, however, contended, as is indeed the case, that the Indian Contract Act is not an exhaustive Code, and in this connection he referred me to the observations of Viscount Duuedin in Jwaladutt Pillani v. Bansilal Motilal : (1929)31BOMLR687 . Accordingly, Mr. Desai submitted that he was entitled to rely upon the English authorities in which in certain cases it has been held that an agent who has contracted for a foreign principal is personally liable. In this connection he drew my attention to Article 91 of the seventh edition of Bowstead on Agency, at p. 310, which is in these terms :-

No foreign principal may sue or be sued on any contract made by a home agent, unless the agent had authority to establish privity of contract between the principal and the other contracting party, and it clearly appears from the terms of the contract, or from the surrounding circumstances, that it was the intention of the agent and of the other contracting party to establish such privity of contract.

When, however, it was pointed out to him that the foreign principal was named in the contract which I have to construe, that the defendants appended the word ' Agents ' to their signature, and indicated in connection with their signature that they were the agents of the Shire Highlands Railway Nayasaland Limited, Mr. Desai felt himself unable to carry that part of his argument further. There may of course be cases where a general or special custom is proved that an agent acting on behalf of a foreign principal undertakes the liability of a principal. No such custom is alleged in the present case. And, as was said by Viscount Cave L. C. in Universal Steam Navigation Co. v. James McKelvie & Co. [1923] A. C. 492, (presently referred to),

In the absence of such a custom, and where a principal exists, the general rule applies, although the principal be not named or be a foreigner .

11. The question whether an agent is personally liable is discussed in Article 118 of Bowstead on Agency, 7th Edition, at p. 400, that article being, as to the first part of it, in the following terms ;-

The question whether the agent is to be deemed to have contracted parsonally, in the case of a contract in writing other than a bill of exchange, promissory note, or cheque, depends upon the intention of the parties, as appearing from the terms of the written agreement as a whole, the construction whereof s is a matter of law for the Court.

The authorities were reviewed by the House of Lords in the case of Universal Steam Navigation Co. v. James McKelvie & Co. [1923] A. C. 492, where Gadd v. Houghton (1876) 1 Ex. D. 357 was approved, and Lennard v. Robinson (1855) 5 B. & B. 125 was overruled. In that case a charterparty was expressed to be made ' between T. H. S. & Co., agents for the owners ' of a steamer, 'and J. McKelvie & Co., Charterers', and it was signed ' for and' on behalf of J. McKelvie & Co. (as Agents), J. A. McK.' It is plain from the opinions expressed by their Lordships in this case that in determining the question'-whether the agents have made themselves personally liable, the ; whole of the document, including, of course, the signature, must be looked at, it being a question of intention regarding the document as a whole. I think it valuable to refer to a passage at' the end of the judgment of Lord Shaw at p. 499, which is as follows :-

But I desire to say that in my opinion the appending of the word 'agents' to the signature of a party to a merchantile contract is, in all cases, the dominating factor in the solution of the problem of principal or agent. A highly improbable and conjectural ease (in which this dominating factor might be overcome by other parts of the contract) may by an effort o the imagination be figured, but, apart from that, the appending of the word 'agent' to the signature is a conclusive...assertion, of agency, and a conclusive rejection of the reponsibility of a principal, and is and must be accepted in that twofold sense by the other contracting party.

At p. 501, Lord Sumner said as follows, with regard to the addition of the words 'as agents' to the signature:-

They are more, too, than words of description of the signatory's business. It has sometimes been said that when ' agents' is the word added to the signature, it is a mere word of description, and so does not qualify the liability which the act of signing imports. I question this explanation. One's signature is not the place in which to advertise one's calling, nor is 'agent' ordinarily used to describe a trade, as ' tailor' or 'butcher' would be. 1 have no doubt that, when people add 'agent' to a signature to a contract, they are trying to escape personal liability, but are unaware that the attempt will fail. The result, however, is the same. When words added to a signature in themselves qualify liability, it is because, as words, they can be so construed in conjunction with the contract as a whole.

12. Lord Sumner then proceeded at p. 502 as follows :-

Unless, then, something is to be found to the contrary in the earlier part of this charter, the qualification 'as agents' appears to me to relieve Messrs, McKelvie & Go, from personal liability,

and upon the construction of the charter as a whole he held that they were so relieved.

13. I have, therefore, to construe Exh. A, the agreement before me, as a whole. Nowhere in that contract do I find any provision whereby the present defendants purport to bind themselves as principals. On the contrary, as I have pointed out, the agreement is on the agreement form of one and/or two named companies. And when I find that the defendants affixed their signature to the document and added words which showed that they did so in the capacity of agents for Shire Highlands Railway, Nyasaland, Limited, I feel constrained to hold that by the opening words the plaintiff intended the agreement to be made with the Shire Highlands Railway Nyasaland, Limited, one of the companies, to whose agreement form he affixed his thumb mark. It is quite true that he agreed to serve one of the three named companies. But the question is, with whom did he make the agreement? lam clearly of opinion, that he made it with the Shire Highlands Railway, Nyasaland, Limited. In my judgment there is not a single word in the agreement from beginning to end which in any way suggests or implies that the agreement was made with the defendants, or that there was any intention on their part to render themselves personally liable. There being nothing in the body of the agreement itself to raise such an implication, the use of the word 'agents' by the defendants in conjunction with their signature, in my opinion, makes it plain that they were thereby negativing a personal responsibility. In the words of Lord Shaw, in the case which I have above cited, the use of the word 'agents' appears to me to be 'a conclusive assertion of agency, and a conclusive rejection of the responsibility of a principal'. Accordingly I answer issue No. 1 in the negative ; and in this event it becomes unnecessary to consider issue No. 2 at all. Costs of these issues will be costs in the cause.

14. In view of my finding, learned Counsel have both agreed, in order to save further expense, that the suit should be forthwith placed on board for dismissal. Accordingly, I direct the suit to be placed on board, and I dismiss it with costs, the same counsel appearing before me as on the hearing of the preliminary issue.


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