1. The contract was signed by the defendant personally and he is attempting to lead oral evidence to show that he was contracting as agent and that the name of his principal was disclosed at the time of the contract.
2. I think the plaintiffs' contention, that this evidence is inadmissible, is correct.
3. Mr. Jinnah contends that the evidence if agency is de hors the contract and refers to Sections 231 and 233 of the Indian Contract Act. No doubt under these sections a principal not named in the contract may come forward and adopt the contract as his or per contra the other contracting party may elect to sue him although he is not named in the contract. But these sections in no way affect the liability of the party who has signed the contract.
4. This distinction is clearly put in the case of Higgins v. Senior (1841) 54 R.R. 884. Baron Parke said:-
There is no doubt, that where such an agreement is made, it is competent to show that one or both of the contracting parties were agents for other persons, and acted as such agents in making the contract, m as to give the benefit of the contract on the one hand to, and charge with liability on the other the unnamed principals : and this, whether the agreement be or be not required to be in writing by the Statute of Frauds : and this evidence in no way contradicts the written agreement. It does not deny that it is binding on those whom, on the face of it, it purports to bind; but shows that it also binds another, by reason that the act of the agent, in signing the agreement, in pursuance of his authority, is in law the act of the principal.
But on the other hand, to allow evidence to be given that the party who appears on the face of the instrument to be personally a contracting party, is not such, would be to allow parol evidence to contradict the written agreement; which cannot be done.
5. An Indian case illustrating this rule is that of Venkatasubbiah Shetty v. Govindarajulu Naidu I.L.R.(1907) Mad. 45 where the plaintiff sued two partners on a contract executed by one of them. The Court held that oral evidence was admissible to show that the partner who did not sign was liable. The Court quoted with approval the following passages from Roscoe's ' Nisi Prius Evidence':-
In an action on a written contract between plaintiff and B, oral evidence is admissible on behalf of the plaintiff, to show that the contract was in fact, though not in form, made by B, as agent of the defendant; for the evidence tends not to discharge B, but to charge the dormant principal; Wilson v. Hart (1817) 7 Taunt. 295, and it is admissible although B named his principal at the time he entered into the contract.
6. This passage well explains the ground on which the evidence is admissible, namely, that it tends not to discharge the contracting party but to charge the dormant principal. It is true that the judgment contains the following passage:-
In our opinion there is nothing in Section 91 or Section 92 of the Indian Evidence Act which is inconsistent with these decisions, since a question as to who the contracting parties are is not in our opinion one of the 'terms of a contract' within the meaning of these sections.
7. This may seem at first sight to support Mr. Jinnah's contention. Perhaps this statement of law is rather too wide. The identity of the contracting parties is not a term of the contract when given as evidence to establish a benefit or to enforce a liability not inconsistent with the contract. But such evidence is not admissible for the purpose of exonerating a contracting party from liability, for that would be substituting a different agreement from that evidenced by the writing.
8. On the same principle the Privy Council have held recently in the case of Sadasuk Janki Das v. Sir Kishan Pershad (1918) 21 Bom. L.R. 605, that it is contrary to all the established rules, that in an action on a bill of exchange or promissory note against a person whose name properly appears as party to the instrument, it is open either by way of claim or defence to show that the signatory was in reality acting for an undisclosed principal.
9. I, therefore, hold that the evidence is irrelevant and allow Mr. Bahadurji's objection.