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C. Venkatasubbiah Chetty Vs. T. Govindarajulu Naidu - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported in(1908)18MLJ1
AppellantC. Venkatasubbiah Chetty
RespondentT. Govindarajulu Naidu
Cases ReferredCalder v. Dobell
Excerpt:
- - this was expressly decided in the well known case of beckham v. it was, nevertheless, held that all three partners were liable jointly for a breach of the agreement inasmuch as the agreement itself was clearly entered into by the firm; and drake like any other undisclosed principal was liable to be sued as soon as his position was discovered......and his co-partners, cannot be determined simply by the terms of the contract. for, supposing a contract to be entered into by one partner in his own name only, still if in fact he was acting as the agent of the firm, his co-partners will be in the position of undisclosed principals; and they may, therefore, be liable to be sued on the contract although no allusion is made to them in it. this was expressly decided in the well known case of beckham v. drake (1849) 2 h.l.c. 579. there drake, kinght and sturge were in partnership as type-founders, but drake was a secret partner. a written agreement relating to the partnership business was entered into between the plaintiff and knight and sturgey and for a breach of this agreement by them the action was brought : drake's name did not.....
Judgment:

1. The plaintiff alleges that the 1st and 2nd defendants were partners and that they borrowed from the plaintiff the amount for which the bond was given.

2. The bond was signed by the first defendant only. We are unable to agree with the learned judge that it was not open to the plaintiff to give evidence of circumstances which went to show that the first defendant signed the bond on his own behalf and as the agent of his partner, the second defendant (assuming-the first and second defendants were partners.) The law is thus laid down in Lindley on Partnership, Edition 7 on page 207: 'If therefore a partner only enters into written contract the question whether the contract is confined to him or whether it extends to him and his co-partners, cannot be determined simply by the terms of the contract. For, supposing a contract to be entered into by one partner in his own name only, still if in fact he was acting as the agent of the firm, his co-partners will be in the position of undisclosed principals; and they may, therefore, be liable to be sued on the contract although no allusion is made to them in it. This was expressly decided in the well known case of Beckham v. Drake (1849) 2 H.L.C. 579. There Drake, Kinght and Sturge were in partnership as type-founders, but Drake was a secret partner. A written agreement relating to the partnership business was entered into between the plaintiff and Knight and Sturgey and for a breach of this agreement by them the action was brought : Drake's name did not appear in the agreement; he did not sign it; nor, when the contract was made, was he known to the plaintiff to be a partner. It was, nevertheless, held that all three partners were liable jointly for a breach of the agreement inasmuch as the agreement itself was clearly entered into by the firm; and Drake like any other undisclosed principal was liable to be sued as soon as his position was discovered.' In Roscoe's Nisi Prius Evidence the law is stated thus: 'In an action on a written contract, between plaintiff and B, oral evidence is admissible in 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. Calder v. Dobell (1871) L.R. 6 Ex. Ch. 486.' 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 the contract within the meaning of these sections. We may further remark that none of the illustrations to the sections deals with this question. It would seem, therefore, that it was not the intention of the Legislature to depart from what would appear to be the settled rule under the English Law.

3. We must, therefore, set aside the decree and send the case back to the Court of First Instance in order that the evidence may be admitted' Costs will abide the event.


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