Skip to content


Namasivaya Gurukkal and ors. Vs. Kadir Ammal and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Reported in(1894)4MLJ31
AppellantNamasivaya Gurukkal and ors.
RespondentKadir Ammal and ors.
Cases ReferredVithilinga Padayachi v. Vithilinga Mudali I. L. R.
Excerpt:
.....assignment z dated 11th january 1886. 3. this suit was brought in february 1887 against the seven defendants alleging that while the contract had been fulfilled on both sides for the season of 1885 up to the 14th january 1886, the defendants had failed to fulfil their part of it for the season of 1886 and praying that all the defendants should be directed to deliver to plaintiffs the salt they had collected and heaped in 1886, and that defendants nos. several issues of law and of fact were raised at the trial, all of which have been found in favor of plaintiffs except that the agreement a was held good so far as the stamp duty was concerned only as against one of the defendants, and penalties were levied upon it in regard to the other six defendants, it being rightly held that it..........upon the contract made by his agent. lord denman, c.j. referred to the general principle that a party to a contract has a right to the benefit he contemplates from the character, credit and substance of the party with whom he contracted. in the american case, the contract was to sell and deliver lead ore from time to time at the smelting works of a firm of partners, that the ore was to become upon delivery the property of the partnership and that it was to be paid for after a subsequent assay of the ore and ascertainment of the price. the question was whether the partnership might assign the contract as to future deliveries and it was determined in the negative. the court stated that every one has a right to select and determine with whom he will contract and cannot have another.....
Judgment:

1. The seven defendants were salt manufacturers holding pans in the factory at Vattanam and they entered into the contract A. dated the 16th November 1884 with one Nur Mahomed engaging themselves in consideration of the said Nur Mahomed discharging the Government taxes and executing certain repairs and paying them at the rate of Rs. 11 1/2 per garce of salt, to manufacture and store in the factory in the name of, and for the benefit of, the said Nur Mahomed such quantities of salt as he might require them to manufacture each season for seven years from 11th April 1885 to 10th April 1892.

2. It has been found as a fact by both the lower courts on the 4th issue raised in the case that the 1st plaintiff Mahomed Aliar Row-ther (now deceased but represented by respondents Nos. 1 to 4) was a party with Nur Mahomed to the contract, though he is not expressly mentioned therein. The 1st plaintiff's share was 2 in 5f shares ; and Nur Mahomed's share was the balance 3| shares. Nur Mahomed assigned his 3 3/8 shares to 2nd plaintiff (now deceased but represented by respondents Nos. 5 and 6) under the deed of assignment Z dated 11th January 1886.

3. This suit was brought in February 1887 against the seven defendants alleging that while the contract had been fulfilled on both sides for the season of 1885 up to the 14th January 1886, the defendants had failed to fulfil their part of it for the season of 1886 and praying that all the defendants should be directed to deliver to plaintiffs the salt they had collected and heaped in 1886, and that defendants Nos. 2, 4 and 7 should be specially held liable for any damages plaintiffs might suffer through a fall in the price of salt. There was also an incidental prayer that each defendant should be directed to execute a separate power of attorney to the plaintiffs as required by the salt department in lieu of a single instrument that had been jointly executed by them, and for a general declaration of plaintiff's rights. Several issues of law and of fact were raised at the trial, all of which have been found in favor of plaintiffs except that the agreement A was held good so far as the stamp duty was concerned only as against one of the defendants, and penalties were levied upon it in regard to the other six defendants, it being rightly held that it contained seven separate and distinct contracts, each defendant having entered into a separate engagement in regard to his own pans only. The decree of the Court of First Instance after a general declaration of plaintiff's rights including the right of the 2nd plaintiff to sue as the assignee of Nur Mahomed and a direction for each defendant to execute a separate power of attorney as prayed in the plaint, further directed each of the seven defendants to pay plaintiff's damages for the years 1886 to 1889 (the decree being dated 10th day of January 1890) at the rate of Rs. 5-12-0 per garce for the salt collected by each of them during those years leaving the quantity to be ascertained in the execution of the decree, and also directed the defendants to pay the plaintiff's costs.

4. It may as well at once be noted that this decree is bad in three different respects :--1st, in decreeing damages for the four years 1886 to 1889 and that against all the seven defendants when in the plaint damages for the year 1886 alone was or could be asked for and that against only defendants Nos. 2, 4 and 7, the claim against the others being only for the delivery of specific salt ; 2ndly, in reserving for determination in execution what was necessary for determination by the decree itself, namely, the amount of each defendant's liability to damages ; and 3rdly, in mating the defendants jointly and severally liable to plaintiff's costs, when as it had been found that the contract of each was separate, they were liable only to pay costs on the amount of damages assessed against each of them separately. The decree of the appellate court without remedying any of the defects noticed perpetuates and even aggravates them. Thus another year--the year 1885--is added to the other four years 1886, 1887, 1888, and 1889 for which all the defendants are to pay damages apparently jointly and severally and they are again in appeal also made severally and jointly liable for the plaintiffs' costs ; the amount of their liability in damages being still left for determination in execution. The appellate court also enhanced the rate to be paid as damages from Rs. 5-12-0 to Rs. 45-10-0 per garce.

5. The chief points taken in second appeal by the first six defendants are as follows:

(1) That the 2nd plaintiff had no right of suit on the assignment.

(2) That the suit was bad for misjoinder.

(3) That the decrees are defective in regard to the matters just pointed out, and

(4) That the rate allowed by the appellate court for damages is opposed to the terms of the contracts between the parties.

6. As to the 1st objection it is that Nur Mahomed was not competent to assign his interest in the contract A. It is argued that the contract was based on personal considerations and that the rights conferred upon Nur Mahomed by the contract were coupled with liabilities and that on both these grounds the contract was not assignable. In support of this contention the appellants' pleader relied on Farrow v. Wilson L. R. 4 O. P. 744 Humble v. Hunter 12 Q. B. R. P. 310 and Arkansas Valley Smelting Company v. Belden Mining Company 127 United States Reports, 379. In Farrow v. Wilson the contract in suit was an agreement whereby the plaintiff undertook to serve one Pugh as farm bailiff, the agreement being terminable upon six months' notice on either side, The question for decision was whether the death of Pugh put an end to the contract which did not contain the word 'assigns' and it was held that it did. The ground of decision was that in contracts for personal service, it is an implied condition that death of either party should dissolve the contract. Justice Willis laid down the principle which governed the case in these terms :--'Where personal considerations are of the foundation of the contract as in cases of principal and agent and of master and servant, the death of either party puts an end to the relation.' The contract in Humble v. Hunter was a charter-party signed by the plaintiff's son on the one part and by the defendant on the other, and it recited that the son was the owner of the ship. The question was whether the plaintiff might show whether she was the real principal and that her son though he signed the contract was really agent. Two principles were discussed, viz., (1) that a principal may come in and take the benefit of a contract made by his agent, and (2) that no parol evidence shall be admitted to contradict a written contract. It was held that the evidence was not admissble, the reason being that the son gave himself a special description and asserted a title to the ship as owner, and that this circumstance took the case out of the general rule, that a principal may sue upon the contract made by his agent. Lord Denman, C.J. referred to the general principle that a party to a contract has a right to the benefit he contemplates from the character, credit and substance of the party with whom he contracted. In the American case, the contract was to sell and deliver lead ore from time to time at the smelting works of a firm of partners, that the ore was to become upon delivery the property of the partnership and that it was to be paid for after a subsequent assay of the ore and ascertainment of the price. The question was whether the partnership might assign the contract as to future deliveries and it was determined in the negative. The court stated that every one has a right to select and determine with whom he will contract and cannot have another person thrust upon him without his consent. It also referred to the principle mentioned by Lord Denman, namely 'you have the right to the benefit you anticipate from the character, credit and substance of the party with whom you contract.' It referred to the rule in Pollock's Treatise on Contracts, Fourth Edition, p. 425, that rights arising out of a contract cannot be transferred if they are coupled with liabilities or if they involve a relation of personal confidence such that the party whose agreement conferred those rights must have intended them to be exercised only by him in whom he confided. Applying that principle to the case before them the court remarked that during the time that must elapse between the delivery of the ore and the ascertainment and payment of the price the defendant had no security for the payment except in the character and solvency of Billing and Eilers, the parties with whom he made the original contract. The defendant therefore could not be compelled to accept the liability of any other person or corporation as a substitute for the liability of those with whom he had contracted.

7. Now in this case it will be seen from the terms of the contract A which are set forth in full in the judgment of the Lower Appellate Court, and need not therefore be repeated here, that by Article (1) the defendants were to allow Nur Mahomed four months' time for payment after delivery of their salt to him, by Article (4) that he was liable to pay the Government taxes and dues, by Article (5) that he was to execute all but petty repairs, and by Article (6) that he was to fix the quantity of salt to be delivered by defendants. There is therefore not only credit given to NUT Mahomed in the matter of payment but other liabilities are thrown upon him the discharge of which depended upon his solvency, and there is also a certain discretion vested in him in regard to the quantity of salt to be demanded, Further, the assignment Z upon which the 2nd plaintiff was suing was an assignment of an executory or continuing contract. The assignment was made on the 11th January 1886 and the breach of contract sued upon was for a breach subsequent to that date. Be that we have here all the eleirrents which we find in the principles above laid down for holding that the contract was based on personal considerations and that the assignment of it as an executory contract was invalid without'the assent of the defendants. It is not pretended that such assent was expressly given, nor is there evidence on the record of such a character as would amount to a novation of the contract such as is contemplated by Section 62 of the Indian Contract Act. It is contended for the 2nd plaintiff that after the assignment to him the defendants accepted payment from him for salt delivered as is shown by entries in the accounts C to C4 and D. But those accounts are kept in the name of the 1st plaintiff as well as of the 2nd plaintiff so that they afford no distinct proof of a direct recognition of the 2nd plaintiff's rights as, assignee. On the grounds that have been stated we must allow the objection that the contract was one not capable of assignment to 2nd plaintiff and therefore that he had no right of suit under it.

[The court, after having decided the other objections raised, proceeded as follows:]

8. In Second Appeal No. 94 the Munsif dismissed the plaintiff's suit as barred by res judicata but the judge reversed the Munsif's decree without apparently noticing this point. The appellant in this second appeal now urges that this suit should be dismissed on the ground stated but we do not agree with the Munsif that the case was res judicata by reason of the decision in a similar suit (No. 447 of 1886). -Not only was that a suit of a small cause nature and therefore not open to second appeal, (Govind Bin Lakshman Shet v. Dhondbarav Bin Ganbarav Tambye I. L. R. 15 B 104 followed in Vithilinga Padayachi v. Vithilinga Mudali I. L. R. 15 M 111 but the simple issue therein decided was that plaintiff was not entitled to relief as he had not executed repairs. It was not decided that the contract was void or had been rescinded and the cause of action now though upon the same contract being for a different year, there is no res judicata. We therefore disallow this objection and as the other special objection is abandoned, this second appeal falls to be treated like the bulk of them, and will be dealt with accordingly by a reversal and remand with similar directions to find out and decree what actual amount is due by defendant to 1st plaintiff.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //