1. I agree. with the judgment to be delivered by my learned brother and have nothing to add.
2. The plaintiff sues as the assignee of one, Nunna Venkataratnam. His case is that the defendant's family had, during the life-time of their father Jagannadham, two Khatas with the said Venkataratnam (1) in which Venkataratnam acted as a commission agent for the family and (2) the suit transaction in which Venkataratnam and the defendant's family were partners in paddy trade. In Venkataratnam's accounts, the first khata stood in the name of their father and manager and the second, in the natriev of the 2nd defendant. The 1st defendant contested the suit on the ground that the 2nd khata did not relate 'to a family transaction ; but the Subordinate Judge decreed in Plaintiff's favour. The 1st defendant appeals.
3. The only point argued for the appellant is that the 1st defendant cannot be made liable in this suit, as there was no privity of contract between him and Venkataratnam even though the debt was a family debt and the 1st defendant may. be liable to his brothers in a suit for contribution.
4. The following facts may be taken as admitted or proved in the case. The defendants and their father were living together ,as a joint family until the father's death which happened ' about the end of 1915 or very early in 1916. Shortly after the father's death, there was a partition between the brothers. The suit transaction commenced in 1908. The accounts were settled on 22-10-15 and it was found that a sum of Rs. 36,496 and odd was due to Venkataratnam. This settlement appears both in the account books of Venkataratnam and in the accounts of the Defendant's family. In the former, it was signed by the 4th defendant (Ex. A.) The other transaction in the name of the father which is admitted to have been carried on for the family was settled on 15-10-15 and it was found that Venkataratnam owed Rs. 3721 and odd to the defendant's family. This amount was transferred to the suit account to the credit of the defendants on 17-1-16, after the father's death. The defendant's family ledger contained both the khatas-Ex. B relating to the suit khatu and C, relating to the admitted family khata. There are day books corresponding to the ledger. The Ist defendant, while admitting that there are accounts kept by the family, says he never cared to look into them. He attended to the cultivation of the family laifds; while the 2nd defendant, who was regarded by the father as a person of greater capacity than his brothers, looked after the family trade. The family had two shares in a rice mill the shares standing in the 2nd defendant's name. The 2nd defendant settled the accounts relating to the dealings of the family with one Pulavarti Venkanna. He was also borrowing from the Madras Bank for the family purposes though all the members executed a security bond in favour of the Bank. Not only did the 1st defendant not repudiate the transfer o/ trie amount in his father's khata to the suit khata but he adopted in Ex. D the result of the transfer as continued up to the date of the petition. In this petition he admitted the suit debt as a family debt. The reference in it, in the sentence 'Until two years ago, Nunna Venkataratnam and we carried on paddy business jointly. There was loss to the extent of Rs. 10,000 for our share' - is obviously to the suit transactions and not to the khata in Jagannadham's name in which Venkataratnam was not a partner but only a commission agent and which did not result in a loss for the defendants, The irresistible inference is that the suit transactions was, from the beginning, one entered into on behalf of the family, being known to its manager, and carried on for its benefit the understanding, from the begining, being that the family will share in the profit or loss. It is not a case where, a member carried on business separately, with his own funds, and for his own benefit and afterwards the family took upon itself, the debts he had incurred and hence, no question as to whether Ex. D amounts to a valid ratification in law arises. (Vide Keighley Maxsted and Co. v. Durant (1901) A.C. 240 ).
5. It seems to me that, where a debt was incurred on behalf of the family though only a single member, not being a manager, deals with the creditor, the creditor being ignorant of the fact that the single member was acting on behalf of the family a suit is maintainable against all the members. In such a case the single member is the agent of the manager (and some or all of the adult junior members). This is the basis of Subramania Aiyar, J's judgment in Krishna Aiyar v. Krishnaswami Aiyar I.L.R. (1899) Mad. 597The dissenting judgments of Davies, J. (at pp, 601 and 607) were based on his view that the spit was based on the note only. At. p. 601 he conceded that 'had it been a bond that was sued on or had the suit been brought on the debt, of which the promissory note afforded evidence, other members of the first defendants's family might have been held liable as well as himself on the ground that the 1st defendant represented them.' This sentence of Davies, J. gives the reply to the argument of Mr. K.V. Krishnaswami Aiyar the learned Vakil for the appellant who earnesly urged upon us the view that that decision proceeded on the ground that the 1st defendant in that case was the manager. He relied on the judgment of Sheppard, J. (at p. 605,) and also referred to the following cases: - Negendra Chandra Dey v. Amar Chandra Kundu (1903) 7 C.W.N. 725 Baisnab Qhandra Deo v. Ramdhan Dhor (1906) 11 C.W.N 139 Pulukkavandy Ambalan v. Periyakaruppa Kone (1908) 2 I.C. 203 Angad Singh v. Sriuath Das (1908) 3 I.C. 403 Govinda Nair v. Nanu Menon (1914) M.W.N. 782 Nachippa Chetty v. Dakshina-niurthy Sevvai (1915) M.W.N. 217 Chinnaih Chetty v. Tikkaui Ramaswainy Chetty (1915) 31 I.C. 317 Ayyasami Pillai v. Gurjiswami Naicken (1916) 3 L.W. 463 affirmed on L.P.A. in 32 M.L.J. 354. It is true that in some of these Krishna Ayyar v. Krishnaswamy Iyer I.L.R. (1899) Mad. 597 was referred to as a decision relating to the dealing by a manager. But, I am of opinion that Sheppard, J. was merely meeting the objection of Davies J that the suit was based on the note and not on the debt and. did not intend to lay and particular emphasis on the word 'manager' used by him. When a single member acts in his own name but really as the agent of the manager, the case is one of an undisclosed principal and the manager is bound. So far, it is an application of the Law of agency. In so far as the manager's acts bind the whole family it is the application of the Hindu Law relating to the manager and involves no extention of the ordinary rules of Hindu Law. Thus, it is a case of a combined application of the Hindu Law and the Law of Agency and Evolves no unjustifiable extension of either. In such a case the contracting member, and (with reference to the first class of Section 231 of the Contract Act), the manager may be personally, liable but not the other members. This is the view taken in Krishna Iyer v. Krishnaswamy Iyer I.L.R. (1899) Mad. 597 where, certainly none of defendants 2 to 9, was the manager. I hold, therefore, that the 1st defendant's share in the joint family properties is liable (but not his separate properties or his person.) The decree will accordingly be modified. Subject to the modification the appeal is. dismissed with costs of 1st respondent.