1. In this case the two defendants carried on the business of timber merchants as a family business, they being father and son in an undivided Hindu family. They are sued on a debt which would be statute-barred in the absence of an acknowledgment sufficient, within Section 19 of the Limitation Act, to take it out of the statute. There is such an acknowledgment, but it is only signed by the 1st defendant, the father, and the question is whether it can operate as against the son, the co-defendant also.
2. The learned Judges who referred the case have propounded a question about the answer to which we feel no hesitation, but it is obviously referred to us because they felt a doubt as to whether the decisions in Valasubramania Pillai v. S.V.R.R.M. Ramanathan Chettiar I.L.R. (1908) Mad. 421 and Skaik Mohideen Sahib v. The Official Assignee of Madras I.L.R (1911) Mad. 142 did not preclude them from arriving at the conclusion which they clearly thought to be the right one.
3. The exact question propounded is : 'whether in the absence of direct evidence that a co-contractor or partner has authorised his co-contractor or partner to make acknowledgments or payments saving limitation on his behalf, such authority can be inferred from other surrounding circumstances such as the position of the other co-contractors or partners in the business.' Our answer is in the affirmative. We think that direct evidence of a specific authority to give acknowledgments is quite unnecessary, and that authority may be inferred from circumstances though it is of course quite beyond our province to indicate what circumstances should in our opinion be deemed sufficient to warrant the inference. It is important to notice the exact wording of Section 21(2) of the Limitation Act. The section does not say that a person shall not be liable on an acknowledgment signed by the partner by reason only of his being a partner but by reason only of a written acknowledgment signed by his partner; and it amounts to saying that if you have no more than a written acknowledgment signed by one defendant the fact that the other defendant is his partner cannot affect the latter's liability. You could obviously have a case where one partner signed an acknowledgment in respect of a gambling debt of his own; but for the sub-section, proof of the acknowledgment would be sufficient to fix the other partner with liability, a conclusion manifestly repugnant both to sense and justice. We see nothing in the sub-section to make it necessary to suppose that it is intended to apply to transactions conducted in the ordinary course of partnership business. We need only refer to the general principle of law embodied in Section 251 of the Contract Act that partners are the agents of one another and that their acts done in the ordinary course of the partnership business bind the partnership.
4. As regards the two decisions referred to, it is not quite easy to say whether they should properly be regarded as laying down as a condition of liability that there should be direct evidence of express authority to give acknowledgments. But at least one sentence in Shaik Mohideen Sahib v. The Official Assignee of Madras I.L.R. (1911) Mad. 142 lends colour to that view, White, C.J. referring to the former decision in ValaSubramanaia Pillai v. S.V.R.R.M. Ramanathan Chettiar I.L.R. (1908) Mad. 421 says ' Following the principle we here 32 Mad. 421 lay down, we have to see in this case if there is evidence that the person who made the acknowledgment had authority to do so on behalf of his firm.' Those words are capable of the construction that what is meant is direct evidence of specific authority, and they were obviously so regarded by the learned Judges who referred this question to us. If that be so, we have no hesitation in saying that they were wrongly decided and should no longer be regarded as law. Such a view is completely at variance with that taken by the other Courts of India and by the English Courts in their construction of the corresponding sections of the English Acts and would obviously put a premium on commercial dishonesty