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Vijiathammal Vs. M. Kadir Sultan and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1937Mad27; 158Ind.Cas.242; (1937)1MLJ23
AppellantVijiathammal
RespondentM. Kadir Sultan and anr.
Cases ReferredPowis and Byrant v. Quebec Bank
Excerpt:
.....to establish the liability of defendants 1 and 2. in the trial court there was a decree against defendants 1 and 2 as well as against the third defendant but in appeal the subordinate judge of negapatam dismissed the suit as against defendants 1 and 2. from that judgment the second appeal was preferred and it was dismissed with costs. in this case however we are satisfied that the power-of-attorney does not at all include a general authority to borrow on behalf of the principals and certainly there is no authority whatever to receive deposits of the kind referred to in the plaint. neither the power-of-attorney nor the course of business carried on justifies the inference that the plaintiff believed in good faith that the deposit was made with the principals and not with the third..........the actual payment having been made to the third defendant who was then the local agent of the firm of defendants 1 and 2. defendants 1 and 2 denied that the firm was bound by the transaction which the agent had no power to enter into on their behalf and it was also contended that the transaction was not entered in the books of the firm and the firm did not get the benefit of the money in question. in other words they disclaimed their liability altogether. the plaintiff had asked for a decree in the alternative against the third defendant in case she was not able to establish the liability of defendants 1 and 2. in the trial court there was a decree against defendants 1 and 2 as well as against the third defendant but in appeal the subordinate judge of negapatam dismissed the suit as.....
Judgment:

Pandrang Row, J.

1. This is a Letters Patent Appeal from the Judgment of Varadachariar, J., dated 12th March, 1935, in S.A. No. 482 of 1931. The plaintiff who is the appellant sued to recover a sum of Rs. 1,000 with interest thereon and her case was that that amount was deposited by her with the firm of defendants 1 and 2 at Negapatam on 21st November, 1924, the actual payment having been made to the third defendant who was then the local agent of the firm of defendants 1 and 2. Defendants 1 and 2 denied that the firm was bound by the transaction which the agent had no power to enter into on their behalf and it was also contended that the transaction was not entered in the books of the firm and the firm did not get the benefit of the money in question. In other words they disclaimed their liability altogether. The plaintiff had asked for a decree in the alternative against the third defendant in case she was not able to establish the liability of defendants 1 and 2. In the trial Court there was a decree against defendants 1 and 2 as well as against the third defendant but in appeal the Subordinate Judge of Negapatam dismissed the suit as against defendants 1 and 2. From that judgment the second appeal was preferred and it was dismissed with costs. The main question in the second appeal was whether as a matter of fact the power-of-attorney granted by defendants 1 and 2 to the third defendant gave authority to borrow on behalf of his principals. On this point the opinion of Varadachariar, J., was that the power-of-attorney did not authorise the third defendant to borrow money for or on behalf of his principals. The authorities which bear on this point have been discussed by our learned brother in his judgment and it is unnecessary to embark on a further discussion, because to our minds the point is very simple and scarcely leaves room for any doubt. The authorities do not seem to be of much use in deciding the effect or purport of the particular power-of-attorney which we have to deal with in this case. The authorities deal with documents worded differently. As to the general principle applicable to cases of this kind there is no dispute, vis., that a power-of-attorney is to be construed strictly, that is to say, where a particular act is alleged to have been done under a power-of-attorney and that allegation is challenged and it is contended that the act was in excess of the authority given by the power of attorney, it is necessary to show that on a fair construction of the entire instrument the authority in question has to be found within the four corners of the instrument either in express terms or by necessary implication. The principle has been laid down almost in exactly these words in Bryant Powis and Bryant v. La Banque du Peuple Bryant : Powis and Byrant v. Quebec Bank (1893) A.C. 170 by Lord Macnaghten at p. 177. Bearing this principle in mind we have examined the power-of-attorney and we are unable to find any reason for differing from the opinion expressed by the learned Judge who heard the second appeal. There is no doubt authority given to purchase goods, the principals being merchants carrying on trade in the shape of export and import of goods. It is contended that a power to purchase goods includes power to borrow. This contention we are unable to accept. The conclusion may perhaps be different if the question arises whether a power to purchase goods implies power to pay for them. That is not the case here. It is not the plaintiff's case that the money was borrowed from her for the purpose of paying for any goods which the third defendant was authorised to purchase on behalf of his principals. On the other hand her own case in the plaint is that she made a deposit of the money. In other words what she did was consistent only with her belief that the principals (defendants 1 and 2) were carrying on a business which involved also the receipt of deposits from others. There is no instance brought to our notice in the evidence of any such deposit having been received on behalf of defendants 1 and 2 at any time; nor is there anything to show that receiving deposits and paying interest thereon was part of their business. One might even go to the extent of saying that even if there was power to borrow it would not necessarily imply a power to receive deposits and carrying on a banking business of this kind. In this case however we are satisfied that the power-of-attorney does not at all include a general authority to borrow on behalf of the principals and certainly there is no authority whatever to receive deposits of the kind referred to in the plaint. Neither the power-of-attorney nor the course of business carried on justifies the inference that the plaintiff believed in good faith that the deposit was made with the principals and not with the third defendant personally. It is common knowledge that traders in goods do not make it part of their business to receive deposits of this kind, and it is going too far to suggest that in this particular case there was sufficient ground for believing that the third defendant was acting on behalf of his principals when he received the deposit in question. As a matter of fact the plaint itself rests on the allegation that defendants 1 and 2 carried on as a part of their business the business of receiving moneys as deposits and repaying the same with interest. This allegation is undoubtedly untrue and devoid of foundation. No attempt has been made to substantiate it. The accounts of the firm do not show any such transactions. The allegation in the plaint, unfounded as it was, shows that the plaintiff had realised it was not possible to bring home liability to defendants 1 and 2 unless it was established that her money had been received by the third defendant as part of the business carried on by him on behalf of his principals. As observed already, there is no foundation for this allegation and there can be no doubt that defendants 1 and 2 never received deposits as part of their business either themselves or through their agent at any time. In particular the plaintiff's money never went into the firm's accounts and it is not shown that the firm had any benefit therefrom. Thus even on the ground of benefit received the plaintiff has no cause of action because no such benefit has been established. Her cause of action is entirely limited to the 3rd defendant and she has got a decree against him. The claim to recover the money from defendants 1 and 2 is baseless, and it was rightly rejected by the lower appellate Court and in our opinion the judgment of our brother Varadachariar, J., dismissing second appeal is perfectly right. The Letters Patent Appeal is therefore dismissed with costs.


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