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P.V. Govindan Vs. Thavarayil Kinathi Narayanan and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1936Mad417; (1936)70MLJ467
AppellantP.V. Govindan
RespondentThavarayil Kinathi Narayanan and ors.
Cases ReferredChandu v. Ramunni
Excerpt:
- - smethurst's laundry and dye works limited, which perhaps would have been better english; it is true that in the present case the promissory note does not profess to be signed 'for' or 'on account of the company, but we have that which is equally strong to show that the company intended to be bound by the note, that is, the stamped signature of the company at the foot of the note and placed over the written signature of the defendant......negotiable instruments act an agent can sign a promissory note on behalf of his principal. if the words 'ahammad kutty, in his own capacity' were not there, but had stood 'ahammad kutty, on behalf of p.v. govindan,' there could be no question that on the note as it stands defendant 2 would be liable. a case similar in point can be found in alexander v. sizer (1869) 4 ex c 102, where the note runs as follows:1,500. on demand i promise to pay messrs. alexander & co., or order, the sum of one thousand five hundred pounds, with legal interest thereon until paid, value received 16th august 1865. for mistley, thorpe, and walton railway company-john sizer, secretary.4. a similar argument was addressed laying stress on the use of the word 'i' to the effect that john sizer was personally liable......
Judgment:

Venkataramana Rao, J.

1. This is a suit upon a promissory note dated 20th June 1925 executed by defendant 1 for himself and as agent of defendant 2 in favour of Ananthanarayana Brothers of Tellicherry. The plaintiffs case is that defendant 2 was a cart contractor of Messrs Aspinwall & Co., at Tellicherry, that in respect of dealings had by defendant 2 with the said company Messrs. Ananthanarayana Brothers & Co., stood surety for him, that the said Ananthanarayana Brothers was carried on by the plaintiff and his elder brother K. Ananthan, defendant 1 was the duly constituted agent of defendant 2 and defendant 1 on behalf of defendant 2 settled accounts with them, that a sum of Rs. 365 was found due and payable to Ananthanarayana Brothers and the suit promissory note was executed by defendant 1 in his own capacity and in the capacity of the agent on behalf of defendant 2, that the said Ananthanarayana Brothers ceased to exist, that the said note was assigned on 25th July 1925 exclusively to the plaintiff in his capacity as the proprietor of the plaintiff Company by K. Ananthan who was the owner of the said company and the elder brother of the plaintiff and therefore as such assignee he has now filed this suit. The defence of defendant 2 is that defendant 1 had no authority to execute the note, that on the note defendant 2 could not be rendered liable, that there was no valid assignment in favour of the plaintiff and he is not entitled to sue. Both the Courts have decreed the plaintiff's claim.

2. On appeal Mr. Variar has raised two contentions on behalf of defendant 2; (1) that on the note as it stands defendant 1 could not be made liable; (2) that the words on the back of the note do not constitute either an endorsement or assignment and the plaintiff is not entitled to sue. In regard to the first contention the main argument of Mr. Variar is that the promissory note purports to be executed by defendant 1 in his individual name, and the form of the note is such that defendant 2 could not in law be made liable. The note runs as follows:

Promissory note dated 20-6-1925.Tellicherry, 20th June 1925.Rs. 365. (Rupees three hundred and sixty five only). On demand, I Thorappa Thenu's son Ahammad Kutty of Valluvampara, amsom and desom, Ernad Taluk, hereby promise and agree to pay to Ananda Narayana Brothers of Tellicherry amsom and desom, Kottayam taluk, or order (the abovesaid sum) with interest accruing thereon at the rate of 2 per cent per month. The abovesaid consideration Rs. 365 has been received by me in ready cash this day.

(Two one anna stamps affixed)

(Left thumb impression of) Ahammad Kutty in his own capacity and on behalf of P.V. Govindan.

3. Stress is laid on the words 'I, Thorappa Thennu's son Ahammad Kutty' as indicating that it was only intended that Ahammad Kutty should be bound in his individual capacity; the mere fact that he purports to sign also on behalf of defendant 2 could not in law render defendant 2 liable. In my opinion this contention is not tenable. The note is a joint and several one having been executed by defendant 1 both in his individual capacity and the capacity of an agent. Under the Negotiable Instruments Act an agent can sign a promissory note on behalf of his principal. If the words 'Ahammad Kutty, in his own capacity' were not there, but had stood 'Ahammad Kutty, on behalf of P.V. Govindan,' there could be no question that on the note as it stands defendant 2 would be liable. A case similar in point can be found in Alexander v. Sizer (1869) 4 Ex C 102, where the note runs as follows:

1,500. On demand I promise to pay Messrs. Alexander & Co., or order, the sum of one thousand five hundred pounds, with legal interest thereon until paid, value received 16th August 1865. For Mistley, Thorpe, and Walton Railway Company-John Sizer, Secretary.

4. A similar argument was addressed laying stress on the use of the word 'I' to the effect that John Sizer was personally liable. The contention was negatived. Baron Pigott dealing with the contention observed:

Mr. Mathews contend... and lays much emphasis on the word 'I', as showing personal liability in the body of the note. But in any other form the note would have been ungrammatical and the form, which is the same as is used in an ordinary Bank of England note, does not in this case any more than in that, necessarily create a personal liability.

5. This case was followed in Chapman v. Smethurst (1909) 1KB 927, where the promissory note was in these terms:

Six months after demand I promise to pay to Mrs. M. Chapmen the sum of 300 for value received together with 6 par cent interest per annum.

J.H. Smethurst's Laundry and Dye Works Ltd.,

J.H. Smethurst, Managing Director.

6. Joyce, J. observed:

The only thing that raises a doubt in my mind is the use in the body of the note of the singular personal pronoun 'I' instead of the plural 'we' or We, J. H. Smethurst's Laundry and Dye Works Limited, which perhaps would have been better English; but this is not in my opinion sufficient to alter the prima facie effect of the affixing of the name of the company as it was affixed.

7. Vaughan Williams, L.J. observed:

It is true that in the present case the promissory note does not profess to be signed 'for' or 'on account of the company, but we have that which is equally strong to show that the company intended to be bound by the note, that is, the stamped signature of the company at the foot of the note and placed over the written signature of the defendant.

8. In the present case we have got the words 'on account of P.V. Govindan,' The words 'Ahammad Kutti in his own capacity' were also added. to indicate that his personal liability was also not excluded; otherwise he would not be personally liable. The words in the body of the note, 'I, Thorappa Thenu's son Ahammad Kutty' mean 'I, Ahammad Kutty, in my own capacity and on behalf of P.V. Govindan.' There is nothing to preclude an agent from signing for himself and also on behalf of his principal. The cases in Mare v. Charles (1856) 119 ER 745 and Jackson v. Hudson (1810) 170 ER 1213, relied on by Mr. Variar do. not help him. They only proceed on the principle that if a bill be drawn upon one man it cannot be accepted by two. Therefore I overrule the contention of Mr. Variar on this point. But I am inclined to think that the second contention of Mr. Variar must prevail. The alleged endorsement or assignment relied' on in the body of the note is:

Received the amount from T.K. Narayanan (Sd.) K. Anandan,Proprietor, Ananda Narayana Brothers.

9. These words do not constitute an endorsement within the meaning of Section 16, Negotiable Instruments Act, because there is no direction to pay the amount of the instrument to a specified person nor does it consist only of the signature of the endorser's name, and it is not seriously contended that it is. Nor do the words in my opinion assignment. There are assignment, no words of assignment, nor do they convey an expression of intention to transfer. Mr. Nambiar very strongly relied upon the observations of Lord McNaughten in Dunlop Rubber Co. v. Brandtt 1905 AC 454, which indicate that the form of the assignment is immaterial provided the intention to transfer is clear. But that intention must be gathered from the words used and not from evidence aliunde. From the language of the words used in this case one cannot infer such an intention. This case is exactly covered by a Bench decision of this High Court in Chandu v. Ramunni 1921 39 MLJ 273, where exactly similar language was used and' their Lordships Spencer and Odgers, JJ. declined to infer therefrom either an endorsement or an assignment. Following the said decision I reverse the decree of the lower appellate Court and dismiss the suit, but in the circumstances I direct each party to bear his own costs throughout. (Leave refused).


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