1. This is an appeal by the defendants against a decree which directed them to hand over possession to the plaintiff of the suit lands and pay mesne profits. The defendants' right to possession rests upon Ex. K, a patta dated 31st October 1923, granted to them by the plaintiff's father. The plaintiff contends that the suit lands have been allotted to him at a partition between himself and his father and that the patta whereby, after the preliminary decree in the partition suit, the father has granted permanent occupancy rights to the defendants in what till then were homefarm lands of the estate is not binding on him. It is therefore necessary to investigate the circumstances under which this patta was granted. Plaintiff's father was the zamindar of South Vellore and in 1920 a suit for partition was instituted against the father by the plaintiff's mother acting as next friend. Allegations of gross mismanagement were made against the father and were more than justified. A preliminary decree was passed on 3rd March 1921 (Ex. J). It was the result of a compromise and its terms show that the persons who brought it about were anxious as far as possible not unnecessarily to affect the dignity of the father's position but at the same time effectively safeguard the plaintiff's rights and prevent the father from causing any further loss to his minor son.
2. It is in evidence that the father was even by that date heavily in debt and the evidence also shows that during the pendency of the partition suit and even between the date of the preliminary decree and the final decree the father wasted all the income that he received from the estate and went on borrowing recklessly to the extent of some lakhs. Fully alive to this tendency of the father the persons responsible for the compromise decree made provision for the discharge of the debts which it was thought fit to admit as binding upon both the father and the son. These debts were specified in a schedule to that decree and totalled Rs. 6,92,000. Of these, it is necessary for the purpose of this appeal to refer only to item No. 3, a sum of Rs. 40,000 due to one Pyda Venkata-chalapathi Garu under the decree obtained by him against the father in O.S. 15 of 1920 on the file of the Ellore Sub-Court. Clause 2 of Ex. J provided that the debts specified in the schedule thereto be discharged completely by the sale of some of the estate villages; that in thus disposing of the villages the plaintiff's next friend and defendant do consult each other and sell only such of the villages as both are willing to dispose of; that necessary documents therefor be executed by the plaintiff's next friend and defendant; that if in connextion with such sale there should arise difference of opinion between plaintiff's next friend and defendant, the matter be referred to M.R. Ry., S. Hanumantha Rao Pantulu Garu, that both do abide by his decision, sell and execute the documents in accordance therewith, etc.
3. Paragraph 3 distinctly prohibited the father from contracting any further debts except in consultation with the plaintiff's next friend in circumstances of necessity. And it was added that if the defendant, i.e., the father alone, contracted any debts such debts should not bind the minor plaintiff. There can be little doubt that both on general principles now well established as to the effect of the institution of a suit for partition on behalf of a minor and especially when a decree for partition is passed therein and also according to the express terms of the compromise decree passed in the plaintiff's partition suit, the plaintiff and his father became divided in status and that after the date of Ex. J, the father could no longer have the powers which he would have as the head of the undivided Hindu family. It has no doubt been laid down in Jagannadhan Rao v. Visvesam 1924 47 Mad 621, and by a majority in Subramania Iyer v. Sabapathy Aiyar 1928 51 Mad 361 that notwithstanding the partition the son will continue liable for the debts of the father contracted before partition, but these very cases adopt the view laid down in earlier cases that under such circumstances the father would have no power to dispose of the son's interest in the family property even for the purpose of discharging such debts. Nor can a creditor who has only obtained a decree against the father bring to sale in execution family property so as to affect the interests of the son who had in the meanwhile become divided. If matters remained there, there could be no doubt that the plaintiff's father would have had no power to make any disposition of family property even if it be for the discharge of antecedent debts so as to affect the son's interests in such property.
4. In the circumstances of the present case, the father was under a disability in the matter of making alienations as the result of another rule as well, viz. the rule of lis pendens. The partition suit, as stated already, had been filed in 1920; the preliminary decree had been passed on 3rd March 1921; the application for final decree was made on 8th April 1922 and the final decree was in fact passed on 7th July 1924. It is in the interval, i.e., 31st October 1923, that the plaintiff's father granted to the defendants the patta Ex. K. Under the final decree the village in which the suit lands lie was allotted to the plaintiff's share. It might have been possible for the defendants to have applied to be made parties to the partition suit and requested the Court to allot the suit lands to the father's share. It is not for us to say whether the equities between the parties would have enabled the Court to grant this request or not; but under the Hindu law that was the only course open to these defendants. For some reason that course was not adopted and the result of the rule of lis pendens will be that if Ex. K is to be viewed as an alienation by the father it cannot prevail against the decree in the suit nor affect the properties allotted to the son under that decree. In the lower Court contentions were put forward seeking to justify the alienation on the footing that it was an alienation by a manager for purposes of necessity. This argument was apparently rested upon the provisions of Clause 5, Ex. J., though from the discussion in the judgment it is not by any means clear whether the argument was sufficiently dissociated from the joint character of the family. Clause 5, Ex. J., provides,
that if during the minority of the plaintiff the father contracts any debts or does anything tending to cause any loss to the estate in the management of its affairs or effects improper and collusive sales the plaintiff be immediately entitled to get his half share by partition.
5. It then goes to provide for the management of such divided share in two ways, viz., that if the father on demand by the plaintiff's next friend agreed to set apart the properties for the plaintiff's half share he should manage the same on behalf of the plaintiff and maintain accounts separately, but if the father did not effect a partition and allot separate share to the plaintiff a petition was to be filed in Court for a final decree for partition and the Court should determine who should manage the plaintiff's half share when separated. On these provisions, it was argued that notwithstanding the division of status brought about by Ex, J. the father retained the powers of management of the whole estate, including the son's share. It was also contended that notwithstanding the division in status the father was under the Hindu law the guardian of the property and person of his minor son and that for both these reasons the father had all the powers which a guardian would have to deal with the plaintiff's estate. I must however say that any argument based on Clause 5 or even on the general powers of the father as the son's guardian cannot overlook the express provisions contained in the other clauses of Ex. J imposing limitations upon the father's powers of alienation. Clause 2, which has already been set out makes specific provisions for discharge of debts, and there is no justification for treating the concurrence of the plaintiff's mother in alienations for that purpose as mere formality and assuming that the father nevertheless continued to have independent power to dispose of the son's share for the discharge of the debts. As already stated, the application for final decree had been made on 8th April 1922 and the father undoubtedly opposed it; the further question will therefore arise whether even under the terms of Clause 5 the father's powers of management did not cease by the time that the suit transaction was entered into, viz. on 31st October 1923. Again if the father's powers are to be assimilated to those of a guardian, any alienation made by him could be justified only on grounds of necessity. The Court below has found that judged by that test the transaction under Ex. K cannot be supported.
6. The father was in possession of annual income of some lakhs and at the time of the institution of the partition suit ho was in possession also of considerable cash and moveables. He wasted them all and went on borrowing several lakhs during the pendency of the partition suit. If having brought himself and the estate to that condition he makes alienations for the purpose of discharging debts it cannot be said that judged by tests applicable to a guardian's alienation as distinguished from a father's alienation the suit alienation must be upheld. Further, it cannot be held that the alienation was necessary in the interests of the minor because, as already pointed out the decree of Pyda Venkatachalapathi had been obtained only against the father and the proceedings which he was conducting in execution could not according to a long line of authorities in this Court have affected the son's interest because the son had by reason of Ex. J become divided in status. It was no doubt open to Pyda Venkatachalapathi to institute a suit against the son for the debt, but even if such a suit had been instituted, steps might have been taken on behalf of the minor son to discharge the debt by means other than an alienation of property, as for instance by the appointment of a Receiver for the minor's share of the estate whose income the father was wasting. The learned Judge was therefore right in holding that even as an alienation made by a manager or guardian the transaction under Ex. K cannot bind the plaintiff.
7. A different line of argument was accordingly urged before us by the learned Counsel for the appellants. He contended that Ex. K should not be viewed as an alienation at all, that what really happened was that homefarm land of the Zamindar was converted into ryoti land, that such conversion is within the powers of any Zamindar or landholdar and that once such conversion is made the ryots who were admitted into possession in due course acquire occupancy rights under the Estates Land Act and not under any alienation made by the Zamindar. Apart from the fact that such was not the line of argument taken before the lower Court, it is difficult to accede to this argument. The true position after Ex. J was that the Zamindar and his son were in the position of co-sharers and as held by the Privy Council in Midnapore Zamindary Co., Ltd., v. Naresh Narayan Roy 1924 47 MLJ 23, it would not ordinarily be within the power of any co-sharer to do anything which would amount to the creation of permanent rights of occupancy in favour of another in any portion of the joint estate. Mr. Srinivasa Ayyangar accordingly sought to escape that difficulty by relying on the doctrine of conversion from homefarm to ryoti. But there is no authority or justification for assuming that a co-sharer landholder has inherent in him the right to make the conversion without any regard to the rights of the other co-sharers. Assuming for the sake of argument that the father during the time that he was in de facto management of the whole estate that might be regarded as a 'landholder' within the meaning of the definition in Section 3, Clause (5), Estates Land Act, that definition must only be held applicable to acts done and powers exercised by the landholder as contemplated in the several provisions of the Act.
8. It may be that a person admitted to possession of ryoti land by such landholder may acquire occupancy rights under Section 6, or, again it may be even that such landholder may be compelled to receive payment under Section 46, Estates Land Act, from a non-occupancy ryot with the result that permanent rights of occupancy right arise therefrom. But on matters where the Act makes no specific provision, the mere circumstance that the plaintiff's father might be regarded as a landholder within the meaning of that term in the Estates Land Act will not make him absolute owner of the estate for all purposes so as to prejudice the rights of other persons interested in the estate. Mr. Srinivasa Ayyangar relied upon Section 181, Estates Land Act, as amounting to a statutory authorisation enabling a land-holder to convert homefarm land into ryoti land. This is certainly not a legitimate interpretation of the proviso to that section. It is merely a proviso inserted by way of abundant caution and only says that nothing contained in the main part of the section 'shall prevent a landholder from converting his private land into ryoti land.' Whether he has power so to convert or not must be decided with reference to other branches of the law. Reliance was also placed in this connection upon two or three decisions of this Court. Narayanaswami Nayadu v. Subramanian 1916 39 Mad 683 and Kallalagar Devasthanam v. Anthony Moopan : AIR1925Mad454 do not bear upon the question now under consideration. They only hold that a parson may be a landholder within the meaning of that term in the Estates Land Act even though he may not be the beneficial owner. Mullai Thayammal v. Subbayyan Pillai 1922 16 MLW 802 no doubt adverted to the question of conversion of homefarm land into ryoti land, but the learned Judges did not lay down that a landholder had absolute power to make such conversion in disregard of other person's rights. They only said that the successor of the landlord who did so convert could not avoid the transaction by merely issuing notice to quit or by any alteration in his own registers.
9. A conversion of this kind could not always be regarded as an act done in the ordinary course of management. The true test will be whether such conversion was necessitated or justified by circumstances relating to the condition of the land or the continuance of its being cultivated as homefarm land. Where the Zamindar merely in consideration of substantial money payment brings about such conversion the transaction must in effect be viewed as an alienation. If on the other hand he discontinues private cultivation because he is unable to carry on private cultivation, other consequences may follow. In the present case no attempt has been made to suggest that the condition of the land or the circumstances attending its cultivation necessitated the conversion. On the other hand it was obviously a devise to raise money to meet the needs of the extravagant zamindar. I am therefore of opinion that Ex. K cannot be held to be a transaction within the powers of the father either as manager or guardian or as a landholder having regard to the terms of Ex. J and the circumstances of the family at the time. The plaintiff is therefore entitled to a decree ?or possession of the suit lands.
10. It was next argued that the plaintiff should not be permitted to take possession except on condition of restoring to the defendants the benefit which he has received under the transaction. This argument was founded on the fact that a portion of the money realized by the zamindar under Ex. K was utilized to pay off the debt due to Pyda Venkata-chalapathi. It would appear that a sum of Rs. 30,000 was received by the zamindar as nazarana under Ex. K. The learned Subordinate Judge has found that out of this sum Rs. 20,000 was paid towards that decree. Before us Mr. Srinivasa Ayyangar contended that not merely Rs. 20,000 but Rs. 25,000 should be held to have been so paid. This argument was based upon a statement in the accounts that on a day prior to Ex. K a sum of Rs. 8,000 odd was paid to Pyda Venkata-chalapathi out of which Rs. 3,000 odd came from the estate treasury and Rupees 5,000 is stated to have been received from one Govindachari in connexion with a proposal to give him permanent jeroyati right in the suit lands. So far as can be gathered from the evidence, the defendants put forward a story that there was an auction sale of the occupancy rights proposed to be created in the suit lands and that Govindachari was one of the bidders, the defendants being another set of bidders. From this point of view Govindachari could not in any sense be considered as defendant's agent because he was a rival bidder.
11. It was however stated that Govindachari who was the bidder for the highest amount was unable to find the money to make the deposit as per his bid, that he accordingly entered into some understanding with the defendant to advance him Rs. 5,000 to make the deposit and that by some arrangement Govindachari agreed to give up in favour of the defendants his right under his bid. Govindachari himself has not been examined and the learned Subordinate Judge has disbelieved the whole story about this auction. It is therefore not possible to arrive at the exact truth as to this payment of Rs. 5,000 and to connect it with the defendants. I must therefore proceed on the footing that the learned Subordinate Judge has rightly found that only Rupees 20,000 out of the amount received under Ex. K, went in discharge of Pyda Venkatachalapathi's decree. Taking this to be so, what is the ground on which the plaintiff can be directed to pay to the defendants the whole or any portion of this sum ?
12. In the Court below, the right to reimbursement seems to have been claimed on the strength of Sections 69 and 70, Contract Act. They are obviously inapplicable and the learned Counsel for the appellants in this Court has not put forward that contention. He sought however to invoke the benefit of Sections 64 and 65, Contract Act. Section 64 deals with voidable contracts and with the liability of the party who rescinds a voidable contract to restore the benefits derived by him thereunder. It has accordingly been argued that the plaintiff must be treated as a person who is a party to Ex. K though not specifically named therein because; it is said he must be held to have been represented by his father. The analogy of sales by Court guardians without the sanction of the Court has been relied on and reference has been made to Sinaya Pillai v Munisami Ayyan (1899) 22 Mad 289. I am unable to accept this argument. It is one thing to say that a person who purports to convey property must be held to convey all the quantum of interest which he could convey in several capacities held by him whether they are expressly referred to in the document or not, but it is another thing to say that in circumstances like those of the present he must be deemed to have acted on behalf of persons not mentioned in the document-indeed of a person whose rights he was doing everything in his power to injure. It does not therefore seem to me reasonable to hold that the plaintiff was a party to Ex. K and that he is avoiding it as a person entitled to rescind the contract in the sense contemplated by Section 64.
13. Reliance has next been placed upon Section 65 and upon an observation of Messrs. Pollock and Mulla at p. 378 of their commentary on the Indian Contract Act (6th Edition) to the effect that an obligation under this section to restore the advantage received under an agreement is not confined to the parties to the agreement but extends to any person that may have received that advantage. This observation is based upon Girraj Baksh v. Kaji Hamid Ali (1887) 9 All 310. On the facts, that case is very similar to Sinaya Pillai v Munisami Ayyan (1899) 22 Mad 289 and the decision might well have been based on Section 64. I need not however take exception to the rule as stated by Messrs. Pollock and Mulla; for even that statement of the rule cannot be taken as of indefinite application, because it was laid down by the Privy Council as early as in Ram Tuhul Singh v. Bisewar Lall Sahoo (1874) 2 IA 131 that it cannot be postulated that every person who has received an advantage from some transaction is under an obligation to reimburse another who has been put to loss or expense in that connexion. The decision of this Court in Ammani Ammal v. Ramaswami Naidu : (1919)37MLJ113 indicates the limitations to which a claim for reimbursement in similar circumstances must be held to be subject.
14. Further, if the reference in Section 65, Contract Act, to 'advantage' is to be construed as contemplating a real advantage and not merely the money received not by him but by some other person the Court must be satisfied that the person who is called' upon to reimburse has really enjoyed that advantage. In this manner at least a distinction must be recognised between a party to the contract who has received an advantage and a person not a party to the contract who is said to have received an advantage. In the present cases it is not the plaintiff who received the money from the defendants. The father received the money. The advantage which the plaintiff is said to have derived is that a debt which was recognised as binding upon the plaintiff as well as his father under the terms of the decree was in part discharged out of this money. But when it is remembered that the father was in possession of other funds and practically deprived the plaintiff for several years of the whole income from the estate it is not easy to say that by the mere fact of the father having utilised a portion of the money received under Ex. K for the discharge of Pyda Venkatachalapathi's decree the plaintiff must be deemed to have derived an advantage. Reliance was next placed upon Limbaji Ravji v. Rahi Ravji 1925 49 Bom 576, where the learned Judges referred to the possibility of justice being done under Section 41, Specific Belief Act. That provision leaves the matter largely in the discretion of the Court, and for the reasons I have above set out, it is difficult to say that there is any justice in asking the plaintiff in the present case to repay any amount to the defendants.
15. Finally, an appeal was made to the principle laid down by the Court of Appeal in England in Bannatyne v. Mao Iver (1906) 1 KB 103, to the effect that even when an agent borrows money in excess of his authority the principal may be held liable to make it good, to the extent to which the money has been applied for the principal's benefit. But the Master of the Bolls as well as Homer, L.J. laid stress in that case upon the circumstance that the lender was not aware that the agent was acting in excess of his authority and that he believed that the agent was acting within the extent of his authority. In then present case, the only defendant who has gone into the box is obliged to admit that he had knowledge even at the time, Ex. K, of the terms of the compromise decree. The other defendants have not gone into the box to swear what their belief or extent of knowledge was. In these circumstances there appears to be no justification for applying to the present case the principle recognised in Bannatyne v. Mao Iver (1906) 1 KB 103. It has been argued on behalf of the appellants that as found by the lower Court they have paid full consideration for the transaction and agreed to pay a fair rent, and there is no reason to hold that the transaction is not one entered into in good faith. But I do not think the mere payment of consideration concludes the matter. The defendants were the mokasadars of a neighbouring village and they were apparently anxious to acquire permanent rights in the suit lands in the adjoining village.
16. It is one thing to say that the transaction might not be male fide, but it is a different thing to hold that the defend-ants paid money in circumstances which would entitle them to claim reimbursement from the plaintiff when the transaction is held unavailing as against him. It has next been argued that the plaintiff should not be given mesne profits for any period to the date of suit. It was said that the transaction under Ex. K was only in the nature of a voidable arrangement and that where a person is in possession under a voidable arrangement he should not be called upon to pay mesne profits before the person entitled to avoid the transaction institutes a suit for the purpose or otherwise intimates his intention to avoid the transaction. It does not clearly appear that this point was taken before the lower Court. In para. 8 of the plaint it is asserted that the plaintiff gave a registered notice to the defendants to vacate the lands and surrender them to him and they refused to do so. Para. 12 of the written statement denies that any such notice was served on the defendants.
17. The plaintiff has not produced any evidence bearing upon the alleged notice, but it is explained before us that this matter was not done because the issues as framed raised only the question of the quantum of mesne profits and not the right to mesne profits. Our attention was invited to some of the decisions of this Court, cf Subba Goundan v. Krishnamachari 1922 45 Mad 449 and Rameswami Aiyar v. Venkatarama Aiyar 1924 46 Mad 815, laying down in general terms that in respect of voidable transactions there is no right to claim mesne profits prior to date of suit. After the decision of the Privy Council in Satgur Prasad v. Har Narain Das 1932 62 MLJ 451, no such general proposition can be advanced.
18. It must depend upon the circumstances of each case whether the plaintiff has] been guilty of such conduct as to disentitle to him to past profits. The plaintiff in the present suit is a minor and his estate was under the management of the Court of Wards. The suit was instituted within about three years after the passing of the final decree whereby the suit village was allotted to the plaintiff's share. In these circumstances there is nothing to disentitle the plaintiff to past profits. If I had held that the defendants were entitled to be reimbursed by the plaintiff in any substantial sum, it might be a question whether it would not be appropriate to set off the interest on such amount against the mesne profits, but no such question now arises. It was next argued that the amount awarded by the Court below by way of mesne profits was excessive. It was also said that the defendant had been misled into the belief that the Court would postpone the enquiry into the mesne profits to a later stage as provided for in Order 20, Rule 12, Civil P.C. and that the defendant had not accordingly led evidence on the point. So far at any rate as mesne profits prior to the suit are concerned there is nothing in the Code, to compel the Court to put off the determination of the question to a later date. Such course is no doubt sometimes adopted by consent of parties, but it does not appear that there was any such undertaking in the present case. Witness after witness on the plaintiff's side has been asked questions bearing upon the quantum of mesne profits and it does not appear that any exception was taken to this course on the ground that it was expected that the question of mesne profits would be reserved for a future enquiry. As regards future profits, the Code no doubt contemplates a separate enquiry, but seeing that in the present case the defendants gave up possession soon after the date of the lower Court's decree, the mesne profits decreed practically cover only the period up to the date of the decree. The matters that had happened up to that date, in so far as they had any bearing on the question of mesne profits, could easily hare been brought to the notice of the Court in the course of the enquiry in the suit itself. I see no reason to think that the defendants have been substantially prejudiced by the course adopted by the lower Court.
19. As regards the quantum, the rate of Rs. 35 per acre adopted by the lower Court is by no means excessive having regard to the fact that the suit wet lands are homefarm lands. Even ignoring the evidence which will put the income at putties per acre, there can be little doubt that the income might fairly be taken at 1 putti per acre as put by some of the witnesses or at least 10 to 15 bags per acre as put by one defence witness. According to the price that ruled up to the date of the decree even a yield of 10 to 15 bags per acre would have been worth about Rs. 50 to Rs. 75. On this basis, the award of Rs. 35 per acre by way of mesne profits allows a sufficient margin to the defendants for expenses of cultivation. There is accordingly no reason to interfere with the decree of the lower Court as to mesne profits. By a memorandum of objections, the plaintiff claims that the lower Court ought to have allowed a larger rate in respect of the forest lands comprised in the suit area. There is no doubt a statement in the evidence of some of the plaintiff's witnesses that Rs. 2-4-0 per acre was the rate for forest lands, but beyond oral statements to this effect no documentary evidence, whether by way of receipts or by way of muchilikas or accounts, have been produced to substantiate those statements. Some of the witnesses are admittedly unfriendly to the present defendants with whom they have been carrying on litigation in respect of these very forest lands. It also appears from the evidence that the defendants have not been able to have peaceable enjoyment of these forest lands on account of disputes which have existed for some time between the raiyats of the village and the estate as regards the rights of the former in the forest. Even supposing some portions of the forest land might have yielded something more than the rate adopted by the learned Subordinate Judge it is by no means clear that the whole area must be taken to be of the same kind or to have yielded income at the same rate. In these circumstances the lower Court acted rightly in adopting an average rate of Re. 1 per acre in respect of the forest-lands. Both the appeal and the memorandum of objections are accordingly dismissed with costs. We are informed that-pending this appeal the lower Court has made certain amendments in its decree. Our decision is of course without prejudice to the amendments thus made.
20. I agree. I desire to add a few words with regard to two matters with which this appeal is concerned. An argument was addressed to us relating to Section 181, Madras Estates Land Act. Mr. S. Srinivasa Ayyangar appeared to contend for the following position that by reason of the proviso therein, which is to the effect that nothing contained in that section should prevent a landholder from converting his private land into raiyati land, a landholder was enabled to convert his private land into raiyati land prejudicially to the interests of the co-owner. That that is not so is, I think, clear from the observations of the Judicial Committee in Midnapore Zamindary Co., Ltd., v. Naresh Narayan Roy 1924 47 MLJ 23, and I think that it is only an argument which requires to be stated to carry within its own refutation. In my view the proviso to Section 181, in no way adds to or detracts from the existing law relating to the powers of the landholder to convert his private land into raiyati land and if that proviso had not been contained in the Act I do not think the position of anybody would be affected. The other point on which I desire to record something more than a formal concurrence relates to the arguments that the defendants in this case should be reimbursed by the plaintiff for the sum which they have paid under Ex. K. Mr. Srinivasa Ayyangar invoked Section 41, Specific Belief Act, and he was entitled to do so because the plaint contains a prayer for a declaration that Ex. J is void. A large number of cases have been cited to us but no facts identical with the present appear to have come under consideration in any of the authorities. In this case there is a clear finding by the lower Court that by the date of Ex. K the defendants knew of the existence of Ex. J. Indeed one of them defendant 2 (D. W. 8), has stated that he took advice about it. Now if that is so, the defendant took possession of this property under Ex. K with full knowledge that Ex. J contained a definite prohibition on the plaintiff's father executing any documents or contracting any debts in such a way as to bind the plaintiff. I think therefore that they entered into this transaction with their eyes wide open, and I am inclined to think that they were prepared to take the chance of its being profitable. It must be remembered that the doctrine on which defendants relied to be reimbursed in this case is an equitable doctrine, and it seems to me that the general principle governing it has been stated by Romer, L.J. in Bannatyne v. Mao Iver (1906) 1 KB 103, to which allusion has been made by my learned brother. It is there said, and it must be remembered in this connexion, that the joint status of the plaintiff and the father had been severed at the time of Ex. K, that where money is borrowed on behalf of a principal by an agent, the lender believing that the agent has authority though it turns out that his act has not been authorized, or ratified, or adopted by the principal, then, although the principal cannot be sued at law, yet in equity, to the extent to which the money borrowed, has in fact been applied in paying legal debts and obligations of the principal, the lender is entitled to stand in the same position as if the money had originally been borrowed by the principal. It must be remembered that in this case the appellant is relying on the position of the plaintiff's father being that of a manager and has argued on the notion of an agency between them. The Judicial Committee in Ram Tuhul Singh v. Bisewar Lall Sahoo (1874) 2 IA 131, in dealing with this equitable doctrine, state:
It is not in every case in which a man has benefited by the money of another, that an obligation to repay that money arises. The question is not to be determined by nice considerations of what may be fair or proper according to the highest morality. To support such a suit there must be an obligation, express or implied, to repay.
21. Applying those principles it seems to me on the evidence in the case, viz., the fact that the defendants entered into this contract with full knowledge of the circumstances and of the risks all of which are clearly indicated in Ex. J that all the necessary ingredients to enable them to invoke the equitable doctrine in their favour are negatived. It must he remembered that there is a discretion in Court under Section 41, a discretion of course to be exercised judicially in accordance with the equitable doctrine laid down. I have not heard nor has any reference been made to cases where that doctrine has been invoked in aid of a party whose conduct can in any way be compared to that of the defendants herein. It is not impossible that their position may be one of misfortune. In my judgment any misfortune they have suffered was entirely their own fault. I generally agree with all the conclusions at which my learned brother has arrived and with the result of those conclusions.