1. This appeal arises out of a suit for recovery of Rs. 1,099 as damages. The facts, which gave rise to the present litigation, were these. The plaintiff and defendant 1 are both contractors under the Dacca Municipality and both got contracts for the supply of alum to that Municipality. Defendant 1 went to Calcutta and entered in to a contract with defendant 2 for the supply of alum, which defendant 1 had contracted with the Municipality to supply. The plaintiff, on finding out that defendant 2's rate was fair, asked defendant 1 to place an order with defendant 2 on his (plaintiff's) behalf. Defendant 1 however instead of placing the order in the name of the plaintiff, took a contract in his own name, although the plaintiff paid in two instalments a sum of Rs. 500 which had to be paid in advance. Subsequently, when the plaintiff went to Calcutta to take delivery of the goods from defendant 2, defendant 2 refused to recognise him and refused to supply him the goods in question, with the result that the plaintiff had, in order to supply the goods contracted for to the Dacca Municipality, to buy the same from another firm and incurred some loss in consequence thereof. On these facts, the plaintiff sued both defendant 1 and defendant 2, praying that he may be allowed a decree for money representing damages which he had suffered. Both the defendants denied their liability. The Courts below gave a decree against defendant 1 and dismissed the plaintiff's claim against defendant 2. Defendant 1 is the appellant before us.
2. On behalf of the appellant our attention was drawn to the provisions of Section 231, Contract Act, and it was urged that, as it was a case of undisclosed principal, the plaintiff was entitled to proceed against defendant 2 alone. In answer to this contention, our attention was drawn to Section 211, Contract Act, and it was contended, on behalf of the plaintiff, that, although Section 231 gave to the plaintiff a right to proceed against defendant 2, it gave him an option to do so, and if the plaintiff could bring his case within the purview of Section 211, there was nothing in Section 231, which could be said to debar him from seeking his remedy Under Section 211. This argument, so far as it goes, is perfectly sound. But the case, in my judgment, is not a case covered by Section 211. Defendant 1, no doubt, by placing the order with defendant 2 in his own name, had acted against the instruction of his principal, the plaintiff. But the refusal of defendant 2 to supply the goods, which resulted in a loss to the plaintiff was, as the facts found indicate, not so much for the reason that defendant 2 did not know the plaintiff, as for the reason that defendant 1 had failed to carry out the conditions of his own contract with defendant 2. It appears that defendant 1 had failed to pay for the second and third lots of goods sent to him by defendant 2, on the basis of the first contract entered into by defendant 1. The plaintiff, no doubt, suffered loss on account of defendant 2's refusal to supply the goods to him. But the inability of defendant 1 to pay for the two lots of goods supplied by defendant 2 was much more responsible for the refusal than the fact that the second contract had been entered into in the name of defendant 1, instead of in the name of the plaintiff. I am therefore of opinion that Section 211 was not applicable to the present case and the proper section, under which the plaintiff could proceed, was Section 231 and, Under Section 231, he was entitled to a decree against defendant 2 and not against defendant 1.
3. I would, accordingly, allow the appeal, set aside the decree of the lower appellate Court and send the case back to the Court of appeal below to give a decree to the plaintiff as against defendant 2 subject, of course, to the rights and obligations subsisting between defendant 1 and defendant 2, which will be determined after giving the parties an opportunity to adduce evidence on the point. In the event of the whole claim of the plaintiff being found not to be realisable from defendant 2 owing to the liability of defendant 1 to defendant 2, the balance of the plaintiff's decree will be realised from defendant 1.
4. The appellant, defendant 1, will be entitled to his costs in this appeal to be realised one half from the plaintiff and the other half from defendant 2.
5. I agree. It is necessary to send the case back, inasmuch as the plaintiff's case in the first place was not a case of undisclosed principal, though, as a matter of fact it was subsequently found to be in fact a case of undisclosed principal. Therefore defendant 2 had no opportunity of shewing what the liabilities and obligations were between him and defendant 1.