1. This is an appeal on behalf of the first two defendants in a suit of a novel description. The events antecedent to the litigation are not in controversy and may be briefly narrated. According to the plaintiff, the first defendant acted as his agent from 1903 to 1907. The plaintiff had, in the name of Kali Das Raghunath Das, started and carried on a business which consisted in the purchase and sale of sundry articles. The first defendant, who was employed to look after this business, as agent of the plaintiff, advanced Rs. 300 the third defendant for purchase of paddy. The latter, failed to perform the contract; the result was that in 1908, the first defendant sued him for damages for breach of contract. During the pendency of this suit in the Court of first instance, the plaintiff terminated the agency of the defendant. He did not, however, himself intervene in the suit then pending, which was tried in due course and decreed on the 28th March 1908. On appeal, this decree was affirmed on the 4th February 1909. In the interval, on the 16th May 1908, the first defendant assigned his rights under the decree to the second defendant. Seven days after the termination of the appeal in that suit, the plaintiff commenced the present action for declaration that he was beneficially interested in the decree obtained by the first defendant against the third defendant and for an injunction to restrain the third defendant from paying any money into the hands of the first or the second defendant in satisfaction of that decree. The defendants resisted the claim on the ground that the suit as framed was not maintainable, They also contended that the first defendant was not the agent of the plaintiff, and that, in any event, the second defendant was entitled to protection as a bona fide purchaser for value without notice of the rights, if any, of the plaintiff. The Courts below have found that the first defendant was the agent of the plaintiff, that the sum advanced by him to the third defendant belonged to his principal, and that the contract was made by him as agent and on behalf of the principal. It has also been found that the second defendant was in league with the first defendant and was not a bona fide purchaser for value without notice. In this view, the Courts below have made a decree in favour of the plaintiff. The decree obtained by the first defendant against the third defendant has, meanwhile, been realised; the money is now in deposit in Court, and the plaintiff asks for leave to, withdraw this sum. On behalf of the first defendant, it is argued that the plaintiff is not entitled to maintain the suit as framed. In our opinion, this contention is well founded and must prevail.
2. It is not disputed that the first defendant as agent was liable to render accounts to the plaintiff of all his dealings in the various transactions carried on by him as agent on behalf of the plaintiff. But what is argued is that, in the absence of a special contract in that behalf, the plaintiff cannot be permitted to select capriciously a single transaction and claim the fruits thereof, without an adjustment of the rights and liabilities of the parties in relation to other transactions. This contention is manifestly sound. It is well settled that when accounts are taken, the agent is bound to make over to the principal whatever sums he has realised on his behalf; but the agent is equally entitled to deduct expenses authorized by the principal and all proper expenses even though incurred for purposes not strictly legal. In the matter of this very transaction, if the plaintiff is entitled to the fruits of the decree, the defendant may equally claim to be remunerated for his services as agent, and to be reimbursed the litigation expenses. But the plaintiff does not offer in the present litigation to reimburse or remunerate the defendant; he merely claims the entire sum realisable under the decree obtained by his agent against the third defendant. This demand is clearly untenable. The plaintiff might possibly have adopted the contract made by his agent and sued on it; but, if he did so, he was bound to adopt it cum onera or not at all. As was observed by Baron Wilde in Udell v. Atherton 7 H. & N. 172 at p. 184 : 126 R.R. 383 at p. 391; 392 : 30 L.J. Ex. 337 : 7 Jur. (N.S.) 777 : 4 L.T. (N.S.) 797: 'Whatever his previous authority to the agent, whatever his innocence, the principal must adopt the whole contract, including the statements and representations which induced it or repudiate the contract altogether.' To the same effect is the observation of Lord Cran worth in Bristow v. Whitmore 9 H.L.C. 391 at p. 404 : 31 L.J. Ch. 467 : 8 Jur. (N.S.) 291 : 4 L.T. 622 : 9 W.R. 621: 'Where a contract has been entered into by one man as agent for another the person on whose behalf it has been made cannot take the benefit of it without bearing its burden.' It was consequently open to the plaintiff, before the suit was brought by the first defendant, to have commenced an action himself for breach of contract against the third defendant. He might also have, as pointed out in Sadler v. Leigh 4 Camp. 185 at p. 195 : 2 Rose 286 intervened at any stage in the action which had been commenced by his agent. But, though, as found by the Courts below, he had full knowledge of the commencement and progress of the litigation by the first defendant against the third defendant, he did not adopt either of the courses open to him. The reason is obvious; if the first defendant had been unsuccessful, the plaintiff would have been free to urge, whether successfully or not it is immaterial to discuss, that he was not liable for the costs of the litigation. When that suit has successfully terminated, he turns round and contends that he is entitled to the benefit of the litigation, but does not offer to bear the burden of costs. The claim is so obviously unjust that no Court will seriously entertain it, and has only to be stated to be repudiated as wholly untenable.
3. The result is that this appeal is allowed, the decree of the Court below discharged and the suit dismissed; but we direct each party to bear his own costs throughout the litigation.