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TMI Blog1940 (12) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... ok at all the surrounding circumstances in inferring the intention of the maker. 2. The appeal arises out of a suit filed by the appellant to recover the amount due on a promissory note of which he was the holder. The promissory note was executed by the second respondent, who is the husband of the first respondent. The first respondent had granted her husband a power-of-attorney, and it has been suggested on behalf of the first respondent that this power did not give him authority to execute a negotiable instrument on her behalf. The question of authority has been investigated by the Courts below and they have agreed that the second respondent was duly authorised to execute promissory notes on his wife's behalf. The promissory note in suit was a renewal of a previous promissory note, and the Subordinate Judge of Cuddalore who tried the suit and the District Judge of South Arcot on first appeal both held that the earlier promissory note was executed by the husband with the knowledge and at the instance of his wife. The husband was empowered under the power-of-attorney to discharge his wife's debts, and we concur in the finding, as Venkataramana Rao, J., did in his Order of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore examining the judgments in Koneti Naicker v. Gopala Aiyar (1913) 25 MLJ 425 and Satyanarayana v. Mallayya (1934) 68 M.L.J. 540 : I.L.R. 58 Mad. 735, I propose to state the relevant provisions of the Bills of Exchange Act, 1882 and the Negotiable Instruments Act, 1881, because the provisions of the two Acts with regard to the execution of a negotiable instrument by an agent are not the same, and English decisions may not always be in point. Section 23 of the Bills of Exchange Act is in these words: No person is liable as drawer, indorser, or acceptor, of a bill who has not signed it as such; Provided that: (i) where a person signs a bill in a trade or assumed name, he is liable as if he had signed it in his own name. (ii) The signature of the name of a firm is equivalent to the signature by the person so signing of the names of all persons liable as partners in that firm. 5. Section 26 reads as follows: Where a person signs a bill as drawer, indorser, or acceptor, and adds words to his signature, indicating that he signs for or on behalf of a principal, or in a representative character, he is not personally liable thereon; but the mere addition to his signature of words describ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it for another, or by procuration of another, which are words of exclusion? Unless he says plainly 'I am the mere scribe', he becomes liable....Every person, it is to be presumed, who takes a bill of the drawer, expects that his responsibility is to be pledged to its being accepted. Giving full effect to the circumstance that the plaintiff knew the defendant to be agent, still the defendant is liable like any other drawer who puts his name to a bill without denoting that he does it in the character of procurator. The defendant has not so done, and, therefore, has made himself liable. 8. When Lindus v. Melrose (1858) 3 H.N. 178 : 157 E.R. 434 was before the Court of Exchequer, Pollock, C.B., did say (1857) 2 H N. 296 : 157 E.R. 123 On reading the instrument as I have suggested, and looking to the surrounding circumstances, 1 entertain not the slightest doubt that in fact it was intended as the note of the Company. 9. But there is no indication that the surrounding circumstances were used to add to the instrument and when the case was before the Exchequer Chamber on appeal it is obvious that it was decided merely on an examination of the words of the note. 10. It has been arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, are admitted to the effect of qualifying, altering, or even inverting the relative liabilities which the law merchant would otherwise assign to them. 13. These remarks are confined to the parties who put their signatures upon the instrument. In that case the directors of a Company agreed with each other to become sureties to the bank for the same debts of the Company and as the result of this agreement successively indorsed three promissory notes to the Company. It was held that they were entitled and liable to equal contribution inter se. The rule stated by Lord Watson-in that case obviously does not apply in the present case. The appellant has not signed the promissory note, he is merely the payee and the question is whether the maker or a third party, whose signature does not appear on the instrument, is liable. 14. In Macdonald Co. v. Nash Co. (1924) 2 A.C. 625 the position was this. The appellants sold 19,000 cases of tinned soup, but as the buyers were unable to find the money they applied for financial assistance to the respondents, who undertook as between themselves and the buyers to find 75 per cent. of the purchase price. The appellants, the respondents and the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of the execution of this hundi, please pay to Seth Sadsuk Janki Das Sahu of the Residency Bazaars or to his order the sum of H.S. Rs. 2,500 (half of which is Rs. 1,250) which sum I have received in cash in the Residency Bazaars from the said Seth Sahib. Dated 3rd Rabi-us-sani, 1328-H (14th April, 1910) Mohan Lal (In Urdu) Acting Superintendent of the Private Treasury of His Excellency Sir Maharajah, the Prime Minister of H. H. the Nizam. (on the back) This hundi has been accepted by Mohan Lal, son of Hira Lal, in favour of Seth Sadsuk Janki Das, inhabitant of the Residency Bazaars, Hyderabad. Dated 3rd Rabi-us-sani, 1328 Hijiri, 16. The question was whether Mohan Lal or the Maharaja was liable. The Privy Council held that the liability rested with Mohan Lal and not with the Maharaja. In delivering the judgment of the Board, Lord Buckmaster said: It is of the utmost importance that the name of a person or firm to be charged upon a negotiable document should be clearly stated on the face or on the back of the document, so that the responsibility is made plain and can be instantly recognised as the document passes from hand to hand. In this case the preliminary words mention no mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Police Station Lane, Madura Town, by R. P. Koneti Nayudu Garu, son of Nanjundappa Naidu Garu agent holding power-of-attorney from the Zarnindar Dorai Rajah Avergal and residing in Vellikurichi village, Manamadura Taluk, Madura District. Amount due to you including principal and interest up-to-date upon settlement of account of dealings which was standing against the name of Rani Chekkani Ammal on cloths, etc., having been purchased ere this for the Vellikurichi palace is Rs. 694-6-0. On demand, I promise to pay this sum of Rupees Six hundred and ninetyfour and annas six with interest at Rs. 5-8-0 per cent. per mensem from this date either to you or order and shall take this back with the endorsement of payment thereon. (Signed) R. P. Koneti Nayudu. 20. It will be observed that after stating that he is the son of Nanjundappa Naidu the maker of the note adds he is the 'agent, holding power-of-attorney from the Zamindar Dorai Rajah Avergal.' The note has very much in common with the note now in suit. The question there was whether R. P. Koneti Naidu was personally liable or whether he had executed the promissory note as the agent of the Zamindar. Sundara Aiyar, J., considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the manner of expression the maker would ordinarily use. 23. Sadasiva Aiyar, J., considered that the maker of a negotiable instrument would be personally liable unless in signing he indicated that he was signing as an agent or had expressly excluded his personal liability in the body of the note. He observed: Why should a holder of a negotiable instrument be driven to make inquiries whether a man who puts his unequivocal signature to it is really an agent of some other person as he described himself in the body or whether he had authority to bind that principal? The very object of the law merchant might be defeated if, when the executant does not choose expressly to repudiate his own personal liability to the holder (whoever he may be) according to the law merchant, he should be allowed to spell out an implied non-liability on his part by involved arguments and by appeals to the negligent practices of people in the mofussil. 24. All the members of the Full Bench read the promissory note in the way it was read by Sadasiva Aiyar, J., although Ayling, J., observed that the question was not free from doubt. White, C.J., said that he did not attach importance to the variation of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anslations of vernacular documents which have come before this Court to realize that to give a fair translation words in English have often to be added, and both my learned brothers Somayya and Patanjali Sastri, JJ., inform me that a Tamilian who wished to indicate that he was signing on behalf of his principal might aptly use the language found in the promissory note in suit and that a Tamilian would read it as an instrument signed by the maker on behalf of his principal. I do not suggest that a document in Tamil or any-other language spoken in India should not be given the meaning which the words used ordinarily imply, but in deciding their implication I agree with Sundara Aiyar, J., that one must put oneself in the position of the writer so far as the language used is concerned. In this country when a person is describing who he is he gives his father's name and says that he is his son. When in a document such as we have here the person after giving his own description adds that he is the agent of another it means that he is acting as the other's agent in the matter of the execution of the document. 27. In this case I consider that it is beyond reasonable doubt that when ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad. 735, I wish to add that to the best of my recollection the question of the propriety of looking into surrounding circumstances was not raised then. Those circumstances were assumed, as constituting the background of facts upon which the case had to be decided. Now that I have had the advantage of hearing that matter fully argued, I agree that in that respect our decision was wrong. Somayya, J. 32. I agree with the judgment just delivered by my Lord the Chief Justice. I only wish to add that I entirely agree with the observations of my brother Patanjali Sastri, J., as to the mode in which promissory notes and other documents are drafted in this country to indicate that the executant excludes his personal liability and that he is executing the document for another. M. Patanjali Sastri, J. 33. I agree with my Lord the Chief Justice whose judgment I have had the advantage of reading, and would only add that the appending of the words 'agent under power-of-attorney of etc.,' to the name of the executant is a well-known form commonly employed in Tamil documents to indicate execution in a representative capacity and exclusion of personal responsibility. The words are almost in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... romissory notes are not only common among the commercial community in the cities but are popular among the large agricultural community in the mofussil on account of the low stamp duty to which they are subject, and it is to the interest of these communities that no doubts should be thrown on the generally accepted meaning of these words as excluding personal liability on the part of the signatory. 35. Mr. Venkatesa Aiyar placed reliance on the wording of Section 28 as sanctioning the application of the English rule in this country also. He pointed out that the section begins with the words 'an agent' and not 'a person; thereby indicating that even if the instrument purports to be executed by a person as an agent, that is not sufficient to exclude personal liability. But there is no warrant for supposing that the section presupposes instruments purporting to be executed by an agent as such. All that it means is that a person who is in fact an agent but signs his name without indicating on the instrument that he signs as agent or that he does not intend thereby to incur personal responsibility, is liable as a principal--Cf. Section 231 of the Indian Contract Act where th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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