DESU RATTAMMA Vs. MOTHEY NARAYANA RAO AND ORS.

JUDGEMENT

(1.) THIS is an appeal filed by the plaintiff in O.S. No. 27 of 1942 on the file of the District Judge of West Godavari at Ellore against the judgment and decree of that Court dated 31st. March, 1944, in so far as it refused the plaintiff relief against the second defendant's share in the hypothecated properties. The short facts necessary for the disposal of the appeal are as follows.

(2.) THE first defendant borrowed Rs. 5,000 from the plaintiff on the 25th April, 1927, and executed a promissory note in her favour. The promissory note, Ex. P -3, stated that the sum was borrowed "for my benefit, i.e., for my business." This promissory note was renewed by another dated the 25th April, 1930, Ex. P -2, which was also for Rs. 5,000, the interest which accrued under Ex. P -3, having been paid from time to time. Ex. P -2 referred to Ex. P -3 as a promissory note previously executed and delivered "for my benefit," the maker of Ex. P -2 being again the first defendant. On the 25th August, 1931, the first defendant for himself and as guardian of the second defendant, his aurasa son whom he had given in adoption to his undivided paternal uncle, executed a deed of simple mortgage, Ex. P -1, for Rs. 5,700 made up of Rs. 5,639 -10 -0, being the principal and interest due under Ex. P -2 and a small cash advance of Rs. 60 -6 -0, hypothecating some of the family properties. The plaintiff filed the present suit for recovery of Rs. 10,000 after having given up Rs. 4,929 -13 -0 out of the amount of principal and interest due under Ex. P -1 on the date of suit. The principal contest was by the second defendant. It was alleged by him that he and the first defendant had ceased to be members of a joint Hindu family even before 1927, that the amount for which Ex. P -3 was executed was borrowed for a business started by the first defendant and that the first defendant could not give a valid mortgage of the second defendant's share in the family property for such a debt, assuming that the first and second defendants were members of a joint Hindu family in 1927 and 1931. The lower Court gave a decree to the plaintiff against the first defendant's share in the hypotheca but dismissed the suit as against the second defendant. It held that the first and second defendants were members of an undivided Hindu family in 1927 and 1931 but that the business for which the suit debt was borrowed was a new business started by the first defendant for which he could not as manager of a joint Hindu family create a valid mortgage over the share of the second defendant, a minor undivided coparcener.

(3.) IT may be stated at the outset that it is established by the eivdence of D. W. 1 and P, W. 3 that the amount of Rs. 5,000 was borrowed under Ex. P -3 principally, if not wholly, for a cashew -nut business which was being conducted under the name and style of American Indian Products Company. D.W. 1 deposes that this business was financed entirely by the first defendant, that the first defendant had four partners in it who were all working partners, one of them having his headquarters in America, that the head office was at Ellore with branches at Quilon, Cochin and Trichinopoly and that the business was started in 1924 and wound up in 1929 or 1930. We see no reason to discredit the evidence of D. W. 1 to the above extent. It is common ground that the business ended in a loss; but there is no acceptable evidence as to the extent of the loss or as to whether the business earned any profit in its early years.