BOLISETTI SUNDARAM Vs. KANUPARTHI VENKATAPPADASU

JUDGEMENT

(1.) The petitioners were plaintiffs in a small cause suit based on a promissory note, Ex. A, dated 25 March, 1933, for a sum of Rs. 167-12-9. The promissory note reads as if it were a joint promissory note by the first and the second defendants. But it is found that it was not executed by the second defendant though it was executed by the first defendant. What happened was that the two defendants went to the plaintiffs and asked them to write a promissory note in renewal of two earlier promissory notes, the major note being Ex. C, a joint bond executed by both the first and second defendants, the lesser one being Ex. B a promissory note by the first defendant alone. While the suit note was being written the second defendant went away. The scribe wrote at the foot of the note the description of the second defendant as the person who affixed his mark, but no mark or thumb print was in fact taken from the second defendant. The first defendant executed the promissory note and he did not defend the suit nor has he appeared to oppose this revision, petition. The lower Court found that as the note was intended to be a joint note and was not executed by one of the joint promisors, there was no completed contract and the suit had to be dismissed as against both the defendants. In revision, it is contended that both the defendants are liable.

(2.) The case with reference to the second defendant is simple. It is based on the decision of a bench of this Court in Balayya V/s. Subbayya (1917) I.L.R. 40 Mad. 1171, which held that when a party to a promissory note authorised the scribe to affix his mark and under that authority the scribe wrote words indicating that the promisor was the person who affixed the mark, but did not actually put any mark, there was a sufficient execution by the agent of the promisor to bind him. It seems to me that there are no such facts in the present case. There is No. evidence that the second defendant authorised any one to affix his mark; all that we have is evidence that he promised to execute the note and; went away without doing so. There was no execution either by him Or by a person authorised to execute on his behalf. Clearly, therefore, the decision of the lower Court so far as the second defendant is concerned is correct.

(3.) The position with reference to the first defendant is not so-clear and there is a good deal of rather conflicting case-law on the subject. Most of thecases decided by the Indian Courts have references to Section 87 of the Negotiable Instruments Act and are cases in which when one person has signed a bond, the signature of the other person is forged on that bond either with or without the connivance of the actual executant. We are not here concerned with any alteration of the instrument or any forgery of the signature of the second defendant. The simple position is this: When there is a promissory note purporting to be a joint promissory note of A and B and A alone executes and delivers that note and B fails to execute it, is the note binding on A, when there is no evidence one way or the other whether or not A executed only on the faith that B would also execute. It is, I think, well established that when A executes a bond on the faith that B will also execute it and that B fails to do so, B has an equity in his favour relieving him from a liability which he never intended to undertake. But it seems also to be settled that if A signed the bond without any regard to the question whether B signed it or not and if he delivered it as his bond, he is liable thereon, even though B did not sign. The English cases do to some extent distinguish between a deed and a simple contract. Seeing that under Section 46 of the Negotiable Instruments Act the making of a promissory note is completed by delivery, it is difficult to see how a person who signs and delivers a negotiable instrument is in any better position than a person who signs, seals and delivers a deed. The instrument is in law the instrument of the maker, unless he can establish any equity whereby it should not be enforced against him. It seems to be settled that the question whether a particular instrument was signed by one of the parties on the faith, that the other would also sign is a question of fact. Vide Latch V/s. Wedlake and Lewis Thomas (1840) 11 Ad. & 959 : 113 E.R. 678. Is this question of fact one which must be proved by the plaintiff who seeks to impose liability upon the actual executant or is it a ground of defence which must be established by the person who has signed the instrument. The latter view seems to be a correct view. It is true that Jessel, M.R., has stated in the case of Luke V/s. South Kensington Hotel Co. (1879) 11 Ch. D. 121 at 125, that: It is well settled that if two persons execute a deed on the faith that a third will do so, and that is known to the other parties to the deed, the deed does not bind in equity if the third refuses to execute.