SIVAGURUNATHA PILLAI Vs. PADMAVATHI AMMAL

JUDGEMENT

(1.) This appeal has been placed before a Full Bench of five judges as its decision calls for the settlement of a conflict which exists in the decisions of Koneti Naicker V/s. Gopala Aiyar and Satyanarayana V/s. Mallayya (1934) 68 M.L.J. 540 : I.L.R. 58 Mad. 735 (F.B.), each of which was decided by a Full Bench of three Judges of this Court. Stated broadly the question is whether the Court can look into the surrounding circumstances when deciding whether the maker of a promissory note has executed it as the agent or the representative of another. In Koneti Naicker v. Gopala Aiyar , the Court held that the surrounding circumstances could not be inquired into. The question of liability could only be decided on the reading of the instrument. In Satyanarayana V/s. Mallayya (1934) 68 M.L.J. 540 : I.L.R. 58 Mad. 735 (F.B.), it was, however, said that one could look 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 Reference, that the husband had authority to execute the promissory note in suit as the agent of his wife. The promissory note in suit reads as follows: Promissory note executed on the 24 November, 1932, in favour of Sivagurunatham Pillai, son of Ramanujam Pillai, residing in Thunisaramedu village, Chidambaram taluk, by me Srinivasam Pillai, son of Velayudham Pillai, the husband and agent under power-of-attorney of Padmavathi Ammal, daughter of Kuppusami Pillai, residing in Gunamangalam village, Chidambaram Taluk: As you have obtained an assignment on 1 January, 1930, of the promissory note executed by me on 11 December, 1929, for Rs. 3000 (Rupees three thousand) in favour of Therku Virudangan Ananta Pillai's son, Ramaswami Pillai, in respect of the debt due by Shanmugasundaram Pillai, my wife's junior paternal uncle, the amount of principal and interest due on the said promissory note is Rs. 3797-4-0 (Rupees three thousand seven hundred and ninety seven and annas four). As I have received this sum in manner stated above, I shall pay interest on the said sum at 15 annas percent per mensem from this day and pay you, or your order, on demand, the aggregate principal and interest and take back this document after endorsement of payment made thereon. V. Srinivasa Pillai.

(3.) It will be observed that while the signature of the maker is not followed by any words indicating the capacity in which he signed, in the first paragraph of the note he is described as the husband and agent under the power-of-attorney of his wife. The wife denied that her husband executed this promissory note as her agent and the husband maintained that he had. Holding that the husband had authority to sign for his wife and had executed this promissory note as her agent, the Subordinate Judge granted the appellant, who is the payee of the promissory note, a decree for the amount claimed. The District Judge, while concurring in the finding of the Subordinate Judge that the husband had authority from his wife to execute the promissory note and had in fact executed it as her agent, held that as the wording of the instrument did not exclude the husband's personal liability he was liable. Accordingly he granted a decree against the husband and dismissed the suit against the wife. The decree-holder has appealed and he asks for the restoration of the decree of the trial Court.