BHAGIRATH SAMANTA Vs. PREM CHAND PAL

JUDGEMENT

(1.) This is an appeal on behalf of the first defendant in a suit brought against him for accounts as an agent. The first defendant and the grandfather of the second defendant, on the 19th March 1888, executed a registered kabuliyat in favour of the plaintiffs by which they undertook to act as gomashtas for collection of rent and jointly promised to carry on the work. The agency continued for many years, till the appellant was discharged on the 11th June 1905. On the 27th May 1909, the plaintiffs commenced the present action. The claim was resisted on various grounds amongst which it is necessary to mention, for our present purpose, only one, namely, the plea of limitation. This was overruled by the Court of first instance and a decree made against the appellant, directing him to render accounts from the 14th September 1902 to the date of the termination of the agency. Upon appeal, that decision has been confirmed by the District Judge. On the present appeal, it has been contended that the claim is barred by limitation under either Article 89 or Article 115 of the second Schedule of the Limitation Act.

(2.) Article 89 provides that a suit by a principal against his agent for moveable properties received by the latter and not accounted for, must be brought within three years from the date when the agency terminates. Article 115, on the other hand, provides that a suit for compensation for the breach of any contract, express or implied, not in writing registered and not specially provided in the Limitation Act, must be brought within three years from the date when the contract is broken, or (where there are successive breaches) when the breach in respect of which the suit is instituted occurs, or when the breach is continuing, when it ceases. In the case before us, the contract was registered and, therefore, if the claim is founded on a breach of the registered contract, the rule applicable is to be found in Article 116, which provides that a suit for compensation for the breach of a contract in writing registered must be brought within six years from the date when the period of limitation would begin to run against a suit brought on a similar contract not registered. But the appellant contends that Article 116 is not applicable because the contract of agency, as embodied in the registered instrument, terminated upon the death of his co-agent, and that his own service thereafter as an agent must be deemed to have been under a new contract of agency not embodied in a written and registered instrument; in this view, the Article applicable would be either 89 or 115. The question accordingly arises, whether upon the death of one of the two persons, who were appointed agents by the instrument of the 19th March 1838, the agency terminated only as regards that individual or whether it terminated in its entirety.

(3.) On behalf of the appellants, it has been broadly contended that a joint agency determines in its entirety by the death of any one of the joint agents. This proposition is supported by the statement of law as contained in Lord Halsbury s Laws of England (Vol. I, Section 490). But, in our opinion, that proposition, when analysed, is found to be in applicable to the circumstances of the present case. The decision, to which reference is made in support of that proposition, is the case of Friend In re Friend v. Friend (1897) 2 Ch. 421 : 66 L.J. Ch. 737 : 77 L.T. 50 : 46 W.R. 139. In that case, a firm had been appointed to act as agents; it was held that upon the death of one of the partners, even before the expiration of the fixed period for which the agency had been made, the entire contract of agency terminated. This decision was based on the principle that as upon the death of one of the partners, the partnership terminated, the authority of any one of the partners to exercise the authority conferred by the contract of agency upon the firm, became incapable of performance by any individual member of the firm which had been dissolved See also Tasker v. Shepherd (1861) 6 H.L.N. 575 : 30 L.J. Ex. 207 : 4 L.T. 19 : 9 W.R. 476 : 123 R.R. 697; Phillips v. Alhambra (1901) 1 K.B. 597 : 70 L.J.K.B. 26 : 49 W.R. 223 : 83 L.T. 431 : 17 T.L.R. 40. That principle clearly is not applicable to the case before us. Section 43 of the Indian Contract Act provides that when two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel any one or more of such joint promisors to perform the whole of the promise. This is, as was pointed out in the case of Lukmidas Khimji v. Purshotam Haridas 6 B. 700 at p. 701 a departure from the rule of the English Common Law. In fact, as was stated in the case of Motilal Bechardas v. Ghellabhai Hariram 17 B. 6 at p. 11 the effect of the section is in so far as the liability under a contract is concerned, to make all joint contracts joint and several. This is illustrated further by the rule contain-ed in Section 44 which describes the effect of release of one of the joint promisors: It is laid down there, contrary to the principles of the English Law that where two or more persons have made a joint promise, a release of one of such joint promisors by the promisee does not discharge the other joint promisor or joint promisors, neither does it free the joint promisor so released from responsibility to the other joint promisor or joint promisors. The question therefore, arises, whether, when there are two joint agents and one of them dies, upon his death, the contract of agency terminates not only so far as he is concerned but also in respect of the surviving agent. If the principle underlying Section 44 is kept in view, it becomes clear that there is no reason why the agency should terminate as regards the surviving agent. Much reliance, however, was placed on behalf of the appellant upon Sections 42 and 201 of the Indian Contract Act and it was suggested that Section 201 controls Section 42. That may be conceded; but neither section is of any real assistance to the appellant. Section 42 provides that when two or more persons have made a joint promise then, unless a contrary intention appears by the contract, all such persons, during their joint lives and after the death of any of them, his representatives jointly with the survivor or survivors, and after the death of the last survivor, the representatives of all jointly, must fulfil the promise. If this had stood alone, uncontroled by Section 201, the result might have followed that upon the death of one of two joint agents, his representative became liable under the contract of agency along with the surviving agent. But Section 201 provides that an agency is terminated by the death of either the principal or the agent. This only justifies an inference that upon the death of one of two joint agents, the agency terminates so far as he is concerned; but does not justify the conclusion sought to be drawn by the appellant that the agency terminates even in so far as the surviving agent is concerned. In our opinion, that contention is opposed to the principle which underlies the first paragraph of Section 43 of the Indian Contract Act. The principle applicable to a case of this character is lucidly stated by Story in his classical work on Agency (Sections, 42, 43 and 44). It is there pointed out that if the agency is strictly a joint agency, that is, if it is the intention of the parties that the work of the agency must be done jointly by all the agents acting together and not individually, the work must be done by all of them jointly, and, consequently, upon the death of one of such agents, as the agency can no longer be carried out in the manner intended by the parties, it must be presumed to have terminated. If, on the other hand, the agency, described as a joint agency, is in reality a joint and several agency, there is no reason on principle why the death of one of the agents should involve the termination of the agency in so far as the surviving agent is concerned. Where authority is conferred on two or more agents, under the English Law, it is understood to be a joint agency, and the powers must be exercised by all of them. Where such is the case, the death of one of them terminates the authority of the others; for they can exercise the power only jointly and the death of one of them, makes it impossible for the others to do so, unless, indeed, there is a subsequent recognition of them as agent by the principal, but that is, in effect, a new appointment. Where, however, the agency is joint and several, the same rule cannot apply, and the death of one of the agents does not terminate the entire agency. In this country, in view of the provisions of Section 43 of the Indian Contract Act, we must hold that the presumption is that the agency is joint and several; and that conclusion is fortified by the terms of the contract in this particular case. It expressly provides that rents can be collected by the agents acting jointly or individually, and it proceeds to lay down that receipts granted to tenants duly signed by both or one of the agents will be a sufficient discharge although each of the agents will be liable for the sums collected by the other. The intention of the principal as also of the agents was that each of the agents would have authority to execute the contract of agency but that each made himself a surety for the other. In a case of this description, we are clearly of opinion that the death of one of the agents does not terminate the agency in so far as the other is concerned. Consequently, the defendant is still liable under the original registered contract executed on the 19th March 1888, and not under any implied oral contract of agency subsequent to the death of his co-agent. The rule of limitation applicable to the present case is consequently that provided, in Article 116 of the 2nd Schedule of the Indian Limitation Act. There is no suggestion that if Article 116 be held applicable, the suit is open to objection on the ground of limitation.