KULANDAIVELU PILLAI Vs. RAMASWAMI NAICKER

JUDGEMENT

(1.) The plaintiffs, here respondents sued the two defendants, and defendant being the petitioner in this Court for Rs. 400 in the following circumtsances: Plaintiffs, it is not disputed, owed 1 defendant Rs. 400 and, it is proved, paid it to 2nd defendant, 1 defendant's agent, as such. 2nd defendant however did not account to 1 defendant for the money, misappropriating it. Ist defendant then obtained a decree for it against plaintiffs who did not appear or plead discharge. On these facts the lower Court dismissed plaintiffs suit against 1st defendant, but gave a decree against 2nd defendant; and the question in this revision petition is whether it was right in law in doing so.

(2.) It is clear that, if it was not, plaintiffs will have paid what they owed twice. But that result cannot affect the decision because it is entailed, not by anything in the legal relation between the parties before me, plaintiffs and 2nd defendant, but by the failure of the former to take advantage in the previous suit against them of the plea of discharge, which was open to them. It was no doubt suggested on their behalf during hearing of this petition that they should now be allowed to make 1 defendant a party to it and claim a reversal of the lower court's decree in his favour. But it would have been useless to allow this in the absence of any possibility that their contention would succeed. The case must be dealt with as between them and 2nd defendant alone on the issue whether in the circumstances they are entitled to recover from him in consequence of his failure to account to his principal.

(3.) Under Section 233, Indian Contract Act, in cases; where an agent is personally liable a person dealing with him may hold either him or his principal or both of them liable. But it is not shown how under any provision of law or in virtue of any principle 2nd defendant was under any liability to plaintiffs in respect of the money received by him from them. This was the basis of the decision in Ellis V/s. Goulton (1893) 1 Q.B. 350 Lord Esher and Smith L.J. dealing with and rejecting seriatim the various heads of liability, which could conceivably be relied on; and so also, although the reasons are given more shortly, in Bamford v. Shultleworth (1840) 11 Ad. & El. 926 and Steppens V/s. Badcock (1832) 3 B & Ad. 354. Against these authorities plaintiffs have relied first on the dictum of Blackburn J. in Pollard. Bank of England (1871) 6 Q.B. 623 and Taylor V/s. Metropolitan Railway (1906) II K.B. 55 in which that dictum is quoted with approval. " Where money has been paid under a mistake of fact to an agent, it may be recovered back from him unless he has in the meantime paid it to his principal or done something equivalent to payment to him in which case the recourse is against the principal only. " But in the present case, as in Ellis V/s. Goulton (1893) 1 Q.B. 350 and the cases cited with it there was no question of mistake, and absence of any being referred to explicitly in Stephens V/s. Badcock (1832) 3 B & Ad. 354; and the two cases last referred to must be distinguished on that ground.