FERGUSON Vs. UM CHAND BOID

JUDGEMENT

(1.) These two appeals arise out of two similar suits which were tried by the Subordinate Judge of Rajshahi. Both the suits were brought by money-lenders against Ferguson of Berhampore on account of suing of money, which had been lent to Moore, who was Ferguson's Manager at the Seroil Silk Factory in Rajshahi. In appeal No. 197 Um Chand Boid sued for Rs. 7,000, which he had lent to Moore on a hand note on the 20 February 1901, at 1 per cent, interest, and in appeal No. 389, Harak Chand and others sued for the balance of Rs. 5,000, which they had lent to Moore, on a hand note on the 16 February 1901, at one per cent. interest. In the former case, the hand note states that Moore borrowed Rs. 7,000 as Attorney for Ferguson and in the latter case, the hand note states that Ferguson borrowed Rs. 5,000 through his attorney and manager, Moore. The suits have been brought against both Ferguson and Moore, but only Ferguson contested them. The Subordinate Judge has decreed the claims against Ferguson only and he has appealed.

(2.) The questions for determination are: First, whether Moore had authority, express or implied, to borrow: secondly, was the money really lent to Ferguson or to Moore; and, thirdly, is Ferguson liable for these loans?

(3.) With regard to the first question, it is not disputed that Moore had no written authority to borrow, because the power of attorney, which Ferguson executed in his name, gave no such authority; but it is contended that Moore had by reason of his position authority to" borrow. The evidence shows that the managers under Ferguson, who has eighteen silk factories, had no general authority to borrow locally. Such authority was not given to them, because Ferguson himself (as he deposes) decided the time, when cocoons had to be bought and he gave no discretion to his managers in that respect. When they wanted money for such purpose he either sent them the money direct from Berhampcre in notes, or he had the money sent in notes from his agents in Calcutta. Local borrowing was altogether , objectionable, because money was obtained locally at 12 per cent, interest, while Ferguson could get as much money as he wanted from his Calcutta agents at 5 per cent. Secs.187 and 188 of the Contract Act have been relied on by the plaintiffs, and they would no doubt authorize a manager to borrow, if necessary; but such general provisions are subject to modifications in particular cases, and in this case, they were so modified, for the managers had been allowed no power to borrow. Something has been urged that there was a custom that managers might borrow, but there is no evidence in this respect except in a few particular cases, which occurred in another factory belonging to other people.