SOERTSZ J.—Appuhamy v. Mohamed Ally.
1938Present: Soertsz and de Kretser J J.
APPUHAMY v. MOHAMED ALLY et a!.
355—D. C. Colombo, 1,433.
Principal and agent—Purchase by agent on behalf of disclosed principal—-Action against both—Judgment against agent—Election—Action barredagainst the principal.
Where the first defendant purchased goods from the plaintiffs, asagent on behalf of the second defendant, the disclosed principal, and theplaintiffs obtained judgment against first defendant by consent,—
Held, that the plaintiffs must be deemed to have elected to proceedagainst the agent and cannot thereafter seek to obtain judgment againstthe second defendant as the other person liable on the contract.Bulatsinghala v. Samarasinha (14 N. L. R. 389) not followed.
^PPEAL from a judgment of the District Judge of Colombo.
N. Nadarajah (with him H. W. Thambiah), for second defendant,appellant.
P. Thiagarajah, for plaintiffs, respondents.
Cur. adv. vult.
March 9, 1938. Soertsz J.—
The plaintiffs- sued the defendants to recover a sum of Rs. 561.56 on acheque which the first defendant had drawn in favour of the seconddefendant and which, they said, the latter had endorsed and delivered tothem.
SOERTSZ J.—Appuliamy v. Mohamed Ally.
On November 12, 1936, the first defendant through his proctor moved“ to be allowed to pay the balance claim by monthly instalments of Rs. 20.”The claim was described as a balance claim in view of a payment of Rs. 120which the plaintiffs’ proctor moved to certify on November 10, 1936, as apayment made by the second defendant. Later developments make itclear that the second defendant did not pay this amount. It appears tohave been a piece of strategy directed against him. On December 4, 1936,decree was entered against the 1st defendant ordering him to pay to theplaintiffs Rs. 561.56 with interest and costs, but providing that if hehypothecated immovable property as security for. the balance claim due,he would be allowed to pay by monthly instalments of Rs. 100 commen-cing from January 1, 1937. The second defendant had not yet beenserved with summons. On March 3, 1937, substituted service of summonswas allowed on him, and that had the immediate effect of bringing himinto the open. On March 18, 1937, he appeared and obtained time tillApril 19, 1937, to file his answer,' and on that date he filed it. He deniedthat he had endorsed and delivered the cheque to the plaintiffs. Thenon May 21, 1937, the plaintiffs moved to amend their plaint. Thesecond defendant consented to this being done, and an amended plaintwas filed and the second defendant filed an amended answer. Theextraordinary feature of the amended plaint is that it sought to makeboth the first and the second defendants liable on the cheque, althoughthe plaintiffs had already obtained a decree against the first defendant onit. There is nothing on the record to show that the first defendant hadnotice of the amendment or that he knew that the plaintiffs were askingfor judgment against him a second time. At any rate he filed no answer.In the amended plaint, there was an alternative claim for goods sold anddelivered. The second defendant in his amended answer again deniedthat he had endorsed and delivered the cheque to the plaintiffs, and inTegard to the alternative claim, he pleaded that there were no dealingsbetween him and- the plaintiffs, and that no goods had been supplied tohim. On the first point the trial Judge held in his favour; on the secondhe found that the plaintiffs had supplied goods to the second defendantthrough the first defendant, his agent, and he entered decree orderinghim to pay Rs. 561.56 less Rs. 120 alleged to have been paid by him on'"November 10, 1936.
The only question rthat was discussed before us on appeal, was thatraised by issue No. 8, whether the plaintiffs can “ maintain this actionagainst the second defendant inasmuch as judgment had already beenentered against the first defendant ”.
In regard to this question the amended plaint makes it quite manifestthat ultimately both causes of action recited therein, arose out of thesame contract. The sum of Rs. 561.56 claimed in the alternative causeof action is the sum for which the cheque sued upon in the first cause ofaction was issued.
The evidence of the. plaintiffs’ kanakapulle establishes definitely thatthe plaintiffs supplied the goods to the first defendant, as the manager ofthe second defendant’s business. He says “ the. person who introducedthe first defendant to me was …. Ismailgee. I was told that
378SOERTSZ J.—Appuhamy v. Mohamed Ally.
the first defendant was the manager of the second defendant ….on the very first purchase I entered the second defendant’s name”, andagain later he says, “ my case is that the second defendant undertook topay This clearly means that the first defendant put himself forwardas the agent of the second defendant, and that the plaintiffs accepted himas such, and regarded the second defendant as the principal. The legalposition that results from these facts is that the second defendant wasliable to be sued as the disclosed principal. The agent too would havebeen liable if he had contracted personally, though on behalf of hisprincipal. See Reid v. Dreaper1. If an agent has not contracted person-ally he is not as a rule liable to be sued. There are a few exceptions, inwhich an agent may be sued even if he has not so contracted, but none ofthose exceptions apply in this case. If an agent purports to act on behalfof a principal when he had no authority to do so, he will be liable on hisimplied warranty for any loss caused to a third party even if the agentacted in the honest belief that he had the authority. See Cherry v.Colonial Bank1 and Brown v. haw ’. But if while professing to act as agenthe can be proved to have been in fact the principal and acting on hisown behalf, he is personally liable on the contract. See Adams v.Hall
Applying these principles to the case as disclosed by the' plaintiffs’kanakapulle’s evidence, and to the Judges finding that the first defendantpurchased goods from the plaintiff on behalf of the second defendantwhose name was disclosed to the plaintiffs, and that as a matter of fact,the second defendant was rightly disclosed as and was the principal, theposition in law is that it was the second defendant who was liable to besued. Certainly till the October 6, 1936, there is nothing to show thatthe first defendant had contracted personally in regard to these goods.But perhaps it can be said that when on. that date he gave the plaintiffsa cheque and that is in effect the finding of the trial Judge, that thecheque was given by him and not by the second defendant, although itwas made payable to the second defendant: and then endorsed as if bythe second defendant—he rendered himself personally liable on thiscontract of goods sold and delivered. There was also the liability of thesecond defendant as the disclosed principal.
In these circumstances the plaintiffs could have sued either the firstdefendant or the second defendant. But they brought their actionagainst both the defendants originally on the cheque. ' As I have alreadyobserved, although they were suing on the cheque, they were in reality,suing for the value of the goods sold and delivered. The cheque had beengiven in payment. When therefore the first defendant consented tojudgment’ and they took it against him they must be deemed to haveelected to look, to the agent alone. The “recovery of judgment againstone of the persons liable is the one- conclusive form of election ”. SeeRamanathan v. Ibrahim Lebbe ’. The plaintiffs cannot now seek to chargethe principal as the other person liable on the contract. See Priestly v.
L 'US(il) 30 /.. J E.r. 26S.■■ (160i) 72 L. T. 77!) H. L.- (woo) 38 /,.p. c. 4u p. r.• (ism 37 l. t. 70.
• 2) _Y. L. Ii. 321. nl 3:)3.
Crider v. Joonoos.
Femie and Kendall v. Hamilton In regard to thebase of Bulathsinghalav. Samarastnghe3, which was cited to us it is difficult to ascertain fromthe report the exact scope of that decision. If as the headnote indicates,the ruling in that case was that although an agent contracted on behalfof a principal who was in fact the principal, and did not make himselfpersonally liable, both the agent and the principal were liable and couldbe sued together, all I would say is that it can hardly be reconciled withother decisions of this Court and with English cases. Section 80 ofBoustead on agency which is relied upon in the judgment in that casedoes not seem to justify such a proposition.
In conclusion, I think I ought to say that the amendment proposedby the motion of May 21, 1937, should not have been allowed at thatstage of the case. So far as the first defendant was concerned, therewas a final judgment against him, and no amendment of pleadingswas possible thereafter. Section 93 of the Civil Procedure Code isquite clear.
I would set aside the judgment of the District Judge and dismiss theplaintiff’s action as against the second defendant. The second defendantis in great measure, responsible for these futile proceedings in the Courtbelow. He consented to the amendment of the plaint and acquiescedin the misjoinder that resulted. The parties will, therefore, bear theirown costs in the trial Court. The second defendant is however entitledto the costs of the appeal.
de Kretser J.—I agree.
APPUHAMY v. MOHAMED ALLY et al