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MUTTAIYA CHETTY v. KAEUPAIYA KANKANI.
D. C., Colombo, 14,404.
Principal and agent—Power of attorney—Appointment of two persons to actjointly—Authority of one agent to bind hie principal by promissorynotes made by himself only—Personal introduction of agent by principalto creditor—Notice of existence of power of attorney—Duty of creditor.
Where a power of attorney appointed two persons to act jointly and)to sign promissory notes, and the principal personally introduced one ofhis agents to the plaintiff and requested the plaintiff to supply him withmoney and cloth, and in the course of such introduction disclosed to theplaintiff that such agent had been 'appointed by a written instrument,—
Held, in an action brought by the plaintiff against the principal, (1)
' • that under the power of attorney granted, one of the agents only couldnot bind the principal by promissory notes signed by himself alone; (2)that an authority to an agent to borrow money and purchase goods onbehalf of his .principal does not include an authority to sign promissorynotes; and (3) that as the plaintiff took the agent's promissory notes,after he was affected -with’ knowledge of the power of attorney, .withoutascertaining for himself whether or not the agent was given the powerto make promissory notes on behalf of the defendant, the plaintiff wasnot entitled to sue the defendant.
HIS was an action by the payee of four promissory notes againstthe defendant as the maker thereof.
The defendant denied that he made them. The notes appeared tohave been signed as follows: “ Vayi Kara Karapaiya Kankani, byhis attorney Suppaiya.” It was admitted that the notes were signedby Suppaiya; but it was contended that the power of attorneyunder which he purported to sign for the defendant was a jointone in favour of Suppaiya and Vellasamy, and that Suppaiya hadno authority to act alone.
The power of attorney set forth that,, as Karapaiya Kankani wasabout to leave the Island, he was desirous of appointing “ some fitand proper person as my attorney' to manage and transact allmy business and affairs in the said Island during my absence,”and it ran on as follows: “ I dd hereby appoint V. E. K. E. Vella-samy and V. E. K. E. Suppaiya my true and lawful attorney andattorneys in Ceylon during my absence therefrom to act for me
and on my behalf, &c; to purchase for me any estates
my said attorneys shall think fit and proper; to invest the
moneys belonging to me upon such security as my said attorneys
shall consider good and sufficientto sign, &c,, promissory
notes, and generally to perform all such other acts which my said
attorneys shall think necessary or proper to be done it
being my intent and desire that all matters and things respectingthe same shall be under the full management, control, and directionof my said attorneys.”
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The Acting District Judge (Mr. N. E. Cooke) found as follows:—
“ I do not think that the defendant would have questioned theauthority of Suppaiya to make and endorse the notes, but for thefact that he afterwards found that Suppaiya had misappropriatedmoneys raised on the notes. It appears that when the defendantleft for India he entrusted to Suppaiya and Vellasamy moneyand goods to the amount of about Bs. 30,000, and during hisabsence money and goods to the amount of about Bs. 30,000came into their hands; that hearing that Suppaiya was raisingmoneys largely he returned to the Island, and on looking intoSuppaiya’s account found that Bs. 3,000 was not accounted for.He prosecuted Suppaiya for misappropriating that sum. Suppaiyawas convicted, and he is now undergoing sentence.
“ As the defendant then claimed to be entitled to all moneysthat came into Suppaiya’s hands, he cannot now be allowed torepudiate the authority of Suppaiya to act alone- for him.
“ Judgment for the plaintiff for Bs. 2,033, with interest, will beentered.”
The defendant appealed.
Van Langenberg, for appellant.
H. J. C. Pereira, for respondent.
30th March, 1903. Layabd, C.J.—
The appellant in this case appeals against a judgment of theDistrict Judge, in which he was held that the promissory notessued on by the plaintiff were binding on defendant, although onlyexecuted by a certain Suppaiya, one of two attorneys appointedby the defendant.
The instrument appointing Suppaiya and another person attor-neys of the defendant in this case is similar to the one produced inD. C., Kandy, No. 14,376 (6 N. L. B. 385), in which we gave judg-ment to-day, holding that the authority given by such instrumentcould only be exercised jointly by the two attorneys appointedby it, and that they could not each of them act separately underit. In that case we followed the judgment of the CollectiveCourt, reported in 1 Lorenz, 108.
Following those decisions, Suppaiya had no authority, under thepower of attorney granted by defendant, by which he, acting alone,could bind the defendant by signing promissory notes on his behalf.
It is .however suggested by defendant’s counsel that thedefendant introduced Suppaiya to plaintiff before leaving theIsland, and asked plaintiff to lend Suppaiya money on his behalfand give him cloth whenever he asked for it. It is argued thatby this introduction the respondent held out that Suppaiya was
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1908. his sole attorney, and was authorized to sign promissory notes onMarch 30. behalf of the defendant. Assuming there was such an introduction,Latabd.C.J. and that the plaintiff’s evidence is true that the defendantinformed him that he had appointed Suppaiya his attorney, andthat the defendant asked the plaintiff to lend Suppaiya moneyand give him cloth whenever he demanded it, and told plaintiffthat he would settle accounts with plaintiff on his return fromIndia, the words alleged to have been used by the defendantdisclosed to the plaintiff that Suppaiya had been appointed hisattorney by some instrument or other, and the plaintiff hadtherefore notice of the existence of such an instrument, and oughtto have called upon Suppaiya to produce it before acceptingpromissory notes signed by him on defendant’s behalf. Even ifhe had not such notice, the words alleged by the plaintiff to havebeen used by the defendant did not disclose an authority toSuppaiya to sign negotiable instruments on behalf of the defendant,for an authority to an agent to borrow money and purchase goodson behalf of his principal does not include an authority to signpromissory notes on behalf of the principal. In the case of a loanof money the right to recover would expire in three years from thedate of the loan under the Prescription Ordinance, whilst an actionon a promissory note is not barred under that Ordinance until sixyears have elapsed from the date of the note. Further, a promissorynote, being a negotiable instrument, passes by endorsement anddelivery, and the defendant might be unable possibly to ascertainon his return from India into whose hands the promissory note hadcome. If the defendant had intended that Suppaiya should signpromissory notes on his behalf, he could not have added the words“ .1 will settle claims with you on my return,” because the liabilityto pay for money borrowed on a promissory note might havepassed to a third party other than the payee, if the payee hadendorsed the note and delivered it to the third party.
The respondent’s counsel has asked me to allow the plaint to' beamended by inserting therein counts for money lent and for goodssold and delivered, and to allow him the indulgence of a new trialto support the amended cause of action.. This is objected to bythe appellant’s counsel as coming too late. I do not. think that wewould be justified in appeal in allowing the amendment suggested.
In my opinion the judgment of the District Judge must be setaside and the plaintiff’s action dismissed with costs. The plain-tiff is reserved liberty to bring a fresh action for goods soldand money lent, should he be so advised. I desire to record,however, that at present there is nothing before me to show thathe could successfully establish such a claim.
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1 am of the same opinion. According to the plaintiff the represen-tation made by the defendant was that Suppaiya had authority toborrow money and buy goods,' but that such authority wascontained in a power of attorney. The plaintiff was thus affectedwith knowledge of that power of attorney, and it was his duty todo what is (as I believe) done by all prudent men engaged incommerce, ask for the production of the powej and ascertain forhimself whether Suppaiya had power to make promissory noteson the defendant’s behalf. If he had done so, he would havefound out, or at all events he ought to have found out, thatSuppaiya had no such power. I agree with the order made bythe Chief Justice.
I also agree, and would only add one word as to the thirdissue framed at the conclusion of the evidence. I am of opinionthere was no foundation for the contention that the plaintiffratified the acts of Suppaiya in making the promissory notes indefendant’s name. The defendant merely prosecuted him formisappropriating a sum of money which Suppaiya had in his ownaccount shown to be in his hands to defendant’s credit, and theaccount produced in the Police Court proceedings made noreference whatever to promissory notes.
MUTTAIYA CHETTY v.KARUPAIYA KANKANI