Annapurnamma v. U.

Akkayya and two others

Madras High Court

Year:1912
Bench Strength: 3

Facts:
A promissory note was executed by the first defendant in favour of the two
plaintiffs who were minors and the second defendant who was not a minor. The
suit was brought by the two plaintiffs more than 3 years after the promissory
note became payable.

Issues:
1. Was the second defendant entitled to give a valid discharge of the entire
debt without the concurrence of the two plaintiffs?

Sankaran Nair J.
Under section 45 of the Contract Act, unless the contrary intention appears
from the contract, the right to claim performance from the defendants rests, as
between him and the payees, with them during their joint lives, and, after the
death of any one of them, with the representative of such deceased person jointly
with the survivor or survivors, i.e., if both the plaintiffs dies, the right to claim the
money does not survive solely to the benefit of the second defendant, but
survives to the benefit of the second defendant and the representatives of the
two plaintiffs.
Under section 45 of the Contract Act, they are all bound to sue to recover the
entire debt or, if any one of them refuses to join as plaintiff, he is to be made a
defendant and the suit must be for the recovery of the entire debt. Section clearly
states that it is a joint claim and they must sue jointly.
Unable to agree with the decisions that hold that in India each payee must be
considered to be entitled to bring a separate suit for the recovery of his own
share.
S. 38 supports the same view. It states that ‘An offer to one of the several joint
promisees has the same legal consequence as an offer to all of them’ and under
the first clause, the promisor is not responsible for non-performance, if his offer
has not been accepted. The payment must be treated as a complete discharge.
The decision that one co-heir cannot give a discharge for the claim of the others
does not apply to this case.
The contract act allows payment to be made to one creditor.
If payment of the debt had been made to the second defendant, he was entitled to
receive such payment and it would be a valid discharge as against the plaintiffs.

Question is answered in the affirmative.

Sadasiva Ayyar J.
No valid reason exists for any distinction between the claims under a mortgage
bond and under a negotiable instrument so far as decision of the above question
is concerned. If in the case of a mortgage bond, in favour of several joint
mortgagees, on joint mortgagee can give a valid discharge binding on the others,
the right of a joint promisee under a negotiable instrument to give such a valid
discharge must stand on even a higher footing, the exigencies of trade requiring
greater protection to be given to those liable under a promissory note than to
those liable under a mortgage bond.

It may be that when money is advanced to one, by several persons jointly, each
of them authorizes the others by implication to act on his behalf and a release or
discharge therefore of the claim, by one, is binding upon the others. This gives
requisite protection to the promisor.

The law laid down in s.38 of the contract act seems to treat each joint
promisee as a partner or agent of the other joint promisees to accept tender, and,
of course payment after tender is accepted. A payment to one should therefore
be treated as having the legal effect of a payment to all. The question is thus
answered in the affirmative.

Decree of Lower court is reversed. Suit is dismissed as it is barred by limitation.

Appellant is entitled to costs throughout.