Kovvuri Basivi Reddi vs Poosarla Peda Tammanna and Others

This was a suit brought by the appellant upon a promissory note, Exhibit CC, which 12th respondent executed in his favor for Rupees 8094 and

annas 2 on the 17th June 1889. The promissory note recites that the amount was due for the price of 13 heaps of salt, which appellant had

engaged to deliver to 12th respondent. Respondents are merchants who traded in salt in 1887, 1888 and 1889 at Bimlipatam under the style of

P.P. Tammanna, Chilaka Sanyasi Nayadu and Co., and they had a branch establishment at Cocanada where 12th respondent carried on business

as their agent and managing partner. On the 18th April 1887 appellant agreed to sell and 12th respondent to buy for three years such salt as the

former might supply under the agreement SS.:- Appellant''s case was that the 13 heaps of salt now in dispute were sold and delivered by him to

12th respondent as the agent or managing partner at Cocanada of the other respondents, that the promissory note sued on was executed for its

price and that all the respondents were liable to pay it.

The 12th respondent admitted the claim and the Subordinate Judge passed a decree against him. No appeal has been preferred from this part of

his decision. Respondents Nos. 7, 9, 10 and 11 adjusted the claim against them by compromise during the progress of the suit in the court below

and whilst dealing with this appeal the question of their liability may be dismissed from further consideration.

The 1st, 2nd, 3rd, 5th, 6th and 8th respondents denied the partnership and the sale and alleged that the sale, if any, was for the individual use of

12th respondent who also carried on business at Cocanada on his own account and for his own benefit. They further contended that the suit was

the result of collusion between appellant and 12th respondent.

[Their Lordships examined the evidence as to the existence of a partnership among the respondents, and finding that the partnership had been

proved, proceeded as follows:]

Another question in the case was whether all the respondents can be made liable on the promissory note CC. Assuming that it was made and

accepted bond fide and that salt was supplied by appellant and received by 12th respondent as alleged, we agree with the Subordinate Judge that

appellant is not entitled to claim upon it a decree against all the respondents. As already observed, 12th respondent signed his own name on the

promissory note CC and did neither sign the name of the firm nor describe himself as a mere agent. It is a settled rule of law that on the one hand,

the agent is liable as principal where he does not sign a promissory note as mere agent, whilst on the other, his other partners are not liable to

appellant unless the name of the firm is signed. The fact that the promissory, note is made for partnership purposes will not render the partnership

liable to be sued on it and it was so held by the Court of Chancery, In re Adansonia Fibre Co., L. R 9 Ch 648. Lord Justice James lays down the

law on this point in these terms :--""Now it is the law of this country and it has alway been the law of this country, that nobody is liable upon a bill of

exchange unless his name, or the name of some partnership or body of persons, of which he is one, appears either on the face or ou the back of

the bill. That is the clear law of this country. It was decided in Nicholson v. Ricketts 2 E & E 497 if authority be required for such a proposition,

that an association which is absolutely without a name has no name by which it can draw, accept, or indorse bills of exchange. It was suggested,

and the argument appears to have prevailed with the Vice Chancellor, that where the members of such an association, or the firms constituting such

an association for the purposes of that association, draw or accept bill in their individual names or in the names of their partnerships, that for that

purpose, and for the purpose of doing equity, or of reaching the real principal, it might be assumed that the name of the partner upon the bill, or the

name of the partnership upon the bill, might be considered as being pro hac vice the name of the association. That, in my opinion, is a mere fictio

juris ; and although it used to be said in fictione juris consistit sequitas, I think that in these prosaic days, and in the old age of the court, we do not

indulge in those flights of imagination which our predecessors did."" It is not, therefore, possible to hold in the present case that 12th respondent''s

name on the promissory note CC represents the partnership whose name is not on it and that a suit can be founded upon it against all the other

members of the firm.

Such being the case, the next question is whether the suit can be sustained against the partnership upon the consideration for the promissory

note. Were it necessary upon the facts found by the Subordinate Judge to decide this question for the purposes of this appeal, we should hold that

the frame of the plaint was such as might admit of the present suit against the partnership being treated as a suit upon the consideration. The plaint

prays for a decree against all the respondents and refers both the promissory note and the sale and delivery of 13 heaps of salt as grounds of claim.

At the first hearing, issues ware framed as regards both and evidence has been adduced with reference to both. The substantial question is whether

the prornissory note was executed and the 13 heaps of salt were delivered for partnership purposes.

[Their lordships then dealt with other questions arising in the case and dismissed the appeal with costs.]