The plaintiff also relied upon certain printed circulars, Exhibit C series, purporting to have been sent by defendants' mother to all the customers of the business, asking them to continue to patronise the business as usual. But I am rather doubtful, in the absence of any evidence to show that these circulars were issued under her instructions, whether they are admissible in evidence against the defendants. There is no doubt evidence to show that Muthiah Chetti gave orders to the printer in her name to print the circulars. But he cannot bind her by his acts to a larger extent than he was empowered to do under the power-of-attorney. If the power-of-attorney does not give him, power to carry on the business except with limitations, the issuing of the circular in her name, in which circular it is recited that he has been given power to continue the business without reservation, cannot bind the defendants. However, whether Exhibit C series are admissible or not, I think (as I said before) that the power-of-attorney itself does indicate that she had resolved upon carrying on the business as usual and gave her agents power to, so carry on the business.
1. The two minor defendants in Appeal No. 139 of 1916 are the 2nd and 3rd defendants in the connected Appeal No. 275 of 1916. The 1st defendant in the suit (Original Suit No. 6 of 1916) out of which the latter Appeal No. 275 of 1916 has arisen, is the mother of the two principal defendants who are the sons of one Kannusami Chetti and the younger brothers of one Tirumudi Chetti. Tirumudi Chetti died on the 7th July 1911 having carried on trade in arecanuts for about two years before his death. The trade had been carried on on a pretty expensive scale and he owed moneys to numerous customers. But he also left stock in trade of the value of about five or six thousand rupees according to the evidence. The probabilities are that there were also outstandings due to him in the business when he died suddenly of cholera, but as the defendants have not produced their trade accounts, it is impossible to state what sums were then really due to the business In the power of-attorney, Exhibit A, executed by the mother, she clearly admits that there were outstandings to be collected due to the business. On Tirumudi's death on 7th July 1911, the minors' mother thought it best in the interests of her sons to continue to carry on the business on their behalf and she executed in favour of her brother Muthiah Chetti (who had been assisting Tirumudi Chetti during the latter's lifetime in the management of the arecanut business) and also in favour of her sister's husband Subramania Chetti, empowering them to carry on the business. The business was so carried on till about the end of 1914.
2. The two suits before us have been filed by two of the creditors of the defendants' business to recover the amounts due to them from the joint family properties belonging to the minor defendants. In the second suit, Original Suit No. 6 of 1916, the defendant, the mother, is also sought to be made liable as she had personally undertaken to be liable for the balance that may be found due to the plaintiff in that suit. The Subordinate Judge decreed the suits against the minor defendants, in the first suit to the extent of the joint family assets and against them similarly as defendants Nos. 2 and 3 in the second suit, as also against their mother the 1st defendant in that suit personally. Hence these appeals.
3. The questions for consideration are, (1) whether Tirumudi Chetti carried on the arecanut business as manager of the joint Hindu family consisting of himself of his minor brothers, whether he had power under the Hindu Law to so carry on the business to the benefit of his brothers also and whether they are bound by the liabilities incurred by him to the extent of their assets in all their joint family properties; (2) whether the mother was entitled to continue the business so as to bind the minors with liabilities; (3) whether the power-of-attorney, Exhibit A, authorised her brother and her brother-in-law to continue the business without any reservations, or whether their authority extended only to such acts as were necessary for the winding up of the business carried on by Tirumudi.
4. As regards the first point, I think that as the family of the defendants belong to a caste whose caste calling is trade in betel and arecanuts and as the father (who had, it is proved, earned moneys by trade in foreign countries) had left properties which were inherited by his sons, Tirumudi Chetti the eldest son, who according to the Hindu Law stands in many respects in the position of a father towards his younger brothers, was justified in taking up the caste calling for the benefit of the family as soon as he came of age. And he seems to have done so with the permission and Under the advice' of his mother and his mother's brother. There is nothing to show that it was wholly imprudent to embark on that business, arid so far as I could gather from the evidence and the recitals in the power-of-attorney, it was a proper business for Tirumudi Chetti to have embarked upon.
5. Then as to its being proper to further carry on the business, the mother had evidently the advice of her brother and her sister's husband whom one would naturally expect to be the persons best fitted to give such advice and I am, therefore, of opinion that her resolve to continue the business as the best thing to do in the interests of her minor sons after Tirumudi's death is binding on the minors.
6. Then the next question is whether she intended merely to give those two male relations of hers the power to do only those acts which were required for winding up the business (that is to sell the stock in hand, collect the outstandings and pay the debts) or whether she gave them power to carry on the business as usual (by purchasing the stock required from time to time for the business to be carried on and continuing the trade in the manner in which it has been carried on before). The power-of-attorney was executed about eight days after Tirumudi's death. It does not restrict the powers of the agents in carrying on the business. It expressly provides for the business being carried on thereafter under the style of Tirumudi Chetti and Brothers instead of in the name of Tirumudi Chetti alone, and though it also states that owing to her inability by reason of her sex to collect the outstandings and to pay the debts, she is obliged to give this power-of-attorney, I think, reading the document as a whole, that it contemplates the old business to be carried on as usual, with an addition to the style to show that her minor sons have an interest in and are intended to be benefited by the business.
7. The plaintiff also relied upon certain printed circulars, Exhibit C series, purporting to have been sent by defendants' mother to all the customers of the business, asking them to continue to patronise the business as usual. But I am rather doubtful, in the absence of any evidence to show that these circulars were issued under her instructions, whether they are admissible in evidence against the defendants. There is no doubt evidence to show that Muthiah Chetti gave orders to the printer in her name to print the circulars. But he cannot bind her by his acts to a larger extent than he was empowered to do under the power-of-attorney. If the power-of-attorney does not give him, power to carry on the business except with limitations, the issuing of the circular in her name, in which circular it is recited that he has been given power to continue the business without reservation, cannot bind the defendants. However, whether Exhibit C series are admissible or not, I think (as I said before) that the power-of-attorney itself does indicate that she had resolved upon carrying on the business as usual and gave her agents power to, so carry on the business.
8. Then the last question that remains is, whether the minors are liable only to the extent of the assets embarked in the arecanut business or to the extent of all the joint family properties which belonged to them and to Tirumudi Chetti. The question as above formulated implies that it was some definite amount taken out of the whole of the joint family properties which had been invested in the business by Tirumudi Chetti. There is nothing to indicate that it was so, and I think that the ordinary presumption in the case of a trading caste or family is that the entire family credit and all the joint family properties are embarked in the business. There are no doubt certain observations, which are rather in the nature of obiter dicta, found in the judgment of one of the learned Judges who decided the case of Sanka Krishnamurthi v. Bank of Burma, Ld. 11 Ind. Cas. 79 : 14 Ind. Cas. 389 : 35 M. 692 : 21 M.L. J. 620 : (1911) 1 M. W. N. 385 : 11 M. L. T. 56. which observations lend support to the idea that the assets directly involved in the business carried On by the managing member of a Hindu family, in which there are minors, can alone be proceeded against so far as the minor members' liability for the trade debts is concerned. But the question whether in an ordinary Hindu trading family the presumption is not that all the joint family assets are involved even as regards minor members was not considered in that case, and as I said before it was unnecessary to consider that question for the purpose of deciding that case. There is another considered later decision in Muthaya Pillai v. Tinnevelly South India Bank Ltd. 37 Ind. Cas. 230 : 5 L. W. 341. and I respectfully agree with the observations therein, which establish that the whole of the joint family properties are liable for the joint family trade debts, which cannot be, on principle, distinguished from any other joint family debts. That for all ordinary joint family debts the whole of the family properties could be proceeded against in execution cannot be disputed. Mr. Madhavan Nair sought to make some distinction between an ancestral trade carried on by a father and a joint family trade begun for the first time either by the father or by the elder brother. I do not think that on principle any such distinction can be made so far as this question is concerned.
9. In the result I would dismiss the appeals with costs.
Madras High Court
Malaiperumal Chettiar, Minor, ... vs Arunaohalla Chettiar, By His ... on 22 March, 1917
Equivalent citations: 41 Ind Cas 224
Bench: W Ayling, S Aiyar
1. The two minor defendants in Appeal No. 139 of 1916 are the 2nd and 3rd defendants in the connected Appeal No. 275 of 1916. The 1st defendant in the suit (Original Suit No. 6 of 1916) out of which the latter Appeal No. 275 of 1916 has arisen, is the mother of the two principal defendants who are the sons of one Kannusami Chetti and the younger brothers of one Tirumudi Chetti. Tirumudi Chetti died on the 7th July 1911 having carried on trade in arecanuts for about two years before his death. The trade had been carried on on a pretty expensive scale and he owed moneys to numerous customers. But he also left stock in trade of the value of about five or six thousand rupees according to the evidence. The probabilities are that there were also outstandings due to him in the business when he died suddenly of cholera, but as the defendants have not produced their trade accounts, it is impossible to state what sums were then really due to the business In the power of-attorney, Exhibit A, executed by the mother, she clearly admits that there were outstandings to be collected due to the business. On Tirumudi's death on 7th July 1911, the minors' mother thought it best in the interests of her sons to continue to carry on the business on their behalf and she executed in favour of her brother Muthiah Chetti (who had been assisting Tirumudi Chetti during the latter's lifetime in the management of the arecanut business) and also in favour of her sister's husband Subramania Chetti, empowering them to carry on the business. The business was so carried on till about the end of 1914.
2. The two suits before us have been filed by two of the creditors of the defendants' business to recover the amounts due to them from the joint family properties belonging to the minor defendants. In the second suit, Original Suit No. 6 of 1916, the defendant, the mother, is also sought to be made liable as she had personally undertaken to be liable for the balance that may be found due to the plaintiff in that suit. The Subordinate Judge decreed the suits against the minor defendants, in the first suit to the extent of the joint family assets and against them similarly as defendants Nos. 2 and 3 in the second suit, as also against their mother the 1st defendant in that suit personally. Hence these appeals.
3. The questions for consideration are, (1) whether Tirumudi Chetti carried on the arecanut business as manager of the joint Hindu family consisting of himself of his minor brothers, whether he had power under the Hindu Law to so carry on the business to the benefit of his brothers also and whether they are bound by the liabilities incurred by him to the extent of their assets in all their joint family properties; (2) whether the mother was entitled to continue the business so as to bind the minors with liabilities; (3) whether the power-of-attorney, Exhibit A, authorised her brother and her brother-in-law to continue the business without any reservations, or whether their authority extended only to such acts as were necessary for the winding up of the business carried on by Tirumudi.
4. As regards the first point, I think that as the family of the defendants belong to a caste whose caste calling is trade in betel and arecanuts and as the father (who had, it is proved, earned moneys by trade in foreign countries) had left properties which were inherited by his sons, Tirumudi Chetti the eldest son, who according to the Hindu Law stands in many respects in the position of a father towards his younger brothers, was justified in taking up the caste calling for the benefit of the family as soon as he came of age. And he seems to have done so with the permission and Under the advice' of his mother and his mother's brother. There is nothing to show that it was wholly imprudent to embark on that business, arid so far as I could gather from the evidence and the recitals in the power-of-attorney, it was a proper business for Tirumudi Chetti to have embarked upon.
5. Then as to its being proper to further carry on the business, the mother had evidently the advice of her brother and her sister's husband whom one would naturally expect to be the persons best fitted to give such advice and I am, therefore, of opinion that her resolve to continue the business as the best thing to do in the interests of her minor sons after Tirumudi's death is binding on the minors.
6. Then the next question is whether she intended merely to give those two male relations of hers the power to do only those acts which were required for winding up the business (that is to sell the stock in hand, collect the outstandings and pay the debts) or whether she gave them power to carry on the business as usual (by purchasing the stock required from time to time for the business to be carried on and continuing the trade in the manner in which it has been carried on before). The power-of-attorney was executed about eight days after Tirumudi's death. It does not restrict the powers of the agents in carrying on the business. It expressly provides for the business being carried on thereafter under the style of Tirumudi Chetti and Brothers instead of in the name of Tirumudi Chetti alone, and though it also states that owing to her inability by reason of her sex to collect the outstandings and to pay the debts, she is obliged to give this power-of-attorney, I think, reading the document as a whole, that it contemplates the old business to be carried on as usual, with an addition to the style to show that her minor sons have an interest in and are intended to be benefited by the business.
7. The plaintiff also relied upon certain printed circulars, Exhibit C series, purporting to have been sent by defendants' mother to all the customers of the business, asking them to continue to patronise the business as usual. But I am rather doubtful, in the absence of any evidence to show that these circulars were issued under her instructions, whether they are admissible in evidence against the defendants. There is no doubt evidence to show that Muthiah Chetti gave orders to the printer in her name to print the circulars. But he cannot bind her by his acts to a larger extent than he was empowered to do under the power-of-attorney. If the power-of-attorney does not give him, power to carry on the business except with limitations, the issuing of the circular in her name, in which circular it is recited that he has been given power to continue the business without reservation, cannot bind the defendants. However, whether Exhibit C series are admissible or not, I think (as I said before) that the power-of-attorney itself does indicate that she had resolved upon carrying on the business as usual and gave her agents power to, so carry on the business.
8. Then the last question that remains is, whether the minors are liable only to the extent of the assets embarked in the arecanut business or to the extent of all the joint family properties which belonged to them and to Tirumudi Chetti. The question as above formulated implies that it was some definite amount taken out of the whole of the joint family properties which had been invested in the business by Tirumudi Chetti. There is nothing to indicate that it was so, and I think that the ordinary presumption in the case of a trading caste or family is that the entire family credit and all the joint family properties are embarked in the business. There are no doubt certain observations, which are rather in the nature of obiter dicta, found in the judgment of one of the learned Judges who decided the case of Sanka Krishnamurthi v. Bank of Burma, Ld. 11 Ind. Cas. 79 : 14 Ind. Cas. 389 : 35 M. 692 : 21 M.L. J. 620 : (1911) 1 M. W. N. 385 : 11 M. L. T. 56. which observations lend support to the idea that the assets directly involved in the business carried On by the managing member of a Hindu family, in which there are minors, can alone be proceeded against so far as the minor members' liability for the trade debts is concerned. But the question whether in an ordinary Hindu trading family the presumption is not that all the joint family assets are involved even as regards minor members was not considered in that case, and as I said before it was unnecessary to consider that question for the purpose of deciding that case. There is another considered later decision in Muthaya Pillai v. Tinnevelly South India Bank Ltd. 37 Ind. Cas. 230 : 5 L. W. 341. and I respectfully agree with the observations therein, which establish that the whole of the joint family properties are liable for the joint family trade debts, which cannot be, on principle, distinguished from any other joint family debts. That for all ordinary joint family debts the whole of the family properties could be proceeded against in execution cannot be disputed. Mr. Madhavan Nair sought to make some distinction between an ancestral trade carried on by a father and a joint family trade begun for the first time either by the father or by the elder brother. I do not think that on principle any such distinction can be made so far as this question is concerned.
9. In the result I would dismiss the appeals with costs.
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