(COURT OF APPEAL)

BUILDMORE CO. (SUDAN) LTD. v. EL MAHDI OMER OSMAN

AND ANOTHER -

AC.APP.22.1960

. Principles

· Agency—Parol evidence—Admissible to show who is real principal

· Civil Procedure—Joinder of defendants—Civil Justice Ordinance, Ord. Vii, r. 8

· Negotiable instrument. note—Maker personally liable—Bills of Exchange Ordinance 1917. S. 91

An agent who signs a contract or promissory note, without qualifying his signature by words indicating that he is signing as an agent, is personally liable on the contract at promissory note,
Where an agent, acting for an undisclosed principal, enters into a contract, whether written or oral, in his own name, parole evidence is admissible to show who the real principal is, in order to charge him or entitle him to sue on the contract. The aleged undisclosed principal can be joined as co-defendant by the plaintiff, under Civil Justice Ordinance 1929, Ord. VII, r. 8

An agent who signs a contract or promissory note, without qualifying his signature by words indicating that he is signing as an agent, is personally liable on the contract at promissory note,
Where an agent, acting for an undisclosed principal, enters into a contract, whether written or oral, in his own name, parole evidence is admissible to show who the real principal is, in order to charge him or entitle him to sue on the contract. The aleged undisclosed principal can be joined as co-defendant by the plaintiff, under Civil Justice Ordinance 1929, Ord. VII, r. 8

An agent who signs a contract or promissory note, without qualifying his signature by words indicating that he is signing as an agent, is personally liable on the contract at promissory note,
Where an agent, acting for an undisclosed principal, enters into a contract, whether written or oral, in his own name, parole evidence is admissible to show who the real principal is, in order to charge him or entitle him to sue on the contract. The aleged undisclosed principal can be joined as co-defendant by the plaintiff, under Civil Justice Ordinance 1929, Ord. VII, r. 8

Judgment

B. Awadalla 1. January 9. 1961 :—This is an appeal against the decision of the Honourable Judge of the High Court, Khartoum, in CS.41.1958 Khartoum High Court.

The facts of the case are clearly set out in the judgment of the Honour’ able Judge of the High Court and we see no reason to restate them here. The grounds of appeal are two: (a) that the Honourable Judge of the High Court was wrong in law in dismissing the case against the respondents (defendants in the suit) on the ground that they were mere agents for delivery of the engine, and (b) that the Honourable Judge of the High Court was also wrong in law in failing to restore to the record the names of the other defendants whose joinder was applied for by appellants (plaintiffs in the suit) on July 27, 1958. and who were struck out by order of the District Judge who was handling the case on November 2, 1958.

As regards the first point, the Honourable Judge of the High Court found that the said two defendants were agents not in the making of the contract but in the delivery of the engine. “They were not agents to negotiate, make or sign the contract . . .“ he says and continues “In this sense, it can be inferred that the signatures were procured by fraud. They never signed with the intention of being bound by the contract nor by the promissory notes.”

I am of opinion that this finding is completely against the weight of evidence. The evidence of both defendants shows that they signed the contract and the promissory notes knowing of their true nature and purport but they contend they never intended to be bound by their signatures, as their mission was that of mere conduit-pipes and therefore they were functus officio once delivery of the engine to the real beneficiaries was over. Is such a contention acceptable? Clearly it is not. Perhaps the Honourable Judge of the High Court was persuaded to make this finding by reason of the fact that one of the defendants was simply a driver and not a cultivator. But even so, a driver whose prospects of finding a job as such are solely dependent on delivery of the engine has as much an interest in the transaction as any of the other beneficiaries, if not more.

I am really unable to find out the basis for the opinion of the Honour- able Judge of the High Court that appellants’ representative caused these defendants to sign the contract and promissory notes by telling them that the signatures were for acknowledgment of taking delivery by them or that such signatures were a mere formality. The statements of both these two defendants on oath show that P.W. 1 had told them that delivery of the engine was impossible without a record” of the transaction in their own names, one as principal and the other as surety. They accepted this and signed both the contract and the promissory notes with full knowledge of what they were doing. D.W. 2 says at p. 27 of the record: We knew at the time that they were promissory notes. I also knew that the promissory notes were for payment of money.” How can it then be said that they were told their signatures were a mere formality. No doubt any such suggestion is obviously unsound. Even if they purported to act as agents, which they did not, their failure to qualify their signature, by words indicating that they were signing as such agents, precludes them from repudiating liability. Bills of Exchange Ordinance 1917, S. 9I is clear on the point, for it says:

“The maker of a promissory note by making it:

(a) engages that he will pay according to its tenor,

(b) is precluded from denying to a holder in due course the existence of the payee and his then capacity to indorse.”

We now come to the second point, i.e., whether the failure by the Honourable Judge of the High Court to restore to the record the names of the defendants whose joinder was. applied for by appellants on july 27, ‘1958 was wrong in law. The learned advocate for appellants is relying on Civil Justice Ordinance, Ord. VII, r. 8, which aims at preventing a multiplicity of suits. There is no doubt from the evidence of the respondents that the intention from the start was that the engine was to be bought by the thirty-one cultivators of whom second respondent is one, forming themselves into a sort of co-operative society. If this is true then it would no doubt seem unfair now to ignore the real purchasers altogether and impose the whole burden of liability upon these two unfortunate respondents. The learned advocate for appellants does not state in his memo of appeal the quality or standing of these persons in the matter in controversy, e.g., are they principals, beneficiaries under a trust, a co-operative society, etc.? In his application to the court below he states they were principals but does not say clearly whether they were disclosed or undisclosed. Before us he said they were undisclosed principals and, assuming that that is correct, then it may be that although the present respondents are personally liable on the promissory notes (which were given as collateral security) then their principals can be made liable on the written hire-purchase agree ment itself. For the law is no doubt established and clear that “Where an agent enters into a contract, oral or written, in his own name, parol evidence is admissible to show who is the real principal, in order to charge him or entitle him to sue on the contract Bowstead, .Agency 199 (12th ed., Griew, 1959)

I am therefore of opinion that the persons whose joinder is now claimed should be joined and evidence allowed by which appellants can prove that such persons ought to be charged under the said hire-purchase agreement. This appeal is therefore allowed and the decision of the Honourable judge of the High Court reversed and case returned for rehearing as per above directions.

.‘M. A. .Abu Rannat C.J. January 9, I961 :—I concur.

M. A. Hassib J. January 9, 1961 :—I concur.