JOINT PROMISORS AND THE NATURE OF THEIR LIABILITY

 

JOINT PROMISORS AND THE NATURE OF THEIR LIABILITY

Sections 42, 43 and 44 of the Contract Act deal with the question of liability of the joint promisors. The following rules are contained in these Sections:

The liability of the joint promisors is joint and several

When two or more persons make a joint promise, the promisee may, in the absence of express agreement to the contrary, compel or more of such joint promisors to perform the whole of the promise. It depends on the discretion of the promisee as to which of the promisors are to be made liable for the whole of the promise. If one of the promisors is sued to meet the whole of the claim, he cannot say that as between different promisors, his liability is for a part of the promise only. For example, A, B and C jointly promise to pay D 3,000 rupees. D may compel either A or B or C to pay him 3,000 rupees.

If two or more persons jointly take a lease, and their liability to pay the rent is joint and several under Section 43 of the Contract Act, it will be wrong to hold that the liability of one of the lessees towards the lessor is only to the extent of 5 annas in a rupee (ie., 5/16).

Successive actions against different joint promisors

If the promisee brings an action against one or some of the joint promisors only, and leaves others, does a judgment against those some promisors bar an action against the others? For instance, A, B and C jointly promise to pay 3,000 rupees to D, and D brings an action against A only. If D's claim is not fully satisfied, bring subsequent actions against B and C? In England, the question has been answered in the negative in King v. Hoare (1844) 13 M. & W. 494 and it has been held that when the judgment has been obtained against some of the joint contractors, or joint debtors, debars subsequent right of action against the others.

There has been a difference of opinion between the various High Courts as to whether the rule laid down in King v. Hoare should or should not be followed in India. The Allahabad and Madras' High Courts have held that notwithstanding the rule laid down in English cases, if the judgment against some of the promisors remains unsatisfied, there is no bar in India to subsequent actions against the other promisors. A contrary view has been expressed by the Calcutta and the Bombay High Courts. The view expressed by the Allahabad and the Madras High Courts appears to be more is consonance with the provisions of the Indian Contract Act.

The liability of joint promisor mentioned in Section 43 is not merely joint, but joint and several' and, therefore, an against one of the joint should not put an end to the of action.

Contribution between joint promisors

Since the liability of the joint promisors is joint and several, one of them may have performed the whole of the promise. He may have, for instance, paid for the share of the others also. If that is so, he has a right to claim contribution from the others. Section 43 (para 2) of the Indian Contract Act, 1872, contains the following provision in this regard :

 

"Each of two or more joint promisors may compel every other joint promisor to contribute equally with himself to the performance of the promise, unless a contrary intention appears from the contract."

For example, A, B and C jointly promise to pay D the sum of 3,000 rupees. If C has been compelled to pay the whole amount of 3,000 rupees to D, he can claim 1,000 rupees each from A and B.

Liability of a promisor to contribute

It has been noted above that a promisor paying than his share of liability can claim contribution from the other promisors. There is a possibility that some of those who were supposed to pay contribution make a default, e.g., due to insolvency. In such a case the loss has to be borne according to the following rule contained in Section 43 of the Act, 1872 (Para 3): "If anyone of the two or more joint promisors makes default in such contribution, the remaining joint promisors must bear the loss arising from such default in equal shares."

For example, A, B and C jointly promise to pay D the sum of 3,000 rupees. C is compelled to pay the whole. A is insolvent, but his assets are sufficient to pay one-half of his debts. C is entitled to receive Rs. 500 from A's estate. Out of the balance of Rs. 2,500, C can now recover equal share, i.e., 1,250 rupees from B. Similarly, if A, B and C are under a joint promise to pay D 3,000 rupees, and C is unable to pay anything, and A is compelled to pay the whole. In such a case, A is entitled to receive 1,500 rupees from B.

Contribution when some promisors are surety

Sometimes as between the various joint promisors, the position of some of them may be that of surety. If the real relation between the parties is that of a principal debtor and the surety, their against each other, would depend on their relation as such. It means that the rule that after the surety has satisfied the claim of the creditor (third party), the surety can claim the indemnity for the same from the principal debtor, will apply in such a case. Explanation to Section 43 makes the following provision in this regard :

"Nothing in Section 43 shall prevent a surety from recovering from his principal, payments made by the surety on behalf of the principal, or entitle the principal to recover anything from the surety on account of payment made by the principal."

For example, A, B and C are under a joint promise to pay D 3,000 rupees. A and B being only sureties for C, C fails to pay. A and B are compelled to pay the whole sum. They are entitled to recover it from C.

Effect of release of a joint promisor

On the release of one joint promisor, the other joint promisces are not discharged and their liability continues as before. This is incorporated in Section 44 of the Indian Contract Act, 1872, which is as follows:

"When two or more persons have made a joint promise, a release of one of such joint promisors by the promisee, does not discharge the other joint promisor joint promisors; neither does it free the joint promisor so released from responsibility to other joint promisor or joint promisors."

The release of one of the joint promisors does not release others, nor does it release the promisor who has been released by the promisee from his responsibility, to contribute to the other joint or promisors. In Devi Lal v. Himat Ram AIR 1973 Raj. 39, there was an action brought against the various partners of a partnership firm for the recovery of money. During the pendency of an appeal, one of the respondent-partner died. Since his legal representatives were not brought on record, the appeal abated against him. It was held that the abatement of the appeal against one partner did not result in the abatement of the appeal against the other respondents (partners). The position in this regard in England is different from that in India. Under English law, a release of one of the joint promisors results in the discharge of all others, unless the right against the others is preserved by an agreement.?

Effect of death of a joint promisor on the liability of others

According to Section 42:

"When two or more persons have made a joint promise, then unless a contrary intention appears by the contract, all such persons, their joint lives, and, after the death of any of them, his representatives jointly with the or survivors, and, after death of the last survivor the representatives of all jointly, must fulfil the promise."

On the death of a joint promisor, his representatives substitute him for the purpose of liability. The liability of the surviving joint promisors is there along with the representatives of the deceased ones. When all the joint promisors die, the representatives of them all must jointly fulfil the promise. This rule is subject to an agreement to the contrary. On this point, Indian law makes a departure English law. In England, on the death of a joint promisor, the liability on the survivors. The representatives of the deceased joint promisors do not incur any liability. If the last surviving joint promisor dies, the liability devolves on his representatives."

Nature of liability of joint promisees

When a promise has been made in favour of a number of persons, then the right of claim performance rests with all of them during their joint lives, and, after the death of any of them, right can be enforced by the representative of such deceased person jointly with the survivor or survivors, and, after the of the last survivor, the representatives of all jointly, can enforce the right. This rule is subject to an agreement between the parties to the contrary. For example, A, in consideration of 5,000 rupees lent to him by B and C, promises B and C jointly to repay them that sum with interest on a day specified. B and C can jointly claim performance. If B dies, the right to claim performance rests with B's representatives jointly with C during C's life, and after the death of C, with the representatives of B and C jointly?