Joint Liabilities and Joint Rights

Its illustrations:

"(a) 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.

(b) 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 500 rupees from A's estate, and 1,250 rupees from B.

(c) A, B and C are under a joint promise to pay D 3,000 rupees. C is unable to pay anything, and A is compelled to pay the whole. A is entitled to receive 1,500 rupees from B.

(d) 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."

Section 44, effect of release of one joint promisor:

"Where 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 or joint promisors; neither does it free the joint promisor so released from responsibility to the other joint promisor or joint promisors."

Section 45, devolution of joint rights:

"When a person has made a promise to two or more persons jointly, then, unless a contrary intention appears from the contract, the right to claim performance rests, as between him and them, with them during their joint lives, and, after the death of any of them, with the representative of such deceased person jointly with the survivor or survivors, and, after the death of the last survivor, with the representatives of all jointly."

Its illustration:

"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 dies. The right to claim performance rests with B's representative jointly with C during C's life, and after the death of C with the representatives of B and C jointly."

Broken down

Section 42: who must perform, and what happens on death

Joint promisors must fulfil the promise during their joint lives; on the death of one, his representative jointly with the survivors; and on the death of the last survivor, the representatives of all jointly.

Note the contrast with English law. English law applied the doctrine of survivorship to joint liability, so on the death of one joint promisor the liability passed to the survivors alone and the deceased's estate was free. Section 42 rejects survivorship: the representative comes in alongside the survivors.

The rule yields to a contrary intention appearing by the contract.

Section 43: joint and several liability, and contribution

Three separate rules, and the marginal notes name them.

(a) The promisee may compel any one or more to perform the WHOLE. He need not sue all, and he need not divide his claim. Illustration (a) is the model: A, B and C jointly promise D three thousand rupees, and D may compel either A or B or C to pay him the whole three thousand.

(b) Each joint promisor may compel contribution EQUALLY. The one who pays is not left to bear it. He may compel every other joint promisor to contribute equally with himself, unless a contrary intention appears from the contract. Illustration (c): C cannot pay anything, A is compelled to pay the whole three thousand, and A is entitled to receive fifteen hundred from B.

(c) A defaulter's share is shared EQUALLY by the rest. Illustration (b) works the arithmetic and is worth following, because examiners set exactly this. A, B and C owe D three thousand. C pays the whole. A is insolvent but his estate pays fifty paise in the rupee. Each share is one thousand. C recovers five hundred from A's estate, being half of A's thousand. The remaining five hundred of A's share is the loss from A's default, and it is borne equally by the solvent promisors, C and B, at two hundred and fifty each. So B owes his own thousand plus two hundred and fifty, which is one thousand two hundred and fifty, exactly as the illustration says.

The Explanation preserves the surety's position. Nothing in the section prevents a surety recovering from his principal what he paid on the principal's behalf, and the principal recovers nothing from the surety. Illustration (d) shows it: A and B being only sureties for C, they recover the whole from C, and the equal contribution rule does not cut across that.

Section 44: a release of one does not discharge the rest

Two limbs. A release of one joint promisor does not discharge the others; and the one released is not freed from his responsibility to his fellow promisors.

So a promisee may settle with one without losing his claim against the others, and the one who settled must still contribute his share to a co promisor who pays. The section makes the release effective only between the promisee and the promisor released.

Contrast section 44 with the position of a surety, where under section 135 of this Act a contract between the creditor and the principal debtor to release him discharges the surety. Different relationship, different rule.

Section 45: joint rights vest jointly

The mirror of section 42, applied to promisees. The right to claim performance rests with the promisees jointly, and on death with the deceased's representative jointly with the survivors.

The practical consequence is that one joint promisee cannot sue alone: all must join, or those who will not must be made defendants. Again the rule yields to a contrary intention.

Here too England differs. English law applied survivorship to joint rights, so the surviving promisee took the whole right and the deceased's estate dropped out. Section 45 brings the representative in.

Note also that under section 38 an offer of performance to one of several joint promisees has the same effect as an offer to all.

The India and England comparison

A worked example

Farid, Gopal and Hemant jointly borrow nine lakh rupees from Indira.

• Indira sues Gopal alone for the whole nine lakh. She may. Section 43 lets her compel any one or more to perform the whole, and illustration (a) is exactly this.
• Gopal pays nine lakh and looks to the others. Each share is three lakh, so he may compel Farid and Hemant to contribute three lakh each.
• Hemant is unable to pay anything. On illustration (c) the loss is shared by the solvent promisors. Gopal recovers three lakh from Farid, and Hemant's three lakh is borne by Gopal and Farid equally, one lakh fifty thousand each. So Farid pays Gopal four lakh fifty thousand in all.
• Farid is insolvent and his estate pays half his debts. Following illustration (b): Gopal recovers one lakh fifty thousand from Farid's estate, and the unpaid one lakh fifty thousand of Farid's share is shared equally by the solvent promisors.
• Indira releases Farid entirely. On section 44 that does not discharge Gopal and Hemant, who remain liable for the whole; and it does not free Farid from his duty to contribute to whichever of them pays.
• Gopal dies before repayment. On section 42 his representative is bound jointly with Farid and Hemant, to the extent of the estate. English survivorship does not apply.

Now reverse it. Indira and a co lender Jaya lent the money jointly, and Indira dies. On section 45 the right to claim rests with Indira's representative jointly with Jaya, and Jaya cannot sue alone.

What it does NOT mean

"The promisee must sue all the joint promisors." Section 43 lets him compel any one or more to perform the whole.

"A joint promisor who pays the whole bears it alone." He may compel equal contribution from the others under section 43.

"Releasing one promisor releases them all." That is the English rule. Section 44 says the opposite, and it also keeps the released promisor answerable to his co promisors.

"On death the survivors alone are liable." Sections 42 and 45 reject survivorship for both liabilities and rights; the representative comes in.

"A surety who pays must bear an equal share." The Explanation to section 43 preserves the surety's right to recover from the principal, and illustration (d) applies it.

"One joint promisee may sue alone." Section 45 vests the right jointly, so all must be before the court.

Quick revision

• s.42: joint promisors bound during their joint lives; on death, the representative jointly with the survivors; then the representatives of all. No survivorship, unlike England.
• s.43: the promisee may compel any one or more to perform the whole; each promisor may compel equal contribution; a defaulter's share is borne equally by the rest. Explanation: a surety may still recover from his principal.
• Illustration (b) arithmetic: three thousand between A, B and C; C pays all; A insolvent paying half; C gets 500 from A's estate and 1,250 from B.
• s.44: a release of one does not discharge the others, and does not free the released promisor from contribution to his co promisors.
• s.45: joint rights vest jointly; on death, the representative jointly with the survivors. One promisee cannot sue alone.
• s.38: an offer of performance to one joint promisee is an offer to all.

Test yourself

1. May a promisee sue one of several joint promisors for the whole? Yes. Section 43 provides that, in the absence of express agreement to the contrary, the promisee may compel any one or more of the joint promisors to perform the whole of the promise, and illustration (a) has D compelling either A or B or C to pay him the whole of three thousand rupees.

2. Work through illustration (b) to section 43. A, B and C jointly promise D three thousand rupees and C is compelled to pay the whole. Each share is one thousand. A is insolvent but his assets meet half his debts, so C recovers five hundred rupees from A's estate. The other five hundred of A's share is the loss caused by his default and is borne equally by the remaining promisors, C and B, at two hundred and fifty each. B therefore pays C one thousand two hundred and fifty rupees.

3. What is the effect of releasing one joint promisor? Under section 44 it does not discharge the other joint promisors, who remain liable for the whole, and it does not free the released promisor from his responsibility to contribute to the others. The release operates only between the promisee and the promisor released, which is the opposite of the old English rule.

4. How do sections 42 and 45 differ from English law on death? English law applied survivorship, so on the death of a joint promisor or joint promisee the liability or the right passed to the survivors and the deceased's estate dropped out. Sections 42 and 45 reject that: the representative of the deceased is bound, or entitled, jointly with the survivors, and after the last survivor's death the representatives of all act jointly.

5. Can one of two joint promisees sue alone? No. Section 45 vests the right to claim performance in the promisees jointly, so all must be before the court, and on the death of one the right rests with his representative jointly with the survivor. The rule yields only to a contrary intention appearing from the contract.