Sanderson, C.J:— This is an appeal from the judgment of Mr. Justice Chapman by which he set aside the judgment of the officiating Additional District Judge of Dacca whereby he affirmed the judgment of the learned Munsif.
The action was brought for rent by the plaintiff, and the defence was that the rent had in fact been paid. The learned Munsif found that it had not been paid.
The learned officiating District Judge investigated the facts and came to the conclusion, as the learned Munsif did, that the rent had not in fact been paid; and, he said in his judgment. “The learned Munsif has disbelieved the witnesses to payment for cogent reasons and these have not been met.” Then, after making a few observations, he goes on to say, “the determining factor in the case is the evidence of the plaintiff's pleader. He deposes that defendant No. 2 came to him before the suit and asked him to make a settlement,” and on reference to the evidence it appears that the interview to which the learned District Judge was referring was about a month before the suit was instituted. The form of settlement was suggested, viz., diminution of interest. On the day the suit was filed, defendant No. 2 again came with a relation and asked the pleader not to file the deficit Court-fee stamps but to make a compromise.” Now, the learned Judge who has allowed the appeal from, the District Judge came to the conclusion that this evidence of the plaintiff's pleader ought not to have been admitted; and the learned vakil for the defendants has supported his judgment upon this ground. He says, that reference must be made to section 23 of the Indian Evidence Act, which runs in this way: “In civil cases no admission is relevant, if it is made either upon an express condition that evidence of it is not to be given, or under circumstances from which the Court can infer that the parties agreed together that evidence of it should not be given.” Now, it is admitted by the learned vakil for the defendants that this case does not come within the first branch of that section; or, in other words, he agrees that there was no express condition that the evidence of this conversation or interview should not be given. But he says that it does come within the second branch of it, because he argues that there were circumstances from which the Court could infer that the parties agreed together that the evidence of it should not be given. The learned Judge, Mr. Justice Chapman, has taken that view, and he says, “that evidence was to the effect that one of the defendants had approached him at the time when the suit was filed and subsequently for the purpose of compromise.” It is to be pointed out, first of all, that the learned Judge has somewhat misunderstood the evidence in the case, because the first interview between the defendant No. 2 and the plaintiff's pleader was at least a month before the suit was instituted, and was not at the time when the suit was filed, as the learned Judge says it was; we have to see whether there are any circumstances in this case from which we can infer that there was an understanding between the plaintiffs' pleader and the defendant No. 2 that the conversation which they had about the settlement of this suit should not be given in evidence against the defendants. I did not see those circumstances and I asked the learned Vakil yesterday what they were; and, so far as I can make out from his argument, they were that, inasmuch as there was a suit about to be instituted and Inasmuch as this conversation was about a compromise of the claim, it must be inferred that it was intended by the parties that conversation should be a privileged conversation or should be a conversation without prejudice. I do not think that the mere fact that it was contemplated between the parties that the suit was about to be instituted prevents the conversation as regards a settlement of the claim from being given in evidence.
My opinion is supported by the case to which my attention was drawn by my learned brother Mr. Justice Mookerjee and which was decided so long ago as 1830 by Chief Justice Lord Tenterden, in Wallace v. Small. There the action was upon an assumpsit on a Charter party: there were some difficulties in fixing the defendant with the contract. It appeared, however, that after the action was brought—I draw attention to that because the conversation in the present case was at least a month before the action was brought, while in that case [Wallace v. Small] it was after the action had been brought—an offer of a specific sum had been made and evidence was given on the part of the plaintiffs that a friend of theirs in consequence went to the defendants and advised them to increase their offer and that the defendants refused to do so saying, we shall lose enough by the Charter party as it is. The witness stated that nothing was said about this communication being without prejudice. The Attorney General for the defendants argued that the evidence was inadmissible and he said that “from the very nature of the transaction it appears to have been a negotiation for a compromise”—the very argument which the learned vakil put forward in this case—“and, if so, it must be understood to be without prejudice, although nothing, is said on that subject at the time, nor does it, even if admitted, amount to any proof of liability.” There the learned Chief Justice said that the evidence “ought to be admitted; and, he also said, he thought it good primâ facie evidence of liability. He said “it is not said to be without prejudice and an offer to compromise may be very well made, without any restriction as to confidence.” That is entirely in accordance with my judgment, and not only that, but with my experience. The mere fact of the conversation taking place when the parties were contemplating that a suit might be instituted is not in itself sufficient to prevent the conversation from being put in evidence. That really disposes of the first conversation. I ought to mention in connection with that, that when the case was being tried in the Court of first instance, no objection was taken by those who were appearing on behalf of the defendants to the conversation, which took place a month before the institution of the suit, being given in evidence. That of course is not conclusive, but it is some evidence at least that the parties themselves did not regard that conversation as being a privileged conversation.
Then it is said that the second conversation which took place about the time of the filing of the suit is privileged. It is quite true that objection was taken to that being given in evidence, in the first Court. But it seems to me that the second conversation was a natural consequence of the first conversation which took place a month before. As I understand, it only amounted to this, that the defendant must have obtained information that the suit was filed and that the deficit court-fee had not yet been paid, and he and a relation went to the plaintiff's pleader, and in fact asked for time in order to see whether the suit might not be compromised. Having formed the opinion, as I have said before, that the second conversation followed as a natural consequence of the first, and that the first conversation was not privileged, I do not think that any difference can be drawn between the first and the second conversation, as to their being admissible in evidence.
A subsidiary point was taken by the learned vakil on behalf of the defendants that the learned District Judge had misunderstood the effect of the evidence as to the second conversation, namely, that the learned District Judge said that it was the defendant No. 2 who took part in the conversation on the second occasion, whereas as a matter of fact it was the relation who went with him who made the offer of compromise. I really think that it is too small a point to require any serious consideration, because that was a conversation which took place in the presence of defendant No. 2 and it must be taken to have been made with his authority.
The other point upon which the learned vakil relied, was that, even if the conversation was rightly admitted, it ought to have been admitted only as against the defendant No. 2 who is supposed to have made the admission. I think that the learned Judge did take it as being an admission against all the defendants, and therefore it is necessary to consider whether the admission made by the defendant No. 2 can be taken in evidence against all the defendants. In my judgment, it can. The question depends upon section 18 of the Indian Evidence Act which runs in these terms, “statements made by a party to the proceeding, or by an agent to any such party, whom the Court regards, under the circumstances of the case, as expressly or impliedly authorized by him to make them are admissions.” Here again there is no express authorization of the defendant No. 2 to make these admissions. If these admissions are to be taken against all the defendants they must come within the implied authority by the other defendants to him. Now, it, was pointed out by Sir Richard Garth when he was the Chief Justice of this Court, in the case of Rowsulliah Sandari Dasi v. Mukta Sandari Dasi, that this section which I have just read is a concise statement of the law which was I think correctly laid down in Mr. Taylor's Book on Evidence, because the learned Chief Justice says at page 590, “where there are several co-contractors or persons engaged in one common business or dealing, a statement made by one of them with reference to any transaction which forms part of their joint business, has always been held admissible as evidence as against the others.” Then he refers to the passage in Taylor on Evidence, Volume I, 1st edition, p. 489, section 525 (which is now section 543):—“When several persons are jointly interested in the subject-matter of the suit, the general rule is that the admissions of any one of those persons are receivable against himself and fellows, whether they be all jointly suing or sued, provided the admission relates to the subject-matter in dispute and be made by the declarant in his character of a person jointly interested with the party against whom the evidence is tendered.” Then he, further says, “The principle of this rule is, that for the purpose of making these statements with reference to the joint concern or common subject of interest one partner or co-contractor is considered to be the agent of the others; and this rule, as I take it is enacted, though in a somewhat concise form in section 18 of the Indian Evidence Act.” In my judgment, the defendants in this case can be looked upon as co-contractors, as they were joint tenants of the plaintiffs. In one sense they may be looked upon as partners. When one of those contractors or partners comes to the plaintiff's pleader for the purpose of seeing whether he cannot settle the action which was brought by the plaintiff against all the defendants, it seems to me that he must be implied to have authority to act on behalf of all the defendants. For these reasons I think the evidence was rightly admitted, not only as against the defendant No. 2 but as against all the defendants and consequently, that evidence having been rightly admitted I think the learned Judge Mr. Justice Chapman was wrong and that this appeal ought to be allowed. The result is that the judgment of the District Judge is restored. The defendants will have the costs both in this appeal and the appeal before Mr. Justice Chapman.
Mookerjee, J.:— I am of opinion that upon each of the two questions of law involved in this appeal, the rule has been too broadly formulated by Mr. Justice Chapman, and that if the principles applicable are duly qualified, his judgment cannot possibly be sustained.
The plaintiff brought this suit against the defendants for recovery of arrears of rent due under a lease executed in favour of their father on the 3rd February, 1897. The substantial defence was a plea of payment. This plea was overruled concurrently by both the Courts below. Upon appeal to this Court Mr. Justice Chapman has reversed the decision of the District Judge and has remanded the case for reconsideration on the ground that the decision of the District Judge was based on evidence inadmissible in law.
The evidence to which exception is taken, is that of the pleader for the plaintiff, who deposed that the second defendant had come to him before the institution of the suit and had asked him to arrange for a settlement by way of remission of interest. The District Judge held that this request for remission of interest was an indirect admission that the whole of the amount claimed was due; in other words, that the plea of payment was untrue. On behalf of the defendants it was argued before Mr. Justice Chapman, first, that evidence was not admissible to prove that the defendant had proposed a settlement and had thereby indirectly admitted the claim; and secondly, that even if the admission was held admissible as against the second defendant, it could not be used as against the other defendants. Mr. Justice Chapman has given effect to both these contentions.
As regards the first objection, Mr. Justice Chapman observes that the Courts below did not consider the application of section 23 of the Indian Evidence Act and that it was quite clear that, having regard to the time when the offer of compromise was made, it was made on the understanding that evidence of it would not be given in the case. Now, section 23 provides that “in civil cases no admission is relevant, if it is made either upon an express condition that evidence of it is not to be given or under circumstances from which the Court can infer that the parties agreed together that evidence of it should not be given.” It is not disputed that in the case before us, there was no such express condition. Consequently, the defendants can rely only on that portion of section 23 which provides for the exclusion of an admission made under circumstances from which the Court can infer that the parties agreed together that evidence of it should not be given. The judgment of Mr. Justice Chapman does not specify the circumstances from which, in the present case, this inference could be drawn. Apparently he assumed that because an offer of compromise was made, there was necessarily an implied understanding that evidence of it would not be given in the case. This view is supported, to some extent, by the observation of Mr. Justice Phear in the case of Mohabeer Singh v. Dhujjoo Singh, where the following statement will be found: “It is a rule which all Courts of Justice find it right to observe that nothing that passes between the parties to a suit in any attempt at arbitration or compromise, should be allowed to effect the slightest prejudice to the merits of their case as it eventually comes to be tried before the Court; unless this were so, the only thing which could be prudently recommended to suitors would be never to listen for one moment to any proposal to settle the matter or to compromise it after it had come into the Civil Court.” This proposition was enunciated in respect of a case not governed by the provisions of the Indian Evidence Act, 1872. It is consequently not necessary for me to consider whether the statement was a correct exposition of the law as it stood before 1872. But, in my opinion; the rule enunciated in the judgment mentioned is expressed too broadly, in view of the provisions of section 23 of the Indian Evidence Act. “An offer of compromise, the essence of which is that the party making it is willing to submit to a sacrifice, or to make a concession,” is “rejected, though nothing at the time was expressly said respecting its confidential character,” only “if it clearly appears to have been made” on “the faith of a pending treaty, into which the party was led by the confidence of an arrangement being effected.” In the absence, however, of any express or strongly implied restriction as to confidence; an offer of compromise is clearly admissible and may be material as some evidence of liability, although, as has been said, it may not be proper to enquire into the exact terms offered, as such an offer might have been made for the sake of purchasing peace and without any intention to admit liability to the extent of the claim. That this is the true rule is obvious from the decisions in Wallace v. Small, Watts v. Lawson, and Nicholson v. Smith. The rule is also well illustrated by the decision in Harding v. Jones, where the fact that the drawer of a bill whose signature was in issue had proposed a settlement was used against him as his admission. Reference may in this connection be also made to the observations of Lord St. Leonards in Jorden v. Money, with reference to negotiations between an attorney on one side and the opposite party: “when an attorney goes to an adverse party with a view to a compromise, or to an action, you must always look with very great care at his evidence of what then occurred. There must be such a disposition in an attorney who has brought an action, to maintain it, that it is always very desirable that the attorney should abstain as much as possible from talking to a person, when he means afterwards, to swear to the conversation, and upon that conversation to found a right which otherwise might not be found to exist.” These observations would have, been obviously superfluous, if, as has been contended by the respondent in this case, all negotiations for settlement between the attorney on one side and the opposite party had been, by reason of a rigid and inflexible rule, always inadmissible in evidence. I hold accordingly that the evidence of the pleader for the plaintiff as to what had passed between him and the second defendant for the settlement of the case was admissible in evidence. This view is strengthened by the circumstance that no objection was taken in the trial court to the reception of a portion at any rate of the statement made by the pleader.
As regards the second objection, Mr. Justice Chapman has held that the evidence of the pleader only proved an admission by the second defendant and that such admission is no evidence against the other defendants. In support of this view, reference has been made on behalf of the respondents to the decision in Kali Kisore Chowdhury v. Gopi Mohan Roy Chowdhury. In my opinion, the contention that an admission by one defendant is not receivable in evidence as against another defendant is too broadly formulated. The cases to which reference has been made on behalf of the appellant, viz., Chalho Singh v. Jharo Singh*, show that under section 18 of the Indian Evidence Act, an admission by one defendant may, in certain circumstances, be admissible in evidence as against another defendant. The principle is that when several persons are jointly interested in the subject-matter of the suit, an admission, of any one of these persons is receivable not only against himself but also against the other defendants, whether they be all jointly suing or sued, provided that the admission relates to the subject-matter in dispute and be made by the declarant in his character of a person jointly interested with the party against whom the evidence is tendered. Now, in the case before us, the defendants have been jointly sued as the representatives in interest of the original tenant. As was explained in Ahinsa Bibi v. Abdul Kader Saheb, in cases of contracts where one of the contracting parties dies, the right or obligation under the contract passes to his representatives as one entire juristic person. In the case before us, the defendants are jointly liable to the plaintiffs as the representatives in interest of their father, who was the original tenant and obtained the lease. We cannot consequently hold that the evidence is admissible as against the second defendant and not admissible as against the others. The result of the acceptance of the contrary view would be that as against the second defendant the Court would have to hold that the plea of payment was untrue and that the plaintiff was entitled to a decree for the entire sum; while, as against the other defendants, the Court would be driven to the conclusion that the plea of payment was established, and that, so far as they were concerned, the plaintiff was not entitled to a decree for the whole sum. But it is perfectly clear that the only possible decree which can be made in the suit is a joint decree for the entire sum found payable by all the defendants jointly as representatives of the original tenant. In my opinion, it is plain, upon principle as also upon the authorities, that the admission was rightly used by the District Judge not merely against the second defendant but also against the other defendants. On these grounds, I agree that the decree made by Mr. Justice Chapman must be reversed and that of the District Judge restored with costs.
S.M
Appeal allowed.