Jagannath Patnaik vs Sri Pitambar Bhupati Harichandan

Jagannath Patnaik vs. Sri Pitambar Bhupati Harichandan

AIR 1954 Ori 241

Key Words: implied condition, agency

FACTS

Defendant was the heir of the property of the deceased who had before his death employed plaintiff as the ‘dewan’ of the said property for a continuous period of 7 years. Plaintiff brought the present suit when defendant terminated his services, claiming salary for the rest of the period out of 7 years for which he contracted to serve.

CONTENTIONS

• The law does not mandate that in every contract involving personal services, the death of either of the contracting parties puts an end to the contract. For. e.g in partnership firms, where employer is a group of partners, death of one partner does not entail immediate dissolution of the contract of employment.
• P was chosen specifically for the post of Dewan by K, due to his skill and confidence K had in his prowess. P could not have reasonably forseen his services being terminated solely on the grounds of K’s demise. Thus, the legal intention of the contracting parties, at the time of concluding the contract was deemed to be to the effect that the contract shall subsist throughout the period it stipulated.

HELD

It has to be determined whether the obligations which the contract seeks to enforce depended upon the personal conduct of the contracting party; if it did not, then according to s.37, the promises bind the representatives of the promisor for the performance of the contract, in such an event when the promisor dies before performing his part of the contract, UNLESS A CONTRARY INTENTION APPEARS FROM THE CONTRACT.

However, if the contract is one whose performance depends upon the skills of any one party or relationship of the contracting parties, i.e. dependent upon the personal conduct of the parties, section 40 provides that the contract stands dissolved upon the death of that party (for the representatives of that party are deemed to be devoid of such skills as would be required to render the discharge of obligations undertaken by the original party) or both parties as the case may be.

In the present case, the relationship of Dewan and proprietor is of such a “close and confidential” nature that the death of any one of them will have the effect of rendering the contract frustrated (“no dewan will be able to discharge his duties unless he is able to adjust himself with the whims of the proprietor”). Such a relationship is depended upon ability and skills of dewan on one hand and temperament and nature of proprietor on another.

Neither of them had anticipated that the other would die during the 7 year period as stipulated by the contract, since both, despite being old, did not suffer from any ailment to warrant such an anticipation. Furthermore, considering the previous relationship between the plaintiff and K, it is evident that the contractual obligations created in this case were personal in nature.

Author: Vishrut Kansal

Editor: Vivek Verma