ADAMSON VS JARVIS

Citation: 4 Bing 66

Date: 1827

Introduction: In this case, Section 124 and Section 125 of the Indian Contract Act, 1872, the contract of indemnity is taken into consideration. The contract of indemnity is a contract through which one party saves the other from the loss caused by the promisor’s conduct itself or by the conduct of any other person. The issue raised in this case was Whether all the damages that indemnity holder has been compelled to pay in a suit in respect of any matter to which the promise is if indemnifier applies? Whether the plaintiff was entitled to pay damages as he was completely unaware of the fact that the respondent is not the real owner?

Facts:

In this case, the plaintiff (Adamson), was an auctioneer, who sold some cattle on the instructions of the respondent (Jarvis). And after the cattle were sold, the plaintiff discovered that the respondent was not the real owner of the cattle. Therefore the real on discovering his cattle were sold without his permission sued Adamson. Adamson was asked to compensate for the loss caused by him to the owner. In return, Adamson sued Jarvis and asked for indemnification, as the cattle were sold on his instruction in bona fide.  

Judgement:

It was held that Adamson was entitled to be indemnified, as he sold the cattle on the instructions of the respondent, also because he was entitled to assume that he would be indemnified by Jarvis if anything turned out mala fide. The defendant was liable for the loss of the plaintiff and compelled to compensate him. Thus indemnity in English law means a promise to save a person from the consequences of an act.  The promise can be expressed or implied depending upon the circumstances of the case. And in Indian law section 124 and 125, contract of indemnity and rights of indemnity holder when sued respectively talks about indemnification of loss incurred by one party to another.