The plaintiff lent RM35,000 to her husband, who was a partner in a firm. The husband issued a receipt under the firm’s name and used the money to pay the firm’s debt. The Plaintiff took an action to recover her money but other partners refused to pay on the grounds that the plaintiff’s husband had no authority to borrow the money.
The court held that the Plaintiff was entitled in equity to recover the loan amount. Since the money was utilised by the firm for payment of the firm’s debts, it is regarded according to the principles of equity as if it had originally been borrowed by the firm.
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