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Chunduru Chinna Lakshmi Narayana and ors. Vs. Neralla Venkata Subba Row Minor, by Next Friend, Mamidi Pichamma - Court Judgment

LegalCrystal Citation
SubjectProperty;Civil
CourtChennai
Decided On
Reported in41Ind.Cas.605; (1917)33MLJ195
AppellantChunduru Chinna Lakshmi Narayana and ors.
RespondentNeralla Venkata Subba Row Minor, by Next Friend, Mamidi Pichamma
Cases ReferredErans v. Moore
Excerpt:
- - if, however, the executors fail to do their duty and refuse or neglect to sue, a legatee may sue the executors for his legacy in due course of administration and may join the debtor or his representatives as parties and claim payment of the debt to the estate......the result of such transfer would be that the sum of rs. 5,000 instead of being a personal debt of subbarayadu would become an item of account in the partnership between the two. mangayya agreed to this and the necessary adjustments were made on january 11, 1901; but a year later, either because mangayya was not bound to contribute any such sum of rs. 5,000 for the working expenses of the rice mills or for other reasons, the debit of rs. 5,000 to the rice mills account was cancelled, and that sum was carried to a separate account to the debt of the 1st defendant, lakshminarayana. that was in january 25, 1902. on the same day the credits and debits in no. 2 account were taken over to no. 1 account and thereafter no. 2 account ceased to exist. that these adjustments were made with.....
Judgment:

1. Several questions were raised at the hearing of the appeal, but at the close of the arguments there finally emerged for decision two substantial questions:

1. Whether the suit was barred by the Statute of Limitations; and

2. Whether the suit as brought was maintainable.

2. The appellants challenged the findings of fact of the Lower Court but as we agree with those findings, it is scarcely necessary to deal with the evidence in detail. The facts which are either admitted or proved may be shortly stated. One Mangayya and Chunduru Subbarayudu, the father of defendants 1 and 2 and grand-father of defendants 3 to 6, had dealings with each other which resulted in mutual accounts. There were three accounts, one for cash dealings, another for purchase and sale of goods on each other's account, and a third called the Rice Mills Factory account. The last account requires some explanation. Subbarayadu and others were working some rice mills in Bezwada in partnership, and Mangayya was a sub-partner with Subbarayadu in that concern. Monies advanced by Mangayya to Subbarayadu for the working of the rice mills were entered in the third account. In December 1900, a sum of over Rs. 10,000 was owing to Mangayya from Subbarayadu on No. 1 account, and it appears that he was pressing Subbarayadu for payment of the sums due to him, but Subbarayadu instead of paying him appears to have asked Mangayya for money for the working expenses of the rice mills and proposed that Rs. 5,000 out of the amount which was owing to Mangayya on No. 1 account should be transferred and debited to the rice mills account; the result of such transfer would be that the sum of Rs. 5,000 instead of being a personal debt of Subbarayadu would become an item of account in the partnership between the two. Mangayya agreed to this and the necessary adjustments were made on January 11, 1901; but a year later, either because Mangayya was not bound to contribute any such sum of Rs. 5,000 for the working expenses of the rice mills or for other reasons, the debit of Rs. 5,000 to the rice mills account was cancelled, and that sum was carried to a separate account to the debt of the 1st defendant, Lakshminarayana. That was in January 25, 1902. On the same day the credits and debits in No. 2 account were taken over to No. 1 account and thereafter No. 2 account ceased to exist. That these adjustments were made with the consent of Subbarayadu is established by the evidence. Though the sum of Rs. 5,000 was debited in the name of Lakshmi Narayana, it was a debt owing by Subbarayadu and the joint family consisting of himself and his sons. Lakshmi Narayana does not say that it was a personal debt of his own. He had nothing to do with this adjustment and in fact he disclaims all knowledge of it. Mangayya died on November 24, 1908 and before his death, on November 6, 1903 made his will by which he appointed Subbarayadu, his debtor, Krishnayya his son-in-law, and another Sambayya executors. He gave authority to his widow Sitamma to adopt and bequeathed 2/3 of the residue of his property to the boy to be adopted and the remaining 1/3 to Sitamma. The legacies were payable, on the boy to be adopted attaining the age of majority. Sambayya, one of the executors declined to act and Subbarayadu and Krishnayya entered on their duties, though probate was not taken out (no probate was necessary as the Hindu Wills Act does not apply)--and Subbarayadu took a leading part in the administration of the estate. It appears however that the widow Sitamma was in actual custody of the monies belonging to Mangayya's estate, though Subbarayadu was in the direction of affairs, Krishnayya the other executor was receiving salary from the estate and was looked upon as practically a servant. Sitamma was pressing Subbarayadu to repay the sum of Rs. 5,000 and interest but Subbarayadu declined to pay on the ground that the money was in his hands and he as executor was entitled to keep it. He also claimed to retain what may be found due to him on taking the accounts of the rice factory. There was practically no balance due either way on any account. Sitamma finding that Subbarayadu was not paying the debt due to her husband's estate in spite of repeated demands applied for a succession certificate jointly, with Krishnayya to collect this debt and certain small debts due to her husband's estate from others and in spite of opposition from Subbarayadu she and Krisbnayya obtained a succession certificate on the 19th October, 1905. The plaintiff was adopted by Sitamma on the 5th June, 1905 and Subbarayadu died in June 1906. The present suit was instituted on August 21, 1911 by the adopted son who is still an infant against the defendants, the sons and grandsons of Subbarayadu to recover the said sum of Es. 5,000 and interest. Neither Sitamma nor Krishnayya the surviving executor is a party to the suit though both of them are named as the next friends of the minor plaintiff.

3. In this state of things, the first question for determination is as to the nature of the right of the plaintiff in the estate of Mangayya and against the defendants, for on that would depend the article of the Limitation Act applicable to the suit. The estate of Mangayya on his death vested in his executors Krishnayya and Subbarayadu under Section 4 of the Probate and Administration Act. As the plaintiff does not repudiate the will and claim the estate as the surviving member of a joint Hindu family,--according to the decisions of this Court he could not have done so--he is not entitled to sue a debtor of the estate for the debt and the only persons who could sue are the executors. If, however, the executors fail to do their duty and refuse or neglect to sue, a legatee may sue the executors for his legacy in due course of administration and may join the debtor or his representatives as parties and claim payment of the debt to the estate. (See Consett v. Bell (1812) 1 Colleyer 569 and Morley v. White (1873) 8 Ch. Ap. 781; but whatever be the form of action the same article of Limitation would apply, and if the cause of action had accrued and time commenced to run during the life-time of the testator, it would continue to run except in the case specially provided for by Section 9 of the Limitation Act. (See Lala Soni Ram v. Kanhaya Lal (1913) L.R. 401. A. 74. If therefore Subbarayadu had been a stranger-debtor, the claim to recover the debt would certainly be barred by limitation, as the debt became due in January 1902 during the life-time of Mangayya, and the period of limitation for a suit to recover the debt is 3 years. The acknowledgments of liability referred to by the Lower Court even if they satisfy the conditions of Section 19 of the Act, would be of no use as there is none within three years of the date of the suit. If, however, the debtor himself is one of the executors, in whom the estate vests, in legal theory, the debt payable by him is assumed to have been paid by him to himself and becomes part of the assets of the deceased testator in his hands. In re Bourne: Davey v. Bourne (1906) 1 Ch. 697 Section 87, Indian Trusts Act. This seems to be the case whether the executor proved the will or not provided he acted as executor, (Wankford v. Wanleford (1703) 1 Salk 299 and In re Applebee: Leveson v. Beale (1891) 3 Ch. 429. If however a person appointed an executor renounces the office or dies without having acted or obtaining probate, he will be in the position of a stranger debtor, and an action to recover the debt will be barred unless brought within the time limited for an action to recover a debt (Ingle v. Richards (1860) 28 Beav. 366. As one executor is as much entitled to be in possession of the assets of the testator and expend it in due course of administration as his co-executor, there can ordinarily be no suit against him by the co-executor to pay over the assets to him (Beall v. Hilliary 54 Am. Dee. 649; but on the death, of one of two executors, the powers of the office are vested in the survivor, and he then may have a right to claim the assets from the representatives of the deceased executor. Also a creditor or a general legatee may for the purpose of recovering his debt or his legacy bring a suit for administration and in that suit claim an account from the representatives of the deceased executor and payment of whatever is found due. Now that Subbarayadu himself was an executor, the co-executor Krishnayya could not bring an action at law to recover the debt due from Subbarayadu but can, if at all, only sue for administration to secure the payment of the debt due to the estate. In such an action, it may not be necessary to join as parties persons beneficially interested in the estate; but the decree in such a suit would not be for payment of the debt as a debt, but would be for an account of the monies belonging to the. testator's estate in the hands of an executor, see Peake v. Ledger (1850) 8 Hare 313 for form of decree the same case reported in 4 De. G. and Smale 131, Seton, p. 1458. But Krishnayya was not bound to bring such a suit so long at any rate as Subbarayadu was alive and the plaintiff cannot be prejudiced by any inaction on the part of Krishnayya (See In re Pardeo Mc Laughten v. Penny L.R. (1906) 1 Ch. 265

4. The plaintiff in this case is only a legatee and does not represent the estate and has no direct claim against any debtor to the estate. His only right under the will is to recover as legatee his share of the residue which was bequeathed to him from the executors and if the executors had died possessed of property belonging to the testator, to recover the same from their representatives; for there can scarcely be any doubt that the defendants as representatives of their father Subbarayadu would be bound to pay to the estate of Mangayya any assets which remained in the hands of Subbarayadu. As the debt due to Mangayya by Subbarayadu became assets in his hands on his appointment as executor, the plaintiff is entitled to two-thirds of the money which remained in the hands of Subbarayadu at the time of his death and the defendants are liable to pay that sum to the plaintiff. It is not said that any debts or other legacies remain to be paid and any further administration of the estate except dividing the residue between the plaintiff and Sitamma is not necessary. The plaintiff's right then is to recover a legacy, and even if he were an adult his suit would not be barred as he has under Article 123, twelve years from the time when he becomes entitled to receive it; Rajamannar v. Venkatakrishnayya I.L.R. (1902) M. 361 : 12 M.L.J. 183 In re Johnson: Sly v. Blake (1886) 29 Ch. D. 964 and In re Jane Davis; Jn re T. H. Davis : Erans v. Moore (1891) 8 Ch. 119. But whatever Article of limitation applies, as the cause of action accrued to the plaintiff for the first time after the death of Mangayya, and as he is still an infant, his right of action could not be barred.

5. The next question is whether the plaint is so framed as to give the plaintiff the relief he is entitled to. The claim made in the plaint as it now stands is undoubtedly a legal claim to recover a debt due to the estate as if the plaintiff is the present owner and representative of the estate, and the lower Court has given a decree to the plaintiff for the whole amount sued for on that basis. That as has already been stated is riot his right. There can scarcely be any doubt that the plaintiff and his advisers have managed to go wrong as often as they can, and although the plaint was allowed to be amended in the lower Court it is obviously still defective. At the close of the arguments in the appeal, the plaintiff applied for permission to further amend the plaint in accordance with his actual rights in the estate of his adoptive father and subsequently filed a petition for that purpose. This application is opposed by the appellants and the question is whether we should allow it now. The plaint contains all the necessary allegations to give the plaintiff the relief to which he is entitled though there is no specific prayer for administration either general or limited, and the claim is not made as for the recovery of a legacy. It is to make the plaint regular by claiming proper reliefs and to cure the defect as regards parties that the application to amend the plaint has been made in this Court. Inasmuch as the plaintiff is still an infant and as his claim is certainly not barred, to avoid further litigation an expense, we think we should allow the amendment now asked for if we can do so without prejudice to any vested rights of the defendants. Inasmuch as the rest of the properties belonging to Mangayya's estate except the sum due from Chunduru Subbarayadu is said to be now in the possession of Sitamma as guardian of the minor plaintiff and inasmuch as both Sitamma and Krishnayya agree to account to the minor for his share of the residue of the testator's estate and to be bound by all the proceedings which had hitherto been taken in this suit, there is no need to pass a decree for general administration or to send the case back for taking general accounts. In the view we have taken, namely, that the claim of the plaintiff is not a legal claim to recover a debt, but only a right to recover his share of the residue, Subbarayadu and his representatives would be entitled to claim, if they so desired, an enquiry as to whether Subbarayadu during his life-time made any payments or was entitled to retain any sum as executor out of the funds which were in his hands. No suggestion was made in the course of the trial in the lower Court that any disbursements were made or expenses incurred by Subbarayadu as executor of the estate of Mangayya, but it was said that if the account of the rice factory partnership is adjusted it will be found that Mangayya's estate was indebted to Subbarayadu. If the defendants insist on an enquiry they are entitled to it. As we can direct this inquiry in this suit, the amendment should we think be allowed and to obviate any possible objection as to want of parties, we also order Krishnayya the surviving executor and Sitamma the other residuary legatee to be added as defendants, reserving however the right of the plaintiff to an account of and payment of his share of the residue in their hands.

6. As the plaintiff is only entitled to 2/3 of the amount, the decree of the lower Court directing the payment of the whole sum to the plaintiff cannot stand. Further the residue is not payable till the infant plaintiff attains the age of majority. As the legacy is payable according to the terms of the will, on the plaintiff attaining majority it is clear that Sitamma's claim to her legacy is also not barred. In these circumstances it is unnecessary to drive Sitamma to a separate suit to recover her share of the legacy. The proper order then to make in view of the rights of the parties is an order directing defendants 1 to 6 to pay into Court out of the joint family property in their hands the sum for which on taking accounts they are found liable and directing its investment when paid under the directions of the Court. Prom out of the invested funds the plaintiff should be paid his share, namely 2/3, and Sitamma the remaining 1/3, when plaintiff attains the age of majority; liberty to be reserved to apply for this purpose.

7. There is one other question in the case, viz., as the debt due to Mangayya from Chunduru Subbarayadu became assets in the hands of Subbarayadu on the death of Mangayya, whether he was bound to pay interest thereon according to the rates stipulated in the contract between the parties or whether after that date he was to be treated as executor with the money of his testator in his hands for which he has not accounted and whether he was chargeable with any interest. It is clear that the monies if Mangayya which were in the hands of executors could have been invested and lent out for interest, and as it is not proved that they could have been lent out at any particular rate, we think 6% interest from the date of the death of the testator on the sum due till date of payment should be charged. There will be no costs in this Court. The costs of the lower Court will be provided for in the final decree to be passed on taking accounts. There will be a preliminary decree for accounts and inquiries in this Court.


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