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Subbaraya Pillai Vs. Vaithilingam - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Judge
Reported in(1897)ILR20Mad91
AppellantSubbaraya Pillai
RespondentVaithilingam
Cases ReferredSubbaraya v. Vythilinga I.L.R.
Excerpt:
trustee of composition deed - managing member of a firm appointed as trustee--right of suit after dissolution of the firm. - - we are clearly of opinion that the plaintiff is entitled to maintain the suit as trustee appointed by the mauritius court under its order of the 22nd july 1887. the district judge has misunderstood the intention of the composition deed, exhibit c, and has not given due weight to the language and intention of the above order of the court, made with a view to effectually carry out the object of the compensation deed. 3.that these words are merely descriptive appears even more clearly from the vesting order of the court of bankruptcy, dated 22nd july 1887. it runs: , seems to us to show clearly that the latter words are merely descriptive just as the word 'trader'..........holding that position. the words are 'that naga pillai subbarayan, the managing member of the said firm, v. subbarayan and company, be appointed trustee,' etc.3.that these words are merely descriptive appears even more clearly from the vesting order of the court of bankruptcy, dated 22nd july 1887. it runs: 'it is further ordered that all the estate and property of the bankrupts both in mauritius and in india...be, and the same are, hereby vested in naga pillai subbarayan of port louis trader, managing member of the firm, v. subbarayan and company, who is hereby appointed 'trustee' to carry out the said composition with full power to recover and realise all the said estate and property.' the interposition of the plaintiff's address and of his description as a 'trader' between his name.....
Judgment:

1. The facts in this case have been set out with sufficient accuracy by the lower Appellate Court, but we are of opinion that some of the documents have been misconstrued, and the rights of the plaintiff have been misunderstood. We are clearly of opinion that the plaintiff is entitled to maintain the suit as trustee appointed by the Mauritius Court under its order of the 22nd July 1887. The District Judge has misunderstood the intention of the composition deed, Exhibit C, and has not given due weight to the language and intention of the above order of the Court, made with a view to effectually carry out the object of the compensation deed. We do not doubt but that Naga Pillai Subbarayan (the plaintiff) was nominated in Exhibit C as trustee in consequence of his being the managing member of the firm of V. Subbarayan and Company, who had undertaken to pay the creditors of the insolvents--Coo. Vaithilingam and Company--for whose benefit the estate of the insolvents was to be collected. But we find it difficult to understand what the Courts below mean by holding that plaintiff was appointed a trustee in his capacity as manager of that firm.

2. If the intention was that the manager, for the time being, of that firm, should be ex-officio trustee, it would have been easy to have said so; yet, if this is not the meaning, we are unable to attach any definite meaning to the expression. Exhibit C does not say that N. Subbarayan should be appointed in his capacity as managing member. It merely describes him as holding that position. The words are 'that Naga Pillai Subbarayan, the managing member of the said firm, V. Subbarayan and Company, be appointed trustee,' etc.

3.That these words are merely descriptive appears even more clearly from the vesting order of the Court of Bankruptcy, dated 22nd July 1887. It runs: 'It is further ordered that all the estate and property of the bankrupts both in Mauritius and in India...be, and the same are, hereby vested in Naga Pillai Subbarayan of Port Louis trader, managing member of the firm, V. Subbarayan and Company, who is hereby appointed 'trustee' to carry out the said composition with full power to recover and realise all the said estate and property.' The interposition of the plaintiff's address and of his description as a 'trader' between his name and the words 'managing member,' etc., seems to us to show clearly that the latter words are merely descriptive just as the word 'trader' undoubtedly is. It is, we think, this fundamental misconception that has led the Courts below to misunderstand the plaintiff's position.

4. The arrangement evidenced by the above two documents is that V. Subbarayan and Company should pay the creditors of the bankrupts fifty per cent, of their debts, that, in consideration of this, the bankrupts assign their property for the benefit of V. Subbarayan and Company and the plaintiff is appointed by the Court a trustee to collect the property of the bankrupts for the benefit of the firm of V. Subbarayan and Company and the property is 'vested' in him as such trustee. The Subordinate Judge thought that, as the plaintiff was suing for costs awarded against defendant after the date of the composition deed, the plaintiff as trustee could not sue for those costs, but the District Judge has pointed out that those suits were brought by the defendant against plaintiff for acts done by him as trustee and the costs were awarded to plaintiff as trustee. There is nothing to prevent the plain-till from now suing as trustee to recover costs awarded to him in suits maintained by him as trustee, though those suits were maintained for the benefit of V. Subbarayan and Company and were financed by that firm. Plaintiff, no doubt, may be bound to account to the firm for such costs, but that cannot affect the plaintiff's right to recover them from the defendant in accordance with the decrees. If any of the costs were awarded, as the Subordinate Judge seems to think, they were to the firm, the plaintiff alone could not sue for them, but we understand that this is not the case.

5. The District Judge has also, we think, misapprehended the effect of Exhibit B. He rightly states that what may be called the legal estate of the bankrupts vested in the plaintiff, though their equitable estate vested in the firm of V. Subbarayan and Company, but when he adds that Exhibit B assigns the whole estate both legal and equitable, to Rayappan Appon and that the latter is, therefore, the only person entitled to maintain this suit, we think he misconstrues Exhibit B. Exhibit B transfers to Appon all the interest which the firm of V. Subbarayan and Company had acquired in the estate of the bankrupts. It neither could nor did transfer anything more. Plaintiff, as a member of the firm, assented to and admitted that he was bound by that document, but it did not, and could not, assign either the rights or the duties of the plaintiff as trustee.

6. Even if the plaintiff desired to do so, he could not delegate his rights or duties as trustee, but there is nothing to show that he attempted to do so.

7. The only effect of the document (Exhibit B) is that Rayappan Appon, instead of the firm of V, Subbarayan and Company, thereby became the beneficiary for whom the plaintiff is to collect the bankrupt's assets, and to whom he must account for the same, or for other moneys received by him as trustee. Exhibit A shows that Appon and the plaintiff' both correctly understood their respective rights, and the duty of plaintiff as trustee.

8. The result then, is, that the plaintiff as trustee can maintain this suit. We may observe that the position which we have assigned to plaintiff is in harmony with that which held in the case reported in Subbaraya v. Vythilinga I.L.R. 16 Mad. 85 a case arising out of the same transactions and practically between the same parties.

9. We set aside the decrees of the Courts below and direct that the suit be restored to the file of the Subordinate Judge, and be disposed of according to law.

10. Plaintiff must have his costs in the Lower Appellate and in this Court. The costs in the Subordinate Judge's Court will abide and follow the result.


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