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Rachamadugu Venkatapathi (Minor) by Next Friend Lakshmamma Vs. K. Ramadas Rao (Receiver) - Court Judgment

LegalCrystal Citation
SubjectTrusts and Societies;Property
CourtChennai
Decided On
Reported in(1924)47MLJ528
AppellantRachamadugu Venkatapathi (Minor) by Next Friend Lakshmamma
RespondentK. Ramadas Rao (Receiver)
Cases ReferredComfort v. Betts
Excerpt:
subject: property - - the official receiver contends that he is entitled to 12 the decree amount and not 1 4th only and that as the swami would as to his 112 under the assignment deed be in the position of an ordinary creditor, the appellant, by the transaction in 1919, can acquire no better rights against the insolvent's estate than the swami had and must rank as an ordinary creditor......relinquishment whereby he acquired the swami's half-share in the net proceeds provided for by the deed of assignment. the appellant asserts that the insolvent (now represented by the official receiver) is entitled only to 1 4th of the amount recovered, himself being entitled to the other 1 4th which, together with the 1/2 acquired from the swami amounts to 3 4th of the fund in court. the official receiver contends that he is entitled to 12 the decree amount and not 1 4th only and that as the swami would as to his 112 under the assignment deed be in the position of an ordinary creditor, the appellant, by the transaction in 1919, can acquire no better rights against the insolvent's estate than the swami had and must rank as an ordinary creditor. this contention was upheld by the district.....
Judgment:

Phillips, J.

1. I agree with the order proposed by my learned brother and need only say that the decision of the Court of Appeal in 1891 in Comfort v. Betts (1891) 1 QB 737 governs this case also. I may also refer to Palaniappa v. Lakshmanan I.L.R. (1893) M 429. and Navajee v. The Administrator-General of Madras I.L.R. (1913) M 500. as supporting this conclusion. The appellant is entitled to the money in Court as the assignment created in the assignor's favour a lien in the nature of a trust or a charge on the money recovered thereunder. The appeal is therefore allowed with costs throughout.

Odgers, J.

2. On 23rd September, 1913, the Swami of Ahobilam Mutt assigned to Rangiah and Sanjeeviah the amount due for rent and damages from one Ramappa who had leased certain lands belonging to the Mutt. The assignees were to collect the arrears of rent due from Ramappa, recover damages from him in respect of cutting trees, pay all the costs themselves in the first instance and pay over hall the net proceeds to the Swami after deducting costs. Rangiah is now represented by minor petitioner-appellant and in 1915 Sanjeeviah was adjudicated an insolvent. Certain moneys have been recovered from the lessee and are in deposit in the District Court of Kurnool. The appellant states that he paid the Swami in 1919 Rs. 1,500 and took a deed of relinquishment whereby he acquired the Swami's half-share in the net proceeds provided for by the deed of assignment. The appellant asserts that the insolvent (now represented by the Official Receiver) is entitled only to 1 4th of the amount recovered, himself being entitled to the other 1 4th which, together with the 1/2 acquired from the Swami amounts to 3 4th of the fund in Court. The Official Receiver contends that he is entitled to 12 the decree amount and not 1 4th only and that as the Swami would as to his 112 under the assignment deed be in the position of an ordinary creditor, the appellant, by the transaction in 1919, can acquire no better rights against the insolvent's estate than the Swami had and must rank as an ordinary creditor. This contention was upheld by the District Judge and the question is whether it is right and whether under the deed of assignment the assignees were constituted trustees for the Swami as to 1 2 the proceeds they recovered. It is further contended that if they were not trustees they were agents for collection or that a charge was created on the fund recovered in favour of the Swami. In my opinion I think the assignment was an absolute one in favour of the assignees. ' I do hereby assign to you, your heirs and assignees the amount now owing and hereafter falling due. ' It does not signify in this country whether the assignment is one at law by virtue of Section 25 of the Judicature Act of 1873 or is only an equitable assignment. A trust in favour of the assignor whether of the whole debt assigned or of the surplus after retention thereout of a definite sum by the assignee does not prevent the assignment being absolute; in the case of an equitable assignment a direction to pay a sum of money out of a specified debt or fund constitutes such an assignment, though not of the whole debt or fund and it is immaterial that the amount of the debt assigned is not ascertained at the date of the assignment. See per Chitty, L.J. in Durham Brothers v. Robertson (1898) 1 QB 765. This case appears to me to resemble Comfort v. Betts (1891) 1 QB 737 where certain persons assigned debts due to them to the assignee to recover the same and on recovery to pay to the assignors respectively out of the aggregate sum recovered such proportionate part of such aggregate sum as should represent or comprise the individual debt due to them respectively or such part thereof as might have been recovered by the assignee. The Court of Appeal held that what was intended was an absolute assignment of the debts subject to a trust for the payment of the money recovered to the creditors. In my portion this decision is applicable to this case; the only difference here is the clause with regard to the recovery of damages, but as pointed out above that is not a matter which needs consideration in this country. The intention here was to pass the whole of the assignor's interest in the debt due and in the recovery of damages. He was however entitled to half the net proceeds recovered. The Court of Appeal has held in the case quoted that the intention in such a case imports a trust and following that decision I have no doubt that it was intended by the parties here to the deed of assignment that the assignees should hold half the proceeds in trust for the assignor. The Swami would therefore not be in the position of an ordinary unsecured debtor with regard to the proceeds and the appellant who stands in his shoes will occupy the same position.


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