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Chithambara Chetti Vs. Muthaya Chetti and ors. - Court Judgment

LegalCrystal Citation
SubjectContract
CourtChennai
Decided On
Judge
Reported in(1882)ILR5Mad330
AppellantChithambara Chetti
RespondentMuthaya Chetti and ors.
Excerpt:
cause of action - sale by french court of ship pledged to secure payment of debt due in future--claim by pledgee on proceeds of sale--suit to declare pledgee's title against french creditor dismissed. - - 8. that the executant of the bond should have been included, and that the suit is bad for non-joinder of this necessary party......party to the suit; that the pledge bond was fraudulent and invalid as to plaintiff's right in the sale proceeds of the suit, as it ought to have been registered.5. the district munsif gave judgment for plaintiff, granting him the declaration sought in the following terms: 'it is decreed that plaintiff's right to recover the amount due under the terms of exhibit a be declared, and the defendant do pay plaintiff's cost and bear his own.'6. defendant appealed on the following, among other grounds : 7. that plaintiff had no claim against defendant, and that there is no cause of action shown under the law in british india.8. that the executant of the bond should have been included, and that the suit is bad for non-joinder of this necessary party.9. the district judge, in appeal, was of.....
Judgment:

1. Plaintiff's suit was for a declaration of plaintiff's right to recover the amount due by one Manjirasa to plaintiff on a bond executed in his favour by that person on the 30th August 1878, on account of a loan to him by plaintiff of Rs. 1,500, which it was engaged should be repaid to plaintiff by two instalments, one on the 26th February 1879 and the other in August 1879, with interest. Manjirasa, according to plaintiff's case, pledged his ship Ahmed Buksh as security for repayment of the loan. He then went off with his ship to Karikal, where defendant had it seized for a debt due to him. It was sold and the proceeds were held by the French Court which had ordered the sale.

2. Plaintiff made a claim upon the proceeds. The French Court on 11th December 1878 required plaintiff to produce, within 25th January 1879, copy of judgment of an English Court, acknowledging and sanctioning his claim against Manjirasa.

3. It is stated, and seems to be conceded, that the sale of moveables in French territory conveys to the purchaser a title free from all encumbrances. Plaintiff's object is to obtain the declaration of his right against Manjirasa, and then apply to the French Court for a share in the proceeds of the ship.

4. The defence set up was that, as plaintiff's object was to obtain consequential relief, he ought to pay the full stamp; that the ship having been purchased by a third party at Karikal, plaintiff has no cause of action against the defendant; that plaintiff has no right to establish the genuineness of the bond, as against the defendant, before the expiration of the time fixed for payment, without making Manjirasa a party to the suit; that the pledge bond was fraudulent and invalid as to plaintiff's right in the sale proceeds of the suit, as it ought to have been registered.

5. The District Munsif gave judgment for plaintiff, granting him the declaration sought in the following terms: 'It is decreed that plaintiff's right to recover the amount due under the terms of Exhibit A be declared, and the defendant do pay plaintiff's cost and bear his own.'

6. Defendant appealed on the following, among other grounds :

7. That plaintiff had no claim against defendant, and that there is no cause of action shown under the law in British India.

8. That the executant of the bond should have been included, and that the suit is bad for non-joinder of this necessary party.

9. The District Judge, in appeal, was of opinion that, under Section 42* of the Specific Belief Act, plaintiff had a right to bring the suit against defendant.

10. The defendant now appeals to the High Court on the ground that the plaintiff had no cause of action against defendant.

11. The plaintiff being the pledgee of the vessel can have no claim against the attaching creditor.

12. The rights of the plaintiff are solely dependent upon the contract of hypothecation made within British territory.

13. The suit is premature.

14. In support of the decrees of the Courts below, it is urged on behalf of the plaintiff that Section 42 of the Specific Belief Act confers on plaintiff a right to bring this suit.

15. That section runs: 'Any person entitled to any legal character or to any rights as to any property, may institute a suit against any person denying or interested to deny his title to such character or right, and the Court may, &c.;

Provided that no Court shall make any such declaration, when the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.

16. The plaintiff says, 'the defendant denies my right and therefore I have a right to come for a declaration of my right. This gives me a sufficient cause of action.' The right which plaintiff establishes in this suit is a right to recover from Manjirasa (who appears as a witness for plaintiff) the amount of the bond. He also establishes the bond, which shows that the ship was pledged as security for the repayment of the amount. The decree has omitted to declare the liability of the ship, possibly because the District Munsif had doubts whether the plaintiff had not lost all right by the sale in French territory to have recourse to the ship as a means of recouping himself.

17. According to the generally recognized principles of private international law certain hypothecation liens survive, notwithstanding a sale in a foreign territory. Story says, in his Conflict of Laws, Section 402 : ' Upon the general principles as to the operation of contracts, and the rule that moveables have no locality, it would seem that these privileges, hypothecations, and liens [333] ought to prevail over the rights of subsequent purchasers and creditors in every other country; that, having once attached rightfully in rem, they ought not to be displaced by the mere change of local situation of the property' (see also Westlake Edition of 1858, pp. 256 and 257). The French law of sale differs from the old Roman law and the English law, in recognizing in sale a contract warranting the title (see Benjamin on Sales, pp. 317-319, 2nd Edition); but at the same time, a fundamental maxim of French law is 'La vente de la chose d'antrui est nulle' (Code Napoleon, Section 1599) and, though the French processual law may purport to convey property in a sale under a decree free of all encumbrances, where these encumbrances had been effected by contracts in French territory, such sale could hardly be held to pass such rights in the property already acquired under a different law in foreign territory, as are usually by international law held to survive. If it did so, it would contravene the principle of the maxim (Code Napoleon, Section 1599) above quoted, and would purport to give a title to one person of property in which another had acquired rights.

18. But the lien of the plaintiff would appear not to be one of the special liens which are held to survive, notwithstanding a sale in foreign territory (see Story, Section 402).

19. But, however this may be, plaintiff either has a right in the ship surviving still, or it is altogether gone.

20. He had no right whatever in the sale proceeds of the ship at the date of the sale or at the date of the claim made by him which defendant resisted. Those proceeds, in so far as they were more than available for defendant's claim, belong to Manjirasa. All that plaintiff could claim of Manjirasa was. payment at the due date which had not arrived. He could not say of anything belonging to Manjirasa, save what had been pledged to him, that he was entitled to it or had acquired any right to it.

21. Even if the proceeds had been in British territory, and plaintiff had brought a suit to enforce payment and the suit had not been premature, he could still have no right to say 'those proceeds are mine,' or even to say' I have some right in them,' and this, not even though he had attached them before judgment.

22. In this latter case, they would indeed be in the custody of the Court for disposal in accordance with the terms of the decree, but he would even then be entitled only to enforce the decree against them, and could not say that they were his until ho had got possession of them under an order from the Court.

23. At the date of his claim and that of the denial by defendant of his title to relief, plaintiff had no right in these proceeds but only a personal right against Manjirasa to the fulfilment of the obligation and a hypothecation right as against the ship. The denial by defendant of plaintiff's right took effect only upon plaintiff's claim to share in the proceeds, for defendant was not interested in denying, and did not deny, plaintiff's right as against Manjirasa personally, and against the ship; and as plaintiff has no right in the proceeds, the denial of his title in them did not give him a cause of action against defendant.

24. We, therefore, reverse the decrees of the Courts below and dismiss plaintiff's suit.

1 Discretion of Court as to declarations of status or right:

[Section 42: Any person entitled to any legal character, or to any right as to any property, may institute a suit against any person denying, or interested to deny, his title to such character or right, and the Court may in its discretion make therein a declaration that he is so entitled, and the plaintiff need not in such suit ask for any further relief ;

Bar to such declaration.

Provided that no Court shall make any such declaration where the plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.

Explanation ;-A trustee of property is a 'person interested to deny' a title adverse to the title of someone who is not in existence, and for whom, if in existence, he would be a trustee.]


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