1. The plaintiff, acting secretary of Sri Kannika Parameswari Visamsetty Venkataratnam Hindu High School Committee, sues for the recovery of Rs. 4,278-5-9 from the defendants who are the sons of one Venkayya Garu. The plaint allegation is that Venkayya managed the affairs of the High School and was in possession of considerable funds and that he rendered an account to the committee of the school, and that on going through the account it was found that the account rendered by him was incorrect and that a sum of Rs. 4,000 and odd was with him and that the defendants who are his heirs are bound to pay the amount to the plaintiff. The defendants raised various contentions and the Subordinate Judge of Bezwada dismissed the plaintiff's suit on the ground that the plaintiff had no cause of action against the defendants. On appeal the District Judge at Masulipatam reversed the decree of the Subordinate Judge and remanded the suit to the Lower Court for taking accounts. Against the decree of the District judge the defendants have preferred this appeal.
2. The point for determination in this appeal, is whether the plaintiff has a cause of action against the defendants. The Hindu High School at Bezwada was managed by a Committee called Sri Kannika Parameswari Hindu High School Committee till November, 1915. The Committee was registered under the Societies Registration Act of 1860. Owing to lack of funds or other reasons the Committee transferred the institution and its properties to Sri Kannika Parameswari Visamsetty Venkataratnam Hindu High School Committee which was also registered under the Societies Registration Act of 1860. This transfer is evidenced by Ex. F. dated 28th November, 1915. The contention of the appellants is that when the first committee transferred all its rights to the second committee it did not transfer any outstanding belonging to the first committee and therefore the plaintiff who is the secretary of the second committee is not entitled to sue the defendants for any sum of money that might be found due to the first committee. From the terms of Ex. F it is clear that the first committee transferred all its assets and liabilities in connection with the Hindu High School at Bezwada to the second committee. In paragraph 2 the recital is-
Whereas the members of your Committee applied on 5th September, 1915, praying that the management of Sri Kannika Parameswari Hindu High School at Bezwada and the entire properties thereof be transferred to your committee on condition of your committee discharging the debts due by the said High School Committee and in pursuance of the terms of the memorandum hereto attached. We have agreed thereto and the members of our general committee have passed a resolution No. 8 on 19th September, 1915, to the effect that our general committee should be dissolved, that the management of the School as well as the properties should be transferred to your committee subject to the terms of the said memorandum, etc.
and in the operative portion of the deed there is this clause:
Therefore in accordance with the said resolution we have hereby transferred to you the management of the School and delivered possession to you of the immoveable and moveable properties belonging to the said School worth about Rs. 30,000 and specified in the schedules of moveable and immoveable properties.
3. The appellant wants to rely upon the fact in the schedule of assets this debt due from Venkayya is not mentioned; but from the tenor of the document and from the recitals therein it is quite clear that the entire properties of the school were transferred to the second committee. As the learned Judge remarks though there is no list of debts in the schedule to Ex. F the debts of the old committee incurred in connection with the school were discharged by the second committee. One of the recitals is-
With this sum and with the sums which might be received hereafter the debts of the School should be discharged.
4. The second committee did undertake to discharge the debts of the first committee, and, though no list of debts was attached to Ex. F. the second committee was bound to pay all the debts of the first committee. It is not necessary that when one committee transfers all its assets to another committee there should be a list in order to pass the title of the first committee to the second committee with regard to the out-standings. In this case the second committee took over all that the first committee possessed on behalf of the Hindu High School at Bezwada. The right of the first committee to sue for and recover any amount due to that committee did pass to the second committee and the plaintiff is therefore entitled to bring a suit.
5. The next contention of the appellants is that the first committee had only a right to sue Venkayya and a mere right to sue cannot be transferred by reason of the provisions of Section 6(e) of the Transfer of Property Act. The mere right to sue cannot be transferred. Here what was transferred was not a mere right to sue but the debt that was due by Venkayya to the first committee and therefore the transfer does not offend against the provisions of Section 6(e) of the Transfer of Property Act. The plaint as laid contains as averment that Venkayya was indebted to the first committee in the sum of Rs. 3,145-13-8. Venkayya was in possession of the funds belonging to the Hindu High School. He rendered an account which was afterwards found to be false and according to the plaintiff's case Venkayya was in possession of the funds of the committee and therefore he was bound to pay that amount to that committee, and the second committee having taken over the management with the rights and liabilities of the first committee is entitled to sue for and recover the amount due to the first committee. The cases relied upon by the appellant, Khetra Mohan Das v. Biswa Nath Bera I.L.R. (1924) C 972 and Varahaswami v. Ramachandra Raju I.L.R. (1913) M 138 have no application to the present case. In Khetra Mohan Das v. Biswa Nath Bera I.L.R. (1924) C 972 it was held that a right to take accounts and to recover such sums as may be found due is not assignable being a mere right to sue within the meaning of Section 6, Clause (e) of the Transfer of Property Act. On the construction of the document and from the way in which the suit as framed it was found that the plaintiff was not entitled to maintain a suit as he had purchased a mere right to sue for account. In Varahaswami v. Ramachandra Raju I.L.R. (1913) M 138 it was held that a mere right to recover damages for the negligence of an agent in failing to collect rents cannot be transferred. The mere right to sae for damages is not assignable. In Varahaswami v. Ramachandra Raju I.L.R. (1913) M 138 the cause of action was the negligence of the agent. If it was shown that the agent did collect a certain sum of money on behalf of the principal the agent was accountable for the amount actually received by him; and for what he had with him, he was in the position of a debtor for he had the money of the principal in his hands. The assignment of the amount in the hands of the agent would not offend against Section 6(e) of the Transfer of Property Act. Vide Madho Das v. Ramji Patak I.L.R. (1894) All 286. In Prosser v. Edmunds (1835) I Younge and Collyer Ex 481 the Lord Chief Baron held that a naked right to sue was not assignable. In Hill v. Boyle L.R. (1867) 4 Eq Cas 260 it was held that a mere right to sue a trustee for interest and profits of a trust fund in his hands was not transferable.
6. The observations of Parker, J. in Glegg v. Bromley (1912) 3 K.B. 474 are applicable to the present case. At page 490 the learned Judge observes:
It is to be observed that an equitable assignee of a chose in action, whether it is legal or equitable, could institute proceedings and maintain proceedings for its recovery. The question was whether the subject-matter of the assignment was, in the view of the Court, property with an incidental remedy for its recovery, or was a bare right to bring an action either at law or in eauity. With regard to the assignments of future property, they stand, I think, on a totally different footing. Nothing passes, even in equity, until the property comes into present existence. Only when this happens can the assignment attach and an interest pass.
7. This observation is quoted with approval by their Lordships of the Privy Council in Subhadrayamma v. Venkatnpathi Raju I.L.R. (1924) Mad 230. In that case the plaintiff's husband advanced certain sums of money for litigation to the defendant on the express agreement that the money borrowed from the plaintiff should have a charge upon the moveable and immoveable properties obtained by means of the litigation. Owing to the disputes between the plaintiff and the defendant the plaintiff refused to advance any further moneys. After a time the suit was compromised and the lender's widow claimed that the advance and the interest thereon were a charge on the money paid under the compromise. The Privy Council held that the plaintiff was entitled to a charge on the amount obtained on compromise in the suit. Their Lordships held that the agreement was an assignment of part of the fruits of the litigation, and even if they were to be regarded as non-existing property at the date of the agreement, the agreement attached upon the money being paid. The principle is that if a certain sum of money is due from any person that sum is recoverable on assignment and if it is to be ascertained only on taking accounts it might be that the right to take the account is not assignable; but where the allegation is that the defendant is in possession of funds belonging to a person or that the defendant is accountable for a definite sum of money to a person such a claim is transferable. In such a case the right to recover the money is not a mere right to sue and the transfer of such a right does not offend against Section 6(e) of the Transfer of Property Act. In the result the appeal is dismissed with costs.
A.A.O. No. 256 of 1919: In view of our judgment in A.A.O. No. 269 of 1919 the appellant does not press this appeal. it is dismissed with costs.