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Ramanadhan Chetty Vs. Katha Velan and Two ors. - Court Judgment

LegalCrystal Citation
SubjectBanking
CourtChennai
Decided On
Judge
Reported in(1918)ILR75Mad353
AppellantRamanadhan Chetty
RespondentKatha Velan and Two ors.
Cases ReferredSowcar Lodd Govinda Doss v. Muneppa Naidu I.L.R.
Excerpt:
promissory-note in favour of the managing trustee of a charity - the trustee succeeded by another--latter's right to sue on the note without any assignment or endorsement. - - we fail to see why this principle should not be extended to public trusts......section 57 of the act, by implication, seems to contemplate that the legal representatives of a deceased person can negotiate a promissory-note. the practice of allowing legal representatives in this country to sue on notes executed to their predecessors is apparently founded on the principle that the act does not abrogate rules of devolution of rights in the properties of the deceased7. if a son, as legal representative, can sue on a note executed to his father, there could be no impediment in principle to other leirs or successors having a similar right. the case of trustees is, in some respects, stronger than that of other heirs. in the case of private trusts, section 75 of act ii of 1882 enacts that the property standing in the name of the predecessor shall vest in the successor......
Judgment:
ORDER

1. We must call for a finding as to whether at the time of the suit the right to collect monies due to the trust had devolved solely on the plaintiff.

2. Fresh evidence may be adduced, if desired. The finding will be submitted within two months from this date, and the parties will be at liberty to file objections to the said finding within seven days after notice of the return of the same shall have been posted up in this Court.

3. We must accept the finding that the promissory-note sued on was executed to Ulagappa Chettiar as trustee of the charity. The question whether the said payee could alone have maintained the suit without joining his co-trustees was not raised in the Court below. It would depend in each case upon the powers and duties of the managing trustee whether such a person is competent to represent the trust solely. That question has not been put in issue and we are not prepared to allow it to be debated now.

4. Another question which was argued at some length need not be discussed now, namely, whether if there is an assignment of the note by the act of parties, it should not be only in the mode prescribed by the Negotiable Instruments Act. There is a considerable conflict of opinion on this question and it can only E be settled by a reference to a Full Bench.

5. The possibility of transfer of right in the note by operation of law has not been the subject of judicial pronouncements to any considerable extent. In this Presidency, apart from certain observations of MILLER, J., in Sowcar Lodd Govinda Doss v. Muneppa Naidu I.L.R. (1908) Mad 634, the matter is res integra.

6. The Negotiable Instruments Act only deals with transfers by negotiation. Under the English Bills of Exchange Act the common law of the land is expressly saved (see Section 97). It is a pity that there is no such saving clause in the Indian Enactment. Section 57 of the Act, by implication, seems to contemplate that the legal representatives of a deceased person can negotiate a promissory-note. The practice of allowing legal representatives in this country to sue on notes executed to their predecessors is apparently founded on the principle that the Act does not abrogate rules of devolution of rights in the properties of the deceased

7. If a son, as legal representative, can sue on a note executed to his father, there could be no impediment in principle to other leirs or successors having a similar right. The case of trustees is, in some respects, stronger than that of other heirs. In the case of private trusts, Section 75 of Act II of 1882 enacts that the property standing in the name of the predecessor shall vest in the successor. It is not necessary to obtain a transfer by an instrument or by endorsement. We fail to see why this principle should not be extended to public trusts. In Byles on Bills it is stated, 'The executor of a deceased party to a bill or note has, in general, the same rights and liabilities as his testator.' ' The executors of every person ', says Lord Macclesfield, ' are implied in himself and bound without naming' . . . ' On the death of the holder of a bill or note, his executors or administrators may indorse; and an indorsement by the executors or administrators is for all purposes as effectual as an indorsement by the deceased.' The cases quoted by the author in support of the above propositions show that the English Bills of Exchange Act does not affect the common law right of devolution by operation of law. The same considerations are applicable to the construction of the Indian Enactment.

8. In Catherwood v. Chabaud (1823) 1 B & C. 150. it was held that a note given to an administrator as such can be sued on without assignment by an administrator de bonis non to the original estate. BAYLET, J., points out that ' the money recovered is applicable to the right fund, as assets of the first intestate.' The case of a trustee replacing another stands on the same footing.

9. Broadly speaking, trustees exercise rights and obligations as agents of the trust. The trust being the owner, succeeding trustees derive their rights and office by relation to the trust and not as the heirs of the last holder of that office. All of them form a chain of representatives in respect of the trust, as was once said by the Judicial Committee. In this view, each trustee by virtue of his appointment takes up the management of the trust properties at the place left by the previous trustee. It is not necessary that the authority or consent of such a person should be given to the successor. As pointed out by MILLER, J., in Sowcar Lodd Govinda Doss v. Muneppa Naidu I.L.R. (1908) Mad. 534 the predecessor being functus officio would have no power to endorse the note given to him in a capacity which he was divested of. Consequently the present plaintiff who has replaced Ulagappa Chetty is entitled to sue on the note without any assignment or endorsement.

10. We are, therefore, of opinion that the decision of the learned Judge must be reversed and that of the Court below must be restored. Appellant will get his costs from the second defendant in this Court.


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