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K. Subbarayudu and ors. Vs. K. Subbanna and anr. - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtChennai
Decided On
Reported inAIR1925Mad371
AppellantK. Subbarayudu and ors.
RespondentK. Subbanna and anr.
Cases ReferredPalaniappa Chettiar v. Shunmugam Chettiar
Excerpt:
- .....of the cases cited before me refer to the question how far recourse can be had to the estate on a note executed by an executor, or a guardian of a minor or a trustee of property. such are the cases in krishna chettiar v. nagamani ammal (1915) 39 mad. 915 ammalu ammal v. namagiri ammal (1917) 39 m.l.j. 631 venhatamwmi naicker v. muthuswami pillai (1917) 34 m.l.j. 177 and ramajogayya v. jagannadhan (1918) 42 mad. 185. when an executor executes a promissory note, to exclude his personal liability he must bring himself under the exclusion provided for in section 29 of the negotiable instruments act. exhibit a clearly does not comply with that provision. i must hold, therefore, that defendants 2 and 3 are personally liable. i need not consider whether in this view the decree against the.....
Judgment:

Krishnan, J.

1. These are three Second Appeals arising from three suits brought by three plaintiffs on promissory notes executed to them respectively by defendants 2 and 3. The cases being similar in their facts they have been dealt with in one judgment by the lower Courts and it will be convenient to do so in Second Appeal as well.

2. One Viranna died leaving debts due to these plaintiffs among others. The 1st defendant is his minor son and was his undivided co-parce,ner. The property belonging to Viranna is found to have been all joint family property. He nevertheless executed a will before his death and named defendants 2 and 3 as the executors of it; he authorised them to take possession of the properties on behalf of his minor son and manage them and collect outstandings and pay the necessary education and maintenance expenses with his mother's consent and hand over the properties and accounts to the minor on his attaining majority. Defendants 2 and 3 entered upon the management under this will, though it is clear that the document is invalid in law as a will in so far as it purported to deal with the joint family property. Plaintiffs as creditors of Viranna pressed defendants 2 and 3 for the payment of their dues. Defendants 2 and 3 asked them for time and executed the suit promissory notes themselves in renewal of promissory notes of the testator. In these suits plaintiffs claimed decrees against defendants 2 and 3 personally as the makers of the notes and against the estate of the 1st defendant. The District Munsif gave them a decree against defendants 2 and 3 personally and dismissed the suits against the minor's estate. Thereupon both the plaintiffs and defendants 2 and 3 appealed to the Subordinate Judge who gave decrees against the estate of the minor but dismissed the suit against defendants 2 and 3. The minor has not appealed, but plaintiffs have brought these Second Appeals claiming personal decrees against defendants 2 and 3.

3. The question for decision is whether defendants 2 and 3 are personally liable under the notes. It will be convenient now to refer to the promissory notes in the three cases, separately as there is some difference in their language. Taking S.A. No. 998 first, the note Exhibit A though it gets out in the preamble that it is executed by Subbanna and Satyanarayana (who ate defendants 2 and 3) as executors of the will of Viranna, it says in the body of the note: 'On demand we promise to pay to you or to your order, etc.' and it is signed by defendants 2 and 3 without any qualification being added to their signatures. It seems to me clear on the language of the note that defendants have made themselves personally liable for the amount due. When a note is executed by any person he is personally liable on it unless it is clear that such a liability is excluded. The document no doubt speaks of the defendants as executors of Viranna's will. But the will, being invalid they had really no such capacity but even if it is to be assumed that the defendants executed Exhibit A only as the executors of Viranna's will, plaintiffs are still entitled to a personal decree as executors are personally liable on notes executed by them as such even though they may be acting for the benefit of the testator's estate in doing so, unless their liability is excluded in the manner provided in Section 29 of the Negotiable Instruments Act. It is clear law that an executor is personally liable. See Chidambaram Pillai v. Veerappa Chettiar (1917) 22 M.L.T. 380 Sudhir Chandra Das v. Gobinda Chandra Roy (1917) 45 Cal. 538 and Ferhall v. Ferhall (1871) 7 Ch. 123. It was argued that as Exhibit A was executed not for money borrowed by the executors themselves but for money already due by the testator the liability fell only on the estate Whether recourse can be had to the estate or not in those circumstances, a point I need not consider, the liability of the executants of the note, it seems to me, remains. The suit note was executed by the defendants in consideration of the plaintiffs forbearing to sue. In fact the correspondence shows that the defendants expressly asked for time and executed the note to get such time and they got it thereby. Most of the cases cited before me refer to the question how far recourse can be had to the estate on a note executed by an executor, or a guardian of a minor or a trustee of property. Such are the cases in Krishna Chettiar v. Nagamani Ammal (1915) 39 Mad. 915 Ammalu Ammal v. Namagiri Ammal (1917) 39 M.L.J. 631 Venhatamwmi Naicker v. Muthuswami Pillai (1917) 34 M.L.J. 177 and Ramajogayya v. Jagannadhan (1918) 42 Mad. 185. When an executor executes a promissory note, to exclude his personal liability he must bring himself under the exclusion provided for in Section 29 of the Negotiable Instruments Act. Exhibit A clearly does not comply with that provision. I must hold, therefore, that defendants 2 and 3 are personally liable. I need not consider whether in this view the decree against the estate is correct or not for no appeal has been filed for the minor against it. S.A. No. 998 must therefore be allowed and the decree of the Subordinate Judge modified by making defendants 2 and 3 also liable for the amount decreed and costs of the first Court. Defendants 2 and 3 will pay the costs of their appeal to the lower Appellate Court and of this second appeal to the plaintiffs with the usual 6 per cent, interest on them.

4. Taking S.A. Nos. 999 and 1000 next, the language of the notes in these cases is different from the language of the note in S.A. No. 998. The notes in these cases begin by saying in the preamble that they are executed by the minor by the guardians appointed under Viranna's will but they are in fact both executed by defendants 2 and 3. The note in S.A. No. 999 is signed by them as guardians of the minor, whereas the note in S.A. No. 1000 is merely signed by them without any description added. Under both notes, however, the executants, defendants 2 and 3 themselves, promise to pay the amount on demand. In Exhibit E, the note in S.A. No. 1000, the language is 'any one of us shall be liable for and pay this sum of Rs. 2,240 to you or your order on demand.' The other note says, 'on demand we shall pay this sum of Rs. 2.240 to you or your order on demand. The other note says, 'on demand we shall pay you or other, etc.' It 'seems to me clear on the language of the notes that the executants were undertaking a personal liability to pay though they were acting as guardians of the minor in executing them. They were not validly appointed as guardians, for it has been held in this Court that a Hindu father cannot validly appoint by will a guardian of the property for his minor son to take effect after his death where such property is joint family property as in this case. But it must be conceded that the parties were under the impression that the will was valid and defendants 2 and 3 did act as the de facto guardians of the minor. However that may be as they undertook to pay themselves they cannot now disclaim their personal liability. A person does not exclude his own personal liability merely by saying that he executes the pro-note as guardian. In the case in Krishna Chettiar v. Nagamani Ammal (1915) 39 Mad. 915 the question of the liability of the mother was not dealt with as pointed out by Wallis, C.J. in Palaniappa Chettiar v. Shunmugam Chettiar (1918) 41 Mad. 915. The reason why the defendants undertook to pay is plain from Exhibit F. in S.A. No. 999 which shows that they wanted to avoid suits being filed and asked for time and 'agreed to settle the affair according to the plaintiff's will and pleasure.' They do not say or indicate in the notes that they will pay only from the estate of the minor, but, on the other hand, they say they will pay the note amounts. I need not consider in these cases either whether the decrees given against the estate are proper decrees, for the same reasons as given above in S.A No. 998. These Second Appeals must also the allowed and the decrees of the Subordinate Judge modified in the same manner as in S.A. No. 998 with the same order as to costs.


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