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Ayyasamy Pillai Vs. Gurusami Naicken and anr. - Court Judgment

LegalCrystal Citation
CourtChennai
Decided On
Judge
Reported in33Ind.Cas.691
AppellantAyyasamy Pillai
RespondentGurusami Naicken and anr.
Cases ReferredKrishna Ayyar v. Krishnasami Ayyar
Excerpt:
hindu law joint family trade - promissory note executed by manager--debt due by family--liability of all members to promisee or his assignee. - .....february 1909. it is not disputed, as i have said, that that promissory note was in respect of a trade debt incurred in the family trade. by subsequent endorsements, the note came to be held by a certain ayyasami pillai as holder and endorsee and he is the plaintiff in the present action.2. so far as gurusami naicken, the 1st defendant, is concerned, there is no difficulty, but the plaintiff has also joined and sought to get a judgment against the 2nd defendant, who is the elder brother of gurusami naicken, the 1st defendant. the story raised by the plaintiff is this. he says; 'this was a family trade concern and you, gurusami naicken, in executing this promissory note in respect of a trade debt were thereby acting on behalf of the family and the other members of the family are liable.....
Judgment:

1. The point in this case is this. There was a retain Gurusami Naicken who was a member of a joint Hindu family. That man was carrying on a trade in which admittedly the joint family was concerned. In the Cause of the made, Gurusami Naicken executed a promissory note in favour of a certain Chockalinga Padayachi in February 1909. It is not disputed, as I have said, that that promissory note was in respect of a trade debt incurred in the family trade. By subsequent endorsements, the note came to be held by a certain Ayyasami Pillai as holder and endorsee and he is the plaintiff in the present action.

2. So far as Gurusami Naicken, the 1st defendant, is concerned, there is no difficulty, but the plaintiff has also joined and sought to get a judgment against the 2nd defendant, who is the elder brother of Gurusami Naicken, the 1st defendant. The story raised by the plaintiff is this. He says; 'This was a family trade concern and you, Gurusami Naicken, in executing this promissory note in respect of a trade debt were thereby acting on behalf of the family and the other members of the family are liable on that note so executed by you.' The 2nd respondent in this petition takes up this position. He concedes that he would be liable too if the action had been brought by Chockalinga Padayachi. But he says: 'You, the assignee, cannot sue me because my liability is not in respect of the debt created by the promissory note, but in respect of the debt which the promissory note was given to discharge either wholly or conditionally.' If that be right, then it is quite clear that the endorsement of the promissory note could only operate as an assignment of the debt on the promissory note, itself and could not be an assignment of the original obligation and, therefore, the assignment of the promissory note, if he actually was not liable on that note, could not possibly make him liable for the original consideration. In support of that contention, reference is made to a very badly reported case Seetharama Chetty v. Seshiah Chetty (1912) M.W.N. 1011 the judgment of Benson and Sankaran Nair, JJ. They held that the endorsement of a promissory note would not enable the endorsee of that note to sue the other members of a family, but only the actual maker of the note or his legal representative after his death. That decision, I think, must be taken to be indistinguishable from the case before me. If that stood alone, whatever my opinion might be, I should feel myself bound by the decision. As a matter of fact, that decision is, in my opinion entirely inconsistent with the decision of a Full Bench of this Court in a Letters Patent Appeal, Krishna Aiyar v. Krishnasami Ayyar 23 M.K 597 a decision which has been followed by the present Chief Justice and Justice Hannay in Nachiappa Chetty v. Dakshinamurthy Servai 28 Ind. Cas. 345. Excluding the dissenting judgment of Davies, J., the decision of the other two Judges in the Full Bench case it, to my mind, undoubtedly a decision that in cases where there is a family trade, negotiable instruments, securities, bills of exchange or promissory notes given and made by a member of the family who is actually the partner in a family business, are binding upon the other members of the family or property involved in the family business. Both Justice Shephard and Justice Subramania Ayyar compared the case to that of an agent in relation to his principal in a trading concern. In my opinion, it is impossible to explain away that decision by saying that what the learned Judges really held was that the liability of the other members of the family was confined to the original obligation and did not extend to the promissory note. Mr. Justice Subramania Ayyar says on page 600: 'it was next urged, if I followed the argument correctly, that the first defendant, even if he was the manager of the family, could not, by such an instrument as the one in question, bind his co-parceners.' He then goes on to negative that contention. The matter does not stop there, because in Raghunathji. Tarachand v. Bank of Bombay 11 Bom. L.R. 255 the following passage occurs in the course of the judgment of Justice Chandavarkar: 'Where a minor is a co-parcener in a joint family, his share in the family property is liable for debts contracted by his managing co-parcener for any family purpose or any purpose incidental to it. If the family is a trading firm, the same rule must apply with this difference that the term family purpose or purposes incidental to it must here give way to the expression trading purpose or purpose incidental to it, having regard to the nature and objects of the family business. The circulating of a negotiable instrument is in the case of a joint family trading as a firm, necessary for its existence and its purposes. It is a necessary, incident of the carrying on of the trade. Without it the firm could not gain credit in the market and prosper. The minor's share is, therefore, bound by it, since it constitutes an obligation of the firm.' That is clearly a decision that the liability of the other members of the family who are not signatories to the promissory note is a liability directly on the debt evidenced by the note and not merely in respect of the antecedent obligation which was discharged by giving the note.

3. I, therefore, must come to the conclusion that the decision in Seetharama Chetty v. Seshiah Chetty (1912) M.W.N. 1011 is in conflict with both those other decisions. I have to observe, therefore, (sic) that neither of these cases was cited to the learned Judges so far as it appears from the totally inadequate report in that case. In these circumstances, I am con strained to feel myself bound by the decision of the Full Bench reported as Krishna Ayyar v. Krishnasami Ayyar 23 M.K 597 and I think the petition must be allowed, but the decree must confine the remedy as against the 2nd defendant to his share in the family property. The appellant will have his costs here and in the Court below.


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