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Debendra Nath Dutt and Banku Behary Banerjee Vs. Administrator-general of Bengal - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Judge
Reported in(1906)ILR33Cal713
AppellantDebendra Nath Dutt and Banku Behary Banerjee
RespondentAdministrator-general of Bengal
Cases ReferredEllis v. Ellis
Excerpt:
administration - administrator-general--suit--fraud--misrepresentation--mistake--administration load--sureties, liability of--assignment--registrar--administrator-general's act (ii of 1874) section 33--indian succession act. (x of 1865) sections 242, 257, 269--indian contract act (ix of 1872) sections 20, 142, 143. - francis w. maclean, k.c.i.e., c.j.1. these two appeals are brought against a judgment and decree of this court in its original jurisdiction in favour of the administrator-general of bengal for rs. 1,07,159-9 against the appellants, on an administration bond executed by them, conditioned for the due performance by ernest cowie of his duties as administrator-general of the estate of edmund craster craster, deceased.2. edmund craster craster died in august 1898 in england, leaving assets of considerable value in this country. the bulk of these assets consisted of 86 1/2 shares in the bank of bengal.3. on july 29th 1902 ernest hardwicke cowie, a member of the firm of sanderson & co., the solicitors of the government of india in calcutta, and who was then regarded as a man of high probity and.....
Judgment:

Francis W. Maclean, K.C.I.E., C.J.

1. These two appeals are brought against a judgment and decree of this Court in its Original Jurisdiction in favour of the Administrator-General of Bengal for Rs. 1,07,159-9 against the appellants, on an administration bond executed by them, conditioned for the due performance by Ernest Cowie of his duties as Administrator-General of the estate of Edmund Craster Craster, deceased.

2. Edmund Craster Craster died in August 1898 in England, leaving assets of considerable value in this country. The bulk of these assets consisted of 86 1/2 shares in the Bank of Bengal.

3. On July 29th 1902 Ernest Hardwicke Cowie, a member of the firm of Sanderson & Co., the Solicitors of the Government of India in Calcutta, and who was then regarded as a man of high probity and position, alleging, that Edmund Craster Craster had died on August 31st 1900, leaving one Henry Craster Craster, his only son and next of kin, applied for letters of administration to the deceased's estate. He produced in support of his application a document, which purported to be a power-of-attorney duly executed by Henry Craster Craster, and he filed the necessary affidavit and made the usual affirmation. On this evidence the order granting letters of administration was made in due course, and Cowie then did that which he was obliged to do under section 256 of the Succession Act, as amended by Act VI of 1889, section 6, before the letters so granted could issue from the office, namely, gave a bond with one or more sureties (in this case the two appellants) engaging for the due collection, getting in, and administering the estate of the deceased. The sureties, apparently, were strangers to Cowie, but they each received a bonus for accepting the suretyship, one of Rs. 300 and the other of Rs. 200. At that time Cowie's character stood very high. This bond was taken in the name of the Chief Justice of Bengal. Amongst other questions raised the appellants say that the bond was, improperly taken in the name of the Chief Justice.

4. The letters of administration to Cowie were in the following manner:

Hereby maketh known that on the twenty-ninth day of July in the year one thousand nine hundred and two, letters of administration of the property and credits of Edmund Craster Craster, late a British subject and a retired member of the Indian Civil Service, residing at Beadnell, in the county of Northumberland in England, deceased, were granted to Ernest Hardwicke Cowie, of No. 30 Dalhousie Square, Calcutta, Attorney-at-Law, and one of the constituted Attorneys of Henry Craster Craster, who is at present residing beyond the jurisdiction of this Court, the only son of the said deceased (with effect within the Province of Bengal) for the use and benefit of the said Henry Craster Craster and limited until he, the said Henry Craster Craster, shall obtain from this Court letters of administration of the property and the credits of the said deceased, he, the said Ernest Hardwicke Cowie, having undertaken to administer the said property and credits and to make a full and true inventory thereof and exhibit the same in this Court within six months from the date of this grant, or within such further time as the Court may from time to time appoint, and also to render to this Court a true account of the said property and credits within one year from the same date or within such further time as the Court may from time to time appoint. Dated at Fort William aforesaid this 16th day of August in the year 1902;' and the bond was as follows:Know all men by these presents that we, Ernest Hardwicke Cowie of No. 30-2 Dalhousie Square, Calcutta, Attorney-at-Law, and one of the constituted Attorneys of Henry Crastcr Craster, the only son of Edmund Craster Craster, deceased, and Debendra Nath Dutt of No. 18 Tamer's Lane in Calcutta aforesaid, and Banku Behary Banerjee of No. 81 Baranoshee Ghose's Street in Calcutta aforesaid, are held and firmly bound unto the Hon'ble Sir Francis William Maclean, K.C.I.E., Chief Justice of the High Court of Judicature at Fort William in Bengal, in the sum of rupees one lakh thirty-one thousand nine hundred and twenty-two and four annas of good and lawful money to be paid to the said Hon'ble Sir Francis William Maclean or the Chief Justice of the said High Court for the time being, for which payment we do hereby bind ourselves and each and every of us binds himself for the whole, our each and every one of our heirs, executors and administrators, unto the said Hon'ble Sir Francis William Maclean, his executors, administrators or assigns, firmly by these presents sealed with our seals, dated the fifteenth day of August in the year of our Lord one thousand nine hundred and two. The condition of the above written obligation is such that, if the above bounden Ernest Hardwicke Cowie, the administrator of the property and credits of Edmund Craster Craster, deceased, do make or caused to be made a full and true inventory of all the estate of the said deceased, which has or shall come to the hands, possession or knowledge of him, the said Ernest Hardwicke Cowie, or unto the hands or possession of any other person or persons for him, and the same so made do exhibit or cause to be exhibited in the Registry of the said High Court on or before the fifteenth day of February next ensuing or within such further time as the Court may from time to time appoint. And the same estate and all other the estate of the said deceased at the time of his death which at any time after shall come to the hands or possession of the said Ernest Hardwicke Cowie or of any other person or persons for him, to administer according to law. And further do make or cause to be made a true and just account of the said administration at or before the fifteenth day of August, which will he in the year of our Lord one thousand nine hundred and three, or within such further time as the Court may from time to time appoint. And all the rest and residue of the said estate, which shall be found remaining upon the said administration account, the same being first examined and allowed of by the said High Court of Judicature shall deliver and pay unto such person or persons respectively as shall be lawfully entitled to such residue. And it shall hereafter appear that any last will and testament was made by the said deceased, and the executor or executors therein named do exhibit the same into the said Court making request to have it allowed and approved accordingly, and if the above bounden Ernest Hardwicke Cowie being thereunto required do render and deliver the letters of administration to him granted (approbation of such testament being first had and made) in the said Court, then this obligation to be void and of no effect, else to remain in full force mid virtue.

5. The bond having been executed by Cowie and the appellants, letters in due course issued from the office on the 15th August 1902, and Cowie began dealing with the estate left by Edmund Craster Craster. Between the 4th and the 25th September 1902 Cowie sold the whole of the bank shares for an aggregate sum of Rs. 1,05,096 or thereabouts, and misappropriated the proceeds of sale. The power-of-attorney purporting to be granted in favour of Cowie was a forgery. Edmund Craster Craster left no son named Henry Craster Craster: there was no such person as Henry Craster Craster; moreover the deceased did not die intestate, but left a will, of which probate had been granted to his executor on the 27th October 1898 by the High Court of Justice in England, George Ayton Craster, Thomas Henry Craster and Robert Con-way Dobbs were the executors, and Thomas Henry Craster and Robert Conway Dobbs alone proved the will. Cowie practised a fraud upon the Court in obtaining the letters of administration to himself.

6. In or about September 1903 it reached the ears of the executors of Edmund Craster Craster's will that letters of administration had been granted to Cowie, and in December 1903 they' sent an exemplification of the will to the Administrator-General of Bengal through Messrs. Morgan & Co., their Calcutta Solicitors, and requested him to undertake the administration of the estate. The executors were apparently unaware of the existence of any assets in India until about September 1903, and so far as one can see, they do not appear to have made any enquiry as to whether or not there were any.

7. Upon the facts and the fraud of Cowie becoming known the grant to Cowie was annulled on the 28th April 1904, and on the same day fresh letters were granted to the Administrator-General of Bengal with a copy of the will annexed. On the 26th May 1904 an order was made directing the Registrar of the Court to assign the administration bond to the Administrator-General, and by a deed dated the 10th June 1904 the bond was so assigned. The validity of this assignment is challenged on the grounds that the Registrar was not competent to assign, and the Administrator-General was not competent to accept the assignment, when Cowie's fraud and dealing with the estate were discovered. The Administrator-General on the 21st day of June 1904 instituted the present suit against Cowie and the present appellants as sureties on the bond, which had been given by them to recover the assets, which had been made away with, and recovered judgment. The sureties have separately appealed.

8. For the appellants a variety of points has been raised--firstly, it is said that the Administrator-General has no right to sue; secondly, that as there was a will in existence and actually proved by the executors at the time when the grant was made, the grant is void ab initio, that Cowie was never administrator, that the bond was only entered into by the sureties on the footing common alike to Court and to the parties, that Cowie was the attorney of Craster and was entitled to the letters of administration and that there was no dealing with the assets by Cowie as administrator, and that the condition of the bond being only for the due performance by Cowie of his duties as administrator, it has not been broken. Thirdly, that the bond was induced by the misrepresentation of the Court that Cowie was the administrator, or that the contract was entered into under a mutual mistake, both parties believing that he was legally entitled to the letters of administration. Fourthly, that even if the sureties were originally liable, they have been released by the subsequent conduct of the executors and the Administrator-General, who is suing practically on their behalf; and fifthly, that as against the sureties, the Administrator-General can only recover the loss, which the estate had sustained at the time he brought his action; and that as regards the bulk of his claim, namely, that in relation to the Bank of Bengal shares at the date of the present action, they still remained assets of the estate, and that the Administrator-General could recover them from the holders of the shares' and, if that had been done, as it ought and could have been done, no loss would have resulted to the estate and consequently that the sureties cannot be held liable for the value of those shares.

9. I will deal with these arguments in the above order. It is to have it allowed instance that the bond ought not to have Hardwicke the name of the Chief Justice. It is questionable whether it is open to the sureties, seeing that they themselves have executed this bond, upon the faith of which letters of administration issued to Cowie, to raise this point. There is nothing substantial in it. Under Section 256 of the Indian Succession Act, the bond is to be given to the Judge of the District Court, and in the case of applications on the Original Side of this Court, that must mean to a Judge of the High Court. Formerly it was the practice to take the bond in the name of the Registrar, but the matter was enquired into by Sir Richard Couch when Chief Justice, and it was decided that, having regard to the language of Section 256, the bond should be given to a Judge of the Court instead of to the Registrar, and ever since the practice has been to take it in the name of the Chief Justice. This practice has continued for 30 or 40 years.

10. Then it is said that the Court had no power to assign this bond to the Administrator-General. The power of assignment is created by Section 257 of the same Act, which authorises the Court, on being satisfied that the engagement of any such bond has not been kept, to assign the bond to some person, his executors or administrators. It is said that the Court had no power to authorize the Registrar to do this. It is difficult to see how the Court, as a Court, could assign it except through one of its officers. By the order of the 20th May, the Court directed the Registrar of the Court to assign the administration bond, and it must be taken that before making the order the Court was satisfied that the engagement of the bond had not been kept. As the matter was on the Original Side of the Court, the Registrar intended by that order must be the Registrar on that side by whom the assignment was made in pursuance of that order of the 10th June 1904.

11. Lastly, it is said that the Administrator-General was not empowered to accept such an assignment, inasmuch as the words 'to some person, his executors or administrators' in Section 257 do not apply to the Administrator-General, but only to private individuals. I think this would be too narrow a view to take of the section. The Administrator-General after all is a person, and the fact that at his death all assets vest in his successor in office under Section 33 of the Administrator-General's Act (II of 1874) as opposed to vesting in his executors or administrators, is not, I think, sufficient to debar him from accepting an assignment.

12. The second point goes to the root of the whole matter, for if in the circumstances the administration bond is void, and that was the contention of the appellants, the Administrator-General cannot successfully sue upon it. I think it must be taken, in the circumstances of the case, that the grant of letters to Cowie was void ah initio, see Abram v. Cunningham (1677) 2 Lev. 182 and Ellis v. Ellis (1905) 1 Ch. 61, apart from the consideration whether the letters of administration issued to Cowie,' for the use and benefit of Henry Grastor Craster and limited until he, the said Henry Craster Craster, should obtain from the Court letters of administration--'(a person who was not in existence and never had existed) can be of any validity. Under Section 234 of the Act, the Court has power to annul letters of administration, where the grant is obtained fraudulently, and it appears from the recital of the order of the 10th May 1904, under which fresh letters of administration were granted to the Administrator-General, that the previous letters had been revoked and annulled, though the expression 'cancelled' is used instead of 'annulled.' It is said that, inasmuch as the letters of administration to Cowie were null and void and the administration bond was dependent upon the validity of those letters, the bond falls with it and is equally void. It is said that the Court represented by its order granting the letters to Cowie, that Cowie was the person entitled to those letters, and in effect, that the representations made by the Court, upon which such letters were granted, were not correct. I cannot see how the Court made any representation. All that the Court said or did was this. It said that it would grant letters of administration to Cowie, if he and the sureties would enter into the bond. It did not in any way guarantee that the evidence, upon which the order was made, was true. So as to the question of mutual mistake. It is said that the case is governed by Section 20 of the Indian Contract Act, which says that, where both the parties to an agreement, are under a mistake as to a matter of fact essential to the agreement, the agreement is void. The class of cases, to which that section refers, is shown by the illustrations to that section. Now was the matter of fact, namely, that Cowie was not entitled to letters of administration, essential to the agreement? Under what mistake was the Court in relation to this bond? The Court simply said that it would not issue the letters of administration, unless Cowie and the sureties gave the bond. The Court, as I have said before, made no representation and gave no guarantee that Cowie was entitled to the letters of administration, but only issued the letters upon the sureties executing the bond. It could not otherwise issue the letters. The terms of the contract itself support the view that the bond was not to be void, if it should turn out that Cowie was not entitled to the letters of administration. The bond contemplates the possibility of a will turning up and the case of Cowie delivering up the letters of administration granted to him. If that happened, that alone was not to constitute a release to the sureties from their liability. The bond was to remain in full force and virtue, unless Cowie made a full and true inventory of the estate, and administered the estate according to law and rendered a true and just account of the administration and paid the residue of the estate over to the parties entitled. Unless all these conditions were fulfilled the obligation under the bond was to remain in full force and virtue. Nothing is said in the bond about the sureties being released, if it turned out that letters of administration had not been properly granted to Cowie, and it seems to me that, unless it be made out that the whole contract was void, either by reason of misrepresentation or mutual mistake, we must look to the terms of the contract and see what the bargain was between the parties. I think the sureties in effect guaranteed the honesty of Cowie in dealing with the estate, if the letters of administration were granted to him, and whether they were rightly or wrongly so granted. If the contention of the appellants prevail, in every case, in which a next of kin has obtained letters of administration, and a bond has been given by him and by the sureties in the form as in the present case, and he misappropriated the estate, and it then-turns out that there was a previous will appointing executors, then in every such case the contract of suretyship would be void and the sureties discharged. This would frustrate the very object for which the bond is required and given. I can scarcely think that this is the law. The bond in my opinion is not void and the Administrator-General can sue upon it.

13. I now pass to the fourth point, namely, that by the action of the plaintiff the position of the sureties has been altered to their prejudice and consequently they are discharged. They complain that, although the executors knew as early as September 1903, from the letter of Cowie to Messrs. Morgan & Co., bearing date the 3rd September 1903, that there was at any rate something wrong in the relation of the grant of letters of administration to Cowie and certainly knew on the 10th December 1903 of what had been done in relation to the Bank of Bengal shares, and authorized the Administrator-General of Bengal, by their letter of that date to take out letters of administration and to recover the assets, no communication whatever was made to them until the 17th May 1904. They contend that, if they had been told, as they ought to have been told, they would have had a better chance of recovering the bank shares and so protecting themselves. They complain that they were not consulted as to the best means of recovering the shares, and that they ought to have been. It is, perhaps, a little difficult to understand why the sureties were not earlier approached, or why there was so much delay in annulling the first letters and granting the fresh letters to the Administrator General of Bengal, which did not take place until the 10th May 1904. But it is far from clear how, as regards the bank shares, the sureties were prejudicially affected by this action on the part of the executors. So far as recovering the shares went, it has not been shown that they were in any worse position in May 1904 than they were in September 1903 or that they were prejudiced by the silence of the executors.

14. I will now pass to the last point, namely, what is the Administrator-General entitled to recover. The Court of first instance has given a judgment against the sureties for Rs. 1,07,757 odd, of which Rs. 1,05,595 represents the proceeds of sale of the bank shares, to which must be added a sum of Rs. 2,162 odd in respect of dividends on those shares. This gives a total of Rs. 1,07,757 odd in respect of the bank shares. The appellants say that they are not liable for this sum of Rs. 1,05,595. Their contention is that the grant of letters of administration to Cowie was a nullity and void ab initio, that they were annulled, that in consequence, at the time when the Administrator-General obtained letters of administration, these shares still remained a part of Craster's estate, that Cowie, having no title, could confer no title upon the purchasers of those shares, and that the Administrator-General could have recovered those shares from the persons in whose names they were standing in the books of the Bank of Bengal, it not being suggested that, at that time, there was any bar of limitation in respect of an action for such shares. They consequently contend that the plaintiff has not shown that, at the date of the institution of this suit, any damage had then accrued to the estate by reason of the dealing by Cowie with the shares and that he could only recover on the bond the loss, which the estate had then actually incurred. I ought perhaps here to mention incidentally that it was not until about May 1904, that suspicion was directed against Cowie as the author, or in any way, the participator in the fraud, for up to that time he had very clearly led the parties to understand that, so far from himself being a party to the fraud, he was an innocent victim in the hands of a man named Smalley, his conspirator. It may well be that from the date of the death of the testator these shares vested in the executors, that they were never divested out of them, as the grant to Cowie was a nullity, and that it might be difficult to successfully defend a suit by the Administrator-General to recover those shares from the purchasers. This question, however, is not before us and I express no opinion upon the possible success or otherwise of such an action. But having regard to the contract the sureties have entered into, we do not see that there can be any obligation as between the present plaintiff and the sureties, for the former to wait, until he has tried to recover the shares from the purchasers, before suing the sureties. He is suing not for the shares, but now is merely asking for the proceeds of sale, which Cowie received and misappropriated. Cowie is clearly liable for those moneys, his liability has been decreed, and the liability of the sureties is co-extensive with that of Cowie, unless otherwise provided for in the contracts (Section 128 of the Indian Contract Act). It does not appear to us to be answer to the present claim for the sureties to say that the shares are or may be recoverable from the purchasers. No such defence was pleaded, nor was this point taken in the Court of first instance, although I do not wish to be understood as saying that it is not now open to them to raise it. The sureties did not ask that they might be allowed to use the name of the Administrator-General in any action or actions they might be advised to bring against the purchasers of the shares. No such action was even suggested. We therefore think the sureties ore liable for the proceeds of sale of the bank shares. For the present, at any rate, they are lost to the estate.

15. The figures found in the judgment of the Court of first instance have not been challenged. The plaintiff would be entitled to nominal damages for the breach of the condition as to making a true inventory of the estate and a true and just account of the administration of the estate, but no claim has been made by the plaintiff on these heads. The appeal therefore must be dismissed with costs.

16. In appeal No. 24, however, there is a cross objection by the Administrator-General in respect of the sums of Rs. 25,094 odd. There is no such objection in respect of appeal No. 27 of 1905, namely, the appeal of Bunku Behari Banerjee. As regards the sum of Rs. 25,094 odd in appeal No. 24, the plaintiff says that this sum was in the hands of D. L. Cowie & Co. as part of the assets of the estate, that it was Cowie's duty to get it in and that if he neglected to do so, he was liable under Section 328 of the Indian Succession Act. As against the sureties, however, the evidence appears to us to be very meagre. The case depends entirely upon the oral evidence of Mr. Meade and an entry in the books of D. L. Cowie & Co. showing a cash balance of Rs. 22,141 odd in favour of Craster's estate. It is perhaps not very easy to see how the sum of Rs. 25,094 odd is arrived at. Mr. Meade does not seem to have had any knowledge of the firm of D. L. Cowie & Co., until the 1st June 1902, at the time when Cowie was beginning to concoct his successful fraud, and there is nothing to show that at the date when the letters of administration were granted to Cowie or at what previous period, if any, there was any cash in the bank to answer this cash balance of Rs. 22,141 odd appearing in the books only. Mr. Meade tells us what Cowie drew before he left the country and this apparently did not include any portion of the so-called cash balance of Rs. 22,141. There is really no evidence to show whether Cowie ever had this sum or what really became of it. No doubt in answer to a question by the Court Mr. Meade says that on the 7th August 1903, the firm of D. L. Cowie & Co. was in a position to pay the amount standing to the credit of account of the estate of E. C. Craster at that time, but apparently this statement is based entirely upon the book entry. It is not shown where this money was. No pass-book of any bank is produced, and Mr. Meade tells us that when the Administrator-General applied for this balance, Cowie & Co. paid only Rs. 100 and that there was no other fund, from which they could pay. The rest was unrealizable. In fact Mr. Meade tells us very frankly that all he knows about this sum is that he found it standing to the credit of Craster's estate in the books. Whatever suspicion we may entertain that, at some time or other, Cowie got hold of this money, there is not, we think, sufficient evidence as against the sureties to warrant us in saying that Cowie could have recovered the money either from the firm of D. L. Cowie & Co. or from himself so as to bring the case within Section 328 of the Indian Succession Act. 'We therefore take the same view of this item as the learned Judge in the Court of first instance. The cross objection must therefore be disallowed with costs.

Harington, J.

17. It is unnecessary for me to recapitulate in detail the facts, which have been so lucidly stated in the judgment of the Chief Justice.

18. In brief Cowie presented a petition to the Court praying for a grant of letters of administration to the estate of Edmund Craster Craster deceased on the allegation that he was the duly constituted attorney of the next of kin.

19. The petition, supported by a forged power-of-attorney and a false affidavit, was granted on July 29th, 1902. Believing the statements in the petition to be true, the appellants executed on August 15th, 1902 a bond with Cowie, one of the duly constituted Attorneys of Henry Craster Craster, the only son of Edmund Craster Craster deceased,' conditioned for the due administration of the; deceased's' estate by Cowie, 'the administrator of the property and credits of Edmund Craster Craster deceased,'' and each of the appellants received a fee for so doing.

20. In truth and in fact Cowie was not the attorney of the next of kin. Henry Craster Craster did not exist. The statements of fact, on which the Court was empowered to make the grant, wore untrue.

21. On those facts I am unable to agree that the [sureties are liable under the contract, on which they are sued. I think no liability under that contract ever attached to them, because both they and the Court were under a mistake of fact essential to the agreement and that fact was the authority of Cowie as attorney of the next of kin to apply for and receive a grant of letters of administration.

22. Under Section 214 of the Succession Act, the Court has power to make a grant to the attorney of the person entitled to administration and to no other person. If, therefore, Cowie had not succeeded in deceiving the Court as to the existence of Henry Craster Craster, and in misleading the Court, into the belief that he was duly authorized by Henry Crastel Craster to apply for letters of administration, the order of the Court of 29th July 1902 granting letters of administration to Cowie as the duly constituted attorney of Henry Craster Craster, the next of kin of the deceased, could never have been made, and similarly the bond could never have been taken by the Court.

23. Suppose the Court had been made aware after (he order of 29th July 1902 and before the execution of the bond on 15th August that Cowie was not the attorney of the next of kin and was not a person to whom a grant of letters of administration could be committed under Section 214, the Court could not have taken the bond under Section 256, nor could the Court have permitted the letters granted under the order of 29th July 1902 to issue from the office.

24. The fraud therefore practised by Cowie induced in the Court a mistake as to a fact, which was essential to the agreement, because but for that mistake the Court could neither have granted letters of administration to Cowie nor have taken a bond from the appellants.

25. Then the fact of Cowie's authority was equally essential to the agreement from the point of view of the appellants.

26. It appears on the evidence that the draft petition, setting out Cowie's title to letters of administration, was shown to the appellants before they executed the bond, and they were informed truly enough that the Court had granted the petition.

27. Both the appellants say that they would not have executed the bond, if they had not believed that Cowie was the duly appointed attorney of the next of kin. I believe the appellants, when they say this, and I have no doubt that, while they were prepared to guarantee the due performance of the duties of administrator by a person, authorised for that purpose by the person beneficially entitled to the deceased's estate, they were not prepared to give such a guarantee in the case of a person not so authorised.

28. Both parties to the bond were equally deceived by Cowie and they were deceived in a matter essential to the transaction. The Court believed it was making a grant to a person legally entitled to claim it. The appellants believed that they were guaranteeing the honest administration of the estate by a person legally entitled to letters of administration. Had it not been for the mistake as to Cowie's authority, the Court could not have taken and the appellants would not have given the bond, under which it is sought to make them liable.

29. In my opinion, on these facts, the case falls within the scope of Section 20 of the Contract Act, and the agreement by which the appellants undertook to be bound to the Court in a penal sum conditioned for the due administration of the estate of Edmund Craster Craster, deceased, by Ernest Cowie, one of the constituted attorneys of Henry Craster Craster, is void, because both parties to the agreement were under a mistake as to a matter of fact essential to the agreement.

30. In effect ,the Court agrees to issue letters of administration under Section 214 of the Succession Act to the attorneys of the next of kin, if the attorney of the next of kin will engage with two sureties for the due administration of the estate and accordingly the sureties engage that the attorney of the next of kin shall duly administer the estate. Both parties contract on the basis that the person, to whom administration is committed is the person duly authorized by the next of kin to represent him, and neither party would contract, if the administrator did not fill that position.

31. The sureties did not guarantee the truth of the allegations made in the petition of Cowie as to his authority to apply for letters of administration. Both the Court and the sureties accepted the truth of these statements and contracted on the assumption they wore true.'

32. The question whether the appellants are estopped by their own deed from alleging that Cowie was not one of the duly constituted attorneys of the next of kin has not been argued. I do not think it could successfully be contended that they are estopped by a statement made by their co-contractor as to a matter of fact peculiarly within his knowledge, unless it be shown that they have been guilty of some negligence. Hero they satisfied themselves that the Court had granted the petition on the evidence, which had been tendered by Cowie. I do not think they were bound to enquire further or that they were guilty of negligence in executing a bond containing this statement.

33. The case of Lester v. Gooch (1868) 17 W.R. (Eng.) 139 was relied on by the respondents as showing that a mis-statement in the administration bond would not release the sureties, but, in my opinion, it does not affect the case. There the bond was conditioned for the due administration by one bond, the true and lawful attorney of Rebecca Gardiner, the lawful cousin german and only next of kin of the deceased, and the breach of the condition of the administration bond alleged, was that the deceased, having left Rebecca Gardiner, Martha Lester, Mary Lester and the plaintiff entitled to participate in the assets, the administrator in breach of the condition in the bond paid over all the assets to Rebecca Gardiner instead of distributing them amongst the four persons, who comprised the next of kin. It was held on demurrer to the declaration that the breach assigned was good. But no plea had been pleaded, there was no allegation that the letters of administration had been obtained by fraud, or that the sureties contracted on the assumption that Rebecca Gardiner was the only next of kin; for all that appears, they may have known she was misdescribed. This case therefore is distinguishable from the present.

34. The respondents relied also on the case of the Mayor & Co. of Kingston on Hull v. Harding (1892) 2 Q.B. 494. That was a case in which it was laid down that a surety could not claim to be discharged on the ground that his position had been altered by the conduct of the person with whom he had contracted, when that conduct had been caused by a fraudulent act or omission against which the surety by the conduct of the suretyship had guaranteed the employer. In the present case, in my view, the contract of suretyship was void ab initio by reason of a fraud against which the sureties did not give a guarantee. They had not warranted Cowie to be the attorney of the next of kin, hut had guaranteed that Cowie, as the attorney of the next of kin, would honestly administer the estate.

35. It has been contended in argument that the same reasoning would apply, if the letters were recalled on the subsequent discovery of a will, the existence of which was unknown at the time the application for letters of administration was made. It is said that in that case the grant would have been made, the bond accepted by the Court and executed by the sureties equally under a mistake of a point of fact essential to the agreement. The contract of suretyship would therefore be void, and the sureties would be discharged from their liability to make good any misappropriation of the deceased's estate by the grantee of letters of administration prior to the probate of the will.

36. I do not feel pressed by this argument for two reasons: first, I do not think a contract is void on the ground of common mistake, if the parties to the contract contemplate the possibility of the mistake and agree as to what is to be done, if there is such a mistake.

37. It is hardly correct perhaps to call it a mistake, when it is a contingency contemplated by the parties with a provision in the contract as to what is to be done, if such a contingency happens.

38. The sureties engage in their bond that, if a will is discovered and probate be granted thereof, the administrator shall render up and deliver the letters of administration to him granted in Court.

39. It would involve an absurdity to say that the contract was void ab initio and the sureties were discharged, because of the existence of a will, when the contract contains a stipulation by which the sureties agree as to what is to be done, if a will is discovered and proved.

40. Secondly, the existence of a will unknown at the time letters are applied for in no way affects the risk the sureties take upon themselves, and therefore a mistake as to the existence of a will is not a matter of fact essential to the agreement into which the sureties entered.

41. The sureties agree to warrant due administration by a person duly authorised by the next of kin to represent him. This risk they undertake is not affected by the existence of a will unknown to any of the parties.

42. The sureties do not undertake the heavier risk of warranting due administration by a person not so authorised. A common mistake therefore as to the authority of the person guaranteed is a mistake on a matter of fact essential to the agreement, because it directly affects the risk undertaken by the sureties.

43. The risk of guaranteeing a parson authorised by the beneficiary might be small, the risk of guaranteeing a person not so authorised would be much greater, as a beneficiary may be expected in his own interest to choose an honest man to administer the estate. But the risk of guaranteeing the person, in whom the beneficiary had confidence, would in no way be increased or lessened by the existence of a will unknown to the person guaranteed.

44. In my opinion to hold the sureties liable is to impose on them a liability, which they never agreed to undertake; I think therefore that the appeal should be allowed and the suit dismissed.

45. It is unnecessary to discuss the other questions argued. It is sufficient for me to say that I agree on those questions with the judgment, which has just been delivered by my Lord.

Stethen, J.

46. I agree with the judgment delivered by Harington J.

Mitra, J.

47. I agree with the learned Chief Justice in dismissing-these appeals. 1 wish, however, to say a few words on some of the questions argued before us.

48. On the death of Edmund Craster Cramer in England on the 31st August 1898, two of the executors named in his will or the 4th January 1898 duly proved it on the 27th October 1898, in the High Court of Justice in England. His estate vested in the executors and the giant of letters of administration to Cowie by this Court on the 29th July 1902 for the use and benefit of Henry Craster Craster, a person not in existence and not for the use and benefit of the executors, who had taken out probate, was void from its commencement and was not merely voidable. The grant was not only in derogation of the right of the executors, but it was for the use and benefit of a fictitious person. The grant was obtained on a grossly fraudulent misrepresentation of facts, and it was annulled on an application under Section 234 of the Indian Succession Act. The subsequent grant to the plaintiff was in substance, though not in form, for the use and benefit of the executors of the will of Edmund Craster Craster.

49. There can be no doubt on the authorities that the mesne acts done by Cowie between the grant of administration to him and its annulment are of no validity. In Abram v. Curningham (1677) 2 Lev. 182, it was held that, where the administration was granted on concealment of a will, which appointed executors, the grant was void from its commencement and the acts performed by the administrator in that character were equally void. The same view has been taken by Warrington J. in Ellis v. Ellis (1905) 1 Ch. 613. Woolley v. Clark (1822) 5 Barn. & Ald. 744 and Boxall v. Boxall (1884) 27 Ch. D. 220 may also be cited in support of this view. Brett J. and I were of the same opinion in Pandit Prayrag Raj v. Goukaran Pershad (1901) 6 C.W.N. 787.

50. But a further question arises, was the bond given by the sureties, the appellants before us, for the due administration by Cowie of the estate of Edmund Craster Craster also void? Or in other words, does our finding that the grant to Cowie was void ab Initio discharge the sureties from their liability under the administration bond? It has been contended on behalf of the sureties that they are discharged, first because the grant was void; secondly, because there was mutual mistake, i.e., mistake in the Court in making the grant and, as a consequence; in accepting the bond and an obvious mistake in the sureties, and thirdly because the bond was executed on a misrepresentation by the Court. As we intimated in the course of the argument, the third ground is clearly untenable. The Court made no representations to the sureties. It was on the representations of Cowie that the Court granted administration to him and it was on the representations of Cowie or his agent and on his invitation that the sureties joined him in executing the administration bond.

51. The contention based on mutual mistake is equally untenable. It is true the grant to Cowie was due to a mistake in one sense, a mistake which arose from a fraudulent misrepresentation of facts. It is also true the sureties would not have joined Cowie in executing the bond, if they had knowledge of the true facts relating to the estate of Edmund Craster Craster. But it seems to me that Section 20 of the Indian Contract Act, relied on by Mr. Pugh has no application to the case. The mistake of the Court and of the sureties did not relate to the essential subject of the contract. The contract may be given effect to notwithstanding the mistake, which in one tense was undoubtedly mutual The liability of the sureties did not depend on the validity or invalidity of the grant to Cowie. The sureties made themselves responsible for the due administration by Cowie of Edmund Craster Craster's estate. He did act under the grant of letters of administration and the validity or invalidity of the giant cannot affect their liability. The liability of a surety is not always dependent on the validity of the contract with the principal debtor nor is it necessarily coextensive with the liability of the latter. A contract may be void so far as the principal debtor is concerned as in the case of a contract with an infant in India or as in the case of fraud or coercion as between the creditor and the principal debtor, but not the surety, and the discharge of the surety is not a necessary consequence. As instances I may refer to Harris v. Huntback (1757) 1 Burrow. 373 and Kashiba v. Shripat Narshiv (1894) I.L.R. 19 Bom. 697. If Cowie failed to put in an inventory or to submit a correct account of his dealings, whether he was properly appointed or not, the liability of the sureties arose under the covenants in the administration bond. The grant covered the Indian, assets of the estate of Edmund Craster Craster, there was no mistake as to the existence of the assets, the Court acted within their jurisdiction and issued letters on the sureties undertaking due administration by Cowie, and neither the non-existence of a person of the name of Henry Craster Craster nor the existence of a duly proved will of Edmund Craster Craster ought to exonerate the sureties from liability arising out of the covenants in the bond.

52. If the liability of the sureties under an administration bond depended on the validity of the grant of letters of administration, the very object of demanding sureties would be frustrated. The object of demanding sureties is to prevent the evil consequences of malfeasance or misfeasance by an administrator and to protect the interest of the persons really entitled to the assets of the deceased. The administrator holds the estate for certain purposes and is responsible to the Court for his dealings. The Court in requiring a bond from the administrator and his .sureties contemplates not only the effect of maladministration, but also the chances of the grant being subsequently declared either void or voidable. I am, therefore, of opinion that neither the invalidity of the grant nor the mistake of the Court in accepting the bond is sufficient to discharge the sureties.

53. Then as to the extent of the liability of the sureties. The plaintiff demanded judgment for Its. 1,31,922-4 against the sureties and obtained in the lower Court, a decree against them for Rs. 1,07,159-7-7. The amount decreed includes the sum of Rs. 1,05,595, the sale proceeds of 86 1/2 Bank of Bengal shares. It is argued on behalf of the appellants that this sum was not lost to the estate of Edmund Craster Craster and was recoverable at the date of the institution of the suit, so that the sureties should not be saddled with liability, and that, if these shares' notwithstanding their sale by Cowie were not lost to the estate, if the shares or their value were recoverable from the purchasers from Cowie, the plaintiff cannot get a decree for damages for their market price against the sureties.

54. It is true that the grant of letters to Cowie was wholly void and the disposition of the shares by him was also void and that Cowie could not give to the purchasers a better title than he himself had, and he bad none under the grant he obtained by suppressing the fact that the estate had already vested in executors. The bank shares or their value might therefore be recoverable.

55. On the other hand the contention on behalf of the plaintiff is that the purchasers have a good title, Cowie having sold the shares in due course of administration and Graysbrook v. Fox (1838) 1 Plowd. 276 has been relied on. A similar contention was raised in Ellis v. Ellis (1903) 1 Ch. 613 and I use the following words of Warrington J. as an answer to the contention raised before us. The administrator's act 'was essentially a voluntary act and no title was conferred by it and on the authorities I have cited I hold it to have been simply void.' The shares were sold nearly four years after the death of Edmund Chaster Craster and it is not pretended that the sales were necessary to be effected for payment of funeral expenses or the debts of the deceased. There was no sale in due course of administration. .

56. Sections 242 and 269 of the Indian Succession Act have also been relied on as conferring on an administrator power to dispose of property and thereby give to the purchasers a good title. I do not think these sections are intended to afford protection to unwarrantable and fraudulent dispositions by an administrator, whose title rests on a grant absolutely void. Sections 242 and 262 have codified in India the law as it exists in England. Section 262 of the Indian Act, which corresponds to Section 77 of 'Statute 20 and 21 Vict. c. 77, affords protection to debtors making bond fide payments to an executor and. administrator before revocation of the grant, but the Statute does not protect purchasers. The scope of the section is limited to debtors making payments bond fide and we cannot extend it to purchasers.

57. It has also been contended on behalf of the plaintiff that the executors of the estate of Edmund Craster Craster assented to the action of Cowie and waived the tort, and they cannot now maintain an action for trover or detinue, and the purchasers have thus got a good title. The evidence is not clear on the point. On the other hand, it appears from the plaint that the plaintiff has asked for recovery of the present market value of the shares, including dividend and not the money actually realised by Cowie by the sales effected by him. If the executors had assented to the sale, the plaintiff could only sue for the amount realised by Cowie and not the higher amount covered by the suit, the present market value of the shares, including all the dividends payable by the bank. I do not also think that the assent of the executors to the tortious act of Gowie after they came to know of the fraudulent disposition of the assets by him and of his grossly fraudulent conduct can be pleaded for the purpose of throwing liability on the sureties.

58. The appellants, however, did not raise in their written statements this plea of abatement of damages, and the point was not argued in the lower Court. It is now raised for the first time before us. The appellants did not also take proper steps to obtain before the final decision of this case an adjudication as to the invalidity of the sales in the presence of the purchasers of the bank shares. Our decision in the present suit will not bind the latter. We cannot therefore discharge the sureties on the ground that these shares have not in law ceased to be a part of the estate of Edmund Craster Craster, when in fact they are not now a part of it. The wrongful acts of Cowie have caused a present loss to the estate and the sureties are bound to make good the loss. The sureties may have under the law the right to recoup themselves by recovering the bank shares or their value from the purchasers, but I do not see how they can now resist the suit on the ground of the bank shares being still recoverable by the plaintiff or the executors of the estate of Edmund Craster Craster.

Geidt, J.

59. I also agree with the judgment delivered by the learned Chief Justice, and I desire to add only a few words with reference to the argument, that there was a mistake as to a matter., of fact essential to the agreement, and that, therefore, under Section 20 of the Contract Act, the bends executed by the sureties are void. The consideration for the bonds was the grant of administration to Cowie. and the grant was such as is contemplated by law, namely, a grant that was liable to be revoked or annulled for any of the causes specified in Section 234 of the Indian Succession Act. That was the only kind of grant that could be made, and its revocation does not therefore constitute a failure of consideration. Nor can the sureties in my opinion evade their liability by saying that they entered into the engagement on the understanding that Cowie was the duly constituted attorney of Henry Craster Cluster, son of Edmund Cluster Cluster, whereas it turns cut that Edmund Cluster Cluster had no such son. What the sureties engaged for was that Cowie should duly administer the estate of the deceased, of which he was to obtain possession under the authority of the Court. The letters of administration enabled Cowie to get possession of the estate, and the exercise of honesty, on Cowie's part guaranteed by the sureties, was every whit as possible in dealing with that estate, whether such a person as Henry Craater Cluster existed or not. I am unable therefore to hold that there was in the present case any mistake as to a matter of fact essential to the agreement.

60. It is probably true enough, that if the sureties had known that Cowie was not the duly constituted attorney of the next of kin, they would not have entered into the engagement. But a consideration of this nature does net justify them in repudiating their contract. The law in India relating to contracts of guarantee is to be found in Chapter VIII of the Indian Contract Act of 1872, and the mistakes, which invalidate such contracts, are specified in Sections 142 and 143. These mistakes must be occasioned either.

(a) by means of a representation made by the creditor or with his knowledge and assent concerning a material part of the> transaction, or

(b) by the creditor keeping silence as to a material circumstance.

61. It cannot be said that the Court in granting administration to Cowie on condition of his finding two sureties made any misrepresentation. The mistake on the part of the sureties was in no way caused by the Court, nor can the Court be said to have kept silence on a matter of which it was in complete ignorance. There is nothing in the law to indicate that sureties are entitled to evade their contract of guarantee, because of a mistake induced by the principal debtor, and it would in my opinion be a novel and dangerous doctrine to hold that an administration bond is invalidated by the fact that the sureties themselves have been deceived by the very person for whose honesty they vouch.

62. With reference to Mr. Pugh's argument that Cowie could give no title to the purchasers of the bank shares, which consequently still formed part of the estate, and that therefore no real loss had occurred, for which the sureties could be made liable, I would only make this observation. The executors were entitled to look to Cowie either for the shares, or their value, or the money into which he had converted them. By the misappropriation of the sale proceeds Cowie caused a real and substantial. loss to the estate, and the sureties under their bond are therefore liable to make it good.


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