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The Oriental Bank Corporation and anr. Vs. Gobinloll Seal and ors. - Court Judgment

LegalCrystal Citation
Decided On
Reported in(1884)ILR10Cal713
AppellantThe Oriental Bank Corporation and anr.
RespondentGobinloll Seal and ors.
Cases ReferredGreender Chnnder Ghose v. Mackintosh I.L.R.
suit by creditor on behalf of all other creditors - administration suit--legal personal representative--refusal to sue--receiver, suit by. - .....of the order might be to constitute the plaintiffs receivers, for the purpose of bringing this suit. i think it is impossible to construe the order in any such sense.20. i agree, therefore, in the view taken of the case by the court below, and i think the appeal should be dismissed.21. i arrive at this conclusion with regret; because it is always unfortunate that costs of litigation should be wasted by reason of the dismissal of a suit on a ground which leaves the merits of the controversy untouched. and so far as appears, i do not suppose the defendants would be worse off, if such a suit could proceed, than in one regularly brought. in this sense the objection, to which i feel bound to give effect, is technical; but in no other sense. it rests upon clear principles, a departure from.....

Wilson, J.

1. The case disclosed by the pleadings is this: The plaintiffs were creditors of one Heraloll Seal who died intestate in March 1876. They sue on behalf of themselves and all other creditors. Administration of the estate of Heraloll was in May 1876 granted to his only son Russickloll. In the same month a creditor's suit was brought in this Court for the administration of Heraloll's estate. In June 1876 a decree for administration was made and the usual accounts and enquiries ordered. A report was subsequently made by which it was found that the plaintiffs were creditors of the estate for the debt now relied upon. On the 25th February 1878 Russickloll having died, administration of the unadministered estate of Heraloll was granted to his widow, the defendant Koosummoney, and the suit was revived against her and Russickloll's widow, the defendant Biddomoney. On the 12th August 1878 by a decree on further directions this report was confirmed and the usual directions given. That suit is still pending.

2. In 1848 Muttyloll Seal, the father of Heraloll and of four other sons, executed a deed by which he conveyed certain property to trustees upon trusts for the benefit of his family. Muttyloll Seal died in 1851, intestate so far as the property involved in this suit is concerned. The defendant Gobinloll Seal and Kannyeloll Seal are the present trustees under the deed of 1848.

3. The plaintiffs contend that the trusts of the deed of 1848 are void in law; that one-fifth part of the property supposed to be affected by those trusts passed to Heraloll as one of the heirs of Muttyloll; and that that share forms part of Heraloll's assets applicable to the payment of his debts.

4. They say in their plaint:

Paragraph 26.--'The defendant Koosummoney Dossee has refused and still refuses to take any proceedings or to take part in any proceedings with a view to impeaching any of the provisions of the said indenture, alleging, amongst other things, that under the terms of the said indenture any member of the family taking any proceedings in any Court of Justice in any matter affecting the said trusts would forfeit all rights, benefits, and interests thereunder.'

Paragraph 27.--'The defendant Koosummoney Dossee is also interested as one of the beneficiaries under the said indenture, and the relation between the defendant Koosummoney Dossee and the defendants Gobinloll Sea] and Kannyeloll Seal, the trustees of the said indenture, who are also beneficiaries under the said indenture, is such as to create a very substantial impediment to the prosecution by the defendant Koosummoney Dossee of the rights of the creditors of the said Heraloll Seal, deceased, against the defendants Gobinloll Seal and Kannyeloll Seal in relation to the property comprised in the said indenture.'

5. The plaintiffs ask, in substance, for a declaration in accordance with the contention above stated, that the share of Heraloll may be duly administered, and that this suit may be taken as supplemental to the existing administration suit.

6. They have made defendants in the suit the trusteess of the impeached deed; Koosummoney, the administratrix of Heraloll; Biddomoney, the widow and heiress of Russickloll, who was himself the sole heir of Heera Lall; certain persons as representatives of the beneficiaries under the trust deed; and Mr. Macgregor, in whose hands the property is as receiver in another suit, which need not be further referred to.

7. The female defendants in a joint written statement take the same ground which the plaintiff in the passage already cited from the plaint alleged Koosummoney to have taken. The trustee defendants, as trustees of the deed, resist the plaintiff's claim to have the property dealt which as assets of Heraloll on a variety of grounds.

8. From what has been said I think the following propositions follow:

(1) That the case is one in which proceedings ought to be taken to test the validity of the plaintiff's contention as to the trusts.

(2) That the administratrix has refused, and still refuses to take any such proceedings.

(3) That the trustee defendants dispute the right of the creditors in their character of trustees and for the benefit of the beneficiaries of whom the administratrix is one; and that the administratrix concurs in this action of theirs and refuses to proceed against them, because she prefers her personal interest under the trust deed to her duty as administratrix. It appears also, if that be material, that the heiress-at-law takes the same view and from the same motive. This, I think, amounts in law to collusion between these parties.

(4) There is already an administration suit pending, covering the whole of Heraloll's assets, whatever they may be.

8. The question we have to decide is whether on these facts the present suit is maintainable.

9. The general rule of law is that the executor or other representative of the deceased is the proper person to realize the assets of his estate, and that no other person can sue for them in any Court; and this rule rests upon obvious principle. The proper person to sue for a debt is the creditor. The proper person to sue to recover property is the person who has a title to it, not one who has none.

10. But an exception to the general rule has been admitted in certain instances. Many cases were cited to us beginning with Alsager v. Rowley 6 Ves. 748 and ending with Yeatman v. Yeatman L.R. 7 Ch. D. 210 in which, on grounds of collusion, insolvency, or other special circumstances, a creditor of an estate has been allowed to join a debtor to the estate as defendant in a suit against the executor. I do not think it necessary to examine those cases in detail. The principle on which they rest is stated by Turner V.C. in Travis v. Milne 9 Hare 141, 149: 'Upon an examination of the authorities I believe it will be found that there is no instance of such a suit being maintained in the absence of special circumstances, and that collusion is clearly not the only ground on which such a bill can be supported. The cases, I think, may fairly be considered to go to this extent, that such a bill may be supported in all cases in which the relation between the executors and the surviving partners' (the case then before the Court was one of a deceased partner's estate), 'presents a substantial impediment to the prosecution by the executors of the rights of the parties interested in estate against the surviving partners.' In Stainton v. The Carron Co. 18 Beav. 146 Romilly, M.R. stated the rule: 'I think it unnecessary to go in detail through all the cases to be found on this subject. I think that they may be summed up thus: that the persons interested in the estate of the testator, not being the legal representatives, will not be allowed to sue persons possessed of assets belonging to the testator, unless it is satisfactorily made out that there exist assets which might be recovered, and which, but for such suit, would probably be lost to the estate;' and both these statements of the rule are cited with approval by Hall, V.C. in Yeatman v. Yeatman. In the present case, had there been no administration suit pending, there would have been, in the collusion of the administratrix and the trustees, a substantial impediment to her suing them, and a strong probability of the loss of assets, unless a suit like the present were admitted, and, in my judgment, the authorities show that it would have lain.

11. But the administration suit is pending, in which the Court has control of the administration of all the assets of Heraloll. In that suit an order might be made directing proceedings to be taken, in proper form and by proper parties, to recover the assets in question; and the conduct of such proceedings might be given as seemed best to the Court. Nor is any reason shown why such an order should not be applied for. The applications that were made, and the order of the Court I shall notice later. Two courses would be open to the Court in. that suit: first, to allow a suit to be brought in the name of the administratrix; secondly, to appoint a receiver to sue. It is pointed out in Dowd v. Hawtin L.R. 19 Ch. D. 61 that the latter course would be in accordance with the older practice of the Court of Chancery, but that in recent times the former course is always adopted. But I do not understand the Court there to have held that there is power to give a receiver the conduct of a suit, if necessary; at any rate, in this country under the Procedure Code, I think there clearly is such a power. Having regard to the requirements of Section 51 of the Procedure Code as to plaints, the nature of the objection raised by the administratrix, and the great practical difficulty of enforcing any order against a purdahnashin woman in this country, I think the Court might well hesitate before directing proceedings in her name. But under Section 503 of the Code, I think it clear that the Court might authorise a receiver to sue in his own name.

12. Under these circumstances, I do not see, on principle, how it can be said that there is any substantial impediment to the bringing of a suit in a regular manner, or any danger to assets such as to necessitate the reception of the present exceptional suit.

13. I think, too, the weight of authority is in favour of this view. In one sense there is no direct authority upon the point. That is to say, there is no case in which such a suit has been held to lie, while an administration suit was pending, nor is there any case in which a suit has been rejected expressly on that ground. Sharland v. Mildon 5 Hare 469 was cited for the plaintiffs. But that case is not in point. The defendant there held liable was not a mere debtor to the estate, but an executor de son tort accountable as such to those interested in the estate. In Stainton v. The Carron Co. 18 Beav 146 already referred to, an administration suit was pending, and a decree had been made, and the Master of the Bolls does not expressly dismiss the second suit on that ground, but lays down the rule in the terms already cited. He' did, however, according to the Law Journal report, point out in his judgment that, if the plaintiffs had any remedy, it was in the administration suit, 23 L.J. Ch. 299. Greender Chunder Ghose v. Mackintosh I.L.R. 4 Cal. 897 was a case similar to the present, and it proceeded to decree both in the Court of First Instance and on appeal. But the point was not raised. It was indeed argued that the Judges before whom the case came must be taken to have approved of the frame of the suit, because they did not object on the ground now in question. But I do not see that it was in any way the duty of the Court to take such a point when the parties did not choose to raise it.

14. On the other hand, in Earle v. Sidebottom 37 L.J. Ch. 503 in the passage cited in the judgment of Pigot, J., Romilly, M.R., examined the question, and stated his view of the law thus: 'If there is no bill existing in the Court at all, a creditor may file a bill on behalf of himself and all other creditors against an executor or a legal personal representative for the administration of a deceased person's estate. That is every day's practice. Also, if he makes out a case of collusion between the legal personal representative and the debtor of a testator, he may make the debtor of the testator a party to that suit. But these are exceptional cases. Excepting those cases, a creditor cannot file a bill to get in the assets of a testator or intestate. It is the business of the legal personal representative to do that, and suits are instituted every day for that purpose. If the legal personal representative, without collusion, is not active and vigorous in getting in the estate of the testator, or is culpably negligent, then the Court does not allow the debtors to be made parties, but appoints a receiver, who by the authority of the Court gets in all the assets. But when once there is a decree in an administration suit, proceedings must be taken in that suit, and there must not be another suit for the same purpose, and if the matter be a peculiar one and the assets cannot be got in without a suit being instituted in the name of the legal personal representative, and the legal personal representative refuses to institute any such proceedings, then the plaintiff in the suit might apply to the Judge in Chambers for leave to file a bill in the name of the legal personal representative indemnifying him against the costs.' And in Dowd v. Haw tin, already referred to, the Court of Appeal states what the ordinary practice of the Chancery Division is, namely, by proceedings in the administration suit.

15. I therefore agree with the view of the learned Judge who heard this case, that under such circumstances as those disclosed the present suit will not lie.

16. It remains however to consider the applications which were made in the administration suit and the order made thereon. It appears from the proceedings brought before us, that the conduct of that suit is in the hands of one Ramdoss Coondoo; that he applied for and obtained in that suit an order nisi for the appointment of a receiver, with a view to bringing a suit for the same objects as the present. The present plaintiffs obtained an order nisi giving them leave to bring this suit. The nature of the latter order is plain enough. It gives leave under Clause 12 of the Letters Patent to sue, though part of the property may not be within the jurisdiction. It gives leave to join causes of action under Section 44, rule (a) of the Procedure Code. It gives leave to sue on behalf of all the creditors, and to sue the defendant Behariloll Seal on behalf of all the beneficiaries under Section 30 of the same Code.

17. The learned Judge before whom the matter came appears to have considered (and as far as I can judge, for good reason), that the now plaintiffs were fitter persons than Eamdoss Coondoo to have the control of the litigation. He dismissed Ramdoss Coondoo's application, and made the plaintiffs' order absolute. The learned Judge, as I understand him, limits his order in such a way as to show that it is an order only as between the parties in the administration suit and not one affecting the defendants in this suit,

18. The plaintiffs sought to use this order in two ways; First, it was said that such a suit may lie with the leave of the Court, if it could not without. I do not see how this can be. So far as the order is one under Clause 12 of the Letters Patent it affects only local jurisdiction. So far as it is under Section 44 of the Code it goes only to the joinder of claims. So far as it is under Section 30 it goes only to the joinder of parties. It makes it unnecessary to join all the creditors as plaintiffs, and places the present plaintiffs in the same position they would have been in under English law without any order. From no point of view can the order, in my opinion, give a right of suit not existing without it.

19. Secondly, it was contended, on the strength of an expression of Turner, L. J., in Harrison v. Richards L.R. 1 Ch. App. 473 that the effect of the order might be to constitute the plaintiffs receivers, for the purpose of bringing this suit. I think it is impossible to construe the order in any such sense.

20. I agree, therefore, in the view taken of the case by the Court below, and I think the appeal should be dismissed.

21. I arrive at this conclusion with regret; because it is always unfortunate that costs of litigation should be wasted by reason of the dismissal of a suit on a ground which leaves the merits of the controversy untouched. And so far as appears, I do not suppose the defendants would be worse off, if such a suit could proceed, than in one regularly brought. In this sense the objection, to which I feel bound to give effect, is technical; but in no other sense. It rests upon clear principles, a departure from which would, I think if not in this case, in other cases lead to multiplicity of suits, increase of expense and confusion. We cannot hold this suit to lie without laying down a new rule, and establishing a-precedent of general application. The objection is one which the defendants have a perfect right to raise, and the defendant Gobinloll raised it at the earliest moment by his written statement. The plaintiffs have carried on their suit through two Courts with full knowledge of the difficulty which lay in their way.

22. On the subject of costs I have had an opportunity of reading what the Chief Justice has written and I concur in his view.

Richard Garth, C.J.

23. As my brother WILSON agrees in this case with the Court below, that we ought in this country to be guided by the rule, which appears to be observed by Courts of Equity in England, I shall defer to their judgment, although I confess I do so with reluctance, because I see no sufficient reason for introducing such a rule here.

24. It is expedient, no doubt, that some recognised procedure should be followed, as regards the persons who should have the conduct of a supplemental suit of this kind ; and it is obviously right that, in the absence of good reason to the contrary, the legal representative of the party, whose estate is being administered, should sue to realise assets of that estate for the benefit of the creditors.

25. And it may also be right, that where there is any valid objection to the legal representative suing, the conduct of such a suit whoever may be the nominal party to it, should generally be in the hands of the plaintiff in the administration suit.

26. But where, as in this case, there is ample reason why the legal representative should not sue, and where there is also good reason as I consider for not allowing the person who instituted the administration suit, to have anything to do with the supplemental suit, I confess I should have thought that the selection of a proper person to bring this suit on behalf of the estate might well have been entrusted to the Judge in the administration suit, without its being absolutely necessary to appoint a receiver.

27. The learned Judge had all the facts and the parties before him; and I should have thought that he was probably the best tribunal to decide, whether it was necessary or expedient, having regard to the circumstances of the case, that a receiver should be appointed.

28. It seems clear from the English authorities, that where there is no administration suit pending, a suit of this kind may be brought by one creditor on behalf of himself and the other creditors ; and, therefore, there would seem to be no objection in substance to such a suit being brought, when there is an administration suit pending. The argument in favour of the rule, which my learned brothers are disposed to adopt, seems to be, that where a receiver can be appointed, to bring such a suit, it is always right that he should be appointed. But the rule is only one of procedure, as it seems to me, and one which we are at liberty to adopt or not in this country, as we think proper; and although in many and perhaps in most cases it may be the best course to appoint a receiver, I think there are some cases, in which such a course may be neither necessary nor expedient; and I am strongly of opinion that, although we should always pay the utmost respect to the wisdom and authority of our English Courts, we are by no means bound to adopt all the rules of procedure and practice, which the Equity Courts in England may have established.

29. In this case, as far as I can see, there was no necessity for a receiver; nor is there any substantial reason why this suit should not have been properly tried upon its merits in its present form, without putting the parties to the frightful expense and delay of fresh proceedings.

30. No receiver, I presume, unless he were himself an interested party, would act gratuitously; and in this case, it appears, there are no means of paying a receiver. There are literally no assets, as I understand,, out of which a receiver could be remunerated, unless the object of this suit were attained, and the trust funds realized for the benefit of the creditors.

31. The consequence is, that the receiver, when appointed, must be paid either by the creditors generally, or by the plaintiffs, who are by far the largest creditors; and in either case the appointment of a receiver would be an expense to them, without being, as far as I can see, any benefit to anybody; because the plaintiffs have such a deep interest in the success of the suit, that there can be no reasonable doubt of their doing their best to win it; and as this suit is supplemental to the administration suit, any assets which may be realized in this suit would of course have to be administered in the administration suit. And, again, if a receiver were appointed, he would only sue, I presume, upon being indemnified by the plaintiff's, either with or without the aid of the other creditors.

32. It is obvious, therefore, that when this suit is dismissed, and the Judge in charge of the administration suit is asked to appoint a receiver, it may be a question well worthy of consideration, whether the plaintiffs themselves should not be appointed receivers, inasmuch as they will virtually have to bear the expense of bringing the fresh suit. I entirely agree with Mr. Justice Norris, that it would have been highly improper under the circumstances to allow Ramdoss Coondoo to have the conduct of this suit in any way. A tradesman, who has had dealings with the Seal family, whose debt is only a small one (some Rs. 2,000), who is actually offered payment of that debt, and refuses to take the money, in the hope of being entrusted, with the bringing this suit against the Seal family, is certainly not the sort of person whom any Court would select to have the conduct of such a suit. He must either have a craving after costs, which, to say the least of it, is not a good trait in a receiver, or he must have some other reason, perhaps even less creditable, for wishing the conduct of the suit to be placed in his hands.

33. It, therefore, as far as I can see, comes to this; that when a receiver is appointed, the persons after all really interested in the suit, and paying the expense of it, and winning the risk of it, will be the plaintiffs, and the real defendants will be in no better position as against the receiver, whoever he may be, than they are now against the plaintiffs. In either case, I presume, they would be entitled to security for costs, if they choose to ask for it, and in either case, they are secure, as far as I can see, from being sued over again for the same cause of action.

34. Indeed, I do not know that the defendants will have effected any other result by the objection which they have taken, than to put themselves and the other parties to the suit to a good deal of unnecessary expense.

35. Under these circumstances, although, as I said before, I defer to the opinion of my two learned brothers upon this, which seems to me a mere question of procedure, I do not think it right to give the respondents any costs, for two reasons-

(1) In the first place, I consider their objection to have been a technical one, advanced for no bond fide object, but merely for the purpose of putting the plaintiffs to expense and trouble, by obliging them to bring their suit in a different form; and

(2) (Which is to my mind the more cogent reason), because hitherto there has been no authority in this country, deciding that a suit in this form cannot be brought; whereas, on the other hand, there is a direct authority that such a suit can be brought, inasmuch as the case of Greender Chnnder Ghose v. Mackintosh I.L.R. 4 Cal. 897 is a precedent for such a suit in this very Court. And it must not be forgotten that the Judge in the administration suit, who, as I consider, ought to have the selection of the plaintiffs in a suit of this kind, had sanctioned the suit in this form.

36. For these reasons, I think that, whatever view the learned Judge may have taken as to the form of the suit, no costs ought to have been allowed to the defendants in the Court below, and I certainly do not feel justified in allowing them any costs in this Court.

37. The appeal will, therefore, be dismissed without costs.

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