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Kherode Behari Gossami Vs. Raja Narendra Lal Khan - Court Judgment

LegalCrystal Citation
CourtKolkata
Decided On
Judge
Reported in55Ind.Cas.310
AppellantKherode Behari Gossami
RespondentRaja Narendra Lal Khan
Cases ReferredTouche v. Metropolitan Railway Warehousing Company
Excerpt:
contract - privity of contract--stranger, whether can sue on contract--trustee and cestui que trust--covenant by assignee to pay third person, whether can be enforced by latter. - .....the plaintiff, p.c. mitter had any authority to represent that if the plaintiff would advance the money, the raja would undertake the liability to repay it, even if any such representation was in fact made.10. the suit is not brought under section 130 of the transfer of property act, 1882, but the cause of action is based upon the ground that under the circumstances of this case the 1st defendant became a trustee for the plaintiff in respect of (1) the rent, of rs. 12,000 which he was liable to pay to the 2nd defendant under the lease of the 8th october 1910 during the term of three years thereby created and (2) the 75 per cent. of the realisable arrears of rent.11. by the deed of 23rd january 1911 the 2nd defendant assigned to the 1st defendant all arrears of rent and granted him.....
Judgment:

Lancelot Sanderson, C.J.

1. This is the plaintiff's appeal from the judgment of Greaves, J., delivered on the 20th February 1917, whereby be dismissed the suit with costs.

2. The facts are set out fully at pages 105, 106 and in the first paragraph of page 107 of the paper-book; they depend upon documents and there is no dispute about them.

3. With regard to the third paragraph on page 107, the learned Judge's finding that he had no evidence as to the authority of P. C. Mitter is contested.

4. It was argued that the evidence of the plaintiff shewed that the 2nd defendant and an officer of the Raja on a certain occasion told him that the Raja was going to take the liablity of re payment to the plaintiff and asked, if be was. agreeable: that the plaintiff said if the Raja took the liability he was agreeable to advance the money; and it was urged that but for this representation the plaintiff would not have advanced the money. It is to be noted first that no date was given for this conversation, and in the second place the plaintiff said he was not sure of the name of the Raja's officer, but that he thought his name was Puma.

5. I do not think the above mentioned contention is correct. The plaintiff himself said later in his evidence that it was at Amarendra's request that he paid the money.

6. Amarendra was A. N. Dutt, who is now dead. He was the brother of H. N. Dutt, the attorney in whose office the plaintiff's mortgage of the 16th December 1910 was prepared.

7. I think it is evident that the period, of time to which the plaintiff was referring in his evidence with reference to the visit of P. C. Mitter was the later date, viz., on or about the 23rd January 1911.

8. It appears from the Raja's letter of the 22nd January 1911 to his attorney H. N Dutt that Purna Babu was going to Calcutta and the Raja requested his attorney to act in consultation with him; that was with reference to the transaction which materialised in the deed dated the 23rd January 1911.

9. There is no evidence to shew that prior to that date the Raja contemplated taking upon himself the liability to pay the sum due from the 2nd defendant to the plaintiff: and further there is no evidence that in December 1916, when the money was advanced by the plaintiff, P.C. Mitter had any authority to represent that if the plaintiff would advance the money, the Raja would undertake the liability to repay it, even if any such representation was in fact made.

10. The suit is not brought under Section 130 of the Transfer of Property Act, 1882, but the cause of action is based upon the ground that under the circumstances of this case the 1st defendant became a trustee for the plaintiff in respect of (1) the rent, of Rs. 12,000 which he was liable to pay to the 2nd defendant under the lease of the 8th October 1910 during the term of three years thereby created and (2) the 75 per cent. of the realisable arrears of rent.

11. By the deed of 23rd January 1911 the 2nd defendant assigned to the 1st defendant all arrears of rent and granted him thereby a receipt for the rent payable by the 1st defendant to the 2nd defendant in respect of the demised premises from the 26th December 1910 for the full term of three years, and the 1st defendant entered into the covenant with the 2nd defendant to pay the Rs. 10,000 and interest due from the 2nd defendant to the plaintiff and agreed to indemnify the 2nd defendant for all claims and demands in respect thereof.

12. There is no doubt that the 1st defendant was aware of the mortgage to the plaintiff of the 16th December 1910, for it is recited in the deed of 23rd January 1911 and the assignment created by that deed was, therefore, subject to the plaintiff's mortgage.

13. There is here no question of privity of contract between the plaintiff and the first defendant: a contract can create no right or liability in a person who is not a party to it, unless he can claim or be charged through a party, as in the case of a cestui que trust claiming through a trustee. There is, however, no doubt that a contract may be in form with a named person, and yet be intended to secure a benefit to another as a cestui que trust in such away that the latter may sue in his own right to enforce the contract. In my judgment the 1st defendant did not become a trustee of the plaintiff in respect of either of the two matters hereinbefore referred to. As regards the first, viz., the rent of Rs. 12,000 payable to the 2nd defendant by the 1st defendant, there was nothing more than a personal liability of the 1st defendant to the 2nd defendant, of which the 2nd defendant by the deed of 23rd January 1911 relieved and discharged the 1st defendant. I fail to see how the mere covenant which the 1st defendant entered into with the 2nd defendant to pay the plaintiff the amount due on his mortgage can possibly be said to have created the 1st defendant a trustee in respect of the Rs. 12,000 or of his personal liability in respect thereof.

14. As regards the second matter, viz., the 75 per cent. of the arrears of rent, although the arrears of rent were absolutely assigned by the 2nd defendant to the 1st defendant by the deed of 23rd January 1911, I find nothing in the deed indicating that the 1st defendant bound himself to pay the amount due to the plaintiff out of such arrears of rent: the 1st defendant took the assignment of the arrears of rent subject to the plaintiff's mortgage, but that in my judgment by itself is not sufficient, even when coupled with his personal covenant with the 2nd defendant to pay the amount due to the plaintiff, to constitute the 1st defendant a trustee of the arrears of rent, when received, for the plaintiff.

15. Farther, even if the 1st defendant did constitute himself a trustee of the arrears of rent, as urged by the learned Counsel for the plaintiff, it would be necessary for the plaintiff, in order to succeed in this suit, to prove that the 1st defendant had in fact received the arrears of rent, or at all events some part of the arrears.

16. The learned Judge has found upon this point that he had not sufficient materials before him to decide the 9th issue which was stated as follows;-'Has the 1st defendant realised any arrears of rent and, if so, how much.

17. The evidence in relation to this matter is that of J.N. Mukerjee at page 42 of the paper-book. He stated that in the year 30th Pous 13 8 to 15th Sravan Rs. 28, 243-14 6 were realised and Rs. 28,459 6 0 were spent. The latter sum included the Rs. 5,000 paid to the plaintiff in March 1911 and Rs. 20,034 10 in respect of cesses, taxes and Government revenue. As regards arrears the only evidence is that the Rs. 28,243 'was realised as rent. The roker will show that this amount was realised as rent: the abstract of account does not show it. It does not show how much was realised from Patnidars or for arrears of rent.'

There is nothing to shew how much was realised for arrears of rent.

18. This does not prove that any arrears of rent were realised, for the statements above referred to are consistent with none having been received. It was urged on behalf of the plaintiff that the matter was solely within the 1st defendant's knowledge and that the plaintiff could not prove the realisation of any arrears of rent and, therefore, an account should now be ordered.

19. I do not think this can be acceded to. The plaintiff did not ask at the trial for an adjournment for further enquiry into the defendant's books for the purpose of ascertaining if any arrears bad been collected; and further I should have thought it would not have been impossible for him to have proved the collection of some arrears by calling some of the tenants liable for arrears, if in fact any arrears had been collected.

20. In my judgment the plaintiff failed to prove the collection of any arrears of rent by the 1st defendant and for this reason as well as for the reasons already, mentioned his suit would fail.

21. In the course of the argument our attention was drawn by the learned Counsel for the plaintiff to the case (amongst others) of Deb Narain Dutt v. Ram Sadhan Mandal 20 Ind. Cas. 630 : 17 C.W.N. 1143 : 41 C. 137 : 18 C.L.J. 603 and he relied particularly only upon a passage at page 1149, Page of 17 C.W.N.-Ed in which the late Chief Judge referred to Touche v. Metropolitan Railway Warehousing Company (1871) 6 Ch. App. 67 at p. 677 and quoted a passage from Lord Hatherley's judgment as follows: 'The case comes within the authority that where a sum is payable by A B for the benefit of C D, C D can claim under the contract as if it had been made with himself.'

22. The learned Counsel relied upon that as a statement laying down the general law and urged that this ease was covered thereby. I think it is desirable to draw attention to what was said by Cotton, L.J., with reference to the above mentioned passage in Gondy v. Gandy (1885) 30 Ch. D. 57 at pp. 62, 67 : 54 L.J. Ch. 1154 : 53 L.T. 306 : 33 W.R. 80:

23 'Of the cases that have been referred to, I will notice the last mentioned by Mr. Hemming, that of Touche v. Metropolitan Railway Warehousing Company (1871) 6 Ch. App. 67 at p. 677 where there was an arrangement between a promoter of a Company and another person that a certain sum should be paid out of the funds of the Company to that other person; the Company seems to have admitted the arrangement, and in the articles there was a contract or stipulation that the money should be paid to the promoter, in order that the arrangement might be carried out. There Lord Hatherley held that the other person who was to get the money was entitled to sue under that contract. What Lord Hatherley says is this Touche v. Metropolitan Railway Warehousing Company (1871) 6 Ch. App 67 at p. 677: The case comes within the authority that, where a sum is payable by A B for the benefit of C D, C D can claim under the contract as if it had been made with himself, it is possible that Walker may, as he states in his answer, not be under any personal liability to the plaintiffs; but I think that, on the evidence, the plaintiffs were to be paid when Walker got the money, and they knew that by the articles of the Company he was to be paid.' Now, if that is intended to lay down the rule as a general proposition of law in the general terms there used, it is not consistent with the other case referred to. Empress Engineering Company, In re (1880) 16 Ch. D. 125 at p. 127 : 43 L.T. 742 : 29 W.R. 342 but it may be that on the facts of the former ease it was considered that the contract between Walker and the Company was entered into by Walker as a trustee for and on behalf of the plaintiffs; and, if so, that is in accordance with what I understand to be the law. But the late Master of the Rolls, in Empress Engineering Company, In re (1880) 16 Ch. D. 125 at p. 127 : 43 L.T. 742 : 29 W.R. 342 dealing with Touche's case (1871) 6 Ch App 67 at p. 677 said this in the course of the argument; -'In that case the Lord Chancellor finds, as a fact, that Walker was to receive the money as a trustee for the plaintiffs. If you can make out that Jones and Pride are cestui que trust, that alters the case. It appears to me that they are not. The promoters were liable to Jones and Pride, who are simply their creditors. A being liable to B, C agrees with A to pay B. That does not make B a cestui que trust? This shows that the general terms used by Lord Hatherley must be taken with some qualification as laying down the general law.' The judgment of Cotton, L.J. is important, as showing that the passage quoted from Lord Hatherley's judgment should not be read as having the unqualified effect as contended by the learned Counsel for the appellant, but that the general terms used therein must be taken with some qualification as laying down the general law.

24. In my judgment this appeal should be dismissed with costs.

Woodroffe, J.

25. I agree.


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