G.K. Mitter, J.
1. This is one of the rare cases in which there is no dispute as to the facts. The only dispute is as to who is entitled to a sum of money left with James Finlay and Co. Ltd., who claim no Interest in it themselves and have filed this interpleader suit. The defendants herein are the divorced wife of the deceased K. I. M. Fegan and the executor to the will of the said deceased.
2. The facts taken mostly from the brief of documents and correspondence marked by common consent as Ex. A are as follows: The deceased Fegan used to be an employee of James Finlay and Co. Ltd. in' one of their tea companies. After having served a long period with them he retired from that service, went over to England where he stayed for a few months and on coming back to India joined another tea company by the name of Tukvar Tea Co., Ltd. under the management of William-son Magor & Co. Up to the year 1942 the deceased Fegan had an account with James Finlay and Co. Ltd. which was styled a private account. James Finlay and Co. Ltd. are not Bankers and therefore their position vis-a-vis Fegan, the deceased, was that of a debtor and creditor pure and simple. On 3-10-1942 Fegan wrote the following letter to James Finlay and Co. Ltd. :
'I shall be obliged if as from date of receipt of this letter you will please note that my private account with you should be converted into a joint account in the name of myself and my wife Mrs. Violet Marian Fegan payable to either or survivor. The account will be operated upon by either of us and in the event of the death of either of us you will be entitled to make payment to the
survivor of all moneys standing at the credit of the account. Specimen signature of my wife is given below'.
This is signed by K.I.M. Fegan. in one corner of the letter the specimen signature of the wife V.M. Fegan appears. On 12-8-1951 Fegan addressed a letter to James Finlay and Co. Ltd. admitting that the statement of account as on 31-12-50 showing a credit of Rs. 18,215-11-2 was correct. Divorce proceedings were had in England between Fegan and his wife as a result whereof the husband was required to pay 360 per annum to the wife. 'This fact appears from an affidavit affirmed by Fegan on 2-1-5952 which was probably meant to be used in the divorce proceedings in England for the purpose of reducing the amount of the maintenance payable to the wife in view of altered circumst-ances. It also appears from this affidavit that after the decree nisi had been made absolute on 28-12-1950 Mrs. Fegan married one Arthur Welleslev Parsons on 28-1-1951 and was living, to the knowledge of the deponent Fegan, in South Africa with her second husband.
3. On 3-1-1952 the deceased addressed a letter to James Finlay and Co. Ltd. In the following words:
Will you be good enough to close my account and send me a cheque for the balance at my credit?''
4. On 11-1-1952 James Finlay and Co. Ltd. wrote back to the deceased saying:
' 'As requested we have closed your account and enclose a cheque for Rs. 18,725-10-3 representing the balance available at your credit as per statement, attached.
For audit purposes, we shall be obliged if you will sign and return to us the attached certificate certifying the correctness of your account.'
5. The statement of account annexed to this letter shows that Fegan and his wife had an account with James Finlay and Co. Ltd. which was payable to either or survivor. This account is shown as squared up on 11-1-1952 by the following entry 'To amount remitted to you as per your letter of 3-1-52. Rs. 18,725-10-3'. At or about this time Fegan was taken mortally ill and had to be removed from Darjeeling to Calcutta. On 18-1-1952 Messrs. James Finlay and Co. Ltd. wrote to the Manager of the National. Bank of India Limited advising them to stop payment of the cheque for Rs. 18,725-10-3 in favour of K.I.M. Fegan on the ground of serious illness of the payee. James Finlay and Co. Ltd. wanted the Bank to notify them if the cheque should be presented for clearing. The Bank wrote back on the same date to sav that the instructions had been noted but they would not be responsible if through pressure of business or otherwise the same were overlooked and the cheque paid.
6. On 21-1-1952 James Finlay and Co. Ltd. made a transfer entry in their books whereby they credited K.I.M. Fegan with the sum of Rs. 18,725-10-3. The entry reads thus:
Debit K.I.M. Fegan and Mrs. V.M. Fegan Joint A/C Rs. 18,725-10-3 and credit K.I.M. Fegan A/C for balance of his joint private account now transferred.'
7. Fegan died on 22-1-1952. From a subsequent letter it appears that the cheque which had been sent on to Darjeeling was brought back to Calcutta by a friend & put into the hands of Mr. Fegan while he was practically in an unconscious condition. He could not keep the cheque in his hand which was allowed to fall to the ground. Fegan had made a will bearing date 19-1-1952 whereby he appointed the first defendant to be the executor and trustee of his will and directed that he should stand possessed of the residue of the estate after payment of just debts and funeral and testamentary expenses. The executor and trustee was to have power to sell call in and convert into money such part or parts of the estate as he might in his own absolute discretion consider fit and to hold invest and reinvest in trustees' securities such moneys of the estate as he might from time to time and in his own absolute discretion consider fit. The testator devised and bequeathed the residue of his estate upon trust to pay the income there from to his mother residing at 2 Park Road Bexhill-on-sea in the County of Sussex in England during her lifetime and thereafter to make over the corpus of the said residue to his friend Catherine M. Macpherson residing at 'Kilverce', 2 Campton Ayenue, Oarkston in Bournemouth in the County of Hampshire in England and if the said Catherine M. Macpherson was to predecease the mother of the testator leaving issue then to such issue taking per stripes in equal shares absolutely. The testator further directed by his will that his son Patrick was not to receive any benefit from his estate.
8. On 25-1-1952 the executor wrote to James Finlay and Co. Ltd. requesting the addressee to furnish him with particulars of the deceased's as sets as might be in their possession or such as might be known to them. It is not necessary to deal with the correspondence which passed between the executor and James Finlay and Co. Ltd. excepting to point, out that James Finlay and Co. Ltd. informed the executor about the sum of Rs. 18.725-10-3 and the transactions with regard to the said fund already mentioned. The whole position was reviewed by James Finlay and Co. Ltd. in their letter to trie executor dated 3-3-1952 and James Finlay & Co. Ltd. very properly pointed out that there was some doubt as to whether the payment of the sum of money could be made to the executor without an order from the Court and advised the executor to apply to this Court by originating summons for clearing up this point. In the meantime before the executor got a direction from this Court the deceased's former wife got into communication with the solicitor of the executor in England and made a claim on this money. The matter was also taken up on her behalf by the firm of Louw and Key of 111, Main Street, Somerset West, Cape Province, South Africa. Probate of the will of K.I.M. Fegan was given to the executor defendant on' 11-9-1952. The present suit was filed on 10-6-1952.
9. On behalf of the executor it is stated in his written statement that the cheque for Rs. 18,725-10-3 was brought down from Darjeeling and handed over to the testator at Calcutta but he died before the cheque could be cashed and the uncashed cheque was taken possession of by the plaintiff. The amount of the cheque is being held by the plaintiff for and on account of the heirs and legal representatives of the testator.
10. On behalf of Mrs. Parsons it was pleaded that the private account of K.I.M Fegan with the plaintiff had been converted into a joint account in the names of Pegan and his wife payable to either or survivor, under instructions contained in the letter of 3-10-1942 and on the death of the said Fegan the defendant No. 2 had become entitled to the payment of the moneys standing to the credit of the said account.
11. The only issue which arises on these pleadings is whether the defendant No. 1 or the defendant No. 2 is entitled to the payment of the said sum of Rs. 18,725-10-3.
12. On behalf of Mrs. Parsons it was contended that the issue of the cheque was a conditional payment and if the cheque remained unpaid the original debt revived. Mr. Mandal, Counsel appearing for her referred to the decision in Kedarmal v. Surajmal, 9 Bom LR 903 (A) and the decision of this Court in Sheikh Akbar v. Sheikh Khan, 7 Cal 256 (B) for this purpose. He also drew my attention to the case of Cohen v. Hale, (1878) 3 QBD 371 (C). The facts in this case were as follows: The plaintiff had recovered judgment on 9-11-1877 for 35. 12s. against the defendant. On 24-12-1877 the Midland Railway Company being indebted to the defendant in the sum of 44. 8s. 9d. drew a cheaue for that amount on the Wolverhampton Branch of Lloyd's Banking Company and sent it to the defendant. On 27-12-1877 the plaintiff applied for and obtained a garnishee order attaching the debt due from the Midland Railway Company to the defendant. This Order was served on the Railway Company on 30-12-1877 who thereupon stopped payment of the cheque which till then remained in the hands of the defendant unpresented. The defendant retained the cheque till the llth February and then took it to the Dudley Branch of Lloyd's Banking Company and obtained cash for it. that Branch not being aware of the stoppage of the cheque. The Railway Company suggested that Lloyd's Banking Company had a lien or charge on the debt and Lloyd's Banking Company ultimately appeared on the garnishee proceedings and claimed such lien or charge but the District Registrar made an order barring any lien or charge on the debt attached as between them and the garnishee, but not as between them and the judgment-debtor and direct execution to issue against the garnishee for that amount. On an application being moved both on behalf of the garnishee and Lloyd's Banking Company to rescind the abovementioned order the matter was heard by a Bench consisting of Chief Justice Cocktaurn and Mr. Justice Mellor. Cockburn, C. J.. observed:
'It is veiy true that a man who takes a cheque may be estopped from proceeding to enforce payment of the debt until presentment of the cheque, and if the cheque, is ultimately paid the debt is extinguished. All that happens in the meantime is that the right of action is suspended. But when the cheque is presented and dishonoured, the debt, the remedy for which was suspended until presentment of the cheque, may be treated as a debt subsisting all along, just as if the cheque had never been given. The giving of the cheque only suspends the remedy, it does not extinguish the debt. * * * Under these circumstances I think the Karnishee order could be enforced against the Midland Railway Company.'
Mellor J. took the same view and made some observations which were practically to the same effect.
13. The real question in this case is To whom did the money belong immediately prior to the death of the testator K.I.M. Fegan?' Did it belong to him alone or did the money still belong to him and his wife? On this point a judgment of the House of Lords in McEvoy v. Belfast Banking Company Ltd., (1935 AC 24) (D) cited by Mr, Mandal is very much in point although the facts in this case are not on all fours with the facts in that case. The facts in the House of Lords case were as follows: One John McEvoy, who was in bad health and anticipating early death, was entitled to a sum of 10,000 on a deposit account with the Belfast Banking Company Ltd. He withdrew that sum and redeposited it receiving from the Banking Company a deposit receipt in the following form:
'Deposit Receipt No. 65564. Belfast Banking Company Ltd., 10,000 Received from John McEvoy Esq., and Mr. Joseph D, McEvoy (a minor), the sum of ten thousand pounds sterling for credit in Deposit Account. Not transferable.'
This was signed by the manager of the Belfast
Banking Co. Ltd. Below that appeared the following:
'Payable to either or the survivor. The receipt must be produced when payment of either principal or interest is desired.'
McEvoy made public his will in August, 1921, and within a few weeks thereafter he died in September, 1921. It came out in evidence that the main object with which McEvoy had redeposited the sum of 10,000 with the Banking Company was that he was under the impression that by doing so his estate could avoid payment of estate duty on that sum. By his will, after making certain pecuniary legacies, McEvoy had directed the rest and residue of his property to be held in trust for his minor son until he should reach the age of 25 and on his attaining that age, for him absolutely. In the meanwhile, he had authorised his business to be carried on by his sister-in-law on such terms as his executors in their absolute discretion might arrange. The executors, after the death of the testator, endorsed this deposit receipt and received 10,000 with 170 as accrued interest thereon. They redeposited the sum of 10,000 and a new deposit receipt for 10,000 was made out in their names. This deposit receipt was not handed to the executors but was kept by the Banking Company .The appellant, i.e., the son of John MCEvoy, after leaving School, took part in the management of the business of the father. The business, however, did not prosper and from time to time moneys were advanced by the bank principally on the security of the deposit receipt to meet its debts. A sum of 2076 approximately was also paid for the purpose of purchasing a house which the minor wanted to occupy himself. The appellant came of age in November, 1926. The overdraft of the business account then amounted to 4027. On 7-1-1927 a sum of 399-19-4 had accrued as interest on the principal sum- The executors transferred 1709-17-9 from the deposit account to the business account and applied it in reducing the overdraft. A new deposit receipt for 7000 was made out in the names of the executors and retained by the respondents. Transactions like this followed with the result that the entire amount covered by the deposit receipt was paid away to meet the debts of the business. On attaining the age of 25 years, the appellant brought the action against the respondents claiming a declaration that he was entitled to the moneys represented by the deposit receipt dated 20-7-1921 and an account oj; the interest due thereon and payment of the sum of 10,000 with interest. The respondents denied liability pleading that diverse sums of money had from time to time been paid and applied by the executors and trustees to the use of the appellant. and had enured to the appellant's benefit. The appeal before the House of Lords was heard by Lord Atkin, Lord Warrington, Lord Thankerton and Lord Macmillan. Although all the Judges came to the same conclusion, the reasoning given was not the same and as a matter of fact Lord Atkin and Lord Thankorton took different views of the rights of the parties on the deposit receipt. Lord Macmillan did not deliver a separate judgment but concurred with the judgment of Lord Warrington. Dealing with the position of the bank as regards the account opened in the names of the father and the minor son, Lord Atkin observed that
'there was a vital difference between a contract purporting to be made by A with the bank to pay A or B and a contract purporting to be made by A and B with the bank to pay A or B. In both cases of course payment to B would discharge the bank whether the Bank contracted with A alone or with A and B. But the question was whether in the case put B had any rights against the Bank if payment to him was refused.''
According to His Lordship there was no doubt that in such a case B could sue the bank.
'The contract on the face of it purports to be made with A and B, and I think, with them jointly and severally. A purports to make the contract on behalf of B as well as himself and the consideration supports such a contract. If A has actual authority from B to make such a contract, B is a party to the contract ab initio. if he has not actual authority then, subject to the ordinary principles of a ratification B can ratify the contract purporting to have been made on his behalf and his ratification relates back to the original formation of the contract. If no events had happened to preclude B from ratifying, then on compliance with the contract conditions, including notice and production of the deposit receipt, B would have the right to demand from the bank so much of the money as was due on the deposit account.'
In His Lordship's view, if nothing had happened to prevent the son from ratifying the contract, he could sue the bank on the original deposit account. But, on the facts His Lordship held that the son had known from the beginning that the contract purported to be made on his behalf, that the money had been claimed and paid to his father's executors, and, therefore in His Lordship's view, ratification could not take place after the principal had by words or conduct intimated to the other party that he did not intend to ratify. His Lordship's conclusion was:
'The facts are that ratification, or no ratification, was in suspense and that the son by his conduct gave the bank reasonably to believe that the decision was no ratification.''
His Lordship accordingly held that the son never acauired the right to sue the bank on the contract. In the view of Lord Thankerton:
'According to its terms the deposit receipt for 10,000 dated 20-7-1921, would be evidence of a contract between the bank and the son as well as the father; but it is only an item of evidence though an important one. In the somewhat unusual circumstances of this case I am satisfied, on the evidence as a whole, of which the deposit receipt only forms part, that the father did not purport to act as agent for his son in making the contract, so as to make the son a contracting party, but that the father alone contracted with the bank, though for the benefit of the son as a third party.' This being His Lordship's view he agreed with the conclusions arrived at by Lord Warrington and observed:
'If I has taken the view that the father purported to make the son a contracting party I should have agreed with the opinion of Lord Atkin.' The legal and technical effect of the contract evidenced by the deposit receipt, according to Lord Warrington, was doubtful, and it was unnecessary to answer the question as to whether the. father had ' purported to act as agent for a son so as to make the latter a party to the contract or whether the contract was made by the father alone for the benefit of the son as a third party. According to his Lordship.
'the material circumstances were: The money deposited was that of the father alone, the son was a mere volunteer. The intention of the father as to the disposition of his estate was clearly expressed at the interview with the bank manager on 19-7-1921. The form of the deposit receipt in no way operated to alter this intention; it was adopted for another purpose. The money was entirely at the father's disposal during his life.'
On the whole. His Lordship was satisfied,
'that if the matter had been brought before a Court of Equity, the decision would have been in favour of the executors, namely, that they alone were entitled to receive the money and to apply it in due course of administration as directed by the testator's will.'
14. In my view, the observations made by Lord Warrington are applicable to the facts of this case. The money deposited belonged to K.I.M. Fegan alone, the wife being a volunteer. She I was not a signatory to the letter of October, 1942. Her specimen signature was given on the said letter merely to inform the bank that she was empowered to give them a discharge for payment properly made at her request. It is agreed on all hands that the wife never operated the account. But that to my mind, does not make any difference. According to me the true import: of the letter of October. 1942 is that the money remained the money of the testator, i.e., the deceased Fegan, but his wife was to be at liberty to draw upon the funds and if and when such funds were drawn, upon by the wife James Finlay and Co. Ltd. would get a proper discharge. It will be noticed that there is a wide divergence between the form of the letter in this case and the form of the deposit receipt in McEvoy's case. In the latter case, on the face of it, the money was purported to be received not from the father alone but from the father and the son jointly.
15. The matter can also be looked at from a different angle which, in my opinion, is definitely conclusive against the wife's contention. When the letter of 3-1-1952 was written by the deceased Fegan, it clearly meant that henceforth the money was not to be treated as belonging to the joint account of himself and his former Wife. The request contained in the sentence 'Will you be good enough to close my account and send me a cheque for the balance at my credit?', can only mean that the joint account should cease to exist whether or not the cheque was sent or paid. The joint account was closed once for all. Non-payment of this cheque, to my mind, did not revive the old debt, but created a new situation, not brought about by nonpayment itself but by the instructions given by K.I.M. Fegan, viz., that the account was to be closed. I do not think it would have made any difference if Pegan had passed away before James Pinaly and Co. Ltd. had drawn the cheque in his favour; the position would still be that the moneys would stand withdrawn from the joint account and belong to the estate of Fegan alone. The fact that James Pinlay and Co. Ltd. transferred the moneys to a new account is one of no significance. Whatever James Finlay and Co. Ltd, did, could not alter the situation in law. It was open either to Fegan or to his former wife to take away from James Finlay and Co. Ltd. whatever money remained in the account '& the direction or instruction of K.I.M. Fegan, when there was none from the wife asking James Finlay and Co. Ltd. to close the account and send him a cheque amounted to his saying that the joint account was to be no more and that the money should thenceforward be treated as belonging to him alone.
16. I do not think it necessary to take any note of The decision of Shantimoyee Devi v. Bengal Central Bank, 53 Cal WN 680 (E). In the result I hold that the money belonged to the estate of the testator K.I.M. Fegan, deceased, and his former wife Mrs. Parsons had no right or interest in it. James Finlay and Co. Ltd. is directed to pay over s. 18.725-10-3 to the first defendant. There Willbe a decree in favour of the defendant No. 1 St.John Demetrius for the sum of Rs. 18,725-10-3 lessthe costs, charges and expenses of James Finlayand Co. Ltd. which they may have properly incurred. The defendants will pay and bear theirown costs.