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Monohur Doss Vs. Romanauth Law - Court Judgment

LegalCrystal Citation
SubjectProperty
CourtKolkata
Decided On
Judge
AppellantMonohur Doss
RespondentRomanauth Law
Cases ReferredLyddon v. Moss
Excerpt:
attorney and client - fiduciary relationship--compound interest--rate of interest--taxation of bills of costs--interest on costs. - .....able and improper.8. the first question here is, whether the defendant had any right to have these bills taxed at all after the mortgage of 1869, and what passed upon the negotiations for the mortgage executed in that year. the plaintiff's counsel contends, that when the plaintiff had offered to have the bills taxed, and the defendant refused that offer, the defendant was debarred from any further right to have the bills taxed. further he contends, that the defendant has lain by so long since the bills wore delivered, that any right he may have had to re-open the account made up in 1869 has been lost by delay and acquiescence.9. we think that, having regard to the relation between the parties, there is no sufficient ground for the plaintiff's contention in this respect. when the account.....
Judgment:

Richard Garth, C.J.

1. The defendant does not deny the plaintiff's general right to an account of what is due under the mortgages, and to have the property sold; but he maintains (1) that lie ought not to pay compound interest, (2) that the bills of costs delivered in 1869 ought to be taxed, and (3) that the rate of interest was too high, and ought to be reduced.

2. Before proceeding to deal with these particular questions, we may say generally, that there is no reason whatever to suppose that the plaintiff' intended to act dishonestly towards his client. The plaintiff had no doubt satisfied himself in his own mind, that if his client went elsewhere to borrow the money, he would not, on the whole, be so well off. We are quite willing to presume this in favour of an attorney of long standing and high character, such as the plaintiff is here. But, for the purposes of this suit, the question is, whether, having regard to the fiduciary relation between the parties, and the rule which the Court always observes in transactions between attorney and client, the plaintiff's contention hero is well founded.

3. First, then, as to the interest. The plaintiff abandoned in the lower Court the claim to any accumulation of interest since the date of the third mortgage; but he maintains that he is entitled to the prior accumulation of interest included in the mortgages of 1870 and 1871. The defendant desires to get rid of all accumulations of interest, and to have the whole account taken from the date of the first mortgage at simple interest. The learned Judge in the Court below has given the plaintiff the accumulations of interest prior to the third mortgage; and, subject to the question of the rate of interest which we shall consider hereafter, we think rightly so. If the debt be really due, and the rate of interest be a fair one (which are wholly separate questions), it would be quite unreasonable that the debtor should pay no interest for many years, and that the creditor should be kept all that time out of his interest without any compensation.

4. We do not for a moment doubt the power of the Court to consider this part of the agreement, and to see whether, as between attorney and client, the client ought to be bound by it. But the plaintiff is entitled to a reasonable compensation for the default of the defendant in not paying interest regularly, and, upon the whole, we do not consider, now that be has abandoned the compound interest, that in insisting upon annual rests up to the date of the third mortgage, he is claiming more than a reasonable compensation, if the rate of interest be fair. It was contended that under no circumstances could an attorney be allowed interest on costs, But the authorities which were relied upon in support of that contention do not apply to a case like the present. There is no rule which prevents an attorney from taking security or otherwise arranging with his client for the payments of costs which have actually become due, or from agreeing for any fair amount of interest in making such an arrangement. Lyddon v. Moss 4 De Gex. and J. 104, at p. 130 : S.C. 5 Jur. N.S. 637, cited by Mr. Jackson, is certainly no authority in his favour; there the stipulation to which Lord Justice Turner's remarks are applicable, was a stipulation for interest on future costs, which stands on a wholly different footing.

5. We now proceed to consider the question as to the rate of interest. It was admitted in the course of the argument--at any rate it appears to us to be beyond dispute--that the attorney, who has lent money to his client upon mortgage, can only recover what would have been a fair rate of interest for his client to have undertaken to pay. We have, therefore, to consider whether 12 per cent was a fair rate in 1889, 1870, and 1871, when the three mortgages were executed. The case is, no doubt, very bare of evidence upon that point. The plaintiff called no witnesses upon it; he was cross-examined as to it by the defendant's Counsel, but no information winch can assist us in coming to a conclusion was elicited from him. One of the plaintiff's witnesses, however, Baboo Shamole Dhone Dutt, an attorney of this Court, and who states that he had considerable experience in lending money upon mortgage, gave evidence, the result of which appears to be, that the security being admittedly ample, and the property favourably situated, the defendant could have got the money at 10 per cent, at the outside. Now this evidence, it must be borne in mind, comes from the plaintiff's own witness. It is affirmative evidence, given by a person of unimpeachable credit upon a matter within his experience. It was tested by the plaintiff's Counsel on re-examination, and was not modified in any material particular. It is, therefore, such evidence as in the absence of good evidence to the contrary, we are bound to accept as credible. It was suggested that as the defendant was himself a banker, be probably know the rate of interest as well as the plaintiff, but this is not the case. The defendant is an up-country banker and merchant, accustomed, no doubt, to advance money on goods, but not likely to be acquainted with the customary rate of interest upon mortgages of immoveable property in Calcutta, with which, in the ordinary course of business, he would have but little to do.

6. The learned Judge in the Court below thought that this evidence of Baboo Shamole Dhone Dutt as to the rate of interest was completely answered by the transaction between the defendant and the Gangoolys, which he considered to be conclusive to show that 12 percent, was a fair rate. Possibly, under one or other of the very general provisions of the Evidence Act, evidence of this transaction would have been admissible evidence for this purpose, at any rate it was not objected to, and we must take it for what it is worth. But we are bound to say, that we are very far from thinking it conclusive to show that the rate charged in another and subsequent transaction was the current rate. An isolated transaction can never, as it seems to us, be conclusive as to current rates: it certainly does not, in our opinion, displace the evidence of a man of experience and unimpeachable credit, such as the plaintiff's own witness, Shamole Dhone Dutt.

7. The remaining question, and the most difficult one, is as to the re-opening the hills of costs. The learned Judge in the Court below was of opinion, that, notwithstanding the settlement of accounts in 1869, the bills ought to be examined by the taxing officer; but, considering the long time hat had elapsed since they had been delivered, he thought that the plaintiff ought not to be put to any proof that the work was done. He thought that the taxing officer should only disallow those charges which appears to him unreason able and improper.

8. The first question here is, whether the defendant had any right to have these bills taxed at all after the mortgage of 1869, and what passed upon the negotiations for the mortgage executed in that year. The plaintiff's Counsel contends, that when the plaintiff had offered to have the bills taxed, and the defendant refused that offer, the defendant was debarred from any further right to have the bills taxed. Further he contends, that the defendant has lain by so long since the bills wore delivered, that any right he may have had to re-open the account made up in 1869 has been lost by delay and acquiescence.

9. We think that, having regard to the relation between the parties, there is no sufficient ground for the plaintiff's contention in this respect. When the account of 1869 was made up, the plaintiff was the defendant's attorney, and a portion of the bills of costs which lie was then called upon to pay, though only the smaller portion, related to suits thon pending. Subsequent to that account being then made up, the plaintiff, besides being the defendant's attorney, became his arbitrator in a very heavy reference, made in a suit wherein the defendant was a party. During all the time, therefore, that has elapsed since the bills were delivered, the defendant has stood in such a relation to the plaintiff, that he can scarcely have been called a free agent. Of course also during all that time the plaintiff enjoyed the full confidence of the defendant; and the defendant was under the impression, that the only effect of having the bills of costs taxed would be to increase his own indebtedness. Practically, he could not, since 1869, have taken any step at all in the matter without quarrelling with his own attorney, and we do not think that, under such circumstances, we ought to infer acquiescence from the delay.

10. Nor are we satisfied that by the bare offer to have the bills taxed, and the rejection by the defendant of that offer, the defendant has lost that right, which he originally had, to have the bills taxed. We cannot now say what the result of a taxation would have been. Possibly it might have been advantageous to the defendant, possibly not. But we think it would be dangerous if we were to sanction the notion that an attorney, by making such an offer as this to Ids client at a time when the client was in difficulties, and he was just about to lend the client money, put himself in any better position. We think that, as between attorney and client, such an offer ought to carry very little weight. Wo do not at all intend to say, that the offer was not in this case made bona fide; but, under all the circumstances, we do not think the refusal ef h> ought to deprive the defendant of his right to tax.

11. It was suggested that if we sent those bills to he taxed in the ordinary way, the defendant might he put in a much better position than he would have been if he had had them taxed in 1869, some of the bills being for work done in 1864 and 1865 in suits long ago concluded; so that it might be extremely difficult for the plaintiff now to prove every item in these bills. We do not apprehend any real difficulty upon this point, having regard to the practice which we understand to prevail in the Taxing Master's office.

12. The lapse of time is a circumstance which, like any other circumstance, the Registrar would take into consideration, and if his decision should not he satisfactory in any particular ease, the parties will he at liberty to object to it, and the matter will then be referred to the opinion of the Court.

13. The decree of Mr. Justice Kennedy will, therefore, be varied by directing that, in taking the account upon the mortgages, interest be calculated at 10 per cent, in lieu of the rate mentioned in the mortgages; the account up to 13th October 1871 being made up with annual rests, and that the plaintiff's bills of costs be taxed in the usual way. In all other respects the decree will he affirmed.

14. As regards costs, we think the defendant is entitled to have the costs of this appeal on scale 2. If the defendant had been challenging these transactions as plaintiff, he would have got his costs, as having substantially succeeded; and we do not see how his position is practically altered because lie happens to be a defendant. He has also succeeded in the appeal. The costs subsequent to the decree, other than the costs of taxation, will be added to the amount found to be due in the usual way. The costs of taxation will follow the result of the taxation according to the rule.

15. Six months' time will lie allowed from the date of the decree for taxing the accounts.


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