1. In this case a Hindu widow, shortly before her death, transferred a Government promissory-note to the defendant, her brother's son, by means of a registered deed of gift, and the finding is that she was competent to dispose of the note as it was part of her stridhan. The plaintiffs, who are her heirs, have attacked the transfer as invalid and sought to recover the note or its value, with the interest accrued, from the defendant. The Court of first instance held that, in the absence of endorsement and delivery, there was no valid transfer and it decreed the suit. The lower Appellate Court appears to have held that the note could have been validly transferred without endorsement by delivery of possession with intent to transfer; but it affirmed the decree on the ground that, although possession had been delivered at the time of registration, the lady did not intend to part with the property in the instrument.
2. The appeal to this Court raises two points of law. The first is as to whether a negotiable instrument such as this Government Promissory-note can be transferred at all save by endorsement and delivery of possession, as contemplated by the Negotiable Instruments Act, 1881. The answer to this question must, we think, be in the affirmative. No doubt, Sections 46 and 43 of the special Act referred to provide that a negotiable instrument payable to order may be transferred by endorsement and delivery, and it is clear that the privileges of a 'holder' secured to the transferee by that Act can be obtained only in the way prescribed by if. Bat the Negotiable Instruments Act of 18S1, like the Bills of Excharge Act, 1832, (45 and 46 Vict. C. 61), deals entirely with transfer by negotiation, that is to say, with transfer according to the law merchant; and, as pointed out in Chalmers on Bills of Exchange 237, at p. 239, it leaves untouched the rules of the general law which regulate the transmission of negotiable instruments and their transfer as chattels. The transferee under the general law would, of course, not be in the privileged position of a 'holder' under the special Act, but would be merely in the position of the transferee of any ordinary chattel and have no better title than his transferor. But he would have a good title to the property, if his transferor had such a title, and this has been recognised in several cases in England. Thus, it was held in In re Barrington and Burton 2 Sch. and Lef. 112 : 9 R.R. 61, that the holder of a note payable to order might transfer his title to another by a separate writing assigning it to the latter; and in Veal v. Veal 27 Beav. 303 : 29 L.J. Ch, 321 : 6 fur. (N.S.) 7 : 2 L.T. 228 : 8 W.R. 2 it was decided that the holder of such a note could pass the title by giving it to another in contemplation of death. In the case of a transfer for value without endorsement, the transferee would, in Eagland, under Section 30(4) of the Bills of Exchange Act, 1882, be able to require the transferor or his representative to complete the transfer by endorsement; and elsewhere a Court of equity would doubtless compass the same end. In the case of a voluntary transfer, it is difficult to say what the exact position of the transferee would be, and it was observed by Sir Mackenzie Chalmers--see p. 144 of the work cited already--that the law requires re-consideration. But with that problem we are not here concerned, and we think that we need not consider further how a voluntary transferee could, for practical purposes, enforce recognition of his title and payment of the note. But that he is entitled to the piece of paper and to the property referred to in it, seems clear; and this is the view taken by the Madras High Court in Muthar Sahib Maraikar v. Kadir Sahib Maraikar 28 M. 544 : 15 M.L.T. 384 and, also, as it seems tous, in Whistler v. Forster 14 C.B. (N.S.) 248 : 8 L.T. 317 : 32 L.J. C.P. 161 : 11 W.R.648. We are disposed to hold, then, that, if the note in this case was transferred in accordance with the provisions of the Transfer of Property Act, 1882, being moveable property within the purview of that Act, read with Section 1(5) of the General Clauses Act, 1865, the enactment in force in 1882, the defendant was entitled to retain the note as against the plaintiff, and the litter's suit ought to have been dismissed.
3. As to the remaining question raised by the appeal, it is clear, on the findings of both the Courts below, that the deed of gift exhibited was executed in accordance with the requirements of Section 123 of the Transfer of Property Act. It appears to have been signed on behalf of the donor, Saudamini Debi; it bears the signatures of three witnesses, and it was duly registered. It has been faintly suggested that the learned District Judge, by referring on appeal to the fact that 'the lady was illiterate,' meant to throw some doubt on the factum of execution by a purdanashin woman'; tat there is not a trace of anysuch suggestion in the pleadings or any where else, and we cannot listen to it now. The instrument is of the simplest character, and it is in evidence that it was read over to Saudamini before she caused it to be signed, while the judgment of the first Court shows that the learned Munsif was satisfied that she was well aware of what she was doing and acted with marked deliberation. We must take it, then, that the deed was properly executed.
4. The lower Appellate Court, however, has found that 'there is no proof of any delivery of possession of the note to the appellant with the intention of transferring title in the note from the endorsee to the appellant,' and that, 'if there was any delivery of the note at all, that delivery was in bailment only, and not in transfer of title.' This finding is, we think, open to criticism on two grounds. In the first plane, it is based entirely on the statement of the lady's am muktiar that, at the time of execution of the deed, Saudamini made the verbal stipulation that, if she lived, it would be given back to her, and it is a question how far such a statement should have been admitted in evidence at all. In the second place, even if this additional verbal stipulation be taken into account, the fact remains that the lady did die, the stipulation has fallen to the ground, and nothing remains but the instrument itself, which is, on the face of it, an out and out dead of gift. And, lastly, the whole of the learned District Judge's inquiry into the matter of delivery is supererogatory; for no delivery was necessary to complete the transfer, since a gift of moveable property may, under Section 123 of the Transfer of Property Act, be effected either by registered instrument or by delivery. It has been suggested that the gift was a donatio mortis (sic) and that, therefore, the application of Section 123 of the Act is barred by Section 129: but there is nothing in this point. The deed is a gift, pure and simple; and the evidence as to Saudamini's verbal stipulation at the time of execution cannot be used to vary its terms and convert it into a gift in contemplation of death. At most, that evidence would be admissible only to show that there was an additional stipulation for a re-conveyance in a certain event; but the gift was a complete gift in presentee.
5. The result is that this appeal must be allowed, the decrees of both the Courts below discharged and the respondent's suit dismissed with costs throughout.