Pachaiyappa Chetti vs Sivakami Ammal

Phillips, J.—The plaintiff in this case is the daughter of one Ponnambala Chetti, who, with his brother, Periyambala Chetti, formed an

undivided family. They carried on money-lending dealings and entrusted those dealings to their brother-in-law, Sadayappa Chetti, the father of the

present defendant. Sadayappa Chetti continued those dealings for some time and maintained accounts for the moneys in his hands. In 1906 the

brothers, Ponnambala Chetty and Periyambala Chetty, effected a partition and the latter removed his share of the property from the hands of

Sadayappa Chetty who, however, continued to deal with the property of Ponnambala Chetty until the latter''s death in February, 1912, and even

after that date remained in possession of all his property. The plaintiff now alleges that Sadayappa Chetty held all these properties in trust for her

and has brought this suit against his son, the defendant, for an account. These facts are not disputed, but it is contended that the plaintiff''s suit for

an account is barred by limitation. The Subordinate Judge has, however, found that Section 10 of the Limitation Act is applicable to this case, and

has given a decree. In appeal we are only concerned with the question of limitation, it being contended for the appellant that Section 10 is not

applicable because the property of Ponnambala Chetty had not become vested for any specific purpose either in Sadayappa Chetty or in the

defendant. The main point relied on in appeal is that the property never became vested in Sadayappa Chetty for any specific purpose ; and it is

contended that as the property consisted of promissory notes, bonds and mortgage deeds, the provisions of Section 5 of the Trusts Act were not

complied with, and no valid trust has been created. It is in evidence that shortly before his death Ponnambala Chetty directed Sadayappa Chetty to

hold his property for the benefit of his wife and daughter ; and there seems to be no reason to disbelieve the oral evidence on this point, for, many

witnesses speak to the fact and the discrepancies in their evidence are merely on matters of detail which is due to the tact that the witnesses are

deposing to events which took place nine years ago. It is also alleged that when Sadayappa Chetty died in December, 1912, he informed the

plaintiff and her mother that his son would continue to hold the property on their behalf. The arguments in appeal have been confined to the

entrustment alleged to have been made by Ponnambala Chetty shortly before his death, and it is contended that, as some of the property consisted

of mortgages which were Immovable property, no valid transfer was effected as there was no registered instrument of transfer, and consequently,

the property did not vest in Sadayappa Chetty, and a fortiori did not vest in him for any specific purpose. This argument, however, ignores the

pleadings in the suit. The plaintiff alleged that the properties vested in Sadayappa Chetty and after him in his son, the defendant, and were held in

trust for her. The defendant admitting that the properties vested in him contended that the properties vested in him absolutely and that the plaintiff

had no interest therein. This contention of the defendant has been found against and this finding is not disputed in appeal. It was therefore the case

of both parties that the properties actually vested in the defendant. Consequently no evidence was let in as to the manner in which such vesting was

effected, and consequently it hardly lies with the. defendant now to plead that the plaintiff has not proved an effective transfer of the properties.

Apart from this, the whole of the appellant''s argument has been confined to the period dating from Ponnambala Chetty''s death ; but it is in

evidence and is not disputed now. that the property entrusted to Sadayappa Chetty was entrusted to him many years before Ponnambala Chetty

died, the alleged trust being at the time one for the benefit of Ponnambala Chetty himself. The bulk of the property originally entrusted was

presumably money and possibly promissory notes and bonds ; there is no evidence at all that at that time any mortgages existed. The transfen of

the money and bonds, therefore, could be effected by delivery ; and if it was the intention of the parties that Sadayappa Chetty should hold the

property as a separate fund to be accounted for by him to Ponnambala Chetty undoubtedly an express trust would be created. There being no

Immovable property, so far as it appears from the record, no registered instrument of transfer would be necessary; and the property would vest in

Sadayappa Chetty by the mere transfer of possession coupled with the intention of the parties that such delivery of possession should vest the

property in, Sadayappa Chetty. The subsequent direction by Ponnambala Chetty that the property should be held for the benefit of his wife and

daughter was merely an alteration for the purpose of the trust ; in both cases the property would have been held for a specific purpose. In this view

of the case, undoubtedly an express trust within the meaning of Section 10 of the Limitation Act was created and, consequently, the plaintiff''s

present suit cannot be barred by limitation.

I do not therefore think it is necessary to ascertain in this suit whether the mortgage deeds had become vested in Sadayappa Chetty inasmuch as

there is nothing to show that, when the entrustment was made, any Immovable properties, such as mortgages, were transferred. Their existence

now can be explained by the fact that Sadayappa Chetty, dealing with the moneys of Ponnambalam Chetty, converted some of those moneys into

mortgages ; and, if the money vested in him the proceeds thereof would similarly vest. Even if it were necessary to prove vesting, it is possible that

the view taken by the late Chief Justice in Kishtappa Chetty Vs. Lakshmi Ammal, , that the word ''vesting'' means merely ''properly having control

of the property '' would be sufficient to dispose of the case, but, as I am of the opinion that the parties did not gp to trial on this question of vesting,

the defendant having admitted that the property vested in him, it is unnecessary to further discuss this question ; and 1 need not refer to the various

authorities, English and Indian, which have been referred to in the course of the argument, an argument which was largely beside the point with

reference to the pleadings in the case.

The appeal therefore fails and is dismissed with costs.

Krishnan, J.

The defendant, the appellant in this appeal, is the husband of the plaintiff. The plaintiff sues him for an account and for payment over of the

moneys which she alleges her father Ponnambala Chetty entrusted to his brother-in-law Sadayappa Chetty, defendant''s father, which on his death

passed into the hands of the defendant. Defendant denied the entrustment and pleaded that pro-notes and mortgage bonds in his name were his

own property and raised several legal pleas and further contended that the suit was barred by limitation. In answer to the last plea plaintiff

contended that her case fell within Section 10 of the Limitation Act and no limitation applied to it. The Subordinate Judge overruling the

defendant''s pleas passed a decree in plaintiff''s favour and the defendant has appealed to us. The only point raised in the appeal is the one of

limitation, the learned vakil for the appellant expressly stating that he gave up. all other points. The question we have to decide is thus confined to

whether Section 10 applies on the facts of this case. It is clear from the evidence that Ponnambala Chetty and his brother, who were carrying on

money-lending business in Thiruvannama.lai but living in a small village near by, being apprehensive of the safety of their property, purchased a

house in Thiruvannamalai, and gave it to their brother-in-law Sadayappa Chetty to live in, free of rent, and transferred their funds to him and got

him to transact their business on their behalf in his own name keeping separate accounts for the same. He was to render accounts and hand over

the moneys and profits when demanded. Ponnambala''s brother subsequently divided off from him and obtained from Sadayappa his half share in

those moneys and in the house. But Sadayappa continued to act for Ponnambala till the latter''s death in 1912. There is a body of evidence which

there is no reason to discredit that just before his death early in 1912 Ponnambala instructed Sadayappa to continue the business as before and

hold the moneys for the benefit of his wife and daughter, the plaintiff ; Sadayappa agreed to it and acted accordingly. Sadayappa also died at the

end of the year 1912 and it is in evidence that just before his death he told his son the defendant to continue the arrangement and pay the ladies the

moneys of plaintiff''s father when wanted. Plaintiff''s mother brought a suit against her son-in-law, the defendant, and got a decree for the transfer to

her of a number of pro-notes and bonds standing in the defendant''s name but found to have been taken with her husband''s money. Plaintiff has

brought this suit after her mother''s death for an account of all the moneys belonging to her father which the defendant collected and had not

hitherto accounted for and for payment over.

On these facts the plaintiff contends that Sadayappa was an express trustee in whom moneys were vested by her father for the specific purpose

of carrying on his money-lending business improving the estate and handing over the capital and profits to him on demand, a purpose which was

afterwards changed by her father into a similar one in favour of herself and her mother ; she, therefore, pleads Section 10 applies. The defendant

pleads that there is no proof that any funds of the plaintiff''s father were vested in his father and even if so vested he says they were not vested for

any specific purpose and Section 10 could not apply. According to him his father was only an agent of the plaintiff''s father and as such an agency

came to an end with his death in 1912 and the suit is barred by limitation.

Although the evidence on the point is somewhat meagre as to what actually took place when Sadayappa was installed in the newly purchased

house in Thiruvannamalai there is evidence to show that the funds of the plaintiff''s father''s money-lending business were thereafter kept by

Sadayappa and were lent out by him on bonds and mortgages taken either in his own name or in the name of his son, the defendant. Ex. KKK, the

account produced, and the other documents referred to by the Subordinate Judge in his judgment prove this. It is true that some bonds were taken

in Ponnambala''s name and Ponnambala at times sent chits to Sadayappa for loans to be given to borrowers. But these circumstances do not

interfere with the inference that Sadayappa was made a trustee and was not a mere agent. If he was only an agent he would not have taken bonds

in his own and in his son''s name for moneys got from Ponnambala. The near relationship of the parties, the fact that Sadayappa dealt with

Ponnambala''s moneys as if they were his own and took bonds in his and his son''s name for such moneys when lent, the fact that he kept a

separate account for these funds, the evidence as to what took place at Ponnambala''s and Sadayappa''s deaths, all point to the fact that

Sadayappa was not a mere agent but was in reality a trustee. There is no force in the argument that the properties were never properly vested in

the defendant''s father by Ponnambala. In fact, the defendant''s case in the Lower Court was not merely that the properties were vested in his

father and after his death in him but that they were actually his own properties. The plea now taken that the properties were not vested in the father

is not consistent with that position. The funds were all apparently in the shape of moneys which had only to be handed over to the defendant''s

father with the intention of passing the property to him to vest them in him. If there were any pro-notes or bonds in Ponnambala''s name at the time

which required endorsement or assignment in writing to transfer, they were evidently subsequently realised and converted into moneys and taken

by Sadayappa as no such notes or bonds exist now. Such taking with Ponnambala''s consent would vest these funds in Sadayappa. The contention

that a registered instrument was required to create a trust with reference to Immovable property like a mortgage interest is of no avail here as it is

not shown that at the time the funds were vested in Sadayappa any portion of them consisted of mortgage securities. The mortgage bonds that now

exist were taken in defendant''s name by his father for moneys lent out by him which were already vested in him though they were originally part of

Ponnambala''s estate. I have no doubt that Ponnambala''s money were legally vested in Sadayappa in trust. The evidence also shows that the

specific purpose of the trust was to carry on money-lending with those moneys and to increase the estate by addition of profits by way of intefest

and hand over when called on to Ponnambala. It was clearly open to Ponnambala, the funds being already vested in Sadayappa, to alter the

purpose of the trust by merely directing him to hold them for the benefit of his wife and child as he did just before his death. It seems to me that all

the conditions necessary for the application of Section 10 of the Limitation Act exist in this case and the Subordinate Judge was right In overruling

the plea of limitation, as u/s 10 the defendant, as the legal representative of the trustee, is equally barred from pleading the statute.

As this case turns on the facts proved here which clearly bring it within the section it is not necessary to refer to any authorities on the exact

meaning of the section. The case cited in Krishna Pattar v. Lakshmi ILR (1921) M 415. to which I was a party is clearly distinguishable as that

was a case of a constructive trust. The case in Bhurabhai v. Bai Ruxmani ILR 32 (1908) B 394. is more in point.

I agree that the appeal fails and should be dismissed with costs.