R. Kuppuswami Mudali vs S. Narayanaswami Aiyar

Odgers, J.—In this appeal, the defendant is the appellant. He together with two others, Amirtham Pillai and Packiria Pillai, were executors

of the estate of Tambuswami Pillai deceased. Defendant appears to have collected some of the outstandings due to the estate and executed a

promissory note in favour of Amirtham Pillai for Rs. 1,090 in 1916. The estate became vested in Tambuswami''s sons, (it is said) after a decree of

Court by which presumably the executors were discharged, and one of them Kailasam Pillai endorsed this promissory note to the plaintiff, acting, it

is alleged, as managing member of the family. Two points were raised for the appellant: (1) that Kailasam Pillai acquired no property in the

promissory note by virtue of the vesting of the estate in himself and (2) that he did not endorse as managing member. The two lower Courts found

that endorsement to Kailasam by the late executor was unnecessary. The first Court puts it on the ground that all the rights of an executor vested in

Kailasam, the lower appellate Court on the ground that the promissory note was taken by Amirtham Pillai on behalf of the estate. Dealing with the

first point, the short question is "" can the ordinary rule as to endorsement be dispensed with? "" Does Kailasam Pillai acquire any property in the

promissory note from the fact that the estate has been handed over to him and is no longer in the hands of the executors? An executor or other

legal representative must endorse (Section 57 of the Negotiable Instruments Act) even though the note may have been endorsed by the deceased

before his death since the legal representative is not the agent of the deceased. It is said that this case is closely analogous to cases where a note

vested without endorsement by operation of law and must be decided on that footing. The Negotiable Instruments Act only deals with transfer by

negotiation, viz., according to the law merchant. It does not affect the rules of law regulating the devolution of bills or notes by Acts of law or their

transfer as choses in action or chattels. As none of the requirements for the latter are present here, the only point is whether the vesting in the

present case was by operation of law. On the death of the holder of a bill the title thereto passes to his personal representatives i.e., executors or

administrators, without endorsement but I have been unable to find any case which covers a legatee such as Kailasam Pillai and further I can find

no ground for holding that Kailasam Pillai represents the estate or can be considered as the agent of the executor. The nearest cases cited to us

were that reported in Sowcar Lodd Govinda Doss v. Muniappa Naidu ILR 31 Mad. 534 and Ramanadhan Chelly v. Kathavelan ILR 41 Mad.

The first was a case of the Court of Wards taking charge of an estate and ousting a usufructuary mortgagee from possession. The tenants of

the mortgaged premises executed promissory notes to the Court of Wards'' Manager for their rents. It was held competent to the mortgagee and

his heirs to maintain suits on such promissory notes when the Court''s superintendence had come to an end and it had delivered to the mortgagee

(the plaintiff) the promissory notes without endorsing or otherwise assigning them in writing. The case was decided by Miller and Pinhey JJ. Miller

J., Puts the decision on the ground of agency; the mortgagee was a receiver and was landlord before dispossession, afterwards the Court of

Wards was landlord. The mortgagee as landlord was the real payee and entitled to sue when the court''s superintendence terminated. Pinhey J.,

also put it on the ground that the power of the Court of Wards having ceased there was nobody who could legally endorse. It appears to me that

thus set out the case is materially different to the one before us. I cannot see how Kailasam can in any way be said to be the Receiver of the estate

or agent of the executor Amirtham Pillai and it does not appear that the latter could not be or could not have been compelled to endorse by

process of law. The 2nd case quoted above was decided by my learned brother and Seshagiri Aiyar J. That was a case of one trustee replacing

another and it was held that a promissory note executed in favour of a trustee can be sued on by his successor without endorsement. The decision

was rested again on the ground of agency. '' Broadly speaking, trustees exercise rights and obligations as agents of the trust'' and reliance was

placed on Catherwood v. Chabaud 1 B.& C. 150. There the bill in question was given to one S.C. as administratrix of J.C. for money due to her

intestate (i.e. J.C.). The money was not paid in the lifetime of the administratrix S. C, and it was held that the right to the bill devolved upon the

representatives of J.C. (administrators de bonis non) on the ground that they succeeded to all the legal rights of the administratrix in her

representative capacity as the money recovered was immediately applicable to the right fund as assets of the first intestate. The Court expressly

said there may be cases where the administrator of an administrator might and ought to sue.

The decision is clearly based on the ground that the Administrator de bonis non represented the estate of the deceased and from the

considerations I have detailed can have no application to the present case.

The result in this case is as put by Richardson J. in Akhoy Kumar Pal v. Haridas Bysack (1914) 18 C.W.N. 494, that ""the procedure provided

by the Negotiable Instruments Act has not been followed and there is nothing which operates as a transfer either under or outside the Transfer of

Property Act. "" It may be remarked that this point though raised in the first Court was only raised by an additional issue and it appears to me that

the requirements of the Negotiable Instruments Act should be enforced and should not, except on very strong grounds, be evaded by increasing

the category of transfers by operation of law. This category includes marriage, death, execution, bankruptcy and reputed ownership (Chamber''s

Bills of Exchange 7th Edition p. 139). For these reasons I think the appeal succeeds on the first point and it is consequently unnecessary to go into

the second. The result is that the suit must be dismissed throughout with costs.

Ayling, J.

I agree.