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Present: Schneider J.CADER v. SAIBU.
331—C, B. Jaffna, 15,131.
Payment by judgment-debtor to person seizing decree after assignment
by judgment-creditor—Civil Procedure Code, ss. 254, 340, and 349,
Plaintiff in this case assigned his decree to substituted-plaintiffon November 4. In action No. 5,299 of the same Court, a Chettyobtained judgment against plaintiff and defendant. The Chettyseized the decree in this case in favour of the plaintiff on November9. The defendant paid the Chetty on November 10 Rs. 65 infull satisfaction. Thereafter the substituted* plaintiff issued writ *against defendant to recover Rs. 123* 64.
Held, that defendant was not entitled to get credit for theRs. 65 paid as aforesaid.
“ A judgment-creditor who seizes a decree in another actionis to be deemed &n assignee of the latter decree only for the limitedpurpose of execution of the decree seized for the satisfaction ofthe decree in his favour. He cannot be regarded as entitled toall the rights of an ordinary assignee.”
“ Once a writ under which a decree is seized is satisfied, it followsthat the seizure is, ipso facto, released, and the decree which hasbeen seized is released from the burden of the seizure and allresults consequent thereon.”
HTHE facts are set out in the judgment.»»
Croos Da Brera (with him Ramachandra), for defendant, appel-lant.—Under section 254 of the Code, the judgment-creditor, atwhose instance a decree of Court is seized, becomes an assigneethereof. The assignment operates as from the date of seizure,and the assignee is entitled to all the privileges of a private assign-ment. The assignment in favour of the substituted-plaintiff mayhave been made prior to the seizure, but so long as it was notnotified to Court, the debtor was not obliged to consider it. Thepayment of the debt by the defendant to the judgment-creditorin case No. 5,299 was made in ignorance of the assignment tosubstituted-plaintiff. Such payment must be taken to be made
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ill good faith, and the debtor should be discharged. A pirateassignment must be taken as non-existent so long as it is notnotified to Court as required by section 339 of the Code. Underthe Roman-Dutch law it is dear that unless the debtor has receivedformal intimation from the cessionary, he can safely pay to thecedent or to a subsequent cessionary who has given notice. Counselcited Berwick's Voet, p. 104; 3 Burge, pp. 547-641; and 4Halsbwry'a Laws of England 379. .
Coder, for substituted-plaintiff, respondent.—Section 264 merelysays that a seizing creditor becomes an assignee from thedate of decree, but in this case there was nothing to seize,as the debtor had by prior deed divested himself of his interest inthe substituted-plaintiff's favour* Section 254 says that theassignment is good “ so far as that person’s interest extends.” Thisclearly contemplates the existence of some interest in the plaintiff.It is the duty of the debtor to pay to any person legally entitledto receive payment. The substituted-plaintiff’s assignment wasprior in date, and he was entitled to payment in preference to thesubsequent assignee by operation of law. Even the seizing-creditor was not substituted as required by section 339, and thedebtor should have waited until this was done.
Croos Da Brera.—Under the Roman-Dutch law, even in the caseof two private assignments, payment to the subsequent assigneewithout notice from the former is good, and discharges debtor.An assignee by operation of law ought not to be placed on a differentfooting.
February 14,1923. Schneider J.—
. An interesting and important question is raised by this appeal.It will be useful to state the facts.
On November 2,1921, decree was entered in this action in favourof the plaintiff for Rs. 73*45, inclusive of costs.
On November 4 this decree was assigned by the plaintiff to thesubstituted-plaintiff, who is the respondent in this appeal by adeed duly registered.
On November 9 the decree was seized by the judgment-creditor•in action No. 5,299 also of the Court of Requests of Jaffna.
That decree was against the plaintiff and the defendant in thisaction. In the absence of proof to the contrary, I will assumethat they are both liable jointly and severally.
On November 11 the substituted-plaintiff made an applicationto have himself substituted in place of the plaintiff in this action.It was opposed. The opposition was upheld, but on appeal it wasdirected that he should be so substituted.. Upon being substitutedhe made an application for the execution of the decree. This* too,was opposed by the defendant, who in his turn made an applicationthat satisfaction of the decree be recorded as certified (section 349V
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1928. The relevant facts set out in his affidavit are the following: HeSchneider the judgment-creditor in action No. 5,299 on November 10J•a siim of Rs. 65, and'obtained the receipt marked D1 in the following
Coder v.terms : “ After the decree in ease No. 15,131 of the Court o1
fiaibuBequests of Jaffna had been seized under the writ in case No. 5,299
of the Court of Bequests of Jaffna, I have received from Meera,Saibo, defendant in the said case No. 15,131, the sum of Bs. 65.”
The substituted-plaintiff thereafter issued writ in this actionagainst him to recover Bs. 123*64, inclusive-of the costs awarded*’in appeal. He claimed to be entitled to set-off against that sum,the sum of Bs. 65 paid as aforesaid and also a sum of Bs. 17 forwhich he had an order in his favour against the plaintiff.. Hebrought the balance sum of Bs. 41*64 into Court, and claimed tohave fully satisfied the decree; On appeal the substituted-plaintiff’scounsel conceded that the defendant was entitled to credit in thesum of Rs. 17. Accordingly, the one issue between the parties,was whether the defendant was' entitled to set-off against thesubstituted-plaintiff the sum of Rs. 65 paid as aforesaid.
Mr. Croos Da Brera, on behalf of the defendant, contendedthat the effect of section 254 of the Civil Procedure Code was toconstitute the judgment-creditor in action No. 5,299 (whom I shallhereinafter speak of as the Chetty), the assignee of the decree inthis action as from the date of the seizure. He drew attention tosection 340 of that Code, and contended that he, as judgment-debtor in this action, could have successfully claimed to havecredit for the payment of the Rs. 65 if he had paid that sum tothe plaintiff, and that, therefore, he was entitled to claim thebenefit of that payment as against the substituted-plaintiff.
The view I take of section 254 is that a judgment-creditor whoseizes a decree in another action is to be deemed an assignee of the-latter decree only for the limited purpose of execution of thedecree seized for the satisfaction of the decree in his favour. Hecannot be regarded as entitled to all the rights of an ordinaryassignee. Any surplus after satisfaction of his claim will notbelong to him, but to the actual decree-holder. Section 254 isone of several sections dealing with matters relating to theexecution of decrees grouped under chapter XXII., which is headed:‘* Of executions.” In* section 254 it is expressly enacted that thejjudgment-creditor who seizes is “ to be deemed ” the assigneeunder assignment as of the date of the seizure, and in so far as theinterest of the person against whom he is seeking execution extends.It would, therefore, appear that the plaintiff divested himself of allinterest in the decree in this action by his assignment to the sub*stituted plaintiff on November 4, and that when the Chetty seizedthe decree the plaintiff had no seizable or any interest whateyerin it.
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But Mr. Croos Da Brera argued that at the time he made thepayment to the Chetty he had no notice of the assignment in favourof the substituted-plaintiff, and that he was, therefore, justified inmaking the payment to the Chetty as the only known assignee.The answer to that argument is that the Chetty was never anassignee of the decree, because at the date of his seizure his debtorhad no interest in the decree.
A second argument against the contention is that a debtor whomakes payment to a creditor who has seized a decree in favour ofhis judgment-debtor does so at his risk, for events may arise asin this case, in consequence of which the seizing-creditor wouldnot be entitled to claim any interest in the decree he has seized.
There is another argument against Mr. Croos Da Brera’scontention,’ Once a writ under whioh a decree is seized is satisfied,it follows that the seizure is, ipso facto, released, and the decreewhich has been seized is released from the burden of the seizureand all results consequent thereon- Accordingly, the defendantis not entitled to credit for the sum of Bs. 65, but only for thesum of Bs. 17.
Subject to that variation the order appealed from is afiSrmed,and the appeal dismissed, with costs.
CADER v. SAIBU