Sri Lanka Law Reports .(1982) 2 S.L.R.
BANK OF CEYLON
COURT OF APPEAL
ATUKORALE, J., AND G.PS. DE SILVA, J.
C.A. APPL. 932/81; D C. PANADURA 1463/TSEPTEMBER 1, 1982
Testamentary proceedings – Relationship between Bank and customer – Requirementof Probt/te before dealing with money in deceased’s current account. ■
One'Eugene Dias died on 25.11.78 leaving a Last Will appointing the. respondentas her executor. At the time of her death she had to credit in her account withthe Bank of Ceylon (City. Office Branch) a sum of Rs. 14,520.90.
On 26.2.81 the lawyers for the respondent who were, the applicants for Probatewrote to the Manager of the City Officer Branch requesting him to deposit theaforesaid sum of Rs. 14,520.90 to the credit of the testamentary case in accordancewith an order made by the Judge on 11.2.81.
The Manager by. his letter dated 3.3.81 addressed to the respondent’s lawyerscalled for the Probate or Letters of Administration. Hie lawyers replied statingthat the order of Court was sufficient. On 9.3-81 the Manager informed thelawyers that according to current banking regulations Probate or Letters ofAdministration were a pre-requisite.
On 15.5.81 the Judge noticed the Manager of the Bank to appear in Court andshow cause on 7.7.81. On 7.7.81 the Judge made order directing the Managerto cany out his order of 11.2.81 and warned that failure to do so would resultin his being dealt with for contempt of Court.
The petitioner Bank, appealed 'against this order.
The question was whether the Court could compel the petitioner Bank to depositmoney lying in current account with the Bank to the credit of the Testamentarycase before Probate or Letters of Administration is granted.
That as the relationship between a Bank and a customer is one of debtor andcreditor, it is only the creditor or the executor who has' obtained pnlr*’ ."h rcould call for the money and give a valid discharge
Hunk ,’J I'cyttm t t'/wli Pius (Aiukoralc. J.)
'(1) The Imperial Hunk – of India Lid. r. Terera (1928) 30 N.L.R. 59.
(2) R V. Davenport (1954) IA.E.R. 602.
APPLICATION for revision of the Order of the District Court of PanaduraK. Kanag-lswaran for the petitioner.
Nimal Senanayake, .S'.A., with Miss S.M. Senaratne for the. respondent.
Ciir :ad'. vult.
November 4. 1982ATUKORALE, J.
This is an application to revise the- order of the learned actingDistrict Judge of Panadura made on 7.7.1981 directing the AssistantManager of the City Office branch of the petitioner (Bank of Ceylon)to deposit, in compliance with an order purported to have beenmade by court earlier, a sum of Rs. 14,520/90 cts. to the credit-ofthe testamentary case in which the. estate of the deceased EugeneDias is being administered. She died on-25.11.1978 leaving a lastwill appointing the respondent as executor. At the time of her deaththis amount of money was lying to the credit of her current accountwith the petitioner at its City Office branch. On 26.2.1981 theattorneys-at-law for the respondent (who was the petitioner claimingprobate in the testamentary case) wrote to the Manager of the CityOffice forwarding an order purported to have been made by courton 11.2.1981 that this amount should be deposited in court on23.3.1981 and also a deposit note to enable the Manager to do so.The Manager by his reply of 3.3.1981 addressed to the respondent’sattorneys-at-law requested them to forward without delay the probateor letters of administration to enable him to attend , to the matter.By their letter of 5.3.1981 the -attorneys informed the Manager thatno question of probate would arise as they had forwarded to himthe order of court to deposit the money.'By his reply of 9.3.1981the Manager brought to the notice of the attorneys that, accordingto the current banking regulations, probate or letters of administrationhad to be produced before the money could be released. On 15.5.1981the Manager received a notice from court requiring him to appear,in court on 7.7.1981 in connection with his failure to act in compliancewith the letter of 11.2.1981 sent on the order of court and requiringhim to show cause, if any, for such failure. On 7.7.1981 the acting
Sri Lanka Law Reports
(1982) 2 S.L .R.
Manager appeared in court in response to this notice and explainedthe petitioner’s position to the acting District Judge and referredcourt to the decision of The Imperial Bank of India Ltd. v. Perera(1). The learned acting District Judge, however, directed him tocarry out the order of court and ordered him to deposit the moneyto the credit of the case before 8-8.1981 and also informed him thatfailure to do so would be regarded as contempt of Court. It is thisorder that is sought to be revised in the present application.
The main issue that was argued before us related to the questionwhether, probate admittedly not having at the time been granted tothe respondent, the court could compel the petitioner to deposit themoney lying to the credit of the deceased’s current account to thecredit of the testamentary case in which the deceased’s estate is beingadministered. Our attention was drawn to the above decision of theSupreme Court which seems to me to be exactly in point. Theretoo an application was made to the District Court for an order onthe bank directing it to bring into the testamentary case the money,lying to the credit of the deceased testator at the time of his death.Thebank (apparently on being noticed of this application) resisted thesame.The reason for resisting did not appear to be clear. Afterinquiry the learned District Judge made order directing the bank todeposit the money in court. The bank appealed from this order. TheSupreme Court observed that the true relationship of the bank andits customer who had deposited money in a current account was thatof a debtor and creditor respectively, the money in deposit being acommon law debt owing from the bank to its customer. It wastherefore held that it was not competent for the District Court tohave made order directing the bank to deposit the money, in court.Schneider J. in delivering judgment (with Garvin, J. agreeing) statedthus:
“If the Bank had. been an ordinary debtor and had refusedpayment of a debt', the proper procedure for recovering itwould be a properly constituted action.'I am not aware whythe Bank has refused in this instance to bring the money into -Court, but it is possible that it might have been advised thatif it did bring money into Court upon an order of the DistrictJudge, which was ultra vires, it might be regarded as a voluntarypayment and not a payment made upon compulsion in pursuanceof a valid order of Court. If that view were taken, then thedefence would not be open to the bank, if sued by any person
CARank of Ceylon r. I'/uiH Dins (Antkorale. J.)735
lawfully entitled to the money, that it had paid the moneyinto Court upon an order of Court. But whatever may havebeen the. reason which actuated the Bank, in my opinion, theBank was within its rights in objecting to deposit the moneyin Court upon an order made by the Judge in this testamentaryaction. If the executors of the deceased testator had perfectedtheir title by obtaining probate the situation might have beendifferent, but I express no opinion thereon.”
The Supreme Court set aside the order of the learned District Judge.
The view that the banker and customer relationship in so far asmoney lying to the credit of the customer in a current account isconcerned is that of a debtor and creditor appears to have beenreCongised in recent times too; vide K.V. Davenport, (2) where LordGoddard, C.J. observed:
“If I pay money into my bank, either by paying cash or acheque, that money at once becomes the money of the banker.The relationship between banker and customer is that of debtorand creditor. He does not hold my money as an agent ortrustee. The leading case in Feloy v. Kill exploded that idea.When the banker is paying out. whether in cash over thecounter or whether by crediting the bank account of somebodyelse, he is paying out his own money, not my money, but heis debiting me in my account with him."
Applying the law as set out in the above decisions to the facts ofthe present case, it is clear that the petitioner was in the positionof a debtor of the testatrix Eugene Dias, the money lying to thecredit of the latter in her account being money borrowed by andbelonging to the petitioner. The petitioner docs not deny the existenceof this. debt. Its obligation is to pay its creditor Eugene Dias andon her death, the person who is lawfully entitled to the debt. It issettled law that the person who is in law entitled to receive paymentof a debt on the death of a creditor is his or her personal representative,namely the executor or administrator. Thus in this case it is theexecutor of the deceased testatrix who was in law entitled to callfor and receive payment of the debt owing frormthe -petitioner. Itis the executor who could have given a valid discharge of -the debt.The petitioner’s obligation was to pay the executor and no one else.Admittedly the respondent, though nominated to be the executor in
Sri Lanka i.aw Reports
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the last will, had not at the relevant time obtained a grant of probate.He had thus no legal authority to claim the debt due to the estate.There is no legal provision which empowers a person claiming to beentitled to probate or letters of administration to make applicationto court to compel a debtor to make payment, of the debt to thejcredit of the testamentary case in which the estate of the creditoris being administerd,; I am therefore of the opinion that the claimof the respondent to the money standing to the credit of the deceasedwith the petitioner is not one which the court could have cnrcriaincd.I hold that the order purported to have been-made by court on11.2.1981 and the subsequent order of the learned acting DistrictJudge of 7.7.1981 are both fundamentally bad as having been madewithout jurisdiction and must be set aside.
Tl^ere is another aspect of this case which requires considerationhere. A perusal of the journal entries produced before us revealsthat the impugned order of 7.7.1981 has been made in consequenceof a proceeding initiated by way of a motion filed by the attorneys-at-lawof the respondent in the lower court. The motion itself appears tohave been one directed to the issue of a deposit note to the Managerof the City Office branch of the petitioner, to enable him to makepayment of the money to court. The court has on this motion orderedthe issue of the deposit order as requested. It is this order that hasbeen communicated by the respondent’s attorneys to the Manager.It appears to me that there has not been a. proper application madeto court for the purpose of determining whether the petitioner wasliable to deposit the money to the credit of the testamentary caseat the instance of the respondent who at the time had not beenclothed with probate. If such an application had been made, the. court no doubt would have granted the petitoner an opportunity ofstating its objections, The order itself (made on 10.2.1981 and not
1.2.1981) is not one which contains a specific direction to make..payment. It does not have the effect of enjoining the petitioner orits Manager to make payment to court. It is one which has been. made without affording the petitioner an opportunity of being heard.It is not one made after a judicial inquiry. On this view of thematter also it appears to me that the direction given by the learnedacting District Judge to-the Assistant Mahager on 7.7.1981 that heshould comply with the earlier order is untenable. On a considerationof the. above matters I am of the opinion that the order purportedto have been made bn 10.2.1981and the order of 7.7.1981 are both
Abevsekern.v. Wijctunge and Others
bad in law and accordingly they are set aside. The respondent''wtll‘pay the petitioner a sum of Rs. 315/- as costs of this application.
G.P.S, DE SILVA, J. – 1 agree
Orders set aside.
BANK OF CEYLON v. UPALI DIAS