049-NLR-NLR-V-16-COLES-v.-CARUPPEN.pdf
( m )ms.
Present: Wood Renton J. and Pereira J.
COLES v. CARUPPEN.
344—D. C. Kandy, 21,543.
Promissory note granted by kangany to his superintendent as surety—
When superintendent may sue on the note.
A kangany who grants a promissory note to the superintendentof a tea estate as security that he would maintain on the estate hisgang of sub-kanganies and coolies till their debts were paid off isin the position of a; surety. His liability on the note is suspendedso long as the labour force which he brings with him to the estateremains on the estate as a working labour force in its entirety.But whenever it either quits the estate altogether, or becomes dis-organized, under circumstances importing a breach of contract onthe part of the surety, the promissory note beoomes enforceableat once.
rjlHE facts are set out in the judgment.
H. A. Jayewardcne (with him Arulanandam), for appellant.—Itcannot be said that the note, cannot be sued on so long as at leastone cooly out of the gang remains on the estate, hnray v. Pala-wasan1 was decided.on different facts. The payee of the customarynote could sue for the amount due from the coolies who have failedto carry out the terms of the agreement, t.e., pay off the debt byworking on the estate (Muttiah v. Ramasamy 2). In the presentcase the appellant has used only for the amount found to be duefrom the coolies who had left with the kangany. Further, thekangany himself, by giving notice to the appellant, has put it out ofhis power to fulfil his part of the agreement as surety. Counsel alsocited Walker v. Cooke,3 Periasamy v. The Anglo-American DirectTea Trading Go., Ltd.4,
Wadsworth, for respondent.—Plaintiff is not entitled to sue so longas the bulk of the coolies remain on the estate. The Supreme Courthas held repeatedly that the kangany is not the principal debtorin these cases (Witham v. Pitchche Muthu Kangany 5). It is for thesuperintendent to show how much is due. on the note. This is notproved.
February 13, 1913. Wood Renton J.—
The plaintiff-appellant, the. superintendent of Nilambe estate,sues the defendant-respondent, who was formerly his head kanganyon that estate, on a promissory note dated October 18, 1910, for the
1 (1900) 4 N. L. h. 113.3 (1910) 14 N. L. R. 161.
* (1903) 6 N. L. R. 323.4 (19E) 14 N. L. R. 366.
s (1900) 6 N. L. R. 289.
1913.
( 100 J
sum of Es. 3,844-86. The note was payable on the face of it ondemand. But it is common ground that it was merely n note ofthe usual kind in cases of this nature, and that the appellant’sremedy on it was suspended so long as there was no breach of thereal customary obligation in security, for the performance of whichit was granted, viz., the maintenance by the respondent on Nilambeestate of his gang of sub-kanganies and' coolies. Before I sayanything further as to the facts, it may be well to deal with thepoint of law that was taken in the District Court, and that formedindeed one of the grounds on which the learned District Judge hasdisposed of the action. It was contended that, while a note of thischaracter purports to embody a promise to pay'on demand, thepayee cannot enforce the note at all so long as the labour forcewhich the kangany brings with him to the estate remains on theestate in whole or in part. In my opinion that contention isunsound, and is not supported by any decisions of the SupremeCourt, if properly understood. The grantor of a note of this kindis in the position of a surety. His liability, on the note is suspendedso long as the labour force which he brings with him to the estateremains on the estate as a working labour force in its entirety.But whenever it either quits the estate altogether, or becomes dis-organized, under circumstances importing .a breach of contract onthe part of the surety, the promissory note becomes enforceable atonce. That clearly results, I think, from the decision of Sir CharlesLayard and Mr. Justice Wendt in the case of Muttiah v. Ramasamy.1The judgment of Sir Charles Layard in particular in that case con-templates the enforcement of the note by the payee wherever there isa breach on the part of the kangany, or of any of his sub-kanganiesor coolies, of the implied term of the agreement. Where such abreach occurs, the payee of the note is entitled to sue the makerfor the full amount of the note, giving him credit for the indebtednessof the sub-kanganies and the coolies to the head kangany, who isthe surety, in so far as that indebtedness can be ascertained. Allthat the payee of the note has to do is to prove a breach of thecondition which suspended the operation of the note at its inception.When that has been done, the burden changes to the shoulders ofthe surety. There is no need to say much in regard to the facts ofthe present case. I have dealt with the point of law forming the.first ground on which the appellant’s action has been dismissed. Itis, in my opinion, untenable. The learned District Judge has,however, gone a step further, and has proceeded to consider the caseto some extent on the evidence. The respondent gave notice to theappellant and left. Five of his coolies, still in debt to the estate,went with him. The rest of the gang elected to remain. Underthese circumstances, the promissory note became immediatelyenforceable. The appellant is prepared to credit the respondent
WoodHeston J.
Coles v.Caruppef
» (1903) 6 N L. R. 323.
1913.
WoodRbnton J.
Coles v.Caruppen
C 200 )
with a sum of Rs. 1,104-76, the indebtedness—so far as they areprepared to admit it—to the respondent of the sub-kanganies andthe coolies formerly in his gang and still at Nilambe estate. Deduct-ing that sum from the total amount of the promissory note, theappellant claims in the present action only the sum of Rs. 2,740'10.The learned District Judge has, however, laid hold of, and, as Iventure to think, misinterpreted, another portion of the evidencedealing with the relations between the appellant and the respondent.The appellant stated that he had credited the respondent with a sumof Rs. 2,880-57. The learned District Judge regards this sum aspart of the indebtedness which forms the subject of the presentaction, and has rejected the affirmative evidence by the appellantthat it relates to a total sum of Rs. 8,000 due to him by the respond-ent, and including not only the amount of the promissory notesued on in this case, but other advances amounting to aboutRs. 5,000. The evidence of the appellant is that this sum ofRs. 8,000 had been reduced by previous payments, including thesum of Rs. 2,880:57, to the sum actually sued upon here. I cansee no ground on which that evidence should be rejected. It isperfectly clear, and it is uncontradicted by the evidence of therespondent himself at the trial. The respondent’s counsel—if Iunderstood him aright—almost tacitly admitted that the decisionof the learned District Judge could not be supported on that ground.But he did support it, not only in respect of the point that I havedealt with already, but on the further ground that the respondenthad in fact proved at the trial that the sum of Rs. 1,104:76, whichhas been credited by the appellant, is an entirely inadequate state-ment of the amount due to him by his sub-kanganies and coolies.The respondent in his answer set up a claim in reconvention forRs. 11,535, and it is clear from the pleadings and the evidence, andindeed from the admission of the respondent’s counsel himself, thatthis sum comprised both the alleged amount of the actual indebted-ness of the sub-kanganies and the coolies to the respondent, andfurther claim for damages. The entire claim in reconvention wasabandoned at the trial. The respondent was content to go to trialon issues not one of which raised the contention that he was in aposition to prove a state of indebtedness between his sub-kanganiesand coolies and himself which would completely wipe out theappellant’s claim. We have carefully considered, in the course ofthe argument,- whether the case should be sent back to the DistrictCourt, with a statement of our view as to the law, for further inquiryand adjudication in regard to this aspect of the litigation. But inview of the issues accepted by the respondent, and of his entireabandonment, at the trial of his claim in reconvention, withoutindicating to the District Judge in any way that he desired theevidence in support of it to be considered from another point of view,I am of opinion that this facility should not be granted to him.
1913.
( 201 )
I would set aside the decree of the District Court, and direct thatjudgment should be entered in favour of the appellant for the sumwhich, in his evidence, he states that he now actually claims, namely,Bs. 2,740-*10. The appellant is entitled to the costs of the actionand of the appeal.
Pereira J.—I agree.
*>
.WoodBbnton J,
Coles v,Caruppen
Appeal allowed.