FERNANDO AJ.—Iragunather v. Ammal.
1937Present; Moseley J. and Fernando A.J.
IRAGUNATHER et al. v. AMMAL.
110—D. C. Jaffna, 9518.
Executor—Power to incur debt for purposes of administration—Liability ofestate.
An' executor has power to contract a debt for purposes of administrationin such a manner as to exclude personal liability ; and when he has doneso, the estate is liable to pay the debt.
Fernando v. Muncherjee (5 S. C. C. 141) referred to.
^^PPEAL from a judgment of the District Judge of Jaffna.
S. J. V. Chelvanayagam (with him Muthucumaru), for plaintiff,'appellant.
S. Natesan, for defendant, respondent.
Cur. adv. vult.
October 20, 1937. Fernando A.J.—
The main question that arises on this appeal is whether the defendantwho has now been appointed administratrix of the estate of K. Ambala-vanar is liable on the promissory note signed by the executor of thatestate in whose place she has been substituted some time after the dateof^the note. This issue of law was raised at the trial and is numbered 3,and the argument of Counsel for the respondent was to the effect that theonly person liable on the promissory note was the executor Appasamyhimself. The note P 1 has been signed by Appasamy “ as executpr of.the estate of K. Ambalavan'ar' for the purposes of the testamentaryexpenses ”. There .'are-some , observations made by the learned DistrictJudge with regard to the words as “ executor, &c. ”, which he thought hadbeen added some time after the note was signed, hut Counsel for therespondent frankly admitted -that he was not in a position to support the .learned District Judge’s opinion on this point, and on certain referencesmade by him.
650FERNANDO A.J.—Iragunather v. Ammal.
Appasamy himself gave evidence and stated that he had to borrowmoney for the purpose of managing the estate of the deceased and thatin the course of his administration, he borrowed this money for thepurposes of supplying stamps in the testamentary proceedings, for theexpenses of Thudaiman estate and for the purposes of administration.There was no evidence led for the respondent and I do not think therewas any material to support the observations of the learned Judge, someof which he admits are based on mere surmises, or to enable him to holdthat in fact the money had not been borrowed for the purposes ofadministration.
It was not denied that under our law, “ an executor may raise moneyby a sale or a mortgage of the property belonging to the estate or evenby the pledge of assets ”. (See Fernando v. Muncherjee *.) If an executorhas that power, I do not think it is possible to deny that he also has thepower to borrow the money on a promissory note for the purposes ofadministration and the only question is whether in such a case it is opento him to borrow that money as executor, that is to say, in such manneras to make the estate liable for the repayment of that money, or whethereven in a case where, as here, he executes a promissory note as executorof the estate, he nevertheless remains personally liable for the money.
The question whether a trustee can incur a liability in such a manneras to enable the creditor to claim payment out of the trust estate wasconsidered in Hayley v. Nugawela*, Drieberg J. in the course of hisjudgment cites a portion of the judgment of Bertram C.J. in Maraliya v.Goonasekera where Bertram C.J. differentiates the position of a trusteefrom that of an executor or administrator, and states' that a trustee ispersonally liable on a bond executed by him and adds, “ The law knowsnothing of the idea of a trustee suing or being sued in his capacity oftrustee. He has not a representative capacity like that of executor oradministrator Drieberg J. then refers to certain English decisions onthe question whether a trustee by describing himself as such can excludehis personal liability. Referring to the case of Muir v. Glasgow Bank*,he refers to the observation of Lord Cairns that there was nothing toprevent a trustee by appropriate words from stipulating that he will makepayment not personally but out of trust funds, “ but having regard tothe words used in that case, it was held that they did not amount to anexclusion of personal liability ”. It was pointed out by de Silva A.J.that in that case, Lord Cairns observed that an executor who contractedas executor, and as executor only, had not incurred a personal liability.In these circumstances, I do not think it necessary to examine the Englishauthorities any further and it seems clear to my mind that an executorhas full power to contract a debt for the purposes of administration insuch a manner as to exclude personal liability, and where he has done so,the estate is liable to pay the debt incurred by him.
Counsel for the respondent suggested that the proper course for acreditor on a note like this was first to sue the executor himself and thatthe executor having paid the debt may be able to have recourse againstthe assets of the estate. I cannot understand why the law should require1 6 S. G. C. 141.■ 23 N r R. 261.
a 35 N. L. ft. 15?.4 (1879) 4 A. C. 337.
SOERTSZ A.C.J.^Jeevani v. Arunachalam Chettiar.561
this circuitous process in a case where the executor who represents theestate of the deceased has incurred a debt in the course of administration.
In the case of In re Watson, Ex parte Philips1 it was held thatwhere services had been rendered for the benefit of the estate during thetime when there was no personal representative of the deceased, undera contract with someone who subsequently by becoming administratorbecame authorized to bind the estate, the estate of such deceased personwas liable for these services, more particularly .because the adminis-trator on being appointed ratified his previous contract. It is clear fromthis decision that the right of the executor or administrator to bind theestate canot be challenged, and that where he does an act so as to bindthe estate, the estate itself is liable for the payment of that debt.
For these reasons I would allow this appeal and enter judgment for theplaintiff as prayed for with costs here and in the Court below.
Moseley J.—I agree.
IRAGUNATHER et al. v. AMMAL