JAMAL MOHIDEEN & CO. v. MEERA SAIBO et al

078-NLR-NLR-V-22-JAMAL-MOHIDEEN-&-CO.-v.-MEERA-SAIBO-et-al.pdf


( 268 )
1920.
Present: Bertram C. j. and De Sampayo J.JAMAL MOHIDEEN fc/CO. v/MEERA SAIBO et al.8Sr—D. C. (Inly.) Colombo, 174.
Registration of Business Names Ordinance, No. 6 of 19.18, s. 9—Partner-ship-z-N on-compliance with the provisions of s. 9—Action on a.note—May action be suspended till proyisionsdre complied with ?■
The plaintiffs, who were partners carrying on business under thename of Jamal Mohideen & Co,, brought this action for the recoveryof the balance, due'on a'promissory note.' At the time the. actionwas brought the first plaintiff had registered his business name.The District Judge held that the second plaintiff- joined the firztfaftef the note: was given, but before the action was brought. Upon*the second plaintiff joining the firm, the additional particularsrequired by section 7 of Ordinance No. 6 of 1918 were not furnished.
, The District Judge made an order suspending the action untilthe plaintiffs complied with the provisions of the Ordinance.
( 269 )
Held* that (I) the’ptebt»tfh'iiriibB«^yQ f,hair rights at the date otthe institution of the .action…
– (2) If the peoond plaintiff joined the tea after the execution ofthe note, section 9 did not apply, and the action was maintainable.
(8) If, however, the second plaintiff joined the firm before theexecution of the note, the action ought to be dismissed; but theplaintiff might, with the leave of Court, withdraw the action undersection 400 of the pivil Procedure Code and commence a freshaction after complying with the provisions of the Ordinance.
r j ^HE facts appear from the judgment.
Keuneman (with him H. E. Garvin), for defendants, appellants.—Section 9 of Ordinance 'No. 6 of 1918, the Registration <3f BusinessNames Ordinance^ says that“ the rights of the defaulter ….shall not be enforceable at any time while he is in default by actionor other legal proceeding.” “ Enforceable by action ” means that nomotion canJ)e instituted. Of. section 4 of the Sale of Goods Ordi-nance. See Britain v. Rossiter,1 Taylor v. (?. Eastern Railway? BiUv.Bameul? These are cases underthe Statute of Frauds (“ shall notbe allowed to be good ”), but . the words have been held to havethe same meaning as “ shall not be enforceable. [Bertram CJT.referred to Godfrey v. George 4 and, Pritchett b. English and ColonialSyndicate.*] The case of Lucas v. Dixon9 emphasizes this point.The local decisions under section 547, Civil Procedure Code, are notapplicable, as the language there is “ shall not be maintainable/'“ Maintainable ” has a technical meaning,“capable of being pro-ceeded with.” See Wood Renton C.J. in Hqssen Hadjutr v. Levane-Marikary Further, it hah been held that the rights of partiesmust be adjudged at the commencement of the action. Silva v.Fernando?
There is a significant alteration in our Ordinance. The English.Act of 1916 en&cts that~“ any contract made by the defaulter whilehe is in default shall not be enforceable by action.”. Under ourOrdinance all contracts made by the defaulter are attacked whethermade while he was in default or before, but the defaulter may atany time before action brought purge his default by registrationand obtain the right to sue.
[Bebtbam C.J.—Do not the words contract made or enteredinto by or on behalf of such defaulter in relation to the busihessin respect of the carrying on of which particulars are required to befurnished ” restrict the disability to contracts made, after thfdefault ? ]^1
* (1819) 11Q. B. D., at 128, 139.* (1899) 2 Q. B. D. 428.
(1901) 1 Q. B. 774, at 778, 779.* (1889) 22 Q. B. D, $87, at
(1841) 9M.& W. 36.360; S3 L. J. Q. B. 161.
(1896) 1 Q. B. B. 48.1 (1912) 16 N. L. B% 276.
8 (1912) 16 N, L. B. 499*
1920.
J&ru&JitpKkdeen 4b Oo.v. Meera3axb.9
( 270 )
f§g0; Theeffect of thesewgrda-**' tothe disability to business
c ont,rtw,to> "*** uotrtoaffect private contracts. The business is thatdeen db Co. which is continuously carped on. The faot that the bumness isV<8aib<>a re<luire(i to be registered or not does not affect the identity of thebusiness. Registration can only affect the “ carrying on ” of theold business.
' H. J. C. Pereira (with him Tisaeverasinghe), for plaintiffs, respond-ents.—Section 9 does not avoid the contract. It only precludesaction being maintained, that is, proceeded, with. It does notprevent institution of the action, but only requires a particular kindof evidence when it is sought to prove the contract. When objectionis taken to the maintainability of the action, the Cou# haB the rightto allow the plaintiff .an- opportunity to correct the deficiency.There are several decisions under section 547 of the Civil ProcedureCode to the same effect. This is a purely technical objection, andnot one of substance. When title derived under a will was put inissue and it -was found that the will had not been proved, the-Supreme Court held that the action should have been suspended andthe party allowed an opportunity to have the will proved. 7 C.W. B. 101. The words “ at any time he is in default ” postulate a.time not necessarily antecedent to action when the default can be•purged. Section 9 should-be construed reasonably. Time hasbeen allowed to correct a deficiency where it is a question of. revenueonly. (22 N. L. B. 165, at 172.) There the omission in section 9of the words “by action or other legal proceedings,” after “en-forceable” running in section 8, sub-section (51), of the English Act,6 and 7'Geo. V., c. 58, is significant. Resides, the transaction inquestion was antecedent to the default, and section 9 does notextend to transactions antecedent to default. It is. only rights ofa defaulter arising under a contract made at a time when he wasin default that is not enforceable. In re a Debtor?
The words are “contract made or entered into by such defaulterin relation to the business in respect to the carrying on of whichparticulars were required to be furnished,” At the time thecontract .was entered into, particulars were not required to befurnished in relation to ithe business, and the contract was thereforenot made by a defaulter.
Keuneman, not called upon in reply.
Cur: adv. wit.
September 2,1920. Bertram^ C.J.—
The question in this case is a question of the interpretation ofsection 9 of the Registration of Business Names Ordinance, No. 6 of1918. The action is brought on a promissory note by two partnersnow trading under the business name of Jamal Mohideen & Com-pany. The second partner joined the firm before action brought,1 (191S) Weekly Notes 293.
(, 271 )
but, it is said by the plaintiff, after the oause of action arose. The *1820*action is brought for the recovery of the balance alleged to be due ona promissory note. If this promissory note was executed before c.J.the second plaintiff joined the firm, then it seems that there must .besome misapprehension in his being made the second plaintiff in the <*een d> Go.action. The District Judge has found on the evidence before him oJUtorsthat the second plaintiff joined the firm after the note was in factgiven. As to whether that finding is justified, I will make certainobservations presently.
At the time when the. action was brought, the first'plaintiff hadregistered his business name Jamal Mohideen & Company. Butupon the second plaintiff joining the firm, he .did not furnish theadditional particulars required under section 7 of the Ordinance.
It is because of tffat default that exception is now taken to his rightto sue, and it is said that under section 9 this action does not lie atall, because at the date when it was instituted the first plaintiff, and,possibly in a certain view of the facts, the second plaintiff also, werein default. The material words which we have to interpret are “ therights of that defaulter under or arising out of any contract made orentered into by or on behalf of such defaulter in relation to thebusiness in respect to the carrying on of which' particulars wererequired to be furnished shall not be- enforceable at any timehe is in default by action or other legal proceedings either .in thebusiness name or otherwise.” More Specifically the importantwords “ the rights of that defaulter shall not be enforceable byaction.”;■. '
The District Judge has thought himself justified in interpretingthe word “ enforceable ” in the same manner as the word “ main-tainable ” has been interpreted under section 547 of the CivilProcedure Code, and on that basis he has. made ah order which ineffect suspends the action until the plaintiffs have complied with theprovisions of the Ordinance, This condition they have now carriedout. But Mr. Keuneman maintains that the words “the rightsshall not be enforceable by action ” means that no action shall be“ brought, to enforce the rights.” HereT Jiave come to the con-clusion that he is right. The words “ enforceable by action “ are adefinite legal phrase-used in many different contexts. They appearin section 4 of the Sale of Goods Ordinance, No; 11 of 1896. Theyare used in a series of cases dealing with a question of procedureunder the English law. Under Order 42, Buie 24, of the EnglishBuies of Practice, there is a reference to the manner in which, ajudgment may be enforced, and in the cases decided upon those andthe connected rules it is always pointed out that a judgment may beenforced, not only by execution, but also by a separate action, andthat an order under this rule may also be enforced by action, andwherever that phrase is used, it means that an actionmay be broughtto enforce the right in question. I may refer as authorities on this
1920*
Oitilui
G.J.
Jamal Mohidun <to Co.v. MuraSaibo
( 272 )
point, to the cases Of Godfrey v. George1 and.*Pritchett v. English andColonial Syndicate# Mr. Keuneman has also dravm our attentionto an interesting case decided under the Statute of Frauds, namely,Lucas v. Dixon.* That was a decision, not upon section 4 of the*• Sale of Goods Act, but upon section 17 of the’Statute of Frauds, andthere the phrase was. not that a contract should not be “ enforceableby action," but that it should not be “ allowed to be good.” It hasbeen held that thoBe two phrases mean the same thing. Stillthe judgment of the Court cannot be .cited as an interpretationof the phrase now under discussion. But in the judgment ofBowen L.J. there is this passage; “ I think it is now finally settledthat the true construction of the Statute .of Frauds,'both the 4th
and 17th sections, is not to render the contracts under them void,still less illegal, but is to render the kind of evidence required indis-pensable when it iB sought to enforce the contract. That stillleaves it .open to-question as to what is the time at which it can besaid the contract is sought to be enforced—when the action isbrought, or when it is sought to prove the case by adducing theevidence. 1 cannot help thinking that the view of Lord Blackburnwas that at the time the action iB brought the evidence ought to bein existence.” This passage well illustrates, what is meant by theenforcement of a right by action.
I have.come to the conclusion, therefore, that on that particularargument Hr. Keuneman ie righti and that when our Ordinance says“ the rights of that defaulter shall not be enforceable by action,"it means that “ the defaulter shall not be entitled to bring anyaction to enforce Iub rights." This is in accordance with the generalprinciple that a litigant’s rights in an action are his rights at the dateof the institution. With regard to the interpretation given by thisCourt to the word “ maintainable ” under section 547 of the CivilProcedure Code—see in particular the judgment of Wood BentonC. J. in thecase oi Hassen Hadjiar v. Levane Marikdr 4—this Court haslaid doWn that in saying “that an action shall not be maintainable,"
proceeded with at any time when attention was called tothedefect.
I have little doubt that in adopting this interpretation our Courthad in view the special meaning of the word “ maintain " in regardto an ao.tion as contra-distinguished from the word “ bring." Thereis a well-known authority on that point, the case of Moon.v. Durden,6where Platt B. made this observation: “ The verb ‘ to maintain ’
' ■ .t
in pleading, has a distinct technical'signification. It signifies tosupport what has already been brought into existence.' Thus, adefendant who admits-the right of a plaintiff to bring,- or to bringand up to the last pleading maintain, his action, but relies,on matter
1 (1996) 1 Q. B. D. 48..8 (1889) L. R. 22 Q. B. D. 357.
.* (1899) 2 Q. B. D. 428.4 (1912) 15 N. L. B. 276.
5 (1848) 2.EX. 22.
( 273 )
disabling him from further proceeding, insists that the plaintiff ' 1930ought not, by reason of such matter, further to maintain his action.” _ ■»—
I think that that principle may explain the interpretation our Court Bk^£am
has thought itself justified in giving to the word “ maintainable.”
But I do not think that the word “ enforceable ” can be construed ‘deendtCofin that manner. So much for that point.v. Meera
*Aiifo
There is a further point. The District Judge is of opinion thatthis particular transaction on which the action is brought wasantecedent to the default. He has not considered the effect of thatfinding, but this is a question that requires to be considered.
Does the disability established by section 9 extend to transactionsantecedent to the default ? To. answer that question we mustooniplare our own enactment with the corresponding enactment inthe Registration of Business Names Act, 19i6, on which our ownOrdinance is based. The corresponding section under that Act issection 8. Our Legislature has departed from the words of thatsection in a very important particular. Under the English Act it isdeclared" “ that any contract made by the defaulter at any timewhile he is in default shall not be enforceable by action.” Our ownOrdinance says that the rights of a defaulter under or arising outof any contract made by such defaulter shall not be enforceable atany time while he is in default.” The intention of our Legislature.was obviously to mitigate the rigour of the English enactment, toenable the defaulter at any time to purge his default by complyingwith the Ordinance, and upon this being done to set him freeto enforce his rights. Under the English Act the defaulter wasdebarred absolutely so long as he was in default.. He could onlyobtain relief by a specific application, and this relief the Court wasfree to give or withhold. Now, it is suggested that, in thus mitigatingthe disability imposed by the English Act, our Legislature at thesame time greatly enlarged the scope of that disability. Whereasthe English enactment limited the disability to transactions enteredinto while the person was actually in default, our own Ordinance,so it is contended, extended those disabilities to all transactionsentered into for the purpose of the business of any partner in default,whether before or after the default. Such an intention is a veryunlikely one to impute to the Legislature. Of course, that may bethe effect of the words actually used. I do not think, however, thatthe words should be so construed.
Mr. Keuneman seems to suggest that the word “ business ” in thissection must be construed as referring to a sort of personification.
A business goes on under various names, and in the conception of theLegislature, so he contends, it is itself a personality, and the words“entered into by or on behalf of such defaulter in relation to thebusiness in respect to the carrying on of which particulars wererequired to be furnished ” must be considered to apply to thiscontinuous unembodied personality. Thus, supposing a man of the
23
( 274 )
mo.
Bertram
C.J.
Jamal Mtihi-deen&Co.if. MuraSaibo
name of James Brown carried on a business in his own name andthen took his son into partnership under the name of James Brown& Company, in such a case he has to furnish particulars consequentupon the adoption of this business name. Supposing he fails to doso, the business, whether conducted by James Brown or JamesBrown & Son is in Mr. Keuneman’s view the same bumness, andany transaction of that business, whether before or after thechange, would be subject to the disability.
I do not take this to be the meaning of the words. I think thatthe words “ the business ” in section 9 means “ the aggregate of thecommercial transactions carried on by the partners.” There is asomewhat similar phrase used infection 6, “ the business in respectof which registration is required.” “ The business in respect tothe carrying on of which particulars were required ” means, in myopinion, “ business carried on in circumstances requiring either theoriginal registration or the further particulars,” asthe case may be.No doubt those words are also intended to draw a distinction betweenthe private transactions of the partners and their business trans-actions. But I think they are further intended to draw a distinc-tion between transactions carried on before and jfter the use of thebusiness name, or before and after the variation in the constitutionof the firm, as the case may be.
In this view of the case, if the District Judge’s finding is correct,the action is maintainable, subject to the point that in that view ofthe case it is difficult to understand why the plaintiff is plaintiff atall. But it does not seem to me that the District Judge has veryfullyinvestigatedthefacts. The only material evidence is that of themanager of theplaintiffs’ firm, who says in chief “ thesecond plaintiffjoined the firm in January, 1920,” that is, after the execution of thenote; whereas in cross-examination he says: “ I do not knowwhether the plaintiffs were partners when the note was made.”
I think, therefore, that the case should go back to the DistrictJudge for the further investigation of that point. If he finds onfurther inquiry that the second plaintiff joined the firm after theexecution of the note, then I think that section 9 should not beheld to apply. If, on the other hand, he finds that the secondplaintiff joined the firm before the execution of the note, and bothplaintiffs were in default at that date, then other considerationswould arise.
Mr. Keuneman has hinted that in such a case the action ought tobe dismissed, and that the question would then become res judicatabetween the parties. I do not think that anything so unreasonableas that should be held to be the law. This very point was mentionedin. the case I have already referred to—Lucas v. Dixon} There itwas a condition of the action, which was an action brought undersection 17 of the Statute of Frauds, that a note or memorandum of a
1 (7m) L. R. 22 Q. B. D. 357.
( 275 )
contraot should be in existence. Such- a note or memorandum didcome into existence after the action was brought. It was main-tained that that entitled the plaintiff to continue the action. Thatcontention was disallowed.' But Fry L.J., on concurring in thejudgment disallowing the contention, said : “ The Statute requiresthe memorandum as evidence, but requires that evidence to be inexistence at the commencement of the notion which is brought toenforce the contract. If, then, it only comes into existence afterthe commencement of such an action, and the plaintiff desires toavail himself of it, he can only do so by discontinuing the action andcommencing another.’*
Our own Code provides for this very contingency in section 406, bywhich it is declared that“ if at any time after the institution of theaction the Court is satisfied on the application of the plaintiff thatthe action must fail by reason of some formal defect, or that thereare sufficient grounds for permitting him to withdraw'from theaction or to abandon part of his claim, with liberty to bring a freshaction for the Bubject-matter of the action, or in respect of the partso abandoned, the Court may grant such permission on such termsas to costs or otherwise as it thinks fit.”
I have no doubt^hat, in the event of the Court finding on investi-gation that both partners were in default in respect of the action,it would accede on reasonable terms to any application that theplaintiffs may make for leave to withdraw from the action and tocommence a fresh one. I would,'therefore, deal with the case inthe manner I have indicated. I would send the case back to theDistrict Judge for further inquiry as to the date on which thesecond plaintiff joined the firm, and for such further action as hemay think fit on the principles I have indicated.
This seems to be a case in which the honours are divided. In myopinion there should be no order as to costs of appeal. Withregard to the costs in the Court below, I think they should be in thediscretion of the District Judge.
1920.
Bertram
O.J.
Jamal Mohi-deen&Oo.v. MeeraSaibo
De Sampayo J.—I agree.
Sent back.
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