078-NLR-NLR-V-36-MURUGIAH-v.-BASTIAN-FERNANDO.pdf
390
GARVIN S.P.J.—Murugiah v. Bastion Fernando.
1934Present: Garvin S.P.J. and Akbar J.
MURUGIAH v. BASTIAN FERNANDO.
166—D. C. (Inty.) Chilaw, 9845.
Insolvency—Action to set aside deed by attorney of assignee—No right to main-tain—Alternative relief—Power of Court.
A person holding a general power of attorney from the assignee of aninsolvent estate is not entitled to bring an action which an assigneemay have brought.
Where the attorney, who instituted the action, was himself a creditorof the estate and the relief claimed was on behalf of the general body ofcreditors, the Court should have permitted the plaintiff to ask for thatrelief in the alternative capacity, provided the facts in regard tothat capacity had been pleaded.
^^PPEAL from an order of the District Judge of Chilaw.
H. V. Perera, for plaintiff, appellant.
N. E. Weerasooria (with him N. Nadarajah), for defendent, re-spondent. .
February 27, 1934. Garvin S.P.J.—
The purpose of this action was to recover for the benefit of the creditorsof the insolvent estate of Francis Xavier Fernando certain premisesvalued in the plaint at Rs. 15,000, which were conveyed by the insolventto the defendant by deed No. 582 of July 28, 1930. The grounds uponwhich this transaction was impeached are set out in paragraphs 5 and 6of the plaint. They are as follows:—“5. The execution of the said
GARVIN S.PJ.—Murugiah v. Bastian Fernando.
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deed No. 582 was fraudulent and rendered the said Francis XavierFernando an insolvent and the defendant paid no consideration and thecreditors of the said insolvent have been deprived of means of recoveringtheir just debts. 6. The plaintiff further states that the execution of thesaid deed in favour of the defendant is a fraudulent preference ”.Answer was filed and in due course, the case came up for trial when threeissues were framed in the following terms:“ (1) Can the plaintiff
maintain this action by his attorney ?(2) Does deed No. 582, dated
July 28, 1930, become a fraudulent preference ? (3) Is it thereforeliable to be set aside ? ” It is manifest at once that all the matterswhich appear to be at issue between the parties have not been raisedby proper issues. However, it was agreed that the Court should try thefirst issue before proceeding with the trial of the rest of the issues. Theevidence of one witness was led and this evidence was directed mainlyto an explanation of the circumstances under which the proxy in thiscase happened to be signed by a person who was an attorney substitutedby an earlier attorney by virtue of a power of substitution committedto him in the power given to him by the original plaintiff.
Now, issue No. 1, though somewhat widely framed, was evidentlyframed for the purpose of raising the contention that this being in forman action by an assignee it should fail for the reason that it was in factbrought not by the assignee but by an attorney. At the hearing of theargument, however, counsel for the plaintiff contended evidently in thealternative that inasmuch as the plaintiff was also a creditor he wasentitled to maintain the action in that capacity. After hearing argumentthe learned District Judge held that this was in effect an action by anassignee of this insolvent estate and that it was not competent for anattorney of the individual who happened to be clothed with the office ofassignee to bring an action in his name. For these reasons he dismissedthe plaintiff's action with costs.
There is authority for the proposition that an assignee appointedunder the Insolvent Estates Ordinance, 1853, cannot delegate his dutiesto an attorney or other agent—see “ In re the Insolvency of Arnolis Appu As in that case, so in the one now under consideration, the assigneewas a member of the Chetty community and' in view of the peculiarcustoms of this community which have been judicially noticed in otherconnections, it appears to have been assumed that where the assignee wasThe proprietor of a Chetty firm, then in his absence everything that hemight have done might legally be done by the person whom he hadappointed his attorney. The judgment to which I have referred and thelaw laid down therein is evidently not as familiar to persons as it should be,and there is every indication that in this case it was once again assumedthat the holder of a general power of attorney from a Chetty was entitledin his absence to function for him even in the capacity of an assignee ofan insolvent estate. We think that the learned District Judge was rightin his view that such an attorney could not take upon .himself to determinewhether an action could or should be instituted on behalf of the creditorsand that the power to do so could not be held to be delegated to himby any power of attorney, no matter how widely it may be worded.
119 .V. L. R. 478.
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GARVIN S.P.J.—Mumgiah v. Bastion Fernando.
While it seems to us that the learned District Judge was also rightin his view that the action as framed was in form an action by anassignee, there are two circumstances which do not appear to havereceived sufficient notice, first the averments in paragraph 8 of theplaint that the plaintiff was one of the creditors of the said insolventestate, secondly, that basing himself upon this averment the proctorfor the plaintiff contended that if the action was not maintainable as anaction by an assignee it was nevertheless maintainable by the plaintiffin the character of a creditor of the insolvent estate. Now it seems tous that that plea should have been more fully considered and not merelydisposed of upon the ground that notwithstanding the averment of thematerial facts this was in form an action by an assignee. The Courtundoubtedly had the power, if it chose to exercise it, to permit issuesto be framed so that matters of substance such as this might be properlyconsidered and determined. This it seems to us is a case in which thispower should have been exercised. It was not an action brought by theplaintiff purely to recover for himself some personal benefit or advantageor to obtain some relief purely personal to himself. It was relief hesought oh behalf of the general body of creditors of the insolvent estateand if there was a technical defect which prevented his obtaining thatrelief in the capacity of assignee there seems to be no good reason whyhe should not have been permitted in the alternative to ask for thatrelief in another capacity, particularly where the facts in regard to thatalternative capacity had been pleaded.
We think, therefore, that this case should be remitted to the Courtbelow to enable this matter of substance to be fully considered anddetermined. We have submitted to counsel a series of issues whichappear to us to be necessary for the proper determination of this actionand they have assented to those issues being framed, subject to thereservation to the defendant of the right to propose such further issuesas may be deemed necessary for the purpose of raising such other defenceor defences that may be available to him. We would accordingly directthat the second and third issues framed in this case be deleted and thatin addition to the first issue the following issues be framed: (1a) Is theplaintiff a creditor? (2) If so, does this action fail for the reason that itwas brought by an attorney ?(3) Was deed No. 582 executed in the
circumstances pleaded in paragraph 5 of the plaint ?(4) Is the execu-
tion of the said deed a fraudulent preference? (5) If either of theseissues is answered in the affirmative, is the deed' liable to be set aside ?(6) Can a creditor maintain an action to have this deed set aside (a) onthe ground that it is in fraud of creditors as alleged in paragraph 5,(b) that it is a fraudulent preference as alleged in paragraph 6 ?
The judgment under appeal will be set aside and the case remitted tothe Court below for the purposes already indicated. The respondent is,I think, entitled to the benefit of the order for costs made by the learnedDistrict Judge, that is to say, all costs incurred up to date. The costs ofthis appeal will abide the event.
Akbar J.—I agree.
Set aside.