019-NLR-NLR-V-23-NAGAHAWATTE-et-al.-v.-WETTESINGHE-et-al.pdf
( TO )
1921.
Present: Bertram C.J. and De Sampayo J.NAGAHAWATTE et al. v. WETTESINGHE et ol.
124—D. C. Gaik, 17,640.
Action by heirs against debtor to estate—Collusion between debtor andadministratrix—Administratrix made defendant—Right of heirsto pay the additional duty in testamentary action and proceed withthe action against debtor—Civil Procedure Code, s. 547.
Plaintifb, aa heirs of S, sued the first defendant for the recoveryof a sum due to the estate of 8, and made the administratrix of theestate second defendant, alleging that the administratrix hadneglected to include the debt in the inventory, and that she wasacting in collusion with first defendant, who was her brother, andthat the debt was about to be prescribed.
Held, that the action was maintainable by the plaintiffs (heirs),and that the heirs themselves may pay the additional duty in thetestamentary action to enable them to maintain the action.
Ordinarily, a legatee or other beneficiary cannot be a party to anaction for the recovery of an asset of the estate unless collusion isalleged, or unless there is such a relation between the executor andthe debtor as to interpose a substantial difficulty in the way of theexecutor calling the debtor to account-.
rpHE facts appear from the judgment.
Samaraioickre?ne, for plaintiff, appellant.
Bawa, K.C. (with him * Jayawardehe), for respondents.
( 71 )
December 5,1921. Bertram C.J.—
This is an action in which the plaintiffs, appellants, as heirs of oneDon Cornelia de Silva, claim to sue the first defendant, who is said tobe a person indebted to the estate of Don Cornelia de Silva. Thewidow of Don Cornells de Silva, who is the administratrix of hisestate, is made the second defendant. The first defendant is thebrother of the administratrix, and the plaintiffs in the plaint allegethat the administratrix has neglected to include the debt sued on inthe inventory of the estate; that she is acting in collusion with herbrother, the first defendant, and that there is danger that, owing tothis action on her part, the debt may be prescribed. . The defendantscontest the right of the plaintiffs as heirs to sue for a debt due to theestate,and the learned Judge,having considered this question of lawwithout going into the facts of the case, has given judgment infavour of the defendants.
Mr. Samara wickreme, who appears for the appellants in this case,in the first instance, based his argument entirely upon section 472of the Civil Procedure Code. It was objected that that sectionhas no application to this case. It was contended that thecases to which that section applies are cases in which an actionis brought by an executor or administrator, and some personinterested is added as a party by special order of the Court. It waseven contended that the indirect effect of the section was that nobeneficiary of an estate had any status to sue a person indebted to it,either as original plaintiff or as an added party, unless a preliminaryorder is first made granting Mm a right to do so.
In my own opinion section 472 has nothing to do with the case.It does not contemplate a case of this hind, nor, on the other hand,is it fatal to an action brought outside that section. It does not saythat the consent of the Court is a condition precedent to an heir orother beneficiary being party to an action by an executor or adminis-trator. All that it says is that, ordinarily speaking, such heir orbeneficiary is not a necessary party, but that if it transpires thatthe addition of such an heir or other person interested as a party tothe suit is desirable, the Court may make order to that effect.-That section was fully considered by the Full Court in MuttuMenika v. Fernando,1 and it was determined that in applying thatsection the Court would be guided by a certain principle of theEnglish law of executors and administrators which was applied tothis Colony by the Charter of 1833. That case was not a case likethe present. In that case both the executor and certain legateessued together. Objection was taken to the legatees being joinedas parties. The Court referred to the principle of English law,which is that, ordinarily speaking, a legatee or other beneficiarycannot be a party to an action for the recovery of an asset of theestate unless collation is alleged, or unless there is such a relation
1921.
NagahatoatU
v.
Wettesingkv
1 {1912) 16 y. r. R. 429.
( 72 )
1921.
Bbbtbam
C.J.
Nagahawatlev.
WetUHnghe
between the executor and the debtor as to interpose a substantiadifficulty in the way of the executor calling the debtor to account.
Now, it appears to me that it is on the basis of that principle andnot upon the basis of section 472 that tins action must be decided.That principle has been explained in a series of English cases.
In 1737, in the case of Beckley v. Dorrington, referred to in 6 Ves.
Jr. 749, it was said: “ There can be regularly no suit against thedebtor, but by the executor, who has the right both in law andequity …. There must be collusion or insolvency or some
special case . . * . . The Court will interfere if there is suchspecial case as collusion or insolvency, and then the bill may hobrought against both the debtor and the executor.” Lord Eldonexpressed the same views in AUager v. Rowley1: “The establishedruleof the Court is certainly that in ordinary cases a debtor to the estatecannot be made a party to a bill against the executor; but theremust be, as the cases expre^j it, collusion or insolvency/* But themost apt case on the question is that cited in MvUu Menika v.Fernando (supra), namely, Saunders v. Druce3 The Vice-Chancellorthere said: “ Now it is perfectly well known that though by thegeneral rule a residuary legatee cannot file a bill for an accountagainst an alleged debtor to the estate, that rule is subject to someexceptions. One is, that if the executor declines or refuses to dohis duty in calling for an account, then any residuary legatee mayfile a bill; and there are several exceptions coming more or less tothe same point. If an executor refuses, or there is such a relationbetween the executor and the debtor as to interpose a substantialdifficulty in the way of the executor calling the debtor to account,then the rule docs not apply/5
It seems to me that the present case comes entirely within thatprinciple. Mr. Bawa has objected that to adopt such a rule inCeylon would be to multiply suits and to cause, confusion. Thatdifficulty was fully realized in England. In TJtter&on v. Mair3Lord Loughborough said: “If this suit was to stand the consequencewould be that every creditor would be entitled to such a bill againstevery individual debtor; and the accounts would be inextricable/5That difficulty, however, did not stand in the way of the applicationof the benevolent and clearly defined equitable principle above-explained, and I do not think that it ought to stand in the way of ^its adoption here.
Mr. Bawa laid stress upon the case of Muttu Menika v. Fernando *and there certainly are observations in that case which seem to laydown the rule that the executor or administrator is the only person •who can sue in respect of a debt due to the estate. But that rulewas simply laid down as a general rule, and not for the purpose ofthequestiondiseu8sedinthiscase,butin a very different connection.
1 {1802) 6 Ves. Jr. at p. 749.
* {1855) 3 Drewry 85$ (S. C. 24 L. J. Ch.598).
{1793) 2 Ves. Jr. 95.
C1912) 15 N. L. R. 429.
( 73 )
The principle there established was that the property which vests inthe heirs under the rule laid down in Silva v. Silva1 does not includeproperty which has not been reduced into possession, and that forthe purpose of recovering such property the executor'is the onlyproper plaintiff. The equitable except ionswhich have been annexedto the general rule by the English cases above cited necessarily didnot come into consideration. The samo explanation applies to thegeneral principleslaid down by Bonser C. J. in Fernando v. Fernanda,2Mr. Bawa, however, took another objection. The debt now suedon was not included in the inventory by the administratrix. Hemaintains, therefore, that under section 547 of the Civil ProcedureCode no action can he brought in respect of it. I'do not think,however, that that section need stand in the way of the applicationof the equitable principle above explained. Its solo object is toprotect the revenue. The principle of this section was in force inEngland (see the cases cited by Wood Benton J. in Silva v.Weerasuriya; 3 but it did not impede the application of that otherequitable principle of the law of England above explained. It hasbeen repeatedly held that where the action is brought by the execu-tor or administrator, the Conrt could, if necessary, allow it to bestayed, pending the payment of any deficiency in duty. I do notsee why, in the present case, plaintiffs should not, in order to qualifythemselves to assert their alleged rights, themselves tender theadditional duty in the testamentary action, and why the case shouldnot be stayed for that purpose. As Mr. Samarawickreme pointsout, it may very well happen that an heir in whom certain propertyis vested either under a will or by a succession may fint^ himself inattempting to recover that property against a trespasser confrontedby section 547, and the pica that the property sought to be recoveredwas never included in the inventory of the estate. It is clear thatthe heir in such a case would be allowed to put himself right bypaying the additional stamp duty, even though he himself was notthe person responsible for the inventory. I see no reason why theplaintiffs should not be entitled to take the same course in this case.I would, therefore, allow the appeal, and send the case back forfurther inquiry into the facts alleged by the plaintiffs in the plaint,and with the direction that the hearing of the case should be stayeduntil the plaintiffs should have had an opportunity of .tendering theadditional stamp duty in the action. If the plaintiffs’ charges ofneglect and collusion are substantiated, the amount recovered will,of course, not be paid to the plaintiffs personally, but will be treatedas part of the assets of the estate. In my opinion the appeal shouldbe allowed, with costs.
1921.
Bertram
C.J.
Nagahatvaffr
r.
Wcttefiinghe
De Sampayo J.—I agree.
Appeal allowed.
1 (1907) 10 N. L. B. 234.* (1900) 4 N. L. B. on p. 206.
9 (1906) 10 N. L. B. atp. 78.
3*