004-NLR-NLR-V-33-RAMAN-CHETTY-v.-SHAWE-et-al.pdf
16
.Roman Chetty v. Shawe*
1931Present: Garvin S.P.J. and Maartensz A.J.RAMAN CHETTY v. SHAWE et ah171—D. 0. Colombo,
Actionbroughtbyagent—Vilasam offirm—Deathof plaintiff—Application by
principal of firm to be added as party—Civil Procedure Code, ss. IS and 18.
Au action on a promissory note was instituted against the defendantsby S. R. M. M. A. Raman Chetty. The initials S. R. M. M. A. were notthepersonalinitials of theplaintiff, butformed* the vilasam of a business
ofwhichtheproprietorwasthefirstrespondent. The defendants
filed answer, pleading, inter alia, that the action was not properlyconstituted and could not be maintained.
■ Held (onanapplicationby thefirstrespondent to be added as party
plaintiff), that he was not entitled to be so added.
A
PPEAL from an order of the District Judge of Colombo, allowingthe first respondent’s application to be added as a party plaintiff.
This was an action to recover a sum of Rs. 30,000 on a promissory notealleged to have been made by first defendant in favour of the second defend-ant company and endorsed and delivered by the latter to the plaintiff. Theaction was filed by one Raman Chetty who prefixed to his name theinitials of a firm, the proprietor *bf which was the first respondent. Thedefendants filed answer denying liability on different grounds. RamanChetty died in India and the second respondent was substituted as plain-tiff in the .action. The application of the first respondent to be added asparty plaintiff was made on the ground that doubts had been raisedwhether the' action should have been instituted in the name of RamanChetty or the name of the first respondent. The learned District Judgeallowed the application.
Hayley, K.C. (with him Kenneman. and Garvin), for second defendant,,appellant.
H. Bartholomeiisz (with him Nadarajah), for first respondent.
1 (1918) 20 N. L. R. 289.
GARVIN S.P.J.—Raman Chetty v. Shawe.
17
August 4, 1931. Garvin S.P.J.—
I agree.
This action was* instituted in the name of S. B. M. M. A. Raman Chettyas plaintiff. The initials S. R. M. M. A. are not Raman Chetty’s personalinitials and are the vilasam of the business in which he was engaged. Butthere is no question as to the identity of the plaintiff. Indeed thefirst respondent to this appeal, Sir Annamalai Chettiar, originally filedpapers to have himself substituted us the assignee of the rights of theplaintiff Raman Chetty upon a certain deed of assignment. Pendinginquiry into this application, Raman Chetty died, and on the footingthat his rights, of action survived to his heirs his administrator wassubstituted plaintiff on the record. His application to be substitutedwas then renewed by the first respondent with a prayer that in the alter-native the applicant be added as plaintiff. The learned District Judgetook the view that no valid assignment had been made and refused the-prayer for substitution; he allowed the applicant to be added asplaintiff. We were not invited to consider the claim to be ^substitutedbased on the alleged assignment and the argument in appeal wasrestricted to the claim to be added as a plaintiff.
It is said that the initials S. R. M. M. A. form the vilasam of a business ofwhich the 1st respondent. Sir Annamalai Chettiar, is the proprietor andthat at all times material to this action Raman Chetty was his agent inColombo. The order permitting the first respondent to be added asplaintiff is supported on^ the ground that doubts have arisen as to theright of Raman Chetty to institute and maintain this action on behalfof the firm. The fact that Raman Chetty when suing prefixed theinitials S. R. M. M. A. to his name is some indication that the action-arose out of transactions in the course of the business carried on underthat name. There is nothing to indicate an intention on Raman Chetty’apart that anybody but himself should be plaintiff. -Had be intended'to bring the action in the name of Sir Annamalai Chettiar he couldquite well have done so as he was the holder of his power of attorney.Even were it assumed that Raman Chetty was ultimately accountableto Sir Annamalai Chettiar the action is none the less a personal action*by Raman Chetty notwithstanding that he affixed the initials S. R. M..
M.A. to his name in accordance with the well known custom amongChetty' traders, whereby the firm’s initials are prefixed by the personbringing an action in respect of a transaction concluded by him whetherhe be sole proprietor, a partner, or only an agent.
The highest at which the case can be put so far as it is based on thecircumstance that Raman Chetty prefixed the firm’s initials to his nameis that he thereby indicated that be was an agent. It was none theless bis personal action.
The appellant contended that this is an action which under the generallaw is maintainable by an agent and I did not understand the respondentto dispute the proposition. Indeed, to do so would also involve therepudiation of the custom which admits the agent of a Chetty firm tosue on causes of action arising out of transactions concluded by himPprefixing the vilasam- of the firm to his name as if he were principal.
ISMAARTENSZ A.J.—Jiaman Che tty v. Skatce.
Moreover this has been treated as Usman Che tty’s personal action,the right to maintain which has survived to his administrator who isnow the plaintiff.
Sir Annamalai Chettiar has failed to show that he has any right to besubstituted in the place of the administrator. Neither the administratornor the original plaintiff, if he were alive, needs the presence of Sir Anna-malui Chettiar as added plaintiff to enable this action to be maintained.It is not contended that this action is not maintainable personally byBanian Chetty, or that he brought it in the mistaken belief that it camewithin the class of actions which an agent may maintain in his ownname.
Jt was contended that it was Baman Chetty’s intention that thisshould be an action by the firm and in the firm’s name. There is nosuch thing as an action by a firm and in the firm’s name. Our lawrequires that every action shall be instituted by and in the names of theperson or persons by whom the right to maintain it is claimed. Assum-ing that the “ firm ” was Sir Annamalai Chettiar, the action shouldhave been instituted in his name, if such was Baman Chetty’s intention.
] can see no indication of any such intention, though it is obvious that,if lie was an agent, he or his estate would ultimately be accountable tohis principal. As a matter of fact, he did not bring the action in thename of Sir Annamalai Chettiar but as one which was maintainable byhim, and the latter at one time actually claimed to be his assignee. Thepresence of Sir Annamalai Chettiar as party plaintiff is not necessaryto supplement and complete the right of the plaintiff to sue in respect•of the cause of action averred, nor is it necessary for the final deter-mination of any of the matters in dispute between Baman Chetty andthe defendants. Since Baman Chetty’s administrator has been sub-stituted as plaintiff the effect of adding Sir Annamalai Chetti'ar will beto confront the defendants with two plaintiffs each of whom claims theright to maintain the action independently of the other, the one for thebenefit of Baman Chetty’s heirs the other for himself, between whomthe Court will have to decide should judgment ultimately go against thedefendants or either of them.
Maartensz A.J.—
This is an appeal by the second defendant in this action from an orderof the District Judge of Colombo, allowing the first respondent’s appli-cation to be added as a plaintiff in the action.
The action is pne for the recovery of a sum of Bs. 30,000 from thedefendants. The main cause of action is founded on ‘ a promissory note■dated September 16, 1926, alleged to have been made by the first defendantin favour of the second defendant company and endorsed and deliveredby the company to the plaintiff.
The action was filed on June 21, 1927, by one Baman Chetty whoprefixed to his name the initials or vilasam of the first respondent, aresident of India, whose attorney or agent he was in Ceylon. It isalleged and not denied that it is a custom among the Natu Kotta Chettiesfor an agent or attorney to prefix the irflasam of his principal to hisown name to signify that he was acting as agent.
MAABTENSfl A.J.—Raman Chetty t>. Shave.
19
The first defendant filed answer on May 21, 1929. The seconddefendant company's answer was filed on September 21, 1927.
Both defendants deny liability, but on different grounds. It was-stated in appeal that the first defendant had been tried and convictedof fraud, and there can be little doubt that nothing can be recoveredfrom him.
Baman Chetty died in India in December, 1928, and the administratorof his estate was substituted as plaintiff in the action of June 5, 1930.He is the second respondent to this appeal.
On March 7, 1929, Messrs. Wilson & Kadirgamer, who were BanianChetty’s proctors, filed a proxy from first respondent authorizing themto have him substituted as plaintiff in this action. No steps appearto have been taken on this proxy till June 6, 1980, when, according to the*journal entry, Messrs. Wilson & Kadirgamer filed a petition datedMay 30, and an affidavit dated June 2, 1930, affirmed to by firstrespondent’s attorney and moved that the first respondent be addedas a plaintiff in the action.
I would observe in passing that there are various pleadings in thisrecord which have not been stamped with the seal of the District Court toshow the date on which they were filed in Court.
The grounds on which the application was made are set out as follows: —
This action came to be instituted by Raman Chetty in the bona
fide belief that he could sue for and on behalf of the firm of‘S. B. M. M. A. by prefixing the vilasam. to his own name assanctioned by the decisions of the Supreme Court.
Doubts have arisen as to the right of the said Baman Chetty
to institute this action or whether the action should have-been brought in the name of the petitioner. Moreover, thesaid Baman Chetty by deed bearing No. 997 dated December22, 1928, attested by J. A. Perera of Colombo, Notary Public,assigned and transferred this action to the petitioner, and thepetitioner is now entitled to proceed with the said action andhave himself added as a party plaintiff in the above action orsubstituted in plaee of the said Raman Chetty.
The petitioner and the third respondent are advised that in all
the circumstances of the case in order to secure a decree onthe merits the petitioner should be joine*d as plaintiff.
The petitioner is the proprietor and sole owner of the firm of
S. R. M. M. A. and Raman Chetty was his agent in Ceylon.
When the application was made no objection had been taken to the-constitution of the action.
On or about July 11, the appellant filed an amended answer, bearing*date July 8, 1930. The amended answer is not dated by the DistrictCourt nor a minute made in the journal entries of the date on whichit was filed.
Paragraphs 6,"7, and 8 of the amended answer averred as follows: —
(6) Further answering, the second defendant 'states that the originalplaintiff could not have and maintain this action and that thesaid action is irregular and not properly before the Court andcannot be sustained on the ground (a) that no valid proxy
90
MAARTENSZ A.-J.—Raman Chetty a, Shatoe:
from the original plaintiff S. R. M. M. A. Raman Chetty hasbeen filed and that Messrs. Wilson A Kadirgamer have notnor at any time had a valid proxy from the said originalplaintiff, and (b) that the said original plaintiff has not dis*closed his name, that the initials S. B. M. M. A. are not theinitials of the persons Raman Chetty who purported to bethe original plaintiff but the initials or vildsam of a firm orperson trading under that vilaBam, that the said RamanChetty was not a partner in or owner of such firm or vilasamand that it is not competent for him to sue in the name ofthe firm S. B. M. M. A. The second defendant states thatthe substituted plaintiff cannot have and maintain this actionbeing an action which was not properly constituted and couldnot be maintained.
That the name of the person Baman Chetty who purported to be
the plaintiff was Murugappa Baman Chetty or some nameother than S. B. M. M. A. Baman Chetty and that he had notfurnished a statement of particulars of the name S. B. M. M. A.Baman Chetty as a business name and had not complied withthe provisions of Ordinance No. 6 of 1918, and could nothave had or maintained this action and the substitutedplaintiff cannot have or maintain the said action.
Further, if the said original plaintiff purported to sue as agent
of the firm or person trading as “ S. B. M. M. A. this actionis wrongly constituted and cannot be maintained.
A motion in writing dated July 28 is on the record withdrawing theamended answer. This motion was consented to by Messrs. Wilson &Kadirgamer who have filed proxies for both respondents. The motionwas, according to the stamp of the District Court, filed on August 5.No order appears to have been made on it.
I have set out the relevant averments of the amended answer as it wasreferred to by the District Judge in his order and was made use of by firstrespondent's counsel in his argument in support of the order appealed from.
The District Judge came to the conclusion' that in view of a certaindecision of the Privy Council, which I shall deal with later, it is doubtfulwhether the action had been instituted in the name of the right plaintiff,Raman Chetty, and that it was so commenced through a bona fide mistakeof law, “ in view of the conflict of decisions by our Courts as' to the exactsignificance to be attached to a firm name which is prefixed to the nameof an agent The first respondent was therefore added as a party inorder that the Court may by its ultimate decision, if the plaintiffs aresuccessful, decree judgment in favour of either of the plaintiffs who maybe found successful.
The District Judge also expressed the opinion that, even if the firstrespondent was not entitled to be added under the provisions of section13 of the Civil Procedure Code, the Court had power to add him as aparty under section 18 of that enactment.
The District Judge held that the first respondent could not rely on theassignment referred to in his application, and as his decision on this pointwas not attacked by the first respondent it need not be referred to againv
MAARTENSZ A.J.—Raman Chetty v. Shawe.
21
It was contended in appeal that this was not a case where the actionhad been instituted in the name of the wrong person, or a case where itis doubtful whether it has been instituted in the name of the right plaintiffand that the trial Judge had misdirected himself with regard to theeffect of the decision of the Privy Council in the case of The firm ofR. M. K. R. M. v. The Firm of M. R. M. V. L. R. M. K. R. M. Soma-sunder am CJietty v. M. It M. V. L. Suppramaniam Chetty 1 when he heldthat in view of the judgment in that casfe “ it is not unreasonable to holdthat it is doubtful that the action has been instituted in the name of theright plaintiff It was further submitted that there was no conflict•of decision in our Courts, as stated by the District Judge, as to the exactsignificance to be attached to a Arm name which is prefixed to the nameof an agent.
The trial Judge has not cited the passage in the judgment of the PrivyCouncil on which he bases his opinion that, in view of that judgment,it is doubtful that the present action has been instituted in the name of theright plaintiff. Counsel were unable * to point to any passage whichmight be the basis of that* opinion, nor were we able to find it ourselves.
The Privy Council judgment decided that when a contracting partybrings an action on the contract against the party with whom he hascontracted, who is in fact an agent, and obtains judgment, he cannot-subsequently take proceedings on the same contract against the principal•and the Court has no power in the second action to set aside the judgmentin the first action, or to consolidate the two actions.
Lord Atkinson stated the facts thus: —
" The appellants and the respondents are money lenders carryingon business in Penang; the respondents—plaintiffs—underthe vilasam or mark of M. B. M. V. L. and the appellants—defendants—under that of B. M. K. B. M. The defendantfirm is owned by one Bamasamy Chetty of Palavangudi,Bamnad District, Southern India. It is the practice of suchfirms to carry on their business through an attorney andagent and to describe and style the firm by its vilasam ormark coupled with the name of its Penang agent for the timebeing. Supramuniam Chetty was at all material times theattorney and agent of the plaintiff and A. N. S. Somasun-daram Chetty the attorney and agent of the defendant firm.*nd continued as follows: —
“ The relation in which these attorneys or agents, when engagedin a money-lending business stand to their principals, whetherthe latter were individuals or firms, their functions andpowers are well and authoritatively described by Barrett-Lennard J. in his judgment delivered in this case in the Courtof Appeal. He said:* First, when a local representative
of a Chetty firm carries on the business under the vilasam-(t.e., the letters) of the firm coupled with his own distinctname, the announcement to the external world in generalis that, whether a co-partner with, or a mere agent of, otherpersons, he is to be looked upon as a principal. It is to- be1 (1926) L. R. Appeal Cases, 761.-
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MAABTEN8Z A.J.—Raman Chatty v. Shawr.
noted that the vilasam of a firm is not its full style. Next,a local representative of the type described does not labelhimself as simply an agent. He regularly sues as a principalon mortgage,. deeds, bills of sale and promissory notes. Thetitle of his co-partners or principals to immovables grantedin form to him is never abstracted or otherwise shown on theoccasion of any sale or. qualified disposition. The rights ofbis principals or co-partners are in truth behind the curtainmuch to the disadvantage of the Government.' ”
Later on he said: —
“ It may possibly be, but it is not proved in evidence, that theplaintiff in suit No. 120, the attorney, agent or partner ofor in the firm of M. R. M. V. L., was under the impressionthat he could obtain a judgmentfor Rs.7,400against the
defendant, the attorney, agentorpartnerof orin the firm
of R. M. K. R. M. which would not merely be a personaljudgment against the attorney or agent but a judgmentagainst the defendant attorney’s firm. If the plaintiffattorney was under that impression it was wholly due to his.ignorance of the law, and it is because he instituted and pro-secuted to judgment suit No. 120 in that state of ignorancethat he or his principal now asks to have this judgment set-aside. No fraud was practised upon the plaintiff in thatsuit, or upon his principal; no false representation was made ■to them; no inducement held out to the agent to sue in theway in which he did; and nomisleadingstepswere taken
or acts done with the consentofthe defendantattorney or;
his principal. It appears to their Lordships that the claimto have this judgment set aside resembles very much thecase of a litigant who, with erroneous and exaggerated notionsof his rights, brings an action to enforce these rights as heunderstands them and is beaten because the Judge comes to-a wholly different conclusion as to the extent of those rightsand directs judgment to be entered against him, and thenthe defeated litigant applied to have this judgment set asidebecause he had mistakenly formed an extravagant opinion .of his own rights which misled him into litigation.
There is nothing as far as I can see which suggests that R. M. K. R. M..had no right to sue on the contract.
The right of an attorney who carries on business with the vilasamof his principal prefixed to his own name to sue in that name was con-sidered and recognized by the Full Bench of this Island in the case ofLetohemanan v. Sanmugam et al.1 The facts are as follows: A borrowedmoney on a promissory note from Letchemanan Chetty, who, beinga Tamil, was carrying on trade as “ Me. A. Ru. A. Ru. LetchemananChetty ”. He received judgment under his name and moved for a writof execution against A, whereupon A appeared in Court and provedthat “ Me. A. Ru. A. Ru. ” represented two partners R. and N.; that theywere both dead; and that their executors were trading under the style of
1 (1903) S N. L. R. 121.
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MAARTENSZ A.J.—Raman Chetty a. Shtiice.
“ Me. A. Ru. A. Ru. and contended that Letchemanan had no authorityfrom them to continue the present action. Layard C.J. who deliveredthe leading judgment discussed our Procedure Code and previous decisionsand held that it was impossible to hold that the judgment was enteredup in favour of some unknown individual or individuals trading underthe name and style of M. A. R. A. R. Dealing with the contention ofthe respondents (defendants) that by prefixing the initials M. A. R. A. R.to his name the plaintiff held out to the world that he was agent to afirm he said:
" Their (defendants*) conduct throughout the case shows that theywere promising to pay Letchemanan Chetty the money, or thatthey knew Letchemanan was agent for some undisclosedprincipal. If they contracted with ’ Letchemanan Chettypersonally, he was entitled to sue; if. on the other hand, asnow appears from Letchemanan Chetty’s evidence, he wasacting for an undisclosed principal and the defendants con-tracted with him in his own name, he can sue the defendants-*’
The case of Meyappa Chetty v. Usoof 1 was an action by R. M. M. S. T.Meyappa Chetty, the initials being the initials of the firm of which he wasthe agent, to recover the amount due on two promissory notes made bythe first defendant in favour of the second and third defendants andendorsed by them to the plaintiff. The second defendant counter-claimed on a debt due to him from R. M. M. S. T. The District Judgein refusing to give .the second defendant leave to defend unconditionallysaid: '* There is nothing to show that the plaintiff has anything to dowith the person to whom the second defendant says he made payment,and I do not believe this defence is made bona fide. The leave to defendwill be allowed to .the second defendant only, on his giving security forthe fuli amount of the plaintiffs claim.” Bonser C.J.’s judgment mustbe read in the light of the judgment of the District -Judge. And all thathe held was that the second defendant was entitled to leave to defendas it seemed that the way in which Meyappu Chetty sued shows thathe was the agent of the firm He nowhere held that it was an actionby the firm.
1 have examined the record and find that the alleged members of thefirm were not named as partly plaintiffs. It is therefore an indirectauthority for the form of the present action.
There is, as far as 1 can see, no conflict of decision which makes itdoubtful whether Raman Chetty could have sued or whether his legalrepresentative, the administrator respondent, could maintain the action.
It was argued by the respondent that the action had been institutedin the name of the wrong person as plaintiff because there was no suchperson as S. R. M. M. A. Raman Chetty. The answer to this argument isthat the right of an agent to sue in this way has been fully recognizedby the decisions of the Court.
It was next argued that Raman Chetty on his death ceased to be agentof his principal, but that is not a sound argument. If the action wasmaintainable by Raman Chetty the right to continue it vests in his legalrepresentative.
1 V902) 5 X. L. R. 26-5.
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MAARTENSZ A.J.—Raman Chetty 9. Shawe.
The first- respondent’s application does not state why doubts havearisen as to the rights of Baman Chetty to institute the action. It wascontended that the objection to Baman Chetty s suing in his name withthe vila8am of the firm prefixed to it have been formulated in the amendedanswer, and although it was withdrawn for the time being the objections-would be renewed.
As regards the objections set out in paragraph 6 of the amended answer,I am, as at present advised, unable to see that Baman Chetty in filingthe action made a mistake either of fact or law.
It is, I think, obvious that the application to add the first respondentwas made1 to meet the objection in paragraph 7 of the amended answerthat S. R. M. M. A. were not Baman Chetfcy's initials and that he hadnot furnished a statement of particulars of the name S. B. M. M. A.Baman Chetty as a business name and had not complied with the provi-sions of Ordinance No. 6 of 1918, and could not have maintained theaction.
We cannot decide now whether this objection is well founded or not.But assuming that it is, I do not think that the first respondent is there-fore entitled to be added as a plaintiff.
It was argued that under section 13 of the Civil Procedure Code theCourt had power to add or substitute parties for the purpose of securing,an effectual adjudication though there is some personal bar in the wayof the original plaintiff.
In support of this argument we were referred to the case of Somittarev. Jasin 1 and the English cases referred to by Wood Benton J. in hi'sjudgment. In that case the incumbent of a Buddhist temple sued tovindicate title to land and it was held that the land was temple propertyand the incumbent could not sue. Dealing with an application to addthe trustee as a party plaintiff, which had been rejected by the trialJudge, Wood Renton J., said:“ If, for instance, it had been shown in
the present case that a trustee of the temple had been duly appointed,and that, by a bona fide mistake as to the requirements of the BuddhistTemporalities Ordinance, the appellant had sued in his own name, Isee no reason why the trustee should not have been made a substitutedparty under section 13
I respectfully agree with this decision which is in accordance with theprinciple that where a person who has no right to sue or only a partialright to sue on the cause of action is made plaintiff or sole plaintiff by a bonafide mistake the Court can substitute or add parties to secure an effectualadjudication upon the real question at issue in the action. But theposition of a plaintiff who has the right to sue on the cause of action,but whose action must fail because of a plea of the nature set up inparagiaph 7 of the amended answer is entirely different. In such acase it: cannot be pleaded that the person suing was made a ‘plaintiffowing to a bona fide mistake of fact* or law, and a person cannot be addedor substituted plaintiff against whom the plea cannot be set up.
L am of opinion, for the reasons given by me, that- the appeal should beallowed with costs in both Courts.
Appeal allowed.
1 {1907) 1 A. C,R, 167.