064-NLR-NLR-V-23-RAMANADEN-v.-FERNANDO-et-al.pdf
Present: Bertram 0. J. and De Sampayo J.RAMANADEN v. FERNANDO et at.
1921.
94—D. C. Negombo, 7,930.
Civil Procedure Code, 8. 339 — Assignment of decree — The assigneebecoming heir of one of the judgment-debtors after assignment—Application by assignee to be substituted plaintiff—Discretion ofCourt—Delay in making application—Prescription.
The second proviso to section 339 of the Civil Procedure Code,which enacts that where a decree against several persons has beentransferred to one of them it shall not be executed against theothers, does not apply to the case of an assignee who becomes anheir of one of the debtors after the assignment.
The Court has a discretion as to the substitution of a plaintiff;where there was considerable delay the Court referred the assigneeto a separate action.
'N this action the original plaintiff sued on a mortgage bond
executed by Madalena Fernando and Romel Gabriel Perera.The latter having died, the administratrix of this estate, withMadalena, was sued in the above case. On March 9, 1910,formal mortgage decree was entered against the defendants.
On October 15, 1910, the original plaintiff executed deed ofassignment bearing No. 29,584, purporting to assign the saidmortgage decree to Maria Perera, the daughter of Madalena. Thesaid Maria Perera executed deed No. 33,873 dated June 15,1916,formally conveying her interest in the decree to the respondent.
Madalena died intestate on November 7, 1916, leaving as heirsMaria Perera, the husband, and five children of a deceased daughter,Veronica.
The respondent to this appeal, who is one of the children ofVeronica (as such being an heir of Madalena), applied under section339 of the Civil Procedure Code to be substituted in room of theoriginal plaintiff, and also prayed for authority to execute the saiddecree. To this application all the heirs of Madalena were maderespondents, supported by the allegation that heirs were in possessionof the lands hypothecated by the mortgage bond.
I
1981.
( 24$ ).
The respondent originally applied on May 1, 1919, but the
application was dismissed on the ground that the heirs of thev. Fernando original plaintiff, who had. died since the decree was entered, werenot made parties to the application.
The respondent renewed his application on December 15, 1919,making the heirs of the original plaintiff and the heirs of Madalena(except applicant himself) respondents to ithe application.
The first appellant, as administratrix of the estate of GabrielPerera, and all the appellants who are the heirs of Gabriel Pereraand Madalena Fernando, contested application.
They contended that the mortgage debt was paid by Madalena,who thereafter fraudulently procured the execution of the deed ofassignment in favour of their-daughter Maria Perera; that the deedof assignment executed in favour of the applicant-respondent wasobtained without consideration; and that the applicant-respondenthad no status to maintain the application under section 339, CivilProcedure Code, on the ground that he was an heir of Madalena, oneof the co-debtors under the mortgage decree. They maintainedthat the assignee should be referred to a separate action for contri-bution.
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The learned District Judge disallowed the objection under section339, and fixed a date for the inquiry into the question of paymentand satisfaction of the decree as alleged by the appellants by thefollowing order:—
The petitioner in this case is the assignee of a decree against thedefendants, one of whom is deceased. It is admitted that the petitioneris an heir of the deceased defendant, and the first point for decision is,whether in this case he can execute the decree. Proviso 2 of section339, Civil Procedure Cpde, enacts that where a decree against severalpersons has been transferred to one of them, it shall not be executedagainst the others. Now, in the present case, the petitioner, who is theassignee, is not one of the co-judgment-debtors. But he is the heir ofone of the deceased co-debtors. And it has been held in ArnmanvUa v.Sinnatamby1 that the heir of a co-debtor in such a case stands in theshoes of the co-debtor, and cannot execute the decree. The onlydifference in the present case is that here the petitioner became anheir of the co-debtor after he became assignee, whereas in ArnmanvUav. Sinnatamby1 the person seeking to execute the decree was already anheir before he became assignee. ' Does this makfl any difference ?That is the only point for my decision at present. Now, the logicalbasis of proviso 2 to section 339 seems to be this : that where a debt isdue from several co-debtors .and one of them pays the creditor thewhole debt, the decree has then been satisfied, and therefore writcannot be issued. The satisfaction of the decree in such a case consistsin the fact that the creditor has been paid the debt by the debtorhimself or one of the debtors. This is not.the case where a completeoutsider, who is not himself a debtor, pays the amount of tin decreeto the creditor, and so takes an assignment of the decree. In such acase, though the creditor has received his money, yet the decree has not
1 (1921)21 N. L. R. 246.
( 247 )
been satisfied, because the debt has not been paid by the Judgment*debtors. And it seems to me that that is what has happened here.The petitioner took an assignment of the decree. At that time he wasnot an heir of one of the debtors, but was a complete outsider to thecase. He stood then in the position of a genuine assignee who has aright to execute the decree. The fact that he afterwards happenedto become an heir of one of the co-debtors cannot alter his status asassignee, which was once and for all determined at the time he took theassignment. Therefore, I hold that he has status to execute the decree,and is not debarred from doing so by proviso 2 of section 339* Thepresent point will, therefore, be decided by this Court in favour of thepetitioner.
There is, however, a further point. The contesting respondentasserts that payment has already been made, and asks that satisfactionof decree be entered. That question has yet to be determined. AndI fix inquiry into that matter for July 18.
H. J. (7. Pereira, K.O, (with him Canaberatne), for applicant.
Samarawickrema, for respondents.
October 20,1921. Bertram C.J.—
This is a matter which has given us some trouble to decide. Theappeal is against an order of the District Judge of Negombo grant-ing an application to be substituted as plaintiff made nnder section338 of the Civil Procedure Code by the assignee of a decree in amortgage action, which was recovered in the year 1910, against aprincipal debtor and the administratrix of his surety. Althoughthe two defendants themselves bore to each other the relation ofprincipal and surety, the liability on the mortgage bond was in factjoint and several. The peculiar feature of the case is that theassignee of the decree has by virtue of the death of the first defendanthimself become an heir to the first defendant, and if he is nowsubstituted as plaintiff, he will be in the position of enforcing thedecree against the heirs of the first defendant, of whom he is one.It has been argued that the case comes within the second provisoto section 339, which says that where a decree against severalpersons has been transferred to one of them, it shall not be executedagainst the others. The learned Judge has given a decision on thatpoint of law. He has referred to the various authorities cited,.and he has come to the conclusion that the proviso does not apply.With that conclusion I feel bound to agree. I do not think theproviso applies to a case where a person becomes a party to a suitby operation of law after the transfer. But there is another pointto bo considered.
The power of the Court to substitute a plaintiff in the action isentirely discretionary. The question arises whether in thecircumstances of this case we should exercise our discretion infavour of the assignees. Allegations of fraud have been made. Onthese I express no opinion. That is a question of fact which shall
1921.
Bamanadenv. Fernando
1921.
Bsrtbam
ax
Ramfinadcnv. Fernando
( 248 )-
have to be tried out in the Court below. But it is admitted thatif the assignee is substituted as plaintiff and pursues his remedy,there is nothing to prevent him proceeding in the first instanceagainst the property which the surety has mortgaged in themortgage bond. Mr. Pereira pressed us very strongly with thisconsideration that as things stand he is bound to the terms of thebond which makes him a joint and several debtor, and that he willnot be able to insist on any rights he might otherwise have assurety against his prinoipal.
There has been a very considerable delay in making this applica-tion, and he claims he is prejudiced by that delay. He is certainlyprejudiced to this extent that the original debtor and creditorare both dead, and that those from whom he appears may thushave a difficulty in proving their case. If the present- applicant iscompelled to enforce his remedy by a separate action, Mr. Pereirainsists that in reconvention he will be able to set up pleas whichwill place him in a more equitable position. I think there is someforce in his contention. Delay in making the application has beenreferred to as a ground for viewing it unfavourably in one of theauthorities, and in all the circumstances of the case I think it wouldbe better that the assignee should assert his rights by a separateaction. There may, however, be one difficulty that if we put theassignee to this comse his claim will apparently be prescribed.There certainly has been very long delay. There may be morereasons than one for that delay. We should be reluctant, therefore,to take a course which Would deprive him of his remedy altogether,Mr. Pereira iu open Court on behalf of his client has formallywaived any plea of prescription that he may put forward in anysubsequent proceedings, and as it appears that action taken by aCotirt on such a waiver would be sufficient to estop his client if anyattempt were made to set up the plea of prescription in any action,it seems to me that that waiver disposes of the difficulty which 1mentioned.
For these reasons I would allow the appeal, and refuse theapplication of the assignee of the decree to be substituted asdefendant. I would allow the appeal on the usual terms as tocosts.
De Samfayo J.—I agree.
Appeal allowed.