( 234 )
1929.Present: Fisher C.J. and Garvin J.
RAMANATHAN CHETTY r. MAK1KAR:
Wrongful seizure of goods—Warrant issued under section 32 of theInsolvency Ordinance—Malice—Absence of reasonable andprobable cause—Burden of proof.
In an action to recover damages for wrongful seizure .of goodson a warrant issued under section 32 of the Insolvency Ordinance,the same questions arise for consideration as in an action formalicious prosecution.
The burden of proving malice as well as the absence of reasonableand probable cause for the seizure lies on the plaintiff.
FDLAINTIFF, a.Chetty, sued the defendant to xecpver a sum ofRs. 50,000 for wrongful seizure of goods in pursuance of awarrant obtained by the latter under section 32 of the Insolvency. Ordinance. A firm of tea merchants (Ibrahim Rawther & Co.)was indebted to the plaintiff in a large sum of money. Theplaintiff being concerned as to the financial position of the firmcame to an arrangement with them to take over certain tea tyingat the offices and the stores of the firm. The defendant, who hadtwo cheques of the firm for goods supplied, presented one of themfor payment, when it was dishonoured. –
Hearing of the insolvency of the firm, the defendant took stepsto protect the interest of the creditors of the firm. One step takenby him was. to swear an affidavit containing a statement as to theremoval of the tea and an application for .the seizure of the tea.
The learned District Judge gave judgment for the plaintiff.
H. V. Perera (with Canagamtne and Peri Sunderam), for defendant,appellant.—In this' case one has to take into consideration thosequestions which arise in an action for malicious prosecution. It isincumbent on the plaintiff to prove the absence of reasonable causefor the prosecution. The relevant questions are : Did the prosecutotbelieve the story upon which he acted ? Was his conduct in believingit, and acting on it, that, of a reasonable man of ordinary prudence ?Has he any indirect motive in making the charge ? The defendantin this case had no motive whatever. He was, as a matter of fact,selected and put forward by several creditors of the insolvent firm.The plaintiff has failed to prove malice or absence of reasonable andprobable cause on the part of the defendant. (Corea v. Peiris.1)
> 12 N. L. R. 147.
.( 235 )
H. H. Bartkolomeusz (with Navaralnam, and Nadaraja), for plaintiff,respondent.—In an action for wrongful seizure of property, all thatthe plaintiff has to prove is that the property seized was his at thedate of seizure. It is for the defendant then to show that the seizurewas lawful and not in violation of any right of the plaintiff.
The case of Corea v. Peiris therefore does not apply.
The question that arises here is: Did he swear a false affidavitin the belief that a false statement is necessary to secure a seizure ?There is nothing in the affidavit to justify the seizure of plaintiff’sgoods, except the statement that the goods were removed fromSea street after their insolvency. That statement is false. At thetime he swore the affidavit he only knew that the goods had beenremoved. He did not know actual date of removal, which wasfalsely stated. (De Alwis v. Murugappa Chetty1; Maasdorpbk. IV., 73; section 362 of Civil Procedure Code.)
The goods were seized in our possession and not in the insolvents’and the seizure was ultra vires. Hence it is not incumbent upon usto prove malice.
H. V. Perera, in reply.—Salmond on the Law of Torts, 5th ed.,pp. 398 and 399. Ministerial officer can be made use of as an agent.But even here it must be shown that there was an expressauthorization to such an officer as to make the officer an agent.
February 20,1929. Fisheb C.J.—
In this case the defendant-appellant obtained a warrant undersection 32 of the Bankruptcy Ordinance, No. 7 of 1853, and inpursuance of the warrant, some tea, which for the purposes of thiscase must be taken to be the property of the plaintiff, was seized bythe Fiscal. The plaintiff thereupon sued the defendant claimingRs. 50,000 damages on the ground that “ the defendant in causingsuch seizure was acting unlawfully and wrongfully, and the defend-ant procured the issue of the said warrant by false and incorrectstatements made to the Court.” (Clause 4 of the plaint.) Theplaintiff amended his plaint and further alleged (Clause 4 (a) of theplaint) “ for a second cause of action, that the defendant in obtaininga search warrant and causing such seizure was acting wrongfullyand maliciously.”
The important facts, which can be gathered from the evidence ofSuppramaniam (known also as Suppiah), the plaintiff’s agent inCeylon, are as follows :—The plaintiff is a Chetty, and a firm by thename of N. M. Mohamadu Ibrahim Rawther & Co., who carried onbusiness at 35 and 65, Second Cross street, as tea merchants, wereindebted to him in a large sum. The plaintiff being anxious as tothe financial position of the firm came to an arrangement with themon June 16,1925, under which all the tea at 35, Second Cross street
1 12 N. L. R. 353.
Ramanathan, Chetty v.'•Marihar
( 236 )
1929. (otherwise known as Prince Street), and at 65, Second Cross street
(a store rented by them), was to become the property of the plaintiff,
Fisher C.J. w])0 jja<j never dealt in tea, the value of the whole being set down atRamanathan Rs. 21,700. Suppramaniam states “ The memorandum shows thatMar&'ai- “ 41,000 lb. of tea was sold to us. It was not weighed. It was notvalued by me, but the insolvents fixed the price.” He also said“ I did not actually pay Rs. 21,000 to the insolvents, but I wasgiven the tea in order that I might sell and credit them with value inour books,” and also, “ I did not credit the value of ten, Rs. 21,000,to the insolvents’ account in our books. I have not done so up todate. That is not because we wanted first to sell the tea and findout what it realized. It is because the insolvency proceedingscommenced. No. I wanted to sell the tea and get the proceedsand then credit the insolvents.’-’
On the same day, June 16, the plaintiff' took over the tenancy ofthe premises of Rawthor & Co., and started removing the tea fromthere on June 16 and 17. On June 18, Rawthcr & Co., wereadjudicated insolvent on the petition of one of their clerks, oneHamid, who had typed and signed his name as witness to thememorandum referred to. The plaintiff remained tenant of 35,Second Cross street, for four or five months, and during the wholeof this period the place was kept shut up, and apparently the boardwith the name of the insolvent firm still remained there.
Suppramaniam’s evidence is to the effect that “ the best tea wasremoved on June 16 and 17,” and that by 12 noon on the 17th he hadcompletely removed the greater part of the tea. He says further“ On Sunday (i.e., on the 21st) I took carts to No. 65, to remove thetea which was lying there. When I first went there I heard about,the filing of the insolvency papers, and so again I went on Sundaywith carts to remove it. On the day I had heard of the insolvencyI had gone to No. 65 for the purpose of removing the tea. I tookcarts and coolies on that day. Before I went to No. 65 for the firsttime I had heard of the filing of the insolvency papers, and that iswhy I went. June 16, the day on which we purchased the tea, wasa Tuesday. I may have heard of the insolvency on the 19th, Friday.I stated in the District Court that we went to remove the tea fromNo. 65, but was prevented from doing so. As soon as I heard of thefiling of the insolvency papers I went up to No. 65 for the purpose ofremoving the tea. As soon as I reached No. 65,1 was also informedthat insolvency papers had been filed.” He says further “Ishowed the assignee my memorandum of purchase. I am sure thateither, on the 19th or 20th I showed the assignee the memorandumand he consented to my removing the tea,” and “ when I went on the21st I loaded 7 or 8 bags in a cart. Intended to remove that teato 45, Prince street, not to 35, Second Cross street. The latter
( 237 )
place is at the junction of Prince street and Second Cross street.
K.M. S. Segu Mohatnadu owns 42, Prince street. I had notremoved any tea to that place.”
In my opinion this case involves consideration of substantiallythe same questions as the questions involved in an action formalicious prosecution. In Corea v. Peiris (supra) the Privy Councildealt with the question of what it was incumbent on the plaintiff inan action for malicious prosecution to prove. In the opinion of thePrivy Council the burden of proving malice under the Roman-Dutch law as under the English law lies on the plaintiff and " theprinciples of the two systems of law on the subject are practicallyidentical.” They were further of opinion that the burden ofproving the absence of reasonable cause for the prosecution also layon the plaintiff, and (page 150) that “ the crucial questions forconsideration are : Did the prosecutor believe the story upon whichhe acted ? Was his conduct in believing it, and acting on it, thatof a reasonable man of ordinary prudence ? Had he any indirectmotive in making the charge ? ”
. Applying therefore these tests to the evidence in the present case,was the plaintiff entitled to succeed ? It is clear in the first placethat there was no evidence that the defendant had any indirectmotive in making the charge. On the contrary, the evidence show'sthat the defendant was selected and put forward by several creditorsof the firm of Rawther & Co., to take steps to protect his and theirinterests, and Counsel for the respondent, for the purpose of support-ing the proposition that malice had been proved against thedefendant, found himself restricted to a statement in. paragraph 7of the affidavit upon, winch the search warrant was obtained. Theparagraph in question, so far as it is material, is as follows :—
“ The insolvents have after their insolvency removed the followinggoods and deposited them in the several places set outhereinafter. Tea of the approximate value of Rs. 5,000has been removed by the insolvents to 42, Princestreet, Colombo, the store of K. M. S. Sego .Mohamado.Nana Kavanna Mana Nana Suppiah has, from June 19 to21, removed tea of the value of about Rs. 30,000 to hisstore at. Sea street, Colombo ….” The words
“ after their insolvency ” are relied upon to siipport theargument on behalf of the respondent. It is urged thatthey w ere untrue to the knowledge of the defendant, andinserted with the object of inducing the Court to grant himwhat he could not have obtained had he stated the truefacts.
The defendant’s position was this : he had two cheques inpayment for kapok supplied, drawn by Rawther & Co., in his favouron June 15, and postdated respectively June 19 and 20. On
RamanathanChelty v.Mar Hear
( 238 )
presentation of one of them on the 19th it was dishonoured and onthe 20th he heard of the insolvency. On the 21st he actually sawtea being removed by Suppiah from 65, Second Cross street,and made a complaint to the Police at 1.15 p.m. on that day, and on-the same day he was appointed to protect the interests of himselfand other creditors. On the 22nd, after consulting his Proctor, hefiled a petition to the Court asking (1) for the removal of the assigneeon the ground that he was not acting in the best interest of thecreditors, and (2) for the seizure of tea removed by the insolvents,and in support of it he swore the affidavit referred to containingthe statement as to th&removal of tea on a date when the assigneehad assumed responsibility.
Such being the circumstances under which the defendant tookaction,, can it be said that the plaintiff has discharged the onus ofproving that the defendant in making the allegation contained inparagraph 7 of his affidavit acted with malice and without reasonableand probable cause ? I see no ground for the view that the applica-tion of section 32 is limited to property which has been removedafter adjudication, still less can I think that the deponent wouldhave it in his mind that there was such a limitation and havedesignedly worded his affidavit accordingly. It would, therefore,in my opinion, be quite unreasonable to impute to the defendant anintention to mislead the Court for his own ends. The action andconduct of'the Agent of the plaintiff points to there being abundantfoundation for the belief that property of thefirm had been removedto the prejudice of creditors, and in view of the fact that the defend-ant lives in Second Cross street, and was at the time carrying onbusiness in a boutique opposite to No. 35, there is ho doubt but thathe was well aware of what was going on there.
Notwithstanding, therefore, that in the result the defendantfailed to upset the transaction between the insolvent firm and theplaintiff, the latter has, in my opinion, signally failed to prove thatthere was malice or absence of -reasonable and probable cause on thepart of the defendant. In my opinion that is the only question withwhich we are called upon to deal, and I think, therefore, that the■ action should be dismissed.
The decree will be set aside and judgment will be entered fordefendant dismissing the action with costs in this Court and in theCourt below.
'Garvin J.—I agree.
RAMANATHAN CHETTY v. MARIKAR