MAARTENSZ A.P.J.—Sokalingam Chettiar v. Ramanayake.
i932Present: Garvin S.P.J. and Maartensz A.P.J.
SOKALINGAM CHETTIAR v. RAMANAYAKE et al.
171—D. C. (Inty.) Colombo, 43,649.
•Cause of action—Mortgage bond—Security for payment of advances made bytwo obligees—Action by obligees to recover money due to them.
Where & mortgage bond, granted as security for the repayment ofmonies tobeadvanced fromtime to timebytwoobligees, provided
inter alia "that the obligor will on demand pay to the obligees or .theiraforewritten all and every sum of money which shall become due tothe obligees upon promissory notes or cheques made or endorsed by theobligor and delivered to. the obligees or either – of them …. or inzrespect ofloans, advances, orpayments madebytheobligees or either
.of them ” . . . .
“ All sums so lent and advanced by the obligees shall be deemed tohave beenlentand advancedby the obligeesand tobe .recoverable by
'the obligees inthe proportionof half part or share by the first named
obligee and half part or share by the second named obligee.1'
Held, that the obligees were entitled to sue in one action to recover the aggregateamount due • to them.
PPEAL from an order of the District Judge of Colombo. The factaappear from the judgment.
H. V. Perera (with him Nadarajah), for appellants.
N. E. Weerasooriya, for first defendant, respondent.
Croos Da Brera, for second defendant, respondent.
January 25, 1932. Maartensz A.P.J.—
This is an action for the recovery of a sum of Es. 129,415.87 allegedto be due on a mortgage bond numbered 515 and dated July 18, 1928,■executed by the first defendant in favour of the first plaintiff and on©
S.K. R. A. A. R. Ramasamy Chetty. S. K. R. A. A. R. Ramasamy'Chetty by deed bearing No. 1,635 dated April 1, 1931, assigned to thesecond plaintiff all sums of money due from the first defendant upon thebond sued on.
The second and third defendants have been made parties-as they arepuisne incumbrancers.
The issues with which the appeal is concerned are the seventh and>eighth issues, .which are as follows:—
Is there a misjoinder of plaintiffs and of causes of action?
.(8) Are the promissory notes mentioned in paragraph 6 of the plaint otany notes of which they are renewals not enforceable by reasonof the failure to give details required by section 10 of OrdinanceNo. 2 of 1918?.
The learned District Judge answered the seventh issue in theaffirmative and the plaintiffs' appeal is from this order. He answered. the eighth issue against the first and second defendants who have fileda cross objection against this part of the order.
The question whether there is a misjoinder of plaintiffs and causes of.-action arises from the form of the bond.
The bond was executed to secure the repayment of money to beadvanced from time to time by the obligees. The obligor agreed that be
MAABTENSZ • A.P.J.—Sokalingam Ghettier v. Ramanayake.
or bis heirs, executors, administrators, and assigns will on demand pay to-the obligees or their aforewritten all and every sum of money which shallbecome due to the obligees upon promissory notes or cheques macle or ^endorsed by the obligor and delivered *fo uie obligees or either of themor upon chits, tundus, or other writings made and delivered by the obligorto the obligees or either of them, or in respect of any loans, advances, orpayments made by the obligees or either of them to or for the use oraccommodation or on account of the obligor, or in respect of any amount oramounts or transactions whatever between the obligor and obligees oreither of them with interest at 12 per cent. He also agreed to pay allsums whatsoever which shall hereafter be or become due and owingto the obligees or either of them and all interest and other charges if anyand also any balance of amount which may be found due by the obligorto the obligees or either of them.
It was further “ expressly agreed and declared that the obligees mayand the right is hereby reserved to them to lend and advance to me- the*obligor in respect of these presents and upon the securities herein con-tained only such sums or sum of money as to them the obligees shall;seem fit, safe, and expedient and at any time to stop further advances orloans or transactions with me the obligor without any notice to me*and that all such sums of money so lent and advanced to me by theobligees shall be deemed to have been lent and advanced by the obligeesand to be recoverable by the obligees in the proportion of half part orshare by the first named obligee and half part share by the second namedobligee M.
For securing the repayment of all sums payable to the obligees theobligor mortgaged and hypothecated with the obligees “ as a first andprimary mortgage ,f the allotments of lands, premises, and buildingsdescribed in the schedule to the bond.
The bond provided that if the obligor “ shall fail to pay or retire on thedue date or on demand, as the case may be, any one or more of thepromissory notes, cheques or chits, tundus or other writings made orendorsed by me the obligor and delivered to the obligees or either of them-or to pay the interest regularly as the same shall be demanded by the-obligees or to keep the sai'd several premises hereby mortgaged in goodorder and condition and the buildings thereon in proper order and repairor to pay and discharge all rates, taxes, assessments or other chargeswhatsoever now payable or hereafter to become payable in respect of thesaid mortgaged premises or to cause any drainage connections to be laid'to or other works executed on the said mortgaged premises at the requestor on the orders of the Municipality of Colombo or other lawfully con-stituted body or to observe and carry out all directions with regard to the-maintenance of the said mortgaged premises in a sanitary condition or*permit the obligees or their agents to visit and inspect the said premises*at all reasonable time during the continuance of this security it shall andmay be lawful for the' obligees or their aforewritten at once to sue forand recover under and by virtue of these presents not only the amount ofthe promissory notes, cheques, chits, tundus, or other writings or docu-ments already dishonoured and of all other loans, advances, and accom-modation made to me by the obligees in respect of these presents but
MAABTEXSZ A.P.J.—Sokaliugam Chettiar v. Ramanayakc.$21
also the amounts of any and every and all promissory note or promissorynotes, cheques, chits, tundus, and other documents or writings made orendorsed by me and delivered to the obligees or either of them or theiraforewritten though the same may not have matured or fallen due andalso all other sums of money lent or advanced or in any other manner1due and paj'able to the obligees on any account or transaction whatsoever,in respect of these presents".
The plaint averred that the first plaintiff had lent to the first defendant-various sums aggregating to Bs. 72,317 and that S. K. B. A. A. B. Bama-samy Chetty had lent to him various sums aggregating !o Bs. 57,083.37and that there is now due and owing to the first plaintiff Bs. 72,332.50which includes a sum of Bs. 15.50 charged as noting fees, andBs. 57,083.37 to the second plaintiff.
The plaintiffs prayed that the first defendant be ordered to pay (1)the first plaintiff, Bs. 72,332.50, with interest; (2) the second plaintiff,Bs. 57,083.37, with interest; (3) that the first defendant be ordered to-pay the said sums and interest and costs on some date to be named by ,the court; (4) that the property, debts, rights, and interest describedin paragraph 3 of the plaint be declared especially bound and executable-for the said sums of Bs. 72,332.50 and Bs. 57,083.37, interest, and costs,on the footing of the said mortgage bond; (5) that in default of paymentof- the said sums of Bs. 72,332.50 and Bs. 57,083.37, interest, and costsof suit within the period aforesaid the said premises declared especiallybound and executable as aforesaid be sold.
The learned District Judge held that there was a misjoinder of plaintiffs:and causes of action as the plaintiffs were not entitled to recover theamount sued for jointly or severally or in the alternative as provided bysection 11 of the Civil Procedure Code. . I agree with him that this isnot a case in which the plaintiffs can be said to be entitled to sue for theamount due in the alternative.
As regards the right to sue jointly the learned District Judge observedthat the draftsman ofthe bond seemed to have takenpains to indicate-
that the rights of themortgagees were independentofone anotherand*
quoted with, I take it, approval the contention on behalf of the firstdefendant that there were really twd bonds on one piece of paper; thatin the plaint itself the plaintiffs claim each a different sum of money and'that the answer affects .the different claims separately, and that for allpractical purposes two cases are being tried together; that the bondcontemplates that themortgagor may Be indebtedtoonly one ofthe
two " obligors ” (should be obligees) and proceedstostate " thatall
such sums of money so lent shall be deemed to have been lent by theobligees and be recoverable by the obligees in the proportion of half partor share' by the first named obligee, and half part or share by the secondnamed obligee".
The construction put upon this clause by the plaintiffs that it wasintended to put beyond doubt the proportions in which the mortgageeswere entitled inter se was not accepted nor was the contention on behalfof the first defendant that each obligee was at liberty to recover a halfshare of the money lent accepted.
11J. H. A 99910 (8/60)
3-22MAARTENSZ A.P.J.—Sokalingam Chettiar v. llamanayakc.
The learned Judge ultimately held that the causes o£ action are notithe same and that tjae plaintiffs are not jointly interested arid orderedthe plaintiffs to elect which of them will continue the action and make theother a defendant.
It was contended on behalf of the plaintiffs-appellants that the right tothe relief claimed existed in them jointly in respect of the same cause ofaction, namely, the failure of the first defendant to pay the obligees theamounts due to them.
In support of this contention we were referred to various passages inthe bond sued on. The first passage relied on is contained in the secondparagraph of the bond in which the obligor agrees with the obligees and.each of them to' pay the obligees money advanced by them or each ofthem. It was pointed out that the agreement was to pay the obligees,the words “ and each of them ” being omitted in this part of the agree-ment. The next passage relied on was the clause that the money lentand advanced to the first defendant shall be deemed to have been lentby the obligees and to be recoverable by the obligees in the proportionof half part or share by the first named obligee and half part or share bythe second named obligee. It was urged that the earlier part of the clauseclearly created a joint right as by its terms the money advanced byeach obligee was deemed to have been advanced by both and that thelatter part of the clause merely set out The rights of the obligees inter se.
It ’ was also pointed out that the property hypothecated to securepayment of the debt was hypothecated to botn the obligees, the words■“and either of them” being omitted. In reply it was contended that thewords “and their aforewritten” In the ‘clause by which the obligoragreed to repay the advance and in the hypothecating clause were intendedto include the words and/or each of them. 1 am unable to agree withthis contention. The words “and aforewritten” are a conventionalterm usually used to avoid the repetition of the words executors,administrators, and assigns, and they do not appear to have been usedfor any other purpose in the bond. It was also argued on behalf of therespondent that the provision that the money lent and advanced shouldbe recoverable in the proportion of half each, created distinct rightswhich could not be combined in one action. But for this provision theobligees would, in my opinion, have been bound to sue together to recoverthe amount advanced, for the earlier part of the clause provides that themoney lent should be deemed to have been lent and advanced by both..The latter part of the clause does not in my opinion prevent the obligeessuing together to recover the whole amount. It was I think insertedas contended by the appellants for the purpose of enabling them to suefor the whole amount on the. footing that they were entitled to a halfeach irrespective of the amount each of them had actually advanced.
That the bond was intended to create a joint right in the obligees is,I think, clear from the provision that on the obligor failing on the due dateor on demand, as the case may be, to meet the notes, cheques, &c., issuedby him, the obligees were entitled to sue for and recover not only theamount due on the notes and cheques which were dishonoured, but thewhole amount then due to the obligees. The failure to meet a note or
MAABTKXSZ A.P.J.—Sokalingom Chetliar t. Ramanayakc.• 3*23
cheque on the due date created a right of action in both to sue for thewhole amount due to both of them.
The property mortgaged was hypothecated to secure repayment of thesums lent by both the obligees. If they are not entitled to sue in oneaction, effect could not be given to the hypothecation of the property.The obligees suing on the bond would have to sell the property in executionof bis decree subject to the mortgage in favour of the other obligee. Thedifficulty created by the plahitiffs not being able to sue in one actioncannot be got over by making one of the obligees a defendant. Theother obligee not being a puisne incumbrancer, he cannot be made a partyto the action, so as to affect his rights ns mortgagee. He can only bemade & party on the ground that he refused -to be joined as plaintiff,which is not the case-
The difficulties which che order of the District Judge creates supportmy opinion that the right to relief exists in the obligees jointly in respectof .the same cause of action. In my opinion the plaintiffs are entitledto sue for the aggregate su& of money lent by them, or either of them,and to recover such sum as may be found to be due * We indicated in thecourse of the argument that the prayer of the plaint required amendmentaccordingly. The plaintiffs must settle between themselves to whatproportion of the aggregate sum each is entitled.
I would accordingly set aside the order of the District Judge directingthe plaintiffs to elect which of them will continue the action. Theplaintiffs will be entitled to costs in both Courts.
The first and second defendants’ objection to the order is that theDistrict Judge has not decided issue No. 8 or has decided it wrongly.
Issue No. 8 raises the question whether the promissory notes referredto in paragraph 6 of the plaint or any notes of which they are renewals* are not enforceable “ by reason of the failure ” to give details required bysection 10 of Ordinance No. 2 of 1918.
The learned District Judge said in his judgment that issue No. 8involved both law and fact and it was not necessary to discuss it at .thatstage because Mr. Perera (plaintiffs' coimsel) wras going to take no risksand was going to lead evidence as to the actual payment of money.
1 entirely agree with the statement that .issue No. 8 involved both law*and fact and that it cannot therefore be decided as a preliminary issueof law. We ascertained at the argument that what the first and seconddefendants really objected to was the passage in the judgment thatMr. Perera was going to lead evidence of payment of money. It wrassubmitted that this passage might be construed to be a finding by theDistrict Judge that such evidence was admissible.
1 am unable to agree with this submission. It appears to me that itwas merely a reference by the District Judge to the procedure which theplaintiffs were going to adopt and was in no way a determination of the.question whether the plaintiffs coulcl follow that procedure. Howeverthat may be, I hold that it was not open to the District Judge to determinethe procedure at that stage and that it will .be open to the defendants totake such objections as they may be advised to raise to the evidence theplaintiffs proposed, to lead.
Bosanquet d Co. v. Rahhntulla d Co.
I would accordingly disallow the objection raised by the first andsecond defendants but without costs, as it has not involved the appellantsin any further costs.
'.Die respondents contended they were not liable in costs even if theAppellants were successful as the plea of misjoinder was justified by theterms of the prayer of the plaint.
I am of opinion* that the first and second respondents were not entitledby fbe prayer of the plaint to press the objection regarding which they havefailed in appeal. If the prayer of the plaint was not in accordance withthe terms of the bond sued on they could have asked for an amendment ofthe prayer which might have been acceded to and not put the appellantsto the expense and delay resulting from an objection which was in thisaction a very sertous objection. I am therefore of opinion that theappellants are entitled to their costs here and in the District Court fromthe first and second defendants.
■Gauvi.v S.P.J.—I agree.
SOKALINGAM CHETTIAR v. RAMANAYAKE et al