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WHITHAM v. PICHCBE MUTTU KANKANI.D. C., Kandy, 13,178.
Promissory note—Action under chapter 68 of the Civil Procedure Code—Defence to such action—Claim in reconvention for unliquidated damages—Transactions between superintendent of an estate and his head kankani—Position of head kankani—His relations between superintendent, andsub-kankanies and coolies—Promissory note by head kankani—Purposefor which the note was given—Subsequent difference between superin-tendent and head kankani—Interference of superintendent with headkankani’s coolies—Severance of head kankani's responsibility—Bight ofsuperintendent to sue him on promissory note—Validity of plea that notewas given, in pursuance of a well-known custom, by way of security forrepayment of advances made to coolies.
A claim in reconvention for unliquidated damages is a “ defence ” toan action on a -promissory note instituted under chapter 58 of the CivilProcedure Code.
The employment of coolies on estates up-country is effected accordingto a well-known custom, whereby the head kankani of an estate desiringemployment on another estate comes to it with a tundu or memorandumreceived from his present employer showing the amount due to theestate from the coolies on advances. The would-be employer gives thekankani a cheque for the amount appearing in the tundu in favour ofthe present employer, who thereupon permits the kankani .and' his cooliesto serve on the new estate. On arrival, the kankani gives the superin-tendent a promissory note for the amount of the advances receivedon account of the coolies, and in turn takes promissory notes from hissub-kanganies. By thisarrangement the superintendent avoids the
inconvenience of having to treat with each cooly, and so long as thecoolies continue under the head kankani, the superintendent obtains onpay days and other occasions a reduction of the debt due to the estate.
In view of such, a custom, a promissory note signed by the headkankani in favour of the superintendent, though containing an uncondi-tional promise to pay on demand or on a certain date, must be lookedupon as a note given for .a special purpose and subject to speciarconditions.
So long as there is no severance of connection between the kankanies’,.coolies, and the estate, the note cannot be put in suit. But if it becomesimpossible by no fault of the superintendent to induce the coolies to-pay off their debt, the liability of the head kankani to the estatebecomes actual.
If the superintendent interferes with the coolies and severs their con-nection with the head kankani, such conduct woulud discharge the latterfrom his liability.
The promissorynote of the headkankani is only asecurity forthe-
advances made tothe coolies and sub-kankanies, and it isthe duty ofthe-
superintendent who comes into Court with such a note ,to prove failure-on the part of theprincipal debtors topay the amounts dueby them.
CTION on apromissory notefor Es. 4,641.19made by the-
defendanjb. as follows: —
“ Kadawella, Watawala, 2nd October, 1897.
' On demand, 1, Pichche Mut£u, head kankani, do promise to-pay to John Whitham, or the Superintendent of Kadawella estate-
July 4, and1902.
November 18and 80, andDecember0-
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1900. for tiie time being, or order, the sum of Rs. 4,641.19 for valueJulV * received.”
.The plaintiff prayed in his plaint for leave to proceed underchapter 53 of the Civil Procedure Code, and for judgmentfor. the amount due at the time of the plaint, viz., Rs. 3,480, withinterest thereon.
Summons being allowed, the defendant submitted by hispetition that he had a good and valid defence in the case; that hemade the note sued on, but was not indebted to the plaintiffin any sum whatsoever; and that the said note was made in the
following circumstances: —
At the time of the making of the note the petitioner wasemployed as the head kankani of Kadawella estate, and hadunder him a gang of 148 coolies, including 13 sub-kankanies.In October, 1897, his sub-kankanies were indebted to the estate onaccount of advances in the sum of Rs. 4,641.19. He made thenote sued on by way of security for their debt in favour of theplaintiff, the superintendent of the said estate, who was acting forand on behalf of the proprietors of the said estate. Since March,1899, the plaintiff began to intimidate the petitioner’s gang ofcoolies, and press them into the service of another head kankani;and the plaintiff did actually remove from the petitioner's gang 123coolies and 8 sub-kankanies, whose debts to the petitioneramounted to Rs. 7,103.87 in various proportions.
The petitioner prayed that he be allowed to defend the suitand claim in reconvention the said sum of Rs. 7,103.87 and 'Rs. 2,500 as damages for the wrongful acts committed by theplaintiff.
The District Judge (Mr. J. H. de Saram) held as follows: —
” The defendant has no defence to the claim on the promissorynote. He has his remedy against his sub-kankanies on thepromissory notes he holds from them.
“ If the defendant applies for leave to appear and defend anaction and pays into Court the sum mentioned in the summons,he is of right entitled to the leave he asks for (section 706). Abare claim in reconvention may sometimes afford a satisfactorydefence within the meaning of chapter 53, as for instance a liquidclaim due to the defendant by the plaintiff upon a promissory note,cheque, or guarantee. Such a claim, being of a liquid and definitecharacter, falls within the purview and meaning of the term" defence ” as used in chapter 53.
“ It was held by the Supreme Court in a case of this Court(D. C., Kandy, 97,222, 8 8. 0. C. 148) in an action of regularprocedure that partial failure of convention does not constitute
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a defence to a claim on a promissory note, if the quantum to bededucted on the account is matter not of definite computationJjut of unliquidated damages. Byles says (p. 150, 15th edition),‘ formerly the money as to which the consideration fails must havebeen a specific ascertained amount, for the jury could not in anaction on a bill or note assess by way of set-off the damage?arising from a breach of contract, and the defendant was left tohis cross action. But now unliquidated damages may be set upin a counter daim.’
“ As such a claim can be made, is a defendant entitled to makeit under chapter 63? It seems to me that he is under section 706.Are then the facts sufficient to support the application? I confessI fail to see any foots entitling the defendant to damages.
" I refuse the application for leave to defend the action, andenter a decree for the plaintiff for Bs. 3,480, with interest asprayed. ”
The defendant appealed.
Browne (with him Fan Langenberg), for appellant.
Morgan, for respondent.
The Supreme Court (Bonser, C.J., and Moncreiff, J.) setaside the decree and permitted the defendant to defend the action,for the following reasons stated in the Chief Justice's judgment:—
4th July, 1900. Bonser, C.J.—t
In my opinion the District Judge was quite right in holdingthat the claim for unliquidated damages was a defence to anaction under chapter 53 of the Code.
The case in 8 S. G. C. 148 was decided before the new Codecame into operation, and is therefore no authority as to thepresent procedure.
At the same time I think that the Judge ought to have allowedthe defendant to defend the action.
Monorbjff, J., concurred.
Upon the case going back, the following issues were in duecourse agreed to: —
Whether the promissory note was given by way of securityfor advances due by the defendant’s coolies to Kadawella estate?
Did the plaintiff unlawfully intimidate' the defendant’sgang of coolies, and forcibly remove 123 coolies, including 8sub-kankanies, from defendant’s gpng and place them underMurukan Kankani?
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(8) If he did, has the defendant been unable to recover thesum of Bs. 7,103.87 alleged to be due to him by the said cooliesand sub-kankanies?
If so, is the plaintiff liable to the defendant in the sum orany part thereof? And—
Is the plaintiff liable to the defendant in Bs. 2,500 asdamages or any part thereof?
At the conclusion of the trial, the District Judge (Mr. J. H. deSaram) delivered judgment as follows: —
“ The defendant says he made the note merely by way of secu-rity for advances due by his coolies to the estate. The case ofImray v. Palawasen Kankani (1 Browne, 88) was cited in supportof the position taken by defendant as to his non-liability. Thepresent case is not on all fours with Imray’s case, for hereMr. Lyall proves that the note was made for moneys advanced tothe defendant for various purposes. Mr. Lyall, from whom theplaintiff took charge of the estate on 2nd October, 1897, had nomoney dealings of any sort with the sub-kankanies, and kept noaccountwhatever with them.Asamatter of factthey owed
nothing to the estate. The superintendent could not sue themor the coolies, because he did not know to whom defendant hadmade payments, or how much had been paid to any particularperson. The account book produced by the defendant establishesthe plaintiff’s case. The defendant is the person who was debitedwith the advances. He madewhatdistribution hepleased of
the money he received from Mr. Lyall, and he holds promissorynotes from the sub-kankanies for the amounts paid to them. Ithas, inmy opinion, been provedthat the advanceswere made
to thedefendant, and thatheisliable on thepromissory
“ The defendant is blowing hot and cqld. He denies his liabilityto plaintiff on the note, on the ground that he was merely asurety for the real debtors, who, he says, are the sub-kankaniesand coolies; and yet he says they owe him the money, and seeksto recover it from the plaintiff, on the ground that the plaintiffremoved some of his coolies and sub-kankanies from his gangand placed them under Murukan, who is now head kankani.There is one circumstance on which Mr. Fernando relied. It isthis: Mr. Hutchinson, the Visiting Agent, said he believed Muru-kan Kankani had given the plaintiff a promissory note for theamount of the defendant’s debt. Assume that he has. I do notthink that affects the question of defendant’s liability. Murukangave the note to secure, the estate, in case of any loss throughthe defendant. If he chose to undertake that debt, it in no way
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lessens (he defendant's liability on his promissory notes forpayments made directly to him.
“ The second issue is whether the plaintiff unlawfully intimi-dated the defendant's gang of coolies and forcibly removed 128coolies, including 8 sub-kankanies, from defendant’s gangand placed than under Murukan Kankani. Mr. Hutchinsonwent to the estate in consequence of reports made to him byplaintiff against defendant. He asked defendant whether hewanted a tundu. The defendant said he would not have it;that he would pay the debt due to the estate and go to the Coast;that he did not want any of his coolies; that Mr. Hutchinsonmight have them. The defendant was at that time employed onKadawella. He left shortly afterwards, after giving plaintiffnotice. Some of the sub-kankanies and coolies went away withhim. The others refused to go with him and remained on theestate. I answer the second issue in the negative. The otherissues need not therefore be considered. I give the plaintiffjudgment as prayed for and costs.”
Defendant appealed. The case was argued before Layard, C.J.,and Moncreiff, J., on 18th and 20th November, 1902.
Van Langenberg, for appellant.
Bawa, for respondent.
Cut. adv. vuIt.
9th December, 1902. Layard, C.J.—
This is an action on a promissory note brought by the holderagainst the maker. The promissory note is dated the 2ndOctober, 1897, and is in the following terms: —
” Kadawella, Watawala, 2nd October, 1897.
” On demand, I, Pichche Muttu, head kankani, do promise topay to John Whitham, or the superintendent of Kadawella estatefor the time being, or order, the sum of Rupees Four thousand Sixhundred and Forty-one and Cents Nineteen (Rs. 4,641.19), valuereceived.”
It was made under the following circumstances: —
The maker was the head kankani at Kadawella estate, and hada large gang of coolies under him, divided into small gangs,. eachgang being under a sub-kankani. The gang consisted of about140 or 150 coolies under 12 sub-kankanies. On the day the notewas executed a Mr. Lyall was superintendent of Kadawella estate,and on that day he handed over the charge of the estate to theplaintiff, the new superintendent.
The main question at issue between the parties is, whether thepromissory note was given as security for advances due by thedefendant’s coolies or for moneys lent to the defendant.
November 18 '
ami SO, andDecember 9.
November 18and 80, andDecember 9.
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The defendant has deposed that when the plaintiff took chargeof the estate he (the defendant) made the promissory note suedon as security for the debts due by the coolies and sub-kankaniesto the superintendent for advances.
The defendant kept a book with the superintendent, whichshowed the amount due at any time, according to the plaintifffrom the defendant, and according to the defendant from thecoolies and sub-kankanies, belonging to his gang.
That book was produced by the defendant, and I shall hereafterhave to allude more particularly to some of the entries made in it.
The entries made in that book after the plaintiff took overcharge of the estate as superintendent were, according to theevidence in the case, made by the plaintiff.
The promissory note having been given for transactions whibbtook place before the plaintiff took charge of the estate, thequestion as to the purpose for which the note was given must bedecided on the evidence of the defendant and Mr. Lyall and theentries in the book above mentioned. Mr. Lyall deposes thaton the 2nd October, 1897, he got the head kankanies to givethe plaintiff promissory notes for the amount due by each ofthem to the estate, “ and that the defendant at that date owedthe estate ” Es. 4,641.19, for moneys advanced to him for variouspurposes, and that he Mr. Lyall had no dealings with the shb-kankanies and kept no account with them, and that they owednothing to the estate.
So far it looks as though Mr. Lyall meant that the money waslent to the defendant alone, and that the coolies were in no wayindebted to the proprietors or superintendent of the Kadawellaestate.
Tn cross-examination, however, he admits that amounts weredue from the coolies to the proprietors or superintendent of theestate, for he says, “ if instead of there being a change of superin-tendents there was to be a change of head kankanies, I wouldgive them tundus for the amounts due by them and theirmen.”
It is to be noted that in examination-in-chief he has not told usthe various purposes for which the moneys were advanced.
The statements made by him, however, in cross-examinationpoint to one purpose very clearly, viz., that it was advanced tosecure from time to time additional labour for working the estate,and'that he used to give the kankanies cheques under the follow-ing circumstances: if a kankani came to the estate with a tunduhe used to speak to the defendant and give him a cheque for theamount of the tundu.
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The nature of transactions of this kind has been concisely andclearly explained by Bonser, C.J., in his judgment in the case ofImray v. Palawasen Kankani, reported in 1 Browne, 89:—
“ It is the well understood practice amongst the planters thatone tea planter will not take into his service a eooly who hasserved on another estate, unless he is satisfied that .he is leavinghis employer with the latter’s consent, and that he has paid off allthe money he owes to the former employer in respect of advancesand shop debts.’’
It is usual for the gang of coolies (for there is generally a gangunder the headship of one kankani) to produce to the person withwhom they wish to take service what is called a tundu, which isa written memorandum by the former employer to the effect thathe is willing to discharge them from his service upon being paida certain amount stated in the tundu as being the amount of theirdebts.
The cheques given in this case appear to have been drawn infavour of the planter issuing the tundu, and Mr. Lyall then debitedthe defendant with the. amount of the cheque, and he goes on toadd that the kankani and coolies are taken on by the defendant.I presume Mr. Lyall means that the coolies enter the service ofthe superintendent and are entered on the check roll of the estate;that is the ordinary practice, and that supports the. plaintiff’sview, because it is in evidence that, when differences subsequentlyarose between the plaintiff and the defendant, Mr. Witham saidthe coolies were his and not defendant’s.
On reference to the book produced, which is styled “ the defend-ant’s advance account,” I find the account debited with items suchas “ advance for P. Carpen’s coolies,” “ advance for new coolies,”“ cheque account, Aruniaigan Kangani,” “ to amount Anlandy’sadvance,’-’ “ Perumal’s debt,” “ to Belliapen for new coolies,” “ toMurugam, check roll debt,” “ to Superintendent, Eildon Hall,cheque,” &c.
I also find the account is credited with pay due to both cooliesand sub-kankanies, in some instances it being stated that they hadrun away.
The entries disclose that the account was debited with ad-vances made to coolies and sub-kankanies, and was credited withpayments made by coolies and sub-kankanies.
I have only so far referred to entries made prior to plaintifftaking over charge of the estate.
Entries subsequent to that date show that a sort of runningaccount was continued in the book, the account being debited ina similar way with debts due by others than the defendant, and
November 18and 20* andDecember 9.
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1902. credited by in one case Suppan’s debt transferred to 8annaiya’aaccount, and in another case by Murugan Kankani’s debt.
Decembers. The entries support the defendant’s contention that the promis-Latabd.CJ. oory note was given as security for the debts of others, and no%merely as an acknowledgment that he was personally indebted inthe amount mentioned in the note.
The book further shows that the plaintiff, subsequent to histaking over, from time to time has added fresh sums to the amountof the debt alleged to be due by defendant on the promissory note,less payments made by defendant on account of the same.
Assuming the promissory note was given for a iixed sum due bydefendant, the sums debited to the account subsequent to the dateof the promissory note cannot be covered by the note unless thepromissory note was given as security for any balance that mightat any time be ascertained to be due from the defendant on arunning account.
Assuming it was, in this case, given as such security, theplaintiff would have to prove what the balance of the account wasbefore he could recover anything on the promissory note.
My opinion is that the evidence discloses that the promissory-note was given merely by way of security for advances made tothe coolies and sub-kankanies of the defendant’s gang, and that theplaintiff, before he can maintain this action, must show a failure onthe part of the principal debtors to pay the amounts due bythem.
He has failed to do so.
Admittedly a large number of defendant’s gang of coolies arestill working on the ’ estate under plaintiff, and the plaintiff hasprobably, in the ordinary course of business, made deductions fromtheir wages for the advances made to them; if he has neglectedto do so, there appears to me no reason why defendant, who ismerely surety, should suffer. 1
1 would dismiss plaintiff’s action with costs.
This note was given by a kankani who had been on Kadawellaestate for many years, and the coolies for advances to whom hesays it was given were already on the estate. It was given on theplaintiff’s arrival to take Mr. Lyall’s place as superintendent, andin substitution for a note which had been held by Lyall; but itwas a promise to “ pay John Whitham, or the superintendent ofKadawella estate for the time being,” Rs. 4,641.19. It was givenin respect of estate matters, and was put in suit for a balance ofRs. -3,480. According to the book P.M., ” in which the plaintiff
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made' entries, the debt secured by the note fluctuated fromtime to time.
Whether the coolies, in the defendant’s gang, came to the estateWith him, or came under bim afterwards, it may be assumed thatthey received advances either before or after their- arrival. Thequestion is, whether the advances were a matter between them andthe lrn.nlm.ni, or whether they were advances from the estatemade through the kankani, for which the kankani gave a notefor a special purpose.
The defendant meets the note (1) with a plea that it was givenas security for sums due on advances by his sub-kankanies andcoolies to Kadawella estate; (2) with a claim for Bs. 9,603.87 inreconvention by way of damages.
Tim plea is founded on a well-known custom, which has oftenbeen stated in this Court. On evidence recorded, the custom wasrecognised and acted upon in Imray v. Palawason Kankani(1 Browne, 88). But Mr. Bawa says that there is no such custom,and that each case must depend upon its own circumstances.
As I understand the plea, it means that the note was given for aspecial purpose and subject to special conditions; that it was givenby way of security for the repayment of advances to coolies (ofwhom the defendant was one); that it was personal as betweenhimself and the estate, and not to be enforced by action so longas the coolies were not severed from him and the estate.
The object of the estate is to get the labour of the coolies, andin order to get it it has to take over, as creditors, the debts due bythem to their previous employer (if any) for advances. It cannottreat with each cooly; for convenience, it deals with the kankaniunder whom the coolies work.
In the usual course the kankani comes to the estate with atundu received from the present employer showing the amountdue from the coolies on advances, on payment of which amountthe employer is willing to part with the coolies. The estate givesthe kankani a cheque for the amount in favour of the presentemployer; the kankani gives the cheque to the employer, and isthen at liberty to take his coolies to the estate which is about toemploy them. On arrival the kankani gives the superintendentof the new estate a promissory note for the amount due onadvances to coolies, and he in turn takes promissory notes fromhis sub-kankanies. So long as the coolies are under him, he or thesuperintendent can, on pay days and other occasions, obtain forthe estate payments in reduction of the debt.
The object of all this is to secure the repayment of the debt of thecoolies by deductions made with their consent from the pay which
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1902. they earn. The arrangement is understood by all parties. TheDecember 9. kankani’s note is delivered conditionally, and not lor the purpose°f transferring property in the note. The note is a sort of escrow,
J. the transfer of property in it is subject to a suspensive condition.So long as there is no severance of the .kankanies, the coolies, andthe estate, the note cannot b.e put in suit; but the moment itbecomes impossible to reach the coolies and induce them to payor work off the arrears, the kankani’s liability becomes actual.Here, the superintendent took the coolies out of the defendant’shands and-cut away the grounds of his responsibility. He exercisedthe right which he had never lost of dealing directly with thecoolies, and put them under another kankani from whom heexacted a note for the amount of the defendant’s note. By sodoing he not only changed the defendant’s position, but dischargedhim from liability.
The plaintiff’s view seems to be that he has nothing to do withadvances to the coolies; he knows nothing of them. He hasadvanced money to the kankani, of which, so far as he knows, thecoolies may never have had a cent.
We have not had the assistance we had a right to expect fromthe plaintiff. He did not give evidence, so we have nothing fromhim as to the alleged custom; nothing as to special circumstances(if any) attaching to this note; we have no means of knowingwhether deductions are now being made from the pay of the coolies.For all we know, the debt may have been extinguished by deduc-tion from wages. He did not call Murugan Kankani, who couldhave said whether, having given a note for the defendant’s debt,he took covering notes from the jSub-kankanies; whether, in fact,he simply gave security for the defendant or was substituted forhim.
It seems to me that the plaintiff’s conduct and the evidence ofMr. Lyall are at variance with the reasons given for this action.
Mr. Lyall, who was superintendent before the plaintiff, says:
“If there was to be a change of head kankanies, I would
give them tund-ua for the amounts due by them and their men
Ifa head kankani dies,anotherwill take his place onthe
estate.Iwould in that casetake apromissory notefromthe
next head kankani for the amount of the deceased man’s debt.If A and B are head kankanies, and C, a kankani of A, wishedto be transferred to B, I Would not make the transfer unless withA’s consent. If A consents I would make the transfer, credit Awith 0’s advances, and debit B with the amount.”
Thisevidence is destructiveof theplaintiff’s case.Hisown
actionisequally destructive.Although he pretendsthatthe
engagement of and advances to coolies are a matter between themand the head kankani, he took the defendant’s coolies from him,depriving him of the benefit of deductions from pay and giving itto another kankani. Me .took a nojbe from Murugan Kankani forthe same debt. I do not believe that that note was taken assecurity for the defendant’s debt. I believe. it was taken onsubstitution of Murugan for the defendant. It is incredible thatMurugan should give a note unless he had the advantage ofdeductions from wages. A further admission is made by trans-ferring to Murugan his own debt of Ms. 312.91 as sub-kankani tothe defendant and crediting the defendant with the amount.The plaintiff has directly' dealt with the defendant’s sub-kankanion a matter with which he says the estate has nothing to do.And lastly, the defendant’s book “ P. M., ” in which the entrieswere made by the superintendent, repeatedly shows a dealing bythe estate with the advances to the kankanies and coolies.
I think that the appeal should be allowed, and that the plaintiff’saction should be dismissed.
WHITHAM v. PICHCHE MUTTU KANKANI