019-NLR-NLR-V-69-CHARLOTTE-JAYASEKERA-Appellant-and-SINNA-KARUPPAN-Respondent.pdf
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Jayasekera v. Sinna Karuppan
I960 Present: SansonI, C.J., and Siva Supramaniam, J.CHARLOTTE JAYASEKERA, Appellant, andSINNA KARUPPAN, RespondentS.C. 529/1964—D.C. Galle, 3250
Cheque— Valuable consideration given by indorsee—Death of drawer before presentment—Liability of executor of drawer's estate—Bills of Exchange Ordinance {Cap. 82),s. 38—Alteration of a cheque by drawer with indorser's consent—Indorser'sliability to indorsee—Notice of dishonour—Proof—Joinder of parties and causesof action—Indorser and executor of deceased drawer's estate—Liability to 6esued by holder in the same action—Joint and several liability— Effect—CivilProcedure Code, ss. 15, 35 (2).
Where the holder of a cheque is an indorsee who has paid valuable considera-tion, his rights on the cheque cannot be extinguished by the subsequent deathof the drawer before presentment. The liability of the drawer would pass tothe executor or administrator of his estate.
Where a cheque, after it is indorsed, is materially altered by the drawer withthe consent and acquiescence of the indorser, the indorser’s liability to theindorsee remains unaffected by the alteration.
When a cheque is dishonoured on presentment by an indorsee, a promisemade thereafter by the indorser to pay the amount of the cheque to the indorseeis evidence of an admission on his part that notice of dishonour was given tohim by the indorsee.
SIVA STJPRAMANIAM, J.—Jaymehern v. Sinna Karuppan
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Where the drawer of a cheque is dead, section 35 (2) of the Civil ProcedureCode does not bar an indorsee from suing both the indorser and the executorof the deceased drawer's estate in the same action. And if the indorser happensto be the executor de son tort also of the drawer’s estate, he may be sued bothpersonally and as executor de son tort in the same action.
A.PPEAL from a judgment of the District Court, GaUe.
E. R. S. R. Coomaraswamy, with N. S. A. Goonetilleke andN. Wijeyanathan, for the defendant-appellant.
C. Ranganathan, Q.C., with J. Perisunderam, for the plaintiff-respondent.
Cur. adv. vult.
September 29, 1966. Siva Suframaniam, J.—
The plaintiff instituted this action claiming from the defendant a sumof Rs. 15,000/- both personally and as executrix de son tort of the estateof her deceased husband F. W. Jayasekera on a cheque dated 17.6.1963drawn by Jayasekera on the Bank of Ceylon; Gallo, directing the B..nk topay “ Cash or Bearer Rs. 15,000/-” and endorsed by the defendant anddelivered to the plaintiff. The learned trial Judge has found that thedefendant received a sum of Rs. 15.000/- in cash from the plaintiff whenshe endorsed and delivered the cheque to the plaintiff. When the chequewas presented for payment to the Bank on 24th August 1963, it wasdishonoured on the ground that the drawer was dead.
The cheque was drawn by Jayasekera and endorsed by the defendantand handed to the plaintiff on 19.12.1962. The amount due on the chequeremained unpaid on 17.6.1963 and by agreement between the parties,in lieu of issuing a fresh cheque, Jayasekera altered the date to 17.6.1963.The alteration was made and signed by Jayasekera in the presence of thedefendant.
In the answer filed by the defendant she resisted the plaintiff’s claimon the following grounds :—
(а)That she was not personally liable as she had endorsed the cheque
at the request of the plaintiff and that no valuable considera tionhad passed.
(She stated, however, in para graph 8 that “ This sum has beenadmitted as a debt of F.W. Jayasekera in the Testamentarycase to be filed and that the said sum is recoverable from theestate of the deceased ”.)
(б)That she was not liable as executrix de son tort as she had not
intermeddled with her husband’s estate ; and
That there was a misjoinder of parties and causes of action.
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SIVA SUPRAMAN1AM, J.—Jayasekera v. Sinna Karuppan
In the course of the trial two further matters were put in issue asdefences:—
That she was discharged from liability as she had no notice of
dishonour ; and
That in view of the material alteration of the date on the cheque
she was discharged from personal liability.
After trial, the learned trial Judge entered judgment for plaintiff asprayed for. Owing to an error in the numbering of the issues he did notanswer the issues relating to notice of dishonour but he held against thedefendant on all the other issues.
In appeal, in addition to the defences raised in the lower Court, learnedCounsel for the appellant submitted that the action on the cheque isnot maintainable for the reason that the cheque became a nullity on thedeath of the drawer, in the absence of presentment before the death ofthe drawer. He argued that the only remedy available to the plaintiffis an action on the original transaction, independent of the instrument.
He based his argument on the following passage in the judgment ofLord Romilly M. R. in Hewitt v. Kaye1—
“But a cheque is nothing more than an order to obtain a certain sumof money, and it makes no difference whether the money is at a banker’sor anywhere else. It is an order to deliver money and if the order is notacted upon in the lifetime of the person who gives it, it is worth nothing. ”
This dictum was quoted with approval by Pollock M.R. in Re Swin-burne.2 In both cases the question at issue was whether a cheque whichhad been given by the drawer on his death-bed as a gift to the payee butwhich had not been honoured by the Bank before the death of the drawerwas a valid donatio mortis causa. Under the English law a gift is invalidunless there is complete delivery and the decision in both those cases wasthat as a gift the cheque was worth nothing. Counsel interpreted thesewords as amounting to a general proposition that on the death of thedrawer of a cheque which remained unrealised, the cheque became anullity and no action could be founded thereon. There is nothing in thejudgment of either Lord Romilly M.R. or Pollock M.R. to warrant thatinterpretation.
Chalmers 3 sets out the position of the donee of a cheque as follows :—“ He cannot successfully sue the drawer’s executors on the instrumentbecause he is not a holder for value and the banker’s authority to pay isrevoked by notice of the drawer’s death. ” The position, however,would appear to be different if the cheque had been negotiated for valueduring the lifetime of the drawer. In the case of Rolls v. Pearce * it was
1 (1868) L. R. 5 Equity 198 at p. 200.
' (1926) 1 Ch. at p. 41.
Cholmen ; Rill* of Exchange, 11th Edition p. 249.
(1877) 5 Ch. 730.
SIVA SUPRAMAXIAM, J.—Jayasekera v. Sinna Karuppan
'Jl
held that a cheque drawn by a testator payable to his wife or her order,given to her shortly before his death, indorsed by her and paid into aforeign bank against the amount of which she drew, was a good donatiomortis causa, although the cheque was not presented for payment at thebank on which it was drawn till after the death of the testator. MalinsV.C. quoted with approval the statement of Lord Loughborough inTale v. Hilbert1 as follows :—“ If she had paid this away either forvaluable consideration or in discharging a debt of her own, it would havebeen good ” (as a donatio mortis causa). A fortiori, where the holder isan endorsee who has paid valuable consideration, his rights on the chequecannot be extinguished by the subsequent death of the drawer beforepresentment.
Learned Counsel for the appellant also cited a passage from the judg-ment of Gratiacn J. in Public Trustee v. Seneviratne 2 which, he claimed,supported his contention. In that case a cheque for Its. 5,000/- wasgiven as a gift by the drawer to the payee but, before the cheque wasrealised, the drawer died. The payee filed an act ion against the PublicTrustee who was the administrator of the drawer’s estate on two alter-native causes of action, one of which was based on the drawer’s liabilityon the cheque itself. In approving of the dismissal by the District Judgeof the action on that cause of action, Gratiaen J. said (at page 149) :" The learned District Judge rightly rejected the cause of action on thecheque, because admittedly the English law governs that aspect of theplaintiff’s claim, and a promise to donate a sum of money to the payeedoes not constitute valuable consideration which is a condition precedentto liability. ” The cause of action failed not because the cheque becamea nullity on the drawer’s death before presentment but because valuableconsideration which was a condition precedent to liability on the chequewas absent. The passage in question, far from supporting Counsel’scontention, would appear to support the view that if valuable considera-tion had been given, the action on the cheque was maintainable, despitethe drawer’s death before presentment. It should also be noted thatthere is no provision in the Bills of Exchange Ordinance (Cap. 82) whichrenders a cheque non-actiona ble on the death of the drawer in the absenceof presentment before his death.
In the instant case, there is the finding of fact by the trial Judge, whichhas not been seriously challenged, that the plaintiff was a holder forvalue. In my opinion, the plaintiff’s rights and powers as a holder underS. 38 of the Bills of Exchange Ordinance remained unaffected by thedrawer’s death. The liability of the drawer would pass to the executoror administrator of his estate.
The next point urged by Counsel for the appellant was that thedefendant was discharged from personal liability as endorser (a) becauseof the material alteration of the date and (6) as she had no notice of
1 2 Vesey 111.
(1952) 54 N. L. JR. 145.
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SIVA STJPKAMANJAM, J.—Jayasekera v. Stnna Karujypan
dishonour. In regard to (a) the evidence of the plaintiff that thealteration of the date was effected by the drawer in the presence of thedefendant, the endorser, was not denied by the defendant. Having regardto all the circumstances, there can be no doubt that the alteration waseffected with her consent and acquiescence and I see no reason tointerfere with 'he trial Judge’s finding that the defendant’s personalliability remained unaffected by the alteration.
As regards the question of notice of dishonour, the plaintiff statedin the course of liis evidence as follows :—
“ After the cheque was returned by the bank I went to meet the
defendant. I spoke to her. I asked her for the money. She said she
would pay …”
This evidence was not contradicted or denied by the defendant. Inmy opinion, it is implicit in the evidence given by the plaintiff that heinformed the defendant of the return of the cheque by the Bank. In thecircumstances, the defendant’s admission of liability may be regarded asevidence of due notice having been received. In the case of Bartholomewo. Hill1, which was an action on a dishonoured Bill of Exchange by theplaintiff as indorsee against the defendant the drawer ancl indorser, itwas held (by a Bench consisting of Pollock C.B., Martin, Charnel andWilde B.B.) that a promise to pay the amount made by the defendantto a person applying to him on behalf of the plaintiff amounted to andwas evidence of an admission on the defendant’s part of notice ofdishonour. On the evidence in this case, the defendant’s plea thatshe is discharged from liability by reason, of non-receipt of notice ofdishonour fails.
The next matter on which the trial judge’s finding has been canvassedis the question of the defendant’s liability as executrix de son tort of herhusband’s estate. The defendant admitted in the course of her evidencethat she is residing in certain premises which forms part of the deceased’sestate and is, in addition, in the enjoyment of the produce from thecoconut trees standing on the said land. She stated that three daysbefore his death, the deceased mortgaged all his properties to oneDharmawardene and that Dharmawardena is in possession of all theproperties. (apart from the land on which she resides) and collects theincome therefrom. Under cross-examination, however, she admittedthat Weihena estate which was owned by the deceased was about 150acres in extent of which only about 100 acres had been mortgaged toDharmawardene. She further admitted that Dharmawardene sends heraccounts in regard to the income from the properties. On the evidencebefore him, the learned District Judge was justified in his conclusionthat the defendant had sufficiently intermeddled in the estate of herdeceased husband to constitute her an executrix de son tort of the estate.
1 (1862) 5 L. T. 756.
SIVA 8UPRAMANIAM, J.—Jayasekera v. Sinna Karuppan93
The only other matter for consideration is the appellant’s plea thatthe action is not maintainable by reason of misjoinder of parties andcauses of action. It was submitted that the cause of action against thedefendant personally as indorser was distinct and separate from herliability as executrix de son tort of the estate of her husband who wasthe drawer and that the claim made against the defendant bothpersonally and as executrix de son tort was barred by S. 35 (2) of theCivil Procedure Code. S. 35 (2) of the C. P. C. (omitting the parts thatare not relevant to this case) is as follows :—
“ No claim . . . against an executor … as such, shall in any actionbe joined with claims . . . against him personally unless the lastmentioned claims . . . are such as he was . . . liable for jointly withthe deceased person whom he represents. ”
In regard to the holder, the drawer and indorsers of any instrumentsre jointly and severally liable for its due payment.1 Had the drawerbeen alive, he as well as the defendant could have been sued togetherin the same action. (S. 15 of the Civil Procedure Code). Does S. 35 (2)bar the claim made against the defendant both personally and asexecutrix? If the liability of the defendant and the deceased was joint,S. 35 (2) permits the joinder of the claims. Does the fact that the liabilityis also several take away from the creditor the right to so join ? Lee andHonore state:“ In the case of a joint liability, each joint debtor is
liable only pro rata parte of the performance promised. . . . By law or bythe terms of a contract a joint debtor may be bound both jointly andseverally (correal or solidary obligation). The joint debtor . . . may thenbe sued either pro rata parte or for the whole performance promised. ” 2
Although certain differences exist in regard to the rights and liabilitiesof the co-debtors inter se in joint and solidary obligations, so far as thecreditor is concerned, the liability of the co-debtors on a solidary obligationdoes not cease to be a joint liability. The plaintiff was therefore entitledunder S. 35 (2) of the Civil Procedure Code to sue the defendant bothpersonally and as executrix de son tort in the same action.
In the result, the appeal fails and is dismissed with costs.
Sansoni, C.J.—I agree.Appeal dismissed.
BaUbury : Simonds Edition Vol. 3 p. 21}.
* Lee and Honore : South African Law of Obligations p. 82.