Madam Pillai v. Athinarayana Pillai

The plaintiff's suit is on a promissory note, alleged to have been executed by the 1st defendant's father and the second defendant. Both the defendants pleaded that the note was a forgery. The District Munsif held that the note was a forgery and dismissed the suit. On appeal, the Subordinate Judge of Tuticorin recorded a finding, that the 1st defendant's father alone executed the promissory note and the 2nd defendant's mark was affixed to the note, without her permission and dismissed the appeal, on the ground that the note being a forged document, so far as the 2nd defendant was concerned, it could not be enforced even against the 1st defendant. The plaintiff has preferred this second appeal. The learned Advocate General for the appellant contends that the Subordinate Judge should have given a decree against the first defendant and that Sect. 87 of the Negotiable Instrument Act is no bar, as the 2nd defend, ant's mark was affixed to the promissory note, with the consent of the 1st defendant if not by him. His argument is that, if the plaintiff and the 1st defendant agreed that the 2nd defendant's mark should be affixed to the promissory note there is no material alteration within the meaning of Sect. 87 of the Negotiable Instruments Act. He concedes that if the 1st defendant had undertaken to be a party to the promissory note, only in case the 2nd defendant was a party thereto, and if the plaintiff had forged the signature of the 2nd defendant, then he could not get a decree against the 1st defendant, for the contract was that the 1st defendant should be a party to the transaction, only in case the 2nd defendant was also a party. Where a person enters into a contract, on the stipulation that some one else also is a party thereto, it is unenforceable against him, if the other person, who was to have been a party is not a party thereto. In this case, if the agreement was that the 1st defendant's father should execute it, the failure of the 2nd defendant to execute the promissory note would stand, in the way of the plaintiff enforcing his remedy, under the promissory note against the 1st defendant.

It cannot be said in this case that there is a material alteration, within the meaning of Sect. 87 of the Negotiable Instruments Act; for, under the section, a negotiable Instrument is void, if there is any material alteration, without the consent of the party, against whom it is sought to be enforced, unless the alteration was made, to carry out the common intention of the original parties. If, after the execution of a negotiable instrument, or any other document, the parties thereto alter it, such alteration does not vitiate the document, but it does, if the alteration is made, without the consent of the party, against whom it is sought to be enforced. It is immaterial whether or not the alteration is beneficial to the person, against whom it is sought to be enforced.

In Gour Chandra Das v. Prasanna Kumar Chandra, it was held that the introduction of the names of two persons into a document, after it was executed, without the consent of the executant, vitiated the document. As observed by the learned Judges:

“The test is not necessary, however, whether the pecuniary liability of one of the parties has been increased by the change; it is of no consequence, whether the alteration would be beneficial, or detrimental to the party, sought to be charged on the contract. The important question is whether the integrity and identity of the contract has been changed.”

Mr. Muthukrishna Aiyar, who appears for the respondents supports the judgment of the lower Court, on the ground that if a document is a forgery, it could not be enforced against any of the parties thereto and urges that Sect. 87 can only apply to a document, which has been properly executed and not to a document, which in its inception is a forgery. His argument is that if the plaintiff and the 1st defendant's father agreed that the 2nd defendant's signature or mark should be forged, the whole document is a forgery and cannot be enforced against the 1st defendant, though he was a consenting party to the forgery. He relies upon the observation of Mr. Justice Sadasiva Iyer, in Amirtham Pillai v. Nanjah Gownden:

“A material portion of the promissory note being a forgery, it seems to come, within the principle of the decisions, which hold that a material alteration invalidates the whole note”.

This observation is only obiter; for; in that case, it, was intended that two persons should be jointly liable, on a promissory note and the finding was that the 1st defendant did not join in its execution. The Subordinate Judge's, decree against the 2nd defendant was reversed by the learned Judge on the ground that “the second defendant could not be made liable as he agreed to beliable, only, if the 1st defendant was jointly made liable. In Civil Revision Petition No. 601 of 1913, the District Munsif found that of the three alleged executants only two signed the promissory note and the 3rd executants' signature was not genuine and gave a decree only against the two executants. Miller J, relying on Gour Chandra Das v. Prasanna Kumar Chandra, reversed the decree and dismissed the suit, on the ground that there was a material alteration, which nullified the instrument. The respondent was not represented in the High Court, in that case. These two cases are distinguishable from the present on two grounds:—

(1) there was no finding that the executants either consented or were parties, to the affixing of the signatures of the persons, who did not join in the execution of the promissory note.

(2) it was assumed that there was an agreement that all the persons whose names appeared on the promissory notes, should join in executing it.

If the two learned Judges intended to lay down the broad proposition that, where a document is alleged to be executed by two persons, if the signature of one of them is found to be a forgery, it is enforceable against the other, irrespective of the knowledge and intention of the parties with all respect, I am unable to agree with them.

If in this case, the intention of the plaintiff and the 1st defendant's father was to deprive the 2nd defendant of her property, or to proceed against her alone, it might be said that the plaintiff and the 1st defendant conspired to deprive the 2nd defendant of her property: by the commission of an offence, namely, forgery. If such an intention is found, as a matter of fact, the suit promissory note would be unenforceable, even against the 1st defendant; for as observed, in Scott v. Brown Doering Mc Nab & Co., no Court ought to enforce an illegal contract, or allow itself to be made the instrument of enforcing obligations, alleged to arise out of a contract or transaction, which is illegal, if the illegality is duly brought to the notice of the Court and if the person invoking the aid of the Court is himself implicated in the illegality. Where the primary intention is not to cheat or to deprive the 2nd defendant of her property, but where her name is introduced, for the purpose of giving an additional security to the plaintiff, I do not think the plaintiff should be denied his remedy against the 1st defendant.

Mr. Muthukrishna Aiyar contends that it is opposed to public policy, to allow the plaintiff to get his remedy against one executant, when he was a party to the forgery by which he sought to make a person, not a party to the document liable on it and relies upon Holman v. Johnson. In that case, Lord Mansfield held that the plaintiff who was a party to an illegal or immoral contract, was not entitled to get back the money paid under an illegal contract. The learned Lord observed:

“If from the plaintiff's own stating or otherwise, the cause of action appears to arise ex turpi causa, or the transgression of a positive law of this country, there the Court says he has no right to be assisted.”

But this case has no application to the present; for, here the contract itself was not an illegal or immoral one. It was an ordinary loan transaction, evidenced by a promissory note. But to evidence the loan, or as part of the contract itself, the promissory note was executed; and in executing it, the mark of a person not a party to the document was forged. If the contract in itself is illegal, the plaintiff would not be entitled to enforce his remedy against any one, who is a party to the contract. But where the contract is legal, and, as evidence of the contract, something illegal is done, it cannot be said that the whole contract is void. In the absence of any finding, that the contract evidenced by the promissory note was, for the purpose of cheating or depriving the 2nd defendant of her property, the contract cannot be said to be invalid. If the intention and object of the plaintiff and the 1st defendant were to deprive the 2nd defendant of her property, the contract evidenced by the promissory note would be illegal. But where the plaintiff lends money to the 1st defendant's father and asks for additional security and the 1st defendant's father forges the mark of the 2nd defendant, with the consent and approval of the plaintiff, it cannot be said that the whole transaction is void.

Granting that Sect. 87 applies to such a transaction, in as much as the alternation was made, with the consent of the executant, the document is not void. But I hold that Sect. 87 has no application to a case like this, as it has reference only to an alteration, after execution and not anything done at the time of the execution.

In this view, the decree of the Subordinate Judge, so far as the 1st defendant is concerned, cannot be supported. I reverse his judgment, and give a decree against the 1st defendant, with interest at 6 per cent, on 923 as from date of plaint, but as the plaintiff was a party to a forgery, I disallow his costs throughout.

It is not necessary, in the view I have taken, to consider the argument of the learned Advocate General, that his client is entitled to sue on the original cause of action. Even if be is entitled to sue on the original cause of action, considering the conduct of the plaintiff, I am not prepared to give him leave to amend his plaint, and sue on the original cause of action. The second appeal is not pressed against the 2nd defendant and it is dismissed with her costs.

This Second Appeal having been set down to be spoken to this day, the Court delivered the following:—

JUDGMENT

The decree is against the assets of the father in 1st defendant's hand.

K. S. D.Appeal allowed..