R.D. Sethna v. Grace Edith Hemmingway

1. The undisputed facts are that one Mr. Wakeford, who was in receipt of a Government pension of Rs. 54 per mensem, had a deposit of Rs. 10,500 with the Hongkong and Shanghai Rank under a deposit receipt of 7th August 1911, which fell due on 7th August 1912. On 26th June 1912 he wrote to the bank saying the receipt had been stolen and asking for a duplicate receipt. He visited the bank soon after and was given a form for an indemnity to the bank on the issue of a fresh receipt. He then told the bank clerk, Sunderrao, that he wanted a duplicate and wanted to give the money to his nephew, the defendant Harrison, who had accompanied him to the bank. The defendant came to the bank again on 7th August with deposit receipt, which had been found duly endorsed and a letter from Wakeford, but upon being told he would have to be identified by Wakeford took away the deposit receipt and the letter. He returned the following day with the deposit receipt bearing Wakeford's endorsement, dated 7th August, and also with a letter in the following terms:

“Bombay, 8th August 1912,

The Agent,

Hongkong and Shanghai Banking Corporation.

I hereby state that I have found my bank receipt. Herewith I am forwarding the same for the interest now due. I wish it to be handed over to my nephew.

I also wish you to hand over the amount of Rs. 10,500 which is in fixed deposit to my nephew, Wilmot Charles Harrison, to his account.

Yours truly,

(Sd.) C.A Wakeford.

This is my nephew's signature:

(Sd.) W.C Habrison.

(Sd.) C.A Wakeford.”

2. The defendant asked for a new deposit receipt for Rs. 10,000 and the Bank issued a receipt for that sum in the defendant's name and paid him the interest due on the former receipt and Rs. 500 at the balance of the principal.

3. Wakeford died on 18th October 1912 at the age of 84 unmarried and leaving him surviving as his next-of-kin ten grand-nephews and nieces, viz., two sons and two daughters of his predeceased niece, Jane Williams, and three sons and three daughters of his predeceased nephew, Edmund Harrison. Two days before the due date for payment by the bank of the sum of Rs. 10,000 secured by the deposit receipt in favour of the defendant, one of the daughters of Jane Williams filed this suit claiming a declaration that she as administratrix of Wakeford was entitled to the said sum of Rs. 10,000 as part of his estate.

4. The plaint was defective in that it did not show that the plaintiff had obtained letters of administration and it should on that account have been rejected on presentation. The plaintiff, however, obtained letters of administration on 31st October 1913, a fortnight before the hearing, and the hearing was allowed to proceed. A decree was passed for the plaintiff declaring that the Rs. 10,000 in question formed part of the estate of the deceased and that the plaintiff was entitled to the same. This was not contrary to Section 190 of the Succession Act as remarked by the learned Judge. The only tenable technical objection was to the institution of the suit before the plaintiff had an existing interest in the subject-matter. That point, however, if it had been taken and had resulted in the rejection of the suit at the hearing, would have only led to a waste of time and costs without benefiting the defendant, for a fresh suit would immediately have been brought by the administratrix. The course which the trial eventually took was determined by a ruling of the learned Judge that the endorsement of the receipt by the deceased was not evidence of a gift and that the onus was on the defendant to show how what was the only property of the deceased in August came to be given to him and that if he proved facts from which the Court could deduce that there was a good gift, the plaintiff would then have to prove circumstances showing the gift was invalid. On the evidence the learned Judge was satisfied that the deceased was anxious that the defendant should have the benefit of the money deposited with the Bank, but did not think that he intended that the defendant should be able to make away with the money in the donor's lifetime or draw the interest without making due provision for the donor's maintenance, but he held that there was no effective transfer, having regard to Section 130 of the Transfer of Property Act, of the debt due by the bank to the deceased and that, if there was, there would be a resulting trust for the legal representatives of the deceased under Section 81 of the Trusts Act.

5. We are unable to concur in the learned Judge's conclusion as to the effect of the transaction of 8th August. It is established by a preponderance of; English authorities that a deposit receipt is not a negotiable instrument which passes either by delivery or by endorsement, but where the money mentioned in the receipt is immediately payable and the receipt is presented duly indorsed together with an order to pay a given individual, that individual becomes the owner of the money upon payment by the banker or his promise to hold it at the disposal of the payee. The question is discussed by Buckley, J., in In re, Beaumont; Beaumont v. Ewbank (1) where he says:

“In all the cases, in order that the gift may be valid, it must, I think, be shown that the donor handed over either property, or the indicia of title to property, which belonged to him. His own cheque is not property, it is only a revocable order such that if, the banker acts on it, the donee will have the money to which it relates. Even without actual payment of the cheque there may be a good gift, for instance if there is undertaking by the banker to the donee to hold the amount of the cheque for the latter, that may be enough. Unless there is that or something equivalent to it there is no delivery of property but only a delivery of that which if acted on will procure the delivery of property.”

6. An order on a banker to pay money which he holds to the credit of the customer, is not an assignment of a debt but an authority to deliver property, which if acted on is equivalent to delivery by the customer. Here the letter of 8th August is such an order and it has been acted on. It may be that if objection had been taken at the hearing it would have been rejected for want of a stamp. That however is not an objection which can be effective in appeal now that the letter is on the record: see Section 36 of the Stamp Act.

7. The defendant is therefore the owner of the money secured by the existing receipt and the plaintiff cannot succeed, unless she shows that he holds it in trust for the donor or his representatives. In our opinion the finding of the learned Judge as to the intention of the donor which is as favourable to the plaintiff as the evidence permits, negatives the idea of any resulting trust. Upon that finding this is a much stronger case in favour of the donee than Standing v. Bowring (2). The plaintiff in that case being 86 years of age and being possessed of consols to the amount of £6,000 transferred them into the names of herself and her godson. It was proved that she was aware when she did this that she would be able during her lifetime to receive the dividends and that if her godson survived her he would become entitled as survivor. Lindley, L.J, remarked at p. 289:

“The plaintiff in her statement of claim and in the Court below rested her case on equitable grounds, and sought to establish a trust in her favour. But the only trust which was consistent with the evidence was a trust to pay her the income of the consols for the joint lives of herself and the defendant. This trust was not in controversy, but is not sufficient for the plaintiff's purpose. No trust will suffice short of an absolute trust for herself. But it is impossible to impose such a trust on the defendant, when the evidence conclusively shows that she never intended to create any trust of the kind. Trusts are neither created nor implied by law to defeat the intentions of donors or settlors; they are created or implied or are held to result in favour of donors or settlors in order to carry out and give effect to their true intentions, expressed or implied.”

8. The gift in this case was an absolute gift to the donee with the expectation that he would look after the donor till the latter's death. In our opinion the evidence shows, though this is not essential to the defendant's success, that the defendant acted up to the donor's expectations.

9. According to Ex. 10 (a letter of the deceased to the plaintiff in June 1911) the donor paid his rent out of the interest he then received from the bank and presumably paid his other expenses from his monthly pension of Rs. 54. In the month following the gift the defendant took the donor to-live with him and thus became responsible for his lodging.

10. The learned Judge at one period of the case thought that the fact that an old man of debilitated health gave all his savings to the one among his nephews and nieces who had taken charge of him raised a presumption of undue influence. We are not prepared to assent to this and the evidence shows that a coolness had arisen between the old man and the plaintiff whom along with her sister he had at one time intended to benefit by will. In our opinion the evidence establishes that the donor was perfectly sensible and competent at the time of the gift, and the charge that the defendant exercised undue influence fails. We reverse the decree of the lower Court and dismiss the suit with costs throughout.

G.P/R.K

11. Decree reversed.