1. This is an appeal by defendants 7 and 8 on whose behalf the suit properties had been purchased from defendant 1 by a sale-deed dated 15th November 1928. The suit was instituted for recovery of two sums of money from defendant 1 and by sale of the suit properties and defendants 7 and 8 were impleaded as subsequent purchasers. In respect of one item, namely, a sum of Rs. 2,500, the plaintiff claimed that he was entitled thereto under a mortgage-deed, Ex. A dated 20th September 1921, executed by defendant 1 in favour of the plaintiff. In respect of the other sum, the plaintiff claimed that according to the terms of a release deed which formed part of the settlement of accounts between himself and defendant 1 in respect of a partnership business carried on by them, defendant 1 had undertaken the liability to pay off certain debts but on account of his default the plaintiff was obliged to pay the same and that according to the terms of that arrangement he was entitled to a charge on the suit properties for this amount also.
2. Defendant 1 was ex parte. Defendant 2 who was the father of defendants 7 and 8 filed a written statement setting forth various defences and the same was adopted by the appellants. One of the contentions raised was that Ex. A does not represent a genuine transaction but it was merely a nominal or sham document. This is the subject matter of the first issue in the case. Another contention was that the arrangement by which the partnership between the plaintiff and defendant 1 was said to have been dissolved as per terms of the release deed, Ex. B, was not intended to be acted upon and that the plaintiff was therefore not entitled to claim any right on the basis thereof and his only remedy was to sue for dissolution of partnership and for the taking of the partnership accounts. This forms the subject matter of the third issue in the case. The evidence bearing on these points has been very fully discussed in the judgment of the lower Court and as we agree with its conclusion, it is not necessary to refer to the evidence at great length. It is established that several notices passed between the plaintiff and defendant 1 before the arrangement evidenced by Ex. B was brought about. (Vide Ex. K series.) Defendant 1 as D. W. 1 also admits that he sent Ex. M suggesting that the matter should be settled by mediation. P.W. 4 is one of the mediators who brought about the arrangement; and though on one occasion defendant 1 thought fit to say that Ex. B was nominal he has admitted in another deposition that from the date of Ex. B the plaintiff had no interest whatever in the business and that he has acted on the basis that the partnership had been dissolved. Even in his present evidence, he does not say that Ex. B was nominal; he only suggests that the figures therein given were tentative and subject to revision if he was unable to collect all the outstandings that he took over at the time. This is very different from the plea that it is a nominal arrangement. It is significant that while the plaintiff who was examined first gives very full details as to the circumstances under which the terms of Ex. B were settled, the defendant 1, who was examined several days later has not been put a single question contradicting these statements of the plaintiff. The points raised by issues 1 and 3 are obviously frivolous pleas.
3. With reference to the grievance which defendant 1 makes of the inequality in. the debts respectively allotted to himself and the plaintiff, it is sufficient to say that Exs. II and II-A, the schedules on which the allotment has been made in Ex. B are in the handwriting of the defendant himself and it is defendant 1 who presented Ex. B for registration. We have therefore no doubt that Ex. A is true, valid and supported by consideration and that the suit properties are liable for the claim under that document.
4. Proceeding next to the other head of the plaintiff's claim, the evidence clearly establishes that under the decree in O.S. No. 105 of 1923 the plaintiff did pay the creditor whom, according to Ex. B defendant 1 had undertaken to pay. Both under the general law, see Veerappa Chetty v. Arunachellam Chetty 1924 47 MLJ 168, and under the terms of Ex. B the plaintiff will undoubtedly be entitled to indemnity from defendant 1 in the circumstances. A question has been raised whether in the absence of a document signed by defendant 1 a charge could be held to have been created in the plaintiff's favour for the amount which the plaintiff may be entitled to under this head. That the parties intended to create a charge and that defendant 1 throughout acted on that footing can admit of no doubt. Ex. B recites that defendant 1 agreed to the charge and Ex. A in terms refers to the release deed, Ex. B. Under Section 9, T.P. Act, all transactions which are not required by any express provision of law [to be in writing can be entered into orally and there is no specific provision of law enacting that a charge can be created only by a document: of Imperial Bank of India v. Bengal National Bank Ltd. 1931 58 Cal 136 at p. 145, Bibhuti Bhusen Ghose v. Baikhuntha Nath Mondal (1935) 62 CLJ 55 and Mulla's Transfer of Property Act, Edn. 2, at p. 548. It is true that if the charge is created by a document, such document must be registered where the charge is for a sum in excess of Rs. 100. No difficulty on the score of registration arises in this case, because if Ex. B is to be held to be a document creating a charge, Ex. B has been registered. Reference may in this connexion be made to the decision of a Full Bench of this Court in Syed Ajam Sahib v. Ananthanarayana Iyer (1912) 35 Mad 95, where dealing with the creation of a lease, this Court held that a document executed by the lessee may constitute a lease when once it is accepted by the lessor. For the same reason, it might well be held that even if a document were necessary for the creation of a charge, Ex. B, when once it has been accepted by defendant 1, could suffice for the purpose. There is no provision of law which insists that such a document, if necessary, must also be signed by the person creating the charge. (See observations in Norton on Deeds, p. 26.)
5. Reliance was placed on behalf of the appellant on certain observations in Somasundaratn v. Nachiappa 1925 Rang 55, and. Makbul Ali v. Ali Ahmad (1913) 40 Cal 514. They really do not bear upon the question now before us. In the Rangoon case, a Court ordered security to be furnished as a condition precedent to grant of stay. But the decree-holder was content with an attachment that he had obtained and did not insist upon security being given. 'The learned Judges in those circumstances rightly held that no security apart from the attachment had been created. The headnote is somewhat misleading because it does not exactly reproduce any sentence in the judgment. The learned Judges no doubt refer to the form of documents prescribed by the Civil P.C. in respect of a security in favour of the Court. That is explained by the fact that they were dealing with a security intended to be given in favour of the Court which must presumably have been in accordance with the forms given in the appendix to the Civil P.C. In the case in. Makbul Ali v. Ali Ahmad (1913) 40 Cal 514, the question arose with reference to rent that a usufructuary mortgagee who had leased back the mortgaged property to the mortgagor himself claimed. The learned Judges held that rent as such could not be held to be a charge on the land and as the lease deed did not provide that the rent shall be a charge on the land the mortgagee could not claim the benefit of the security for the rent in the absence of a clear provision to that effect. Here again we see no justification for taking one or two observations in the judgment out of their context and reading them as upsetting what has been laid down or assumed in several decisions that a charge can be orally created.
6. Where the charge is oral the question of notice may assume importance, where it is sought to enforce it against a transferee of the property. But no authority has been brought to our notice which decides that a charge cannot be created except by a document in writing signed by the debtor. It was lastly contended that as the claim under the second head is one for contribution, the plaintiff who admits having collected other debts due to the partnership than those assigned by him under Ex. B, should not be permitted to claim contribution except on the taking of accounts of all the collections and disbursements made by him. This is a question of fact and cannot be permitted to be raised now for the first time. No such point was raised before the first Court nor even in the grounds of appeal. The statement appearing in the plaintiff's cross-examination was elicited incidentally in the course of an attempt to show that Ex. B had not been acted upon and not in the support of any defence of the kind now suggested. We have however examined the evidence to see whether there is any basis for this contention. In re-examination, the plaintiff states that he has paid Rs. 4,000 odd for debts which should in the ordinary course have been discharged by defendant 1. Taking this statement along with the one in the cross-examination which is now relied on by the appellants, we see no justification for allowing this plea to be raised at this stage. The appeal therefore fails and is dismissed with costs.
7. The memorandum of objections claims that the appellants should be directed personally to pay the costs of the plaintiff. The appellants are minors and we are not satisfied that the circumstances justify a departure from the usual course adopted in such circumstances. The memorandum of objections is therefore dismissed.