Samuel Pillai v. Ananthanatha Pillai

1. The plaintiff obtained a decree in the Small Cause Suit 226 of 1882 against the defendant for Rs. 415-1-0 on foot of a promissory note to the plaintiff, dated the 8th of April 1881, payable on demand, and costs.

2. The defendant applied in Revision to set aside that decree on the following grounds:

(1) That there was no consideration for the note.

(2) That there was no liability on the part of the defendant to pay the debt due by his father which was barred by limitation.

3. On the 26th January 1883, by order of that date, we requested the Subordinate Judge to say what the consideration was which he found to support the defendant's promise, and whether he decided that the debt due by the defendant's father, apparently barred by limitation, was sufficient consideration for the defendant's promise.

4. The Subordinate Judge reports that he found' there was deposited with the defendant's father by the plaintiff Rs. 700, at interest, which interest was for the benefit of plaintiff's wife, the sister of the deceased, and that he decided that the period of limitation was 30 years from the date of the deposit. Admittedly this action is within that time and, therefore, he found the plaintiff's claim was not barred by limitation, when defendant gave the note sued on. The evidence, however, does not prove that the deposit of the money was anything more than a sum placed at interest with the deceased on his own credit. Foley v. Hill 2 H.L. Cal. 28. He was not prohibited from using it, and he was not bound to keep it investing in any particular way.

5. There is nothing to show that the deceased was trustee of the fund in any way. We therefore do not agree with the Judge that the deceased held the money on deposit within Article 145 of Schedule II of the Limitation Act.

6. The Subordinate Judge states that, even if the money was lent to defendant's father by the plaintiff, the debt due (though barred by limitation when the note was made) would be a good consideration for the promissory note, and he referred to Section 25 Clause 3,1 of the Contract Act. Raghoji Bhikaji v. Abdul Karim I.L.R. 1 Bom. 560, Chatur Jagsi v. Tulsi I.L.R. 2 Bom. 231.

7. The evidence shows that the defendant's father died in 1878, and was a rich vakil, and left assets for more than sufficient to pay all debts due by him, and that defendant's stepmother took out letters of administration to his estate while the defendant was a minor; that after the defendant attained majority (before the date of the note, 8th April 1881) the accounts of the deceased and of the defendant's stepmother were looked into. The plaintiff claimed a debt of Rs. 780, but this claim was disputed by the defendant, although the admin-istratix admitted it to the extent of Rs. 700 and wished that it should be paid. Defendant alleged that he was compelled by duress to sign the promissory note, but the Judge does not believe this. On the same day that the note sued on was made, a deed of division was signed, giving the defendant his share of his father's property and bonds were executed to the defendant and by him.

8. Previous to and on that day defendant's stepmother, the administratrix of the deceased, admitted the claim of plaintiff for Rs. 700, and defendant admits that she signed on that day a promissory note to the plaintiff for Rs. 300, part of that claim.

9. Kannusami Pillai and Amirtham Pillai stated that, if the defendant had not signed the note sued on, the deed of division would not have been signed. It is plain then that the defendant applied to the administratrix of his father for his share of the assets and that the administratrix considered the plaintiff's claim of Rs. 700 should be paid, and refused to execute to defendant a deed of division unless he signed the promissory note for Rs. 400, part of the debt, for the remainder of which, she, on that day, gave a note for Rs. 300.

10. We think that we ought not to interfere with the decision of the Subordinate Judge, as it appears to us, there was sufficient consideration for the defendant's promise.

11. The Rs. 700 was, as the Judge found, placed by the plaintiff with the father of the defendant, at interest, and was not repaid to plaintiff. It was, therefore, a debt due to plaintiff and he could have recovered the amount, unless barred by limitation, from the administratrix and from the defendant out of assets of defendant's father in their hands.--Contract Act, Section 25, Clause 3. The executrix and the defendant might have refused to pay the debt on the ground of limitation, but they did not do so.

12. The receipt by the defendant of assets of the debtor, his father, more than sufficient to pay his debt, was sufficient consideration to him for giving the promissory note to the plaintiff for a debt already barred by limitation. A deed of division and the actual division and delivery by the executrix to the defendant of the assets took place at the same time that the defendant gave the promissory note.

13. Whatever consideration would support a simple contract is sufficient consideration for the promissory note.

14. This was the law before the Bills of Exchange Act. It is so now by the Bills of Exchange Act, 1882, Section 27 (45, 46 Vic, C. 61).

15. The Contract Act of 1872, Section 2, Clause (d), provides that when at the desire of the promisor, the promisee or any other person does or promises to do something, such act or promise is called a consideration for the promise.

16. Here it is proved that the defendant requested his stepmother to deliver him his share of his father's assets, but that she stated the debt to the plaintiff was due, and that defendant should pay part of the debt, as he was to receive part of the assets. She agreed to pay the defendant his share out of the assets, if he agreed to pay his share of the debt, and this the defendant agreed to do. Thereupon the defendant's stepmother gave him his share of the assets.

17. If he did not agree to sign the note and if he did not do so, the division would not have been made, or the property (as we understand the evidence) would not have been delivered to the defendant.

18. The making of the note by the defendant and the execution of the division deed and delivery of the property by the defendant's stepmother, were contemporaneous acts.

19. Although the plaintiff's claim may have been barred by limitation and he might not be able to recover it by suit, still the administratrix was entitled to pay the same out of the assets of the deceased received by her and to have credit for such payment in her account as administratrix. Instead of doing this, an agreement was made between her and the defendant that she would hand over to the defendant his share of the assets without deducting that debt, if he would give the note sued on for his share of such debt. She was bound in law, no doubt, to do the act of handing over to defendant his share of the assets left after deducting the full debts of his father. But she was not bound to hand over the assets without deducting such debt. This handing over without deduction is the act which she did at the defendant's request, and this act was consideration within the Contract Act, 1872, for the promissory note sued on which she required to be given to provide for that debt.

20. The absence of consideration between the plaintiff and the defendant is not material under the circumstances, as the defendant received consideration from the administratrix. It was stated in argument that plaintiff was not present when the note was made, and that the note was given to the administratrix to be, and that it was handed by her to the plaintiff on account of the sum of Rs. 700.

21. Even if the defendant had not received such consideration from the administratrix or from the plaintiff, yet if the promissory note was made payable to the plaintiff at the request of the administratrix for her accommodation, and if it was delivered to her to be, and if it was handed over by her to the plaintiff in discharge of part of his debt, the want of consideration to the defendant would be immaterial, and the defendant could not plead nudum pactum in this action, as the plaintiff and defendant would not then be the immediate parties.

22. Munroe v. Bordier 8 C.B. 862.

23. We think the petition should be dismissed with costs.

1 Agreement without consideration void.

[Section 25 : An agreement made without consideration is void unless Or is a promise to pay a debt barred by limitation Law.

(3) it is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in that behalf, to pay wholly or in part a debt of which the creditor might have enforced' payment but for the law for the limitation of suits. In any of these cases, such an agreement is a contract.]