BOMBAY COMPANY LIMITED Vs. OFFICIAL ASSIGNEE OF MADRAS THE ASSIGNEE OF THE ESTATE AND EFFECTS OF PSEETHAPATHI IYER, AN INSOLVENT

JUDGEMENT

(1.) This is an appeal from an order of Mr. Justice Coutts Trotter in the Insolvency of one Seethapathy Iyer who was formerly a dubash of Messrs. Dymes and Co and afterwards of the Bombay Company who took over the business, directing the Bombay Company to repay to the Official Assignee as representing the estate of the insolvent Rs. 27,243-13-0, which the Bombay Company had appropriated out of monies belonging to him in reduction of the loss the above firms had sustained in transactions with one V. V. Somasundaram Chetty, which Seethapathi had guaranteed under his dubash agreement. The ground upon which the refund was directed was that the effect of the arrangement entered into by the Bombay company with Somasundaram Chetty was to release the dubash from his liability as surety. Assuming for the moment that the effect of this agreement was to release the surety from all further liability, I am not satisfied, and no authority has been cited to show that this surety also became entitled to recover the monies which he had already paid under his contract of suretyship, but before dealing further with this point it will be as well to set out the facts as they appear in the evidence.

(2.) On 15th June 1915 as appears from Ex. 2, the Bombay Company terminated Seethapathy s employment as dubash and about the same time, as appears from the same Exhibit and their accounts Ex. C. (3) they realised the promissory notes deposited with them and appropriated the proceeds and the other monies standing in their books to the dubash s credit, some Rs. 33,940 in all, to the losses they had sustained on the various transactions for which he was responsible.

(3.) There was no specific appropriation to the various heads of loss, but, assuming the other losses to have been met in full this balance of Rs. 27, 000 remained and must have been appropriated to the loss sustained in the transactions with Somasundaram.