ALAPATI ANANDARAO Vs. PRESIDENT, CO-OPERATIVE CREDIT SOCIETY

JUDGEMENT

(1.) The appellants are the sons of the fourth respondent and are all minors. They filed a suit through their maternal grandfather as their next friend in the Court of the Subordinate Judge of Ellore for partition of the family properties and the setting aside of certain alienations made by their father. They attached to their plaint three schedules. Schedule A contained the descriptions of ten items of immovable property belonging to the family. Schedule B was a list of the family's movable properties, and Schedule C, a list of the debts owed by the family. Of the immovable properties, items Nos. 1 to 9 had been mortgaged by their father and item No. 10 had been sold. These alienations were said to be invalid so far as the interests of the appellants were concerned and it was also alleged that some of the debts were not binding on them. The mortgage of items Nos. 1 to 9 was in favour of the Co-operative Credit Society of Pedatadepalli, which is represented by its President, the first respondent. The appellant's father had been employed as Secretary of the Society and it was his duty to collect moneys from its debtors. Out of his collections he misappropriated amounts totalling Rs. 8,073-4-8. As security for Rs. 5,490-4-8 he executed a mortgage of items Nos. 1 to 9 in Schedule A, and for the balance of Rs. 2,583 he gave a letter acknowledging his liability. Item No. 10 was sold by the father to the second respondent who has transferred his interest in the property to the third respondent. The respondent society averred that all the immovable properties were the self-acquired properties of the father. After considering the evidence adduced by the parties, the Subordinate Judge found that items Nos. 1 and 9, half of item No. 2 and a quarter of item No. 10 represented ancestral properties, the rest being the separate estate of the father. The Subordinate Judge also held that the interests of the appellants in the ancestral properties were liable for the debts of the father to the respondent society. The finding of the Subordinate Judge that items Nos. 1 and 9, half of item No. 2 and a quarter of item No. 10 formed the ancestral properties is accepted, by all the parties. The appellants, however, say that the Subordinate Judge erred in holding that the other properties belonged to their father separately. They further say that the Subordinate Judge erred in holding that their interests in the ancestral properties are liable for their father's debts. These are the only two questions which arise in this appeal.

(2.) The finding of the Subordinate Judge with regard to the father's separate properties is not really open to serious question. When the father separated from his brothers about the year 1916 his share in the family, estate was confined to the properties which the Subordinate Judge has held to be ancestral properties and the income merely sufficed to maintain himself and his wife. The evidence of the father's own brother establishes this. The father, however, held the office of village karnam and was in receipt of its emoluments. He also entered into contracts for the construction of works for local boards and acted as a school master. The non-ancestral properties could only have been acquired out of the income he received from these occupations. We have no hesitation in concurring in the fin8ing of the Subordinate Judge on this question. The alienations of items Nos. 3 to 8, half of item No. 2 and three quarters of item No. 10 therefore cannot be challenged.

(3.) The contention of the appellants with regard to the finding of the Subordinate Judge that their shares in the ancestral properties are liable for their father's debts is this. Inasmuch as their father misappropriated moneys of the respondent society he committed a crime and in these circumstances they say that the resultant debt is not binding on them. This argument ignores a long line of decisions of this Court to the contrary. This Court has always held that where a father has lawfully received money the fact that he misappropriates it later will not change the character of the debt and the son is liable under the pious obligation rule. Where a person receives money on behalf of another a civil liability immediately arises and the fact that the person who has received it fails in his duty to pay it over to the person entitled to it does not alter the civil character of the debt - see Natessayyan V/s. Ponnuswami (1892) 3 M.L.J. 1 : I.L.R. 16 Mad. 99, Kanemar Venkappayya V/s. Krishna Charia (1907) 17 M.L.J. 613 : I.L.R. 31 Mad. 161, Thirnmalayappa Mudaliar V/s. Veerabhadra (1909) 19 M.L.J. 759, Venugopala Naidu V/s. Ramanathan Chetty , Garuda Sanyassayya V/s. Narella Murthenna , Venkatacharyulu V/s. Mohana Panda and Ramasubramania Pillai V/s. Sivakami Ammal (1925) 21 L.W. 606.