KISEN GOPAL BOGREE Vs. LJBAVIN

JUDGEMENT

(1.) In the early part of 1923 the Eastern Machinery and Engin. Co., Ltd. sold and delivered to Messrs. Kilburn & Co. a lathe, the price of which was Rs. 2,000-2-0. An allowance of Rs. 200 was claimed by Messrs. Kilburn & Co. which claim was admitted. There remained therefore due and owing to the Company by and from Messrs. Kilburn & Co. a sum of Rs. 1,800-2-0. One Kissen Gopal Bogree claims to be entitled to the same by virtue of an assignment alleged to have been made by the Company on the 17 May 1923. The liquidator submits that if an assignment was made it was a fraudulent preference on the part of the Company and therefore invalid; and secondly, that the assignment, such as it is, does not operate in law as a valid assignment. The assignment which is on the back of the bill against Messrs. Kilburn & Co., is in these terms: "Messrs. Kilburn & Co., kindly remit to Babu Kissen Gopal Bogree, who will collect on our behalf for and on behalf of the Eastern Machinery and Engineering Co., Ltd. Metcalf & Co., Secretaries."

(2.) The sole question, therefore, which I have got to determine on this application is whether the above words amount to an assignment of the debt due to the Company within the meaning of Section 130 of the Transfer of Property Act. It was a well-known rule of the Common Law that no possibility, right, title or thing in action could be granted to third persons, because it was thought that a different rule would be the occasion of multiplying contentions and suits. At Common Law a debt was looked upon as a strictly personal obligation and an assignment of it was regarded as a mere assignment of a right to bring an action at law against the debtor. Hence the assignment was looked upon as open to the objection of maintenance (see Hawkurs Pleas of the Crown, Vol. I, 458); after a time the Common Law Courts recognized the right of anyone who had a pecuniary interest in the debt to sue in the name of the creditor. This was the limit of their departure from the old strict rule. But the Courts of equity took a different view: see Row V/s. Dawson [1749] 1 Ves. 331. Courts of equity admitted the title of an assignee of a debt regarding it as a piece of property, an asset capable of being dealt with like any other asset, and treating the necessity of an action at law to get it in as a mere incident: see Prosser V/s. Edmonds [1835] 1 Y. & C. 481, Every such assignment was considered in equity as in its nature amounting to a declaration of trust, and to an agreement to permit the assignee to make use of the name of the assignor in order to recover the debt or to reduce the property into possession. The doctrine of the Courts of equity is so nearly coincident with the rules obtaining in the civil law and in the jurisprudence of the modern commercial nations of continental Europe that perhaps I may be allowed to quote the following passage from Pothier on Sales (Ed. Cushing): "A credit being a personal right of the creditor, a right inherent in his person, it cannot, considered only according to the subtlety of the law, be transferred to another person nor consequently be sold. It may well pass to the heir of the creditor because the heir is the successor of the person and of all the personal rights of the deceased. But in strictness of law it cannot pass to a third person; for the debtor being obliged towards a certain person cannot by a transfer of the credit, which is note an act of his, become obliged towards another The jurisconsults have nevertheless invented a mode of transferring credits without either the consent or the intervention of the debtor as creditor may exercise against his debtor by a mandatory as well as by himself the action which results from his credit. When he wishes to transfer his credit to a third person he makes such person his mandatory to exercise his right of action against the debtor. It is agreed between them that the action shall be exercised by the mandatory in the name indeed of the mandatory, but at the risk and on the account of the mandatory who shall retain for himself all that may be exacted of the debtor in consequence of the mandate without rendering any account thereof to the mandator. Such a mandatory is called by the jurisconsults procurator in rem suam. From this it was established in practice that credits might be transferred, given, sold or disposed of by any other title, and it was not even necessary that the act which contains the transfer should express the mandate in which, as has been explained, the transfer consisted." In order to constitute an assignment of a debt or other chose an action in equity not particular form is necessary. An assignment of a chose in action must be made by writing under the Indian Law, signed by either the transferrer or his duly authorized agent, but, as stated above, no particular form of words seems to be necessary provided that the words used are sufficiently indicative of the transferrer's intention to assign the chose in action. As was observed by Lord Macnaghten in Brandts V/s. Dunlop Rubber Co., [1905] A.C. 454: "It may be addressed to the debtor. It may be couched in the language of command. It may be a courteous request. It may assume the form of mere permission. The language is immaterial if the meaning is plain. All that is necessary is that the debtor should be given to understand that the debt has been made over by the creditor to some third person and order for payment of money is, however, not the same thing as an assignment of the debt, but a direction in writing to pay the amount due on an instrument endorsed on such instrument by the payee thereof coupled with the delivery of the instrument so endorsed to the person to whom payment is directed is a valid assignment within the meaning of Section 130: see Rama Iyen V/s. Venkatachellam [1906] 30 Mad. 75. Therefore the test is in a case like this whether or not the right of the seller of the goods to the price of the same has been transferred to a third party by an effectual assignment that the assignee becomes entitled as of right to the payment. Now I have given to the words used in the present instance by the Company my most careful consideration and I am of opinion that they do not amount to anything more than a mere order for the payment of money due by Messrs. Kilburn & Co. In my judgment the words used do not amount to an assignment within the meaning of Section 130 of the Transfer of Property Act.

(3.) The result, therefore, is that in my opinion the Official Liquidator is not bound to pay the sum claimed to Kissen Gopal Bogree. The latter must pay the costs of this application. All other costs to be retained by the liquidator out of the assets.