MAHANTH SINGH Vs. U BA YI

JUDGEMENT

(1.) The facts in this case can be shortly stated. The plaintiff who is a building contractor was employed by the four trustees of a pagoda known as the Kyaikasan Pagoda. The terms of the employment are set out in a written agreement dated 1 January 1933, and expressed to be made between the Board of the Kyaikasan Pagoda Trustees and the appellant. It is signed by the appellant and each of the trustees. The respondent was trustee of the estate of a lady called Daw Dwe who had left certain property for charitable purposes. He was not a party to the contract but had orally guaranteed its due performance by the trustees, and in Burma such a guarantee is binding though it is not in writing. The appellant fulfilled his contract and there was due to him a sum of Rs. 26,082-8-6, less, as the learned trial Judge found, a sum of Rs. 158, which had not been paid. The appellant thereupon instituted the present action on 21 May 1934, in the High Court in its original jurisdiction, claiming the former sum against the four trustees and the respondent. In the plaint each of the trustees was named as a defendant and after their names were added the words "All the above four are trustees of the Kyaikasan Pagoda, Thingangyun, and are sued in that capacity."By his prayer the plaintiff asked for relief against each of the defendants personally and against the respondent in particular as the trustee of Daw Dwe's trust. The sum awarded by the learned trial Judge was obviously due from the respondent and from the trustees personally, but the appellant seems to have thought that his remedy was not against the named trustees but against any one who might from time to time be trustee of the pagoda.

(2.) Shortly after the suit had been begun, the four trustees were removed from their position as trustees of the pagoda, and eight others were appointed in their place. The appellant thereupon made an interlocutory application asking originally to add the eight new trustees as defendants and ultimately to substitute the new trustees in place of the old. The application was granted on 20 June 1935, and thereupon the names of the four original trustees were struck out and those of the new trustees inserted in their place. When however the case came on for trial and before the hearing on the merits, the learned trial Judge suggested that the liability of the original trustees was a personal one and that no liability attached to the new trustees. Thereupon the appellant on 24 March 1936 applied to replace the names of three out of the four original trustees (the other having died) as defendants. To this application the trial Judge refused to accede. He held that he had jurisdiction to grant it under O. 1, R. 10 and O. 6, R. 16 (R. 17 ?), Civil PC, but he did not think that the appellant should be allowed to change his mind again in the course of the proceedings. The eight trustee defendants were, he thought, entitled to have their case disposed of, more particularly as in his view the appellant would probably be able to pursue his remedies against the original trustees in another suit though to do so might expose him to a liability for some extra costs.

(3.) The suit then proceeded to trial, the claim against the new trustees was dismissed and the respondent found liable as guarantor. From this decision the respondent appealed to an Appellate Bench and in that appeal for the first time put forward the contention that the learned Judge erred in law in holding him liable. His liability, it was suggested, should have been held to be discharged by the act of the present appellant in forgoing his claim against the original trustees. The learned Judges of the Appellate Bench, whilst rejecting all the other grounds of appeal, held that this contention was well founded, allowed the appeal and condemned the appellant in costs. The question argued before their Lordships was whether they were right in so doing. The grounds upon which in circumstances material to the present case a guarantor may be discharged from his liabilities are well established and indeed were not in issue. A surety is discharged if the creditor, without his consent, either releases the principal debtor or enters into a binding arrangement with him to give him time. In each case the ground of the discharge is that the surety's right to pay the debt at any time and after paying it, to sue the principal in the name of the creditor is interfered with. To hold that in such cases the creditor still retained his right against the surety, and that the surety on his part could still sue the principal debtor, would mean that the release or grant of time was of no effect inasmuch as the debtor would still be liable at any moment to an action at the suit of the surety.