Assignment in writing of all the assets and liabilities of assignor without endorsement of the pronote in favour of assignee.

This civil revision petition is filed as against the judgment and decree of the District Munsif of Tirupati in S.C.S. No.741 of 1950 dismissing the plaintiff’s suit on the ground that he had no right to sue on the promissory note, Exhibit A-6. The case of the plaintiff was that the first defendant and defendants 3 and 4 as sureties executed the suit promissory note on 17th August, 1949, for Rs.450 in favour of the Tamil Nad Commercial Fund, Ltd., Kumbakonam, with its branch at Tirupati, and that as all the assets and liabilities of the Tamil Nad Commercial Fund, Ltd., were transferred to the second defendant, the Tirupati Commercial Fund, Ltd., the second defendant become entitled to the amount due under the promissory note, and that as the second defendant transferred the promissory note to the plaintiff, he was entitled to sue and recover the amount from defendants 1, 3 and 4.

While the third defendant remained ex parte, defendants 1, 2 and 4 resisted the suit. The main contention of the first and the fourth defendants was that as the promissory note was not endorsed by the Tamil Nad Commercial Fund, Ltd., Kumbakonam, in favour of the Tirupati Commercial Fund, Ltd., i.e., the second defendant, no title passed to the second defendant in the promissory note, and that the endorsement of the second defendant in favour of the plaintiff was of no avail. The District Munsif upheld the contention of the defendants, and held that the suit was not maintainable. He also held that if the promissory note was enforceable, only a sum of Rs.97-3-0 was due thereunder. The plaintiff has filed the civil revision petition under section 25 of the Provincial Small Cause Courts Act against the decree and judgment of the District Munsif.

The District Munsif is wrong in holding that the agreement of transfer executed by the Tamil Nad Commercial Fund, Ltd., in favour of the second defendant is not a completed transfer, and that the assets and liabilities have not been trans-ferred to the second defendant. A reading of the terms of Exhibit A-8 clearly shows that all the assets and liabilities were transferred under the agreement which was duly given effect to. As a result of the transfer in writing, the second defendant has become entitled to the amount due under the promissory note. It is unnecessary for me to deal with the effect of sections 130 and 137 of the Transfer of Property Act, as there is an agreement in writing evidencing the transfer.

The main contention of the learned advocate for the respondents was that as the promissory note was not duly endorsed by the Tamil Nad Commercial Fund, Ltd., in favour of the second defendant, no title passed. He relied mainly upon the decisions reported in Pattat Ambadi Marar v. Krishnan1and Abboy Chelti v. Ramachandra Rau2, in support of his contention. It is no doubt true that in Pattat Ambadi Marar v. Krishnan1, it was held that without endorsement there could not be negotiation of a promissory note payable to order. This was followed in Abboy Chetti v. Ramachandra Rau2, Muttuswami Ayyar, J., who was a party to the decision in Pattat Ambadi Marar v. Krishnan1, held in Abboy Chelti v. Ramachandra Rau2, that the ground of the prior decision was that a promissory note could not be negotiated by the mere execution of a deed of assignment. In A.S. No.175 of 1897, Shephard, Offg. G.J. and Moore, J., considered the effect of the decision in Pattat Ambadi Marar v. Krishnan1and held as follows:-

According to English law it is clear that a promissory note may be assigned by the holder just like any other chose in action, the assignee taking the rights which his assignor has to convey and no more. (Whistler v. Forster3.) He does not obtain the title according to law merchant which an endorsement would give him, nor could he, before the Judicature Act, sue in his own name, but the transfer is nevertheless valid as an equitable assignment. There is no reason why in this country an assignee of this particular so