Fernando Et Al. V. Jayasinghe Et Al.,

1933 Present: Dalton A.C.J. and Maartensz A.J.

FERNANDO et al. v. JAYASINGHE et. al.

92-D. C. Colombo, 30,181.

Registration of Business Names-Contract entered into by person in default-Assignment of rights under contract-Action by assignee-Ordinance No. 6 of 1918, s. 9.

The disability imposed by section 9 of the Business Names Registration Ordinance upon a person who has failed to comply with the provisions of the Ordinance does not extend to a bona fide assignee of the contractual rights of the defaulter.

THIS was an action instituted for the recovery of arrears of rent on a hire purchase agreement entered into by the plaintiff, who was carrying on business as Ceylon Auto-Carriers Company, and the defendants on May 28, 1926, by which the plaintiff hired to the defendants a Stewart bus according to certain terms.

On November 7, 1930, the plaintiff by deed No. 1,039 assigned the business carried on by him to Avitchi Chettiar, who was added as a plaintiff on February 18, 1931. The added plaintiff filed his plaint on March 6, 1931, in which he claimed the arrears of rent sued for by the plaintiff. The defence to the action were (1) that the District Court had no jurisdiction to entertain it, (2) that the plaintiff had failed to comply with the requirements of the Business Names Registration Ordinance. The learned District Judge overruled the first objection and upheld the second. He held that the added plaintiff being an assignee of the plaintiff could be in no better position and could not maintain the action.

H. V. Perera (with him Rajapakse, Nadesan, and D. W. Fernando), for plaintiff-appellant and added plaintiff-appellant.-The plaintiff is not a defaulter under section 9 of Ordinance No. 6 of 1918. Prima facie he has purged his default by the registration effected on May 14, 1928 (P 5). The plaintiff and one Thambyah were carrying on business under the name of Ceylon Auto-Carriers Company at the date of the execution of the hire purchase agreement sued upon. There is nothing to show that they had not registered their business name under the provisions of Ordinance No. 6 of 1918. On the contrary there is documentary evidence from which it may be inferred that the business of plaintiff and Thambyah was registered. P 5 is a certificate of registration granted pursuant to a statement of change under section 7 of the Ordinance. A certificate in the Form P 5 can only be granted if there has already been a prior registration of a business and a change has taken place in respect of such business. Therefore the registration (P 5) cured not merely the default of the plaintiff but also the default of the plaintiff and Thambyah, if there was any default at all.

The added plaintiff is the assignee of the business of the plaintiff. He is an innocent assignee for value. Even if plaintiff is a defaulter under section 9 of the Ordinance an innocent assignee for value from him is not affected by such default. This point is covered by cases decided in the English Courts. Section 8 (1) of the Registration of Business Names Act, 1916, is the same as section 9 of our Ordinance. It has been held under section 8 (1) of the English Act that the disability imposed by section 8 is limited to the defaulter and does not pass to his innocent assignees. (Daniel v. Rogers 1[(1918)2 K .B.228]; Hawkins and another v. Ducho.2[(1921)3 K .B 226]) These cases are in point and support the contention that the added plaintiff is not affected by the default of the plaintiff.

H. E. Garvin (with him S. Alles), for defendants, respondents.-The default committed is the default of plaintiff and Thambyah and it cannot be cured by registration by the plaintiff alone. Registration to purge this default must be by both plaintiff and Thambyah. Until such registration the hire purchase agreement is not enforceable.

The added plaintiff is not an innocent assignee. He had notic

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