SANTURAM HARI Vs. TRUST OF INDIA ASSURANCE CO

JUDGEMENT

(1.) ON February 4, 1937, the plaintiff applied to the first defendant company for the issue of an endowment life policy for Rs. 2,000 on the joint lives of himself and his wife. The proposal was accepted, and a policy was issued on April 8, 1937. The plaintiff's wife died on January 14, 1940.

(2.) ON August 15, 1937, the plaintiff assigned the policy to defendant No. 2 who forwarded it to the first defendant company for registration, and the assignment was duly registered by the first defendant company on February 8, 1940. ON the face of it this assignment is absolute in form,; but it is clear that it was intended only to be by way of security. ON March 14, 1941, defendant No. 2 informed the first defendant company that his claim in respect of the policy was restricted to his interest in the policy money as the first mortgagee in respect of the moneys advanced by him on the security of the policy. But, as I shall presently point out, it makes no difference to the position in law whether the assignment by the plaintiff to defendant No. 2 was an absolute assignment or merely an assignment by way of security.

(3.) RELIANCE has been placed on a decision in Muthukrishrder v. Veeraraghava Iyer (1913) I. L. R. 38 Mad. 297. In that case it was held that a mortgage in writing of a promissory note, executed in favour of the mortgagor by a third party for a debt, creates an assignment of the promissory note in favour of the mortgagee even without an endorsement, and as the right of the promisee to sue on the note becomes vested in the mortgagee, the mortgagee alone is entitled to sue on the note, and in taking accounts of the mortgage, the mortgagee is liable to be debited with the) amount of' the note if he without any justification allows the recovery of the debt barred by limitation. At p. 300 of the judgment White C. J. says : The rights, of the transferor being vested in the transferee, by the express words- of the section, the transferee is the only party entitled to sue, and this being so, he is, I think, accountable to the transferor for having, allowed the remedy to become time-barred.