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Present: Ennis J. and Shaw J.
ABEYASEKERA v. GUNASEKERA.
102—D. C. Kalutara, 7,259.
Specific performance—Want of mutuality—Promise deliberately made.
Anaction forspecific performance lies under our lawif.there is
reasonable cause to support the contract.
Therule thatspecific performance should be refusedforwant of
mutuality must be considered from the point of view of Roman-Dutch law, and not of English law.
T1 HE facts are set out in the order of the District Judge, AllanA Beven, Esq.: —
This is an action forspecificperformance,andplaintiffasks that
defendantbe orderedto execute a conveyance of half shareofplaintiff’s
leasehold interests mentioned in deed of agreement 13,863 of November10, 1915 (D 2). The factsare asfollows. Thedefendant took on lease
for a period of eight years 100 acres of rubber land on indenture oflease 13,860 of November10, 1915(D1), for a sumof Rs.35,000. At
theexecution of thelease the sum of Rs. 10,000 was paidonthe same
day the plaintiff and' defendant; entered into the deed of agreement D 2,whereby defendant agreedto*assignover to plaintiff,subjectto certain
covenants, half of the leasehold interests, whenever plaintiff pays defend-ant the sum of Rs. 7,500 within two years from the date of the agreement.
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The covenants referred to are:(1) the defendant was to carry on the
lease and incur expenditure,and, afterlooking into accounts,ifthe
expenditure and the intereston Bs. 15,000 at 12 percent,perannum
exceed the income accruing from the property, the plaintiff should paythe defendant half of the sum in excess; (2) if the income exceed theexpenditure and interest,halfof the profitshall beregardedaspaidby
the plaintiff to defendant and set off against the sum of Bs. 7,500 dueby him; (3) whenever within twoyears thesumofBs. 7,500or the
balance found to be due is paid,defendantwastoexecute atransfer
of half his interests to plaintiff; (4) in default of his doing so, this deedwas to be cancelled;(5) if defendant failed to make the transfer on
payment being made of the Bs. 7,500, plaintiff had the right to sue him.
The defendant contends there is no consideration for, and wantof mutuality in, the agreement, and therefore the Court cannot givethe plaintiff the reliefheseeks. This being acontract forspecific
performance, the principles of English law are applicable.
It is quite clear that at theexecution of the contractthesumagreed
upon between the parties was Bs. 7,500. It is not alleged that thissum was tendered to plaintiff, but he alleges that, as the income of theleasehold interests exceeded that sum, the defendant was bound, intermsoftheagreement,tomake aconveyance of halfhisinterests.
But it is essential in a contract such as this that plaintiff must showsome real, substantial consideration proceeding from himself, and thatconsideration must beascertained atthe time of the execution of
In this case there is nothing proceeding from him to defendant. Asregards want of mutuality, the agreement is manifestly unfair and one-sided. There is nothinginthe contractto compelplaintifftopaythe
consideration and take thetransfer. Defendant canbringanaction
onlyafterthe expiry of two years.Heclaimsnowin reconvention only
because plaintiffinstituted thisaction. Theagreementbecomesnull
and void if plaintiff within two years fails to pay the sum of Bs. 7,500.It will beseen,therefore,thatthe contract isunilateral, thedefendant
having no rights at all.
Ihold,therefore, that for wantofconsiderationand ofmutuality, and
on the ground of unfairness and hardship on defendant, plaintiff cannotmaintain this action, which is dismissed, with costs.
The deed referred to in the case was as follows: —
D 2.—Know all men by these presents.
Thedeed ofagreemententered intoby andbetween thetwoparties,
Nelis CornelisgeDon ThamolisGunasekeraAppuhamy,ofKalutara,
in the totamune of Kalutara, hereinbelow called the party of the firstpart, ontheone part,andBennetFrancisAbeyesekera,ofKalutara
aforesaid, hereinbelow called the party of the second part, on the otherpart, purports, to wit:—
It was agreed that out of the lease for a period of eight years of thesoilandthe rubber, plantains,andothertreesthereonof the rubber
landcalled Wadiyakanda, containingin extentabout «onehundred acres,
bounded, &c., in the Mawatapattu of Paranakuru koraleinFour
Korales, in the District of Kegalla, in the Province of Sabaragamuwa,taken upon lease deed No. 13,860, attested on November 10,1915, by
D. J. Fernando,Notary Public,by me, theparty ofthefirstpart,
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1918. one-half share shall be assigned over unto the party of' the second part
Abeyaaekera *** me>P^ty of the first part, subjeot to the undermentioned
u.covenants,wheneverthe partyofthesecond partpays the sum of
Gunaeekera Bs. 7,500 within two years from the date hereof.
The said covenants are: —
That the party of the first part shall carry on the leasefromthe
date hereof, and whilst carrying on the lease the expenditure and theinterest on Ks. 18,000 at the rate of 12 per cent, per annum and theincome accruing shall be looked into, and if the expenditure andinterest exceed the income, the party of the second part shall pay untothe party of the first part one-half share of the said sum in excess, andif the income exceed theexpenditure andinterest, one-half share ofthe
said profitshall beregarded aspaidbythepartyofthe second part to
the party of the first part.
Thatif the party of the secondpartfailtopay the Bs. 7,500
within twoyears asaforesaid,andanysumdueasaforesaid, the said
sum, or if any amountis credited to theparty of the secondpartas
excess of profits, the said sum shall * be deducted from the said sum ofBs. 7,500, and the balance sum shall be paid, and the half share of thelease shall be taken over, and in default this deed shall be cancelled.
That when the party of the first part so executes the deed, thesame shallbe executedas alease, so thattheleaseorone-halfshareof
the leasecannot beassigned over to any outsiderbutto thepartyof
the first part, and to accept the same. .
Thatif the party ofthe secondpartpay theamountuntothe
party of the first part asaforesaid withintwo years, one-halfshareof
the lease shall be delivered over by the party of the first part upon adeed of assignment or a lease deed, and in default of such delivery theparty ofthe second partshall obtainaproperright by processof
Bawa, K.C., (with him J. S. Jmjawardene and Candkaratne),for appellant.
Drieberg, for respondent.
June 26, 1918. Ennis J.—
This was an action for specific performance of an agreement toassign a half share of a lease. Several issues were framed, and thecase dismissed on the first issue, which was heard as a preliminaryissue. By the agreement D 2 the defendant promised to convey half. share of a lease to the plaintiff “ whenever the plaintiff paid the sum ofBs. 7,500 within two years.” The agreement was subject to certain“ covenants, " the plaintiff was to carry on the lease, and if the incomeexceeded the expenditure, half the profits were to be " regardedas paid ” to the plaintiff, while if the expenditure exceeded theincome, half the loss was to be deducted from the sum of Bs. 7,500.In default of payment the agreement was to be cancelled.
The first issue was:“ Is there an absence of consideration for,
and mutuality in, the agreement sued upon? If so, can the plaintiffmaintain this action?”
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In the agreement the plaintiff made no promise "to pay the sum ofEs. 7,500. The only promise is that by the defendant. Further,the agreement does not disclose any consideration, in the Englishsense of the word, for the option given to the plaintiff. By Roman-Dutch law, however, any reasonable cause is sufficient to supporta contract, and any nude pact made deliberately and in earnest isbinding and begets an action (Pereira: Laws of Ceylon, 2nd ed,tpage 566). There can be no question in the present case that theagreement was deliberately made: it is in writing notarially executed.
The learned Judge held that as the action was one for specificperformance the principles of English law applied. Specificperformance was not, however, unknown to Roman-Dutch law(Pereira, ib., page 578), and the rule that specific performance shouldbe refused for want of mutuality must be considered from theRoman-Dutch point of view. No issue as to whether there was a“ reasonable cause ” for the agreement was raised in the case, andin the absence of evidence it must be presumed that there was areasonable cause for a promise so deliberately made; and presuminga reasonable cause, there is no want of mutuality, as the doctrine ofmutuality is understood in England (Arnold v. The Mayor of Poole 1).In the circumstances I am of opinion that the appeal should beallowed, and the case sent back for further proceedings on the other
issues. I would order accordingly, with costs.
Shaw J.—I agree.
ABEYASEKERA v. GUNASEKERA