*(1918) A. D. at 465-66.* (1944) 45 N. L. R. 198.
filed, it has been assumed that the English law of conversion wets partof our law. The question as to whether the law governing the r'ght ofaction was not Roman-Dutch law does not there appear to have received’consideration. Certainly, an earlier decision of this Court in Thomsonv. Mercantile Bank1, where it had been held that it was the Roman-Dutch law that should be applied had not been cited or considered.
In the case before us for decision, the issue having been raised as towhether the plaint disclosed a cause of action against the defendant,an answer to it required to be considered on the basis of the law appli-cabe, i.e., whether it was the English Law or the Roman-Dutch Law.The action being one founded on a delict, in my opinion, the Roman-Dutch law called to be applied. On the pleadings it was manifest thatthe action was one for conversion, and such an action was not available.The issue should therefore have been answered against the plaintiffs.
There is one point remaining that needs consideration by us. In thesavings clause of the Bills of Exchange Ordinance (Cap. 82)—section98 (2)—it is enacted that
“ The rules of the common law of England, including the law merchant,save in so far as they are inconsistent with the express provisions ofthis Ordinance, or any other enactment for the time being in force,shall apply to bills of exchange, promissory notes and cheques.”
The learned trial judge was inclined to take the view that, as section3 of the Civil Law Ordinance (Cap. 79) had introduced into Ceylon thelaw of England with respect to banks and banking, that section andsection 98 (2) of the Bills of Exchange Ordinance had the effect of makingavailable in Ceylon the right of action given by the English commonlaw to a person placed in the position of the plaintiffs’ firm. It wasbrought to our notice that this court in Bank of Ceylon v. Kulatilleke*,in holding that the drawer of a cheque was entitled to succeed in aclaim against a collecting banker for recovery of the sums paid out onfraudulently altered cheques, has stated that in view of section 3 of theCivil Law Ordinance the case fell to be decided according to the law ofEngland. It was submitted to us that this case has not been correctlydecided. It is sufficient to observe that the question whether theaction was really one where the banker was sought to be made liable onthe basis of conversion did not receive attention by the court; nor werecertain relevant authorities referred to in the judgment of the court.
Section 98 (2) of the Bills of Exchange Ordinance was, in my opinion,only intended to apply to any omissions or deficiencies in the Ordinancein respect of the law relating, inter alia, to cheques, and cannot form thebasis of a proposition that, where the delict of conversion was in relationto a cheque, therefore the English common law of conversion is introducedinto our law.
2*—R 8848 (9/66)
In Hongkong and Shanghai Bank v. Krishnapillai1, where an applica-tion had been made by the assignee in insolvency for an order of courtto sell certain shares alleged to be the property of the insolvent, an appli-cation resisted by certain banks to which shares had been pledged withright to sell without reference to court, Drieberg J. (with whom Garvin
J.agreed) stated:—“ It was contended that as Ordinance No. 22 of1866 (the Civil Law Ordinance) introduced into the Colony the law ofEngland in all questions relating to banks and banking they have thesame rights in the matter of realizing these securities as they wouldunder the law of England. But the right of a pledgee to sell his securitieswithout recourse to a court of law is peculiar to the English law of pledgeand the common law of the land in the matter of rights of mortgageand pledge does not give place to the English law when the mortgageeor pledgee is a bank ”. This decision was followed in an analogous caseby Howard C. J. and Keuneman J. in Mitchell v. Fernando 2 where it wasunsuccessfully sought to maintain an argument that, as the Civil LawOrdinance introduced into Ceylon the law of England with respect tojoint stock companies, therefore a mortgage of shares in a company wasgoverned by the relevant rules of English law. The Court rejected thisargument by stating that the question related not to joint stockcompanies but to mortgage of movables, a subject governed by theRoman-Dutch Law.
The defendant was right, in my opinion, when he contended throughoutthe trial that the action instituted against him was not maintainable.I would therefore allow his appeal and direct that the plaintiffs’ actionbe dismissed with costs in both courts.
Tambiah, J.—
I agree with the findings of my brother Fernando J. Since this is amatter of importance and interest, I wish to deal with the importantquestion whether the English doctrine of conversion is part of our lawat some length. The question to be decided is whether the plaint,which sets out in unmistakable language a cause of action based on theEnglish doctrine of conversion, discloses a cause of action.
In England, the wrong of conversion consists in “an act of wilfulinterference with a chattel, done without lawful justification, wherebyany person entitled to it is deprived of its use and possession ” (videSalmond on the Law of Torts, 7th Ed. page 375). There are threedistinct methods by which a man may deprive another of his propertyand become liable in the special action known as the “ action of trover ”under the English Law. A person may incur liability by taking achattel belonging to another or by wrongful detaining or disposing of it.Corresponding to these methods of wrongful deprivation, there werethree distinct forms of action provided by the English Common Law,namely, (1) trespass de bonis asportatis, for wrongful taking ; (2) detinue,for wrongful detention, and (3) trover, for wrongful conversion (thatis to say, disposal). Trover was simply a variant of the form of actionknown as detinue, the only material difference being that in trover thedefendant was charged with wrongfully converting the property to hisown use, while in detinue, he was charged with unjustly detaining it.
Soon trover became established and it began to extend its boundariesand succeeded in appropriating almost the w hole territory both of tres-pass and of detinue. It became a general remedy applicable in almostall cases in which a plaintiff has been deprived of his chattels whetherby way of taking, by way of detention or by way of conversion. Theaction for trover gradually developed into the general action for conver-sion by detention.
Negotiable instruments and other securities such as guarantees, con-sidered as corporeal property, are simple pieces of paper. Their solevalue is as choses in actions. But when they are unlawfully convertedor detained the courts gave a remedy to the person who is entitled bygiving damages to the extent of the loss (vide Midland Bank v. Reckitt1;Savoury da Co. v. Lloyd's Bank 2; Kleinwort Sons da Co. v. Le ComptoirNational D'escompte de Paris3). The English Courts granted this remedyby a process of extension by treating the cheque, the subject matter ofconversion, as a chattel, which was converted into money.
A party could waive the action based on tort and bring an actionfor money had and received under the English Law. This form ofaction was known as assumpsit, and was applicable to cases in whicha person may be required to re-pay to another money which had comeinto possession under circumstances which disentitled him to retain it.Although at one time, in the hands of Lord Mansfield, this class of casethreatened to expand into the vagueness of moral obligation, it isreducible to certain groups of circumstances which are now clearlydefined. Among these may be mentioned cases of money obtainedby wTong such as payments under contract induced by fraud or duress ;cases of money paid under such mistake of fact as creates belief in thepayer that a legal liability rests on him to make payment and cases ofliability to repay the money paid for a consideration which has whollyfailed. This remedy for want of a better term, is said to be based on aquasi-contract, and is also granted to a person who is the owner of acheque which is the subject matter of conversion. The action forconversion is therefore based on tort and the action for money had andreceived is based on quasi-contract, a concept which is peculiar to theEnglish Law.
1 (1933) A. 0.1.
* (1933) A. O. 201.
* (1894) Q. B. 674, Vol. 63.
The question is whether the tort of conversion or the action for moneyhad and received has ever been received into our legal system.
The Roman Dutch Law is the common law or the general law ofCeylon. It is a legacy of the Dutch to this Island and although it hasceased to be the law governing Netherlands, the home of its origin,it has thrived on the soil of Ceylon, although to a lesser degree of growththan in South Africa.
During the Dutch regime the States General in Holland seldomlegislated for the Dutch Colonies. The Dutch ruled Ceylon by a seriesof statutes enacted in Batavia, and by placaats promulgated by theDutch Council in Ceylon. After nearly a century of Dutch occupation,a compilation of these was made by Mr John Maetsuveker. Thiswas done on the instructions of Governor Van Diemen and these cameto be known as the “ Old Statutes of Batavia”. It consolidated allthe laws in force in the colonies at that time. By a resolution of theDutch Council of Ceylon, dated 3rd March 1666, the Old Statutes ofBatavia were made applicable to Ceylon (vide Karonchihamy v.Angohamy1). The statutes of Batavia, which modified the RomanDutch Law to suit the legal climate of the Dutch East Indies, over-rodethe statutes passed locally in the Dutch Colonies whenever there wasa conflict.
Almost a century later, it became necessary to make a new collectionof the statutes of Batavia, in view of the number of statutes promulgatedin Batavia which altered and supplemented the Old Statutes of Batavia.It was compiled on the instructions of Governor Vander Parra and waspublished in September 1766. Although this new collection neverreceived full legislative authority and was never formally introducedinto Ceylon, yet there is ample evidence that this collection was appliedin Ceylon (vide Van Clief’s case in Vanderstraaten’s Appendix).
The States General seldom legislated for the colonies. During theDutch era in Ceylon, apart from customary laws, the Dutch ruled bythe placaats issued by the Dutch Council in Ceylon and the Statutesof Batavia. The Statutes of Batavia provided that a casus omissusshould be governed by the Roman Dutch Law. It is in this mannerthat the Roman Dutch Law was introduced into Ceylon. During theDutch period, many works of the Roman Dutch writers were citedin courts (vide the Roman Dutch Text Books in the Library of theCourts of Ceylon during the Dutch Regime, by H. W. Tambiah, CeylonLaw College Review, 1960-61, p. 44 et seq.).
When the British took over the reins of government those who werecalled upon to administer justice were often recruited from the EnglishBar. They were not conversant with Dutch or mediaeval Latin. TheRoman Dutch authorities, save a few works which were translatedinto English, were rarely cited. Those trained in English legal traditionsnaturally turned to English decisions and text books for the expositionof the law. In this setting it became uncertain as to what was thegeneral law of the land. Consequently, the Proclamation of 23rdSeptember 1799 (which is now incorporated in the Adoption of the
»(1904) 8 N. L. R. 23.
Roman Dutch Law Ordinance, Cap. XII) was enacted. The preambleto this Proclamation stated that “ The Laws and institutions thatsubsisted under the ancient government of the United Provinces, subjectto such deviations in consequence of sudden and unforeseen emergenciesor to expedient or useful alterations as to render a departure therefromeither absolutely necessary and unavoidably or evidently beneficial ordesirable ” should be applied.
The Statutes of Batavia and the placaats promulgated by the DutchCouncil in Ceylon were gradually forgotten and the courts thereafterassumed that the general principles of the Roman Dutch Law, asexpounded by writers, such as Voet. Grotius and Vanderlinden appliedin Ceylon.
Here again the whole of the Roman Dutch Law was never acceptedin Ceylon. The courts adopted what has been described by WoodRenton C.J. (vide Roman Dutch Law in Ceylon under the British Regime(1932) 49 S.A.L.J. 161) as the “ eclectic attitude ” in adopting so muchof the Roman Law as “ suited our circumstances (vide Wijekoon v.Gooneu'ard-enax). Fiscal measures and tenures peculiar to Hollandwere never received in Ceylon. Thus, for instance, the rule of RomanDutch Law prohibiting donations to religious houses and gifts forpious causes was never enforced in Ceylon (vide 1843 RamanathanReports 134).
The Royal Commission known as the Colebrooke-Cameron Commissionwhich was sent to investigate into the administration of Ceylon andsuggest reforms formulated a number of questions and obtained someinstructive answers which threw much light on the adoption of theRoman Dutch Law by the Dutch. In Karonchihamy v. Angohamy2Moncreiff A.C.J. cites some of the answers given to questions 9, 15 and16. From these answers it is clear that the laws administered by theDutch consisted of £< the old Roman Dutch Law, partly of the customsof the natives, partly of the local statutes or regulations enacted inthe time of the Dutch and also the British.”
The question as to how far the statutes of Batavia were applied isanswered thus. “ The Statutes of Batavia are necessarily admitted,because the Government of that Island, having been superior to theGovernment of Ceylon, had power to modify or disallow the regulationsof the latter. Vander Parra’s collection is considered of the greatestvalue.”
To the question “ Are they (the statutes) often referred to in theCourts, and are they enforced in cases where they deviate from theprovisions of the Roman Dutch; Law as expounded by the DutchCommentators ? ” the following answer is given. “ They must necessarilybe admitted as paramount to all authorities when applicable to thepresent state of the Island.” Moncreiff A.C.J. rightly observed thatthis answer was possibly given in reference only to the Statutes ofBatavia (vide S N.L.R. 11).
* (1904) 8 N. L. R. 1 at 10.
1 (1892) 1 S. C. R. 147 at 149.
The question as to how far the Roman Dutch Law was resorted towhen the Muhammedan Law and the Thesawalamai contained noprovisions, was answered as follows:“ Where the native laws and
customs have not been compiled, we refer, if the subject of dispute ariseamong Muhammedans, to the most learned and best informed amongthem. In disputes among Malabars we should pursue a course nearlysimilar. But in other cases we consider the Roman Dutch Law as therule by which causes ought to be decided ; and whenever that is silent,we must refer to the laws of Rome.” It may be mentioned that thecourts abandoned this practice of resorting to expert evidence owingto the unreliability of those who professed to be experts.
It should be remembered that the answers cited above only appliedto what was termed the Maritime Provinces of Ceylon. A separateset of questions addressed by the Colebrooke-Cameron Commissionand the answers given to them give an insight into the sources of KandyanLaw as applied in the Kandyan Provinces by the British. When theKandyan Provinces were brought under the general administrationof the Island the Roman Dutch Law was applied in matters where theKandyan Law was silent.
It is significant that in none of those answers is English Law saidto be applicable. This Royal Commission visited Ceylon before theCharter of 1833 was enacted. As stated earlier, in administering the” Laws and institutions that subsisted under the ancient Governmentof the United Provinces ” the Courts appear to have forgotten theStatutes of Batavia and followed the Roman Dutch Law as found inthe writings of Grotius, Voet and Vanderlinden without adopting anyrules which had only a local application in Holland.
It is important to consider how far statute law of Holland was adoptedin Ceylon. The general statute law of Holland which altered the RomanDutch Law on any topic to which this system applied, became partof the Law of Ceylon provided the placaat was enacted prior to theDutch occupation of Ceylon and did not deal with any fixed measuresor matters which had local application in Holland. Any statiate passedin Holland after the Dutch occupation of Ceylon must be shown to havebeen recognised or adopted in Ceylon {vide Karonchihamy v. Ang^hnmy1).
In dealing with the applicability of Roman Dutch Law in Ceylon,Thompson who was one of the earliest writers on the Laws of Ceylonsays—
“ The genera], or as it is popularly termed, the common law ofCeylon, is obtained from treatises on the Roman Dutch Law. thatis, the Roman civil law, added to or abrogated by the feudal customs,and federal or state statutes of the United Provinces of Holland.These variations, additions, or abrogations, appeared nob only inthe statute books of Holland, but in respect of Dutch customs ofjudicial decisions, and in learned treatises of jurisconsults, whichbear almost the authority of such decisions. In respect, therefore,.
1 (1904) 8 L. R. 1.
of its Roman basis, the Roman Dutch law may, perhaps, be lookedupon as written law : but. in respect of the Dutch decisions andcommentaries, as unwrit' en law. From this Roman Dutch Law,which is popularly regarded as the common law of the great partof Ceylon, Dutch feudalism and local customs must be largely sub-tracted, as well as other institutions peculiarly Dutch, which do notobtain in Ceylon ; so that the Roman Dutch Law, as accepted inCeylon re-approaches the civil law ; and indeed it will be found inthe old treatises, as in Voet on the Pandects, that, when not controlledby some statute or custom, the Dutch commentator always relieson the civil law as his authority.
The Roman Dutch law, modified by statute, and the introductionof certain portions of English law and of modern equity, forms thelaw of the “ maritime provinces ”, and extends to every inhabitantof the island, except in those instances in which such inhabitant isby privilege under the sanction of another form of law in certaincases.” (Vide Institutes of the Laws of Ceylon by Thompson,Vol. II, pp. II & 12.)
In Weerasekera v. Peiris1 Sir Lancelot Sanderson, in deliveringthe opinion of the Privy Council, cited with approval the dictum ofMoncreifF A.C.J. in Karonchihamy v. Angohamy (vide 8 N.L.R. 1) whichis as follows :—
“ The Common Law of Ceylon is the Roman Dutch Law as itobtained in the Netherlands about the commencement of the lastcentury.”
It must not be assumed that Roman Dutch Law applies in all mattersgoverned by private law. The English law has made inroads intoour legal system in several ways. Referring to the reception of EnglishLaw in South Africa, Hahlo and Kahn state as follows : (vide the BritishCommonwealth Series, The Development of its Laws and the Consti-tutions, Vol. 5, p. 18).
“ The process by which English doctrines and principles infiltratedinto the law of the Cape resembles in many respects the receptionof Roman Law on the Continent during the 15th and 16th centuries.Some English institutions marched into our law openly along thehighway of legislative enactment, to the sound of brass bands ofRoyal Commissions and public discussion. Others slipped into itquietly and unobstrusively alongside roads and by paths.”
The same observations apply to Ceylon. The English Lawgoverning certain topics on Mercantile Law were bodily introduced intoCeylon by statute law. There are other statutes which are eitherreplicas or close imitations of English Statutes. In interpreting thesestatutes, naturally, English decisions have to be resorted to.
1 {1932) 34 N. L. R. at 285.
A more subtle way in which English law had gradually crept in isby tacit acceptance of English Law. What Sir John Wessels wroteregarding the Cape Province is equally true of Ceylon (vide 1920 S.A.L.R.265). He says :—
“ Roman Dutch Law has influenced the English Law far morethan people think. Sometimes inroads have been open and over-whelming as when the English Law of evidence was introduced bylegislation, first at the Cape and afterwards throughout the wholeof South Africa, and at other times English legal ideas have creptin insidiously as if it were almost by accident.”
Thus the action for use and occupation is entirely English Law (videLandlord and Tenant by Tambiah). The relief given to the lesseeagainst forfeiture for non-payment of rent is based on English Law.In the law of property there are many instances where the EnglishLaw has found acceptance (vide Partitions in Ceylon by Jayewardene).The areas in which the English Law is applicable in Ceylon are fairlywell known.
The Law of Delict in Ceylon is the Roman Dutch Law. Althoughthe English Law dealt with specific torts, under the Roman DutchLaw delicts could be brought under two main categories : for patrimonialloss caused as a result of a negligent or intentional act the Aquilionaction is available ; and for intentional and contumelious aggressionagainst personal reputation or dignity of another person the actio injuriais the proper remedy. There are other actions such as the actio de pauperie,action de pastu, and actions under the Aediles edicts imposing liabilityon the owners and occupiers of dangerous premises. The Englishdoctrine of tort known as conversion found no place in our legal system.
The oft quoted d ctum in Dodw ll & Co. Ltd. v. John et a. 1 does notsupport the propo ition that the English Law of conversion is partof our law. What was held by the P,ivy Council in that case was thatwhere a person receives money with notice of the nature of the trustaffecting it, he was bound to account for it I o the beneficiary. It is truethat Lord Haldane observed (vide (1918 20 N.L.R. 210): “ It may wellbe true hat the principles of the Eng ish common law have been sofa recognised in the jurisprudence of Ceylon as to admit of the samequestion being trea'ed as one of conve sion having taken p ace.” Thisdictum was merely ob.ter and is not supported by authority.
In Punchi Banda v. Ratnam 2 it was held that the English Law ofconversion was part of our law. But the ruling in Thomson v. MercantileBank 3. whe e it was held that the English doctrine of conversion isnot part of our law, was not cited or considered. In Punchi Banda v.Ratnam i was a sumed that he English Law of conversion is applicable.The Roman Dutch authorities were neither cited nor considered. The
better view is that the English Law of conversion is not par: of ourlaw vide The British Commonwealth Series, The Development of itsLaws and Constitutions by Jennings and Tambiah, Vol. 7, page 251),
In South Af ica al o an at!empt to introduce the Engli h Law ofconvrr.'ion was made, but it was not successful. In John Bell <Se Co. Ltd. v.Esselen 1 the Appellate Division of the Supreme Court of South Africare-iterated the view that, as far as the doctrine of conve sion is concerned,it is sufficient to say that the doctrine is unknown to the Roman DutchLaw.
For any principle of English law to be tacitly accepted in Ceylon,there should be a long line of decisions adopting it. For the reasonsset out, I hold hat the English doctrine of conve sion was never tacitlyadopted in Ceylon and is not part of our common law.
The only question that remains to be considered is whether by statutoryprovision the English doctrine of conversion has been applied to Billsof Exchange. The Civil Law Ordinance (Cap. 79) enacts that thelaw of England should be observed in Ceylon in certain maritime andcommercial matters. Section 3 of the Ordinance enacts that in allquestions or issues which may have to be decided in Ceylon with respectto the Law o Banks and Banking etc., the law to be administered shallbe the same as is administered in England in the like case at the corres-ponding period if such que t on or issue had to be decided in England,unless there is some contrary statutory provision in force in Ceylon.
In English Law the liability of the Banker with regard to the collectionof cheques is founded on the common law doctrine of conversion whichconsists of any dealing with goods in a manner inconsisten, with theright of the true owner provided that it was also es ablished 'hat therewas an intention on the part of the defendant in so doing to deny theowner’s right or to assert a right which was inconsistent with the owner’sright. Therefore under the English law, any person who, howeverinnocently obtains possession of the goods of a p r on who has beenfraudulen ly deprived of them, and disposes of them whether for hi?own benefit or that of any other person is guilty of conversion (videHollins v. Howler*). The Roman Dutch law on this matter differsfundamentally from the English law.
The introduction of English Law on Banking did not let in principlesof Engl sh law governing mortgages and pledges of movables to a Bank.Thus in Krishnapil'ai v. Hong Kong and Shanghai Bank Corporation 8the question arose as to whether the doctrine of parate execution, whichgave the right to an English Bank to sell shares pledged to it withoutrecourse to the Courts of law, is part of the law of Ceylon. It wascontended that the Civil Law Ordinance introduced the English Lawof Banking in Ceylon and • herefore the principles of English law governingpledges of movables form part of the law of Ceylon. This contention
1 (1954) 1 S. A. L.R. 147, page 2.* (1875) L. R. 7 H. L. 575 at 591.
* (1932) 33 N. L. R. 249.
was rejected by the Supreme Court. It was held that .he commonlaw of the land does not give place in the matter of rights of mortgageeand pledge to the Englsh Law when the mortgagee or pledgee is a Bank.This ruling was followed in Mitchel v. Fernando K
In this connection the case of Kulatilleke v. Bank of Ceylon 2 shouldbe considered. In that case it was also held that the drawer of a chequemarked “Not Negotiable”, the amount of which was subsequen yaltered by a hi d par y, was entitled to recover from the collectingbanker the amount by which the cheque was so f. audulently alteredand that in such a case the collecting banker cannot cla m the benefitof section 82 of the Bills of Exchange Ordinance. Basnayake CJ.in a short judgment said ; “ As our law on the subject of a banker’sliability is the same as in England (section 3 of the Civil Law Ordinance}except where special provision has been made in our law, the defendantwould be liable to pay to the plaintiff the amount that has been paidto the defendant by his bank without his authority.” It is submittedthat the liability of the banker depended on the doctrine of conversionwhich is not part of our law and this aspect was not considered by thecourt in that case.
Another reason given in that case is that section 82 of the Bills ofExchange Ordinance applies to cheques which do not have a taintof forgery or fraudulent alteration, and therefore a cheque, which is adrawer’s cheque in all respects and which carries the authority of thedrawer and wh ch has been altered fraudulently is inva'id. An al eredcheque still remains a cheque and attaches to it elf the benefit of sect on82 of the Bills of Exchange Ordinance. I regret I am unable to agreewith the reason given in the case of Kulatilleke v. Bank of Ceylon.Despite section 3 of the Civil Law Ordinance the common law of Ceylonon delict remains unaltered.
The ne.ct question for consideration is whether section 82 of the Billsof Exchange Ordinance (Cap. 82) impliedly introduced the English Lawof conversion into Ceylon. It may be urged that if the English doctrineof conversion is not part of our law, section 82 of he Ceylon Bills ofExchange O dinance is superfluous. Section 82 of the Ceylon Billsof Exchange Ordinance is an exact replica of section 82 of the EnglishAct. In South Af ica it was reproduced as section 80 of the SouthAfrican Bills of Exchange Act. In Sou h Africa the question arosewhether thi> provision altered the common law of Sou'h Africa. InYorkshire Insurance Co. v. Standard Bank 3, Tindall J. said :—
“ If I do not mi understand the Engl sh common law the collectingbanker is liable, not by lea on of any du y he owes to the true owner,
but on the doctrine that it is guilty of a conversion But it
is well settled now 1 hat no such doctrine obtains in Roman Dutch Law
It is vital to bear in mind this diffe ence n the two systems
of law in considering the interpretation of section 80 of ths Bills of
* (1945) 46 N. L. R. 265.» (1957) 59 N. L. R. 189.
• (1928) W. L. D. 251 at 278, 280.
Exchange Proclamation Seeing that in our law, the collecting
banker is not liable on the ground of conversion, the only g ound onwhich he col ecting banker who receives payment in good fai h couldposs.bly be held liable is that he owed a duty to the true owner and
was negligent The frame o section 80 is clear y not tha of
a section designed to impose a liability where none exis ed before but
to afford a protect on The result o!~ my interpretation may be
to make sect on 80 superfluous ; but provisions in statutes sometimesare of that character. The whole statute was copied almost verbatimfrom the Engl sh Act probably without considering what the effectof a specific provision would be, having rega d to the differences inthe common law of two countries.”
In view of the fact that the English doctrine of conversion is notpart or our law, the same ob ervations would app y to the provisionsof section 82 of the Ceylon Bills of Exchange Ordinance. In SouthAfr ca as a result of the ruling in Yorkshire Insurance Co. v. S andardBank, the law was amended.
Finally it was contended that section 98 (2) of the Bills of ExchangeOrdin nee introduced the English law of Conver ion so far a; t appliesto cheques. Th s section enacts :—
“ The ru'es of the common law of England including fhe LawMerchant, save in so far as they are inconsistent with the expressprovisions of this Ordinance, or any other enactment for the timebe ng in force, thall app y to bills of exchange, promissory notes andcheques.”
This provision was intended to bring the substant ve law of billsof exchange, promissory notes and cheques and was not intended toaffect the con equence and the rights and Labilites of persons undsrthe general law of the land when a bank enters into transactions.
Section 10 of the Canad an Bills of Exchange logislat on is very similarto section 98 (2) of the Ceylon Bills of Exchange Ordinance. The questionarose whe her section 10 of the Canad an Bills of Exchange Act introducedthe doc rine of conversion in Canada. In dealing wi h this aspectFalcon bridge in his “ Banking and Bil s of Exchange in Canada ” (6thEdition) says. “ The result would appear to be that notwithstandingsection 10 of the Bills of Exchange Act, which purports to make thecommon law of England app icable to bill ;, notes nd cheques, in ca canot expressly provided for by the statute tself, effect is g ven to thisprovision in Canada only with n the limits of what may be called thelaw o bills and notes, but not including all the consequences of or allthe rights or 1 abilities re ulting from the con racts entered into byparties to bills or notes.” The same observat on applies to Cey on.Mere'y because a cheque is the sub ect matte of the < onver ion, theEnglish law of conversion has not been ntroduced .nto Ceyion. (Compare
Norwich Union Fire Insurance Society Ltd. v. Banque CanadienneNationale l, where the Supreme Court of Canada held that the Englishdoct:ine of conversion was not in force in the Province of Quebec.)
Where a cheque is forged and money obtained by using it, theremedy availab e under the Roman-Dutch law has to be found withinthe four corners of this system of Law. In Le i <Sc Co. v. Williams 2Ennis C.J. after citing Voet 6.1.10 said : “ The remedy that our lawgives to the owner of a stolen property is, he may follow the propertyand vindicat i‘, anywhere, provided it is still in esse and he may bringan action ad exhibendum to recover the property or its value shouldit have been consumed against the thief or heirs or against any person,who has received it with the knowledge of the tainted title. But thefact that these are the only remedies allowed by our law is inconsistentwith the doctr ne of conversion, which allows an owner to proceedagainst a bona fide intermediary who obtains a stolen property andparts w th it again. It may be that the Aquilian action would also beavailab e if neglgenee or intent'onal wrong doing could be shown onthe part of the per on who s made liab e in such cases. The RomanDutch Law always attaches liability on a fault basis. This is a matterwhere legislation is very necessary to amend the Bills of ExchangeOrdinance in the interest of commerce. The courts of law can onlyinterpret the provisions of law as they exist and cannot usurp thefunctions of the legislature. Legislation on the lines of those enactedin South Africa would be necessary in Ceylon to protect commerce,(vide A lison and Kahn, pages 582—583 and 726).
For the reasons set out I am of the view that the plaint does notdisclose a cause o action. Even if it is based on an action for use ofmoney had and received, as contended by counsel for the respondent,it cannot succeed for the reason that such an action is unknown to ourlaw. In the present action ev<.n the Roman Dutch principle againstundue enrichment cannot be invoked since enrichment is not available.The defendant has paid valuable consideration for the cheque. Hehas parted with a radio set and also given the balance sum to Aboosah.Therefore he would not be liable even if an action for undue enrichmentwas brought against him.
For the reasons set out the plaint.flf’s action is dismissed with costsin both courts.
All.es, J.—I agree with the judgment of my brother Fernando.
Appeal allowed.