PTXLLE J.—Fernando v. Fernando
Present: Pulle J. and Swan J.
N. FERNANDO, Appellant, and M. J. C. FERNANDO,
S. C. 104—D. G. Colombo, 26,306
Sent Restriction Act—Appropriation of payments—Onerous nature of debt due as rent•When a tenant who is protected by the Rent Restriction Act owes hislandlord not only rent but also money due on certain money lending transac-tions, any payment made by him must, if its purpose is unspecified, be firstAppropriated to pay off the arrears of rent. The payment “ must be carriedto that account which it is most beneficial to the debtor to reduce
./^.PPEAL from a judgment of the District Court, Colombo.
S. J. Kadirgamar, for the plaintiff appellant.jVo appeg,ran<vt £or the defendant respondent.
Cur. adv. wit.
May 10, 1954. Purus J.—
The landlord who is the appellant in this case sought to eject his tenanton the ground that he was in arrears of rent from October, 1950. Theaction was instituted on the 1st April, 1952. It is not necessary to gointo detailed figures as to how the tenant set up the plea that he was notin arrears. He jlid not give evidence at the trial and the learned DistrictJudge disposed of the case on the basis of the landlord’s evidence, excepton one material point to which I shall later advert.
Admittedly there was a payment by the tenant of Rs. 554 on the 29thOctober, 1951. Giving the tenant credit for this sum and two othersums, namely, Rs*. 89‘76 being the excess rent recovered during the firstsixteen months of the tenancy and Rs. 106 being the amount spent bythe tenant in effecting repairs, the learned District Judge held that thetenant was not in arrears and dismissed the action.
It is plain on the evidence, and the Judge so finds, that there weremonetary transactions between the parties. In regard to the paymentof Rs. 544 the landlord stated,
“ Thereafter he paid me Rs. 544. He told me that was all he had
and gave me the money and he said it was on account of the loan. ”
If this was true then clearly the tenant was in arrears but the finding 0nthis point is specific that the Judge did not believe that the tenantrequested the landlord to take this amount in payment of the loans.If Rs. 544 was not paid in payment of the loans, then the* inference isreasonable that it was on account of rent. The matter, however, doesnot rest at this point? The letter P15 of 9th June, 1951, written by thetenant to the landlord and the letter P16 of 24th September, 1951,
PXJIiLE J.—Fernando v. Fernando
written to the tenant by the landlord’s wife and the reply thereto amplysupport the finding that Rs. 644 was paid on account of rent^nd acceptedby the landlord on that basis. •
An argument was addressed to us that the learned Judge wronglystated the law to the following effect:
“ Arrears of rent was the more onerous debt and this payment of
Us. 644 should have been appropriated to pay off the arrears d.ue at
that time. ”
I do not think that the Judge intended to convey that he had anydoubts as to the accuracy of the finding based on circumstantial evidencethat the payment must have been on account of rent. It was arguedthat if the tenant did not indicate the purpose for which the paymentof Rs. 544 was made the landlord had the choice of applying it in reductioneither of the rent or the loan. Reliance was placed on the case of Leesonv. Leeson1 and Wessels on the Law of Contract in South Africa, Vol. I~p. 692.The English case no doubt lays down that there must be something morethan an intention of the debtor uncom municated to the creditor to amountto an appropriation by the debtor but it also( says that that intentionmay be inferred from circumstances known to both ‘parties. Wessels.says at paragraph 2295, “ If the debtor, when he makes the payment,does not apply the money to a particular debt, the creditor is entitled toappropriate the money, within certain limits, to whatever debt hepleases ”. Paragraph 2297, however, states that it is not enough tomake the appropriation in praesenti, he must also communicate it to thedebtor so as to give the latter an opportunity of refusing to pay undersuch circumstances.
In view of the finding by the Judge which was supported by the evidencethe authorities relied on do not support the landlord’s Contention. Hetook his stand on the positive allegation that the tenant requested himto apply the money to the loan and his evidence has not been acceptedowing to the circumstances which surrounded the payment.
Travelling outside the citations at the argument J .would refer toWalter Pereira’s Laws of Ceylon at pp. 772 and 773 which refer to twolocal cases Ephraims v. Jansz2, Schokman v. Felsinger3, in which itwas held that where the purpose for which a payment is made isunspecified “ it must be carried to that account which it is most beneficialto the debtor to reduce”. There can be no doubt that as between adebt arising from a money lending transaction and one arising out of acontract of tenancy subject to the Rent Restriction Act the latter is themore burdensome.
Whether the debtor was silent as to how the payment should beappropriated or whether the parties well understood that the paymentwas made on account of rent, I reach the same result that the appealfails and should be dismissed.
Swan J.—I agree. 1
1 (1936) 2 K.B. 156.* (1895) 3 NJOJt. 142.
(1872-76) Ramanathan’s Reports 317.
C. N. FERNANDO, Appellant, and M. J. C. FERNANDO, Respondent
PTXLLE J.—Fernando v. Fernando