EKyathamby v. Miranda.
1946Present : de Silva J.ELIYATHAMBY, Appellant, and MIRANDO, et al„Respondents.
198—C. R. KaZmunai, 1,848.
Contract—Mortgage—Loan of paddy—Agreement to pay interest in form ofpaddy—Outbreak of war■—Impossibility of performance of contract as
contemplated by the parties—Equitable order.
The plaintiffs had borrowed on a mortgage bond 16 avanams of paddyof the value of Rs. 160 and had undertaken to repay the amount withinterest at the rate of 10 maracals for one a van am of paddy per annum.They brought this action to redeem the mortgage bond and undertookto pay the principal, Rs. 160, and interest at the rate of 20 per centumon the basis that it was impossible for them to pay the interest in theform of paddy.
The defendant claimed that, according to the price of paddy at thedate of action, he was entitled to nine times the sum wh,vh had beenlent as principal.
Held, that in view of the outbreak of war it had become impossibleto perform the contract as contemplated by the parties and, under thecircumstances, it was open to the Court to do what seemed to be equitableand to provide that a reasonable interest should be given for the principallent.
DE SILVA J.—Eliyathamby t>. Mirando.
PPEAL from a judgment of the Commissioner of Requests,Kalmunai.
S. Nadesan, for the defendant, appellant.
C. E. 8. Perera (with him E. A. O. de Silva), for the plaintiffs,respondents.
March 8, 1946. de Silva J.—
The plaintiffs in this case had borrowed 16 avanams of paddy of thevalue of Us. 160 and had undertaken to repay the amount with interestat the rate of 10 maracals for one avanam of paddy per annum. Theybrought this action to redeem the mortgage bond and undertook to paythe principal, Rs. 160, and interest at the rate of 20 per centum on thebasis that it was impossible for them to pay the interest by way of paddy.They also apparently urged that the value at which paddy was soldat Puliantivu at the time of suing cannot be determined because thereis no sale of paddy at the present time owing to the various DefenceRegulations and other laws regarding the sale of paddy.
The learned Commissioner of Requests apparently took the view thatpaddy was a commodity which was extra commercium and that thereforeit had become impossible to perform the contract in view of the DefenceRegulations. In the circumstances he decreed that the plaintiffs shouldpay the principal and interest at the rate of 18 per centum on the principalfor the time for which interest was due.
In appeal it is urged that as paddy is purchased by the Governmentat the rate of Rs. 45 per avanam, there was a market for paddy and thatthe defendant was entitled to get at the rate of Rs. 45 for the paddy due interms of the mortgage bond, and in support of this the judgment in caseNo. 630 D. C., Batticaloa*, has been cited. On the other hand the Counselfor the respondent has referred me to case No. 573 D. C., Batticaloa,decided on January 21, 1946, in which a different view was taken by thisCourt.
In the circumstances, I am free to decide the matter adopting eitherview which has been taken by this Court. It seems to me, in law, thedefendant will not be at any time able to recover more than double theprincipal which has been lent. His claini at present comes to nine timesthe principal which has been lent. In the circumstances, I think thedefendant’s claim as it is made at present cannot be* sustained. Thereal position is that the parties contemplated at- the time they enteredinto this contract that normal conditions would prevail and they had notin view the possibility of war breaking out or paddy being regulated byDefence Regulations. It has, therefore, really become impossible toperform the contract as contemplated by the parties. Under suchcircumstances, I think, it is open to the Court to do what seems to beequitable as between the parties and to provide that a reasonable interestshould be given for the principal lent. I think, in all the circumstances,the learned Commissioner has arrived at a correct conclusion and dismissthe appeal without costs.
See page 105 (Supra)—Ed.
ELIYATAMBY, Appellant, and MIRANDO , et al Respondents