[Pbivt Council. ]
Present: Earl Loreburn, Lord Atkinson, Lord Scott Dickson,and Sir Arthur Channell.
JAYAW1CKREME et al. v. AMARASTTBIYA.
D. C. Galle, 11,862.
Consideration—Just acausa—Compromise ofthreatenedaction—Verbal
agreement to pay money—Action to enforce the verbal agreement—Agreement enforceable, though 'the fist threatened action mas notenforceable in lam~~Duty of Judge to frame proper issues on thefacts proved at trial.
The plaintiff averred that the defendant held certain propertyreceived byhim from his motherin trnstfor himself and the
plaintiff inequalshares; that the plaintiff hadthreatened to
institute againsthim asuit to compelhim, in performanceof that
trust, to assign to her an undivided half share of this property;that aftermuchnegotiation anamicablesettlementwas arrived
at on thetermsfollowing:first, that the plaintiffshould refrain
from instituting the contemplatedaction,and should not assert
title to any share of the aforesaid properties; and secondly, thatthe defendantshouldin considerationthereof pay herasum of
Rs. 160,000 in five yearly instalments.
The DistrictJudgeheld that thedefendant madethepromise,
but that there was no trust as alleged by the plaintiff.' He dis-missed the action, holding thatthecompromise could not be
supported, because the alleged trust which the plaintiff threatenedto enforce by action was not – enforceable at law, nor a justa causadebendi.
Held, that the plaintiff couldhave successfully maintained an
action against the defendant on the promise mentioned, even ifno suit had ever been threatened and no compromise ever beenmade, inasmuchas thepromise was made deliberately,after much
negotiation, in discharge of the moral obligation found to rest uponthe defendant to do an act of generosity and benevolence to hissister. “ But however that may be, if the plaintiff had threatenedto institute a suit to compel the defendant to discharge this moralobligation and do this act of benevolence to her, and had under-taken not to proceed with that suit on the terms __ that he (defendant)should make the above-mentioned promise, thepromise could have
been enforced, whether the suit was likely to fail or not."
“ If at the trial the District Judge,whohadfullcontrol over the
record, had amended the issue so astosuitthefacts proved, he
should have given a decree in favour of the plaintiffs for the sumsued for. He did not do so. He, onthecontrary,seized the word
‘ trust ’ used in the plaint, and having foundthatno trust existed.
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decided against the plaintiffs, although they had established beforehim a good and meritorious cause of action according to thesystem of law applicable to the case."
“ It may well be that accordingtoEnglish law,asa general
rale, an existing moral obligation not enforceable at law does notfurnish good consideration forasubsequent expresspromise, but
according to the Roman-Dutch law a promise deliberately made todischarge a moral duty or to doanactof generosityorbenevolence
can be enforced at law, the justa causa debendi, sufficient accordingto the latter system of law tosustaina promise, beingsomething
far wider than what the English law treats as good considerationfor a promise."
June 4, 1918. Delivered by Lord Atkinson: —
The original defendant, Henry Amarasuriya, died since thecommencement of this action, and his widow and executrix hasbeen made a defendant in the suit. She is the sole respondent.The female plaintiff and the original defendant were sister andbrother, children of T. D. S. Amarasuriya, deceased, who died inthe year 1907 possessed of some considerable property, which heleft by will to his widow. The widow subsequently made over thisproperty to the deceased defendant, without making any substantialprovision for the female plaintiff and her family.
The action was brought to. recover a sum of Rs. 5,500, the unpaidbalance of a sum of Rs. 30,000 alleged to have been on or aboutJuly 31, 1912, promised and agreed by the deceased defendant tobe by him paid to the female plaintiff on March 31, 1913.
The parties had disagreed as to the issues upon which they shouldgo to trial, and thereupon the two issues following were (amongstothers) framed by the District Judge: —
Did the defendant on or about July 31,1912, promise and agree
to pay first plaintiff a sum of Rs. 150,000 in five annual instalments ofRs. 30,000 each, payable on March 31 in each year, the first paymentto be made on March 31,1913, and were the promise and agreement
made for the reasons and considerations stated in the fifth and sixthparagraphs of the plaint?
Were the payments made by the defendant in fulfilment of thesaid agreement, or out of generosity to the plaintiff and her children?
The first issue was treated by the learned District Judge whotried the case as composed of two parts, involving two distinct butinseparable issues,' the first part ending with the word and figures“ March 31, 1913," putting in issue the making of the promisementioned, which the defendant stoutly denied; and the secondpart ending with the word “ plaint, ” designed apparently to raisetwo questions: first, whether the consideration for the deceaseddefendant's promise alleged in the fifth and sixth paragraphs of theplaint had in fact moved to and been received by him; and, second,whether, even if it had so moved and been received bv him, itamounted to good consideration for his promise according to
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•Rnglicli law, or a justa causa debendi according to Roman-Dutch law.The consideration, as seated in the above-mentioned paragraph?,was in effect this, that the deceased defendant held certain propertyreceived by him from his father through his mother in trust forhimgp.lf and the female plaintiff in equal shares; that she, thefemale plaintiff, had threatened to institute against him a suit tocompel him, in performance of that trust, to assign to her an un-divided half share of this property; that after much negotiationan amicable settlement was, on or about July 31, 1912, arrivedat on the terms following: first, that the female plaintiff shouldrefrain from instituting the contemplated action, and should notassert title to any share of the aforesaid properties; and secondly,that the deceased defendant should in consideration thereof pay toher a sum of Rs. 150,000 in five yearly instalments of Rs. 30,000each on March 31 in each and every year.
The female plaintiff may in these two paragraphs have phrasedher claim too strongly in point of law, but it is not found proved oreven alleged in the pleadings that she did not make it honestly, inperfect good faith, and in the bona fide belief in its justice andlegality, and, if pressed to a conclusion, in its ultimate success.
Both Courts below have found that the deceased, despite hissworn evidence to the contrary, did make the promise in the firstpart of the above-mentioned issue set forth, and not only this, butthat he had paid to the female plaintiff in pursuance of it a sum ofRs. 24,500. But when the District Judge came to deal with thesecond part of the issue, namely, “ the reasons and considerations ”for which this promise was in the fifth and sixth paragraphs of theplaint alleged to have been made, he in effect started to try upon itsmerits the suit threatened by the female plaintiff against her brotherto compel him to perform the trust by which she alleged he wasbound. He found that the alleged trust was not proved, but thatit was established that the deceased defendant felt himself under amoral obligation to perform the sacred duty imposed upon him byhis father’s verbal enjoinder, “ which was not legally compellable,”to provide for his sister, the female plaintiff, and her family: ” thathe had knowledge .that litigation would result,” which in theirLordships’ view must mean litigation at the suit of his sister,directed to enforce this obligation, misnamed by her a trust, andthat it “ was in that state of mind he promised and agreed to payher Rs. 150,000 in five years and be quit of the duty.” Upon thesecond issue, he found that the payment of Rs. 24,500 was made“ in pursuit of the agreement arrived at; that it was not made forthe reasons and considerations stated in the fifth and sixth para-graphs, but something different, viz., the responsibility and dulyof providing for his sister and her family.” This he describes assomething more than a generosity, since it was made under amoral obligation and in pursuit of a promise.
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He then sums up the grounds of his decision in the seventhparagraph of his judgment in the words following: —
7. To sum up, then, the position is this. The plaintiffs have proveda promise and an acceptance. They have failed to discharge theburdenofproving the" trust ” and “ agreement ” set outin thepara*
graphs2and 8 and4 of the plaint.Their justa causa fails, andif the
two parts of the first issue must stand or fall together, their whole casefalls to the ground.
I do find that the inducement for the promise was quite of anotherkind, viz., the consciousness that the defendant had received thelarger share of the inheritance of the father, and that he was in dutybound and charged with the sacred trust of providing for his siBter andher family. He hadtaken all theestate except theamountwhich
had gone to the plaintiffs, whether Bs. 60,000 or Bs. 100,000. Theplaintiffs have not been able to deny that the defendant had Bs. 240,000to payashis father’sdebts, howeverincurred; but theyaver that the
father was worth Bs. 600,000 or Bs. 700,000.
I come to the conclusion that the " moral obligation ” created by the*' sacred trust " reposed in him to support the family of his sister doesnot constitute an adequate “ justa cause debendi ” for' the pact to payBs. 160,000.
The justa causa pleaded by the plaintiffs fails. There is no alternativebut to ‘dismiss the plaintiffs’ action, with costs.
It is- plain from these passages that the decision of the learnedDistrict Judge was based upon the view that the compromise couldnot be supported, because the alleged trust which the female plaintiffthreatened to enforce by action was not a valid trust enforceable atlaw, nor a justa causa debendi. He thus permitted himself to be ledastray by the form of the pleading and the issue, from determiningwhether the alleged compromise which it was sought by the suitbefore him to enforce was valid, into that of determining whetherthe threatened suit alleged to have been compromised could havesucceeded if prosecuted to its end—a wholly different and irrelevantquestion. The legal validity or invalidity of the claim the femaleplaintiff threatened to enforce by action is entirely beside the pointif she, however mistakenly, bona fide believed in its validity. LordBlackburn, in Callisher v. Bischoffsheim,1 pointed out that in Cook v.Wright 2 it was decided that, even if the defendant actually knew .that the plaintiff’s claim, which was compromised, was invalid, yetthe compromise of it was enforceable; and it was in the former casedecided that the compromise of a disputed claim made bona fide is agood consideration for a promise, even though it ultimately appearsthe claim was wholly unfounded. In the case of Miles v. NewZealand Alford Estate Company,3 Bowen L.J., as he then was,said:—
It is a mistake to suppose it is not an advantage, which a suitor iscapable of appreciating, to be able to litigate his claim even if he turnsout to be in the wrong. It seems to me it is equally a mistake to suppose
1 5 Q.B. 449, at p. 452.^ lB.de S. 559, 570332 Ch. D. 266.
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that it is Dot sometimes a disadvantage to a man to have to defend anaction even if in the end he succeeds in his defence, and I think, there-fore, that the reality of the claim which is given- up must be measured,not by the state of the law as it is ultimately discovered to be, but bythe state of the knowledge of the person who at the time has to judgeand make the concession. Otherwise you would have to try the wholecause to know if the man had a right to compromise it, and with regardto a question of law, it is obvious you never could compromise a questionof law at all.
In the Court of Apppeal, in the present case, the learned ChiefJustice states in the following passage the grounds of his judgment.He said:—
The defendant had benefited largely by his father's death, and therecan be no doubt that it was his father's wish that he should provide forthe first plaintiff and her large family. He was aware that the firstplaintiff, under the influenceto some extentof herhusband,the second,
had thoughts ofinvolving him inlegalproceedings. Butthe District
Judge does not find, and the evidence would not, in my opinion, havesupported him had he done so, that the fear of litigation was the motivefor the agreement into which he entered to pay the first plaintiff a sumof Bs. 150,000. The DistrictJudgeexpressly holdsthat thedefendant’s
action in this matter was guidedby hisfather’swishes, and by his
consciousness thathe had himselfbeenenriched out ofthe family
property to a far greater extent thanhissister. In thesecircumstances,
the present action, which is based on an allegation of a trust imposedupon the defendant by his father in the first plaintiff's favour, must fail.
Mr. Justice Shaw said:—
The learned District Judgein thecourseof hisjudgmentfinds that
the defendant did promise to pay the second plaintiff Bs. 150,000, andthat he in fact did make payments in fulfilment of the said promise.He also finds thatthe considerationforthe payments – was something
more than mere generosity, and was the responsibility and duty ofproviding for the plaintiff’s family, and that the payments were madeunder a moral responsibility in pursuit of the promise.
He concurs in the result with the Chief Justice.
It is plain, therefore, from those passages that the decision of theCourt of Appeal, like that of the District Judge, was not based onany assumption that a dispute had not arisen between the femaleplaintiff and her brother touching her claim upon his property, northat she did not threaten litigation against him to enforce it, nor thatthe threatened suit had not been compromised, but solely in theground that the “ trust ” upon which she alleged in her pleading heheld the aforesaid property was not valid in law or did not exist.She was held rigidly bound by the word “ trust ” used in thepleading, and her action defeated, not because she had no just claimto relief, but because her claim was not of the kind she had describedit to be.
It may well be that according to English law, as a general rule,an existing moral obligation not enforceable at law does not furnish
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good consideration for a subsequent express promise (Eastwood v.Kenyon,1 Pollock on Contracts 189); but the Roman-Dutch law,by which, in their Lordships’ view, this case must be governed, iswholly different. According to this latter law it would appear thata promise deliberately made to discharge a moral duty or to do anact of generosity or benevolence can be enforced at law, the justacausa debendi, sufficient according to the latter system of law tosustain a promise, being something far wider than what the Englishlaw treats as good consideration for a promise.
In Pereira’s Laws of Ceylon, 2nd ed., p. 568, it is stated thatwhere there is what the English law treats as consideration for acontract, there is what the Roman-Dutch law treats as a justa causadebendi for it, but that the converse is by no means true; that theselatter terms have a much wider meaning than the English word“ consideration, ” that they comprise motive (sensu latiori) or reasonfor a promise, or what in English law is known as purely moralconsiderations; that, according to the Dutch author Van derKeessel, a promise which is not founded on a justa causa debendi(i.e., obligandi) does not give a right of action, although otherwisean action is maintainable on a nudum pactum. He then quotes,apparently with approval, the following passage from the work ofa Mr. Morice on Dutch law: —
Under Dutch law a consideration in the English' sense of the wordis not an essential of a contract. The nearest approach to anything ofthe natureis a causa,the presence of whichis essentialtoa contract.
The causawas takenfromHoman law, andis perhaps thegerm of the
English doctrine of consideration.The meaning appears clear from
Grotius’s expression “ reasonable cause.” There must be a reason fora contract,a rationalmotivefor it, whetherthat motiveisbenevolence,
friendship , or, other proper feeling, pr, on the other hand, is of a com-mercial or business nature. In other words, the agreement must be adeliberate,serious act, notone that is irrational or-motiveless. This
point of view would appear very similar to that of English law inrecognizing the validity of a contract under seal without consideration.The solemn forms of the deed under seal are assumed to involvedeliberation.
Tn Lipton v. Buchanan 3 the two defendants, named respectivelyBuchanan and Frazer, were partners .in trade. They incurred adebt to the plaintiff, for which they were, of course, jointly andseverally liable. The partnership was subsequently dissolved by adecree of the Court, and a receiver appointed. Frazer paid to theplaintiff, through the receiver, one-half of this debt, the plaintiff, inconsideration thereof, undertaking not to take any steps againstFrazer personally for the recovery of the balance due by the firm,Until he had exhausted every possible means of recovering it againstthe other partner, Buchanan. At the date of this payment Buchananwas possessed of ample means to pay his debts. The plaintiff
111 A. <fc E. 438, 482.
(1904) 8N.L. R. 49.
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delayed t-alring action against him for more than a year, during whichtime Buchanan incurred additional debts, in the payment of whichhis property was exhausted. Thereupon the plaintiff sued boththe former partners for the unpaid balance of the partnership debt.Two points bearing upon this case were decided. First, that thecase did not come within Ordinance No. 22 of 1866, whioh appliesthe English law to partnership transactions, and it was, therefore,governed by the common law of Ceylon, which was the Roman-Dutch law; and, second, that the maxim of the Roman law, exnudo pacto non oritur actio, did not obtain in the Roman-Dutch law,and that causa in the latter law denotes the ground, reason, or objectof a promise; that it has a much wider meaning than the Englishterm “ consideration," and comprises motive or reason for a promise,and also purely moral consideration; and it was accordingly heldthat there was a lawful causa for the above-mentioned agreementof the plaintiff, inasmuch as the receiver, though he had been inpossession of the assets of the firm for three years, had not been ableto pay the plaintiff anything, and that Frazer then came forwardand paid half the debt, presumably saving the plaintiff further delayand trouble.
It would, in their Lordships’ view, appear from these authoritiesthat the plaintiffs in the present case could have successfullymaintained an action against the deceased defendant on the promisementioned in the first part of the above-mentioned issue, even if nosuit had ever been threatened and no compromise ever been made,inasmuch as the promise was made deliberately, after much nego-tiation, in discharge of the moral obligation found to rest upon thedeceased defendant to do an act of generosity and benevolence to hissister, namely, to make a provision for her and her children; buthowever that may be, it is perfectly clear that if the female plaintiffhad threatened to institute a suit to compel her deceased brother todischarge this moral obligation and do this act of benevolence to her,and had undertaken not to proceed with that suit on the terms thathe should make the above-mentioned promise, the promise could,according to the Roman-Dutch law, have been enforced, whetherthe suit was likely to fail or not.
But that is very much what the female plaintiff really did. Thedeceased defendant, in his letter dated March 7, 1912, while hismother was still alive, addressed to his sister, stated that he and hismother were prepared to. do what was required of them for the welfareof her. the sister’s family. The District Judge has found that thefemale plaintiff’s letter of March 10, 1912 (exhibit P 2), was notproved to have reached the deceased defendant; but she wrote it.It is an indication of her mind and intention, at all events, thoughhe cannot be fixed with knowledge of its contents. It contains adistinct threat to institute litigation to obtain from the brothera share of her father’s property. Dr. Cooray, in his letter of
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March 27, 1912, to the deceased defendant, his uncle, distinctlystated that the female plaintiff was willing to accept Rs. 150,000,secured by a promissory note, and payable in three instalments, andmentioned that he, the writer, considered it very commendable inhis uncle to have made up his mind to settle the dispute in thismanner. The deceased defendant replied to this letter on March 30,stating that he offered to give her money, not on a business note, butupon an agreement, which would be more binding. In his letter ofApril 10, 1912, to* Dr. Cooray, he says:—
As, in my opinion, a business note astheoneyoudescribewill not
protect me, the only way of securing the interests of either party isby notarial. agreement, and 1 thereforethink itquiteessentialto have
such a document Therefore, please suggest to my sister to
accept my terms, and try to inducehertoenterinto thenotarial
On June 16, 1912, he again writes to Dr. Cooray, and says: —
My lawyers tell me that I cannot write the deed without running therisk of litigation. You can,therefore,,assuremysister that Iwillgive
her the amount I have promised every year. The first instalment will
be paid to her by March 30, 1912 “ She can be angry until such
time as the full amount is paid, and proportionally deduct her angeraccordingly as each payment is made.”
On June 26, 1912, he again writes to Dr. Cooray, saying:—
I am in receipt of your letter of the 20th instant. What you sayregardingthe proposed deedis quite true.Theone you referto is a
very important objection, as far as my lawyers are concerned. I amcertainlygenuine as to myintentions,asregards my sisterandher
children. Let us try and do our best in ’the matter, and I am convincedthat yoursympathies are oneither sideandwellbalanced. Ihavenot
met my sister since she had the rupture with mother.
He proceeds to ask to have a meeting with his sister arranged, asnothing definite can be done without it.
Dr. Cooray, who is married to the daughter of the female plaintiff,was examined. He stated that on March 12, 1912, the deceaseddefendant approached him, and discussed with him the matter ofthe plaintiffs’ claim; that he, Cooray, was then aware that theplaintiffs had for six or eight months before that been telling himthat if the deceased defendant did not settle their claims theyintended to bring an action; that the deceased defendant then saidto him, “ Do you know that my sister has got angry about a share inthe. estate and is going to sue me?” that the witness replied, “ Yes,I know about it, but why don’t you settle it amicably withoutgoing to Court that the defendant replied, “ How to settle?She is asking a share in the land which I have improved and addedto that the witness replied, “ You need not give the land if youdo not like, you can give a reasonable amount for the share”;that the defendant then said, “ What is a reasonable amount? ”
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and the witness replied, “ According to the value of the land whenit came to him from his father that the defendant then asked,“ What amount? ” and the witness replied, “ You know best,”whereupon the defendant, after some thought, said, “Well, I willgive her Rs. 150,000, and there must be no further claim ”; thatthe witness replied, “ I can’t accept your statement to conveyand asked the defendant to give it to him in writing, and that thedefendant said he would enter into an agreement or a business note.The witness further, stated that he communicated what had passedto the second plaintiff, and requested him to inform his wife of it.On cross-examination the witness further stated that he was presenton July 31, 1912, at the interview between the female plaintiff andthe deceased defendant, which the latter had asked for; that thewhole discussion, which lasted a long time, was about her claim totiie land, and the upshot of it was, if her brother paid her the moneyshe would keep quiet. This evidence is absolutely consistent withthe letters above referred to, and is corroborated by them, andfrom both it is, in their Lordships’ view, perfectly clear that thefemale plaintiff had long asserted a claim to the land the deceaseddefendant had derived from his father; that there was a disputebetween them as to whether this claim was good; that she threat-ened to institute proceedings to enforce it, and that the deceaseddefendant agreed to compromise with her by paying her Rs. 150,000on the instalments described in satisfaction of this claim. Thevalidity of the claim, or the ultimate success of a suit brought toenforce it, is entirely b.eside the point. On those facts the plaintiffswere, in their Lordships’ opinion, entitled to succeed in the presentaction. The question is, are they to be denied justice becausetheir pleader has chosen to over-state his client's’ case, and theJudge to frame an issue embodying that over-statement?
If at the trial, which did not take place before a jury, the learnedDistrict Judge, who had full control over the record, had amend0'!the issue so as to suit the facts proved, he should, in their Lordships’opinion, have given a decree in favour of the plaintiffs for the Sumsued for. He did not do so. He, on the contrary, seized upon theword " trust ” used in the fifth paragraph of the plaint, and havingfound that no trust existed, decided against the plaintiffs, althoughthey had established before him a good and' meritorious cause ofaction according to the system of law applicable to the ease.
Their Lordships are therefore of opinion that the decision appealedfrom, as well as that of the District Judge, were on the facts provedat the trial erroneous, and should be set aside,-and this appeal beallowed, with costs here and below, and that judgment be enteredfor the appellants for the sum sued for, and they will humbly adviseHis Majesty accordingly.
JAYAWICKREME et al. v. AMARASURIYA