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Present: Shaw J. and Schneider A.J.
KADIRAVELPILLAI v. PAARIS.
32—D. C. Negombo, 13,679.
Account stated—Oral acknowledgment of balance—Prescription Ordi-nance, s. 8.
Plaintiff was a lessee of the defendant. On the .termination ofthe lease in June, 1917, plaintiff and defendant came to a settle-ment of the business transactions between them. Plaintiff owedsix months’ rent (Rs. 450), and had received Rs. 275 by thesale of an old oil engine whioh was on the land. He spent Rs. 1,500for a new engine. It was agreed that the accounts should besettled by payment of Rs. 400 by the defendant. The plaintiffsued for this sum.
Held, that this amounted to an account stated between theparties, and that the olaim fell under section 8 of the PrescriptionOrdinance.
“ Where there have been mutual dealings between parties anda balance has been struck by consent between them, the plaintiffis entitled to sue on an account stated, and this notwithstandingthe absence of any written acknowledgment of the debt on thepart of the defendant.”
' j ^HE facts appear from the judgment.
A. St. V. Jayawardene (with him Croos-Dabrera), for plaintiff,appellant.—The Judge was wrong in holding that the action was onefor goods sold and delivered. The evidence shows that the plaintiffand defendant had mutual accounts. An account was statedbetween them, and the plaintiff’s claim is based on this. Undersection 8 of the Prescription Ordinance the claim would only beprescribed in three years. When there are mutual dealings and anaccount is struck, no writing is necessary. Counsel cited ManthiraNadan v. Eulanthivdf Ashby v. James,2 and 7 Halsbury's Laws ofEngland 489.
Zoysa (with him Canakeratne and Ameresekara), for defendant,respondent.—The plaintiff came into Court claiming the balance dueto him on the sale of the engine. In.his evidence, too, he puts hisclaim on the same footing. Under section 9 of the PrescriptionOrdinance his claim is clearly barred. The theory of an accountstated was only put forward by plaintiff ’s counsel in the lower Courtlong after the plaintiff’s case had been closed. The evidence doesnot support this theory.
1 [1905) 8 N. L. B. 372.a 11 M. & W. 642.
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July 16, 11)20. Shaw .J—
111 this case the plaintiff, iu .June. J1JJ5, took a lease of certainpremisos from the defendant for the term of two years at Rs. 75 amonth. Upon the premises there was an old Kunda! oil engine of24 horse power After the plaintiff had been a short time in posses-sion of the premises, he found that this engine was not suitable forhis purpose, and he sold it for the sum of Rs. 275, and himself boughta new engine for the sum of Rs. 1,000, and had it fitted up on thepremises at the cost of another Rs. 500. In June, 1917, the leasecame to an end, and the plaintiff vacated t he premises. leaving uponthem the new engine, which had cost him Rs. 1,500 to instal.Shortly after the termination of the lease the Judge has found as afact there was an interview'between the plaintiff and the defendantas to settlement up of business transactions between them. At thisdate there was due from the plaintiff to the defer)>'lant six months*rent for the premises—Rs. 450. There was also an amount which hehad received for the sale of the old engine, Rs. 275, making Rs. 750due from the plaintiff to the defendant. On the other hand, theplaintiff claimed from the defendant the sum of Rs. 1,500, the costof providing and installing the new engine, which had been left onthe premises. There was thus a balance of Rs. 775 in favour of theplaintiff on the claims of the two parties one against the other. Itwas then agreed between them that the account should be settled bythe payment of Rs. 400 from the defendant to the plaintiff. Thesefacts have been found as being the true account of what took placeby the District Judge, and I see. every reason on the evidence tothink that this finding as to this is entirely correct. The plaintiffcommenced this action on J une 26. 1919. claiming this sum ofRs. 400. The defendant contested his claim, and put in a counterclaim for the amount of rent which was due at the termination ofthe lease. The question, and the only question that really arose atthe trial, was as to the true effect of the arrangement made in June,1917, as to the Rs. 400. Was it an agreement for the sale of theengine provided by the plaintiff for the sum of Rs. 400, or was it anaccount stated between the parties V If it was merely an agree-ment for the sale of the engine for Rs. 400, thou the plaintiff's claimis'barred under section 9 of the Prescription Ordinance. If, onthe other hand, what took place in June, 1917, amounted to anaccount* stated between the parties, then the plaintiff's claim wouldcome undersection 8 of the Prescription Ordinance, and would notbe barred. The District Judge, although he has found the facts inthe way that I have stated and as the plaintiff contended, has.nevertheless, found the claim was really a claim for the sale of theengine, and was, therefore, barred. There can be no doubt thatwhere there have been mutual dealings between the parties and abalance has been struck by consent between them, the plaintiff isentitled to sue on an account stated, and this notwithstanding the
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absence of any written acknowledgment of the debt on the pa*rt ofthe defendant. The law as to this is laid down in the local case ofManthira Nadan v. Kulanthivd? That case follows certain Englishdecisions, which show what the settled law upon the subject is inEngland. Here, on the finding of the Judge himself, there weremutual accounts between the parties in June, 1917, and there wasa balance agreed upon by them for the sum of Its. 400, which is thesum sued for in this action. It is clear, therefore, that there wasat that date a new agreement between the parties, and that theplaintiff in the present case, however he may have stated his claimin his plaint, is in reality suing on a new contract of that date,which is entirely independent of the defendant’s liability to pay forthe price of the engine as goods sold and delivered.
In my opinion the plaintiff’s claim is therefore not barred bythe Prescription Ordinance, and he is entitled to recover the amountagreed from the defendant.
I would therefore allow the appeal, with costs, here and in theCourt below.
Schneider A.J.—I agree.
KADIRAVELPILLAI v. PAARIS